Sydney Water Corporation and Australian Services Union (New South Wales and Australian Capital Territory Branch) [2005] NSWIRComm 305

CATCHWORDS: Appeal - application for leave to appeal - industrial dispute - interlocutory dispute order for reinstatement under ss 136 and 137 - relevant principles - breadth of discretion to be applied to broad range of disputes - limited application of tests for private law injunctions - relevance of damages to collective industrial dispute - relevance to orders under s 89(7) - genuine dispute - broader than threatened dismissal of two employees - threatened industrial action - balance of convenience favoured grant of interim order - leave to appeal granted - appeal dismissed

Industrial Arbitration Act 1940 Industrial Relations Act 1991 LEGISLATION CITED: Industrial Relations Act 1996

Australian Salaried Medical Officers Federation (New South Wales) on behalf of Dhayanithi Sivathondan and South Western Sydney Area Health Service [2002] NSWIRComm 98 Australian Salaried Medical Officers Federation (New South Wales) on behalf of Professor Bruce Hall and South Western Sydney Area Health Service [2003] NSWIRComm 8 Australian Services Union and Sydney Water Corporation [2005] NSWIRComm 156 Australian Services Union and Sydney Water Corporation (No 2) [2005] NSWIRComm 211 Broken Hill Chamber of Commerce and CFMEU (NSW Branch) [2002] NSWIRComm 244 Caltex v Harmer (1999) 92 IR 264 Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 Commissioner of Police and Police Association of New South Wales [2005] NSWIRComm 132 Crewsdon v New South Wales Department of Community Service & Anor (No. 9) [2004] NSWIRComm 125 CASES CITED: CSR Ltd and Others v Australian National Paper Alcohol Company Pty Ltd and Others (1995) [Print M5779] Dimension Data Pty Ltd v National Union of Workers, New South Wales Branch [2005] NSWIRComm81 Ellen Ford and WD&HO Wills (Australia) Limited [1999] NSWIRComm 399 Hill v Director General of the Department of Education and Training (1998) 85 IR 201 Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380 Maritime Union of Aust and ors v ASP Ship Management Pty Ltd and anor (2002) [Print PR 920954] Re Express Data (A Division of Dimension Data Australia Pty Ltd) and NUW [2005] NSWIRComm 140 Simon Richard Lane v The Commonwealth Bank of Australia [1999] NSWIRComm 336 Woolstar Pty Limited v Federated Storemen & Packers Union of Australia (New South Wales Branch) (1992) 45 IR 39

APPELLANT Mr JV Murphy of Counsel Sparke Helmore Lawyers (Mr J Murphy) LEGAL REPRESENTATIVES: RESPONDENT Mr A M Slevin of Counsel Slater & Gordon Lawyers (Mr P Pasfield)

• 27 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: WRIGHT J, President WALTON J, Vice-President STANTON C Thursday, 15 September 2005

Sydney Water Corporation and Australian Services Union (New South Wales and Australian Capital Territory Branch)

Application by Sydney Water Corporation for leave to appeal and appeal against the decision of Justice Boland given on 17 May 2005 in matter no. IRC 962 of 2005.

1 On 17 May 2005 in Australian Services Union and Sydney Water Corporation [2005] NSWIRComm 156 Boland J granted an interim order restraining Sydney Water Corporation ("Sydney Water") from dismissing Messrs Tony Bagala and Ronald Austin until further order of this Commission. The order was made pursuant to ss 136 and 137 of the Industrial Relations Act 1996 ("the Act"). 2 In accordance with ss 187 and 188 of the Act, Sydney Water seeks leave to appeal and (should leave be granted) appeals that decision. Messrs Bagala and Austin are both members of the Australian Services Union, New South Wales and Australian Capital Territory Branch ("the Union"). The Union opposes Sydney Water's application. Background

3 This appeal has been filed in the context of a long-running dispute between Sydney Water and the Union concerning the content and application of Sydney Water's injury management policy. Sydney Water did not contradict the Union's claims that the dispute dates back to 1997 and it is a matter of record that the dispute has been before this Commission several times, including in Matter Number IRC 7027 of 2004 before Grayson DP. 4 Most recently, the Union filed a Notification of Industrial Dispute on 24 February 2005 pursuant to s 130 of the Act. The initial compulsory conference pursuant to that notification was held on 25 February 2005 and in Australian Services Union and Sydney Water Corporation at paragraph [3] Boland J described the Union's concerns thus: Essentially, the ASU was concerned at what it regarded as an inadequate process within Sydney Water to search for and find suitable duties for employees who had been injured and were unable to perform their pre-injury duties, a lack of proper communication with injured workers and what the ASU regarded as an inadequate approach by Sydney Water to the re-training of injured workers.

In particular, the Union was concerned that Sydney Water intended to dismiss two injured employees (Messrs Bagala and Austin) in accordance with its injury management policy, despite the contentious nature of that policy; the fact that it was the subject of compulsory conciliation and could soon be the subject of arbitration. 5 Following the compulsory conference on 25 February 2005 the Commission recommended that the parties confer about Sydney Water's injury management policy and that, in the meantime, there should be no threat to dismiss Mr Bagala or Mr Austin. At a further appearance before the Commission on 11 April 2005 (at the instigation of Sydney Water, concerned at the prospect of a stop-work meeting "in support of injured workers") the Commission gave more explicit recommendations to facilitate a conciliated resolution of the dispute, and scheduled an appearance before the Commission on 20 April 2005 to review the matter. 6 Although it appeared on 20 April 2005 that some progress had been made in the parties' discussions concerning the injury management policy, events were overtaken by Sydney Water's advice that it intended to dismiss Messrs Bagala and Austin and that it would not comply with a recommendation under s 134(2) of the Act to refrain from dismissing them. Sydney Water came prepared with legal representation, a number of witnesses and documentary material in support of its position. 7 In response, the Union applied for a certificate of attempted conciliation (unopposed by Sydney Water) and, orally, for interim orders under ss 136 and 137 that Sydney Water refrain from dismissing Messrs Bagala and Austin until arbitration of the dispute concerning Sydney Water's injury management policy. 8 Describing Sydney Water's conduct on 20 April 2005 as "smacking of an ambush", Boland J adjourned the Union's application for interim orders to 2 May 2005. In the interim the Commission issued a certificate of attempted conciliation and recommended that neither Mr Austin nor Mr Bagala be dismissed. That recommendation was complied with. The legislation

9 Sections 136 and 137 of the Act state: 136 Arbitration of dispute

(1) The Commission may, in arbitration proceedings, do any one or more of the following: (a) make a recommendation or give a direction to the parties to the industrial dispute, (b) make or vary an award under Part 1 of Chapter 2, (c) make a dispute order under Part 2, (d) make any other kind of order it is authorised to make (including an order made on an interim basis).

(2) Any such action may be taken by the Commission on its own initiative or on application by any person authorised to notify the Commission of the industrial dispute. 137 Kinds of dispute orders (1) The Commission may make the following kinds of dispute orders when dealing with an industrial dispute in arbitration proceedings: (a) The Commission may order a person to cease or refrain from taking industrial action. (b) The Commission may order an employer to reinstate or re-employ any one or more employees who were dismissed in the course of the industrial dispute or whose dismissal resulted in the industrial dispute. (c) The Commission may order an employer not to dismiss employees in the course of the industrial dispute if the employer has threatened to do so. (d) The Commission may order a person to cease a secondary boycott imposed in connection with the industrial dispute. (2) If employees are taking industrial action in connection with the industrial dispute, the Commission may order the employees to cease taking that industrial action before it makes any other kind of dispute order against the employer. (3) A dispute order may not provide for the payment of compensation, lost remuneration or any other amount. 10 Section 163(1) of the Act (found in Chapter 4, Part 5 - Procedure and Powers of the Commission) is also relevant to this application: 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 decision at first instance 11 Once the certificate of attempted conciliation was issued, the Commission was empowered to deal with the industrial dispute by arbitration: s 135 of the Act. There was no issue at first instance that there was an industrial dispute within the meaning of ss 136 and 137 of the Act between the Union and Sydney Water; that Sydney Water had decided to dismiss Messrs Austin and Bagala in accordance with its injury management policy; and that the Commission had the power pursuant to ss 136 and 137(1)(c) to grant an interim order that Sydney Water refrain from dismissing the two men. 12 Nor was there any issue as to the test to be applied. Both parties argued the application on the basis that the principles to be applied in granting a dispute order of the kind prescribed by s 137(1)(c) were those pertaining to interlocutory injunctions in private law litigation (that is, that there is a serious question to be tried; the applicant will suffer irreparable injury in the absence of an injunction; and that the balance of convenience favours the granting of an injunction). These principles were adopted by Schmidt J in relation to interim orders sought under s 89(7) and ss 136 and 137 and granted in Hill v Director General of the Department of Education and Training (1998) 85 IR 201 following the decision of Mason ACJ in Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153. 13 Despite expressing reservations about the unquestioning application of these principles to s 137(1)(c) in all cases, Boland J broadly relied upon them in granting the Union's application for a dispute order restraining the dismissal of the two men. At [68] his Honour stated: 68 The next matter for consideration is whether orders of the kind under s 137(1)(c) should be made in this case and what are the tests to be applied in determining that question. Both parties relied on Hill , which, of course, employed the standard tests applied to the granting of injunctions as enunciated by Mason ACJ in Castlemaine Tooheys. Those tests have been applied in numerous cases before the Commission in circumstances of threatened dismissal, usually in the context of s 89(7) of the Act, and whilst I am not entirely satisfied that the approach in Hill is necessarily appropriate in all cases for the granting of interim relief under s 136 and s 137, it is my intention to adopt it in this case as a guide to achieving a fair and proper outcome. In doing so, the Commission cannot lose sight of its duty under s 163(1)(c) of the Act to act according to equity, good conscience and the substantial merits of the case and if that requires some modification of the tests applied in Hill to the peculiar circumstances of the case then so be it. 14 The real contest at first instance centred upon whether the three tests described in Hill were satisfied. The first test was described in Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153 in the following terms: "that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief". 15 In relation to the first test, Boland J held (at [69] - [77]): 69 The question of whether there is a serious issue to be tried, or in this case arbitrated, is complicated by the approach the parties took to this question. The ultimate issue to be arbitrated is whether Sydney Water's approach to injury management is adequate, but both parties in their respective submissions on whether there was a serious question to be arbitrated have blurred the issue of the adequacy of the respondent's injury management policies and practices and the issue of the termination of employment of Mr Bagala and Mr Austin. The focus of submissions on whether there was a serious issue to be tried was on Sydney Water's treatment of Mr Austin and Mr Bagala under its injury management policies and practices rather than the wider question of the policies and practices themselves. 70 The approach I propose to take, however, in considering whether there is a serious question to be arbitrated, is whether Sydney Water's treatment of Mr Austin and Mr Bagala gave rise to a prima facie case that such treatment reflected an inadequate injury management scheme.

71 There is no doubt that Sydney Water has a comprehensive and largely commendable injury management policy and it is difficult to find fault with much of the process as it was reflected in its application to Mr Austin and Mr Bagala. Various attempts over a number of years were made to find suitable duties within Sydney Water for both Mr Austin and Mr Bagala given the nature of their incapacity and it could not be successfully contended that Sydney Water acted with indecent haste in arriving at a decision to medically retire these two employees. 72 Nonetheless, the ASU contended that the various positions offered to Mr Austin and Mr Bagala amounted to no offers at all because either the requirements of the work exceeded the medical limitations imposed on the employees or the offers were unreasonable in the circumstances. The ASU were particularly concerned with the failure of Sydney Water to offer Mr Austin a clerical or administrative role and that Sydney Water simply relied on one vocational assessment of Mr Austin in August 2002 that "his minimum education would not render him competitive for formal administration positions." The ASU strongly contended that Sydney Water's system for searching out suitable duties for employees who could no longer perform their pre-injury duties was inadequate. The ASU also questioned why Sydney Water could not give precedence to finding suitable duties for an incapacitated employee over contractors or employees of contractors. That is, why was it that Sydney Water could not look at the work being done by contractors and replace the contractor or the contractor's employee if that would achieve the goal of providing suitable work for the employee who could no longer perform pre-injury duties? 73 This last issue is one about which I do not have any information. Where an employee has served the employer well over many years and who, despite a work injury, is keen to remain in employment and is able to perform productive full time or part time employment even though re-training might be required, why should a contract worker not be displaced if that is what is required in order to provide suitable duties to a long serving and loyal employee who will find it difficult to find other employment because of their age? 74 I consider Sydney Water's injury management and medical retirement policies and practices are generally good. There is clearly a well developed system in place to for liaising with injured workers, managers, treating doctors and other treating health professionals, developing return to work plans and monitoring the injured worker in the workplace. Further, I consider Sydney Water is essentially committed to retaining employees where it is able, rather than having the tacit objective of getting injured employees "off the books" as quickly as possible. However, the question remains whether the system in place is adequate to ensure that the retention of injured employees in employment is achieved to the greatest degree that is reasonably possible, consistent with the spirit and intent of the Workplace Injury Management and Workers Compensation Act. 75 In considering this question there are some issues about which I need further information and which require further consideration. For instance, I would not consider an injury management system to be adequate if the only mechanism in place in an organisation such as Sydney Water for searching out suitable duties was an email to various managers inquiring whether they had vacancies for a person with certain limitations and where there was no follow up to ensure the inquiry was dealt with in a proper manner. It is too easy for a manager to reply that no position is available for an employee who will require monitoring and greater management effort if the alternative is to engage an able bodied contractor. 76 The issues about which I require further information are as follows: (1) What is the system, if any, for searching out, and following up, on suitable duties for injured employees, having regard to the restrictions on the work they are able to perform, within: (a) Sydney Water's Water Service Division; (b) Sydney Water Corporation; (c) Other employers? (2) What is the system, if any, for determining what range of duties an injured employee may be able to perform with reasonable and appropriate re-training, what re-training does Sydney Water provide and on what basis is it determined that an injured employee is a candidate for re-training? (3) Does Sydney Water give precedence to the employment of employees over the engagement or continued engagement of contract workers in circumstances where the employees are unable to perform pre-injury duties but who are able to undertake full time or part time work in an area of Sydney Water's operations covered by contractors? If not, why not? (4) What arrangements are in place to review on a regular basis return to work programs in consultation with relevant unions? (5) What formal role does an injured worker's representative have in determining whether suitable duties are available and what practical arrangements are in place to ensure the representative is provided with an opportunity to be consulted about the question of suitable duties? Does the representative have access to a list of suitable duties that may be available and a description of the work involved? 77 Given the foregoing, I consider there are matters yet to be fully made clear about Sydney Water's injury management and medical retirement policies and practices and that in order to resolve the industrial dispute, either by arbitration or in the form of recommendations to the parties, it is appropriate that I give further consideration to the issues I have raised once I am provided with the necessary information. I will give directions in that regard. 16 After the foregoing consideration of the prima facie case, Boland J attended to the second test at [78]: 78 That brings to the question of irreparable injury or, put another way, whether the relief that might be available to Mr Austin and Mr Bagala under the unfair dismissals provisions of the Act, if their employment were terminated, would be an adequate remedy. 79 Clearly, adequate relief is available to Mr Austin and Mr Bagala if they were able to make out a case for reinstatement and such a consideration counts in favour of refusing interim relief. However, whilst I acknowledge the principle the Commission will not lightly interfere with an employer's right to dismiss an employee without first coming to the view that such dismissal would be harsh, unjust or unreasonable, in the present case there are a number of issues I have identified that need to be resolved before being able to come to that view. If, for example, after considering the further information I have sought, I was to come to the view that the system within Sydney Water for searching out suitable duties was inadequate and that inadequate system operated in respect of Mr Austin and Mr Bagala, it might lead to a conclusion that termination of employment would be harsh, unjust or unreasonable. On the other hand, the further consideration may lead to the conclusion that the respondent took all reasonable steps to find alternative work for the two employees and medical retirement was the only reasonable option for the employer. 80 I propose to order that Sydney Water not proceed with its decision to terminate the employment of Mr Bagala and Mr Austin until I have considered those matters in respect of which I require further information. 17 And as to the third test relating to balance of convenience, his Honour stated: 81 That leads me to consider the balance of convenience. In that respect, I note that in both the case of Mr Austin and Mr Bagala it has been close to four years that the respondent has had to monitor and manage the two employees in order to accommodate their incapacity to perform pre-injury duties. Further, I am aware of Sydney Water's view that it has followed its medical retirement process, that the employees have been afforded procedural fairness throughout that process and that it should not be required to provide light duties indefinitely. Of course, it is not a question of light duties, but rather suitable duties that the employer would otherwise require to be performed in the conduct of its business. I am further led to understand that Mr Austin and Mr Bagala are not performing any productive work but they are continuing to be paid wages. 82 On the other hand, if I do not grant the interim relief sought by the ASU it will be open to the respondent to terminate the employment of Mr Bagala and Mr Austin. If that were to occur, and within a short period thereafter I was to find that Sydney Water's injury management system was inadequate, not only generally but in the manner it was applied to Mr Bagala and Mr Austin, that would likely provide the two employees with strong grounds to seek a remedy under the unfair dismissal provisions of the Act. There is also the strong prospect that if the employment of the two employees was terminated in circumstances where the Commission was continuing its inquiry into the respondent's injury management system it might spark industrial action. 83 The balance of convenience, in my opinion, lies in favour of the two employees being retained in employment until such time as the Commission completes its inquiry into the additional matters identified in this decision and makes a determination in that respect. I propose to expedite my consideration of the additional matters. 18 In conclusion, at [84] Boland J made the order which is the subject of this appeal: 84 Pursuant to s 136 and 137 of the Industrial Relations Act , the Commission makes the following orders and directions:

1 Sydney Water Corporation shall not terminate the employment of Mr Tony Bagala and Mr Ronald Austin until further order of this Commission. Sydney Water's Objection under s 173

19 At approximately the same time that Sydney Water filed the present application for leave to appeal, it lodged an objection pursuant to s 173 of the Act to Boland J (as a member of the Commission who had attempted conciliation of an industrial dispute) exercising arbitration powers in relation to the "broader dispute" concerning Sydney Water's injury management policy (as distinct from the "narrow dispute" concerning the threatened dismissal of Messrs Bagala and Austin). 20 Boland J rejected this application on 24 June 2005 in Australian Services Union and Sydney Water Corporation (No 2) [2005] NSWIRComm 211. His Honour held that by 11 April 2005 there could be no mistake that the dispute the Commission was attempting to deal with involved not only the immediate issue of the threatened dismissals of Messrs Bagala and Austin but also the substantive issue of Sydney Water's injury management policy. The certificate of attempted conciliation issued on 20 April 2005 related to the whole dispute pertaining to Sydney Water's injury management policy, not merely to the threatened dismissal (as contended by Sydney Water), and accordingly the broader dispute had moved to the arbitration phase. Rights conferred by s 173 must be exercised before arbitration commences: see the recent decision of the Full Bench in Commissioner of Police and Police Association of New South Wales [2005] NSWIRComm 132 at [17]-[30]). It was too late for Sydney Water to raise an objection under s 173. Leave to appeal 21 Sydney Water seeks leave to appeal the interlocutory order on the following bases:

(a) that the order (and the reasons given by Boland J in support of it) raise serious questions as to the appropriate circumstances in which the Commission will restrain an employer from dismissing an employee; and

(b) questions of this nature are of such importance that, in the public interest, leave to appeal should be granted. 22 Sydney Water submitted that if the interlocutory decision of Boland J was allowed to stand it would serve as a precedent (contrary to existing authority) that employers may be restrained from dismissing employees, even in cases where the remedies available under the Act to those employees were adequate. This, together with the public interest in the threatened use of industrial action in support of a union's application for interlocutory relief, raised substantial issues of principle and law and had wider implications for the jurisprudence of the Commission. Leave to appeal should be granted in accordance with Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380. 23 The Union submitted that leave to appeal should be refused on the basis that the appeal did not raise any substantial issues of principle or law. Sydney Water has not raised any issue as to the Commission's jurisdiction to make the orders; the decision appealed against does not have widespread application; and the appeal has no wider implications for the jurisprudence of the Commission. Sydney Water merely takes issue with the way the test in Castlemaine Tooheys Ltd was applied at first instance. 24 Furthermore, the Union submitted, Sydney Water had appealed an interim order which militated against the granting of leave to appeal: Caltex v Harmer (1999) 92 IR 264 and Broken Hill Chamber of Commerce and CFMEU (NSW Branch) [2002] NSWIRComm 244 in which the Full Bench observed that an appellate court would be loath to interfere with the discretion of a trial judge in an interlocutory decision, particularly where the order is designed to protect the status quo. 25 We agree with Sydney Water that this case raises matters of such importance that, in the public interest, leave to appeal should be granted. The Full Bench recently discussed the power to grant interim orders under ss 136 and 137 of the Act in Re Express Data (A Division of Dimension Data Australia Pty Ltd) and NUW [2005] NSWIRComm 140 at [3]-[4]: 3 In refusing leave to appeal, we propose to make some brief, albeit not exhaustive, observations as to the proper administration of the Commission's dispute settling jurisdiction under Parts 1 and 2 of Chapter 3 of the Industrial Relations Act . The Full Bench gave anxious consideration to whether these proceedings were a proper vehicle to determine authoritatively the approach to be taken when, in the context of the dismissal of an employee or a number of employees, a registered organisation of employees notifies dispute proceedings pursuant to s 130 of the Act and seeks relief, on either an interim or final basis, pursuant to ss 136 or 137. 4 We have come to the conclusion that these proceedings do not provide an appropriate vehicle for these issues to be explored or determined. We have reached this conclusion because of key features of the approach adopted by the parties both at first instance and on the application for leave to appeal. That is, a failure to adequately address as a matter of law and principle, how an application for reinstatement or re-employment by a Union on behalf of its member or members (or an interim application of that kind) under s 136 or s 137 should be approached. Such issues may well require authoritative determination by a Full Bench in a suitable case either on appeal or by reference pursuant to s 193. 26 The presentation of this case to some extent suffers from similar deficiencies to those described in Re Express Data: there was a failure to comprehensively address as a matter of law and principle how the Commission should approach an application for reinstatement or re-employment (or an interim application of that kind) under s 136 or s 137. However, the circumstances of this case, including the matters raised by Boland J as to the connection between the industrial dispute and the threatened dismissal; the circumscribed relevance of the Hill tests; the manner of their application; and evidence of impending industrial action in the absence of the orders sought have persuaded us that this matter provides an appropriate basis for appellate consideration of the issues outlined above, notwithstanding the lack of argument on general principles and the Commission's longstanding reluctance to allow appeals from interlocutory decisions: see Re Express Data at [10]. Grounds of Appeal 27 In its application, Sydney Water enumerated the following grounds of appeal: (i) The Commission erred in holding that the threat of industrial action is a relevant consideration, in favour of granting orders sought by the Respondent. (ii) The Commission erred in its failure to take into account that the provisions under Part 6 and / or Part 7 of Chapter 2 of the Act amount to an adequate remedy. (iii) The Commission erred in holding that whether the Appellant should interfere with existing contracts/contractors to facilitate the temporary or permanent placement of injured workers, is a relevant or appropriate consideration. (iv) The Commission erred by interfering with the Appellant's right to dismiss an employee without first coming to the view that such a dismissal would be harsh, unjust, or unreasonable. (v) The Commission erred in its application of section 163(1)(c) of the Act. (vi) The Commission erred in the application of the legal principles, set down by the High Court of Australia, in Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148, and adopted by the Commission in Hill v Director General of the Department of Education and Training (1998) 85 IR 201, to the facts of this case. (vii) The Commission erred in finding that the 2 Employees would suffer irreparable injury unless the Appellant was restrained from terminating their employment. (viii) The Commission erred in failing to accept that there was available, to the 2 Employees, the subject of the Order, adequate alternative remedies, pursuant to Part 6 and Part 7 of Chapter 2 of the Act. (ix) The Commission erred in its finding that the balance of convenience favoured the granting of the orders sought by the Respondent. (x) The Commission came to a decision which was not reasonably open to it upon the balance of the evidence and the facts. Submissions

Although not stated expressly in the Grounds of Appeal, Sydney Water submitted that Boland J erred in his determination of the first test in Hill - whether there was a serious question to be tried. Boland J identified the "ultimate issue" as the adequacy of Sydney Water's injury management policy. In fact, the real question to be tried was whether the termination of the two employees would be found to be unfair. Further, at [79] of the judgment, Boland J confused the question of "irreparable injury" with "serious question to be tried".

Schmidt J restrained the dismissal of Mr Hill in Hill v Director General of the Department of Education and Training on the basis of an "unusual combination of factors": the irreparable damage which would flow from dismissal (including being placed on the Department's "Not to be Employed List") and the negligible adversity to the Department, given that Mr Hill would not return to classroom teaching (for medical reasons) before the final resolution of the dispute. There are no such unusual factors in the present case.

Boland J erred in finding that Messrs Bagala and Austin would suffer irreparable injury unless Sydney Water was restrained from dismissing them. Examples of irreparable injury include damage to reputation in specialised fields (such as an anaesthetist in Australian Salaried Medical Officers Federation (New South Wales) on behalf of Dhayanithi Sivathondan and South Western Sydney Area Health Service [2002] NSWIRComm 98 and a senior academic staff member in Australian Salaried Medical Officers Federation (New South Wales) on behalf of Professor Bruce Hall and South Western Sydney Area Health Service [2003] NSWIRComm 8) but does not include the financial and personal difficulties associated with being dismissed and having to seek reinstatement and payment for lost income under s 89 of the Act (see Crewsdon v New South Wales Department of Community Service & Anor (No. 9) [2004] NSWIRComm 125; Simon Richard Lane v The Commonwealth Bank of Australia [1999] NSWIRComm 336; and Ellen Ford and WD&HO Wills (Australia) Limited [1999] NSWIRComm 399).

The Union did not put forward any evidence to support a finding that Messrs Bagala and Austin would suffer irreparable injury. In fact, at [79] Boland at first instance held: Clearly, adequate relief is available to Mr Austin and Mr Bagala if they were able to make out a case for reinstatement and such a consideration counts in favour of refusing interim relief. ...

The Commission should not interfere with an employer's right to terminate employment without first having come to the view that the threatened dismissal would be harsh, unjust or unreasonable: Hill at [208]. In this case, not only did the Commission fail to come that view (at [79]); Boland J made the observations commending Sydney Water's treatment of Messrs Bagala and Austin (at [71] and [74], extracted above) which suggest the opposite and which should have weighed against the granting of the orders.

The Commission erred in holding that whether Sydney Water should interfere with existing contractors to facilitate the temporary or permanent placement of injured workers was a relevant or appropriate consideration. Sydney Water should not be encouraged to interfere with its contractual obligations and is entitled to engage contract workers where necessary in accordance with its obligations and objectives under the Sydney Water Act 1994 and as permitted by the Sydney Water Award 2004.

The Commission erred in holding that the threat of industrial action is a relevant consideration in favour of granting the interim dispute orders.

The Commission erred in its application of s 163(1)(c) of the Act. This section does not impose a broad duty to act "according to equity, good conscience and the substantial merits of the case" ( Australian Services Union and Sydney Water Corporation at [68]). The commentary in the Explanatory Memorandum makes it clear that the section prevents the Commission from being bound by legal technicalities or the rules of evidence, neither of which describe the principles in the High Court's decision in Castlemaine Tooheys , followed in Hill . 29 The Union made the following submissions:

In Broken Hill Chamber of Commerce and CFMEU (NSW Branch) (2002) 118 IR 183 the Full Bench refused leave to appeal from an interlocutory order of Sams DP which had been designed to protect the processes of the tribunal in the proceedings before him. In making the orders, Sams DP referred to two decisions of the Australian Industrial Relations Commission ( CSR Ltd and others v Australian National Power Alcohol Company Pty Ltd and Others (1995) [Print M5779] and Maritime Union of Australia and Others v ASP Ship Management Pty Ltd and Another (2002) [Print PR920954]) which embodied the following principle concerning the granting of interlocutory relief: the Commission may make such orders (at least against the parties against whom final relief may be granted) as are needed to ensure the effective exercise of the jurisdiction invoked and to prevent the frustration of its process.

This statement of principle is equally applicable to proceedings before the Commission in the resolution of an industrial dispute and is consistent with the approach of Boland J.

Boland J was not required to apply the test in Castlemaine Tooheys but chose to do so as a guide to the exercise of discretion. Sydney Water's challenge to the application of Castlemaine Tooheys should be considered in that context.

Sydney Water's main complaint - that Boland J erred by incorrectly applying the test in Castlemaine Tooheys - fails to make out an appealable error. The errors alleged in the Grounds of Appeal do not demonstrate any error in the exercise of his Honour's broad discretion; nor do they identify any inadequacy in his Honour's reasons that warrants correction on appeal.

The acknowledgement by Boland J that there was adequate relief available, should the dismissals proceed (and Sydney Water's consequent complaint that there was no irreparable injury), must be read in the context of the dispute that was being considered in the Commission: challenges to the very process followed to effect those dismissals.

His Honour did take into account the availability of reinstatement remedies (at [79]) but considered that other factors outweighed this consideration and determined that the prospect of possible reinstatement was not adequate in the circumstances of the dispute. Remedies under Part 7 of the Act (raised by Sydney Water on appeal) were not argued at first instance.

In any event, the evidence considered by Boland J and referred to in his Honour's interlocutory decision showed, objectively, that if dismissed, both employees would suffer considerable damage with little prospect of mitigation. They were both long-serving employees, who had worked almost their entire lives with Sydney Water, and, injured at 56, have little or no alternative employment prospects. The uncertainty about their employment future had caused considerable distress, particularly to Mr Bagala, whose family depends on his wage. Mr Austin had developed health problems, including headaches and increased blood pressure.

Although Boland J did not make an express finding that the proposed dismissals would be harsh, unjust or unreasonable, his Honour expressed a view (at [81]-[83]) that any dismissal of the employees before the dispute was resolved would give strong grounds for reinstatement. In Hill itself, there was no finding that the proposed dismissal would be harsh, unjust or unreasonable.

The complaint about the question of contractors is misplaced - his Honour only referred to it in the context of the broader dispute, and when addressing the question of whether the dispute gave rise to a serious question to be tried. It did not bear significantly on the exercise of discretion to make the interim orders.

There is no authority to support Sydney Water's contention that the threat of industrial action should not have been taken into consideration. In fact, industrial action is referred to expressly at s 137(2).

The complaint as to the application of s 163(1) of the Act is ill-founded and has no bearing on the outcome of the proceedings. As it happened, his Honour did not modify Castlemaine Tooheys by reference to s 163(1)(c). Consideration

30 In our view, Sydney Water's application (and its submissions) suffer from difficulties arising from their artificial confinement both in relation to the facts, and in relation to legal principle. 31 The proceedings at first instance, arising from the notification of an industrial dispute, are not limited to the fairness of the dismissal of two employees. As Boland J held in Australian Services Union and Sydney Water Corporation (No 2), the arbitration proceedings presently under way relate to the substantive issue of Sydney Water's injury management policy and to the related or contingent issue of the threatened dismissals. Once this is understood, much of the apparent force of Sydney Water's submissions falls away. 32 As to legal principle, we agree with Boland J's circumspection regarding the inflexible application of the Hill tests to dispute orders made under ss 136 and 137. In Hill itself (at 208), Schmidt J recognised that the exercise of power under s 89(7) was not identical to the exercise of power under ss 136 and 137, although similar considerations would be involved. We also agree with his Honour's observations at [65] concerning the history of s 136: [65]...The section, I think, owes its existence to the Parliament's concern, in introducing the Industrial Relations Bill 1995, that the Industrial Relations Act 1991 did not invest power in the Commission, in dealing with an industrial dispute, to reinstate or re-employ any one or more employees who were dismissed in the course of an industrial dispute or whose dismissal resulted in an industrial dispute, other than in accordance with the specific provisions dealing with unfair dismissals in Chapter 3, Part 8 of the 1991 Act: see Woolstar Pty Limited v Federated Storemen and Packers Union of Australia (New South Wales Branch) (1992) 45 IR 39; Hansard, Legislative Council, 23 November 1995, 3851. 33 The Full Court of the Industrial Court of New South Wales examined the history of jurisdiction relating to reinstatement in New South Wales industrial tribunals (a jurisdiction which emanates from statutes) in detail in Woolstar Pty Limited v Federated Storemen & Packers Union of Australia (New South Wales Branch) (1992) 45 IR 39. That case concerned reinstatement under the Industrial Relations Act 1991, which the Court contrasted with reinstatement under the preceding Industrial Arbitration Act 1940. 34 The Full Court held in Woolstar that, unlike the 1940 Act (which conferred power to order reinstatement in both the contexts of conciliated industrial disputes and unfair dismissals), the unfair dismissal provisions in the 1991 Act conferred the sole jurisdiction upon the commission to reinstate a dismissed employee. Although the provisions for dealing with industrial disputes by conciliation empowered the Commission to deal with any surrounding industrial circumstances which may arise in relation to mass dismissals occurring during an industrial dispute (such as the dismissals of approximately 400 workers in Woolstar itself), reinstatement was only available under the unfair dismissal provisions of that legislation. 35 Subsequently, in the second reading speech for the Industrial Relations Bill on 23 November 1995, the Attorney General and Minister for Industrial Relations, the Honourable J W Shaw QC, made the following comments in relation to dispute orders under Chapter 3: Under this bill, the commission may make the following kinds of dispute orders when dealing with an industrial dispute in arbitration proceedings: it may order a person to cease or refrain from taking industrial action; it may order a person to cease a secondary boycott imposed in connection with an industrial dispute; it may order an employer to reinstate or re-employ any one or more employees who were dismissed in the course of an industrial dispute or whose dismissal resulted in an industrial dispute, thus re-investing the commission with its useful pre-1991 Act jurisdiction in this regard. 36 While we agree that the tests formulated in Castlemaine Tooheys as adopted in Hill (on the submissions of both parties) offer some useful guidance for the exercise of power to grant interim orders, it would be wrong to apply, strictly and inflexibly, what are essentially private law and equity principles to the full range of industrial disputes under Chapter 3 of the Act, many of which fall into the realm of a jurisprudence not only more closely aligned to public law but having its own particular features. Industrial disputes may cover a spectrum from what is essentially an isolated, ordinary unfair dismissal case, to an industrial dispute in which dismissals or threatened dismissals are subsidiary, and then to a full-blown collective dispute involving stoppages, lock-outs, and mass dismissals. Across most of the spectrum, there will be factors at play which cannot be accommodated by the Hill tests, and the further the situation approaches the collective dispute at the end of the relevant spectrum, the more strained the application will become. The Hill tests will usually be applicable to applications brought under s 89(7) of the Act. 37 The Commission, in using its powers under the Act to conciliate, arbitrate and generally facilitate the resolution of industrial disputes, is engaged in an undertaking considerably removed from the adjudication of individual civil grievances. In furthering the objects of the Act (including the promotion of efficiency and productivity in the economy of the State and providing for the resolution of industrial disputes in a prompt and fair manner with the minimum of legal technicality), it is vital that the Commission recognise the broad discretion granted by the Act to fashion appropriate relief by reference to the merits of the industrial dispute itself and the steps necessary to resolve it. This will involve a variety of considerations, some of which may include those deriving from private litigation, but more usually will include the public interest in managing the industrial dispute in a fair and just manner with minimum disruption and disputation. 38 The Castlemaine Tooheys tests must be understood in the context of litigation between two individual parties to a private dispute albeit with public law elements, seeking a judicial resolution. In such a context, strict evaluation of the first test in terms of the evidentiary burdens of court proceedings assists the overall integrity of the proceedings by placing a check upon dubious or frivolous claims, claims which are unlikely to succeed and claims which should be concluded at an early stage. But technical evidentiary questions such as whether or not "there is a prima facie case" do not sit as neatly in the context of the arbitration of an industrial dispute by the Commission, charged as it is by the Act with the promotion of various public policies, including those referred to above. 39 In our view, there is no doubt that the essence of the first test (which, in this context, should be posed in terms of whether there is a serious dispute or issue to be resolved between the parties) is satisfied in this case. There was no suggestion that the Union was not genuine in its concerns about the adequacy of Sydney Water's injury management policy and about the potential dismissal of numerous employees (not just Messrs Austin and Bagala) by the application of an allegedly inadequate policy; nor could there be, in our view, given the long-running nature of the dispute and its numerous manifestations before this Commission. These factors also emphasise the genuine nature or enduring quality of the dispute, in the sense the parties themselves have not, to date, been able to resolve it. 40 Moreover, the industrial dispute was broader than an isolated case of unfair dismissal. Boland J rejected Sydney Water's contention that the dispute the subject of the current arbitration proceedings was a "narrow dispute" concerning the threatened dismissal of two employees: as we have already noted, his Honour held in Australian Services Union and Sydney Water Corporation (No 2) that there could be no doubt by 11 April 2005 that the dispute the Commission was attempting to deal with involved not only the immediate issue of the threatened dismissals of Messrs Bagala and Austin but also the substantive issue of Sydney Water's injury management policy. 41 The second Hill test must be treated with much greater caution for this area. While it is relevant to consider "irreparable injury for which damages will not be an adequate compensation" in private law litigation, the preceding discussion makes it abundantly clear that although the second test may well be applicable to orders sought in ordinary unfair dismissal cases pursuant to s 89(7), it will be very unusual for this test to apply to orders sought under ss 136 and 137 in the context of an industrial dispute. As a preliminary point, ss 136 and 137 do not allow for the remedy of compensation. The remedy is confined to either orders preventing a threatened dismissal (s 137(1)(c)) or orders of reinstatement or re-employment (s 137(1)(b).

42 Secondly, but no less obviously, it is difficult to accept that damages could ever be adequate compensation in a case such as this where the threatened dismissal is subsidiary to the dispute: the issue here is rectification of an allegedly inadequate injury management policy (and the consequent prevention of other potentially unfair dismissals pursuant to that policy). How would payment to two individuals by reference to their employment status be likely to constitute an adequate remedy for the collective body represented by the Union seeking to improve a process or remedy an alleged injustice or unfairness within the workplace? 43 Thirdly, the general inapplicability of the second test can be ascertained by reference to the conceptually related inapplicability of any requirement to give an undertaking as to damages (see Dimension Data Pty Ltd v National Union of Workers, New South Wales Branch [2005] NSWIRComm 81 at [9] and [10]. 44 The question of whether this test will have any relevance to the granting of interim dispute orders under s 137 will depend upon the nature, scope, circumstances and potential ramifications of the industrial dispute before the Commission. In this case, we agree with Boland J that the risk of industrial action (should the employees be dismissed) was a matter of significance to be taken into account, and in fact to be accorded considerably greater weight than the availability of remedies to two individuals under s 89 for harsh, unreasonable or unjust dismissal or the nature of those remedies. As we have already noted, the industrial dispute was broader than the fate of Messrs Bagala and Austin. 45 We agree with the observations of Boland J: 63 The proposed terminations have a connection to the subject matter of the dispute because part of the ASU's complaint is that in applying its injury management policy Sydney Water is not making sufficient effort to find suitable employment for injured employees nor is it putting sufficient effort into re-training employees who may have been injured so that they are able to perform work other than pre-injury duties. The ASU contends that if proper efforts had been made by Sydney Water to find suitable employment for Mr Austin and Mr Bagala, or had Sydney Water provided the two employees with re-training, there would be no need to medically retire them. 46 Similarly, it would be inappropriate to limit the broad discretion to grant dispute orders on the basis of the principle contended for by Sydney Water that the power to restrain an employer on an interim basis from dismissing employees should not be exercised unless the Commission had formed the view that the threatened dismissal would be harsh, unjust, or unreasonable. This is, in effect, a variation of the second Hill test of irreparable injury, and should not be accepted in this case for the same reasons. As Boland J noted in the decision under appeal, the fairness or otherwise of the threatened dismissals is inextricably linked to the adequacy of Sydney Water's injury management policy, and that matter - the heart of the dispute - is in the very process of being assessed. 47 It will be clear from the preceding discussion that, in our view, there is no doubt that the third aspect of Hill - the balance of convenience - favoured the granting of the interim order. Sydney Water had refrained from dismissing these two employees for a number of years and was in the process of arbitration to resolve the underlying dispute concerning its injury management policy. The resolution of that broader dispute would necessarily resolve the appropriate policy to apply in determining whether or not it would be appropriate to dismiss Messrs Austin and Bagala or, alternatively, take further steps to secure suitable work for them. In other words, in a comparatively short period of time, the problem could well have been resolved with the imprimatur of both parties and the Commission without the disruption of industrial action or further industrial disputation. On the other hand, in the absence of such orders, Sydney Water proposed to dismiss the two employees in the course of arbitration proceedings despite the threat of industrial action attendant upon such an act. 48 Finally, we reject Sydney Water's submissions concerning s 163(1)(c). We agree with the Union that Boland J did not modify Castlemaine Tooheys by reference to s 163(1)(c) but we would also stress the preceding discussion concerning the importance of modifying the tests in Castlemaine Tooheys and Hill in the context of industrial disputes, depending upon the circumstances of each case, by reference to the objects of the Act, some of which directly overlap with the terms of s 163(1)(c) and the matters referred to by Boland J in the sense of resolving industrial disputes with a minimum of legal technicality, in a prompt and fair manner. Not only are these tenets relevant to the procedure and powers of the Commission in the discrete sense suggested by Sydney Water due to the location of s 163 in Chapter 4 Part 5 of the Act; they influence the operation of the entire Act by their direct inclusion in s 3. 49 In conclusion, we find no appealable error in the manner in which Boland J exercised the broad discretion to grant an interim dispute order restraining Sydney Water from dismissing two of its injured employees at, or near, the centre of an industrial dispute concerning its injury management policy. 50 We make the following orders:

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