Unions NSW v Carter Holt Harvey Wood Products Australia Pty Ltd

Unions NSW v Carter Holt Harvey Wood Products Australia Pty Ltd - [2010] NSWIRComm 152 - NSWIRComm 2010 case summary — Zoe

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6 During the course of the hearing, evidence of a formal kind was given in favour of the application by John Cahill, the General Secretary of the PSA, and Nathan Marlborough Keats, its solicitor, as well as by Troy Wright, an industrial officer employed by the CPSU. 7 Detailed evidence concerning the management and operation of the PSA, its interface with the CPSU and the activities of the PSA in connection with the Department of Corrective Services was given by Mr Stephen Turner, the Assistant General Secretary of the PSA, who also gave oral evidence and was cross-examined on it. 8 The PSA represents the industrial interests of employees of the Crown across many areas, shared, obviously, with other industrial organisations of employees who cover employees in specific areas including, by way of example, teachers, health services, police, fire-fighters and the like. 9 Specifically, as at 1 September 2010, the PSA represented approximately 5,400 members employed in Corrective Services NSW occupying a variety of positions including administrative and clerical officers, correctional officers, psychologists, community monitoring officers, and a number of persons of managerial rank. The PSA has represented the industrial interests of these persons over many years. 10 There are two correctional facilities in New South Wales that are privately operated. The first is Junee Correctional Centre, which is managed by the GEO Group (Australia) Pty Ltd. The PSA does not have coverage at this correctional centre, which reposes in the federal LHMU. The second is the Parklea Correctional Centre which from 1 November 2009 has been managed by the same company as operates the Junee Correctional Centre. 11 As I have previously observed, and as confirmed by Mr Turner in his evidence, the CPSU, the federally registered organisation has constitutional coverage over correctional officers and others employed by GEO Group (Australia) Pty Ltd at the Parklea Correctional Centre. 12 In his evidence, Mr Turner referred also to an understanding that

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[27] The PSA has traditionally provided industrial coverage of employees providing transport of prisoners which have always been operated by the NSW Government through the Department of Corrective Services. In 2009 the Department sought to privatise prisoner escort and court security functions of the Department referred to as Court and Escort Security. During the industrial dispute over this proposal the PSA successfully obtained a recommendation of the Commission that the privatisation not occur. ( Department of Corrective Services and Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales [2009] NSWIRComm 212.) [28] Following the recommendation of the Commission, the PSA participated in a process to find employee-related cost savings within the operation of Court and Escort Security involving delegates and members within that part of the Department's operations. That process successfully identified the required saving and I am not aware of any current proposals to privatise Court and Escort Security. [29] If prisoner transport services were privatised in the future and undertaken by employees not engaged in the New South Wales public service, those employees would be eligible to join the CPSU and have industrial representation provided within the Federal system. [30] It is the prisoner escort and court security functions of the Department that delivers and picks up prisoners from the privatised correctional facilities in NSW. [31] I am unaware of the Transport Workers Union of New South Wales ever seeking to provide industrial representation of employees engaged in providing services relating to the transport of prisoners. The TWU did not object to the alteration of the rules of the CPSU in 2010 so as to provide coverage of persons employed or engaged in work in private correctional facilities or prisoner transport. 14 Evidence was given on behalf of the TWU by Bruce Penton, Assistant State Secretary and Sydney Sub-branch Secretary. It was the evidence of Mr Penton that the TWU has approximately 40,000 members in New South Wales and is affiliated with a federal body, which comprises 85,000 members from the transport industry from affiliated state organisations. The TWU members in New South Wales cover a broad range of persons involved in transport including persons involved in the security industry and, in particular, in the transportation of cash and other valuables. Furthermore, the TWU represents persons employed by or engaged by private sector companies that contract with government for the provision of services such as the waste industry. 15 It was the position of the TWU that its eligibility rules covered persons who were employed or engaged to work in prisoner transport including the provision of security escort services to and from correctional facilities, court and/or hospitals. Furthermore, Mr Penton said:

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25 I have previously set out in summary form the substance of the notice of motion filed by the LHMU. 26 In written submissions, the LHMU explained why it was that it took the course of applying by way of notice of motion rather than raising an argument under s 245(3) of the Act, which is the more usual course of action where there are competing interests of industrial organisations of employees. I have previously set out the provisions of s 245(3). Put shortly, the LHMU emphasised the current state of the industrial relations landscape in Australia. The New South Wales government has, through the provisions of the Industrial Relations (Commonwealth Powers) Act 2009, amended the Act with effect that the Commonwealth Fair Work Act applies to all employees in New South Wales who are private sector employees including employees who are employed by certain State corporations. It was agreed by and between all of the parties to these proceedings, including the applicant PSA, that the persons who were sought to be covered by the eligibility rule would be employed by a private sector employer and thus outside the regulation of the New South Wales industrial system. Accordingly, such persons could not conveniently belong to the objector TWU or, indeed, the LHMU if it were to be an objector, which would render as irrelevant any argument that either sought to raise under s 245(3). I shall return to this aspect when considering the TWU objection because the same considerations will apply to a determination of the case that it has sought to make out. 27 It was the submission of the LHMU that it would be inappropriate to allow the PSA to extend it eligibility rule to cover persons whose industrial interests it could not represent because there was no power or jurisdiction within the State system to affect in any way their working conditions and their employment. These were all matters that would fall under the Commonwealth industrial relations system. 28 In its submissions in reply, the PSA commenced by stating that "the Industrial Relations Act also does not evince any intention that its provisions will not (leaving aside any instance in which they are overridden by federal law) apply to employees covered by federal industrial laws or federal industrial instruments." It cited in support a decision of a Full Bench of the Commission in Unions NSW v Carter Holt Harvey Wood Products Australia Pty Ltd [2006] NSWIRComm 2; (2006) 149 IR 361. In those proceedings, the Full Bench held that the unfair dismissal provisions of the Act permitted the making of orders for reinstatement in favour of employees whose conditions of employment were governed by the Workplace Relations Act 1996 (Commonwealth) and by a federal industrial award. The Full Bench held that there was no implied or express limitation of the relevant provisions of the Act that would confine them so as to exclude their operation to persons who would otherwise be covered by the federal system. The Full Bench also held, in all the circumstances, that there was no relevant inconsistency between the provisions of the Commonwealth legislation and the federal industrial award on the one hand and the provisions of the Act on the other. 29 Adopting the same approach, the PSA submitted that there was no valid reason why it should be concluded that a State registered organisation should not include within its membership eligibility rules coverage of persons whose conditions of employment would be governed by the federal industrial system. 30 In so submitting, the PSA said that it would be entitled to enrol as members persons whose industrial interests fell within the federal industrial system in order to provide comity with its counterpart federal union with whom it was closely associated. 31 Mr Turner, in his evidence, described the federally registered CPSU as being an amalgam of two federal unions, namely the PSU, which traditionally represented Commonwealth public servants, and the SPSF, the State Public Services Federation, which represented persons employed by employers covered by the federal industrial system but who had an historical nexus with New South Wales. He referred to the State Public Services Federation ("SPSF") as being the other federal union that had amalgamated with the PSU to form the CPSU. The prime example of persons who were covered by the former SPSF were persons employed by universities. 32 It was the evidence of Mr Turner that a person who joined the PSA as a member paid the one membership fee. Part of that fee would be paid to the SPSF administration within the CPSU provided that the member indicated that he or she wished to join the CPSU at the time of becoming a member. Thereafter, the PSA collected membership fees for members and referred that portion referrable to federal membership to the federal office. The SPSF part of the CPSU was separately administered and kept separate membership records of those persons whom it represented. 33 Under cross-examination, Mr Turner said that PSA organisers, who also represented the SPSF, had joined up a number of employees at the privately run Parklea Correctional Centre, as members of the SPSF. 34 In written submissions, the PSA said:

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As such, the Industrial Relations Act expressly recognises and envisages that State organisations may include organisations whose coverage will inevitably extend to employees whose employment is generally regulated under federal legislation. No distinction is made in s 217 or anywhere else in the Industrial Relations Act between the employees who constitute the membership of a State organisation and employees who constitute the membership of the federal organisation: Health Services Union [2010] NSWIRComm 107 at [57]. 35 These submissions rely heavily on the judgment of Boland J, President, in Health Services Union, cited in the written submissions. Those proceedings concerned an application by a State registered organisation, the HSU, to change its eligibility rules to include as members the same persons entitled to become members of the counterpart federally registered organisation, also known as the HSU. Another change in the rules sought to introduce uniformity concerning the election of officeholders between a new division of the federally registered HSU and the State registered organisation. These changes were brought about as a result of changes made by the federally registered union. It merged two of its Victorian branches with the existing New South Wales branch of the federal organisation. The existing New South Wales branch had approximately 40,000 members, including 412 who resided in the Australia Capital Territory. The existing Victorian branches had a combined membership of about 17,000 members. 36 The Acting Deputy Industrial Registrar had declined to approve of the proposed change because it had been concluded that registration under the Act was confined to organisations of employees substantially within New South Wales and that it was impermissible to allow a rules change that would result in a significant number of members who were not living and working in New South Wales and in having officers who did not reside in New South Wales. 37 Boland J reviewed the statutory framework in which State organisations were registered and a number of decided authorities dealing principally with the question of relevant territorial nexus. His Honour concluded that there was a sufficient territorial nexus if the State organisation of employees had "a real and substantial connection with New South Wales." (At [60]). In this context, his Honour pointed to the comity between State and federally registered organisations that was inherent within the Act, the provisions of which I have earlier referred to. 38 At [68] his Honour said,

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(c) The PSA and CPSU aim to take advantage of the provisions of s 239 of the Industrial Relations Act which permit the rules of a State organisation to provide for persons elected to offices in a State branch of a federal organisation to be taken to be elected to the corresponding offices in the State organisation. Such provision is only permissible if the membership of the State and Federal organisations is substantially similar: s 239(1)(a). 43 In considering the approach to construction adopted by Boland J in Health Service Union, distinction needs to be made between persons who are eligible for membership of a State registered organisation and the work that can be undertaken by such an organisation on behalf of its members in terms of territorial nexus. There seems to be no reason why a person who is otherwise within the criteria established by the eligibility rules of the State registered organisation may not become a member even if resident outside New South Wales. Whether or not that person will derive any tangible benefit from the membership fees that he or she pays will be another issue. Furthermore, the activities of a State registered organisation may not be strictly confined to participation in the State industrial system. Many State registered industrial organisations provide benevolent resources for members and, indeed, retired members. Many of them engage in activities that are not necessarily strictly industrial in character, such as participation in political campaigns, environmental issues, and the like. Of course there will be activities that will test the bona fide boundaries and limitations of such activities, but it is not necessary to discuss these matters for present purposes. 44 I now turn to a consideration of the argument raised principally by the LHMU to the effect that there is no practical utility in consenting to the proposed rule alteration because any of the persons to be covered would be outside the jurisdiction and power of the State industrial system. In considering this aspect, I shall, for present purposes, ignore the "conveniently belong" argument, which is the subject of the TWU objection. I should add for completeness that in Health Services Union, Boland J was not required to deal with any contrary argument put up by any objector because there was no such objector. Indeed, his Honour referred specifically to this in his reasons for judgment noting, however, that counsel for the applicant organisation had provided contrary arguments for the benefit of the Commission. 45 In the context of the proposed rule change, which I am now considering, the "conveniently belong" argument applies only to the persons covered by the new proposed rule 5(7)(ii), namely prisoner transport. The TWU has not, as I understand it, mounted any "conveniently belong" argument with respect to persons employed or engaged to work in any correctional facility. 46 Apart from the comity argument referred to above, the only basis upon which the Commission might grant consent to the proposed alteration (leaving aside any "conveniently belong" argument) would be directed to the possibility that, in some way, the industrial landscape may change to an extent that would allow the PSA as a State registered organisation to represent the industrial interests of such employees within the State industrial system. Even though the industrial landscape in Australia has changed dramatically over the last five years, any discussion about changes which might bring about such a result would involve pure speculation. There are circumstances where industrial organisations, both State and federally registered, have successfully altered eligibility rules so as to accommodate or anticipate a proposed change in the structure of an employer, an industry or even an industrial system. However, these circumstances in the main have been confined to those where it is reasonably arguable that they will occur. I recollect that the opening of the first gambling casino in Australia created a flurry of activity involving the alteration of the rules of a number of federally registered organisations. At a federal level, it would appear that neither major political party is likely to dismantle the present federal structure. There may be a possibility at State level that the transfer of powers might be reversed but, again, this is only a matter of speculation. 47 This raises squarely the question whether in the interests only of the matter of comity it is appropriate to give consent to the proposed alteration. In considering this, it is necessary to have regard to a number of other matters that were referred to by the parties during the course of submissions on the LHMU motion, which fall outside a strict consideration of the "conveniently belong" argument. 48 It was argued that in considering whether or not consent should be granted to the proposed alteration, it was necessary to take into account the provisions of s 245(2)(b). That is, the alteration must be made consistent with "law". It was submitted by the LHMU that it was impermissible to consent to the alteration if, in doing so, this would result in a breach of the provisions of s 218 of the Act which establish a number of necessary criteria for the registration of an organisation under the Act. Section 218(1) is in the following terms:

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(m) in the case of an organisation of employees - there is no other industrial organisation of employees to which the members of the organisation might conveniently belong. 49 The LHMU submitted that the PSA would not be capable of representing the members whom it sought to now cover by reason of the proposed changed eligibility rule in connection with industrial matters because there would be no jurisdiction or power residing within any State registered organisation. Accordingly, it could not be said that the PSA was capable of representing these members in connection with industrial matters and the eligibility rule should not be extended to cover them. 50 The LHMU also pointed to the provisions of s 218(1)(m) and argued that the employees concerned could conveniently belong to the TWU. Accordingly, this would found a further argument that the grant of consent would be contrary to law because it would offend s 218(1)(m). 51 The word "capable" potentially has two meanings where used in s 218(1). It can refer to the authority at law of an organisation to represent members industrially. It can also refer to the competence of such an organisation to accord representation by reference to its organisational structure, staff, protocols and procedures and the like. It is not necessary that I determine which of the two meanings is applicable. Logically, it is possible that both meanings may be comprehended within the word as used in s 218(1)(c). 52 I would regard the reference to the representation of members in s 218(1)(c) as being a reference to members generally and as not extending to each and every member of the organisation. There will be times when the structure of an organisation will preclude representation of a particular member on each and every occasion or where, by reason of the particular industrial matter, representation is not legally possible. The effect of such an approach is analogous to that adopted by Boland J in Health Services Union, to which I have previously referred. Furthermore, in all the circumstances it would seem appropriate to allow the PSA to extend its eligibility rule so as to assist in the representation process, albeit through the federally registered CPSU, by reason of the comity argument, which was utilised by Boland J in Health Services Union. 53 The application of s 218(1)(m) is, however, a different matter because this essential requirement is replicated within s 245(3). Much of the consideration of this matter will overlap the consideration of the "conveniently belong" argument to which I have earlier referred. It is convenient that I deal with both matters, that is the motion and the objection, together. 54 For completeness, I note that the "conveniently belong" argument relied upon by the TWU only applies to the proposed new rule 5(7)(ii). The "conveniently belong" argument

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Another issue that was raised in relation to s 142 was whether I can consider if a section of the membership of ASMOF can conveniently belong to an already registered organisation or whether I must only consider the position of the membership as a whole. This matter was recently dealt with by a Full Bench of the C&A Commission in Re the Association of Architects of Australia who decided that a section of the membership only can be considered when applying s 142. I respectfully agree with the conclusion of the Full Bench and I will approach this matter on the basis that I can consider whether a section of the membership of ASMOF can conveniently belong to an already registered organisation. (Citations omitted.) 57 The difficulty that I have in considering this aspect of the argument raised by the TWU is that the persons sought to be covered cannot conveniently belong to the TWU being the State registered organisation. As I have now indicated on several occasions, they would be employed in circumstances that are governed by Commonwealth legislation and fall within the jurisdiction of Fair Work Australia. Accordingly, on this basis, these persons could not under the current regime conveniently belong to the objector TWU. However, on the other hand, neither can they be industrially represented by the applicant PSA, in its manifestation as a State registered organisation. The PSA submitted, however, that by applying the comity principle to be found in Health Services Union it was appropriate to extend coverage by the PSA to these persons. 58 The structure of the Act in marking out the respective areas of operation and influence of industrial organisations is to minimise the prospect of any undue competition; hence the use of the "conveniently belong" principle. If I were to extend coverage to the PSA in circumstances where it concedes that it cannot represent the industrial interests of the persons described in the sub-rule and base solely on the comity principle I would, in effect, preclude the TWU from asserting any "conveniently belong" argument if and when circumstances might arise that would create a real and effective state of affairs against which a "conveniently belong" argument might be conducted. In making this observation, I should not be seen to be determining whether the persons concerned might "conveniently belong" to either the PSA or the TWU. The position, put simply, is that no such determination could possibly be made because no person is employed or engaged to work in prisoner transport, including the provision of security escort services to and from correctional facilities, court and/or hospitals, other than within the existing arrangements that have prevailed for many years, and that are clearly within the existing eligibility rules of the PSA. 59 As the PSA conceded, it is not until the creation of some provision for prisoner transport outside the existing operations conducted by the Crown through the Department of Corrective Services that the altered eligibility rule will operate. The nature and structure of any employing entity is, therefore, unknown. The conditions under which persons will perform work are entirely unknown. 60 The situation is identical with respect to the provisions of the proposed rule 5(7)(i). There is no other State registered organisation to which persons employed at Parklea Correctional Centre, being the only other correctional facility that could be the subject of the proposed rule, might conveniently belong because the Parklea Correctional Centre is subject to the federal industrial regime. If the Commission were to allow the PSA to vary its eligibility rule to cover persons whom it could not, in reality, represent industrially, this would foreclose the ability of the LHMU or, indeed, any other relevant organisation to mount an argument at some time in the future, when the issue might become relevant, that the persons concerned could conveniently belong to it. 61 There can be no doubt that the thrust of the Act in dealing with what might be competing claims for eligibility coverage made by State organisations is directed to a determination on the basis of the "conveniently belong" principle. If the application brought be the PSA were granted, it would foreclose any argument that any other organisation might wish to bring based on the "conveniently belong" principle. No such argument is possible currently because in reality the persons sought to be covered could not be represented by the PSA. Furthermore, other than in the case of Parklea Correctional Centre, whether and to what extent other privately operated correctional centres will operate and whether and to what extent prisoner transport will be privately operated are matters of pure conjecture. This does not provide, in my opinion, an adequate basis upon which to determine now whether or not the PSA should be entitled to extend its eligibility rules. 62 The PSA's comity argument fastened on the practical benefits of having persons join the one entity and thereby gaining access to both the State and federal systems. Whilst this will have practical significance for the PSA and CPSU, and will enable some minimisation of operational costs to be achieved, there is no reason why the PSA could not seek to enrol persons as members of the CPSU acting as its agent. No doubt this is what happens in a practical sense at the present time. Conclusion

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Judgment (81 paragraphs)

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