Virtue v New South Wales Department of Educati

LEGAL REPRESENTATIVES: RESPONDENT Mr P Newall of counsel Solicitors: Mr S Skyring PriceWaterhouseCoopers

JUDGMENT: - 5 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

NOTIFICATION UNDER SECTION 130 BY NEW SOUTH WALES LOCAL GOVERNMENT, CLERICAL, ADMINISTRATIVE, ENERGY, AIRLINES AND UTILITIES UNION OF A DISPUTE WITH SYDNEY CITY COUNCIL AND OTHERS

1 On 23 April 2003 the New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union ("United Services Union" or "USU" - previously the Federated Municipal and Shire Council Employees' Union of Australia, New South Wales Division) notified the existence of an industrial dispute under s 130 of the Industrial Relations Act 1996 involving, principally, the Council of the City of Sydney. It was alleged that the Council had refused to protect conditions of employment for employees transferring from Leichhardt and South Sydney Councils consequent upon the provisions of the Local Government Amendment (Amalgamations & Boundary Changes) Act 1999 and a Proclamation made under the Local Government Act 1993 in a Special Supplement published in the Government Gazette dated 19 February 2003 regarding amalgamation and boundary changes affecting the three Councils. The transfers were to take effect from 8 May 2003.

2 The dispute was allocated to Deputy President Grayson who conducted conciliation proceedings in an attempt to resolve the dispute. On 2 May 2003 the Minister for Local Government, the Honourable Tony Kelly MLC, made two Determinations pursuant to the Governor's Proclamation published on 19 February 2003 relating to the transfer of staff between Leichhardt Council and the City of Sydney Council and South Sydney Council and the City of Sydney Council. Those Determinations, at least from the perspective of the USU, appeared to resolve the majority of the issues between the parties. On 7 May 2003 Grayson DP was informed of the Minister's Determinations and made a Recommendation aimed at resolving certain outstanding issues apparently not addressed in the Determinations.

3 Further conciliation proceedings occurred on 6 and 11 June. On 4 July the USU asked that the matter be re-listed and further conciliation ensued. The issue essentially concerned directions to former employees of Leichhardt and South Sydney Councils to alter their work arrangements. In particular, former employees of South Sydney Council employed in the domestic waste section who had previously enjoyed an arrangement called "job and finish" were directed to carry out other work after completing their daily collection runs. Job and finish is an arrangement whereby the employees, once they had finished their collections, would finish work for the day, regardless of the time, and be paid for the full shift. The USU maintained that it was their understanding, and the understanding of their members, that upon transfer to the Sydney City Council none of the employees' employment arrangements would change for a minimum of three years and that the Minister's Determinations confirmed that to be the case. The City Council appears to have taken the view that the freeze on current working arrangements arising out of the Proclamation and the Minister's Determinations related only to terms and conditions dealt with in an industrial instrument and not to matters governed by individual contracts of employment.

4 Since about 3 July 2003 employees who have continued to work in accordance with the job and finish arrangements have had their pay docked at the rate of about four to six hours pay per day.

5 On 8 July 2003, Grayson DP made a further Recommendation to the effect that the Sydney City Council preserve the job and finish arrangements consistent with the Minister's Determinations. His Honour noted that the City Council had indicated that it was unlikely to accept the Recommendation but, nevertheless, he exhorted the Council to seriously consider its position in that regard. On the same date Grayson DP issued a certificate of attempted conciliation pursuant to s 135(2) of the Industrial Relations Act 1996.

6 On 10 July the USU filed an application for orders to be made as follows: 1) The Council of the City of Sydney together with employees and agents of the Council be restrained from changing the terms and conditions of employment of employees transferring to the Council of the City of Sydney from South Sydney and Leichhardt Councils including the practice of job and finish.

2. That the Council of the City of Sydney together with the employees and agents of the Council cease the docking of transferred employees' wages where job and finish arrangements are worked.

3. That the Council of the City of Sydney together with employees and agents of the Council cease to give unlawful and unreasonable directions to employees concerning the performance of duties falling outside current job and finish arrangements, including: a. Directions requiring employees transferred from South Sydney Council to tip a second garbage load; b. Directions requiring employees to wash trucks at the conclusion of their garbage runs; c. Directions requiring employees to attend to additional "dumps" beyond those ordinarily attended to during the employees' garbage runs; d. The requirement for employees to alter shift commencement times from 5.30am to 6.00am; e. The requirement for employees to remain on duty until 2.30pm. f. The requirement for employees to take unpaid meal breaks. g. The requirement for employees to make up sulo bins and other miscellaneous duties at the conclusion of the employees' runs.

4. That the Council of the City of Sydney together with employees and agents of the Council be restrained from restructuring the garbage runs for transferred employees and maintain the existing trucks, plant and equipment within the existing garbage runs.

5. The abovementioned orders be made against the Council of the City of Sydney together with its employees and agents including General Manager Robert Domm, Manager Employee Relations Christopher Saunders, Director Living City Services Gary Harding, Manager Waste and Cleansing Services Les Simons, Waste Services Coordinator Peter Cheney, Team Leader John Mousley, Dave McDonald and Peter Calarco.

7. The Union makes application for interim orders to be effective immediately pending a full hearing.

7 On 15 July, solicitors for the City Council advised Grayson DP that pursuant to s 173 of the Act the Council objected to his Honour dealing with the USU's application by arbitration. His Honour referred the file to me. On 16 July I listed the matter for directions and indicated to the parties that I would hear the application the following day.

8 On 17 July Mr P Newall of counsel for the City Council indicated that he had a jurisdictional objection to the application in that the Commission had no power to make the orders sought either under s 136 or s 137 of the Act or under any other provision of the Act. Given the material that had been filed in the proceedings, including affidavit material filed by the USU as to the nature of the dispute and the actions being taken by the respective parties, I considered I was in a position to hear argument relating to jurisdiction and determine it as a threshold issue. See Virtue v New South Wales Department of Education and Training (1999) 92 IR 428 at 448.2.

9 Mr B Kruse appeared for the USU. Mr Kruse's primary contention was that the City Council was engaged in industrial action against the USU and its members and that it was open to the Commission to make dispute orders, including interim dispute orders, under s 137(1)(a) of the Act in the form of the orders in his application. In the alternative, Mr Kruse submitted that orders were available under s 136(1)(d) or, in the further alternative, the Commission could make directions under s 136(1)(a) or take action under s 136(2).

10 It was Mr Newall's submission that there was no industrial action, thus no orders were available under s 137; that the orders sought were not orders of the kind authorised by s 136(1)(d); that it would be fruitless making any further recommendations pursuant to s 136(1)(a); and, that s 136(2) referred to actions and not orders that the Commission might take.

11 Sections 136 to 139 of the Act provide as follows: 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. Note. Examples of other kinds of orders the Commission may make are orders for secret ballots (section 172), a demarcation order under Part 6 of Chapter 5 and stand-down orders (section 126). 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. Note. See also claim for remedy under Part 6 of Chapter 2 (Unfair dismissals). 138. Making of dispute orders (1) A dispute order may be made only against: (a) a party or likely party to the industrial dispute, or (b) a member, officer or employee of an industrial organisation that is such a party or likely party, or (c) a person engaged, or likely to be engaged, in a secondary boycott in connection with the industrial dispute. (2) A dispute order: (a) must clearly identify the persons against whom the order is made and who are bound by the order, and (b) must state a time within which the order is to be complied with or state a period during which it remains in force, and (c) may be varied or revoked by the Commission at any time. (3) If an employee is reinstated or re-employed under this Part, the Commission may order that the period of employment of the employee with the employer is taken not to have been broken by the dismissal. 139. Contravention of dispute order (1) The Commission, on application, must deal expeditiously with an alleged contravention of a dispute order. The application may be made by the person who applied for the order or any other person who was authorised to apply for the order. (2) Before dealing with an alleged contravention of the order, the Commission is required to summon the person alleged to have contravened the order to show cause why the Commission should not take action for the contravention. (3) The Commission may, after hearing any person who answered the summons to show cause and considering any other relevant matter, do any one or more of the following: (a) dismiss the matter if it finds that the dispute order was not contravened or if it finds that the circumstances were such that the Commission should take no action on the contravention, (b) cancel the approval of an enterprise agreement, (c) suspend or modify for any period all or any of the entitlements under an industrial instrument, (d) cancel the registration of an industrial organisation or take any other action authorised by Division 2 of Part 3 of Chapter 5, (e) impose a penalty on an industrial organisation or an employer as provided by subsection (4), (f) make any other determination that the Commission considers would help in resolving the industrial dispute. (4) The maximum penalty that may be imposed on an industrial organisation or employer is: (a) except as provided by paragraph (b)---a penalty not exceeding in total $10,000 for the first day the contravention occurs and an additional $5,000 for each subsequent day on which the contravention continues, or (b) if a penalty has previously been imposed on the industrial organisation or employer for a contravention of an earlier dispute order---a penalty not exceeding in total $20,000 for the first day the contravention occurs and an additional $10,000 for each subsequent day on which the contravention continues. (5) Any such penalty may be recovered in the same way as a penalty imposed by the Commission for an offence against this Act. Note. The jurisdiction of the Commission under this section is exercisable only by the Commission in Court Session.

12 Industrial action is defined in the Dictionary to the Act as follows: "industrial action" means a strike by employees or a lock-out by an employer, and includes: (a) a practice relating to the performance of work, adopted in connection with an industrial dispute, that restricts, limits or delays the performance of work, or (b) a ban, limitation or restriction affecting the performance of work, or the offering or acceptance of work, that is adopted in connection with an industrial dispute, or (c) any failure or refusal in connection with an industrial dispute to attend for work or to perform work, but does not include any action taken by employees with the agreement of their employer or any action taken by employers with the agreement of their employees.

13 It was contended by Mr Kruse that: (i) Because the City Council would not allow the employees to "clock on" before 6.00 am and their normal starting time was 5.30 am this was a lockout and, therefore, industrial action within the meaning of the Act; and (ii) The unilateral withdrawal of the job and finish arrangement was a "restriction affecting the performance of work". Consequently, it was contended, the City Council was engaging in industrial action.

14 Because of the urgency with which I have been requested to deal with this matter there has not been sufficient time to give full treatment in this decision to the scope and meaning of industrial action as it is defined in the Act. However, I do not consider the Council's direction to start at 6.00 am as opposed to 5.30 am constitutes a lockout. A lockout may be taken to mean the closing of a place of employment, or a suspension of work, or refusal by an employer to continue to employ any number of its employees to compel those employees to accept terms of employment. See definition of lockout under Industrial Arbitration Act 1940. What the City Council is seeking to do is fix starting times in accordance with its mode of operation and in accordance with what it considers, rightly or wrongly, to be the terms of the relevant award. The City Council is not locking out employees by directing them to adjust their starting times.

15 As for the contention that withdrawal of the job and finish arrangement is a "restriction affecting the performance of work" and, therefore, constitutes industrial action by the City Council, I cannot agree. What the Council is seeking to do, again rightly or wrongly depending on how the terms of the Proclamation and subsequent Ministerial Determinations are to be interpreted, is to overturn the practice of job and finish and to direct domestic waste employees to adopt work arrangements wholly consistent with the terms of the relevant award. A direction to work in accordance with the terms of an award cannot constitute a lockout by an employer in the form of a restriction affecting the performance of work.

16 Even if the City Council's actions could be considered to be industrial action, the orders sought by the USU are not orders that might be made under s 137 of the Act. In shorthand terms, the orders sought were as follows: Order 1: An order restraining the Council, etc., from changing terms and conditions of employment. Order 2: An order that the Council, etc., cease docking wages. Order 3: An order that the Council, etc., cease giving unlawful and unreasonable directions to employees. Order 4: An order restraining the Council, etc., from restructuring garbage runs. Order 5: That the orders be made against the Council and certain specified persons. Order 6: That the orders remain in force until 8 May 2006. Order 7: That the Commission make interim orders.

17 With the exception of Orders 5 and 6, which may be regarded as merely incidental or ancillary, none of the orders sought are orders of the kind specified in s 137. See Transport Workers' Union of Australia, New South Wales Branch and Chubb Security Services Ltd [2001] NSWIRComm 248. See also Notification under s 130 by the NSW Department of Community Services of a dispute with the Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales re work bans [200] NSWIRComm 66 regarding interim orders.

18 The USU referred to s 136(d) of the Act. As Schmidt J observed in Notification under section 130 by the New South Wales Teachers Federation of a dispute with the Department of Education and Training re casual teacher [2003] NSWIRComm 145 at pars [31] and [32]: 31 While the Commission undoubtedly has very wide powers to deal with disputes notified under s130 of the Act, in arbitration it is not empowered to make any kind of order which might seem just in the circumstances of the particular case. In this respect, the power stands in contrast to predecessor legislation, such as s25 of the Industrial Arbitration Act 1940, where, for example, orders or awards could simply be made about 'industry disputes'. Section 136 contains a more restricted power.

32 Apart from dispute orders, s136(1)(d) contemplates the making of various types of orders which the Commission is 'otherwise authorised to make'. This includes orders of reinstatement, re-employment and compensation under s89, in relation to unfair dismissal; orders for reinstatement of injured workers under s94; even demarcation orders under s294.

19 The Commission as constituted has no power to make the orders of an injunctive nature sought by the USU pursuant to s 136(1)(d) of the Act. As to the alternative of making a recommendation under s 136(1)(a), the City Council has already demonstrated that it is not prepared to comply with such a recommendation. Consequently, I do not propose to indulge in the futility of making a further recommendation and see it rejected. 20 The application by the USU for orders in this matter is refused.

21 This leaves the matter in quite an unsatisfactory state. Employees are losing wages and the employer has refused to comply with a recommendation of the Commission aimed at resolving the dispute. It seems that the employer is content to rely on what it regards as its rights under the relevant industrial instruments and notwithstanding the obvious discontent - and loss of wages - that is causing within its workforce, is not presently contemplating seeking any further assistance from the Commission in resolving the matter.

22 There are a range of options open to the USU under the Act to obtain relief if, in fact, such relief is available. However, it is not for me to provide advice on those options. That is a matter for the USU. The Commission grants liberty to either party to have the matter re-listed at short notice.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.