Waterside Workers Federation v Commonwealth Steamship Owners Association

THE COURT This is an appeal against a judgment of this Court of 21 May 1998 in an application made pursuant to s 413 of the Workplace Relations Act 1996 ("WR Act") by Comalco Aluminium Ltd ("Comalco"). The application arose from proceedings in the Australian Industrial Relations Commission ("the Commission") heard by Justice Munro. On 12 December 1990 Comalco notified the Commission of the existence of a demarcation dispute involving the Federated Engine Drivers' and Firemen's Association of Australasia ("FEDFA") and the Australian Workers' Union ("AWU") concerning employees at a mine and related processing facilities at Weipa in northern Queensland. On 19 April 1991 Comalco applied to the Commission for orders under s 118A of the Industrial Relations Act 1988 ("IR Act"). While the IR Act was the name of the WR Act prior to a change of name effected by the Workplace Relations and Other Legislation (Amendment) Act 1996, it is convenient to refer to them as if they were different Acts. The application for orders under s 118A concerned broadly the same issues raised in the notification given on 12 December 1990 though it appears no finding of the existence of an industrial dispute was made by the Commission based on that notification. The absence of a finding is a procedural bar to the exercise of powers to settle the dispute capable of affecting substantive rights and liabilities: see Re Australian Bank Employees Union; Ex parte Citicorp Australia Ltd (1989) 167 CLR 513 at 517. The subsequent proceedings before Justice Munro concerned, in substance, the application for orders under s 118A. On 25 October 1991 Justice Munro made orders under s 118A and published his reasons for doing so: see Re Comalco Aluminium Ltd (1991) 42 IR 336. In those reasons his Honour discussed, at length, the demarcation issues that had arisen in the aluminium and related mining and processing industries involving the FEDFA and AWU. His Honour also discussed the principles that might guide the Commission in exercising the power conferred by s 118A and the application of those principles to the position arising at Weipa. He referred to an earlier judgment he gave on 15 July 1991: Re Queensland Alumina Ltd (1991) 42 IR 304 in which he had discussed at greater length the applicable principles. His Honour's reasons for decision concerning Weipa concluded at 347 with the following: I determine that an order will be made under s 118A(1)(c) of the Act to the effect that FEDFA does not have the right to represent the industrial interests of employees who are eligible for membership of the FEDFA and employed by the company in its operations at Weipa. It will be a condition of the order that for the 1991/1992 financial year a paid up and financial member of the FEDFA as at 25 October 1991 shall as far as practicable be deemed to be a member of the AWU for a period corresponding to the unexpired period of financial membership with the FEDFA, not to extend beyond 29 June 1992. The order made will take effect from 2 December 1991 and shall remain in force for a period of two years. The order will be referred to a designated Presidential Member under s 118A(5) of the Act as I am of the view that the rules of the FEDFA may need to be altered to reflect the order. The order is published in conjunction with a decision as Print KO160. (Emphasis added) It is clear from his Honour's reasons read as a whole that the order he proposed to make was intended to endure. That is, his Honour did not intend that the removal of the representational rights of FEDFA was to be temporary. His Honour does not explain why he specified a period for which the order was to operate but, as will be apparent later in this judgment, his Honour may have proceeded on a mistaken understanding of a provision of the IR Act. The orders his Honour made on 25 October 1991 were: 1. This order shall be known as the "Comalco Weipa Site Organisation Coverage order 1991". 2. Pursuant to the decision recorded in Print K0153 dated 25 October 1991 the Commission orders: (a) That pursuant to section 118A(1)(c) of the Industrial Relations Act 1988 (the Act), The Federated Engine Drivers' and Firemen's Association of Australasia (the FEDFA) does not have the right to represent under the Act the industrial interests of persons otherwise eligible for membership of that organisation and employed by Comalco Aluminium Ltd (the Company) in its operations at Weipa in the State of Queensland. (b) That pursuant to section 118A(5) of the Act that the matter, and in particular this order, be referred to a designated Presidential Member for such further consideration under section 118A(6) of the Act as may be appropriate. (c) That it is a condition of this order binding upon Comalco Aluminium Ltd, The Australian Workers' Union (the AWU) and the Federated Engine Drivers' and Firemen's Association of Australasia that a person who at 25 October 1991 is a financial member of the FEDFA shall be deemed by each party bound by this order to be a member of the AWU, and shall be treated by the Company as a paid up member of the AWU, for a period coextensive with the period of financial membership of the FEDFA paid up for at 25 October 1991, or with a period expiring on 29 June 1992, whichever first expires. (d) That this order shall be binding upon the Comalco Aluminium Ltd, The Australian Workers' Union and The Federated Engine Drivers' and Firemen's Association of Australasia. 3. This order shall take effect on 2 December 1991 and shall remain in force for a period of 24 months. Order 3 gives effect to his stated intention that the orders would operate for 24 months from 2 December 1991. Consistent with order 2(b) the matter, in due course, came before a designated Presidential Member of the Commission, Deputy President Williams. On 27 January 1993 Deputy President Williams made a determination under s 118A(6) altering the rules of the Construction, Forestry, Mining and Energy Union ("CFMEU"). The CFMEU was an organization resulting from the amalgamation, after 25 October 1991, of other organizations including the FEDFA. Deputy President Williams noted in his reasons for decision that the combined effect of s 253V and 253T of the IR Act was that the CFMEU was to be treated as bound by the orders made against FEDFA: see Australian Workers' Union v Federated Engine Drivers' and Firemen's Association of Australasia (1993) 46 IR 66 at 67. Deputy President Williams made the following observation at 71 about what Justice Munro had intended by his decision: [Justice Munro's decision] clearly demonstrates that his Honour was concerned with solving demarcation problems that had existed as between the two unions at this site for some time and with doing so by removing the presence of one of those unions from the site. To achieve that in any "permanent" sense, ie. by a decision or order of the Commission that will continue to operate until amended or reversed, it is necessary for the eligibility rules of CFMEU to be altered. Following this passage, Deputy President Williams set out the alteration to the eligibility rules of the CFMEU excluding from its coverage any person employed by Comalco in its operations at Weipa in the State of Queensland. The alteration to the rules took effect on 27 January 1993. It appears that the decision and orders of Justice Munro and the consequential alteration of the eligibility rules of the CFMEU remained uncontentious until an application was lodged by the CFMEU on 30 May 1997 seeking the consent of a designated Presidential Member under s 204 of the WR Act to an alteration it had made to its eligibility rules. That alteration was to give the CFMEU coverage of employees of Comalco at Weipa other than clerical and administrative employees. Until consent was given under s 204 the alteration made by the CFMEU had no legal effect: see s 204(1) of the WR Act. It appears that this application raised questions about the continued legal efficacy of the orders made by Justice Munro on 25 October 1991. In order to establish their continuing efficacy Comalco made the application to this Court under s 413 of the WR Act which resulted in the judgment leading to this appeal. In its application Comalco sought the following orders: 1. An order that upon its true meaning and intent the order made by the Honourable Mr Justice Munro on 25 October 1991 and known as the Comalco Weipa Site Organisation Coverage Order 1991 is an award or an order affecting an award within the meaning of s.143 of the Industrial Relations Act 1988. 2. A declaration that the said order remains in full force and effect pursuant to s.148(1) of the Workplace Relations Act 1996. When the application was heard in May 1998 the principal focus of the submissions of the parties was whether order 2(a) of the orders made by Justice Munro on 25 October 1991 was an order affecting an award. This issue arose because of the language of s 143(1) of the IR Act which will be considered in detail shortly. The award in question was the Aluminium Industry (Comalco Aluminium Ltd - Weipa) Award 1982 ("the Weipa Award") which was the award applying to the relevant sections of the workforce of Comalco at Weipa on 25 October 1991. At first instance the primary judge concluded that the order made under s 118A(1) had the requisite connection with the Weipa Award and it was an order affecting that award for the purposes of s 143. Accordingly her Honour made an order substantially in terms of the first order sought by Comalco. This conclusion was based on an analysis of various clauses of the Weipa award and how they might be affected by the s 118A(1) orders. This conclusion meant that s 148 of the IR Act would have applied to order 2(a) at the time the two year period was specified in order 3 and order 2(a) would have continued in force by operation of the Act. Whether this is so is the principal point in issue between the parties. The primary judge did not, however, make the second order declaring that the s 118A order continued in force apparently on the footing that the Weipa Award had been superseded by other awards. The orders made by the primary judge were: 1. The order made by Munro J on 25 October 1991 and entitled the Comalco Weipa Site Organisation Coverage Order 1991 is an order affecting the Aluminium Industry (Comalco Aluminium Limited - Weipa) Award 1982. 2. Each party has liberty to apply in relation to any necessary variation of the terms of the order. In order to understand the issues arising in this appeal it is necessary to set out certain provisions of the IR Act at the time Justice Munro made the orders on 25 October 1991. It is by reference to the provisions of the IR Act at that time that the character and legal effect of the orders of Justice Munro are to be determined. It is convenient to start with s 4 which defined various expressions of relevance. Section 4 commenced with the prefatory words: 4(1) In this Act, unless the contrary intention appears: The word "award" was defined in the following terms: "award" means an award or order that has been reduced to writing under subsection 143(1), and includes a certified agreement; It can be seen that the definition contained, relevantly, two elements. The first was that an award in the defined sense must be either an award or an order. The second element was that the award or order must have been reduced to writing in the manner contemplated by s 143(1). Section 4 also defined both a demarcation dispute and an industrial dispute. A demarcation dispute was defined as: (a) a dispute arising between 2 or more organisations, or within an organisation, as to the rights, status or functions of members of the organisations or organisation in relation to the employment of those members; or (b) a dispute arising between employers and employees, or between members of different organisations, as to the demarcation of functions of employees or classes of employees; or (c) a dispute about the representation under this Act of the industrial interests of employees by an organisation of employees; An industrial dispute was defined as: (a) an industrial dispute (including a threatened, impending or probable industrial dispute): (i) extending beyond the limits of any one State; and (ii) that is about matters pertaining to the relationship between employers and employees; or (b) a situation that is likely to give rise to an industrial dispute of the kind referred to in paragraph (a); and includes a demarcation dispute (whether or not, in the case of a demarcation dispute involving an organisation or the members of an organisation in that capacity, the dispute extends beyond the limits of any one State). It can be seen that a demarcation dispute is an industrial dispute and the repeated references in the IR Act to an industrial dispute can be taken to include, subject to any contrary intention, a demarcation dispute. The powers of the Commission to prevent or settle a demarcation dispute were the general powers of the Commission to prevent and settle an industrial dispute. This would have included the power to make a demarcation award in settlement of such a dispute: see R v The Commonwealth Conciliation and Arbitration Commission; Ex parte The Transport Workers' Union of Australia (1969) 119 CLR 529. The definition did not repeat what at one stage was a defined feature of a demarcation dispute and possibly a perceived constitutional requirement to enliven jurisdiction, namely that it be an interstate demarcation dispute: see R v Turbet; Ex parte The Australian Building Construction Employees and Building Labourers' Federation (1990) 144 CLR 335. Apart from the general powers of the Commission to prevent and settle demarcation disputes as a class of industrial dispute, special provision was made, at the time Justice Munro made his orders, for such a dispute in s 118 of the IR Act which provided: 118 In exercising its powers in relation to a demarcation dispute, the Commission: (a) must consider whether it should consult with appropriate peak councils that are representative of organisations representing employees or organisations representing employers; and (b) may consult with appropriate peak councils and, where it does so, must inform the parties to the dispute of any views expressed by those peak councils. In addition to and separate from its general powers to prevent and settle industrial disputes including demarcation disputes, the Commission had power under s 118A to deal with demarcation issues. That section provided: 118A(1) Subject to this section and subsection 202(3), the Commission may, on the application of an organisation, an employer or the Minister, make the following orders: (a) an order that an organisation of employees is to have the right, to the exclusion of another organisation or other organisations, to represent under this Act the industrial interests of a particular class or group of employees who are eligible for membership of the organisation; (b) an order that an organisation of employees that does not have the right to represent under this Act the industrial interests of a particular class or group of employees is to have that right; (c) an order that an organisation of employees is not to have the right to represent under this Act the industrial interests of a particular class or group of employees who are eligible for membership of the organisation. 118A(2) In considering whether to make an order under subsection (1), the Commission: (a) must consider whether it should consult with appropriate peak councils that are representative of organisations representing employees or organisations representing employers; and (b) may consult with appropriate peak councils and, where it does so, must inform the parties to the proceedings under this section relating to the order of any views expressed by those peak councils; and (c) must have regard to any agreement or understanding of which the Commission becomes aware that deals with the right of an organisation of employees to represent under this Act the industrial interests of a particular class or group of employees. 118A(3) An order under subsection (1) may be subject to conditions or limitations. 118A(4) The powers of the Commission under this section are exercisable only by a Full Bench or Presidential Member. 118A(5) Where the Commission makes an order under subsection (1), the Commission must refer the matter to a designated Presidential Member unless the Commission is satisfied that the rules of the organisations concerned do not need to be altered. 118A(6) Where a matter is referred to a designated Presidential Member under subsection (5), the Presidential Member must, after giving each organisation concerned an opportunity, as prescribed, to be heard, determine such alterations (if any) of the rules of any organisation concerned as are, in the Presidential Member's opinion, necessary to reflect the Commission's order. 118A(7) An alteration of the rules of an organisation determined under subsection (6) takes effect on the day on which the determination is made. The history of this section may be stated briefly. The Conciliation and Arbitration (Organizations) Act 1974 amended the Conciliation and Arbitration Act 1904 ("C&A Act") and introduced s 142A which, for the first time, conferred on the Australian Conciliation and Arbitration Commission ("C&A Commission") a power similar to the power conferred by s 118A(1)(a), namely a power to grant an organization a right to represent the industrial interests of a group of employees to the exclusion of another or other organizations. The exercise of that power did not depend on an existing, pending or threatened demarcation dispute. The validity of that section depended on a source of constitutional power other than to provide directly for a mechanism to prevent and settle industrial disputes by conciliation and arbitration: see R v Sweeney; Ex parte Northwest Exports Pty Ltd (1980) 147 CLR 259 at 272-273 and R v Marks; Ex parte The Australian Building Construction Employees' and Builders Labourers' Federation (1981) 147 CLR 471 at 488. Section 142A was amended by the Conciliation and Arbitration (Amendment) Act (No 3) 1977 though the substance of the power was not altered. This amending legislation did, however, expressly provide for the C&A Commission to make an order directing an organization affected by the order to alter its rules to reflect the order. When the IR Act was enacted in 1988, and repealed the C&A Act, s 118 of the IR Act conferred on the Commission a power to make an order of the type that could have been made under s 142A though, of some present significance, the power was expressed to be exercisable to prevent or settle a demarcation dispute. That had not been a feature of s 142A. However in January 1991 the Industrial Relations Legislation (Amendment) Act 1990 introduced into the IR Act s 118A which conferred a power similar to that which had been s 142A though the nature of the orders that might be made and the scheme under which they were given effect to was expanded and modified. However the exercise of the power under s 118A(1) was not conditioned on the existence of an actual or pending demarcation dispute nor was the order made to settle or prevent such a dispute. Both at first instance and on appeal in these proceedings a central question was the true character of an order made under s 118A(1) in October 1991. In particular, the issue was whether it was an order on which s 148 of the IR Act operated with the effect that it continued in force beyond the period nominated in a related order. Section 148 is found in Division 6 of Part VI of the IR Act. Division 6 contained several provisions concerning awards and orders of the Commission. It is desirable to set out several of them: 143(1) Where the Commission makes a decision or determination that, in the Commission's opinion, is an award or an order affecting an award, the Commission shall promptly: (a) reduce the decision or determination to writing that: (i) expresses it to be an award; (ii) is signed by at least one member of the Commission; and (iii) shows the day on which it is signed; and (b) give to a Registrar: (i) a copy of the decision or determination; and (ii) a list specifying each party who appeared at the hearing of the proceeding concerned. 143(2) Where the Commission makes a decision or determination: (a) that, in the Commission's opinion, is not an award; but (b) in relation to which either of the following subparagraphs applies: (i) the decision or determination is a decision or determination from which an appeal may be made to a Full Bench; (ii) the decision or determination is, in the Commission's opinion, otherwise so significant that it should be made available in writing; the Commission shall promptly: (c) reduce the decision or determination to writing that: (i) is signed by at least one member of the Commission; and (ii) shows the day on which it is signed; and