Yatras and another v Moraitis Administration

Industrial Relations Commission (NSW)|2004-01-12|Before: Staff J, Mr P

Industrial Relations Commission of New South Wales in Court Session

CITATION : Yatras and another v Moraitis Administration (NSW) Pty Ltd and others [2004] NSWIRComm 391 APPLICANTS/RESPONDENTS ON MOTION Dianne Yatras and Anthony Yatras

PARTIES : RESPONDENTS/APPLICANTS ON MOTION Moraitis Administration (NSW) Pty Limited (First Respondent) Nicholas Moraitis (Second Respondent) Moraitis Fresh Packaging (NSW) Pty Limited (Third Respondent) FILE NUMBER: IRC 7315 of 2003 CORAM: Staff J CATCHWORDS : Unfair contract - Interlocutory application - Notice of motion seeking dismissal of summons under s 106 of the Industrial Relations Act 1996 - Application of s 108B of Industrial Relations Act 1996 - S 108B applied to summons for relief - Summons dismissed Practice and procedure - Interlocutory application - Notice of motion seeking dismissal of summons under s 106 of the Industrial Relations Act 1996 - Application of s 108B of Industrial Relations Act 1996 - S 108B applied to summons for relief - Summons dismissed Industrial Relations Act 1996 LEGISLATION CITED : Industrial Relations Amendment (Unfair Contracts) Act 2002 Interpretation Act 1987 Attorney-General for the State of Queensland v Australian Industrial Relations Commission, Minister for Employment and Workplace Relations (C'th) v Australian Industrial Relations Commission (2002) 213 CLR 485 Aveling v UBS Capital Markets Australia Holdings Ltd [2004] NSWIRComm 261 Commander Australia Limited v Kerr (2004) 134 IR 160 Crowe v UCS Developments Pty Ltd, (2003) 130 IR 266Kennedy v Contract Transport Solutions Pty Ltd [2003] NSWIRComm 158 CASES CITED : Larsen v Ondeo Nalco Australia Pty Ltd [2004] NSWIRComm 123 Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd & Ors (1991) 28 NSWLR 443, 39 IR 169 Maxwell v Murphy (1957) 96 CLR 261 Nagle (T/as W D & J L Nagle & Sons) v Tilburg & Anor (1993) 51 IR 8 Virtue v New South Wales Department of Education and Training (1999) 92 IR 428 Youry Dawidar v One Steel Wire Pty Ltd and another [2004] NSWIRComm 372 HEARING DATES: 12/01/2004 DATE OF JUDGMENT: 12/16/2004

APPLICANTS/RESPONDENTS ON MOTION Mr S Prince of counsel Solicitor: Mr W Szekely Szekely & Associates LEGAL REPRESENTATIVES: RESPONDENTS/APPLICANTS ON MOTION Mr P Newall of counsel Solicitor: Mr R Cameron Hicksons

JUDGMENT: 1 INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

DIANNE AND ANTHONY YATRAS v MORAITIS ADMINISTRATION (NSW) PTY LIMITED AND ORS

Application under s 106 of the Industrial Relations Act 1996 JUDGMENT [2004] NSWIRComm 391

This judgment deals with a specific and discreet issue raised by the respondents in respect of a summons for relief filed by the applicants Dianne and Anthony Yatras pursuant to s 106 of the Industrial Relations Act 1996 (NSW) ("the Act"). 2. The respondents, by notice of motion filed on 2 June 2004 contend that s 108B of the Act prevents the Commission from making the orders sought in the summons on the basis that: The application was made later than 12 months after the termination of the contracts (s 108B(1)); and The Commission does not have jurisdiction to extend time for making any such application or to accept an application made out of time (s 108B(2)). 3. It was common ground, for the purposes of dealing with the notice of motion that: a) the applicants' employment was terminated by the respondent on 24 August 2001 and 10 September 2001 respectively; b) it was appropriate to determine the matter raised in the notice of motion as a preliminary matter: Nagle (T/as W D & J L Nagle & Sons) v Tilburg & Anor (1993) 51 IR 8; Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd & Ors (1991) 28 NSWLR 443; 39 IR 169; Virtue v New South Wales Department of Education and Training (1999) 92 IR 428; c) section 108B was inserted into the Act with operation on and from 24 June 2002; d) the summons for relief under s 106 of the Act was filed on 19 December 2003. Statutory Provisions 4. It is relevant to set out the provisions of s 108A and 108B which are in the following terms: 108A Employment contracts in respect of which applications cannot be made (1) An application cannot be made for an order under this Division if the application relates to a contract of employment under which: (a) a remuneration package that exceeds the remuneration cap is paid or received (or is payable or receivable) during the period of 12 months immediately before the application is made (or, if the application concerned relates to a contract that has been terminated, immediately before the termination), or (b) a remuneration package is paid or received (or is payable or receivable) during a period of less than 12 months immediately before the application is made (or, if the application concerned relates to a contract that has been terminated, immediately before the termination) that would, if the remuneration package had been paid or received (or been payable or receivable) for a period of 12 months, have exceeded the remuneration cap. (2) An application cannot be made for an order under this Division by a person who is a partner carrying on a business if: (a) the application relates to a contract between that partner and the other persons carrying on that business in partnership, and (b) the share of the net profits, or payments contingent on the net profits, of the business that are paid to or received by (or payable to or receivable by) the applicant during the period of 12 months immediately before the application is made (or, if the application relates to a contract that has been terminated, immediately before the termination) exceed: (i) $200,000, or (ii) if an amount is prescribed for the purposes of paragraph (b) of the definition of "remuneration cap" in subsection (3) - that amount. (3) In this section: contract of employment means any contract or arrangement under which work is done by a person in the capacity of an employee, and includes a related condition or collateral arrangement with respect to such a contract. employment benefit means a benefit provided to an employee at the cost of his or her employer (being a benefit of a private nature) and, without limitation, includes: (a) contributions payable to a superannuation scheme by an employer in respect of the employee, including any liability of that employer to make any such contributions or to pay costs associated with that scheme, or (b) the provision by an employer of a motor vehicle for private use by the employee, or (c) any other benefit prescribed by the regulations for the purposes of this definition. monetary remuneration includes any performance-related bonus or incentive payment. remuneration cap means: (a) $200,000, except as provided by paragraph (b), or (b) any greater amount prescribed by the regulations (being a regulation that increases the amount by reference to increases in the amount referred to in section 83 (1) (b)). remuneration package means the total value of monetary remuneration and employment benefits payable or receivable under a contract of employment. 108B Time for making application (1) An application for an order under this Division in relation to a contract that has been terminated must be made not later than 12 months after the termination of the contract. (2) The Commission does not have jurisdiction to extend the time for making any such application or to accept an application made after the time prescribed by subsection (1). Submissions of the Parties 5. Mr P Newall, counsel for the respondents, the applicant on the notice of motion, submitted that the Full Bench's reasoning in Aveling v UBS Capital Markets Australia Holdings Ltd [2004] NSWIRComm 261, which considered the meaning of s 108A, was correct. It followed that s 108B was also intended to operate from 24 June 2002 and that a summons could not be filed in respect of contracts of employment which were terminated more than 12 months from the date of filing. The Commission, in such circumstances, was deprived of jurisdiction to entertain the summons. Section 108B(2) precluded the Commission of jurisdiction to extend the time for the making of any such application. 6. Mr S Prince of counsel who appeared for the applicants submitted that the decision in Aveling did not have application in respect of s 108B and anything said by the Full Bench in respect of s 108B must be obiter and not binding. Mr Prince acknowledged that if the reasoning in Aveling was binding on this Court in respect of s 108A, and I accepted the submissions of the respondent that s 108A and s 108B are indistinguishable, then I was bound by the reasons given in Aveling to dismiss the application. Counsel then sought to distinguish s 108B from s 108A. Counsel argued that the applicants had accrued rights in August and September 2001 respectively to commence proceedings without any relevant time restriction and that, on the basis of the ordinary rules of construction, relying particularly on Maxwell v Murphy (1957) 96 CLR 261, that right remained unaffected by the later amendment, given the absence of any express intention that the amendment was to have retrospective effect. Counsel also relied upon s 30 of the Interpretation Act 1987 which creates a presumption against the retrospective operation of statutes. 7. Neither counsel referred to Larsen v Ondeo Nalso Australia Pty Ltd [2004] NSWIRComm 123 where Marks J considered the construction of s 108B. Decisions where Section 108A and Section 108B Considered 8. The Industrial Relations Amendment (Unfair Contracts) Act 2002 which introduced s 108A and s 108B and took effect from 24 June 2002, has been considered by three judgments at Full Bench level. Those judgments are: Aveling, Crowe v UCS Developments Pty Ltd; (2003) 130 IR 266 and Commander Australia Limited v Kerr (2004) 134 IR 160 each of which are binding upon single Members of this Commission. 9. In Crowe the Full Bench considered the effect of s 108B on proceedings commenced prior to 24 June 2002 and, in particular, the effect of s 108B on an application seeking to amend proceedings which were already on foot to add additional respondents, in circumstances where more than 12 months had elapsed following the termination of the contract to which the proceedings related. 10. The Full Bench in their deliberations referred to a judgment of the High Court in Attorney-General for the State of Queensland v Australian Industrial Relations Commission; Minister for Employment and Workplace Relations (C'th) v Australian Industrial Relations Commission (2002) 213 CLR 485 in which the High Court considered many of the issues which arise from the enactment of amending legislation, including the effect of the change upon existing rights, liabilities, claims or proceedings. The Full Bench in Crowe stated at [39], [40]: [39] On its face, s 108B has the effect of imposing a time limitation on the filing of a summons seeking relief in respect of a particular or identifiable contract. That is, on and after 24 June 2002, a summons cannot be filed in the Court seeking relief under s 106 "in relation to a contract" terminated more than 12 months prior to the filing of the summons and there is no jurisdiction to extend the time so limited. [40] Although there are well known principles of construction which would point against giving any retrospective effect to the amendment made by s 108B, to apply that principle broadly would result in s 108B applying only to contracts terminated on and after 24 June 2002. Whilst we consider that there may be some difficulties with such a construction, it is unnecessary to deal with this matter on that precise basis as it was not in issue that both the substantive proceedings and the notice of motion seeking to join additional respondents were filed prior to the commencement of s 108B. 11. The Full Bench reached the conclusion that the 2002 amendments did not affect the application to amend because: [55] ... [T]he application to amend the summons and the proposed amended summons do not constitute a fresh application for an order, but are in substance an amendment to an application for an order made under s 106(1) prior to s 108B coming into effect. The amendment sought and, if granted, the resulting amended summons are therefore not precluded by s 108B. [56] There may be circumstances in which an amendment to an original application may be so substantial or its nature such as to warrant the conclusion that it could be characterised as an application for an order caught by s 108B. That is not the situation here. 12. Their Honours made the following observation at the end of the judgment of Crowe at [63] which is pertinent to these proceedings: We would emphasise, as we have done, that the operation of s 108B is a question of statutory construction which, as with any issue of construction, may often be resolved by ascertaining the intention of the legislature from the express words of the instrument viewed in their context. 13. The present issue, regarding an application for relief under s 106 of the Act filed more than 12 months after the contract of employment was terminated was not considered in Crowe. 14. In Kerr, the Full Bench considered the effect of s 108A(1)(a). 15. In considering the relevant approach to statutory construction, the Full Bench referred what they had said in Crowe at [63] (referred to above) and stated at [35],[36]: [35] ... First, to paraphrase what was said in the recent Full Bench judgment of this Court in Crowe v UCS Developments Pty Ltd [2003] NSWIRComm 234 at [63], albeit in respect of another part of the 2002 amending legislation (s 108B), the operation of the relevant provision is a question which, as with any issue of construction, may often be resolved by ascertaining the intention of the legislature from the express words of the instrument viewed in their context.

[36] Second, a statutory provision must not be construed in isolation but in the context in which it appears as part of the whole instrument. Third, courts are obliged by statutory injunction to prefer a construction which would promote the purpose of a statute to one which would not. Fourth, the requirement to look to the purpose or object of the statute transcends the former obligation to adopt the traditional mischief or purpose rule in preference to the literal rule of construction because the earlier rule required the identification of an ambiguity or inconsistency before the court could have regard to purpose. Further, if the language of the statute or statutory provision is not ambiguous or uncertain, the court will apply its ordinary and grammatical meaning unless to do so will give the statute an operation that was obviously not intended: Mills v Meeking [(1990) 169 CLR 214] at 223. 16. Later, in Kerr the Full Bench stated at [39]. [39] In Crowe v UCS Developments Pty Ltd the Full Bench referred to the Explanatory Memorandum to the Industrial Relations Amendment (Unfair Contracts) Act 2002. It is plain that reference to extrinsic material, such as parliamentary debates and papers, is permissible in the process of statutory interpretation: see s 34 of the Interpretation Act 1987. The intention of the Bill and of the Explanatory Memorandum to the Bill was considered in Crowe v UCS Developments Pty Ltd at [34] in the following way: Section 108B was enacted as part of the amendments made to the Industrial Relations Act by the Industrial Relations Amendment (Unfair Contracts) Act 2002 which took effect on 24 June 2002. The intention of the amending Act in relevant respects is reasonably plain on its face. It was intended that applications seeking orders directed towards contracts of certain identified types and satisfying certain conditions, should be removed from the scope of the unfair contracts provisions of the Act; namely, those applications which seek to vary or avoid contracts (as defined) providing a remuneration package that exceeds an identified "remuneration cap", or those which seek an order to vary or avoid the terms of certain kinds of partnership agreements. The amending Act also required that any application for an order under s 106(1) be brought within 12 months of the termination of the relevant contract or arrangement. Those observations seem to be confirmed by the objects of the amending Act, identified in this way in the Explanatory Memorandum to the Bill: (a) to prevent an application being made to set aside or vary a contract of employment by the making of an unfair contract order if the remuneration package paid or receivable under the contract during the 12 months preceding the application (or, if paid or receivable for a shorter period, that would have been paid or receivable if converted to an annual basis) exceeds $200,000 (or a greater indexed amount), and

(b) to prevent an application being made to set aside or vary a contract between partners in a partnership by the making of an unfair contract order, and

(c) to require the Commission to take into account whether or not an applicant (or person on behalf of whom an application is made) took any action to mitigate loss in assessing the amount of money payable in connection with a contract that is set aside or varied by an unfair contract order, and

(d) to require an application for an unfair contract order in relation to a contract that has been terminated to be made within a period of 12 months after termination. 17. In Aveling the Full Bench summarised the effect of the judgments in Crowe and Kerr as follows at [20]: [20] As was emphasised in the judgments in both Crowe v UCS Developments and Commander Australia Limited v Kerr , the operation of the 2002 statutory amendments is a question which, as with any issue of construction, may often be resolved by ascertaining the intention of the legislature from the express words of the instrument viewed in their context: cf the observations of Gleeson CJ in Attorney-General (Qld) at [6]. The intention of the amendment is reasonably plain on its face ( Crowe v UCS Developments at [34]); the limitation on the Court's power under s 106 has been imposed by s 108A in relatively peremptory terms ( Commander Australia Limited v Kerr at [30]). It is difficult to conceive of more straightforward language being used than the words actually used in s 108A ("[a]n application cannot be made for an order [pursuant to s 106] if the application relates to a contract of employment ..." of a specified class). Reference is to be made to the purpose or object of the enactment (whether expressly stated or not) so that a construction which promotes the purpose or object is to be preferred ( Interpretation Act 1987 s 33). Any ambiguity is to be resolved by reference to extrinsic material such as explanatory memoranda or Second Reading speeches ( Interpretation Act s 34) although the rule must be applied cautiously and its application does not necessarily require the demonstration of ambiguity. 18. In determining the meaning of s 108A, the Full Bench in Aveling referred to s 30 of the Interpretation Act 1987 and the presumption against retrospectivity and concluded that s 108A not only precludes, but prevents, an application being made in respect of a contract with the indicia specified in the section; that is, it prevents an application being made of the relevant class or classes from the time the section operated. The Full Bench then referred to s 34 of the Interpretation Act 1987 which permits the use of extrinsic material in the interpretation of Acts and statutory rules. The Court considered the terms of the explanatory note and the "Overview of the Bill" concluding at [33] that: "the terms of s 108A starkly show that it was intended to bring about significant changes and limits to the Court's jurisdiction pursuant to s 106 from a particular time; the particular time being the date of s 108A's operation."

Finally, the Full Bench referred to the passage entitled "Contrary intention" found in [51] and following of the judgment of Gleeson CJ in Attorney-General (Q'ld) where his Honour held: [51] In any event, s 111AAA speaks in imperative terms with respect to proceedings pending at the commencement of its operation on 1 January 1997. Even if there had been "accrued rights" then subsisting, in the sense of s 8 of the Interpretation Act [the Commonwealth equivalent to s 30 of the Interpretation Act 1987 (NSW)], s 111AAA itself and together with other provisions of Sched 5 to the WROLA Act evinces a contrary intention to the saving operation of s 8. We turn to explain why this is so. [52] The operation of the presumption that accrued rights are unaffected by a repealing statute is, by s 8 of the Interpretation Act , expressly subject to the appearance of a "contrary intention". Therefore, where the provisions of a repealing statute are clearly inconsistent with the survival of accrued rights, those provisions are controlling, and any presumption erected by s 8 is displaced. [53] Although it received little attention in the Federal Court, the text of s 111AAA itself indicates a contrary intention. The expression "must cease dealing with" assumes the existence of pending proceedings. It postulates the prior continuation of those proceedings, to which the provision then attaches, requiring, in terms, that those proceedings cease. One can only "cease dealing with" a matter if one is already dealing with it. This construction, consistent with the natural meaning of the words used in s 111AAA(1), is reinforced by s 111AAA(4). That sub-section relevantly provides that the definition of "cease dealing", in relation to an industrial dispute, includes " to refrain from further hearing or from determining the industrial dispute or part of the industrial dispute" (emphasis added). [54] "Must cease" is a legislative command of a particular emphatic kind. Those words permit no derogation from, or qualification to, the direction conveyed. Where it applies, and subject only to the "public interest" qualification in the closing words of sub-s (1), s 111AAA requires the Commission immediately to withdraw from the industrial dispute. 20. In Youry Dawidar v One Steel Wire Pty Ltd and another [2004] NSWIRComm 372, Boland J considered the construction of s 108B and gave four reasons why s 108B precluded the applicant in that matter from maintaining the proceedings. 21. Firstly, his Honour considered the decision of Larsen v Ondeo Nalco Australia Pty Ltd [2004] NSWIRComm 123 where Marks J found that an application for an order made after 24 June 2002 under s 106 in relation to a contract that had been terminated must be made not later than 12 months after the termination of the contract and that in relation to such application, s 108B applies in respect of the contract terminated both prior to and after 24 June 2002. See [17]-[19] of Larsen. I note the decision in Larsen is the subject of an appeal. Boland J was not persuaded he should take a different view to that of Marks J in Larsen. 22. The second reason was the decision in Aveling. Boland J observed s 108B was part of the same package of amendments as s 108A. If the legislature was concerned to impose immediate strictures on the application of s 106 (which the Full Bench found it intended in Aveling) through the introduction of s 108A, it is difficult to see why it would take a different view in relation to s 108B. 23. His Honour found, correctly in my view, that the Full Bench's reasoning in Aveling regarding the wording of s 108A applies with equal force to s 108B for the reasons expressed by Marks J in Larsen. 24. The third reason was that the decision of Peterson J in Kennedy v Contract Transport Solutions Pty Ltd [2003] NSWIRComm 158 was specifically overruled in Aveling. Peterson J had determined that an application was not time barred under s 108B if in fact 12 months had elapsed since the termination. 25. The fourth reason was that an amendment to the original application was so substantial as to warrant the conclusion that it was squarely caught by s 108B. His Honour found the amended application was in fact a new application seeking relief against the first respondent and given it was made after 24 June 2002, s 108B applied to it. Consideration 26. The principles to be applied in determining the operation of s 108B are succinctly summarised in the decisions to which I have earlier referred. 27. The task of statutory construction may be resolved by ascertaining the intention of the legislature from the express words of the instrument reviewed in their context. Section 108A and s 108B became operative at the same time. In Aveling the Full Bench observed "it is difficult to conceive of more straightforward language being used than the words actually used in s 108A". That being so, the language used in s 108B, in my view, is even more intractable. I respectfully agree with Boland J that the Full Bench's reasoning in Aveling regarding the wording of s 108A applies with equal force to 108B. As his Honour found at [34]: ... Section 108B(1) is quite unequivocal. ... expressed in "imperative terms" (see Attorney-General (Qld) v AIRC at [51]). 28. The words "must be made not later than 12 months after the termination of the contract" not only precludes, but prevents an application being made in relation to a contract that was terminated more than 12 months prior to the application being filed. Furthermore, s 108 (2) reinforces this construction by providing that the Commission does not have jurisdiction to extend time. 29. After analysing s 108A in Aveling the Full Bench's conclusion was that the "drafter" of the legislation framed it in this way to demonstrate, on its face, the intention to exclude the operation of s 30 of the Interpretation Act 1987. A similar conclusion must follow in respect to s 108B. 30. In addition, the useful analogy drawn between s 108A of the Industrial Relations Act and the legislation analysed by Gleeson CJ in Attorney-General (Qld) by the Full Bench in Aveling is the apposite to s 108B. A clear example is the reference by his Honour to the words "must cease" being "a legislative command of a particular emphatic kind". These words can be compared to the words "must be made" in s 108B. 31. For the reasons I have shortly expressed concerning the proper operation of s 108B, I conclude that the summons is caught by the amendments introduced in 2002 and the applicant's submissions should therefore be rejected. 32. The Court makes the following orders: 1. The summons for relief filed by the applicants on 19 December 2003 is dismissed. 2. Costs are reserved. 3. Liberty to apply as to costs.

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