Yirra Pty Ltd (t/as Richmond Demolition and Salvage) v Summerton

ON APPEAL FROM THE INDUSTRIAL RELATIONS COURT OF SOUTH AUSTRALIA

BETWEEN: YIRRA PTY LTD (T/AS RICHMOND DEMOLITION AND SALVAGE)

AND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

1. The appeal be allowed. 2. The Order made by Industrial Magistrate Lieschke on 27 June 2008 be set aside. 3. The summons dated 24 January 2008 filed by Steven Robert Summerton in the Industrial Relations Court of South Australia be dismissed. 4. The District Registrar pay to the appellant the balance of the interest bearing deposit account established by Order of Mansfield J on 30 July 2008. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA

ON APPEAL FROM THE INDUSTRIAL RELATIONS COURT OF SOUTH AUSTRALIA

BETWEEN: YIRRA PTY LTD (T/AS RICHMOND DEMOLITION AND SALVAGE)

AND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

REASONS FOR JUDGMENT SPENDER ACJ: 1 On this appeal, I regret to say that I am in profound disagreement with Graham and Tracey JJ, on the two central issues the subject of their Honours' joint judgment (the joint judgment), which I have had the benefit of reading. 2 Those issues are, first, whether an Industrial Magistrate was wrong in determining that a payment pursuant to cl 16 of the National Building and Construction Industry Award 2000 (the Award) was an "incentive based payment" within s 513(1)(b) of the Workplace Relations Act 1996 (Cth) (the Act). 3 The second issue is whether the Construction, Forestry, Mining & Energy Union (CFMEU) in applying, pursuant to s 855(1) of the Act for "leave to be heard in a proceeding before the Court in a matter arising under this Act", over the opposition by Yirra Pty Ltd (Yirra), the CFMEU was "a party to a proceeding in a matter arising under [the] Act", for the purposes of s 824(1) of the Act, and thus (its application to intervene being neither vexatious nor unreasonable) it was immune from any costs order against it.

the proper characterisation of clause 16 of the award 4 This appeal concerns the proper characterisation of cl 16 of the Award. The facts relevant to the appeal are set out in the joint judgment, which I will not repeat. 5 When the task is the proper characterisation of a clause in an Award, that task is best met by having regard to the terms of the clause as well as its context and its purpose, rather than to any label that is applied to it, as the joint judgment appears to do. 6 The analysis of cl 16 in the joint judgment [109] is, in my respectful submission, circular. The majority say: Clause 16 of the Award is entitled "Redundancy". It provides that a redundant employee is entitled to receive redundancy payments calculated by reference to the employee's length of continuous service. The longer the period of service, the larger is the sum to which the employee is entitled. The term "redundancy" is broadly defined to mean "a situation where an employee ceases to be employed by an employer, respondent to this award, other than for reasons of misconduct or refusal of duty." 7 By characterising payments pursuant to cl 16 as "redundancy payments" and referring to the allowable Award matter identified in s 513(1)(k), the joint judgment concludes that since the "redundancy payments" under cl 16 is not "redundancy pay" within s 513(4), the payments pursuant to cl 16 is not an allowable Award matter. 8 The joint judgment notes that: Mr Summerton did not, either in this Court or before the Industrial Magistrate, seek to assert that clause 16 provided for redundancy pay as that term is defined in s 513(1)(k) and s 513(4). 9 However, the majority asserts, wrongly in my opinion: Nor did he assert that the clause dealt with any of the other allowable award matters identified in s 513. 10 In fact, Mr Summerton asserted, both before the Industrial Magistrate and on this appeal, that a payment pursuant to cl 16 of the Award in the circumstances of his case was properly to be characterised as an "incentive-based payment", and therefore, an allowable Award matter under s 513(1)(b) of the Act. 11 Kirby J said in Minister Administering the Crown Lands Act v NSW Aboriginal Land Council (2008) 82 ALJR 1505, at [2]: Whilst the starting point in interpretation must still always be the text [Re Bolton; Ex parte Beane (1987) 162 CLR 514 AT 518; 61 ALJR 190; Trust Co of Australia Ltd v Commissioner of State Revenue (2003)77 ALJR 1019 at [68]], it is now appreciated that context and purpose are also vitally important. Further, this approach is not limited to cases where the text appears on its face to be ambiguous. [Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69]-[70]; 72 ALJR 841; Boral Besser Masonry Ltd v Australian Competition and Consumer Commissioner (2003) 215 CLR 374 at [383]; 77 ALJR 623.] 12 Clause 16 of the Award provided: 16. REDUNDANCY 16.1 Definition Redundancy means a situation where an employee ceases to be employed by an employer, respondent to this award, other than for reasons of misconduct or refusal of duty. Redundant has a corresponding meaning. 16.2 Redundancy pay 16.2.1 A redundant employee shall receive redundancy/severance payments, calculated as follows, in respect of all continuous service (as defined by this award) with the employer: Period of continuous service with an employer Redundancy/severance pay 1 year or more but less than 2 years 2.4 weeks pay plus for all service in excess of 1 year, 1.75 hours pay per completed week of service up to a maximum of 4.8 weeks pay 2 years or more but less than 3 years 4.8 weeks pay plus, for all service in excess of 2 years, 1.6 hours pay per completed week of service up to a maximum of 7 weeks pay 3 years or more than but less than 4 years 7 weeks pay plus, for all service in excess of 3 years, 0.73 hours pay per completed week of service up to a maximum of 8 weeks pay 4 years or more 8 weeks pay 16.2.2.Provided that an employee employed for less than twelve months shall be entitled to a redundancy/severance payment of 1.75 hours per week of service if, and only if, redundancy is occasioned otherwise than by the employee. 16.2.3 Week's pay means the ordinary time rate of pay at the time of termination for the employee concerned. 16.2.4 If an employee dies with a period of eligible service which would have entitled that employee to redundancy pay, such redundancy pay entitlement shall be paid to the estate of the employee. 16.2.5 Any period of service as a casual shall not entitle an employee to accrue service in accordance with this clause for that period. 16.2.6 Service as an apprentice will entitle an employee to accumulate credits towards the payment of a redundancy benefit in accordance with this clause if the employee completes an apprenticeship and remains in employment with that employer for a further twelve months. 16.2.7 An employer bound by this award may utilise a fund to meet all or some of the liabilities created by this clause. Where an employer utilises such a fund: 16.2.7(a) payments made by a fund designed to meet an employer's liabilities under this clause, to employees eligible for redundancy/severance pay shall be set off against the liability of the employer under this clause, and the employee shall receive the fund payment or the award benefit whichever is the greater but not both; or 16.2.7(b) where a fund, which has been established pursuant to an agreement between unions and employers, does not make payments in accordance with this clause, contributions made by an employer on behalf of an employee to the fund shall, to the extent of those contributions, be set off against the liability of the employer under this clause, and payments to the employee shall be made in accordance with the rules of the fund or any agreement relating thereto and the employee shall be entitled to the fund benefit or the award benefit whichever is greater but not both. 16.2.8 Service as an employee for the Crown in the Right of the State of Western Australia, the Crown in the Right of the State of New South Wales, Victorian Statutory Authorities, or the Crown in the Right of the State of Victoria shall not be counted as service for the purpose of this clause. 16.3 Employee leaving during notice period An employee whose employment is to be terminated in accordance with this clause may terminate their employment during the period of notice and if this occurs, shall be entitled to the provisions of this clause as if the employee remains with the employer until expiry of such notice. Provided that in such circumstances, the employee shall not be entitled to payment in lieu of notice. 16.4 Transmission of business 16.4.1 Where a business is, before or after the date of this award, transmitted from an employer (in this subclause called the transmittor) to another employer (in this subclause called the transmittee) and an employee who at the time of such transmission was an employee of the transmitter in that business becomes an employee of the transmittee: 16.4.1(a) the continuity of the employment of the employee shall be deemed not to have been broken by reason of such transmission; and 16.4.1(b) the period of employment which the employee has had with the transmittor or any prior transmittor shall be deemed to be service of the employee with the transmittee. 16.4.2 In this subclause business includes trade, process, business or occupation and includes part of any such business and transmission includes transfer, conveyance, assignment or succession whether by agreement or by operation of law and "transmitted" has a corresponding meaning. 13 It is crucial to note that "redundancy" as defined in cl 16.1, set out above, is quite different from the "redundancy" contemplated in s 513(1)(k), and s 513(4) of the Act, set out below. In my respectful opinion, the joint judgment erroneously concludes that because the cl 16 payment is labelled a "redundancy payment", and is not within the meaning of "redundancy pay" in s 513(4), it is therefore not an allowable matter under s 513(1)(k). 14 It is now common ground that the respondent was entitled to the benefit of the Award, and that, prior to 27 March 2006, he had a contingent entitlement to payment, pursuant to cl 16, in excess of $6,000.00. The contingency was that he ceased his employment, and that the cessation of his employment was not by the employer for misconduct or refusal of duty. 15 The contention by the appellant, accepted in the joint judgment, is that Parliament, by enacting ss 513 and 525 of the Act, which provisions came into effect on 27 March 2006, took that contingent entitlement away. 16 Section 513 of the Act relevantly provided: 513 Allowable award matters (1) Subject to this Part, an award may include terms about the following matters (allowable award matters) only: (a) ordinary time hours of work and the time within which they are performed, rest breaks, notice periods and variations to working hours; (b) incentive-based payments and bonuses; (c) annual leave loadings; … (k) redundancy pay, within the meaning of subsection (4); … (4) For the purposes of paragraph (1)(k), redundancy pay means redundancy pay in relation to a termination of employment that is: (a) by an employer of 15 or more employees; and (b) either: (i) at the initiative of the employer and on the grounds of operational requirements; or (ii) because the employer is insolvent. … 17 Section 525 of the Act relevantly provided: 525 Terms in awards that cease to have effect after the reform commencement (1) Immediately after the reform commencement, a term of an award ceases to have effect to the extent that it is about matters that are not allowable award matters, except to the extent (if any) that the term is permitted by Subdivision B to be included in the award. (2) This section does not affect the operation of preserved award terms. 18 The submission by the employer on this appeal is that a payment pursuant to cl 16 of the Award was not "an allowable matter", with the consequence that any entitlement to a payment pursuant to cl 16 of the Award ceased to exist after 27 March 2006. 19 As the joint judgment notes, there is not now any dispute as to the facts. That was not the position at first instance before Industrial Magistrate Lieschke, who, at the commencement of his reasons, summarised the position: 1 Steven Summerton and Yirra Pty Ltd, trading as Richmond Demolition and Salvage, are in dispute over whether or not Mr Summerton's employment was governed by the National Building and Construction Industry Award 2000. If the award did apply he claims a "redundancy/severance" payment in accordance with clause 16, following the termination of his employment by resignation. 2 If the award did apply Yirra argues that the Workplace Relations Act has excluded clause 16 from the award as a non allowable matter in a preserved award. If the clause applies, Yirra says that Mr Summerton ceased to be employed by reason of either misconduct or refusal of duty, and thereby is disqualified from the benefit. 20 Yirra was unsuccessful before the Industrial Magistrate in its contentions that Mr Summerton's employment was not governed by the Award, and that Mr Summerton ceased to be employed by reason of either misconduct or refusal of duty. On this appeal, Yirra does not challenge the findings of the Industrial Magistrate rejecting those contentions. 21 His Honour found that Mr Summerton had been employed by Yirra since 1996; His Honour continued, at [17]-[19]: 17 Mr Summerton's classification was described on his pay advices as a Construction Worker Level 1(c). This is the lowest classification of the award for a labourer of at least twelve months experience. He was also paid a supervisor's allowance. 18 Yirra made contributions to the South Australian Building Industry Redundancy Scheme Trust for Mr Summerton. 19 Mr Summerton resigned in October 2007 without giving any notice. If the award applied he was required to give one day's notice according to clause 13.2.1(a). 22 His Honour found, at [32] and [33]: 32 I conclude by finding that Mr Summerton's primary function was to perform work in connection with the demolition and removal of buildings. In my opinion the award applied to Mr Summerton's employment. 33 Under clause 16 of the award if the circumstances of Mr Summerton ceasing employment fall within the definition of "Redundancy", the parties have agreed he is entitled to the sum of $6,323.20 being eight weeks pay for over four years' service. 23 Industrial Magistrate Lieschke rejected the contention of Yirra that Mr Summerton ceased to be employed by reason of either misconduct or refusal of duty, (and was thereby disqualified for the benefit), and found, at [42]: Mr Summerton ceased to be employed because he resigned. He was not dismissed by his employer for any form of misconduct. … 24 The position of Mr Summerton both below and before this Court was that the payment pursuant to cl 16 that he is seeking to enforce does not fall within the defined meaning of "redundancy pay" in s 513(4). Instead he submits that the payment he is seeking pursuant to cl 16 is "an incentive-based payment", which is an "allowable matter" under s 513(1)(b). 25 The joint judgment has, at [105] of their Honours' reasons, characterised the payment sought by Mr Summerton as "an entitlement to redundancy pay" under the relevant Award, which is "not 'an allowable award matter'" within the meaning of the Act. The joint judgment repeatedly describes the payment pursuant to cl 16 of the Award as "redundancy pay": see, by way of example, at [104], [105], [109] and [110]. 26 This description pre-empts the answer to what was the central issue before the Industrial Magistrate, and on this appeal, and thus impermissibly determines the conclusion about the application of s 513(1). 27 The joint judgment expresses the view, in [105], that: The Industrial Magistrate was able to make a finding favourable to Mr Summerton by characterising the redundancy pay entitlement as an "incentive-based payment" which was an allowable award matter. The central issue on this appeal was whether or not he was correct to do so. We have concluded that he was not. (Emphasis added). 28 I have set out the provisions of cl 16 of the Award above. 29 It is plain that in industrial relations in Australia, the term "redundancy" has been used with significantly different meanings, as this case amply demonstrates. "Redundancy" as defined in cl 16.1 of the Award, is quite different from the concept of "redundancy" in s 513(4), where redundancy means: … a termination of employment that is: (a) by an employer of 15 or more employees; and (b) either: (i) at the initiative of the employer and on the grounds of operational requirements; or (ii) because the employer is insolvent. 30 At common law the meaning of "redundancy" was described by Bray CJ in R v Industrial Commission of South Australia; ex parte Adelaide Milk Supply Co-operative Limited (1977) 16 SASR 6 at 8, where his Honour said: … the concept of redundancy … seems to be simply this, that a job becomes redundant when the employer no longer desires to have it performed by anyone. A dismissal for redundancy seems to be a dismissal, not on account of any personal act or default of the employee dismissed or any consideration peculiar to him, but because the employer no longer wishes the job the employee has been doing to be done by anyone. 31 The common law meaning has, as a central feature, dismissal of an employee by an employer. 32 In the Termination, Change and Redundancy Case (1984) 8 IR 34, the Commission (Moore (President), Maddern J, and Brown (Commissioner)) referred, at 35, to the claim of the ACTU in its final form, and said that that formulation: … seeks to establish in federal awards a right for individual employees not to be unfairly dismissed, a right for individual employees in ordinary termination of employment situations to an increased period of notice based on length of service, obligations on employers to notify and consult with employees about the introduction of new technology and in redundancy situations, increased notice and a right to compensation and assistance for employees dismissed due to redundancy. 33 The amendments to the Act which took effect in 2006 defined "redundancy" narrowly, in 513(4). That statutory definition is an artificial construct, at odds with the ordinary meaning of that word, as [1599] of the Explanation Memorandum dealing with par 116(1)(i)of the Bill (which became s 513(1)(k)), recognises: Paragraph 116(1)(i) would make redundancy pay within the meaning of sub-section 116(4) an allowable award matter. This would limit redundancy pay to redundancy pay in relation to a termination of employment by an employer of 15 or more employees; and which is either, at the initiative of the employer and on the grounds of operational requirements, or, because the employer is insolvent. 34 Redundancy in s 513(1)(k) is confined to the following two situations: (i) The termination is by an employer who has 15 or more employees, and is on the grounds of operational requirements; or (ii) The termination is by an employer of 15 or more employees, and is because the employer is insolvent. 35 Neither applied in the case of Mr Summerton: Yirra did not have 15 or more employees, and Mr Summerton resigned. Further, the termination was not on the grounds of operational requirements, nor because Yirra was insolvent. 36 It was never Mr Summerton's case that his claim was for redundancy pay, as defined by s 513(1)(k). His case was that his claim under cl 16 was for an "incentive-based payment", which, pursuant to s 513(1)(b), after 26 March 2006, was an allowable award matter. 37 I accept that cl 16 in its terms provides for "redundancy pay" where the circumstances of the termination of employment do fall within s 513(4). In those circumstances, payment pursuant to cl 16 would be allowable after 26 March 2006: see s 525(1). However, "redundancy pay" would not be payable under cl 16 where the employer initiated the termination for operational reasons, or was insolvent but did not have 15 or more employees. 38 This disentitlement, arbitrary as it is as to the number of employees, has no connexion with any previous meaning of redundancy, but applies because, however unfairly one might regard such a provision, Parliament has said that a termination of employment by an employer on the grounds of operational requirements or because the employer is insolvent is not a "redundancy", if the employer has fewer than 15 employees. 39 Clause 16 covers situations that are outside those situations described above. In particular, it contemplates payments in all cases where the employee resigns, and in all cases where the employer has terminated the employment other than on the grounds of operational requirements or where the employer is insolvent (regardless of the number of employees the employer has), excepting only where the employer has terminated the employment for misconduct or refusal of duty. 40 Payments in these circumstances are properly to be characterised as "severance payments", as the express terms of cl 16 contemplate. 41 The joint judgment accepts, at [138], that: Clause 16 provides for the payment of larger sums for long-serving employees than those provided for employees who have served for a short time. In this sense it may be said that the clause provides the employee with an incentive to remain with a particular employer longer than might otherwise be the case. That service is also likely to be longer if the employee conducts him or herself appropriately and does not refuse duty. 42 The Industrial Magistrate accepted that, in the circumstances that relate to Mr Summerton's termination of employment, his entitlement under cl 16 is properly to be characterised as an "incentive-based payment", and therefore an allowable matter under s 513(1)(b). 43 The joint judgment asserts, at [138]: … the evident purpose of s 513(4) would be wholly undermined if s 513(1)(b) is accorded the wide construction contended for by Mr Summerton. 44 Their Honours say that one of the purposes of s 513(4) was to prevent awards dealing with "employee initiated redundancies", being a phrase coined to refer to severance payments payable in circumstances where there were no operational requirements, or insolvency of the employer as the basis for the termination of employment. 45 The joint judgment, at [138], concludes: Were provisions such as clause 16 to be treated as incentive-based payments under s 513(1)(b) the legislature's purpose of enacting s 514(4) would be frustrated. 46 This assessment of the legislature's purpose in enacting s 513(4) is at odds with the basic canons of statutory construction of an Act of Parliament, and attributes to the Explanatory Memorandum a power to expand and define the meaning of an Act, which the document does not have. 47 If it were Parliament's intention to say that a severance payment consequential on an employee resigning, and quantified by length of service, was to be characterised as a redundancy payment, but outside the allowable redundancy payment as defined by s 513(4), and therefore not an allowable matter, it could have said so. 48 It is trite to say that one is entitled to expect that if rights are to be taken away, it should be done by clear words. It follows, in my view, that the right of Mr Summerton to a severance payment pursuant to cl 16 of the Award was not affected by the enactment of s 513(1)(k), and s 513(4). 49 The Chief Justice of New South Wales, Spigelman CJ, speaking extra-curially in delivering the McPherson Lecture Series on Statutory Interpretation and Human Rights, (University of Queensland Press, 2008) said, p 24: The basic principle that Parliament did not intend to invade fundamental rights, freedoms and immunities has been well established in Australia at least since 1907, when the High Court adopted a passage from a text on statutory interpretation that said: It is in the last degree improbable that the legislature would overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness; and to give any such effect to general words, simply because they have that meaning in their widest, or usual, or natural sense, would be to give them a meaning in which they were not really used [Potter v Minahan (1908) 7 CLR 277 at 304]. 50 Spigelman CJ referred to the statement of a unanimous joint judgment of the High Court in Coco v The Queen (1994) 179 CLR 427, at 437: The courts should not impute to the legislature an intention to interfere with fundamental rights. Such an intention must be clearly manifested by unmistakable and unambiguous language. General words will rarely be sufficient for that purpose if they do not specifically deal with the question because, in the context in which they appear, they will often be ambiguous on the aspect of interference with fundamental rights. 51 As a consequence, Spigelman CJ notes that the "basic principle" leads to a rebuttable presumption that Parliament did not intend, retrospectively, to change rights and obligations, citing: Cox v Hakes (1890) 15 App Cas 506 esp at 519, 528, 534; Newell v The King (1936) 55 CLR 707 at 711; Maxwell v Murphy (1957) 96 CLR 261 at 267; Fisher v Hebburn Ltd (1960) 105 CLR 188 at 194; Rodway v The Queen (1990) 169 CLR 515 at 518; Esber v Commonwealth (1992) 174 CLR 430 at 440-441. 52 Spigelman CJ refers to a rebuttable presumption that Parliament did not intend to interfere with vested property rights, citing: Clissold v Perry (1904) 1 CLR 363 at 373; American Dairy Queen (Qld) Pty Ltd v Blue Rio Pty Ltd (1981) 147 CLR 677 at 682-683; Clunies-Ross v Commonwealth (1984) 155 CLR 193 at 199-200; and to a rebuttable presumption that Parliament did not intend to alienate property without compensation, citing: Commonwealth v Hazeldell Ltd (1918) 25 CLR 552 at 563; Colonial Sugar Refining Co Ltd v Melbourne Harbour Trust Commissioners [1927] AC 343 at 359; Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399 at [28]-[31]. 53 It has to be acknowledged that in this case the entitlement of Mr Summerton to a severance payment pursuant to cl 16 was contingent, and had not vested at the time of the coming into force of ss 513 and 525 of the Act. Nonetheless, if it was the intention of Parliament that redundancy pay as defined by s 513(4) be the only allowable matter in an Award flowing from the termination of employment, regardless of how termination of employment by an employee has occurred, Parliament could and should have said so. 54 Similarly, if it had been Parliament's intention to remove an entitlement to a severance payment, which had been inserted in an Award to promote stability of employment in the notoriously transient construction industry, as not being an incentive-based payment, that equally could have been spelt out and was not. 55 Further, in my respectful opinion, to, to say that incentive-based payments have to be payments that are "productivity-related", by some reference to what is said in the Explanatory Memorandum, is to place an impermissible gloss on the meaning of "incentive-based payments" where those words appear in s 513(1)(b) of the Act. Incentive-based payments, of course, frequently are directed at improving productivity, but it is an impermissible confinement to say that all incentive-based payments have to be productivity-related. 56 Payments to encourage work safety are incentive-based payments, because they constitute an incentive to adopt safe work practices, not because they improve productivity. Safe work practices might improve productivity, for instance if they avoid industrial accidents, but frequently safe work practices are less productive of profit than unsafe work practices. Payments to encourage workplace safety are primarily directed at promoting the welfare of the employee, and in my opinion, the question of whether they do or do not improve productivity does not determine whether such payments are "incentive-based". 57 Whatever might be said by way of explanation of the intent of legislation, the ultimate duty of a Court is to give effect to the terms of the statute itself. In Re Bolton; Ex Parte Beane (1987) 162 CLR 514, Mason CJ, Wilson, and Dawson JJ said, at 518: The words of a Minister must not be substituted for the text of the law. Particularly is this so when the intention stated by the Minister but unexpressed in the law is restrictive of the liberty of the individual. It is always possible that through oversight or inadvertence the clear intention of the Parliament fails to be translated into the text of the law. However unfortunate it may be when that happens, the task of the Court remains clear. The function of the Court is to give effect to the will of Parliament as expressed in the law. 58 Importantly, McHugh J said in Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57, at [132]: … even when a Minister, in introducing legislation, has expressed a view as to the meaning of that legislation, the court will not give the enactment that meaning if such a reading is not justified. The need to act on the text of the enactment and not the Minister's statements is particularly important when the Minister's meaning has serious consequences for an individual. 59 A fortiori, when one is dealing with an Explanatory Memorandum. 60 McHugh J also commented in Newcastle City Council v GIO General Limited (1997) 191 CLR 85, at 113: Even if extrinsic material convincingly indicates the evil at which a section was aimed, it does not follow that the language of the section will always permit a construction that will remedy that evil. 61 McHugh J went on to say: If the target of a legislative provision is clear, the court's duty is to ensure that it is hit rather than to record that it has been missed. 62 The provision for redundancy payments and severance payments in cl 16 has to be understood in the historical context of the construction industry. The clause reflects the desire to address the historically transient construction workforce. It does so by providing an incentive to remain with one employer, with scaled payments relative to length of service. 63 The disqualifications of entitlement to severance payments, namely dismissal for misconduct or refusal to work, encourage good behaviour. 64 Both of these aspects fit conformablywith the description of "incentive-based payments" used in [3060] of the Explanatory Memorandum for the Work Choices Bill: "a direct or indirect inducement, reward or benefit which aims to motivate an employee to achieve a particular goal or target". Clause 16 was introduced precisely to encourage a more stable and less transient workforce. Such a workforce conduces to improved productivity. 65 The decision of Commissioner Bacon in Re Moranbah North Coal Enterprise Interim Award 1997, Print PR916980, and the decision in Re Roche Mining Coppabella Certified Agreement 2004, Print PR974847, are illustrations of what might properly be regarded as "incentive-based payments". 66 Having regard to the terms, context and purpose of cl 16, the Industrial Magistrate was right to conclude that the severance payment payable to Mr Summerton in the circumstances of the cessation of his employment with Yirra was an allowable matter within s 513(1)(b). 67 His Honour was right to reject the submission that Parliament, by enacting s 513(4), had, by a sidewind, wiped out contingent entitlements to severance pay by construction workers, the entitlement to which had been introduced as an incentive to alter the transient nature of the construction workforce. 68 In conformity with the principles referred to above, I take it that Parliament intended that the only payments allowable as an Award matter in respect of redundancy was where the redundancy had occurred as defined in s 513(4). 69 The contrary was not argued by Mr Summerton, either before the Industrial Magistrate or before this Court. The question was whether a severance payment that occurs in circumstances outside s 513(4) is properly to be characterised as an "incentive-based payment" within s 513(1)(b). The Industrial Magistrate, carefully looking at the matter, so characterised the payment pursuant to cl 16 to Mr Summerton. 70 In my respectful opinion, it was open to him so to conclude, and further, in my view, he was correct so to conclude.

COSTS On the application by the cfmeu to intervene 71 Section 855(1) relevantly provides: If the Court is of the opinion that an organisation, person or body should be heard in a proceeding before the Court in a matter arising under this Act … the Court may grant leave to the organisation, person or body to intervene in the proceeding. 72 Section 824 provides: (1) A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) must not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause. (2) Despite subsection (1), if a court hearing a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) is satisfied that a party to the proceeding has, by an unreasonable act or omission, caused another party to the proceeding to incur costs in connection with the proceeding, the court may order the first-mentioned party to pay some or all of those costs. (3) In subsections (1) and (2): costs includes all legal and professional costs and disbursements and expenses of witnesses. 73 The application by the CFMEU for leave to intervene in the appeal was an interlocutory hearing in the appeal. The application by the CFMEU for leave to intervene was a step in the principal proceeding. According to the joint judgment, it was only when its application for leave was successful that the CFMEU became a party to the appeal, and therefore the ordinary rule as to costs applied to the application for leave to be heard on the appeal, 824(1) not being applicable. 74 In my respectful opinion, that conclusion is inconsistent with the judgment of Young J in Paras v Public Service Body Head of the Department of Infrastructure (No 3) (2006) 152 FCR 534 (Paras) and with the judgment of the Full Court (Black CJ, Tamberlin and Sundberg JJ) in Commonwealth v Construction, Forestry, Mining and Energy Union (2003) 129 FCR 271 (the 2003 Commonwealth v CFMEU judgment). 75 Paras was concerned with the dismissal of a Notice of Motion by which the respondents sought orders discharging or staying an interlocutory injunction which Young J had granted in the principal proceedings. Young J said, at [7] and [8]: 7 As to the scope of s 824(1), the respondents submitted that the exception it makes for proceedings instituted vexatiously or without reasonable cause only has application to the originating application, and not to interlocutory applications made by the respondents in the course of the principal action. 8 The respondents also contended that s 824(2) does not apply to the costs of a particular aspect of the proceedings, such as an unsuccessful motion to discharge or stay an earlier interlocutory order. They submitted that subs (2) is only concerned with acts or omissions in the practical sense of things done or omitted to be done which do not accord with reasonable notions of the conduct of proceedings, such as failing to turn up at a hearing, failing to meet deadlines laid down in court directions and not giving timely notice. 76 Young J rejected both of these submissions. 77 The joint judgment notes, in [151]: 151 … The authorities were reviewed by Young J in Paras v Public Service Body Head of the Department of Infrastructure (No 3) (2006) 152 FCR 534. His Honour's review demonstrates that the weight of authority favours the proposition that an interlocutory application, made by a party to a proceeding under the Act, is a proceeding in a matter for the purposes of s 824(1): see, particularly, Shackley v Australian Croatian Club Ltd (1996) 141 ALR 736; Commonwealth v Construction, Forestry, Mining and Energy Union (2003) 129 FCR 271. See also Sydney Ferries Corporation v Australian Maritime Officers Union (No 3) [2008] FCA 960 at [6]. 78 The joint judgment seeks to distinguish the interlocutory application in the appeal in the present case, on the basis that "the authorities reviewed" by Young J involved an interlocutory application by a person who was a party to the proceeding at the time at which the application was made, and not a third party. However, the 2003 Commonwealth v CFMEU judgment concerned a case where the Commonwealth was not a party to the principal proceedings. 79 In my respectful opinion, what Young J decided in Paras was that an interlocutory application (which was in the circumstances of that case made by a person that was a party to the principal proceedings, and not a third party) is a proceeding in a matter for the purposes of s 824(1). 80 Young J said in Paras, at [16]: As with s 824(1), the references in subs (2) to a "proceeding" encompass a step in the proceeding, such as the institution and hearing of an interlocutory application. However, s 824(2) goes further than s 824(1). The proviso to s 824(1) applies if the entire proceeding, or a step in the proceeding, has been instituted vexatiously or without reasonable cause. Section 824(2) is not confined to costs associated with the institution of the proceedings or a step in the proceedings; it extends more broadly to costs incurred as a result of any unreasonable act or omission. On a plain and natural meaning of s 824(2), there is no reason why the reference to an unreasonable act or omission that has caused another party to incur costs in connection with the proceeding should not extend to unreasonable acts or omissions in connection with an interlocutory application. And, as the Explanatory Memorandum suggests, the power conferred by s 824(2) can be exercised irrespective of the outcome of the particular application in question, and of the proceedings as a whole. (Emphasis added) 81 In my judgment, the conclusion in the joint judgment is contrary to the judgment of the Full Court in the 2003 Commonwealth v CFMEU judgment. 82 The joint judgment refers, in [153], to the question of whether the Commonwealth was correct to contend that it was not a party in the matter. The joint judgment makes reference to the observation by the Full Court in the 2003 Commonwealth v CFMEU judgment, at 274-5, [13], that: Consistently again with the objects of the section, there is no reason to construe "party" narrowly and the Commonwealth, having taken part in the proceeding before the trial judge, and having sought and obtained leave to appeal and having had the carriage of the appeal, is to be treated as a party for the purposes of s 347(1). (Emphasis added in the joint judgment). 83 The joint judgment, in reliance on the words emphasised, concludes that it was only when the Commonwealth had sought and obtained leave to appeal that it became a party. However, the application by the Commonwealth was for an order that the CFMEU pay the costs of the Commonwealth both of the application and of the appeal. The application was an application by the CFMEU to inspect a document which had been discovered by the Employment Advocate, and the Commonwealth, a non-party to the principal proceedings, was heard in that application, asserting its claim to public interest immunity. 84 The Full Court said, at [2]: The issue concerning the discovery and inspection of the copy letter that has given rise to the present appeal arose in a proceeding before the Court in which the Union sought the imposition of a penalty upon the second respondent (the Advocate) pursuant to the Workplace Relations Act 1996 (Cth) (the Act). 85 The Advocate had filed a verified list of documents, and in respect of the copy of a letter by the Minister to the Prime Minister claimed public interest immunity from production. 86 The Full Court noted, at [3], that: The primary judge heard argument on the public interest immunity claim from counsel retained upon behalf of the Commonwealth and counsel for the Union … 87 The same Full Court had, some three years earlier, upheld an appeal by the Commonwealth against the primary judge's decision allowing inspection of the document: Commonwealth v Construction, Forestry, Mining and Energy Union (2000) 98 FCR 31. The Full Court concluded that judgment in 2000 by saying, at [48]: The orders made by the primary judge should be set aside and the respondent should pay the costs of the Commonwealth both at first instance and on the appeal. 88 In the 2003 Commonwealth v CFMEU judgment, the Full Court said, at [4]: 4 Although the Commonwealth is not a party to the substantive proceeding for a penalty, the Full Court considered it appropriate that it be granted leave to appeal from the order for inspection. The Commonwealth having now succeeded in the appeal, a question has arisen as to costs. 5 The Court provisionally ordered that the Commonwealth should have its costs of its application before the primary judge and its costs of the appeal. [This is a reference to the last sentence of the Full Court judgment of 12 April 2000 set out in [87] above]. The Union submitted, however, that s 347 of the Act applies to prevent the making of any order for costs. (Emphasis added). 89 The competing contentions by the Commonwealth and the Union in respect of costs appears from [6] of the Full Court's 2003 judgment: The Union says that the appeal, and the Commonwealth's intervention before the primary judge, were each part of the one "proceeding" in a "matter" arising under the Act or, alternatively, were each a separate matter - that is to say, separate from the substantive proceeding - in the one matter arising under the Act. Either way, the Union submits, s 347(1) applies. The Commonwealth, on the other hand, argues that the provision does not apply because, however viewed, the proceedings in question concern the enforcement of a right, namely the right to claim public interest immunity, that does not owe its existence to a provision of the Act. Thus, it is said, on the authority of Re McJannet; Ex parte Australian Workers' Union of Employees (Qld) (No 2) (1997) 189 CLR 654, s 347(1) has no application. Alternatively, the Commonwealth submits, s 347 does not operate to prevent a costs order being made in favour of a non-party and the Commonwealth is a non-party to the original proceedings. (Emphasis added). 90 The Full Court concluded that the substantive proceedings, where the Union sought a penalty to be imposed upon the Advocate for contravention of the provision of the Act, was a proceeding in a matter arising under the Act. 91 There is no doubt that the substantive proceeding in this case is similarly a proceeding in a matter arising under the Act. 92 The policy behind s 347(1) (the predecessor of s 824 and the successor of the earlier s 197A of the Conciliation and Arbitration Act 1904 (Cth)) was referred to, and the Full Court quoted with approval the observations by Northrop J in Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 at 272, set out in the joint judgment at [10]. The Full Court commented, in the passages set out in the joint judgment, that: … it would be quite contrary to this object to read s 347(1) narrowly such that interlocutory proceedings about, for example, discovery were not seen as proceedings "in the matter" at the heart of the principal proceeding and were instead seen as proceedings in a separate matter, defined according to the narrower and subsidiary controversy about discovery. 93 The ratio of the Full Court, which, in my respectful view has not been appreciated in the joint judgment, is to be found in [12] of the Full Court's reasons: In the present case, inspection of the copy document could have been sought only for the purposes of the principal proceeding and as an interlocutory step in the resolution of the matter that the principal proceeding had been brought to resolve. In those circumstances what may be seen as separate proceedings concerning the inspection of the document and the claim for immunity, are properly to be regarded as proceedings "in" the principal matter. 94 The Full Court's conclusion was expressed, at [13] and [15]: 13 Consistently again with the objects of the section, there is no reason to construe "party" narrowly and the Commonwealth, having taken part in the proceeding before the trial judge, and having sought and obtained leave to appeal and having had the carriage of the appeal, is to be treated as a party for the purposes of s 347(1). … 15 In these circumstances, s 347(1) precludes the making of any order as to the costs of the proceedings concerning the production of the copy document, either at first instance or on appeal. (Emphasis added). 95 The Full Court's 2003 Commonwealth v CFMEU judgment is that a non-party to the substantive proceedings, who is heard in an interlocutory proceeding in connection with the principal proceedings, is to be treated as a party for the purposes of s 347(1) (the precursor to s 855 of the Act), both for the interlocutory proceeding, and for the appeal from the judgment made on the interlocutory proceeding. 96 In the same way, and in obedience to the judgment of the Full Court in the 2003 Commonwealth v CFMEU judgment, the CFMEU, having taken part in the proceedings before this Court for leave to intervene, is to be treated as a party for the purposes of s 824 of the Act. 97 The joint judgment seems to proceed on the basis that once the CFMEU was successful in its application for leave to intervene, it became a party to the proceedings, but not before. 98 This adopts the view that if a non-party is heard on an interlocutory application in a proceeding before the Court in a matter arising under the Act, the non-party is not, in making the application, a party to a proceeding before the Court in a matter arising under the Act. This is directly contrary to the ratio of the judgment of the Full Court in the 2003 Commonwealth v CFMEU judgment,as I have sought to demonstrate. 99 The leave to intervene power given to the Court in s 855(1) is predicated on the Court being satisfied that the organisation "should be heard" in the principal proceedings. Unless the application to intervene is vexatious or without reasonable cause, s 824(1) is engaged with the consequence that a costs order is prohibited. 100 There is no suggestion that the application for leave to intervene was vexatious or without reasonable cause. The CFMEU was successful in that application. 101 Section 824(2) is not relevant in these proceedings, because there is no suggestion that any unreasonable act or omission was done or omitted to be done by the CFMEU. 102 I would make no order as to costs on the Motion by the CFMEU seeking leave to intervene on the appeal by Yirra Pty Ltd against judgment of the Industrial Magistrate, because s 824 applies to immunise the CFMEU from any adverse costs order on that application. Section 824 also applies to prohibit any order as to the costs of the appeal. 103 The appeal should be dismissed. I certify that the preceding one hundred and three (103) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Acting Chief Justice Spender.

ON APPEAL FROM THE INDUSTRIAL RELATIONS COURT OF SOUTH AUSTRALIA

BETWEEN: YIRRA PTY LTD (T/AS RICHMOND DEMOLITION AND SALVAGE)

AND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

GRAHAM AND TRACEY jj 104 One afternoon in October 2007 the respondent, Mr Steven Summerton, had an argument with his supervisor. He told his supervisor that he could "stick his job" and left his employer's premises never to return. Mr Summerton claimed to be entitled to what was described in the relevant award as "redundancy pay". An Industrial Magistrate, sitting in the Industrial Relations Court of South Australia, held that he was entitled to be paid "redundancy pay". Mr Summerton's employer, Yirra Pty Ltd ("Yirra"), appeals from that decision. 105 There is no dispute that, but for the operation of certain statutory provisions, Mr Summerton would have an entitlement to redundancy pay under the relevant award. The difficulty which confronts Mr Summerton is that redundancy pay (save in narrowly confined circumstances) is not an "allowable award matter" within the meaning of the Workplace Relations Act 1996 (Cth) ("the Act") and the Act provides that any provisions in awards which were not allowable award matters ceased to have effect on 27 March 2006. The Industrial Magistrate was able to make a finding favourable to Mr Summerton by characterising the redundancy pay entitlement as an "incentive-based payment" which was an allowable award matter. The central issue on this appeal was whether or not he was correct to do so. We have concluded that he was not.

THE FACTUAL BACKGROUND 106 The facts are not in dispute. The following summary is taken from the learned Industrial Magistrate's reasons for decision. 107 Yirra operates a demolition and salvage business. Mr Summerton was first employed by Yirra in 1996. He was engaged as a casual demolition labourer. After two years his employment status was changed to full time permanent. Over the period of his employment Mr Summerton's duties changed. During the last 12 months of his employment he was based in a yard where material salvaged from demolition sites was stored. From time to time he would also attend demolition sites to deliver fuel or assist as a demolition labourer. During his period of employment with Yirra, Yirra made contributions to the South Australian Building Industry Redundancy Scheme Trust for Mr Summerton. At the time at which Mr Summerton's employment with Yirra ceased, Yirra had fewer than 15 employees. 108 On 11 October 2007 Mr Summerton was rebuked by his supervisor. He took offence at the supervisor's remarks. He responded by making the remark which has already been recorded, tossed his mobile phone across a table and left the work premises. He never returned.

THE AWARD 109 There is no dispute that the National Building and Construction Industry Award 2000 ("the Award") governed Mr Summerton's employment. Clause 16 of the Award is entitled "REDUNDANCY". It provides that a redundant employee is entitled to receive redundancy payments calculated by reference to the employee's length of continuous service. The longer the period of service, the larger is the sum to which the employee is entitled. The term "redundancy" is broadly defined to mean "a situation where an employee ceases to be employed by an employer, respondent to this award, other than for reasons of misconduct or refusal of duty." 110 It is clear that, but for the operation of certain statutory provisions, Mr Summerton would have an entitlement to redundancy pay under the Award.

THE ACT 111 Relevant amendments to the Act commenced operation on 27 March 2006. Section 525(1) provided that, subject to certain irrelevant exceptions, "a term of an award ceases to have effect to the extent that it is about matters that are not allowable award matters …". Allowable award matters are identified in s 513(1). One of these matters is "redundancy pay, within the meaning of subsection (4)": see s 513(1)(k). Subsection (4) provides that: "For the purposes of paragraph (1)(k), redundancy pay means redundancy pay in relation to a termination of employment that is: (a) by an employer of 15 or more employees; and (b) either: (i) at the initiative of the employer and on the grounds of operational requirements; or (ii) because the employer is insolvent." 112 Section 513(1)(b) provides that "incentive-based payments and bonuses" is an allowable award matter.

THE INDUSTRIAL MAGISTRATE'S DECISION 113 The Industrial Magistrate accepted that clause 16 of the Award applied to Mr Summerton. Mr Summerton had not been dismissed for reasons of misconduct or for refusal of duty. Rather, he had resigned, having taken offence at his supervisor's remarks. 114 The Industrial Magistrate appears to have accepted a concession by Mr Summerton that clause 16 did not fall within the allowable award matter of redundancy pay within the meaning of s 513(1)(k) of the Act. This was because certain of the requirements of s 513(4) had not been met: Yirra had fewer than 15 employees in October 2007; Mr Summerton's employment had not been terminated at the initiative of Yirra; and Yirra was not insolvent. 115 The Industrial Magistrate did, however, accept submissions by counsel for Mr Summerton that the payment, provided for in clause 16, was properly to be characterised as an "incentive-based" payment and, therefore, an allowable award matter under s 513(1)(b) of the Act. His Honour explained his reasons for so concluding as follows: "38 Mr Summerton says the payment is calculated by reference to length of service, with four levels of benefit and the maximum payment being made only after completion of four or more years' service. The payment accordingly provides an incentive for longer service, but short of the period that would give rise to a pro-rata long service leave entitlement. 39 Next the term is said to be incentive-based because it encourages the avoidance of misconduct. Cessation of employment for the reason of misconduct, which is not qualified to be only serious and wilful misconduct, disqualifies an entitlement. The final incentive is to accept all duty, as cessation of employment for refusal of duty is also a disqualifying event. 40 [Counsel for Yirra] submitted that an incentive-based payment must be one related to production. No authority was cited to support this proposition. I disagree as incentives may relate to a range of issues in employment other than production, but which are all somehow related to productivity or efficiency. An incentive-based payment may, for example, relate to an employee not taking all of their paid sick leave in a period. It may relate to successful training or supervision of employees. I see no logical reason why an incentive-based payment needs to be narrowly based upon production when that is only one aspect of broader efficiency and productivity considerations. 41 In my opinion Mr Summerton's characterisation of the payment is correct. The terms of the clause he seeks to enforce provide an allowable incentive-based entitlement. Two incentives have been identified for good conduct and acceptance of all duty, with a further incentive for long service." 116 The parties had agreed that, if Mr Summerton had an entitlement under clause 16, it was for $6,323.20. Interest of $200 was added. Yirra was ordered to pay Mr Summerton $6,523.20 within 21 days.

THE APPEAL 117 Yirra contends that the learned Industrial Magistrate erred by holding that clause 16 dealt with an allowable award matter because it provided for incentive-based payments. Conversely, Yirra complains that the Industrial Magistrate erred by not holding that, by operation of s 525 of the Act, clause 16 had ceased to operate at the time at which Mr Summerton resigned from his employment. 118 Mr Summerton supported the Industrial Magistrate's decision for the reasons which the Magistrate gave. He advanced further arguments in support of the proposition that clause 16 provided for an incentive-based payment. 119 The Construction, Forestry, Mining and Energy Union ("the CFMEU") was granted leave to intervene in the appeal: see Yirra Pty Ltd (t/as Richmond Demolition and Salvage) v Summerton; in the matter of an application by the Construction, Forestry, Mining and Energy Union [2008] FCAFC 175. It appeared by counsel and sought to argue that clause 16 dealt with the allowable award matters of redundancy pay and incentive-based payments.

CONSIDERATION 120 Counsel for Mr Summerton submitted that clause 16 provided for "incentive-based payments" which s 513(1)(b) rendered an allowable award matter. Whilst acknowledging that clause 16 and its predecessors had always been treated as a redundancy provision, she emphasised that this did not, in the statutory context, mean that it could not also be treated as providing for an incentive-based payment. On the contrary, she submitted that clause 16 was intended to encourage employees to remain with their employers for long periods: the longer they remained the greater the financial benefit available under the clause when they chose to resign. The caveats relating to misconduct and refusal of duty provided further incentives to employees to conduct themselves properly in the performance of their duties. 121 There was general agreement that the award provisions relating to redundancy could be traced back to the Termination, Change and Redundancy Case determined by the Australian Conciliation and Arbitration Commission ("the Commission") in 1984: see (1984) 8 IR 34 at 53ff. The Commission produced a draft order to give effect to its decision. That draft order defined "redundancy" consistently with the decision of Bray CJ in R v Industrial Commission (SA); Ex parte Adelaide Milk Supply Co-operative Limited (1977) 16 SASR 6 at 8 where his Honour said: "… the concept of redundancy … seems to be simply this, that a job becomes redundant when the employer no longer desires to have it performed by anyone. A dismissal for redundancy seems to be a dismissal, not on account of any personal act or default of the employee dismissed or any consideration peculiar to him, but because the employer no longer wishes the job the employee has been doing to be done by anyone." This definition was qualified by the Commission in a supplementary decision in which it noted that "it was not our intention that the redundancy provisions should apply to the "ordinary and customary turnover of labour"": see (1984) 9 IR 115 at 128. 122 In the following years various agreements were reached between employers and unions in the building industry about the provision of redundancy benefits for workers. Many of these were more generous than the standard established in the Termination, Change and Redundancy Test Case: see Building and Construction Industry (TCR) Case (1989) 30 IR 1 at 2. Following further proceedings in the Commission and negotiations between the parties the forerunner of the present clause 16 was, in 1990, inserted in the National Building Trades Construction Award 1975. It contained, in clause 38A, the same definition of redundancy which now appears in clause 16: see Order re National Building Trades Construction Award 1975 Print J5115. An earlier version of clause 38A was referred to by the Commissioner as providing for "[e]mployee initiated redundancy": see Stuart Bros. Pty Ltd v Building Workers Industrial Union of Australia (Unreported) Print J4870 p 2. 123 The word "redundancy" was first employed in the Act when the phrase "redundancy pay" was introduced as part of s 89A following amendments to the Act by the Workplace Relations and Other Legislation Amendment Act 1996 (Cth) (Act No. 60 of 1996) ("the 1996 Amendment Act"). By s 3 and Schedule 5 to the 1996 Amendment Act amendments were made to Part VI of the Act, which was entitled "Dispute Prevention and Settlement". A new s 88A was inserted under the heading "Objects of Part", a new s 88B was inserted under the heading "Performance of Commission's functions under this Part", s 89(a)(ii) was amended, the new s 89A was inserted, ss 90AA, 90AB and 92A were repealed, s 95 was replaced and a new s 98A was inserted into Division 1, which had as its heading "Functions of Commission generally". 124 Section 89A, enacted under the heading "Scope of industrial disputes", limited what could fall within an industrial dispute to matters covered by subsections (2) and (3). Subsection (2) specified 20 matters including: "… (b) ordinary time hours of work and the times within which they are performed, rest breaks, notice periods and variations to working hours; (c) rates of pay generally …; (d) piece rates, tallies and bonuses; (e) annual leave and leave loadings; (f) long service leave; … (m) redundancy pay; …" Subsection (3) confined the Commission's power to make awards, dealing with the 20 matters covered by subsection (2), to making "a minimum rates award". 125 The expression "redundancy pay" was not defined by the 1996 Amendment Act, nor was the word "redundancy". 126 Section 89A(2) of the Actwas itself amended by the Workplace Relations Amendment (Tallies) Act 2001 (Cth)(Act No. 7 of 2001). That Act amended paragraph (d) of s 89A(2) so that it became: "(d) incentive-based payments (other than tallies in the meat industry), piece rates, tallies and bonuses" The amendment took effect on 22 March 2001. By the same Act, paragraph (d) was further amended to become: "(d) incentive-based payments (other than tallies in the meat industry), piece rates and bonuses" with effect on 22 March 2002 i.e. 12 months after the day on which the Act received Royal Assent. 127 The Workplace Relations Amendment (Tallies) Act 2001 (Cth)also provided for the insertion into the Act of a new s 89B, which was itself repealed, along with s 89A and other provisions, by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) (Act No. 153 of 2005) ("the Work Choices Act"). That repeal became effective on 27 March 2006 when the relevant part of the Work Choices Act commenced. 128 Under the former s 89B, provision had been made for the Commission, within the period 22 March 2001 to 22 March 2002, to "review all awards containing clauses that provide for, or regulate, tallies in the meat industry" and empowered the Commission, after considering appropriate alternatives, to vary awards to remove such clauses. 129 The Explanatory Memorandum circulated by authority of the Minister for Employment, Workplace Relations and Small Business in respect of what was then the Workplace Relations Amendment (Tallies and Picnic Days) Bill 2000 included an observation concerning the proposed amendment of s 89A(2)(d) as follows: "Item 1 would remove tallies from the allowable award matters set out in subsection 89A(2) of the WR Act. Allowable award matters are the matters which may be the subject of an industrial dispute, for the purposes of the exercise by the Australian Industrial Relations Commission … of the powers set out in subsection 89A(1). This is because the Government considers that tallies are more appropriately dealt with at the enterprise or workplace level and, if regulation by industrial instruments is necessary, by certified agreements or Australian Workplace Agreements." 130 In time issues arose in the Commission as to the differences which existed between the definition of redundancy in the National Building Trades Construction Award and the definitions contained in other awards which adhered to the Termination, Change and Redundancy Test Case standard. These differences were acknowledged by Commissioner Merriman in the course of an award simplification exercise in 1999. He said that: "[17] All parties agree that the subject of redundancy is allowable, however, the definition as contained within this award was argued by the Government and some Employers to be inconsistent with the Test case and not "consistent with the use of concepts in industrial practice in Australia". Commissioner Wilks in the Plumbing Industry Award decision [Print Q8609 p33] provides a number of reasons as to why he believes the redundancy provision in that award, which is consistent with this award, is consistent with the use of the concepts in industrial practice in Australia and, therefore, consistent with the Full Bench decision in the CBOAcase. In addition to the reasons provided by Commissioner Wilks, the Commission is of the view that a substantial part of the redundancy provisions and entitlements within this award would be allowable under s.89A(n) - notice of termination. The entitlements, given the reasons that they are paid, flow in some circumstances following the giving of notice where in other circumstances they flow from the cessation of the work. For these reasons the Commission is prepared to maintain the existing clause in the award in its current form because, in the Commission's view, it is allowable pursuant to s.89A(2)(m) and (n)." See Review of National Building and Construction Industry Award 1990 Print R7494 p 4. 131 None of the parties was able to refer the Court to any decision of the Commission or a Court in which clause 16 or its predecessors had been held to deal with an allowable award matter other than under s 89A(2)(m) or (n). 132 Reference was, however, made to two decisions of the Commission in which an award and an agreement provided for incentive-based payments or bonuses. In Moranbah North Coal Enterprise Interim Award 1997, Print PR916980 Commissioner Bacon found that a dispute about performance appraisal was a dispute over an incentive-based payment or a bonus. He did so because the proposed regime provided for individual assessment of employees against criteria. A score was to be allocated to the employee. The score had a bearing on how much employees were paid: the higher the score the higher the quantum of money to which the employee was entitled. The second case was Roche Mining Coppabella Certified Agreement 2004, Print PR974847. That case dealt with the construction of a clause in an enterprise bargaining agreement which provided for financial rewards for the maintenance of workplace safety. The Commission was not called on to determine whether the clause dealt with an allowable award matter. Counsel referred to the case as an example of the type of provision which might fall within the former s 89A(2)(d) or s 513(1)(b). 133 The amendments to the Act which took effect in 2006 were designed, among other things, to restrict the range of matters which could be prescribed by an award. The changes were contained in the Work Choices Act. The Explanatory Memorandum for the Bill which became the amending Act noted that, following the amendments, awards could continue to contain provisions dealing with "incentive-based payments and bonuses" and "redundancy pay for employers with 15 or more employees." Redundancy pay was only to be allowable "in cases of genuine redundancy." Paragraph 116(1)(b) of the Bill effected the amendment that became s 513(1)(b) of the Act. Paragraph 1588 of the Explanatory Memorandum said that: "Paragraph 116(1)(b) would make allowable terms in awards about incentive based payments and bonuses and the derivation or alternation of such payments. An incentive based payment or bonus is a payment that is a direct or indirect inducement, reward or benefit which aims to motivate an employee to achieve a particular goal or target. Payments can be ongoing or made on a periodic or one-off basis …" 134 Paragraph 1599 dealt with paragraph 116(1)(i) of the Bill which became s 513(1)(k). It read: "Paragraph 116(1)(i) would make redundancy pay within the meaning of subsection 116(4) an allowable award matter. This would limit redundancy pay to redundancy pay in relation to a termination of employment by an employer of 15 or more employees; and which is either, at the initiative of the employer and on the grounds of operational requirements, or, because the employee is insolvent." 135 Paragraph 116(4) became s 513(4). The Explanatory Memorandum dealt with this paragraph as follows: "1607. Subsection 116(4) would define redundancy pay for the purposes of paragraph 116(1)(i) as redundancy pay in relation to a termination of employment that is: • by an employer of 15 or more employees; • either at the initiative of the employer and on the grounds of operational requirements or because the employer is insolvent. 1608. Termination of employment would be at the initiative of the employer and on the grounds of operational requirements where the employer decides that for economic, technological or other reasons the position or job occupied by an employee has become superfluous, in excess of, or unnecessary for, the requirements of that employer's enterprise. 1609. Some current awards define redundancy as occurring when an employee ceases to be employed by an employer in any situation, other than for reasons of misconduct or refusal of duty. This broad definition of redundancy may lead to redundancy payments being paid in some circumstances where termination of employment was not at the initiative of the employer and on the grounds of operational requirements. This includes, for example, to the estate of an employee that has died while still employed. Award terms providing for redundancy payments in ordinary resignation situations are also not to be treated as a redundancy. 1610. Redundancy would also arise in circumstances where an employer is insolvent and the termination arises from the insolvency, whether the employer actively terminates the employment relationship or not. 1611. Subsection 116(5) would set out how to determine whether an employer has 15 or more employees at the relevant time, for the purposes of paragraph 116(4)(a). The provision makes clear that this calculation is to include any employee who becomes redundant, and any casual employee engaged by the employer on a regular and systematic basis for at least 12 months. The relevant time is when notice of the redundancy is given or when the redundancy occurs, whichever happens first." 136 In a Supplementary Explanatory Memorandum circulated by authority of the Minister for Employment and Workplace Relations in respect of the Workplace Relations Amendment (Work Choices) Bill 2005 the following appeared at paragraph 410: "410. The Australian Government opposes any attempt to impose redundancy pay obligations on employers who employ fewer than 15 employees." 137 Mr Summerton contended that the characterisation of clause 16 should not be influenced by the fact that the clause and its predecessors had only ever been found to deal with an allowable award matter under the former s 89A because they dealt with redundancy pay. As Commissioner Merriman had observed in 1999, the term redundancy was susceptible to a range of meanings, all of which fell within s 89A(2)(m). These meanings included the wide definition contained in clause 16. There was, therefore, no occasion to look beyond that paragraph and to seek to characterise such redundancy provisions as incentive-based payments. Furthermore, the purpose served by s 89A, whilst similar to that served by ss 513 and 525, was not identical. There was, accordingly, no obstacle to the Court accepting that the clause provided for an employee entitlement to an incentive-based payment. 138 The statutory context, however, points to a different conclusion. Clause 16 provides for the payment of larger sums for long-serving employees than those provided for employees who have served for a short time. In this sense it may be said that the clause provides the employee with an incentive to remain with a particular employer longer than might otherwise be the case. That service is also likely to be longer if the employee conducts him or herself appropriately and does not refuse duty. The same, however, can be said of any award provision which conditions the payment of monies to an employee on satisfaction of a particular length of service. Many of the allowable award matters which are identified in s 513(1) of the Act concern award entitlements which become payable after prescribed periods. Annual leave loadings only become payable when the employee has worked long enough to become entitled to annual leave. Penalty rates only become payable to employees who are prepared to work longer than normal hours or at uncongenial times. The same may be said of loadings for working overtime or for shift work. Similarly allowances which are payable to employees who are prepared to work in difficult surroundings or remote areas might be said to provide incentives to employees to undertake such work. None of these provisions would be necessary if such payments were to be characterised as incentive-based payments within the meaning of s 513(1)(b). Moreover, the evident purpose of s 513(4) would be wholly undermined if s 513(1)(b) is accorded the wide construction contended for by Mr Summerton. These contextual considerations strongly suggest that such a wide construction, if otherwise open, must yield to the context in which the paragraph appears. This is necessary in order to ensure that the provision is construed in a way which conforms to the legislative intention: see Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69], CIC Insurance Limited v Bankstown Football Club Limited (1997) 187 CLR 384 at 408; Gidaro v Secretary, Department of Social Security (1998) 83 FCR 139 at 150-151; Commissioner of Taxation v Industrial Equity Ltd (2000) 98 FCR 573 at 577. The Explanatory Memorandum for the Work Choices Bill makes it clear that Parliament was well aware that the term "redundancy pay" had been applied, in awards, to both employer initiated and employee initiated redundancies. One of the purposes of s 513(4) was to prevent awards dealing with the latter category of redundancy. Furthermore, such award provisions as were to be permitted could only apply to respondent employers who employed 15 or more employees. Were provisions such as clause 16 to be treated as incentive-based payments under s 513(1)(b) the legislature's purpose in enacting s 513(4) would be frustrated. 139 Dictionary definitions support Yirra's submission that incentive-based payments are productivity related. The Oxford English Dictionary relevantly defines an incentive as: "Of or pertaining to a system of payments, concessions, etc., to encourage harder work or a particular choice of work." The Macquarie Dictionary defines incentive, inter alia, to mean "an inducement such as extra money, better conditions, etc., offered to employees to encourage better work." The Explanatory Memorandum for the Work Choices Bill treats such payment as being productivity related when it speaks of it being "a direct or indirect inducement, reward or benefit which aims to motivate an employee to achieve a particular goal or target." Provisions of the kind which were considered in Moranbah and Roche Mining provided for incentives in this sense. In Moranbah the employees who performed their duties at the highest standard received more than those who did not attain the same standard. In Roche Mining the dispute related to a provision which rewarded employees if certain safety bench marks were attained. There was, therefore, an incentive for employees to avoid unsafe practices which might give rise to injury or interruptions to production thereby undermining productivity. The examples suggested by the Industrial Magistrate can also be understood to be productivity related incentives. An employee who does not take all his or her available sick leave or one who successfully undertakes a training course or provides effective supervision of fellow employees can thereby enhance the productivity of a business. 140 By contrast, clause 16 does not provide an inducement to employees to work "better" or "to achieve a particular goal or target." Insofar as it rewards longevity as an employee it requires the employer to pay the same amount to a highly productive employee as it must pay a less productive employee who has been employed for the same period. Insofar as it makes it a condition of payment that the employee has not ceased to be employed by reason of misconduct or refusal of duty it does no more than preclude payments to employees who breach their contracts of employment. Put another way: employers are not required to make severance payments to employees, no matter how long they have served, if the termination of the employment agreement results from a failure, by the employee, to perform his or her obligations under the employment contract. 141 The expression "incentive-based payments and bonuses", as used in the Act, contemplates payments being made for achievement in the context of continuing employment even if the relevant payment happens to be made upon cessation of employment. The reference in the Explanatory Memorandum to motivation of employees to achieve particular goals or targets clearly suggests to us that the essence of the relevant payment is productivity, achievement or performance, rather than the accumulation of years of service. 142 For these reasons we consider that the Industrial Magistrate erred in holding that clause 16 could be characterised as an incentive-based payment within the meaning of s 513(1)(b) of the Act. Mr Summerton did not, either in this Court or before the Industrial Magistrate, seek to assert that clause 16 provided for redundancy pay as that term is defined in s 513(1)(k) and s 513(4). Nor did he assert that the clause dealt with any of the other allowable award matters identified in s 513. Clause 16 does not deal with an allowable award matter. It, therefore, ceased to have effect on 27 March 2006 to the extent that it contained provisions falling outside s 513(1)(k) and it did not require Yirra to make a redundancy payment to Mr Summerton. 143 The appeal should be allowed, the orders of the learned Industrial Magistrate should be set aside and the summons dated 24 January 2008 should be dismissed.

COSTS OF THE APPLICATION to intervene 144 While the appeal was pending the CFMEU applied, under s 855 of the Act, for leave to intervene in the appeal. The application was opposed by Yirra. On 15 October 2008 we heard argument on the application and granted the CFMEU leave to intervene on certain terms. Yirra contended at that hearing that the CFMEU should pay its costs of the application. We deferred ruling on the costs claim pending further argument on the hearing of the appeal. 145 Yirra contends that, at the time at which it sought leave to intervene in the appeal, the CFMEU was not a party to the proceeding. It was not, therefore, protected by the provisions of s 824 of the Act. 146 The CFMEU submitted that its interlocutory application was a "proceeding in a matter" within the meaning of s 824(1) of the Act and that, as applicant on the motion, it was a party for the purposes of the application and was therefore entitled to the protection of s 824(1). Alternatively, the CFMEU submitted that, if it was not a party to the intervention application, Yirra was not immunised, by s 824(1), from an order that it should pay the CFMEU's costs as the successful applicant on the motion. 147 Section 855(1) relevantly provides: "If the Court is of the opinion that an organisation, person or body should be heard in a proceeding before the Court in a matter arising under this Act … the Court may grant leave to the organisation, person or body to intervene in the proceeding." 148 Section 824 provides: "(1) A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) must not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause. (2) Despite subsection (1), if a court hearing a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) is satisfied that a party to the proceeding has, by an unreasonable act or omission, caused another party to the proceeding to incur costs in connection with the proceeding, the court may order the first-mentioned party to pay some or all of those costs. (3) In subsections (1) and (2): costs includes all legal and professional costs and disbursements and expenses of witnesses."

149 It is not disputed that the application for leave to intervene, made pursuant to s 855 of the Act, was an application by the CFMEU to be heard as an intervener in a proceeding in a matter arising under the Act. The CFMEU's application for leave to intervene in the appeal owes its existence to the requirements of s 855: see Re McJannet; Ex parte Australian Workers' Union of Employees (Qld) (No 2) (1997) 189 CLR 654 at 656. The application is not, of itself, "a proceeding … in a matter." In Ruhani v Director of Police (2005) 222 CLR 489 at 512-3 McHugh J said that:

"Both ss 76(ii) and 75(i) require that there be a "matter" for the purposes of conferring original jurisdiction on this Court. This Court cannot exercise original jurisdiction if there is no "matter" in the constitutional sense. Whether or not a controversy is a "matter" is not always easy to decide. A proceeding is not itself a "matter" for constitutional purposes. Thus, the mere creation of a proceeding by legislation does not mean that the controversy to be resolved by the proceeding is a "matter … arising under" the relevant Act… (If the mere creation of a proceeding could give rise to a "matter … arising under" the relevant Act, there would be no work for s 76(ii) to do. The law conferring the jurisdiction would be the law under which the "matter" would arise.) In Abebe [v The Commonwealth (1999) 197 CLR 510], Gleeson CJ and I held that the term "matter" meant "subject matter for determination in a legal proceeding", that is, the "determination of rights, duties, liabilities and obligations in a legal proceeding", and not simply "legal proceeding". Gummow and Hayne JJ identified three elements that may be used to ascertain whether there is a"matter": "the subject matter for determination in a proceeding", the "right, duty or liability [that] is to be established" and "the controversy between the parties"". (Footnotes omitted). An application under s 855 is not the "subject matter for determination in [the] legal proceeding." In this case the proceeding is the appeal. The matters for determination in the appeal were the rights, duties, liabilities and obligations of the parties to that appeal. The application which sought the leave of the Court for the CFMEU to be heard in that proceeding was not itself a proceeding in those matters.

150 Yirra accepts that, if s 824 applies to an application by a person to intervene in a proceeding, the CFMEU cannot be required to pay Yirra's costs of the application. No complaint is made that the application was made vexatiously or without reasonable cause. The only issue is whether the CFMEU is to be treated as a party when it made its application. If it was, s 824 applies. If it was not, Yirra submits that an order that the CFMEU pay its costs of the motion should be made.

151 There are conflicting decisions in this Court and in the Industrial Relations Court as to whether an interlocutory application constitutes a "proceeding in a matter" within the meaning of s 824(1) and its predecessor. The authorities were reviewed by Young J in Paras v Public Service Body Head of the Department of Infrastructure (No 3) (2006) 152 FCR 534. His Honour's review demonstrates that the weight of authority favours the proposition that an interlocutory application, made by a party to a proceeding under the Act, is a proceeding in a matter for the purposes of s 824(1): see, particularly, Shackley v Australian Croatian Club Ltd (1996) 141 ALR 736; Commonwealth v Construction, Forestry, Mining and Energy Union (2003) 129 FCR 271. See also Sydney Ferries Corporation v Australian Maritime Officers Union (No 3) [2008] FCA 960 at [6]. None of these cases, however, involved an interlocutory application by a person who was not a party to the proceeding at the time at which the application was made. They do not, therefore, provide direct assistance in resolving the present issue.

152 The most closely analogous decision is that of the Full Court in Commonwealth v Construction, Forestry, Mining and Energy Union. In that case the union had commenced a proceeding for a contravention of the Act against the Employment Advocate. The trial judge made an order for the filing of a verified list of documents. The Employment Advocate filed a list. The list included a copy of a letter from a Minister to the Prime Minister. The Employment Advocate objected to the production of the letter on the ground of public interest immunity. The claim for immunity was supported by an affidavit sworn by a senior officer of the Department of Prime Minister and Cabinet. Counsel retained by the Commonwealth appeared before the trial judge and argued unsuccessfully that the letter was protected from production. The judge ordered that it be made available for inspection. The Full Court granted leave to the Commonwealth to appeal from the order for inspection. The Commonwealth succeeded on the appeal. The Commonwealth sought its costs of the appeal and its application was opposed by the union on the ground that a forerunner of s 824 (s 347) operated to prevent the making of any order for costs. The Commonwealth maintained that s 347 did not apply because the Commonwealth was not a party to the original proceeding and that s 347 did not operate to prevent a costs order being made in favour of a non-party. The Full Court rejected the Commonwealth's argument and determined that there should be no order as to costs. The Full Court quoted with approval the reasons of Northrop J in Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 at 272 where his Honour said:

"The policy of s. 197A of the Act [the predecessor of s 347] is clear. It is designed to free parties from the risk of having to pay the costs of an opposing party. At the same time the section provides a protection to parties defending proceedings which have been instituted vexatiously or without reasonable cause. This protection is in the form of conferring a power in the court to order costs against a party who, in substance, institutes proceedings which in other jurisdictions may constitute an abuse of the process of a court." The Full Court continued (at 274): "In an action brought to enforce a right given by the Act, it would be quite contrary to this object to read s 347(1) narrowly such that interlocutory proceedings about, for example, discovery were not seen as proceedings "in the matter" at the heart of the principal proceeding and were instead seen as proceedings in a separate matter, defined according to the narrower and subsidiary controversy about discovery. Viewed in that way, the policy choice that s 347(1) reflects would be undermined since the so-called ordinary rule as to costs would often, perhaps nearly always, prevail in interlocutory matters. Only the trial of the principal action would be unassailably a proceeding in a matter arising under the Act. Such a result could not have been intended." 153 The Court then turned to the question of whether the Commonwealth was correct to contend that it was not a party in the matter. On this point the Court said (at 274-5) that: "Consistently again with the objects of the section, there is no reason to construe "party" narrowly and the Commonwealth, having taken part in the proceeding before the trial judge, and having sought and obtained leave to appeal and having had the carriage of the appeal, is to be treated as a party for the purposes of s 347(1)." (Emphasis added). 154 Neither the common law nor equity allowed a third party to intervene in a proceeding between a plaintiff and defendant. Accordingly, intervention must be authorised by statute. Thus Commonwealth and State Attorneys-General are able to intervene in proceedings that relate to a matter arising under the Constitution because that right is conferred by s 78A of the Judiciary Act 1903 (Cth). A similar right of intervention is conferred on the relevant Minister (acting on behalf of the Commonwealth) in proceedings arising under the Act: see s 856. Other statutory provisions which facilitate intervention, like s 855, require that the leave of the Court first be obtained. Whether intervention occurs by right or by leave, once a person or body has become an intervener, that person or body becomes a party to the proceeding and assumes the rights and responsibilities of a party: see Corporate Affairs Commission v Bradley; Commonwealth of Australia [1974] 1 NSWLR 391 at 396. This legal reality is acknowledged in the Act insofar as provision is made in s 856 for the awarding of costs against the Commonwealth where the Minister exercises his or her right to intervene. This is achieved by providing that s 824 does not protect the Commonwealth in such circumstances: s 856(3) and (5). 155 In the present case, s 855 required that the CFMEU obtain leave from the Court to intervene in the appeal. In order for it to obtain that leave it was necessary for it to move the Court on notice for the grant of leave. This gave rise to an interlocutory hearing in the principal proceeding. Once leave was granted the CFMEU became a party. Although having regard to the objects served by s 824, the word "party" ought not be narrowly construed, we consider that it is inapt to describe an applicant for leave under s 855 as a party to the proceeding in which the application is made. The applicant is seeking the status of intervener. It is not a party when the application is made and will not become one unless the application is successful. 156 We, therefore, consider that s 824 of the Act did not protect the CFMEU, as a "party" to the interlocutory application for leave to intervene in this appeal. 157 Whilst the CFMEU was successful in securing a grant of leave to intervene, the Court's exercise of its power in the intervener's favour was discretionary. In exercising its discretion the Court had regard to Mr Summerton's support for the proposed intervention and Yirra's opposition to it (see [2008] FCAFC 175 at [39]-[45]). Although Yirra was unsuccessful in its opposition to the granting of leave it was successful in securing the imposition of a number of terms and conditions limiting the role to be played by the intervener. 158 As the High Court has said there is no absolute rule with respect to the exercise of the power to award costs (see Oshlack v Richmond River Council (1998) 193 CLR 72 at 88 [40] and 126 [143]; see also Bodruddaza v Minister for Immigration and Multicultural Affairs (2007) 228 CLR 651 at 675-676 [77]). 159 In the circumstances we consider that there should be no order as to costs. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Graham and Tracey.

Associate: Dated: 5 May 2009 Counsel for the Appellant: Mr T Stanley QC and Mr R Manuel

Solicitor for the First Respondent: Bourne Lawyers

Solicitors for the Intervener: Construction, Forestry, Mining and Energy Union