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[2008] FCAFC 175
Federal Court of Australia (Full Court)
2008-10-15
As Black CJ, Graham J, Tracey JJ, Spender J
Original judgment source is linked above.
Background 9 Steven Summerton, the respondent, served Yirra Pty Limited trading as Richmond Demolition and Salvage for over four years. His pay advices described him as a 'Construction Worker Level 1(c)', this being the lowest classification for a labourer of at least twelve months' experience under the National Building and Construction Industry Award 2000 ('the award'). He was also paid a supervisor's allowance. The respondent left the appellant's employment in October 2007 by resigning without giving any notice, notwithstanding that the award contemplated that one day's notice be given. 10 The primary function of the respondent when working for the appellant was to perform work in connection with the demolition and removal of buildings. The work included loading of demolished materials and removal of those materials from the site. Some of the materials were dumped and others were unloaded and stored at the appellant's yard for later sale. The respondent engaged in labouring duties as required. He delivered fuel to demolition sites. He was responsible for the maintenance of tools and equipment including small items of plant and for the delivery of various items such as generators, jackhammers and welding gear to sites. 11 The respondent claimed that his employment was governed by the award and that he was entitled to receive redundancy pay in accordance with clause 16 of the award following his resignation in October 2007. 12 The parties were agreed that if the award applied and if the respondent had an entitlement to receive redundancy pay then the amount that was owing was $6,323.20 being eight weeks' pay for over four years' service. 13 The respondent's claim came before the Industrial Relations Court of South Australia constituted by Industrial Magistrate SM Lieschke who on 27 June 2008 decided the matter in the respondent's favour. 14 The learned Industrial Magistrate found that the respondent's employment with the appellant was governed by the terms of the award and that he was entitled to an 'incentive-based "redundancy/severance" payment as set out in clause 16 of the award following his resignation from employment in circumstances other than for misconduct or refusal for (sic) duty'. 15 The learned Industrial Magistrate proceeded to find that the respondent had an award based entitlement in the agreed sum of $6,323.20 to which he added an entitlement to interest from the date of filing of the summons fixed in the amount of $200. He proceeded to order the appellant to pay the respondent the sum of $6,523.20 within 21 days. 16 Clause 16 of the award defined redundancy to mean a situation where an employee ceased to be employed by an employer, respondent to the award, other than for reasons of misconduct or refusal of duty. Under clause 16.2.1 a redundant employee's entitlement to receive redundancy/severance payments was to be calculated in respect of all continuous service (as defined by the award) with the employer. 17 The learned Industrial Magistrate found that the respondent had become redundant in circumstances where the cessation of his employment was unrelated to any misconduct or any refusal of duty, it being held that refusal of duty was directed at a situation where an employee refused to perform certain aspects of the employee's job upon request. He distinguished such a case from one where an employee simply resigned. 18 Questions which were raised before the learned Industrial Magistrate included: (a) whether the respondent's employment was governed by the award; (b) if so, whether clause 16 of the award was excluded by ss 513 and 525 of the Workplace Relations Act 1996 (Cth) ('the Workplace Relations Act') as a non allowable matter in a preserved award; (c) if clause 16 of the award did apply to the respondent's entitlement, whether his employment ceased by reason of either misconduct or refusal of duty with the consequence that he was disqualified from receiving a redundancy payment by virtue of the definition of redundancy in clause 16.1 of the award. 19 Counsel for the appellant argued before the learned Industrial Magistrate that s 513 of the Workplace Relations Act did not permit as an allowable award matter those terms of clause 16 that the respondent sought to rely upon. This was because the termination of the respondent's employment was not at the initiative of the appellant, a company which had less than 15 employees. Accordingly it was submitted that by virtue of s 525(1) of the Workplace Relations Act, clause 16 of the award ceased to have effect. 20 Section 513 of the Workplace Relations Act relevantly provided: '513(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. …' 21 Section 525 of the Workplace Relations Act relevantly provided: '525(1) Immediately after the reform commencement [27 March 2006], 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.' 22 The respondent agreed that clause 16 provided for payments that did not fall within the meaning of redundancy pay permitted under s 513 of the Workplace Relations Act. However, he submitted that the terms of clause 16 provided for an allowable incentive-based payment, which was permitted by s 513(1)(b) of the Workplace Relations Act. 23 Counsel for the appellant submitted that an incentive-based payment had to be one related to production, but the learned Industrial Magistrate disagreed since incentives could relate to a range of issues in employment other than production but which were all somehow related to productivity or efficiency. 24 The learned Industrial Magistrate concluded that the respondent's characterisation of the payment for which clause 16 of the award provided was correct. He held that it provided for an allowable incentive-based entitlement. 25 On 11 July 2008 the appellant filed a Notice of Appeal in which it alleged that the learned Industrial Magistrate had erred in the following respects: 'a. holding that clause 16 was an allowable matter within the meaning of the Workplace Relations Act 1996 and was not excluded by or substantially modified by section 513 of the Workplace Relations Act 1996; b. holding that clause 16 was not excluded by the operation of section 525 of the Workplace Relations Act 1996; c. holding that clause 16, despite being described as redundancy and having the general characteristics of a redundancy clause, was as a matter of law an incentive-based payment provision.'
The present application 26 By a Notice of Motion filed 12 August 2008 the Construction, Forestry, Mining and Energy Union ('the CFMEU') has sought an order that it be given leave to intervene in the appeal pursuant to Order 52 rule 14AA of the Federal Court Rules. 27 The application has been supported by an affidavit of an Assistant National Secretary of the CFMEU, who is also the National Secretary of the Construction and General Division of the Union. 28 The deponent, David Noonan, deposed to the CFMEU being the principal union party to the award. Paragraphs 5, 6 and 7 of his affidavit provided: '5. The CFMEU has as members a large number of persons working in the construction industry whose conditions of employment are regulated in whole or in part by [the award]. Consequently the CFMEU has a real, significant and ongoing interest in the outcome of proceedings relating to the proper construction and/or enforceability of the provisions of [the award]. 6. The CFMEU and its predecessor organisations were parties to proceedings in the Australian Industrial Relations Commission which ultimately led to the inclusion of what now appears as 'Clause 16 Redundancy' of [the award]. 7. The CFMEU is familiar with the history of industrial regulation in the Australian construction industry, [the award] and its various clauses, including "Clause 16.1 Redundancy" and the practical application and operation of those provisions.' 29 Section 855(1) of the Workplace Relations Act relevantly provided: '855(1) 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 BCII Act or the Registration and Accountability of Organisations Schedule, the Court may grant leave to the organisation, person or body to intervene in the proceeding.' 30 By the Federal Court Amendment Rules 2002 (No. 2), which commenced on 12 September 2002 (later amended with effect from 23 March 2004) two new rules were inserted into the Federal Court Rules in relation to intervention. Order 6 rule 17 provided for intervention by third parties at trials and Order 52 rule 14AA provided for intervention by third parties on the hearing of appeals. 31 Order 52 rule 14AA of the Federal Court Rules provides: '14AA(1) The Court may give leave to a person (the intervener) to intervene in the appeal, on the terms and conditions, and with the rights, privileges and liabilities (including liabilities for costs), determined by the Court. (2) In deciding whether to give leave, the Court must have regard to: (a) whether the intervener's contribution will be useful and different from the contribution of the parties to the appeal; and (b) whether the intervention might unreasonably interfere with the ability of the parties to conduct the appeal as they wish; and (c) any other matter that the Court considers relevant. (3) The role of the intervener is solely to assist the Court in its task of resolving the issues raised by the parties. … (5) When giving leave, the Court must specify the form of assistance to be given by the intervener and the manner of participation of the intervener, and, in particular, must specify: (a) the matters that the intervener may raise; and (b) whether the intervener's submissions are to be oral, in writing, or both.' 32 A number of cases have dealt with the question of intervention including Re Boulton; Ex parte State of Victoria (1994) 126 ALR 620, but these were decided prior to the insertion into the Federal Court Rules of the rules to which reference has been made (see, in particular, Re Boulton; ex parte State of Victoria at 626-628). 33 In Forestry Tasmania v Brown (No 2) [2007] FCA 604 Black CJ addressed the status of an appeal where parties had intervened pursuant to Order 6 rule 17 at the trial level. In the course of the Chief Justice's reasons for judgment he made general observations in relation to the operation of the new rules. He observed that the Rules demanded a departure from the previous practice. He observed that the rules drew an express distinction between interveners and parties. He emphasised that the new rules provided that the role of an intervener was 'solely to assist the Court in its task of resolving the issues raised by the parties' (at [9]). 34 At [11] the Chief Justice said: '11 … the purpose of the intervention rules is to confine and limit intervention …' 35 In Sharman Networks Ltd v Universal Music Australia Pty Ltd (2006) 155 FCR 291 a Full Bench comprising Branson, Lindgren and Finkelstein JJ, considered the operation of Order 52 rule 14AA in relation to an appeal in which the Australian Consumers' Association, Electronic Frontiers Australia Inc and the New South Wales Council for Civil Liberties had made an application to be heard as amici curiae, rather than as interveners pursuant to Order 52 rule 14AA. At [11] the Full Court expressed its view that the new rules were intended to regulate comprehensively the practice of the Court with respect to the intervention of non-lawyer parties in proceedings, both original and appellate. 36 In the trial in Australian Securities and Investments Commission v Citigroup Global Markets Australia Pty Limited (ACN 003 114 832) (No 3) [2007] FCA 393 Jacobson J declined to make orders giving leave to the Australian Financial Markets Association to intervene in the trial. He observed that the Association was an industry association for participants in the financial markets industry which could be described as a 'lobby group for the industry'. He observed that its role was to 'represent the interests of its members and advocate what it described in its evidence as a "sensible and proportionate regulation of the wholesale banking and financial markets'''. The plaintiff, Australian Securities and Investments Commission, opposed the intervention, arguing that it was inappropriate for what was in essence a lobby group for the industry to intervene. It argued that whilst the Association had a substantial interest in the outcome, that was not a proper basis for permitting them to intervene. 37 Jacobson J observed that the limited form of intervention proposed by the Association would not unreasonably add to the length of the hearing nor would it unreasonably interfere with the ability of the parties to conduct the proceedings as they wished. However, his Honour was not satisfied that the Association's contribution would be 'useful or different from the contributions of the parties'. 38 Against the possibility that in the course of the proceedings his Honour may come to the view that the Association's submissions would provide a useful and different perspective, he reserved liberty to the Association to renew its application. 39 The CFMEU's application has not been opposed by the respondent, who is said not to be a member of the CFMEU. Indeed he supports the proposed intervention. 40 However, the CFMEU's application is opposed by the appellant. It has submitted that the CFMEU seeks to intervene not 'solely to assist the Court in its task of resolving the issues raised by the parties' but rather to support the case of the respondent and to protect the CFMEU's interests over a wider range of awards that it considers may be impacted by the decision. 41 The appellant submits that the fact that the CFMEU may have a genuine interest in the outcome of the appeal is not a sufficient basis for a grant of leave to intervene. 42 The appellant submits that the CFMEU's contribution, if given leave to intervene, will not be 'useful and different from the contribution of the parties to the appeal'. 43 The appellant further submits that there is a real likelihood that the duration of the appeal and the material to be considered will be increased so that the parties to the appeal would end up incurring additional costs. 44 If the Court is minded to give leave to intervene to the CFMEU, then the appellant submits that it should only be on a limited basis and subject to an undertaking by the CFMEU that it will meet the additional costs of preparation and hearing incurred by the parties. 45 The appellant submits that if leave to intervene is given, then the intervention should be limited to the provision of written submissions. Further, if oral submissions are permitted, they should be limited to no more than 30 minutes. 46 Whilst s 824(1) of the Workplace Relations Actimposes a restraint upon the Court ordering one party to pay the costs incurred by another party, that section, in my opinion, has no application to an intervener under s 855 of the Workplace Relations Act. By intervening an applicant such as the CFMEU does not become a party to the appeal to which the limitation on costs orders imposed by s 824 applies. There is no restraint upon the Court making an appropriate order for costs against an intervener regardless of the outcome of issues in respect of which submissions may have been provided by the intervener. 47 In my opinion, no leave could be given to the CFMEU to intervene in the appeal which would permit it to make submissions inconsistent with the findings of fact made by the learned Industrial Magistrate or with the concessions made by the respondent in the proceedings before the learned Industrial Magistrate. 48 Having said that I consider that, notwithstanding that both parties are represented by competent legal practitioners, the Court may be assisted in its task of resolving the issues raised by the parties were the CFMEU to be permitted to provide written submissions in a timely manner on the true construction of ss 513 and 525 of the Workplace Relations Act and, in particular, on the following questions: (a) whether clause 16 of the award was a term about an allowable matter being 'incentive-based payments and bonuses' within the meaning of s 513(1)(b) of the Workplace Relations Act, and (b) whether, immediately after 27 March 2006, clause 16 of the award ceased to have effect by virtue of s 525 of the Workplace Relations Act, as it was about a matter that was not an allowable award matter, and to provide brief oral submissions in support thereof and in response to such questions as the Court may, on the hearing of the appeal, see fit to direct to the CFMEU. 49 I would observe that the appellant's address is given as 'c/ Master Builders Association.' Whilst it is difficult at this stage to measure the utility of the CFMEU's likely submissions and the extent to which they may differ from those of the respondent, nevertheless, I anticipate that the CFMEU's approach may cast additional light upon the discrete issues to which reference has been made. 50 In my opinion, leave to intervene should only be granted on the basis that the CFMEU pays such additional costs of the appeal as may be incurred by the appellant by virtue of the grant of leave that is given. 51 The question of costs of this application should be reserved for consideration on the hearing of the appeal. 52 The orders that I would propose are that: '1. The Court gives leave to the Construction, Forestry, Mining and Energy Union to intervene in the appeal on the following terms and conditions: (a) The leave is confined to the provision of written submissions on the following questions, namely: (i) whether clause 16 of the National Building and Construction Industry Award 2000 ('the award') was a term about an allowable matter being 'incentive-based payments and bonuses' within the meaning of s 513(1)(b) of the Workplace Relations Act 1996 (Cth), and (ii) whether, immediately after 27 March 2006, clause 16 of the award ceased to have effect by virtue of s 525 of the Workplace Relations Act 1996 (Cth), as it was about a matter that was not an allowable award matter, and to the provision of brief oral submissions in support thereof and in response to such questions as the Court may, on the hearing of the appeal, see fit to direct to the Construction, Forestry, Mining and Energy Union. (b) The written submissions be filed and served on or before Thursday 13 November 2008. (c) The applicant pay such additional costs of the appeal as may be incurred by the appellant by virtue of the intervention. (d) If the leave to intervene is to be availed of, a Notice of Appearance is to be filed and served by the applicant, as intervener, on or before Friday 24 October 2008. 2. The Court orders that the question of costs of the Motion filed 12 August 2008 be reserved to the hearing of the appeal.' I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham
ON APPEAL FROM THE INDUSTRIAL RELATIONS COURT OF SOUTH AUSTRALIA
BETWEEN: YIRRA PTY LTD TRADING AS RICHMOND DEMOLITION AND SALVAGE
PLACE: ADELAIDE BY VIDEOLINK FROM BRISBANE, SYDNEY AND MELBOURNE
TRACEY J 53 I also agree with the orders proposed by Graham J and I agree with his Honour's reasons, save that I would reserve my position in relation to the application of s 824 of the Workplace Relations Act 1996 (Cth), in the case of an application made under s 855 of that Act, pending the argument that will occur on that point on the hearing of the appeal. I certify that the preceding paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.
Solicitor for the Appellant: K M M Eaton of Bourne Lawyers
Counsel for the Applicant, Construction, Forestry, Mining and Energy Union: A M Slevin
Solicitor for the Applicant, Construction, Forestry, Mining and Energy Union: T Roberts
Yirra Pty Ltd (t/as Richmond Demolition and Salvage)
Summerton; in the matter of an application by the Construction, Forestry, Mining and Energy Union
REASONS FOR JUDGMENT SPENDER J: 1 I agree with the orders that Justice Graham proposes, and I agree with his Honour's reasons in the making of those orders, subject to one reservation. I reserve my position concerning the operation of s 824 of the Workplace Relations Act 1996 (Cth) (the Act) in connection with the Notice of Motion seeking leave to intervene. Whether there is power to award costs on the motion seeking to intervene, and if so, what costs order should be made, is a matter which requires further submissions and research. 2 There is, in my view, a question of power to award costs against a person who has succeeded in an application under s 855 of the Act. That question has to have regard not only to the terms of s 855, and of s 824 of the Act, but also to the changes brought about by the new rules of the Federal Court, which came into force in 2002, and in particular, the new rule dealing with intervention on appeals in O 55, r 14AA. 3 That question has to be seen in the historical context of s 347 of the former Act (the precursor of the present s 824), and also in the context of the general "costs-free" environment of industrial disputation then obtaining. 4 As Black CJ pointed out in Forestry Tasmania v Brown (No 2) [2007] FCA 604, the new rules demanded a departure from the previous practice. The previous practice is exemplified in such cases as Re Boulton v Ex Parte State of Victoria (1994) 126 ALR 620. It would be curious if, as a matter of power, the introduction of new rules by the Federal Court in 2002 had the effect of dramatically altering the scope and reach of s 824 of the Act as then applied. 5 That is a sound reason for reserving the question of costs of the motion seeking leave to intervene, to the hearing of the appeal. 6 I therefore agree with the order proposed by Graham J, that the question of costs of the motion filed 12 August 2008 be reserved to the hearing of the appeal. 7 Consequent on that order, the written submissions on the question of costs of the motion to intervene should be filed in accordance with the timetable for which written submissions on the appeal have been ordered. 8 The orders of the court are as indicated by Graham J, with which both Tracey J and I agree. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender.
(1994) 126 ALR 620
(2006) 155 FCR 291