Finance Sector Union of Australia v Commonwealth Bank of Australia [2003] FCA 51 (7 February 2003)

Last Updated: 7 February 2003

FEDERAL COURT OF AUSTRALIA

Finance Sector Union of Australia v Commonwealth Bank of Australia [2003] FCA 51

FINANCE SECTOR UNION OF AUSTRALIA & JOSEPH ADAMS v COMMONWEALTH BANK OF AUSTRALIA

N 1068 OF 2000

MOORE J

7 FEBRUARY 2003

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1068 OF 2000

BETWEEN:	FINANCE SECTOR UNION OF AUSTRALIA FIRST APPLICANT
	JOSEPH ADAMS SECOND APPLICANT
AND:	COMMONWEALTH BANK OF AUSTRALIA RESPONDENT
JUDGE:	MOORE J
DATE OF ORDER:	7 FEBRUARY 2003
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The application by the respondent for an order staying this proceeding is dismissed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1068 OF 2000

BETWEEN:	FINANCE SECTOR UNION OF AUSTRALIA FIRST APPLICANT
	JOSEPH ADAMS SECOND APPLICANT
AND:	COMMONWEALTH BANK OF AUSTRALIA RESPONDENT
JUDGE:	MOORE J
DATE:	7 FEBRUARY 2003
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1 This judgment concerns an application ("the stay application") by the Commonwealth Bank of Australia ("the Bank") for an order staying an application ("the principal application") by the Finance Sector Union of Australia ("the Union") and Joseph Adams (collectively "the applicants"). The principal application is a representative proceeding brought by the applicants on behalf of former employees of the Bank who resigned from their employment when the information technology services of the Bank were outsourced and provided to the Bank by a third party. The group members are said to number approximately 572. Amongst other things, it is alleged in the principal application that the Bank breached the Commonwealth Bank Officers Award 1990 ("the Award") by failing to pay the group members severance payments on the basis that they had been made redundant.

2 The principal application was filed on 5 October 2000. It was in the docket of another Judge and the matter was fixed for hearing in July 2001. However the hearing did not proceed to finality as the principal application was transferred to my docket. This was because another matter ("the Macey matter"), raising broadly similar issues, was already in my docket and due to be heard by me. It was agreed that the further prosecution of the principal application would await judgment in the Macey matter. Judgment was given in the Macey matter 16 November 2001: see [2001] FCA 1613 and judgment given in an appeal on 18 June 2002: see [2002] FCAFC 193. The judgment of the Full Court determined the meaning of relevant provisions of the Award as they applied in the Macey matter. One material factual difference between the circumstances raised in the Macey matter and those raised in the principal application is that the employees said to have been entitled to payment under the Award in the former matter did not resign their employment with the Bank when the information technology services were outsourced, but the employees in the latter matter did resign.

3 In the stay application, the Bank seeks an order staying the principal application until the Australian Industrial Relations Commission ("the Commission") has determined an application under s 113(2) of the Workplace Relations Act 1996 (Cth) ("the Act") to vary the Award ("the variation application"). The purpose of the application is to endeavour to make clear that the Bank would have no obligation under the Award to pay the group members to which the principal application relates, any payment arising from their resignation from their employment on the basis that they had been made redundant. It is unnecessary to express a view about whether this objective can be achieved. It is sufficient to note that the variation application was filed on or about 3 April 2001 and that it was adjourned generally as a result of a decision of Senior Deputy President Duncan given on 20 June 2001. The variation application was adjourned generally on the application of the Union. During the submissions to the Senior Deputy President, counsel for the Union intimated that it would, in the principal application in this Court, initially seek only declarations about whether the Award had been breached and would not, initially, seek other orders. This appears to have been viewed by the Senior Deputy President as a matter of some significance. That is not now the position of the Union. Indeed, and in addition, there remains an unresolved issue as to whether I should order, as the Bank now requests, the trial of a separate issue designed to determine the Bank's liability under the Award before determining whether orders should be made, and if so in what amount, requiring payment of redundancy pay by the Bank to members of the group.

4 I should also mention that on 10 April 2001 the Bank applied to the then docket judge that the principal proceedings in this Court be stayed pending the determination of the variation application. However the docket judge stood over the application generally on 20 April 2001.

5 On 7 March 2002 on the Bank applied to Senior Deputy President Duncan to list the variation application for hearing. By a decision given on 4 April 2002 the Senior Deputy President declined to do so and confirmed his earlier decision to stand the variation application over generally.

6 The Bank supports the application for a stay on the following basis. It is appropriate that the proceedings in the Commission (namely the variation application as it relates to the Bank's possible liability in relation to group members) be resolved before the principal application is heard and determined. This would reflect the proper relationship between the Court and the Commission given that the Commission is the proper (and only) forum to resolve the underlying industrial dispute between the parties about redundancy entitlements. While the Bank, understandably, did not concede the point (and made clear it did not invite its determination in this stay application), it submitted that arguably any declarations about liability under the Award in its present terms would be declarations of right binding the Bank which could not be undone by the Commission: see Warramunda Village Inc v Pryde [2001] FCA 61; (2001) 105 FCR 437 and Commonwealth Bank of Australia v Finance Sector Union of Australia [2002] FCAFC 193 at [6] together with Tszyu v Fightvision Pty Ltd [2001] NSWCA 103. Arguably an issue estoppel may arise: see Australian Transport Officers Federation v State Public Services Federation (1981) 34 ALR 406 and Blagojevch v Australian Industrial Relations Commission [2000] FCA 483; (2000) 98 FCR 45 at [13]- [14]. The Bank submitted that if a stay application was unsuccessful it could suffer serious prejudice and be deprived of its statutory right to seek to have the Award varied.

7 The gravamen of the response of the applicants was that the Bank had a right to apply to vary the Award: see Fisher v Madden as Receiver and Manager of Dataflow Computer Services Pty Ltd [2002] NSWCA 28; [2002] 54 NSWLR 179 which it had exercised and what it was now seeking was effectively an opportunity to have the principal application adjourned to enable it to alter the respective rights of the parties. As a matter of principle, that should not be facilitated: see McGarry v Boonah Clothing Pty Ltd (1988) 80 ALR 284.

8 This is not the occasion to endeavour, in any comprehensive way, to discuss the relationship between the Court and the Commission. Suffice it to say that amendments made in 1993 to what was then the Industrial Relations Act 1988 (Cth) and subsequently have brought about what, in my opinion, are significant changes in the role of the Commission and an increased role for the Court in what might broadly be described as industrial relations issues. That is not to say, however, that the Court has not always had such a role (reflected in the existence, until recently, of an Industrial Division of the Court) though the Court's role has always been, and continues to be, to determine justiciable controversies about existing rights and liabilities. There is potential for tension arising from, on the one hand, the exercise of jurisdiction by the Court to interpret awards or industrial agreements made under the Act either in an application for their interpretation (see s 413 of the Act) or as a step in the process of determining an application for their enforcement or a penalty under Part VIII and, on the other hand, the exercise of the power of the Commission to vary an award (see s 113 of the Act) with, potentially, retroactive effect. The Commission's power to vary an award with particular effect may be exercised notwithstanding, and in the face of, an interpretation by the Court that the award has a different effect: see Re Brack; ex parte Operative Painters & Decorators Union of Australia (1984) 51 ALR 731.

9 In my view, the appropriate approach is not to stay the principal application. Whatever rights are presently conferred and liabilities imposed by the Award will be determined in the principal application. The Court has a duty to determine that application: see the judgment of Gray J in McGarry v Boonah Clothing Pty Ltd (supra) and the authorities referred to and Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at [19]. It is not appropriate to refrain from exercising that duty simply because one party wishes to take steps, potentially, to alter the rights and liabilities of the parties to the litigation in the Court. If, as the applicants contend, Mr Adams and group members were entitled to redundancy pay under the Award (as it was framed at the relevant time) when they left the employment of the Bank, that is a legally enforceable right the applicants are entitled to vindicate by proceedings in the Court. Assuming the existence of such a right and that the Commission can and would wish to alter those rights on the application of the Bank, that is a matter for the Commission. There is no reason why the Commission cannot, in the course of dealing with any application to vary the Award and for the purpose of determining such an application, interpret the Award. However even if the Commission took the view that it should hear the Bank's variation application (notwithstanding its earlier decision to adjourn the variation application generally though made apparently by reference to a position then adopted by the Union which has altered) the Court's duty would continue to be to hear and determine the principal application. If the Award was varied before judgment was given then the legal effect of the variation would, if raised as an issue which was relevant, have to be determined in the principal application.

10 I dismiss the stay application.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.

Associate:

Dated: 7 February 2003

Counsel for the Applicant:	Mr S Rothman SC with Mr P Ginters
Solicitor for the Applicant	Geoffrey Edwards & Co
Counsel for the Respondent:	Mr R Ellicott QC with Mr J Fernon
Solicitor for the Respondent	Freehills
Date of Hearing:	20 November 2002
Date of Judgment:	7 February 2003