Poultry Industry Preparation (State) Award and Other Awards, Re [2003] NSWIRComm 129 (30 April 2003)

Last Updated: 22 May 2003

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Poultry Industry Preparation (State) Award and Other Awards, Re [2003] NSWIRComm 129

FILE NUMBER(S): IRC 2882; 2883; 2884 and 2885

HEARING DATE(S): 04/07/2001, 05/07/2001

DECISION DATE: 30/04/2003

PARTIES:

APPELLANTS:

Employers First

Australian Business Industrial

RESPONDENTS:

Quality Bakers of Australia Ltd

Australian Workers' Union, New South Wales

Australasian Meat Industry Employees' Union, New South Wales Branch

Australasian Meat Industry Employees' Union, Newcastle and Northern Branch

INTERVENOR:

Labor Council of New South Wales

JUDGMENT OF: Wright J President Walton J Vice-President Harrison DP Patterson C

LEGAL REPRESENTATIVES

APPELLANTS:

Mr J Gallagher SC with Mr P Newall of counsel

RESPONDENTS:

Mr D Lloyd

Blake Dawson Waldron Solicitors for Quality Bakers

Mr M Thistlethwaite

The Australian Worker's Union, New South Wales

Mr S Gurney

The Australasian Meat Industry Employees' Union, New South Wales Branch and Newcastle and Northern Branch

INTERVENOR:

Mr M Lennon

Labor Council of New South Wales

CASES CITED: Bakery Industry (State) Industrial Committee. Application by the ALHMWU for a new Miscellaneous Workers' & Tip-Top Bakeries (NSW) Enterprise Award (unreported, McKenna C, IRC 97/1667, 22 July 1997)

Gregory v Phillip Morris Ltd (1988) 80 ALR 455

King v State Bank of New South Wales [2002] NSWIRComm 353

Knowles v Anglican Church Property Trust (No2) (1999) 95 IR 380

Principles for Review of Awards - State Decision 1998 (1998) 85 IR 38

Re Application by Building Workers' Industrial Union of Australia (1979) 41 FLR 192

Re Hotel &c Employees (State) Award (2001) 111 IR 393

Re Review of the Principles for Approval of Enterprise Agreements (2000) 101 IR 332

United Firefighters Union v Metro Fire Brigades (1998) 86 IR 340

LEGISLATION CITED: Industrial Relations Act 1991 s 231 s 232 s 233 s 234

Industrial Relations Act 1996 s 10 s 17 s 19 s 21 s 26 s 118 s 126 s 173 s 188 s 191

Workplace Relations Act 1996 (Cth) s 89A s 126

JUDGMENT:

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

FULL BENCH

CORAM: WRIGHT J, President

WALTON J, Vice-President

HARRISON DP

PATTERSON C

Wednesday 30 April 2003

Matter No IRC 2882 of 2001

POULTRY INDUSTRY PREPARATION (STATE) AWARD

Application by Employers First for leave to appeal and appeal against a decision and orders of Commissioner McKenna given on 3 April 2001 in Matter Nos IRC 109, 1958, 2241 and 2249 of 1999

Matter No IRC 2883 of 2001

POULTRY INDUSTRY LIVESTOCK (STATE) AWARD

Application by Employers First for leave to appeal and appeal against a decision and orders of Commissioner McKenna given on 3 April 2001 in Matter Nos IRC 109, 1958, 2241 and 2249 of 1999

Matter No IRC 2884 of 2001

PASTRYCOOKS, &c. (STATE) AWARD

Application by Australian Business Industrial for leave to appeal and appeal against a decision and orders of Commissioner McKenna given on 3 April 2001 in Matter Nos IRC 109, 1958, 2241 and 2249 of 1999

Matter No IRC 2885 of 2001

BISCUIT & CAKE MAKERS (STATE) AWARD

Application by Australian Business Industrial for leave to appeal and appeal against a decision and orders of Commissioner McKenna given on 3 April 2001 in Matter Nos IRC 109, 1958, 2241 and 2249 of 1999

REASONS FOR DECISION OF THE COMMISSION

[2003] NSWIRComm 129

1 On 4 and 5 July 2001, the Full Bench heard applications for leave to appeal and, subject to leave being granted, appeals by Employers First and Australian Business Industrial (ABI) against decisions of McKenna C given on 14 January and 3 April 2001 in which the Commissioner varied the Poultry Industry Livestock (State) Award 300 IG 208, the Poultry Industry Preparation (State) Award 265 IG 559, the Poultry Industry Preparation Wages (State) Award 282 IG 648, the Biscuit and Cake Makers (State) Award 309 IG 157, and the Pastrycooks, &c (State) Award 309 IG 133, (the awards) pursuant to s 19 of the Industrial Relations Act 1996 (the Act).

2 Mr J Gallagher SC appeared with Mr P Newall for the appellants. Mr B Lloyd appeared for Quality Bakers of Australia Ltd (QBA). Mr M Thistlethwaite appeared for The Australian Workers' Union, New South Wales (AWU). Mr S Gurney appeared for The Australasian Meat Industry Employees' Union, New South Wales Branch and Newcastle and Northern Branch (AMIEU). Mr M Lennon appeared for the Labor Council of New South Wales. Whilst it appeared in the proceedings at first instance, the National Union of Workers, New South Wales Branch, did not appear in these proceedings.

3 Having considered the parties' submissions, the Full Bench announced on 5 July 2001 its decision that leave to appeal should be granted, the appeal upheld, the decisions and challenged award variations made by McKenna C should be set aside and the awards varied in terms of exhibit 2, a document which contained the agreed variations to the relevant awards in the event that the appeals were upheld. The Full Bench indicated that reasons for decision would be given in due course, and made the following observations "for the benefit of parties to proceedings under s 19 of the Act":

The Commissioner decided to remove from the sick leave provisions of the subject awards the provision requiring employees to communicate the nature of their injury or illness to their employer when absent from work due to such occurrences.

The Commissioner determined to remove those provisions from the subject awards, pursuant to s 19(6) of the Act, in order to modernise the subject awards pursuant to s 19(2).

We consider that the variations of the subject awards, so made, were not permitted by the terms of s 19 of the Act. The terms of s 19 did not require the adjustments made by the Commissioner. In particular, the variations made to the awards were not warranted by the expression "to modernise" in s 19(2).

The issues raised in relation to sick leave provisions of the awards were appropriate to be dealt with pursuant to s 10 or s 17 of the Act and not s 19. We note in this respect the Full Bench makes no findings about the merit of the particular provisions contained within the subject awards.

We now provide the reasons for the decision.

4 As is clear from the observations made in the extempore decision of 5 July 2001, the principal issue in these proceedings concerned the operation of s 19 of the Act and, in particular, the power to alter the provisions of an award the subject of the review process. Before considering the Commissioner's decisions, it is convenient to set out s 19 of the statute:

19. Review of awards

(1) The Commission is required to review each award before September 2001 and subsequently at least once in every 3 years.

(2) The purpose of a review is to modernise awards, to consolidate awards relating to the same industry and to rescind obsolete awards.

(3) The Commission must take account of the following matters in the review of awards:

(a) any decision of the Commission under Part 3 or any other test case decision of the Commission,

(b) rates of remuneration and other minimum conditions of employment,

(c) part-time work, casual work and job-sharing arrangements,

(d) dispute resolution procedures,

(e) any issue of discrimination under the awards, including pay equity,

(f) any obsolete provisions or unnecessary technicalities in the awards and the ease of understanding of the awards,

(g) any other matter relating to the objects of the Act that the Commission determines.

(4) The Commission must also take account of the effect of the awards on productivity and efficiency in the industry concerned.

(5) During a review of awards, relevant industrial organisations and any other parties to the awards may make submissions on any of the matters being reviewed.

(6) The Commission is to make such changes to awards as it considers necessary as a result of a review.

The Decisions under appeal

5 The decisions subject to appeal were made by McKenna C in award review proceedings commenced by the Industrial Registrar of the Commission's own motion, under s 19 of the Act.

Decision of 19 January 2001

6 The first of the decisions subject to appeal was delivered on 19 January 2001 and dealt only with the Poultry Industry Livestock (State) Award. The parties to these proceedings were the AWU, Employers First (known then as the Employers Federation of New South Wales) and ABI. Agreement was reached on all of the proposed changes except the issues of sick leave (clause 12 of the award), disciplinary leave (clause 19 of the award) and the payroll deduction of union dues (clause 22 of the award).

7 Each of the disputed issues had been agitated by the AWU which, in essence, sought the removal of certain provisions of the award as an exercise of the power provided in s 19(6) of the Act. The employer parties contended, inter alia, that the Commissioner did not have power to deal with the matters agitated by the AWU in the context of review proceedings, as the variations sought were beyond the scope of the power conferred by s 19(6). On the employer's contentions, each of the variations sought by the AWU should properly be dealt with by way of an application for variation under s 17 of the Act, or by reference to the President as a special case.

8 McKenna C considered that "none of the matters which [were] raised in the submissions would go beyond the scope of s 19 nor beyond the matters contemplated in the Full Bench decision" (referring to Principles for Review of Awards - State Decision 1998 (1998) 85 IR 38 (the Award Review Decision)). The Commissioner also referred to Re Review of the Principles for Approval of Enterprise Agreements (2000) 101 IR 332 (at [54]), before refusing to accept the employer's contention that the matters raised by the AWU "amount to an ordinary application to vary the awards, such as might attract wage fixing principles and special case considerations", referring to the "specific statutory context of modernisation of the awards and so forth" before concluding:

The Commission has a statutory obligation under s 19 to review awards periodically. In the context of a review conducted by the Commission, those appearing in the proceedings do not make applications as ordinarily understood. Rather, during a review of awards relevant industrial organisations and any other parties to the awards may make submissions on any of the matters being reviewed. In addition to the submissions of the relevant industrial organisations, the Minister, the President of the Anti-Discrimination Board and State Peak councils may make submissions in pursuance of their general right of intervention in Commission proceedings under s 167 of the 1996 Act. The Commission is then to make such changes as it considers necessary as a result of a review, no doubt assisted by the parties' submissions.

In short, I do not accept those parts of the submissions of the Employers' Federation and ABI which were to the effect that the changes proposed in the AWU's submissions were beyond the scope of a s 19 review and nor do I accept the submission that the matters should be referred to the President as special cases within the meaning of the wage fixing principles.

9 The Commissioner then turned to deal with the disputed issues. The issue surrounding the sick leave provision revolved around a requirement in the clause for an employee "as soon as reasonably practicable ... inform the employer of an inability to attend for duty and, as far as practicable, state the nature of the injury or illness and the estimated duration of the illness" (emphasis added).

10 The Commissioner, having stated that "one of the purposes of a review under s19 of the 1996 Act is to modernise awards" and that in such a process "the Commission is to make such changes to awards as it considers necessary", emphasised the need to consider "the objects of the Act" and in particular "the legislative object of providing a framework for the conduct of industrial relations that is fair and just". Whilst accepting the submission of Employers First that the award provision was not "obsolete", the Commissioner continued:

Nonetheless, having considered the parties' submissions, I consider that as part of the modernisation of the award it is necessary and appropriate to make the change proposed by the AWU, that is, to omit the requirement presently imposed on employees to state the nature of illness and injury. As the AWU submitted, the employer relevantly and reasonably needs to know the anticipated duration of an employee's sick leave absence for operational reasons. The nature of a person's illness or injury may, however, be an intensely personal or private matter. It is, in my opinion, inconsistent with modern concepts of privacy and industrial relations that an employee should be required by an award to have to state the nature of an illness or injury to an employer if an employee does not wish, for his or her own reasons, to disclose what ordinarily may be considered personal and private information. ...

I am satisfied that a requirement on employees to state to employers the nature of illness or injury has no proper place in a modern award; indeed, I consider it to be an arcane and intrusive requirement.

11 The Commissioner then rejected a contention on behalf of the employer parties that the words "so far as practicable", and in particular the emphasis on the practicability of disclosure, was sufficient to protect privacy concerns before concluding:

In a modern industrial context that is “fair and just” (s3(a)), I do not consider that an employee should have a routine, award based requirement to disclose what may be considered as private information concerning the nature of personal illness or injury. Moreover, as the AWU submitted, there may be, unfortunately, a stigma attaching to some forms of illness - and, hence, the collateral possibility of discrimination. It is an object of the 1996 Act to prevent and eliminate discrimination in the workplace. The omission of an award based requirement to state the nature of an illness or injury may be seen as being compatible with the object of preventing or eliminating discrimination (at least in some work contexts), having regard to the nature of the particular illness or injury of the employee concerned.

12 McKenna C concluded that the terms of the award provision should be varied as part of the s 19 review by the omission of the words "the nature of the injury or illness ".

13 The "disciplinary leave" issue arose out of clause 19 of the award (entitled "contract of employment"), which provided that employment would be on a weekly basis and that upon termination, other than summary dismissal for "malingering, inefficiency, neglect of duty or misconduct", an employee would be entitled to receive "one week's notice or payment in lie thereof ". The disciplinary clause continued to provide an alternative to dismissal in what may conveniently be referred to as "disciplinary leave", in the following terms:

(b) In lieu of dismissal for an action other than wilful misconduct, the employer and employee concerned on "disciplinary leave". Such leave shall be without pay and shall be for a period of not less than five working days and not more than 20 working days.

This option may only be exercisable once in any two-year period for an individual employee.

14 Clause 19 also provided a "Counselling Procedure" which laid down a procedure for dealing with "any case where the action of an employee is unacceptable to the employer".

15 The Commissioner accepted submissions from the AWU that the disciplinary leave provisions were properly characterised as a stand-down clause, that the provision for a stand-down in s 126 of the Act was a "comprehensive code" and that the award provisions for stand-down were inconsistent with and rendered obsolete by s 126 of the Act. The employer parties contended that the award provision was not contrary to s 126 of the statute, could co-exist with the statutory provision as they served different purposes and that to remove the provision would be to go beyond the powers available to the Commission in the context of a s 19 award review. It was further contended that the inclusion of that provision was inserted as a consent matter arising out of structural efficiency negotiations in 1992 and that as such, the issue was more properly dealt with by way of an application for variation under s 17 of the statute. In dealing with this matter in her decision of 19 January 2001, the Commissioner said:

I am of the view that the provisions of cl 19 of the award cannot remain in the award in as much as they purport to permit employers and employees' representatives to agree to direct an employee onto an unpaid suspension or stand-down for disciplinary reasons.

It seems to me that, whatever name it may given in the award, disciplinary leave under cl19 of the award amounts, no more and no less, to a stand-down or suspension without pay for disciplinary reasons. Under the award's provisions, the direction to take disciplinary leave may be effected upon agreement between the employer and the employee's representatives - even in circumstances where the employee did not accept the consent position that had been reached between the employer and the employee's representative as to the disciplinary outcome.

As the disciplinary leave provisions should be more properly characterised as stand-downs without pay, then it is clear that the award clause runs foul of the stand-down provisions set out at s126 of the Act.

16 McKenna C considered the history of stand-down provisions in the New South Wales industrial legislation, concluding that the Industrial Relations Act 1991 had "legislatively codified the circumstances in which employees could be stood down without pay", before concluding that "s 126 of the 1996 Act comprises an exclusive code" for the standing down of employees, and continuing to observe:

It seems to me that the Act specifies at s 126 the circumstances where unpaid stand-downs may be effected by the Commission, and there is no proper jurisdictional source elsewhere in the Act for the Commission to give effect to unpaid stand downs as disciplinary leave or otherwise. In reaching this conclusion, I have also considered the interaction of other provisions in the Act designed to protect an employee's entitlement to payment of wages. ...

In New South Wales, the 1996 Act specifies the particular circumstances when stand-downs without pay may be effected - and the disciplinary leave provisions of the award do not come within any of the circumstances specified in the statute".

17 The Commissioner emphasised that "plainly, ... the Commission may not effect by award matters which would otherwise be beyond the scope of the jurisdiction in the Act even where, as was submitted, such provisions were inserted by party consent" before concluding:

Accordingly, I have decided that it is necessary, as a result of the review, to omit the award's disciplinary leave provisions. In summary, there is no proper jurisdictional footing for the retention of such provisions within the award. Hence, the provisions are obsolete or there omission is required to modernise the award, or both.

18 McKenna C expressed further concern as to a provision, clause 19(iv) of the award, which provided that clause 19 "shall not affect the right of the employer to deduct payment for any day or portion thereof during which an employee is stood down by the employer as the result of refusal of duty, malingering, inefficiency, neglect of duty or misconduct on the part of the employee". The Commissioner continued:

Given that this sub-clause was not raised by me during the proceedings or by the parties, it is appropriate that the parties should be given the opportunity to make submissions concerning the retention or otherwise of the sub-clause as part of this s 19 review.

19 The review of the Poultry Industry Livestock (State) Award was stood over to allow "relevant industrial organisations the opportunity to consider this decision".

Decision of 3 April 2001

20 The second decision of the Commissioner dealt with the Poultry Industry Preparation (State) Award, the Poultry Industry Preparation Wages (State) Award, the Biscuit and Cake Makers (State) Award, the Pastrycooks, &c (State) Award, and the outstanding issues from the review of the Poultry Industry Livestock (State) Award, as identified in the decision of 19 January 2001. Whilst the awards were not formally joined, the Commissioner considered it "convenient" to deal with the various review proceedings in the one decision, having regard to "the overlapping issues concerning the awards' stand-down and sick leave clauses". These overlapping issues were dealt with at the outset of the second decision.

21 Turning firstly to the Livestock award, the decision noted that the parties exercised the leave granted in the decision of 19 January 2001 to make further submissions on whether it was appropriate to include clause 19(iv) in the award. On this occasion, the employers were represented by Mr P Newall of counsel and the AWU was represented by Mr M Thistlewaite.

22 Mr Thistlewaite contended that the clause did not of itself purport to create a right to stand-down for breach of duty, malingering, etc, and could not in its terms be construed as providing such a right. Rather, it sought to protect a purported existing common law right. In his submission, the stand-down without pay provision should be removed in the s 19 process, as the right to which the provision referred, did not exist at common law (referring to Re Application by Building Workers' Industrial Union of Australia (1979) 41 FLR 192 and Gregory v Phillip Morris Ltd (1988) 80 ALR 455). The award review process expressly required the removal of provisions which would lead to confusion in interpretation, and to have an award provision which protected a right which does not exist is certainly a provision that warrants removal. Mr Thistlewaite further contended that s 126 of the Act was an "exclusive code", the award provision was inconsistent with it and as such should be removed.

23 Counsel for the employers adopted the contentions put in the earlier proceedings relating to the Livestock award, emphasising that the Commission was bound to act within the "guidelines" set out in the Award Review Decision, that the removal of the stand-down without pay provision would result in a "substantial change to the award not warranted by any perception of obsolescence or infelicitous wording" and that such a change should only be made in accordance with the wage fixing principles, by an application under s 17 of the Act. It was further contended that there remained "without question" a common law right to refuse pay where an employee refuses "duty": see United Firefighters Union v Metro Fire Brigades (1998) 86 IR 340 and that it was not open as a matter of statutory construction to construe s 126 as a code, requiring an employer to make application to the Commission every time it intended to exercise this right. On Mr Newall's contention, s 126 was not a comprehensive code which would operate to the exclusion of any provision within an award and that clause 19(iv) of the award, itself, conferred power to stand-down without pay in certain circumstances.

24 Having referred to the remaining submissions in relation to the Livestock award, the Commissioner set out submissions from the remaining parties in the other awards subject to review (the Poultry Industry Preparation (State) Award, the Poultry Industry Preparation Wages (State) Award, the Biscuit and Cake Makers (State) Award, and the Pastrycooks, &c (State) Award), dealing with the "overlapping issues" - that is, the sick leave provisions, the disciplinary leave provisions and the provisions providing for stand-down without pay for breach of duty, malingering, etc. Each of the other awards contained clauses in substantially similar, although not precisely the same terms as those considered in the Livestock award proceedings.

25 The distinguishing feature in relation to these latter awards, which warrants emphasis in this decision, was that each of these further award review proceedings came forward by way of consent. Expressly included within the consent position put to the Commissioner was a recognition that the proposed award contained clauses which the Commissioner had concluded warranted removal in the decision of 19 January 2001 relating to the Livestock award. The parties had jointly contended these matters could only be removed from the award by way of special case in accordance with the wage fixing principles.

26 The Commissioner stated that in her view the consent position between the parties covered "essentially the same matters that were in contention" in the earlier Livestock award proceedings and that she "did not propose to deal again in this decision with submissions already considered" in the decision of 19 January as "the further submissions advanced in these proceedings have not led me to any relevantly different conclusion". Having made reference to a submission from counsel for the employer parties that in the latter proceedings, "no party ... could be said to be trying to use s 19 as a 'back door' to effect changes which otherwise would have to be brought by way of a special case", the Commissioner made some further observations on the nature of the Commission's role in s 19 award review proceedings, similar to those made in the decision of 19 January, as follows:

In s 19 proceedings where the industrial parties are in consent, but the Commission does not accept that consent position as representing an appropriate s 19 review outcome, it may be asked rhetorically what "application" could be referred to the President for special case consideration under the wage fixing principles and who would make the submissions in any such proceedings contrary to the parties' consent proposals? I think the answer must be that there is no application, as such, and that position is crystallised in circumstances where all industrial parties are in consent, but the Commission, having regard to the provisions of s 19 of the 1996 Act, does not accept such consent position as being the appropriate review outcome. A number of very recent decisions have similarly concluded that an application under s 17 is not required in order to give effect to changes in s 19 matters, eg see Re Warehouse Employees - Drug (State) Award, Kavanagh J, IRC/99/851, 21 February 2001; and Re Rock and Ore Milling and Refining (State) Award and other awards, Sams DP, IRC 99/6041 and other maters, 28 March 2001.

27 These observations were also consistent with some observations made earlier in the decision of 3 April 2001, in relation to a foreshadowed application by the AMIEU to disqualify the Commissioner under s 173 of the Act. Whilst the Commissioner noted that the application for disqualification was not finally pressed, she indicated that she would not have acceded to the request in any event. The Commissioner's reasoning for such an observation was expressed in the following terms:

Shortly stated, a review under s19 of the 1996 Act does not involve the exercise of conciliation and arbitration functions as ordinarily understood, and as is contemplated in s173 of the 1996 Act. Rather, it involves the exercise by the Commission of a legislatively required function to review awards. Moreover, the relevant industrial organisations which made submissions matters IRC99/1958 and IRC99/1959, namely the AMIEU, EF and ABI, had reached a consent position concerning the form the reviewed award should take. The Commission is not a party to awards nor to the review proceedings, and is not bound to give effect to the consent position of the relevant industrial organisations. Given there were no contested issues to decide in the review proceedings between the industrial organisations, the hearing of the parties' consent submissions (pursuant to the rights given in s19(5)) in the review could not, on any analysis, be characterised as "the exercise of arbitration powers" within the meaning of s173(1) of the 1996 Act.

28 McKenna C then embarked upon a detailed consideration. Turning firstly to the disciplinary leave and stand-down without pay provisions, the Commissioner referred to various recommendations and submissions which arose from inquiries into possible stand-down provisions for industrial legislation, the Green Paper, White Paper and Niland Inquiry, and the amendments to the Industrial Relations Bill of 1990 which then became the Industrial Relations Act 1991 (the 1991 Act) with stand-down provisions located in Part 6 at ss 231 - 234, before concluding that the "provisions of the 1991 Act ... demonstrated the Parliament's intention to create an exclusive code concerning stand-downs" and that "the 1996 Act continued the legislative approach to stand-downs which had been brought about in 1990-1991". The Commissioner stated that, in her view, "since the introduction of dedicated provisions in the 1991 Act and the 1996 Act concerning stand-downs ... stand-downs have not been available by means of award based provisions", before concluding:

The award clauses concerning stand-downs and disciplinary leave run foul of the provisions of s 126 of the 1996 Act, and they are without a proper jurisdictional basis. It does not matter that they were permitted under the 1940 Act; or that the clauses were inserted by consent, arbitration or as trade-offs; or whether they are cast in terms purporting directly to permit such stand-downs; or whether the clauses are cast in terms which may inferentially confer such a right. The award clauses in question have no proper jurisdictional basis and, as such, cannot remain in the reviewed form of the awards.

29 The Commissioner also observed that:

Even if I am wrong in relation to the issue of jurisdiction, I would not consider as appropriate the inclusion of such provisions in awards where they were contested.

30 McKenna C then made observations specific to the issues surrounding the stand-down for breach of duty clauses, rejecting the construction placed on similarly worded clauses by J B Sweeney J in Re Application by Building Workers Industrial Union of Australia as such a construction was "inconsistent with the words of the clauses themselves", concluding that "the award does not itself confer a right to stand-down employees without pay, and on a plain reading refers to purported rights which do not in fact otherwise arise under the award or at common law". McKenna C noted that "the purported rights to which the award refers misrepresent the common law position" and that it was appropriate to remove the provisions providing for stand-down without pay from the Livestock award and the other awards as "it does not assist in the ease of understanding of awards to refer to rights which do not exist".

31 Turning then to the issues surrounding the form of the sick leave provisions in the other awards, notably in terms similar to those dealt with in the decision of 19 January 2001 as requiring an employee to disclose to an employer the nature of a personal illness or injury, the Commissioner held that "whilst I have considered the new or additional submissions advanced", she maintained her view and adopted the reasons given in the decision of 19 January 2001, noting in particular that "consent of the parties in each of the awards in question to the inclusion of such a provision does not leave me to any contrary view". McKenna C did not accept contentions advanced on behalf of the employer's that such a clause assisted compliance with occupational health and safety legislation, stating "I can see no good need for an award-based requirement on employees to state the nature of every illness that may befall them", before making the following conclusions:

In my opinion, it is not discriminatory within the meaning of the Anti-Discrimination Act 1977 to require an employee to provide a medical certificate if required to support a claim for paid sick leave; and each of the awards makes provision for the provision of medical certificates. However, it is, in my opinion, overstepping the mark to also have an award-based requirement on employees to personally state to the employer the nature of the illness or injury. It must be borne in mind that this requirement applies to every illness or injury that may befall an employee. There would be an obligation to personally state to the employer information concerning potentially intensely personal, private or distressing information about the nature of an illness or injury - information that an employee may be shielding even from his or her own family members and friends. I cannot accept the proposition that it is appropriate for any such requirements to feature in any modern award, having regard to the balance between employers' reasonable needs for relevant information (eg the anticipated period of absence) and protecting employees' rights to privacy about matters as personal as illness where the employee does not want, for his or her own reasons, to discuss such matters with the employer. I determine accordingly in relation to each of the awards. To the extent that this involves a values-based assessment of what is appropriate in a modern award, I consider that sch changes are within jurisdiction given that the Commission is to make changes considered necessary as a result of a review.

32 The final matters determined by the Commission in the decision of 3 April are then dealt with under the heading "Miscellaneous Issues". These matters related only to the Poultry Industry Preparation (State) Award, and as such, formed part of the consent position put by the industrial parties to that award. Again, the Commissioner concluded that the proposed clauses relating to redundancy and deductions from wages for a failure to return protective clothing and equipment provided by an employer, had no "jurisdictional authority" in the 1996 Act and as such should be removed as a part of the review process. The provisions providing for a deduction of wages to cover the cost of protective equipment not returned, is the only "miscellaneous" issue that has been the subject of challenge on appeal.

33 In relation to that issue, McKenna C adopted the reasoning contained in her earlier decision in Bakery Industry (State) Industrial Committee. Application by the ALHMWU for a new Miscellaneous Workers' & Tip-Top Bakeries (NSW) Enterprise Award (unreported, McKenna C, IRC 97/1667, 22 July 1997), to the effect that an award provision of the kind in question was inconsistent with s 118 of the statute in that it failed to meet the "twin criteria" of being "paid on behalf of an employee" and "authorised by an industrial instrument to be deducted and paid". That is, deductions of that kind "could not, on any reasonable analysis, be said to be paid on behalf of an employee". Having adopted that reasoning, the Commissioner continued:

In my view, there is no proper jurisdictional basis for the purported award-conferred powers to effect deductions to the extent they are inconsistent with the statutory formulations. In this regard, I note also that it is not uncommon for disputes to arise where an employer asserts that an employee has not returned company property or has returned property in poor condition (or, for instance, has allegedly been overpaid). In such circumstances, it is simply not lawfully open to an employer unilaterally to withhold or deduct from wages (or other entitlements) amounts already earned by or otherwise accruing to an employee to offset alleged debts, and awards of this Commission cannot purport lawfully to confer such authority. In any event, if an employee did not return old or worn-out protective equipment, it is not apparent to me why the employee should effectively have to pay to the employer the full replacement cost for new equipment. The provisions purporting to permit deductions are, in my view, bad for want of proper jurisdictional authority, having regard to the provisions of s 118 of the 1996 Act. I would not include a purported award right to effect such deductions in the reviewed award.

Grounds of Appeal

34 The applications for leave to appeal and the appeals reflect largely the same grounds. The matters in common to the four appeals are as follows:

1. The Commissioner erred in holding that none of the variations made to the Award went beyond the scope of s 19 of the Act.

2. The Commissioner erred in holding that none of the variations proposed to be made to the Award warranted referral to the President in accordance with the Special Case Principle.

3. The Commissioner erred in holding that none of the variations proposed to the award went beyond the scope of the matters contemplated in the decision of the Full bench in the Review Principles Case, particularly in holding that none of the award variations contemplated amounted to applications to vary the Awards, and did not attract the Wage Fixing Principles.

4. The Commissioner erred in proceeding on the basis that in the exercise of her powers pursuant to s 19, the Commission may vary awards in order to give effect to the Commission's opinion as to what a modern award should contain.

5. The Commissioner erred, and took into account an irrelevant consideration, when she permitted that view to affect or form any part of her decision.

6. The Commissioner erred in holding there was no jurisdictional basis for the Commission to insert stand-down clauses in awards, or otherwise give effect to stand-downs, otherwise than pursuant to s.126 of the Act.

7. The Commissioner erred in deleting and/or varying the clauses in the awards.

8. The Commissioner erred in holding that the requirement placed in the various awards for an employee to advise the employer, so far as is practicable, of the nature of the employee's illness was an "arcane and intrusive requirement", contrary to "modern notions of privacy", and thereby permitting value judgments to influence the outcome of the review process with respect to the substantive terms of the awards.

9. The Commissioner erred in placing insufficient weight on the fact that the awards as previously made were done so by consent.

35 In addition, the appeal in relation to the Poultry Industry Preparation (State) Award, raised questions of whether the clause providing for the deduction of monies from wages for the failure to return certain protective equipment was inconsistent with the provisions of s 118 of the statute.

Appellants’ Submissions

36 Senior counsel for the appellants, Employers First and ABI, contended that there were three main issues on the appeal: the scope of the powers exercisable by the Commission in a s 19 award review; the nature and effect of s 126 of the statute and the operation and effect of s 118 of the statute.

37 In relation to the first of these issues, senior counsel contended that McKenna C had fallen into error in approaching the resolution of s 19 award review proceedings on the basis that the Commission may vary awards of its own volition in order to effect the purpose of "modernising" an award as provided in s 19(2).

38 Employers First and ABI contended that the power in s 19 is "essentially an administrative power". The purposes of an award review as identified in s 19(2), consolidating awards, rescinding obsolete awards are "demonstrably administrative powers not requiring the exercise of subjective judgment" and that the term "modernise" awards in that provision "must be read in the context of the two purposes with which it is listed in s 19(2) and cannot be seen as a purpose wider that the other two, administrative, purposes".

39 On senior counsel's submission, "substantive changes to rights and obligations above determined minima and based on value judgments are not intended to occur in the review process". The award review process is not to be seen as "an alternative to the award making power" under s 10 of the Act. The award making power is the context in which the Commission has a mandate to apply value based judgment as to what constitutes "fair and reasonable conditions of employment", and does so in the context of evidence and submissions directed to that end and within the constraints of the Wage Fixing Principles. Where parties seek "substantive changes" to an award, those variations are properly addressed in the context of an application to vary and where applicable, by reference as a special case.

40 Employers First and ABI further contended that, in undertaking an award review, the Commission is bound by the wage fixation guidelines - such a process cannot be used to effectively by-pass the application of the special case principle: see the Award Review Decision at 48. The Commission cannot create new award terms, or remove award terms, in order to reflect its own view, or the view of a particular party to an award, of what a "modern award ideally should be": see the Award Review Decision at 45 - 46. The rejection in the Award Review Decision of the idea that the Commission could add new terms to remedy a perceived "omissions" in an award review, "makes clear that this is not a process which confers wide discretionary powers on the Commission over the content of awards". On the contentions of senior counsel, variations to effect "substantive changes" in the operation of the award, are therefore not to be carried out in an award review "at all, and certainly not to be made by the Commission of its own volition within that process". The phrase "modernise", ought not be read to confer a power to modernise awards by substantive changes or in accordance with subjective judgments: as the Full Bench emphasised, the word "modernise" is "to be understood in its statutory context as comprehending both bringing the award up to date and making it contemporary". The "stated and limited purpose" of award review proceedings, indeed the obligation to be fulfilled by the Commission in exercising its powers under s 19, is "to ensure that the awards are made consistent with the current statutory framework": the Award Review Decision at 44. There is no "general discretion under s 19 to insert into an award being reviewed any other conditions which the Commission might consider a "modern" award might contain": at 46. The power under s 19 of the Act "do not extend to the varying awards on the basis of providing fair and reasonable conditions": at 45.

41 Employers First and ABI contended that McKenna C had made "variations of substance" to each of the awards under appeal, which should have been the subject of separate application for variation. This was ultra vires the power under s 19 of the statute. In particular, the determination that the relevant sick leave provisions "had no place in a modern award", the Commissioner was exercising a value judgment as to what a modern award should contain. Contrary to the views expressed by the Commissioner, this was not available under s 19 of the statute and in so approaching the review of the relevant awards the Commissioner fell into error warranting correction on appeal.

42 As to the issues surrounding s 126 of the statute, senior counsel contended that s 126 was not an "exclusive code" providing for the stand-down of employees. The provision permits an application to be made to the Commission in certain specified circumstances and has nothing to say on the issue of a disciplinary leave or stand-down without pay clause in an award.

43 Further, it was submitted that stand-down clauses had been included in many awards under the Industrial Arbitration Act 1940. There is nothing in the relevant extrinsic materials to indicate that the "stand-down" provisions in the 1991 Act were intended to be a comprehensive code or should have had the effect of invalidating those clauses existing in valid awards at the time. There were no transitional provisions providing for the introduction of such a comprehensive code, and there is a distinct absence of the clear and express language which would be needed in order to warrant a conclusion that the rights afforded by those awards were to be removed: Re Solicitors (State) Award (No.2) (1996) 72 IR 213. Similar observations can be made about the 1996 Act.

44 Counsel for Employers First and ABI contended stand-down and disciplinary leave clauses are clearly "industrial matters" and fall within the award making power pursuant to s 10 of the Act. Section 126 does not contain any limitation on the award making power under s 10, and absent any express limitation, it was contended there is nothing in s 126 to warrant a restriction on the broad powers to make an award under s 10. On its proper construction, s 126 does no more than confer an ability on employers to obtain an order from the Commission the stand-down of employees in certain circumstances - it does not purport to invalidate clauses made in the proper exercise of the Commission's jurisdiction.

45 In concluding that it was appropriate to remove the stand-down and disciplinary leave clauses from the awards, the Commissioner erred as such an approach was beyond the scope of the powers conferred by s 19 of the Act. Further, in concluding the disciplinary leave and stand-down provisions of an award were without a jurisdictional foundation the Commissioner fell into error, warranting correction on appeal.

46 Finally, as to the Commissioner's conclusion that the award provision entitling an employer to deduct amounts from monies owed to an employer by an employee for failing to return clothing and equipment provided by an employer, Employers First and ABI raised two issues:

1. Whether s 118(2) of the Act, read in the context of s 118(1) governs or limits the terms of award clauses relating to deduction of monies from employee remuneration; and

2. If so, whether the proposed award clauses permitted the deduction of monies "on behalf of" employees.

47 On their submission, s 118(2) should not be read as governing all circumstances in which monies can be deducted from employee remuneration. Further, it was contended that even if this were the case, the clauses in question would be allowable. The deductions are made "on behalf of the employee" as they are made in payment for debt owed - the debt arising by the retention of clothing issued by the employer. The clause is thereby warranted and the Commissioner erred in finding otherwise.

48 Quality Bakers of Australia Ltd, represented by Mr Lloyd, solicitor, whilst a respondent to the appeal, supported the submissions of the appellants and adopted the outline of submissions put by the appellants, Employers First and ABI. Mr Lloyd submitted that s 126 provides a mechanism for application for stand-down orders where such a provision does not exist in the relevant award. The test as to whether such provisions are appropriate in an award is that contained in s 10, being whether or not the clause, having regard to the circumstances of the particular industry or workplace, lends to the setting of "fair and reasonable conditions of employment for employees."

49 It was further submitted that a comparison to the federal provisions is useful, in that s 89A(2)(o) of the Workplace Relations Act 1996 (Cth) specifically provides stand-down provisions as an allowable award matter, even though application for stand-down orders are catered for in s 126 of the Workplace Relations Act. It was also pointed out that there are a number of awards which had been reviewed by the Commission that have included stand-down provisions.

50 With respect to the issues surrounding the sick leave clauses, Mr Lloyd agreed with the submissions of the appellants that the Commissioner went beyond the scope of the power conferred by s 19 of the statute and that in any event, there was no evidence on which the Commissioner could have based her conclusion. There is no legislative provision restricting the requirement that an employee state the nature of an illness when advising on sick leave and the clause sought met the minimum requirements in s 26 of the Act. No relevant test case has established a standard in relation to sick leave. Further, it was contended that the clause sought was not inconsistent with s 10 of the statute and that there were "significant workplace reasons" which militated in favour of such a requirement, such as the encouragement of the "proper use" of sick leave and to "discourage the abuse" of such a provision.

51 Submissions filed by the AMIEU largely supported the submissions of the appellants. The AMIEU contended that s 126 of the Industrial Relations Act did not preclude an award containing a provision affording the "right to stand-down" in circumstances other than those identified in the statutory provision. This was put on the basis that disciplinary leave is a "viable and valuable alternative to dismissal" that would be unavailable if s 126 were construed as being a comprehensive code. There would be no other option for the employee but to institute unfair dismissal proceedings. Further, it was submitted that the Commissioner's view that such provisions could be used arbitrarily "misses the point that the provisions are only available in lieu of termination".

52 The AMIEU made a further submission, to the effect that in relying on the reasoning of the decision delivered 19 January 2001 in proceedings to which the AMIEU was not a party, the Commissioner had denied the union procedural fairness. The approach adopted would, on the union's submission, "suggest that [the Commissioner] had already made up her mind about the issues without the AMIEU being given the opportunity to be heard" and that "the proceedings before her on 13 February 2001 and the decision of 3 April 2001 were more about convincing her as to why she should overturn her position already formulated in the decision of 19 January 2001".

Respondents' Submissions

53 Submissions for the AWU contended that changes made to awards in the context of a s 19 review are, in accordance with the Award Review Decision, "a matter left to be determined in the Commission's discretion in the context of the overall review of the award provisions". Further, the Commission is to make such changes "as it considers necessary as a result of a review" in accordance with s 19(6).

54 On the AWU's submissions, the term "modernise", consistently with the way in which that phrase was construed by the Full Bench in the Award Review Decision, was "not a defined term but is a word which is used with its ordinary meaning to be understood in its statutory context as comprehending both bringing the award up to date and making it contemporary”. Making an award modern and contemporary must involve an assessment of that award in the context of community standards.

Leave to appeal and Nature of Appeal

55 Appeals to the Full Bench of the Commission may only be brought by way of leave: s 188(1). Leave to appeal will be granted where the appeal raises matters of such importance as to warrant the grant of leave in the public interest: Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380 at 381 - 382. These appeals raise important questions as to the role of a Member of the Commission in conducting an award review under s 19 of the Act, and in particular, important issues surrounding the scope of the power to amend an award under s 19(6) "as [the Commission] considers necessary as a result of a review". Having regard to the requirement for the Commission to review its awards "at least once in every 3 years", the issues, in our view, warrant the grant of leave in the public interest.

56 The nature of an appeal under Part 7 of Chapter 4 of the Industrial Relations Act and in particular s 191 of the statute has been recently examined by the Full Bench of the Commission in Court Session in King v State Bank of New South Wales [2002] NSWIRComm 353 at [58] - [77] and needs no further exposition here, it being sufficient to reiterate what was stated in that decision in relation to appeals from discretionary decisions at [66]: "the appellate scheme under the Industrial Relations Act provides that the powers of the Full Bench on appeal are directed towards correcting error and do not permit the Commission to substitute its decision for that at first instance".

Consideration

57 The central error alleged in the decisions of the Commissioner is that she failed to properly approach the determination of the review proceedings under s 19 of the statute, and in particular that the Commissioner erred in concluding that the purpose of "modernising" an award as provided for in s 19(2) of the statute, entitled the Commission to make a "value-based assessment of what is appropriate in a modern award". On the appellants' submissions, this error in approach led the Commissioner to further err in the exercise of the power in s 19(6) to vary an award as considered necessary following a review. We agree with these contentions.

58 The operation of s 19 of the Act has been authoritatively determined by the Full Bench of the Commission in the Award Review Decision. Not surprisingly, that decision was relied upon extensively by all parties to the appeal, and a proper understanding of that decision is central to our decision in this matter.

59 The Full Bench in that decision, emphasised at the outset of its consideration, having regard to the location of s 19 in Part 1 of Chapter 2 of the Act, that the awards which come forward for review under s 19 "must, in the first instance, be reviewed in the context of the power given to the Commission to make awards under the 1996 Act". The Full Bench "particularly emphasise[d] this point" because of submissions directed towards "the meaning of the word 'modernise' as used in s 19(2)", observing (at 44):

“Modernise” is not a defined term but is a word which is used with its ordinary meaning to be understood in its statutory context as comprehending both bringing the award up to date and making it contemporary.

The 1996 Act is the third major piece of legislation this decade to govern the making of awards by this Commission and its predecessors. Section 19 of the 1996 Act itself had no predecessor in the Industrial Relations Act 1991 or the Industrial Arbitration Act 1940. It follows, necessarily in our view, that comprehended in the s19 review process in "modernising" awards is an obligation to ensure that the awards are made consistent with the current statutory framework. (our emphasis)

60 The Commission made some observations on the construction of the section by contrasting it to the procedures for the making and variation of awards. It is useful to set out those comments in full (at 44 - 45):

We turn now to another feature of Part 1 - Awards of Chapter 2 - Employment of the 1996 Act. Applications for the making of an award under s10 may be made by an employer, by an industrial organisation of employers or employees or by a State peak council or by the Commission acting upon its own initiative (s11). There is detailed provision made as to matters such as who will be bound by an award (s12), various formal matters (s13), mandatory dispute resolution procedures (s14), the term of awards (s16), how awards may be varied or rescinded (s17), exemptions from awards (s18) and consolidation of awards (s20).

We immediately remark that it follows from this statutory framework that the review process established by s19 of the 1996 Act gives the Commission a particular role in reviewing awards which is different to the opportunity which parties to awards themselves are given, by the other sections mentioned, to bring forward applications for the making of new awards or the variation of existing awards. Section 19 is neither an alternative to nor a substitute for such applications.

Applications brought by award parties in order to meet the needs of employers and employees in the circumstances of a particular industry or enterprise are pursued and determined in accordance with the provisions of the 1996 Act, particularly s10, together with other applicable legislation and applicable principles, including those established in State Wage Case decisions, State decisions and test case decisions. By way of contrast, the process established by s19 has a stated and limited purpose - namely 'to modernise awards, to consolidate awards relating to the same industry and to rescind obsolete awards'. In s19(3) and (4), matters which the Commission must take into account in giving effect to that purpose are specified.

Care must be taken, it seems to us, to ensure that those two processes are not confused.

While emphasising that point, we observe, as Rule 39 of the Commission's Rules envisages, that there is nothing which precludes a s19 review being conducted in conjunction with an application for the variation of an award or the making of a new award, and all the more so if the parties to the award are in agreement with that course. If it is a course opposed by a party, however, the Commission may be cautious about requiring a s19 award review to be so conducted.

61 In observing that the Commission is to review "existing awards" as opposed to "awards that have been rescinded and replaced", the Full Bench emphasised (at 45) that "the s19 award review is not a mechanism for an appeal from earlier decisions made by the Commission in respect of an award, a means to overcome the consequences of earlier bargains made between the parties to an award or a device available to an award party to avoid the proper burdens involved in bringing a contested application to the Commission for the making or variation of an award in the normal way".

62 Further, the Full Bench expressly rejected a contention that the Commission could "itself insert into an award the conditions of employment [identified in s 21 of the Act], even if the parties themselves did not seek to have such provisions included in the award". The Full Bench indeed said that "in a s 19 review the Commission may not require parties to bring forward applications under s 21", before concluding its discussion of "omissions" from awards the subject of review, by stating (at 46):

We observe also that the Commission is not given a general discretion in s19 to insert into an award being reviewed any other conditions which the Commission might consider a "modern" award should contain. The review directed by s19 concerns the provisions of existing awards. Unless properly arising from the matters specified in s19 itself, during a review the Commission is not at liberty to insert into awards other conditions not already contained therein. If award parties wish to advance such matters they must, in our view, utilise the other provisions of the Act to which we have referred. (our emphasis)

63 The decision then went to "various questions going to the construction of s 19", and in particular, we would draw attention to what was stated on pages 47 - 48 of the decision under the heading "The construction of s 19(6) of the 1996 Act":

The question whether in s19 review proceedings the Commission is required by sub-s(6) thereof to make any change to an award was much debated. It was the final submission of the Labor Council that in the review process the Commission could change matters of form, such as sexist language, but that in the case of matters of substance, having identified in the review that change was required, it would direct the parties to make an application in accordance with s17 of the 1996 Act for variation of the award. Such applications would then be determined by the Commission in accordance with the requirements of that section and the applicable wage fixing principles. What such "matters of substance" would include was not specified.

The Crown took a different view by submitting that, while natural justice would oblige the Commission to give the parties an opportunity to be heard in relation to any changes to be made to an award, once the Commission had come to the conclusion in the review proceedings that some change to the award was necessary as a result of the review, s19 (6) required it to make such a change. The employers, apart from the NSW Farmers, adopted a similar position.

The NSW Farmers argued that s19(6) was merely a machinery provision and that any change to an award had to be effected under other provisions of the Act on appropriate application; for example, by way of a variation under s17 or an award of consolidation under s20. It was submitted that in the review proceedings, the Commission should merely determine what changes were required and then direct the award parties to make application to give effect to that determination. What was less clear was what the Commission would do if the parties failed to comply with such a direction and how, in that event, the requirements of s19(6) would have been satisfied.

We accept the construction urged by the Crown and by the other employers. The statutory injunction in s19(6) is mandatory, requiring that "the Commission is to make such changes to awards as it considers necessary as a result of a review". In our view, such changes must be made as a part of the review process. The legislature did not intend that the fate of the changes found to be necessary be left to the Commission's direction being complied with by the award parties.

We observe that the s19 review process as part of industrial regulation by awards involves both new and different processes and obligations. They are philosophically different to the familiar processes available to award parties in the 1996 Act and in the predecessor legislation to which we earlier referred. It requires the Commission to make changes to the award which properly flow from the review process. That obligation could not be achieved by the giving of a possibly unenforceable direction to award parties that they make an application consistent with the view the Commission had formed in the review. (our emphasis)

We add that in coming to a view changes were required to the award being reviewed, that the Commission of necessity would have regard to other principles applicable to the making or variation of an award, such as the wage fixing principles and would not act inconsistently with them. The parties would also be given an opportunity to be heard. Nevertheless, if the Commission formed the view in the review proceedings that a particular change to the award was required then, in order to satisfy the purpose of the review as specified in s19(2), it would be obliged to make the change as part of the review process in accordance with the mandatory provisions of s19(6).

To adopt any other approach would potentially make the review process a pointless exercise. The fate of awards judged as requiring modernisation, presumably as a result, in part at least, of a lack of attention by the award parties, would again be left to the same parties. Potentially, that would result in the award review process being a time-consuming, expensive and ultimately futile exercise.

64 We pause in our analysis of the Award Review Decision, to emphasise that whilst the Full Bench in the preceding passage, was emphasising the need for the Commission to comply with the "mandatory" direction in s 19(6) to make changes to awards as necessary following an award review, the Full Bench equally emphasised that the Commission is to "make changes to the award which properly flow from the review process".

65 It is manifestly clear that changes which "properly flow" as an exercise in the review process, are those consistent with the purpose of the review process; that is, having regard to the construction attributed to the term "modernise" in the Award Review Decision, making it consistent with the current statutory framework. Whether the award is consistent with the statutory framework will require an analysis of the matters identified in s 19(2) and s 19(3).

66 The Award Review Decision proceeds to deal with two practical issues associated with a "review", namely, the role of the Commission in the receipt and consideration of evidence in the proceedings, and the role of the parties and the Commission in conducting a "review". In this latter respect, the Full Bench emphasised (at 53) that "whilst the 1996 Act imposes an obligation upon the Commission to review awards under s 19 it does not detract from the burden falling upon the parties to an award to participate themselves in the normal way in such proceedings", continuing to observe that regardless of whether the review be commenced by application or of the Commission's own motion, "the matter will be programmed, heard and determined in the ordinary way". After having referred to the submissions of the parties to the proceedings, the Full Bench stated (at 56):

The Commission is neither a party to awards made under the 1996 Act nor is it a party to proceedings conducted before it. The review process established by s19 will not necessarily involve the type of adversarial process envisaged in some other aspects of the 1996 Act, indeed the Commission expects that in the vast majority of cases the review process will not be contentious at all and the end result will be agreed between the parties and accepted by the Commission. In the event of contested issues, however, the usual adversarial model will apply.

In a s19 review of an award it will always be the parties to the award who are best placed to assess the requirements of the industry and those of the employers and employees affected by the particular award or awards concerned in the review. That indeed is expressly envisaged in s19(5). There is no special role provided by s19 for the Commission itself to call evidence in review proceedings or to embark upon a wide ranging investigation into the operation of a particular award or industry.

We observe also that there is nothing in s19 which detracts from the ordinary approach to litigation before the Commission under the 1996 Act wherein it is a matter for the Commission to determine whether, on the material brought before it by the parties in a particular case, the requirements of the 1996 Act have been satisfied.

If not satisfied, the Commission has a discretion to require more of the parties or to reject a particular approach urged by the parties - even if it is an agreed approach. Such circumstances arise not infrequently in proceedings brought under other parts of the 1996 Act, for instance when the Commission is asked to make a consent award or to approve an enterprise agreement. In so far as it was suggested there is any different role for the Commission in a s19 review, that submission is rejected. (our emphasis)

67 This passage, taken with the earlier reference in the decision that "the s19 review process as part of industrial regulation by awards involves both new and different processes and obligations" that were "philosophically different to the familiar processes available to award parties in the 1996 Act and in the predecessor legislation", does not, in our view, invite a Member of the Commission to take up the role of inquisitor in review proceedings in order to fashion industrial instruments which fit the Member's own conception as to what a "modern" award should contain. As was emphasised by the Full Bench in the Award Review Decision, there is "no special role" for Members of the Commission in an award review process. This observation was in the context of recording that "it will always be the parties to the award who are best placed to assess the requirements of the industry and those of the employers and employees affected by the particular award or awards concerned in the review".

68 Whilst the Full Bench did record the well established and entirely unexceptional proposition that the "Commission has a discretion to require more of the parties or to reject a particular approach urged by the parties - even if it is an agreed approach", it was clear that the Commission was cautioning against Members of the Commission too readily imposing their views on what was and was not appropriate to be included in an award the subject of review, contrary to a consent position reach by the parties.

69 Whilst the decision was delivered subsequent to the extempore decision in these proceedings, it is instructive to note the Full Bench of the Commission has continued to emphasise the need to draw a distinction between matters that are to be dealt with under an award review, and those that are more properly dealt with under an application under either ss 10 or 17: see the decision of the Full Bench in Re Hotel &c Employees (State) Award (2001) 111 IR 393. In that decision, the Full Bench dealt with an appeal against a decision of Marks J in which his Honour had made variations to an award the subject of review, resulting in very significant alterations to the conditions and pay rates provided in the relevant award and extending the coverage of the award to cover new groups of employees who were not represented in the proceedings. At no stage of those proceedings was the magnitude of the proposed changes brought to his Honour's attention. After having set out a passage from the Award Review Decision, the Full Bench referred to a number of decisions, including the extempore decision in these proceedings, as examples of "the need to adhere" to the distinction between the powers of making and varying an award pursuant to s 10 or s 17, and the power to vary an award following an award review under s 19. The Commission held (at [40]):

Section 19 of the Industrial Relations Act is neither an alternative to, or a substitute for, applications under s10 and s17 of the Act. Such applications must be brought in the customary manner in accordance with the requirements of the Act, although such applications may, in appropriate circumstances, be heard in conjunction with s19 proceedings.

70 The two main issues determined by McKenna C related to particular requirements in the sick leave clauses contained within the relevant awards, and award provisions providing for "disciplinary leave" and stand-down without pay as the result of a refusal of "duty, malingering, inefficiency, neglect of duty or misconduct on the part of the employee". The distinction between how the Commissioner determined these two disputed issues is of fundamental importance to the resolution of this appeal and to an understanding of how we consider the Commissioner fell into error.

71 In relation to the sick leave requirements, whilst the Commissioner accepted that the provision was not "obsolete" in that it was still in use, and accepted that an employer would have an operational need to be notified of how long an employee may need to be absent from a workplace, it was, in the Commissioner's view, to "overstep the mark" to require an employee to personally state to the employer the nature of the illness or injury. The Commissioner could not "accept the proposition that it [was] appropriate for any such requirement to feature in any modern award, having regard to the balance between an employer's reasonable needs for relevant information ... and protecting employees' rights to privacy about matters as personal as illness ...". McKenna C stated:

In a modern industrial context that is “fair and just” (s3(a)), I do not consider that an employee should have a routine, award- based requirement to disclose what may be considered as private information concerning the nature of personal illness or injury.

72 As the appellants contended, and indeed as was recognised by the Commissioner in the decision of 3 April 2001, the Commissioner was plainly applying a "value-based assessment" of what a "modern" award should contain, and as such, having formed the view that it was "inappropriate" for a "modern" award to contain the relevant disclosure requirement, it was "necessary" to make the changes sought by the AWU.

73 That the Commissioner was called upon to exercise these "value-based" judgments as to what constituted "fair and reasonable conditions of employment" in order to "modernise" the subject awards demonstrates, in our view, the point which the Commissioner inappropriately entertained in s 19 proceedings, which should have rather formed part of an application under s 10 for a new award or under s 17 for the variation of an award.

74 In the Award Review Decision, the Full Bench having observed that the term "modernise" in s 19(2) was "not a defined term", but one that "is used with its ordinary meaning to be understood in its statutory context as comprehending both bringing the award up to date and making it contemporary" emphasised that in viewing the phrase in context, it "necessarily" was to be construed as meaning "an obligation to ensure that the awards are made consistent with the current statutory framework". In concluding that the disclosure requirements in the relevant sick leave clauses were not "fair and just" conditions of employment in a "modern industrial context", the Commissioner went beyond the "stated and limited purpose" of a s 19 review and has failed to heed the warning of the Full Bench in Award Review Decision that "care must be taken ... to ensure that those two processes are not confused".

75 It was not "necessary as a result of a review" that those changes be made, in order to "modernise" the awards; that is, "to ensure that the awards were consistent with the statutory framework". The provision was not obsolete, did not relate to any test case standard and did not relate to the other matters identified in s 19(3), with the exception perhaps of s 19(3)(e) as "any issue of discrimination": see the Award Review Decision at 50 - 51. The issue at least so far as it arose in the Livestock award, was in contest and as such the usual "adversarial model" should have been applicable: see Award Review Decision at 56. There was no evidence that any issue of discrimination arose in relation to the clause. Nothing in s 19 required the adjustments made by the Commissioner, and in particular, the variation was not warranted having regard to the purpose of the section as stated in s 19(2).

76 In reaching this conclusion we make no findings as to the merit of the award provisions. We observe that the Commissioner has identified some substantial issues in relation to those award provisions. Any application to amend the sick leave provisions of the award should, however, properly be made pursuant to s 17 of the Act. We make it clear that whilst variations may be made to awards pursuant to s 19 of the Act, such variations may be made only in circumstances where those variations are required to give effect to a review of the award undertaken in accordance with s 19(2) and (3).

77 The approach adopted in relation to the sick leave issue is to be contrasted with that applied to the disciplinary leave and stand-down issues. In that regard, the Commissioner concluded that "the award clauses concerning stand-downs and disciplinary leave run foul of the provisions of s 126 of the 1996 Act, and they are without a proper jurisdictional basis .... The award clauses in question have no proper jurisdictional basis and, as such, cannot remain in the reviewed form of the awards". Whilst the appellants were correct to point out that the Commissioner went on to conclude that, even were she incorrect on the jurisdictional basis, she would not have included the relevant provisions in the award, the decision plainly turned on the conclusion that s 126 of the Industrial Relations Act was inconsistent with the existence of such a provision within the award. There was, in the Commissioner's view, no jurisdictional basis upon which the provision could remain in an award.

78 When the Commissioner's decision is looked at in that way, that is as involving the removal of matters inconsistent with the current statute, it is manifestly clear that the Commissioner's decision was not ultra vires the power in s 19, as contended by the appellants. The Commissioner was required, as she did, to consider the questions of jurisdiction and consistency with the current statutory framework, as far as they emerged in relation to the subject provisions.

79 However, having made that observation, we consider that the Commissioner erred in concluding that a provision providing for "disciplinary leave" or stand-down without pay for breach of duty, malingering and the like, may properly be characterised as a "stand-down" provision as provided for in s 126 of the Industrial Relations Act. Section 126 provides:

126 Stand-down orders—suspension of payment of remuneration

(1) The Commission may, on the application of an employer or an industrial organisation of employers, order the stand down of employees of that employer or of members of that organisation if there is no useful work for the employees because of:

(a) industrial action, or

(b) breakdown of machinery, or

(c) any other act or omission,

for which the employer or employers concerned are not responsible.

(2) The Commission is to give high priority to the hearing and determination of any such application.

(3) An employee who is stood down by the Commission is not entitled to any remuneration (including allowances) while stood down. However, this subsection does not apply to any allowance that the Commission considers should be paid despite the stand-down order.

(4) The period during which an employee is stood down is to be regarded as a period of employment with the employer for all other purposes, including the accrual of leave and the calculation of superannuation and other entitlements.

(5) A stand-down order does not apply to an employee who is an apprentice or trainee (other than an existing worker trainee) within the meaning of the Industrial and Commercial Training Act 1989.

The stand-down provisions contemplated by s 126 relate to a particular set of circumstances; that is, where there is "no useful work for the employee" because of certain identified matters, namely, "industrial action", the "breakdown of machinery", or "any other act or omission" in circumstances "for which the employer or employers concerned are not responsible". It is plain that the statutory provision does not purport to deal with the suspension of employees for disciplinary reasons.

80 There was no jurisdictional impediment to these provisions being included in the awards. Nor can the section thereby constitute a code as to issues relating to "stand-down", at least as that expression is contemplated in the authorities. Again, however, it should be noted that the Commissioner raised various concerns as to the nature of the provisions and in particular in relation to the terms of clause 19(iv) of the Livestock award. These issues should be tested, if appropriate, in proceedings seeking to vary the award.

81 The third aspect of the appeal concerned provisions of the award which permitted the deduction of monies from an employee's wages, where protective clothing and equipment supplied to the employee in the course of his employment was not returned to the employer. The Commissioner removed this provision as in her view it was inconsistent with s 118 of the Act. We do not agree. Section 118 is in the following terms:

118 Employees to be paid in full

(1) Payment of remuneration to an employee is to be made in full without any deduction for goods, board or lodging or any other services supplied by the employer in payment (or part payment) of remuneration.

(2) However, an employer can deduct and pay on behalf of an employee from any remuneration payable to the employee:

(a) any payments principally for the benefit of the employee that are authorised in writing by the employee to be deducted and paid, or

(b) any payments that are authorised by an industrial instrument to be deducted and paid.

(3) An employer must not pay remuneration to an employee contrary to this section.

We have some doubt that s 118(1) has any application to the award provision presently relevant (which provides for deduction as to protective clothing and equipment in certain circumstances) since the "deduction" from wages for these items supplied by the employer, would not be for "goods, board or lodging or any other services supplied by the employer in payment (or part payment) of remuneration" (emphasis supplied) in terms of that sub-section. In any event, the award provisions are expressly permitted by s 118(2)(b).

82 In the light of the conclusions we have reached, it is unnecessary to decide the issue raised by the AMIEU that there was a denial of natural justice in the Commissioner's conduct of the proceedings at first instance.

83 The orders earlier made are confirmed.

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LAST UPDATED: 02/05/2003