Health and Research Employees' Association of New South Wales v Baptist Community Services NSW and Act (No 2) [2003] NSWIRComm 7 (31 January 2003)

Last Updated: 7 March 2003

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Health and Research Employees' Association of New South Wales v Baptist Community Services NSW and ACT (No 2) [2003] NSWIRComm 7

FILE NUMBER(S): IRC 7180

HEARING DATE(S): 18/07/2002, 01/08/2002

DECISION DATE: 31/01/2003

PARTIES:

APPLICANT

Health and Research Employees' Association of New South Wales

FIRST RESPONDENT

Baptist Community Services NSW and ACT

SECOND RESPONDENT

Aged Services Association of New South Wales

THIRD RESPONDENT

Catholic Commission for Employment Relations

JUDGMENT OF: Wright J President

LEGAL REPRESENTATIVES

APPLICANT

Mr J V Murphy of counsel

Mr M Williamson, State Secretary, Health and Research Employees' Association of New South Wales

FIRST RESPONDENT

Mr P J Newall of counsel

SECOND RESPONDENT

No appearance

THIRD RESPONDENT

No appearance

CASES CITED: Cepus v Heggies Transport Pty Ltd (1994) 52 IR 123

Health and Research Employees' Association of New South Wales v Baptist Community Services NSW and ACT [2002] NSWIRComm 32

Kingmill Australia Pty Ltd t/a Thrifty Car Rental v Federated Clerks' Union of Australia, New South Wales Branch (2001) 106 IR 217

Perisher Blue Pty Ltd v Australian Workers Union (1999) 91 IR 274

Principles for Approval of Enterprise Agreements (1996) 94 IR 98

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

Seamen's Union of Australia v Adelaide Steamship Company (1976) 46 FLR 444

Security Officers (Waterfront) Award (1988) 26 IR 1

Short v F W Hercus (1993) 40 FCR 511

Storeworkers - Campbells Cash & Carry Pty Limited (NSW), NUW (NSW Branch) Award 2000 (No 2) (2001) 104 IR 385

LEGISLATION CITED: Industrial Relations Act 1996 s 10 s 11 s 15 s 17 s 19 s 154

JUDGMENT:

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

IN COURT SESSION

CORAM: WRIGHT J, President

Friday 31 January 2003

Matter No IRC 7180 of 2001

THE HEALTH AND RESEARCH EMPLOYEES' ASSOCIATION OF NEW SOUTH WALES v BAPTIST COMMUNITY SERVICES NSW AND ACT AND OTHERS

Application by The Health and Research Employees’ Association of New South Wales for declaratory relief under s 154 of the Industrial Relations Act 1996

JUDGMENT

[2003] NSWIRComm 7

1 In the extempore judgment delivered on 25 February 2002 in these proceedings (Health and Research Employees’ Association of New South Wales v Baptist Community Services NSW and ACT [2002] NSWIRComm 32) the Court dealt with an application by the Health and Research Employees’ Association of New South Wales (HREA) for declaratory relief pursuant to s 154 of the Industrial Relations Act 1996 in respect of coverage by the Charitable Aged and Disability Services (State) Award (the CADS Award) of employees of the respondent, the Baptist Community Services NSW and ACT (BCS).

Background to the Present Proceedings

2 One of the complications which arose during the original hearing was that it became clear only on that day that there were in existence, during the period relevant to the relief sought, not one award but in fact three awards. Paragraphs [28] to [32] of the February judgment summarised the situation in this way:

[28] As earlier observed, it seems reasonably clear that when these proceedings were commenced last year and, indeed, when the hearing of the proceedings commenced today, both parties considered that the issue between them related to the terms of the Award as made by Maidment J in June 1999. It was only when the Court raised some concerns in determining the matter whether it was sufficient to have before it in terms of the relevant Award only the particular clause, that is cl 49, the Area, Incidence and Duration provision, that the parties were obliged to investigate a related question. That is, whether the Award had been published in the Industrial Gazette. They then obtained a copy of the whole document so that it might be tendered before the Court.

[29] These inquiries led to the discovery of a much more complex situation. For example, it indicated that not only had the relevant Award been published in the Industrial Gazette at (1999) 315 Industrial Gazette 1302 but that the Award had been varied by Glynn J on 14 July 1999; see (1999) 315 NSWIG 1497 and that two subsequent awards had been made which successively rescinded and replaced the 1999 Award. The first of those awards was made by Grayson DP on 18 May and 8 August 2001; see (2001) 330 NSWIG 1023.

[30] The Award made by Grayson DP arose from an award review pursuant to s 19 of the Industrial Relations Act, and although the Award was expressed to be made under s 19 and its term as to duration was as set out as follows in cl 49 (i):

49. AREA, INCIDENCE AND DURATION

This award was made following a review under s 19 of the Industrial Relations Act 1996. It shall take effect on and from 18 May 2001 and shall have a nominal term of twelve months;

the relevant Area, Incidence and Duration clause was otherwise in relevant respects unaltered so that it included the previous opting or electing out provision with the cut off date of 1 September 1999 preserved, although that date had well passed.

[31] The second subsequent Award, or at least an HREA print thereof, was tendered and became Exhibit N. It has apparently not been published in the Industrial Gazette. It was made by Commissioner Neal in October 2001, with effect from 26 October 2001.

[32] The time frame covered by the Award is set out in sub cl (v) of clause 51 Area, Incidence and Duration in the following terms:

(v) This award shall rescind and replace the Charitable, Aged and Disability Care Services (State) Award made on 18 May 2001 (unpublished) and all variations thereof. This award shall take effect on 26 October 2001 but by administrative action will commence from the beginning of the first pay period on or after 1 July 2001, and shall have a nominal term till 30 June 2003.

Otherwise the only alteration material for present purposes is the omission of the “elect out” or “opt out” provision previously found in sub cl (iv) of the clause.

3 The relief sought in the proceedings was, as stated in paragraph [3] of the judgment, as follows:

[3] The declaratory orders sought by the applicant are in the following terms which also is the document which is marked Exhibit C.

1. Employees of the Baptist Community Services - NSW and ACT (‘BCS’) and/or aged or disability care facilities owned or operated by the BCS, who come within clause 49 - Area, Incidence and Duration of the Charitable, Aged and Disability Care Services (State) Award, are entitled to the rates of pay and conditions of employment provided for in that award.

2. The BCS and/or aged or disability care facilities owned or operated by the BCS are bound by the terms of the Charitable, Aged and Disability Care Services (State) Award in relation to employees who come within clause 49 - Area, Incidence and Duration of that award whether or not the BCS is a member of the Aged Services Association of NSW and ACT.

The factual background and other circumstances pertinent to the proceedings are also to be found in that judgment.

4 Because of the way in which the proceedings were commenced and the way in which they then developed, it was only feasible to deal with the initial award. The final paragraphs of the judgment dealt with the situation as follows:

[66] I consider that is the conclusion which should be reached here by an objective consideration of all the circumstances which include not only the provisions referred to but also the whole course of the proceedings before Maidment J which refer to a highly considered reorganisation of an important part of the industry; that is, the part of the industry represented by the ASA and the CCER; and it could not be objectively considered likely that what was to result in a differential award coverage based largely upon workplace reorganisation and corresponding changes in the terms of an award would be a situation which could be put aside, at least as to the consequent benefits to employees, by the unilateral act of the employer.

[67] The applicant sought to describe that situation as one which could occur in circumstances which could be described as a "whim". I should not be taken as necessarily accepting that word as an appropriate description of what has occurred in this matter. Indeed, one could accept that the employer could have a well founded basis to opt out of certain award coverage by resigning from membership of a certain employer organisation. The significant consideration, however, is whether it would be properly said to be the intention in making the award that such significant changes at the workplace which were reflected in qualitative changes in the award could at least to important aspects of them be altered during the duration or term of the award by the unilateral act of one side of the industrial equation. The overall circumstances in my view do not permit that as a likely construction of the 1999 Award.

...

[70] It should be emphasised that the view reached as to the 1999 Award was reached without referring to the terms of s 12. For the reasons referred to in the last paragraph, the terms of that section should be seen as confirming the conclusion reached. It was observed during the course of argument that the submissions of the parties were finely balanced and it should be recorded that in reaching that conclusion the Court has found the question of some difficulty but nevertheless considers that the view reached is appropriate in all the circumstances referred to.

[71] However, those considerations demonstrate the difficulty of applying that reasoning to the subsequent two awards made in May 2001 and in October 2001. It is not intended to reach firm and final conclusions as to those instruments because of the concern earlier referred to and also that it is considered that the parties should be given some further opportunity to consider the implications of s 19 reviews to the question of award coverage.

[72] Without expressing a firm conclusion as to the award made pursuant to s 19, the question which arises in relation to the May 2001 Award is whether it could be considered likely, on an objective basis, that the intention when an award was made in the context of a s 19 review was (presumably without the Commission or the parties expressly saying so) that the coverage of the Award would be altered.

[73] True it is that when one applies the Court's reasoning as to the 1999 award to the October 2001 award it seems difficult to conclude that the respondent was bound by that award because at the time the ambiguity discerned by the Court had ceased to be manifest in the Award and it seems (without expressing a final view) that the plain words of the Award did not extend to employers not members of the relevant employer organisations. But that question in turn may depend on an assessment of the proper construction of the May 2001 Award, which emphasises the importance of the Court receiving submissions on s 19 aspect of the matter.

...

[76] That means in a practical sense I have determined the coverage of the first award in terms of Mr Murphy's submissions. I have said in effect that applying that reasoning to the last award it is difficult to see how the same result would follow. However, in a real sense, any final conclusion as to the last award may depend on the conclusion as to coverage as to the second Award, which, in turn, shows the importance of the assistance the Court be provided as to the effect of s 19 on the matter. That is not to detract from what has been said as to the first award. This may be addressed after the parties have considered this decision. Perhaps, because of the concerns as to costs, this might be done by written submissions. The proceedings are adjourned accordingly.

Chronology

5 To recapitulate some of the factual matters relevant to this part of the proceedings the following Chronology is helpful:

15.6.1999 CADS Award made by Maidment J - at that time BCS member of ASA and EF

1.1.2001 BCS resigned from ASA; pay of employees reverts to State Award

18.5 and Award made by Grayson DP pursuant to s 19 of the Industrial

8.8.2001 Relations Act 1996 with effect from 18 May 2001

14.11.2001 Award made by Neal C with effect from 26 October 2001.

Submissions

6 When the issues requiring decision again came before the Court the applicant argued that the award made by Grayson DP pursuant to s 19 (the second award) and that made by Neal C (the third award) both applied to BCS and any declarations made should extend to those awards. As to the second award, the applicant submitted:

5. Therefore, when the s 19 review of the award came before Grayson DP in 2001, BCS and its employees were covered by the award, despite non-membership of BCS of the ASA at that time.

6. The award made by Grayson DP (the Second Award) contained clause 49 ‘Area Incidence and Duration’ which was in relevant respects unaltered from clause 49 in the First Award. The Applicant, therefore, submits that the approach to the construction of that provision in the First Award by His Honour the President should also be adopted in relation to the relevantly identical provision in the Second Award, namely, that there was never any intention that individual employers had the right to unilaterally relieve themselves of obligations arising under the award by resigning membership of their employer organisation. Further, there is nothing to suggest that the parties to the Second Award proceedings or Grayson DP gave the slightest thought to the proposition that by effectively repeating clause 49 in the same terms as appeared in the First Award, the consequence would be the removal of BCS and its employees from the coverage of the award. Had such a drastic alteration to the coverage of the award been intended it would have been expected that such a significant matter would have been fully ventilated by Grayson DP.

7. In any event, it is clear from s 19(2) that the purpose of a review is “to modernise awards, to consolidate awards relating to the same industry and to rescind obsolete awards”. Clearly, an alteration to the coverage or potential coverage of an award of the sort referred to in the previous paragraph travels far beyond the purpose of a s 19 review as stipulated in the statute.

7 The applicant relied on the Full Bench decision in Principles for Review of Awards - State Decision 1998 (1998) 85 IR 38 at 44 and 47 - 48 which was said to have considered the process of award review contemplated by s 19 of the Act and identified the clear distinction between the s 19 process and other processes available to parties to apply to the Commission to make an award pursuant to ss 10 and 11 or to vary or rescind an existing award pursuant to s 17.

There is nothing before the Commission to suggest that in making the Second Award Grayson DP formed the view that in order to satisfy the purpose of the review as specified in s 19(2) it would be necessary to alter the operation of the Area Incidence and Duration clause of the award in such a way as would have the immediate effect of excluding BCS and its employees from the scope of the award. There is nothing before the Commission to suggest that such a change was considered necessary by Grayson DP as a result of the review. The Applicant submits that it is clear that the matter was not considered and the consequence now contended for by BCS was never intended, and it would have been contrary to the statutory scheme for such a significant change to the award to be effected through the s 19 review process.

8 The respondent submits, however, it was not bound by the second award from the date of its effect and contends that the applicant's submissions ignore, first, the fact that there is a fundamental factual difference in relation to the making of the two awards; the respondent was a member of ASA at the time of the making of the award by Maidment J, but was not a member of the ASA at the time of the making of the second award. Further:

8. [The applicant] also ignores the fact that the Second Award rescinded and replaced the award made by Maidment J. The Award came into effect on the date specified within it, that is 18 May 2001: [Industrial Relations] Act, s.15(1), and is not (as it is not expressly specified to be) retrospective: s.15(3). In other words, one starts afresh with the Second Award in assessing the meaning of its terms that are referable to any point in time.

9. The Area, Incidence and Duration clause of the Second Award beings as follows:

49 Area, Incidence and Duration

(1) This award shall apply to all employees employed by employers that are members of the ASA and/or CCER, excluding those in the County of Yancowinna, who are: ...

Clause 49 then goes on to address the nature of the work performed by the employer.

10. That means that the express terms of the Area Incidence and Scope clause of the Second Award, in providing that 'This Award shall apply to all employees employed by employers that are members of ASA ...' simply did not and could not, by any sophistry, be made to apply to BCS. BCS was not a member of ASA at the time of the making of the Second Award. The use of the present tense of the verb 'to be', in the phrase 'that are members', necessarily means that on its plain and unambiguous words the Second Award can only have had application to those persons who were, at the date of effect of the Award, members of ASA.

9 The respondent says its reasoning is entirely consistent with the reasoning in the Court's initial decision which held BCS to be bound by the award. It is also consistent with the warning in Kingmill Australia Pty Ltd t/a Thrifty Car Rental v Federated Clerks' Union of Australia, New South Wales Branch (2001) 106 IR 217 at 230 that the application of aids to construction should not detract from or override the plain words of an award. It stresses that the expression "that are members" must be given effect and cannot be ignored and that the applicant's submission also ignores the terms of the Court's earlier decision as to the application of the award made by Maidment J would remain so "for the life of the Award". The initial award had a life of six months which was thus the longest period that a person could be bound by it who was not so bound under a literal reading of the award. Further, even if that point is not accepted, the second award was a new award which replaced and rescinded the award made by Maidment J which therefore ended its life upon the making of the new award, effective 18 May 2001. Thus:

16. The Applicant's focus on the existence of the "opt out provision" within cl 49 is misconceived and simply avoids the central issue before the Commission, that is, the meaning of the words 'who are members'. The opt-out provision is not, as implied by the Applicant, a provision of general application to all respondent employers which gives the only means by which persons party to the Award could cease to be a party. Rather, it applied for a specific and limited period and only to a limited class of employers who were in the position of having dual membership and gave those employers an opportunity to elect to be bound by another award. It did not apply to all employers to be bound by the Award. It did not apply to BCS.

17. In any event, the fact that the opting-out clause was left in the Second Award is not relevant to the question now before the Commission for another reason. Indeed, the clause could have had no effect in the Second Award as the dates contained within it had long passed. As it could perform no function, that part of cl 49 of the Award need not have been in the Second Award and its retention is properly seen as an oversight. It certainly cannot give rise to any proposition that its retention meant that BCS was somehow still bound by the Second Award when the Second Award on a plain reading of the express words of the Award did not include BCS.

18. The Applicant advances (submissions, para 6) that if it were intended that the making of the Second Award was to remove BCS from respondency, that matter would have been ventilated in proceedings before Grayson DP. First, that is not any basis for holding, in the fact of the clear provisions of the Second Award, that BCS was bound by the Award; the warning in Kingmill referred to above is directly relevant.

19. Secondly, of course, BCS was not represented in any way, either by an agent or as a member of a party principal, in proceedings going to the making of the Second Award. That being so it is not available to say that the lack of any agitation about BCS' respondency is a matter having any weight in the assessment of the meaning of the terms of the Second Award.

20. It matters not that the s.19 process had a particular purpose, as argued by the Applicant (submissions, para 8). That does not bear on the fact that a new award was made rescinding and replacing the award made by Maidment J.

10 The parties, at the request of the Court, reached agreement on factual matters relevant to the present issues. The document filed was relevantly in these terms:

STATEMENT OF AGREED FACTS

1. The Industrial Registrar issued a ‘Notice of Award Review’ (IRC Matter Number 925 of 2001) pursuant to section 19 of the Industrial Relations Act 1996 for the Charitable, Aged and Disability Care Services (State) Award on 16 February 2001.

2. This award, the subject of the section 19 review, was originally made by Maidment J (as published in Volume 315 of the Industrial Gazette at page 1302) and subsequently varied by Glynn J (as published in Volume 315 of the Industrial Gazette at page 1497).

3. In an appearance before His Honour, Deputy President Grayson, on 18 May 2001, the following variations resulted to the then existing Award:

(a) The existing clause 2 ~ Basic Wage/State Decisions, was deleted.

(b) As a result of (a) above, the existing clause 3 ~ Definitions, was renumbered as clause 2.

(c) The Anti-Discrimination clause made by General Order of the Industrial Relations Commission of NSW was inserted and numbered clause 3.

(d) A new sub-clause (i) and (ii) were inserted into clause 49 ~ Area, Incidence and Duration, of the existing award that sought to reflect the process of review completed under section 19 of the Industrial Relations Act 1996.

(e) The form of words used in clause 49(i) and (ii) identified in (d) above reflected ‘standard’ wording adopted by the Industrial Registry.

(f) As a result of (d) above, the existing sub-clauses in clause 49 were renumbered to give effect to the newly inserted sub-clauses (i) and (ii).

(g) Table 1 ~ Rates of Pay, in Part B of the existing award, was amended to remove reference to pay rates applicable from 10/11/98, 01/07/99 and 01/01/00.

(h) The rates of pay previously designated as being applicable from 01/01/00 identified in (g) above remained unchanged and only amended as being deemed to apply from the first full pay period to commence on or after 18 May 2001.

4. The award, as made by Grayson DP, appeared in Volume 330 of the Industrial Gazette at page 1023.

11 The parties also reached agreement on, or did not contest, a number of other factual matters which included:

(a) that the resignation of BCS from membership of the ASA was known to HREA prior to the s 19 award being made by Grayson DP in May 2001;

(b) HREA was then aware that BCS was advising employees that they were no longer entitled to the benefits of the relevant award;

(c) the employees of the BCS were not paid the increased rates under the award of Maidment J whilst the appeal from his Honour was on foot. In December 2000, after the appeal was dismissed, the increased rates were "back-paid" but the employees were adviced by BCS that the increased rates would cease as of 1 January 2001;

(d) the present proceedings were commenced shortly before the proceedings before Neal C were heard;

(e) changes of substance resulted from the award made by Neal C (it is unnecessary to detail the changes. They are summarised in a two page document which was tendered).

12 The applicant submitted:

11. The Second Award was rescinded and replaced by a new award made on 14 November 2001 by Commissioner Neal (the Third Award). The Third Award contained a number of changes to rates of pay and other conditions of employment. The Third Award did not contain the limited opting out provision which was contained in the First Award and repeated in the Second Award. Therefore, on its face and adopting a purely literal approach to the document the Third Award applies only to employers who are members of the ASA or CCER. The Applicant conceded that BCS is not and was not at the time of the making of the Third Award, a member of the ASA.

12. However the Applicant contends that in the special circumstances of this case it would be inappropriate to the Commission to adopt a literal approach to the determination of the question of the coverage of the Third Award. To do so would have the effect of “enshrining” an error.

13 The applicant contended that neither the transcript of the proceedings of 14 November 2001 which led to the making of the third award nor the decision of Neal C support the proposition that the parties to those proceedings, or the Commissioner himself, gave any consideration to the prospect that in making the award in the terms proposed by the parties one consequence would be that employees of BCS who were, up until the time of the making of the third award, covered by the second award yet immediately rendered no longer covered by that award but rather by the Charitable Sector Aged and Disability Services (State) Award, an award which contains lower rates of pay and different classification structures than are contained in the first, second and third CADS Awards. It was strenuously submitted that such an outcome was neither contemplated nor intended.

14 As to the question of the construction of the Area, Incidence and Duration clause of the third award the applicant relied upon the approach of Burchett J in Short v F W Hercus (1993) 40 FCR 511 as cited with approval in, for example, Perisher Blue Pty Ltd v Australian Workers Union (1999) 91 IR 274 at 283 - 284 (for example, the wider context of the making of the award provisions should be considered). The clause in the third award is a successor provision to the corresponding clause in the earlier awards. That is, and using the analogy adopted by Burchett J, the clause in the last award has, in some respects, been “transplanted”. Continuing the metaphor, the applicant submitted when the “soil in which it once grew” is considered, it may be readily concluded that its intended operation was not relevantly different from the intention that underpinned its predecessor provisions, with the single qualification that the formerly expressed limited “opting out” provision was removed because the time frame of the operation of that provision had long since past and it served no purpose.

15 The applicant submitted that:

It would be extreme irony if, as a consequence of the removal of this provision which was always intended to be limited in its scope and to operate for a finite period of time (ie up until 1 September 1999), the coverage provision of the award was completely altered from one, as the commission as presently constituted has found, that, in its original form, did not permit individual employers to escape the provisions of the award by resigning membership of the relevant employer association, to one where such an outcome became instantly possible and, indeed, where a large number of employees, namely those of BCS, were immediately excluded from the scope of the award. Again, it is submitted that if such an outcome was within the contemplation of the parties and the Commission one would have expected reference to it in the proceedings. The consequence of acceptance of the contrary view would be that Commissioner Neal has been unwittingly led by the parties, who were equally unwitting in this respect, to a position where he has made a new award with immediately excluded employees previously covered by the award from the more advantageous rates of pay and employment conditions contained within it. When considered in that light it is clear that such an approach pays no regard to the “source”, “creation” and “understanding [of] its original meaning.”

16 The applicant relied on Kingmill Australia Pty Ltd t/a Thrifty Car Rental v Federated Clerks’ Union of Australia, New South Wales Branch at 229 - 230 for the submission that:

The Applicant contends in this case that the “context” of the relevant provision in the Third Award includes the circumstances in which it was made and the history of its predecessor provisions. This “context” does not lend support to the proposition that there was ever any intention to alter the scope of the Third Award from that of the First and Second Awards.

17 It was said that a different approach would be contrary to the principles enunciated in the judgment of the majority in Cepus v Heggies Transport Pty Ltd (1994) 52 IR 123 at 127 - 128 and specifically these principles stated there:

(iv) Situations which fall accidentally within the words of an award should not be regarded as coming within such award.

...

(vi) The meaning to be attributed to an award term is to be found by reading it in its industrial context recognising that awards are drawn up by those who cannot be expected to be perfectionists in legal drafting.

(vii) It is desirable that, in interpreting an award, the Tribunal should have the fullest knowledge of the circumstances under which it is made.

(viii) The context of an award should be considered in the first instance and not merely when ambiguity might be thought to have arisen.

(ix) The history of the award provision is relevant to the ascertainment of its meaning.

18 The applicant submits finally that:

The Commission and its predecessors have historically, when confronted with disputes as to the scope of a particular award, adopted a practical approach to the reality of the award making process, especially where the award was made by consent. This approach, in general terms, give[s] primacy to an outcome which is consistent with what was intended by the parties, and does not uphold unintended consequences. Such an approach is consistent with that adopted by Curlewis J in Wills v Hartland (1917) AR 410 at 412 where his Honour stated as follows:

“Let us stop for a moment to consider what really takes place on the hearing of an application for an award. The applicants put before the Board a statement of the work done by the various classes for whom they desire wages and conditions fixed. The Board makes an award for the classes to which its attention is drawn. I am now asked to hold that a Board must be deemed to have foreseen every contingency that can ever arise, and to have prescribed that every one who cannot be shown to be something else is to be deemed to be a journeyman. Every award is a bed of Procrustes, into which every employee is to be fitted, however manifest it may be that the case of such an employee could never have been considered by the Board.”

Such a practical approach has been consistently followed in this jurisdiction.

19 It was said the respondent puts the reverse proposition, namely that employees who were always intended to be covered by the award have unwittingly been excluded. That approach, it was submitted, pays no regard to “what really takes place on the hearing of an application for an award”. In this case the Commission should be satisfied that there was never any intention to exclude persons covered by the award from its scope. It would thus be contrary to the approach described above to decline to make the declaratory orders sought by the applicant.

Consideration and Conclusions

20 The starting point for the determination of the present matter is the conclusion reached in the initial judgment that the CADS Award made by Maidment J in 1999 applied to BCS and its relevant employees notwithstanding the BCS resignation from, and cessation of membership of, the ASA with effect from 1 January 2001. As to the two issues for decision here as to the coverage of those persons by the second and third awards made in 2001, I conclude that the situation with the first award continued with the second award but ceased with the making of the third award by Neal C in November 2001. The applicant should therefore have declarations made broadly as sought as to the first two awards subject to the declarations making clear that the last award did not apply in the same way. In light of the detailed submissions of the parties which have already been referred to, the reasons for these conclusions may be stated shortly.

21 Section 19 of the Industrial Relations Act provides:

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.

22 It is unnecessary for present purposes to analyse exhaustively the purpose and role of s 19 and the process created by the provision. It is sufficient to observe that it is essentially an award review provision, rather than an award making or award variation provision, in the usual sense in which the latter expressions are used. So much is confirmed by the decision in Principles for Review of Awards - State Decision 1998 at 44 and 47 - 48 where the following observations were made:

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.

...

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.

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).

23 The review process, as stated in s 19(2), is essentially a modernising process which may in relevant cases involve consolidation and/or rescission of awards. There is no basis, however, in the terms or manifest purpose of the section to conclude that it was intended that the member of the Commission conducting the process might sub silentio add or subtract parties to the award or expand or contract the range of employees or employers within the award's coverage. It is even less likely that an intention to act in such a manner could be objectively attributed to the "award maker" when the Commission member was unaware, as a matter of fact, that was to be the outcome of the process.

24 In the earlier judgment in these proceedings I held, at [65] to [66]:

[65] ... [T]he inclusion of that provision indicates a concern on the part of the employers affected to have one last opportunity to “opt out” and indicates an intention on the part of the hypothetical (in this case) award maker that the award was intended to cover members of the affected employer organisations throughout its life.

[66] I consider that is the conclusion which should be reached here by an objective consideration of all the circumstances which include not only the provisions referred to but also the whole course of the proceedings before Maidment J which refer to a highly considered reorganisation of an important part of the industry; that is, the part of the industry represented by the ASA and the CCER; and it could not be objectively considered likely that what was to result in a differential award coverage based largely upon workplace reorganisation and corresponding changes in the terms of an award would be a situation which could be put aside, at least as to the consequent benefits to employees, by the unilateral act of the employer.

That this remained the situation after the s 19 process seems to be confirmed by the continuance in the award after review of the former clause 49(iv) in relevantly the following terms, as clause 49(vi) of the "reviewed" award:

(vi) This award shall not apply to:

...

(b) Employers who are members of the employer organisations that are party to this award and either the Employers’ Federation of New South Wales or the Australian Nursing Homes and Extended Care Association (NSW), who elect not to be covered by this award. These include:

...

For the purposes of this clause, an employer who elects not to be covered by this award shall do so by writing to the parties to this award to advise them of the election, on or before the first of September 1999. In such cases this award shall be deemed never to have applied and the Charitable Sector Aged and Disability Care Services (State) Award (281 IG 1011) shall continue to apply.

...

Particularly is this so when, virtually alongside that provision, is clause 49(i) (which makes plain that the award was made following a review under s 19) and when the original clause 49(i) is maintained as clause 49(iii). The presence of the original clause 49(i) was one of the bases upon which the initial judgment was made. In my opinion, these matters are of more significance than the assertions made by the BCA as to its legal situation. The matters considered most significant are objective in nature whereas the assertions of the parties are inevitably subjective or self-serving (cf Seamen's Union of Australia v Adelaide Steamship Company (1976) 46 FLR 444 and Re Security Officers (Waterfront) Award (1988) 26 IR 1 at 7 - 8, as referred to in the earlier judgment in these proceedings [2002] NSWIRComm 32 at [74] and [75], and Re Storeworkers - Campbells Cash & Carry Pty Limited (NSW), NUW (NSW Branch) Award 2000 (No 2) (2001) 104 IR 385 at 390 [22]) and, in any event, it is not suggested that the view of BCS was accepted by HREA either in fact or by its conduct. The conclusion reached is also confirmed by the limited and essentially formal nature of the changes reflected in the award made under s 19 which are summarised in the third paragraph of the Statement of Agreed Facts recorded in paragraph [10] above.

25 Turning then to the third award, it is considered that a different situation arises. The proceedings before Neal C, which occurred on 14 November 2001, were award proceedings of the more usual kind in the sense that they involved an application for a consent award to be made pursuant to the Commission's more general award making powers under ss 10 and 11 of the statute, rather than under the more particular or specialised award review powers under s 19. (Incidentally, during the resumed proceedings, the transcript of the proceedings before Neal C of 14 November 2001, and the Commissioner's decision of the same date, were tendered. Until that tender, it had been assumed that those proceedings were heard on 26 October 2001, which accounts for the error in that respect in the initial judgment).

26 The hearing on 14 November 2001 was brief and its transcript comprises one page. Mr Ravlich appeared for the HREA and Mr Liggins appeared for the only other parties which appeared, that is, the ASA and the CCER. The Commissioner accepted the submissions of the parties as to :

(a) the consent nature of the award;

(b) that the award was to replace the award "made on 18 May 2001 which is unpublished". That is, the award of Grayson DP; and

(c) that all parties considered the proposed award was consistent with the requirements of the Industrial Relations Act and the relevant State Wage Case principles.

27 The Commissioner's decision, delivered extempore on the same date, recited certain formal matters and concluded:

On the basis of the material before the Commission, I am satisfied that the application complies with the principles of relevant State Wage Case Decisions and the provisions of the Industrial Relations Act 1996. Accordingly, by consent of the parties, I make a new award in terms of the application to be entitled the Charitable, Aged and Disability Care Services (State) Award.

By consent, the new Award rescinds and replaces the Charitable, Aged and Disability Care Services (State) Award made on 18 May 2001 (unpublished) and all variations thereof. It shall commence on and from the beginning of the first pay period to commence on or after 26 October, 2001 and shall remain in force until 30 June, 2003.

In respect to operative date, I note that the parties intend to apply the new Award by administrative action effective on and from the beginning of the first pay period to commence on or after 1 July, 2001.

28 Importantly, and as observed earlier, the award rescinded the award made by Grayson DP. That award, of course, was an award which in substance continued the award made by Maidment J, as varied by Glynn J, albeit as an award "reviewed" under s 19. That is, in terms of process and in substance, the award made by Neal C involved a departure from the awards which had hitherto existed under the same title or name. The area, incidence and duration provision of the third award was clause 51 which, although in subclause (i) it continued to state that it applied "to all employees employed by employers that are members of the A.S.A and/or C.C.E.R", did not continue the "opt out" or "elect out" provisions contained in all of the earlier instruments.

29 Further, it was a consent award and consented to on the employers' side only by the employer organisations, the ASA and the CCER, neither of whom (and more relevantly the ASA) at the time had as a member or could act for the BCS. It could not, therefore, be said or found that employer continued to be bound by that award. The award was a "new" award not merely in form but in substance. In any event, its literal terms, at the time it was made, only bound employer members of the ASA and CCER.

30 Finally, clause 51(v) of the award made by Neal C, the terms of which are set out earlier in paragraph [2], provided that the award took effect on the first full pay period on or after 26 October 2001 but that, "by administrative action", it was to commence from the first pay period in July 2001. Presumably, the award was framed in this differential way because of the limited power in s 15 of the Industrial Relations Act to make retrospective awards. For present purposes, however, the legal effect of the new award is the relevant consideration and the "administrative action" aspect cannot be relevant or given any effect. Therefore, relevantly, the November 2001 award rescinded the award made under s 19 with effect from the first full pay period to commence on or after 26 October 2001.

31 It is for these reasons that the Court has reached the conclusions set out earlier in paragraph [20] and will make declarations broadly in line with those sought by the applicant. However, two modifications are appropriate. First, the two declarations sought should be modified to make plain that, although the BCS is or may be an employer in the Australian Capital Territory, the declarations only apply to employment in this State. Second, a further declaration or order should be framed to reflect the conclusions expressed in the initial decision and also in this decision. That is, declarations should be made in the applicant's favour as to the first and second awards, but not as to the third award, and the form of the declarations should expressly reflect their limited effect. The declarations and orders made are as follows:

Declarations that:

1. Employees within New South Wales of the Baptist Community Services - NSW and ACT (BCS) and/or aged or disability care facilities owned or operated by the BCS in New South Wales, who come within clause 49 - Area, Incidence and Duration of the Charitable, Aged and Disability Care Services (State) Award, are entitled to the rates of pay and conditions of employment provided for in that award.

2. The BCS and/or aged or disability care facilities owned or operated by the BCS in New South Wales are bound by the terms of the Charitable, Aged and Disability Care Services (State) Award in relation to employees who come within clause 49 - Area, Incidence and Duration of that award whether or not the BCS is a member of the Aged Services Association of NSW and ACT.

3. The references in declarations 1 and 2 above to the Charitable, Aged and Disability Care Services (State) Award are to the awards with that name or title made or varied by:

(a) Maidment J in June 1999;

(b) Glynn J on 14 July 1999; and

(c) by Grayson DP on 18 May and 8 August 2001 and until rescinded by Neal C on 14 November 2001 with effect from the first pay period to commence on or after 26 October 2001.

Liberty to apply is granted to deal with any matters as to the form of the orders, provided the liberty is exercised within 14 days.

32 The conclusions reached in this judgment and in the earlier judgment have presented considerable difficulties in interpreting the relevant awards and award provisions, since their relevant terms do not appear to have been drafted with contemplation of factual circumstances of the kind presented here. It is not surprising therefore that the conclusions reached may seem somewhat anomalous and not entirely satisfactory to any party. It is likely, however, that any other conclusion which might have been reached on this complex of factual circumstances and award provisions may have been perceived as similarly anomalous.

33 It is therefore necessary to make some brief observations as to the complexities of the parties' situation. The difficult situation in which they find themselves seems very much one of their own making. The Commission's role in relevant respects was inevitably limited and reflected the continued devolution under the statute of industrial relations matters directly into the hands of the parties as those most immediately concerned: see for example the observations of the Full Bench in Re Principles for Approval of Enterprise Agreements (1996) 94 IR 98 at 117:

[T]he 1996 Act as a whole ... emphasises the continued devolution of industrial relations matters directly into the hands of those most immediately concerned, employers, employees and the industrial organisations which represent them. The Commission's role in this aspect of the legislation is protective and facilitative rather than interventionist.

34 The inevitable corollary of this situation is that parties now have an even greater responsibility to ensure that the employment structures and methods of regulation which they propose, and agree to, do not contain or create any unnecessary pitfall, anomaly or hiatus. The present case illustrates the potential difficulty, and thus probable doubtful utility, of defining award coverage in this jurisdiction by reference to membership of an employer organisation or permitting, or appearing to permit, award protection to be dependent upon continuing membership of an employer organisation which could have the potential for alteration or removal of award coverage at short notice, or no notice, to the relevant employees or employee organisation and without any involvement of the Commission.

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LAST UPDATED: 13/02/2003