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Unions NSW v Carter Holt Harvey Wood Products Australia Pty Ltd [2006] NSWIRComm 2 (30 March 2006)

Last Updated: 30 March 2006

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Unions NSW v Carter Holt Harvey Wood Products Australia Pty Ltd [2006] NSWIRComm 2

FILE NUMBER(S): IRC 3513

HEARING DATE(S): 23/11/2005

DECISION DATE: 30/01/2006

PARTIES:

APPLICANT

Unions NSW

RESPONDENT

Carter Holt Harvey Wood Products Australia Pty Ltd

JUDGMENT OF: Walton J Vice-President Sams DP Boland J Bishop C

LEGAL REPRESENTATIVES

APPLICANT

Mr A Searle of counsel

Ms M Yaager

Unions NSW

RESPONDENT

Mr R F Crow of counsel

Solicitor: Mr D Sloan

Middletons

CASES CITED: Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237

Australian Broadcasting Commission v Industrial Court (SA) (1977) 138 CLR 399

Australian Education Union v Department of Training and Employment (WA) (1999) 97 FCR 150

94 IR 386

City of Mandurah v Hull (2000) 100 IR 406

Dao v Australian Postal Commission (1987) 162 CLR 317

East Coast Brokers Pty Limited v The Commonwealth of Australia (Department of Defence) and another [2005] NSWIRComm 371

Fabros v Hotel Intercontinental Sydney (1994) 53 IR 193

Metal Trades Industry Association of Australia v The Amalgamated Metal Workers' and Shipwrights' Union (1983) 152 CLR 632

Moore v Newcastle City Council

Re Civic Theatre Newcastle (1997) 43 NSWLR 614

77 IR 210

Sydney Water Corporation and Australian Services Union (New South Wales and Australian Capital Territory Branch) [2005] NSWIRComm 305

Victoria v Commonwealth (1937) 58 CLR 618

LEGISLATION CITED: Anti-Discrimination Act 1977 (NSW)

Conciliation and Arbitration Act 1904 (Cth) - Repealed

Employment Protection Act 1982 (NSW)

Equal Opportunity Act 1977 (Vic) - Repealed

Industrial Relations Act 1988 (Cth)

Industrial Relations Act 1991 (NSW)

Industrial Relations Act 1996 (NSW)

Industrial Relations Amendment (Federal Award Employees) Act 1998 (NSW)

Interpretation Act 1987 (NSW)

Judiciary Act 1903 (Cth)

Occupational Health and Safety Act 2000 (NSW)

Postal Services Act 1975 (Cth) - Repealed

Workplace Relations Act 1996 (Cth)

Workplace Relations Amendment (Termination of Employment) Act 2001 (Cth)

JUDGMENT:

- 43 -

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

FULL BENCH

CORAM: Walton J Vice President

Sams DP

Boland J

Bishop C

Monday 30 January 2006

Matter No IRC 3513 of 2005

Unions NSW v Carter Holt Harvey Wood Products Australia Pty Limited

Notification under s 130 of the Industrial Relations Act 1996 of a Dispute, Question or Difficulty concerning the termination of the employment of Mr Karl Safranek on 27 May 2005

DECISION OF THE COMMISSION

[2006] NSWIRComm 2

INTRODUCTION

1 This matter concerns a reference by Sams DP under s 193 of the Industrial Relations Act 1996 ("NSW Act") of three questions that raise issues concerning the power of the Industrial Relations Commission of New South Wales to deal with an industrial dispute involving the dismissal of an employee whose employment was regulated by industrial instruments made under the Workplace Relations Act 1996 (Cth) ("WRA") and, in particular, the power of the Commission under s 137(1)(b) of the NSW Act to order the reinstatement or re-employment of the dismissed employee. The matter raises for consideration the correctness of the decision of the Full Bench in Moore v Newcastle City Council; Re Civic Theatre Newcastle (1997) 43 NSWLR 614; 77 IR 210.

2 The background to the reference was conveniently set out in an agreed statement of facts that was in the following terms:

1 Carter Holt Harvey Wood Products Australia Pty Limited (Carter Holt Harvey) is a body corporate that is, for the purposes of paragraph 51(xx) of the Constitution, a trading corporation formed within the limits of the Commonwealth.

2 From approximately 13 May 2002 until 23 May 2005 Karl Safranek was employed by Carter Holt Harvey as a storeperson (Employment).

3 On or about 9 May 2005, Mr Safranek witnessed a safety incident when another employee jumped on the tines of a forklift that Mr Safranek was driving. Mr Safranek reported the incident but declined to name the other employee.

4 Company witnesses say that on several occasions in the days immediately following the incident, Mr Safranek told supervisors and managers that he would not disclose the name of the other employee because he would not ‘dob’ on a mate. Mr Safranek denies this. Mr Safranek later said he also feared for the safety of himself and his wife and child if he named the other employee. Carter Holt Harvey did not accept that Mr Safranek held this fear genuinely or reasonably.

5 During interviews and meetings with Mr Safranek, company representatives told Mr Safranek that they required him to name the other employee so that the company could comply with its obligations under the Occupational Health and Safety Act 2000 and with its own safety policies. Mr Safranek and his union disputed this and suggested other ways in which the incident could be investigated.

6 In a letter to Mr Safranek dated 23 May 2005, Carter Holt Harvey stated that the termination of Mr Safranek’s employment was due to his deliberate disobedience of a lawful and reasonable direction.

7 The Employment was terminated on 23 May 2005 (Termination). The Termination took place at the initiative of Carter Holt Harvey.

8 Immediately prior to the Termination, the Employment was subject to the terms of the Carter Holt Harvey Customwood Oberon Enterprise Agreement 2004 – 2006 (Enterprise Agreement). A copy of the Enterprise Agreement is attached to this statement of agreed facts and marked "A".

9 The Employment was also subject to the terms of the Timber Industry – CFMEU Wood Panels – Award (Award). A copy of the Award is attached to this statement of agreed facts and marked "B".

10 The Award was made by the Australian Industrial Relations Commission.

11 On 10 June 2005 the Construction, Forestry, Mining and Energy Union (CFMEU), on behalf of Karl Safranek, filed an application for relief in relation to termination of employment with the Australian Industrial Relations Commission. A copy of that application is attached to this statement of agreed facts and marked "D".

12 On 6 July 2005 the Labor Council of New South Wales filed a notification of industrial dispute with this Commission.

13 On or about 11 July 2005 the CFMEU filed a notice of discontinuance with the Australian Industrial Relations Commission. A copy of that notice of discontinuance is attached to this statement of agreed facts and marked "E".

14 On 27 July 2005 the Labor Council of New South Wales filed a document titled Application for Interim Dispute Orders, Application for Expedition and Application for Final Dispute Orders. A copy of that document is attached to this statement of agreed facts and marked "F".

3 Following the discontinuance of the matter in the Australian Industrial Relations Commission, Unions NSW (formerly the "Labor Council of NSW") notified the existence of an industrial dispute to the Industrial Registrar pursuant to s 130 of the NSW Act. The dispute notification included the following information:

4. The question, dispute or difficulty concerns the following industrial matters:

(a) On about 13 May 2002 Carter Holt Harvey Wood Products Australia Pty Ltd employed Mr. Karl Safranek as a store person.

(b) On 9 May 2005 Mr. Safranek was operating a forklift at the company's premises at Lowes Mount Road, Oberon NSW 2787.

(c) At approximately 2pm on that day Mr. Safranek looked to the side and when he turned his head back around noticed a fellow employee riding on the tynes of the forklift. Mr Safranek stopped the forklift and advised the employee to "get off".

(d) On 10 May 2005 Mr Safranek completed an Injury and Incident Investigation Report relating to the incident. Mr Safranek did not name the fellow employee who rode on the tynes.

(e) At a subsequent meeting with management Mr. Safranek was asked to name the fellow employee. A company manager Mr. Brian Cobcroft advised Mr. Safranek that he was obligated to name the individual under the provisions of the Occupational Health and Safety Act 2000. Mr. Safranek refused to do so. Mr. Safranek was stood down on pay.

(f) At a further meeting with management on 16 May 2005 Mr Safranek was again asked to name the individual. Again Mr. Safranek refused to do so and informed management representatives that he feared for his safety if he named the individual. Mr Safranek offered alternative means of informing the company of the individuals name including reporting to the Chair of the OH&S Committee or a workcover inspector. The company refused this alternative.

(g) On 27 May 2005 Mr. Safranek's employment with the company was terminated for alleged deliberate disobedience of the lawful and reasonable direction amounting to serious and wilful misconduct.

4 Originally, Unions NSW sought both interim and final orders, but this was later confined to final orders pursuant to s 136(1)(c) and s 137(1)(b) of the NSW Act. The orders sought were in the following terms:

1. A Dispute Order providing for the reinstatement or re-employment of Mr Karl Safranek to a position commensurate with the position he occupied in his employment with the respondent as at the date that employment was terminated on 23 May 2005.

2. An Order pursuant to s 136(1)(d) for the respondent to pay to Mr Safranek the remuneration that he would have been paid but for the termination of his employment for the period from 23 May 2005 until the date the Commission orders his reinstatement or re-employment.

3. Such other or further Orders as the Commission finds are just or necessary.

5 The matter came before Cambridge C for conciliation. On 14 July 2005, the Commissioner issued a certificate of unsuccessful conciliation. On 27 July 2005, pursuant to s 173 of the NSW Act, Unions NSW objected to Cambridge C exercising arbitration powers in relation to the dispute. The dispute was subsequently re-allocated to Sams DP who, in September 2005, heard evidence and submissions. His Honour formed the view that certain questions relating to jurisdiction should be referred to the President for his consideration as to whether the questions should, in turn, be referred to a Full Bench for hearing and determination. On 16 September 2005 the President referred the matter to a Full Bench.

Questions referred

6 There were, initially, three questions referred to the Full Bench for determination. On 12 October 2005 a document was filed by Unions NSW identifying five questions for determination - the questions being:

(1) Whether the power granted to the Industrial Relations Commission of NSW by s 137(1)(b) of the Industrial Relations Act 1996 (“the NSW Act”) to order the reinstatement or reemployment of dismissed employees is not available in respect of dismissed employees whose employment was regulated by awards made, or agreements certified under the Workplace Relations Act 1996 (Cth) (“the WRA”)?

(2) Whether an order under s 137(1)(b) of the Industrial Relations Act 1996 for the reinstatement or reemployment of Mr Safranek would be inconsistent with the Federal Timber Industry – CFMEU, Wood Panel – Award 2000 or the Timber and Allied Industries Award 1999 and invalid, by reason of s 109 of the Constitution and s 152(1) of the Workplace Relations Act 1996 (Cth)?

(3) Whether, in respect of an application for an order under s 137(1)(b) of the Industrial Relations Act 1996 the reinstatement or reemployment of Mr Safranek, s 137(1)(b) would be inconsistent with s 170CH of the WRA and invalid by reason of s 109 of the Constitution?

(4) If the power granted to the Commission by s 137(1)(b) of the NSW Act to order the reinstatement or re-employment of dismissed employees is available in relation to Mr Safranek, and the Commission does make such an order, whether an incident of that power would permit the Commission to make an order that the respondent pay to Mr Safranek the remuneration payable to him in the ordinary course of his employment from the date the re-employment or re-instatement is effected? Alternatively, whether s 137(1)(d) would authorise such an order.

(5) Whether the power conferred upon the Commission by s 137(1)(d) would permit the Commission to make orders pursuant to s 213 of the NSW Act?

7 At the commencement of the hearing of the questions referred, the Full Bench inquired of the parties whether there was a proper basis for referring the fourth and fifth questions. Counsel for both parties agreed that these two questions could appropriately be dealt with at first instance once the Full Bench had determined the first three questions. Consequently, the only questions for consideration are questions (1), (2) and (3).

8 The other threshold matter raised by the Full Bench was the desirability of issuing a notice of a constitutional matter under s 78B of the Judiciary Act 1903 (Cth). Section 78B(1) of that Act provides:

(1) Where a cause pending in a federal court including the High Court or in a court of a State or Territory involves a matter arising under the Constitution or involving its interpretation, it is the duty of the court not to proceed in the cause unless and until the court is satisfied that notice of the cause, specifying the nature of the matter has been given to the Attorneys-General of the Commonwealth and of the States, and a reasonable time has elapsed since the giving of the notice for consideration by the Attorneys-General, of the question of intervention in the proceedings or removal of the cause to the High Court.

9 The Commission as currently constituted is not a court and it would appear that, strictly speaking, no notice is required under s 78B. For abundant caution, however, and to provide an opportunity for the Attorneys-General to make submissions if they chose to do so, the Full Bench proposed, and the parties agreed, that the Full Bench should hear the parties as to the three questions referred, adjourn the proceedings to allow notices to be issued, together with relevant documentation, and receive any written submissions from the Attorneys-General by 12 December 2005. The parties were to be given an opportunity to reply. However, whilst the relevant notices were issued, no submissions were received from any of the Attorneys.

QUESTION (1) - POWER TO ORDER REINSTATEMENT OF DISMISSED FEDERAL AWARD EMPLOYEE UNDER S 137(1)(b)

Operation of s 137

10 Section 137(1)(b) of the NSW Act is to be found in Pt 2 of Ch 3. Chapter 3 is entitled "Industrial Disputes". Section 137 is in the following terms:

Kinds of dispute orders

1) The Commission may make the following kinds of dispute orders when dealing with an industrial dispute in arbitration proceedings:

(a) The Commission may order a person to cease or refrain from taking industrial action.

(b) The Commission may order an employer to reinstate or re-employ any one or more employees who were dismissed in the course of the industrial dispute or whose dismissal resulted in the industrial dispute.

(c) The Commission may order an employer not to dismiss employees in the course of the industrial dispute if the employer has threatened to do so.

(d) The Commission may order a person to cease a secondary boycott imposed in connection with the industrial dispute.

(2) If employees are taking industrial action in connection with the industrial dispute, the Commission may order the employees to cease taking that industrial action before it makes any other kind of dispute order against the employer.

(3) A dispute order may not provide for the payment of compensation, lost remuneration or any other amount.

11 The following sections appearing in Parts 1 (entitled "Conciliation and Arbitration of Industrial Disputes") and 2 (entitled "Dispute Orders") of Chapter 3 are also relevant:

130 Notification of industrial dispute to Commission

(1) Any of the following may notify the Commission of an industrial dispute for the purpose of resolving the dispute:

(a) an industrial organisation of employees or employers,

(b) an employer who is or is likely to be affected by the dispute,

(d) a State peak council.

(2) The Commission may act on its own initiative to resolve an industrial dispute.

...

132 Compulsory conference

(1) For the purpose of resolving an industrial dispute, the Commission may convene a compulsory conference and require the attendance of any person whose presence the Commission considers would help in the resolution of the dispute.

(2) A compulsory conference is to be presided over by a member of the Commission.

(3) The Commission may confer with any person on any matter that may affect the resolution of an industrial dispute, without requiring the person to attend a compulsory conference.

...

136 Arbitration of dispute

(1) The Commission may, in arbitration proceedings, do any one or more of the following:

(a) make a recommendation or give a direction to the parties to the industrial dispute,

(b) make or vary an award under Part 1 of Chapter 2,

(d) make any other kind of order it is authorised to make (including an order made on an interim basis).

(2) Any such action may be taken by the Commission on its own initiative or on application by any person authorised to notify the Commission of the industrial dispute.

...

138 Making of dispute orders

(1) A dispute order may be made only against:

(a) a party or likely party to the industrial dispute, or

(b) a member, officer or employee of an industrial organisation that is such a party or likely party, or

(2) A dispute order:

(a) must clearly identify the persons against whom the order is made and who are bound by the order, and

(b) must state a time within which the order is to be complied with or state a period during which it remains in force, and

(3) If an employee is reinstated or re-employed under this Part, the Commission may order that the period of employment of the employee with the employer is taken not to have been broken by the dismissal.

139 Contravention of dispute order

(1) The Commission, on application, must deal expeditiously with an alleged contravention of a dispute order. The application may be made by the person who applied for the order or any other person who was authorised to apply for the order.

(2) Before dealing with an alleged contravention of the order, the Commission is required to summon the person alleged to have contravened the order to show cause why the Commission should not take action for the contravention.

(3) The Commission may, after hearing any person who answered the summons to show cause and considering any other relevant matter, do any one or more of the following:

(a) dismiss the matter if it finds that the dispute order was not contravened or if it finds that the circumstances were such that the Commission should take no action on the contravention,

(b) cancel the approval of an enterprise agreement,

(d) cancel the registration of an industrial organisation or take any other action authorised by Division 2 of Part 3 of Chapter 5,

(e) impose a penalty on an industrial organisation or an employer as provided by subsection (4),

(f) make any other determination that the Commission considers would help in resolving the industrial dispute.

(4) The maximum penalty that may be imposed on an industrial organisation or employer is:

(a) except as provided by paragraph (b)—a penalty not exceeding in total $10,000 for the first day the contravention occurs and an additional $5,000 for each subsequent day on which the contravention continues, or

(b) if a penalty has previously been imposed on the industrial organisation or employer for a contravention of an earlier dispute order—a penalty not exceeding in total $20,000 for the first day the contravention occurs and an additional $10,000 for each subsequent day on which the contravention continues.

(5) Any such penalty may be recovered in the same way as a penalty imposed by the Commission for an offence against this Act.

12 In Sydney Water Corporation and Australian Services Union (New South Wales and Australian Capital Territory Branch) [2005] NSWIRComm 305 the Full Bench of the Commission gave consideration to the operation of s 137 in the following terms:

31 The proceedings at first instance, arising from the notification of an industrial dispute, are not limited to the fairness of the dismissal of two employees. As Boland J held in Australian Services Union and Sydney Water Corporation (No 2), the arbitration proceedings presently under way relate to the substantive issue of Sydney Water's injury management policy and to the related or contingent issue of the threatened dismissals. Once this is understood, much of the apparent force of Sydney Water's submissions falls away.

32 As to legal principle, we agree with Boland J's circumspection regarding the inflexible application of the Hill tests to dispute orders made under ss 136 and 137. In Hill itself (at 208), Schmidt J recognised that the exercise of power under s 89(7) was not identical to the exercise of power under ss 136 and 137, although similar considerations would be involved. We also agree with his Honour's observations at [65] concerning the history of s 136:

[65]...The section, I think, owes its existence to the Parliament's concern, in introducing the Industrial Relations Bill 1995, that the Industrial Relations Act 1991 did not invest power in the Commission, in dealing with an industrial dispute, to reinstate or re-employ any one or more employees who were dismissed in the course of an industrial dispute or whose dismissal resulted in an industrial dispute, other than in accordance with the specific provisions dealing with unfair dismissals in Chapter 3, Part 8 of the 1991 Act: see Woolstar Pty Limited v Federated Storemen and Packers Union of Australia (New South Wales Branch) (1992) 45 IR 39; Hansard, Legislative Council, 23 November 1995, 3851.

33 The Full Court of the Industrial Court of New South Wales examined the history of jurisdiction relating to reinstatement in New South Wales industrial tribunals (a jurisdiction which emanates from statutes) in detail in Woolstar Pty Limited v Federated Storemen & Packers Union of Australia (New South Wales Branch) (1992) 45 IR 39. That case concerned reinstatement under the Industrial Relations Act 1991, which the Court contrasted with reinstatement under the preceding Industrial Arbitration Act 1940.

34 The Full Court held in Woolstar that, unlike the 1940 Act (which conferred power to order reinstatement in both the contexts of conciliated industrial disputes and unfair dismissals), the unfair dismissal provisions in the 1991 Act conferred the sole jurisdiction upon the commission to reinstate a dismissed employee. Although the provisions for dealing with industrial disputes by conciliation empowered the Commission to deal with any surrounding industrial circumstances which may arise in relation to mass dismissals occurring during an industrial dispute (such as the dismissals of approximately 400 workers in Woolstar itself), reinstatement was only available under the unfair dismissal provisions of that legislation.

35 Subsequently, in the second reading speech for the Industrial Relations Bill on 23 November 1995, the Attorney General and Minister for Industrial Relations, the Honourable J W Shaw QC, made the following comments in relation to dispute orders under Chapter 3:

Under this bill, the commission may make the following kinds of dispute orders when dealing with an industrial dispute in arbitration proceedings: it may order a person to cease or refrain from taking industrial action; it may order a person to cease a secondary boycott imposed in connection with an industrial dispute; it may order an employer to reinstate or re-employ any one or more employees who were dismissed in the course of an industrial dispute or whose dismissal resulted in an industrial dispute, thus re-investing the commission with its useful pre-1991 Act jurisdiction in this regard.

36 While we agree that the tests formulated in Castlemaine Tooheys as adopted in Hill (on the submissions of both parties) offer some useful guidance for the exercise of power to grant interim orders, it would be wrong to apply, strictly and inflexibly, what are essentially private law and equity principles to the full range of industrial disputes under Chapter 3 of the Act, many of which fall into the realm of a jurisprudence not only more closely aligned to public law but having its own particular features. Industrial disputes may cover a spectrum from what is essentially an isolated, ordinary unfair dismissal case, to an industrial dispute in which dismissals or threatened dismissals are subsidiary, and then to a full-blown collective dispute involving stoppages, lock-outs, and mass dismissals. Across most of the spectrum, there will be factors at play which cannot be accommodated by the Hill tests, and the further the situation approaches the collective dispute at the end of the relevant spectrum, the more strained the application will become. The Hill tests will usually be applicable to applications brought under s 89(7) of the Act.

37 The Commission, in using its powers under the Act to conciliate, arbitrate and generally facilitate the resolution of industrial disputes, is engaged in an undertaking considerably removed from the adjudication of individual civil grievances. In furthering the objects of the Act (including the promotion of efficiency and productivity in the economy of the State and providing for the resolution of industrial disputes in a prompt and fair manner with the minimum of legal technicality), it is vital that the Commission recognise the broad discretion granted by the Act to fashion appropriate relief by reference to the merits of the industrial dispute itself and the steps necessary to resolve it. This will involve a variety of considerations, some of which may include those deriving from private litigation, but more usually will include the public interest in managing the industrial dispute in a fair and just manner with minimum disruption and disputation.

13 The Full Bench's observations in Sydney Water, particularly at [37], highlight important differences between the Commission's powers under s 137 and its powers in relation to unfair dismissals under Pt 6 of Ch 2 of the NSW Act. Section 137(1)(b) provides the Commission with the power to act quickly in dealing by arbitration with an industrial dispute where the Commission determines that orders under s 137(1)(b) are necessary in order to resolve the dispute or to assist in resolving a dispute. It may be, for example, that employees have been dismissed in the course of an industrial dispute and the Commission takes the view that in order to resolve the wider dispute it is necessary to make orders reinstating the employees. Depending upon the circumstances of the dispute, there may be no need for the Commission to consider questions of fairness (whether the dismissal was harsh, unreasonable or unjust), as the Commission would be required to do under Pt 6 of Ch 2. In this respect, the Full Bench observed in Sydney Water at [46]:

Similarly, it would be inappropriate to limit the broad discretion to grant dispute orders on the basis of the principle contended for by Sydney Water that the power to restrain an employer on an interim basis from dismissing employees should not be exercised unless the Commission had formed the view that the threatened dismissal would be harsh, unjust, or unreasonable.

14 That observation was made in respect of interim dispute orders, but we consider the principle remains the same for final orders (as does the reasoning of the Full Bench set out in paragraph [12] above).

Collective nature of industrial disputes

15 As we have noted, unlike the relevant provisions in Pt 6 of Ch 2 of the NSW Act, there is no requirement in s 137 to make a finding that a dismissal was harsh, unreasonable or unjust before orders may be made providing relief, although in some cases a finding of that kind (whether preliminary, or otherwise) may be applicable. Moreover, an industrial dispute under the NSW Act will at least have some collective ingredient or characteristic beyond an individual grievance or claim. That is to say, an industrial dispute will extend beyond merely the grievance of an individual employee and will exhibit a concern or involvement of an industrial organisation of employees, and/or an employer or employers, and/or a State peak council representing a collective of unions or employers. This is to be contrasted with Pt 6 of Ch 2 of the NSW Act which, although enabling an industrial organisation of employees to make application on behalf of an employee for a remedy in respect of an alleged unfair dismissal (s 84(2) and (3)), is essentially designed to accommodate applications by individual employees. Indeed, individuals make the great majority of applications.

16 At a basic level, the distinction between s 137 and the provisions of Pt 6 of Ch 2 is demonstrated by the fact that individual employees may not notify an industrial dispute to the Commission. Section 130 of the NSW Act provides:

1) Any of the following may notify the Commission of an industrial dispute for the purpose of resolving the dispute:

(a) an industrial organisation of employees or employers,

(b) an employer who is or is likely to be affected by the dispute,

(d) a State peak council.

2) The Commission may act on its own initiative to resolve an industrial dispute.

17 Further, on most occasions industrial disputes come before the Commission in compliance with dispute settlement procedures found in awards which are designed to regulate individual disputation between unions and employers, including disputes over particular grievances of employees (see s 39 and s 131). Those sections provide:

39 Mandatory dispute resolution procedures in enterprise agreements

(1) An enterprise agreement is not to be approved unless it contains procedures for the resolution of industrial disputes under the enterprise agreement (dispute resolution procedures).

(2) However, an enterprise agreement need not contain dispute resolution procedures if the Commission is satisfied that another relevant agreement or award already does so.

(3) Dispute resolution procedures may (but need not) be included in an enterprise agreement if the employer employs fewer than 20 employees.

...

131 Mandatory dispute resolution procedures to be followed first

The Commission may refuse to deal with an industrial dispute until it is satisfied that any relevant dispute resolution procedures in an industrial instrument have been followed as far as is reasonably practicable in the circumstances.

Note. Sections 14 and 39 require the inclusion of dispute resolution procedures in awards and enterprise agreements

18 The term industrial dispute in itself connotes the industrial and collective flavour of the issue. This is reinforced by the definition of industrial dispute in the Dictionary to the NSW Act:

industrial dispute means a dispute (including a question or difficulty) about an industrial matter, and includes the following:

(a) a demarcation dispute,

(b) a threatened or likely industrial dispute,

19 The general definition of "industrial matter" is contained in s 6 of the NSW Act in the following terms:

General definition

In this Act, industrial matters means matters or things affecting or relating to work done or to be done in any industry, or the privileges, rights, duties or obligations of employers or employees in any industry.

20 Section 6(2) of the NSW Act provides examples of industrial matters and these include:

...

(e) the termination of employment of (or the refusal to employ) any person or class of persons in any industry,

...

21 "Industrial action" is defined as follows in the Dictionary to the Act:

industrial action means a strike by employees or a lock-out by an employer, and includes:

(a) a practice relating to the performance of work, adopted in connection with an industrial dispute, that restricts, limits or delays the performance of work, or

(b) a ban, limitation or restriction affecting the performance of work, or the offering or acceptance of work, that is adopted in connection with an industrial dispute, or

but does not include any action taken by employees with the agreement of their employer or any action taken by employers with the agreement of their employees.

22 An industrial dispute, by definition, may, of course, relate merely to a question or difficulty. And it may involve a dispute as to a dismissal of an employee simpliciter (see s 6(2)(e)). It will often be the case, however, that the dismissal of an individual employee which is the subject of the notification of an industrial dispute pursuant to s 130 of the NSW Act will involve substantive collective ingredients because of a broader concern amongst fellow employees and/or the employee's union who oppose or question the dismissal. Such collective concern may, for example, arise from the reasons given for the dismissal because the rationale for the termination may have some broader significance for the members of a union (see Sydney Water), or because a dispute settlement procedure arising out of earlier collective bargaining or award making processes provides for the resolution of such matters. This concern may or may not manifest itself in industrial action (the definition of industrial dispute specifically contemplates a threatened dispute or a dispute which is likely to give rise to industrial action). Even if it does, s 137 may be employed to cause the industrial action to cease. Section 137(1)(b) provides the Commission with the necessary power to deal with the dismissal aspect of such a dispute.

Genuineness of dispute

23 One issue that we have found it necessary to consider in this matter is the genuineness of the industrial dispute. If the dispute was manufactured simply to test the issue of whether this Commission had the power under s 137(1)(b) to reinstate an employee whose employment is covered by a federal award, a real question arises as to the proper characterisation of the matter before us; is it an industrial dispute we are dealing with or in reality an unfair dismissal? While it is clearly within the purview of the Commission's power under s 137(1)(b) for an unfair dismissal case to be dealt with in a collective dispute, it would generally be inappropriate for the Commission to exercise that power in relation to an unfair dismissal simpliciter with no collective element.

24 The issue arises because, initially, Mr Safranek's dismissal was the subject of an application for relief in relation to termination of employment in the Australian Industrial Relations Commission. As we have said, that application was subsequently discontinued and the matter came before this Commission by way of a notification of an industrial dispute by Unions NSW, the State peak council of employees (see s 215 and definition of "State peak council" in the Dictionary to the NSW Act).

25 In his submissions to us, Mr R F Crow, counsel for the respondent, raised the issue of the unusual course the matter had taken, this way:

There was a procedure available to Mr Safranek and/or his union under the Federal Act which they obviously knew of because they instituted it. They have subsequently withdrawn or discontinued that for reasons which have not been explained to us, but it is not a case of mere oversight or ignorance of the law. There was a conscious decision made to discontinue the proceedings in the Federal Commission and instead proceedings have been initiated here under section 130 - notably not under section 83 which would not be available by reason of section 83(1)A because Mr Safranek does have a remedy available to him under the Federal legislation for reasons we explain more fully in our written submission.

He was an employee of a constitutional corporation, which is an agreed fact, but where a Federal Award applied. So 83(1)A would have disqualified him from that remedy. We have here a resort to a device to circumvent two obvious remedies, one of which was available and one of which was not. So it is remarkable and curious that really it does put a heavy burden on the notifier to justify what is an unusual course of action. In our submission the submissions which have been put on by the notifier do not discharge that burden and do not explain why this Commission should use its processes, these dispute settling processes, to do what would conventionally be done by order under section 170CH of the Federal Act.

...

[W]hat is sought is a dispute order providing for the reinstatement or re-employment of Mr Safranek to a position commensurate with the position he occupied in his position as at the day he was terminated. That is all that is sought - a remedy for termination of employment. That is what highlights, in our submission, the oddity of what is being done and really puts a significant burden to satisfy this Commission that it should do something so remarkable and it has a jurisdiction to do something so remarkable.

26 Then followed an exchange between Mr Crow and the Full Bench:

BOLAND J: You accept though, Mr Crow, do you that the course Unions New South Wales have followed and the remedy they seek, is one which is open?

CROW: The course of notifying a dispute is open to them if there is a dispute.

BOLAND J: I have not heard you say there is not.

CROW: There is no industrial action.

BOLAND J: That does not mean there is no dispute.

CROW: That’s right, so indeed there is still a question even if there is no dispute, so we do not complain about that. We say it is the jurisdiction to grant this particular remedy that is missing.

SAMS DP: I may have asked Mr Searle during the earlier proceedings why the union discontinued the Federal proceedings and I am not sure I got a straight answer.

CROW: I don’t think you did. There was coyness about that. Perhaps he may be more forthcoming today.

WALTON VP: That could bear on the question we have to answer. I am trying to understand the submission that you are making in the light of the questions that have been raised with us, as it were, to ascertain whether there is something more here than meets the eye on the basis of it looks like a submission going to how the Commission should properly exercise its discretion as to whether to grant relief or not, having regard to the background and so forth as opposed to a question of law, there have been two Full Bench decisions of relatively recent origin dealing with how the parties in coming and seeking reinstatement of a person or persons in the context of an industrial dispute notification and in dealing with the issues that arise in that context where there is a manifestation of an industrial dispute...in this matter you have on the one hand [exhibit] R4 [notification of dispute] which may on one reading be confined to what might be said to be a termination type complaint and on the other hand a demonstration of broader considerations concerning the dispute and the like. The fact that the Labor Council of New South Wales brought it seems to indicate it has something unusual about it.

On the other hand exhibit R5 [application for dispute orders] looks very much like a termination application in another form. Having raised these matters with you in that way, is there something more going to the legal question?

CROW: I have endeavoured to highlight the unorthodoxy of this. It is essentially a jurisdictional issue. We do not say that there is any discretion at all available to the Commission. We also say it is a very unusual jurisdictional question. I am not aware of any case in which this Commission - certainly since Moore [Moore v Newcastle City Council] - has been asked to reinstate the employment of someone covered by a Federal Award or instrument... It is such a very unusual thing for the Labor Council to do; we just make that point because I think it supports the strength of the jurisdictional argument that I am putting. No one has ever tried to do this before, because it is just hopeless.

27 Mr A Searle of counsel for the notifier submitted that the issue was not confined to Mr Safranek's dismissal, but that:

[A] substantial issue in the proceedings was whether or not obligations under the Occupational Health and Safety Act had in fact been complied with or not complied with.

28 Mr Searle contended that whilst the question of Mr Safranek's dismissal had been referred to the Australian Commission (AIRC) by his Union, the Construction, Forestry, Mining and Energy Union, it was decided not to proceed in that jurisdiction because "this Commission has significant experience in relation to that piece of legislation (Occupational Health and Safety Act 2000) in the way that the Federal Commission does not".

29 In the grounds and reasons supporting the notifier's application for dispute orders, it was stated in relation to occupational health and safety:

Furthermore, this situation raises broader questions involving the application and implementation by employers and employees of the public policy embodied in the Occupational Health and Safety Act 2000. In particular, it gives rise to the question of when and in what circumstances it is permissible for an employer to terminate employment on the basis of occupational health and safety considerations (whether in whole or in part). Similarly, it gives rise to the question of whether action (or inaction) taken by an employee due to genuine fears for personal safety constitute non-compliance with the Occupational Health and Safety Act 2000.

30 It is apparent that whilst the relief sought here is the reinstatement of Mr Safranek, the notifier's wider concern relates to the respondent's reliance on its responsibility for occupational health and safety as the basis for the termination of Mr Safranek's employment and the notifier's view that this reliance is wrong or misconceived. The dispute is not confined to a question of law concerning the operation of the Occupational Health and Safety Act but extends to industrial and employment policies where occupational health and safety issues arise. We are satisfied that the dispute has not been contrived, but that it involves a real concern by the employees' State peak council in respect of the reliance by the respondent on the occupational health and safety laws of NSW to dismiss employees and more generally as to the employer's policies regarding the maintenance and achievement of a safe workplace. In coming to this conclusion we have had regard to the various documents describing the dispute before us and our experience in dealing with these matters.

Moore v Newcastle City Council

31 Both parties made comprehensive submissions on the decision of the Full Bench in Moore v Newcastle City Council. The respondent relied on Moore to contend that s 137 did not apply to the dismissed employee; the notifier submitted that Moore did not decide that question and, alternatively, sought to argue that the decision was wrong. Distillation of counsels' submissions suggests that the following questions must be answered in order to assess the implications of Moore v Newcastle City Council for the present matter:

(1) Was Moore correctly decided?

(2) Did the ratio in Moore apply to s 137 of the NSW Act?

(3) If Moore is wrong, does the amendment constituted by s 83(1A) nevertheless indicate a statutory intention consistent with that evinced in Moore?

32 As we shall discuss, the observations of the Full Bench in Moore concerning the operation of the NSW Act (outside Pt 6 of Ch 2) to dismissed employees were obiter dicta. In this sense, leave is not required to reconsider the correctness of the decision. We will, however, as contended by counsel, have regard to the reasoning in Moore so far as it bears upon this matter (including the extent to which it illuminates the purpose of s 83(1A)). Given the arguments advanced by both parties, that will involve, with respect, a consideration of the correctness of Moore.

Was Moore correctly decided?

33 Moore v Newcastle City Council also involved a reference to a Full Bench and concerned the issue of whether the Commission had jurisdiction to hear and determine the application under Pt 6 - Unfair Dismissals of Ch 2 of the NSW Act. The jurisdictional issue arose because at the time the applicant, Mr Moore, was dismissed, he was employed under the terms of the Entertainment and Broadcasting Industry - Live Theatre and Concert - Award 1995, an award that had been made under the Industrial Relations Act 1988 (Cth) and continued in force by the WRA.

34 Ultimately, in Moore, the issue of constitutional inconsistency did not arise for determination. The provision of the NSW Act that was in sharp focus in Moore was s 83 and the issue the Full Bench determined was whether s 83 was intended to apply to employees who were covered by a Federal award. The Full Bench found that it was not so intended. Therefore, no question of inconsistency arose.

35 At the time, s 83 was in the following terms:

83 Application of Part

(1) This Part applies to the dismissal of:

(a) any public sector employee, or

(b) any other employee, except an employee for whom conditions of employment are not set by an industrial instrument and whose annual remuneration is greater than $62,200 (or such greater amount as is prescribed by the regulations).

(2) This Part does not apply to an employee who is exempted from this Part by the regulations. Any such regulation may only exempt specified classes of employees included in any of the following classes:

(a) employees engaged under a contract of employment for a specified period of time or a specific task,

(b) employees serving a period of probation or qualifying period,

(d) employees whose terms and conditions of employment are governed by special arrangements providing particular protection in respect of termination of employment either generally or in particular circumstances,

(e) employees in relation to whom the operation of the provisions of this Part causes or would cause substantial problems because of:

(i) their particular conditions of employment, or

(ii) the size or nature of the undertakings in which they are employed.

(3) This Part does not apply to the dismissal of any such employee who is an apprentice or trainee (within the meaning of the Industrial and Commercial Training Act 1989) or any such employee who is an executive officer to whom Part 2A of the Public Sector Management Act 1988 or Part 5 of the Police Service Act 1990 applies.

(4) This Part applies to the dismissal of an employee even though it occurred in the course of an industrial dispute and the Commission is otherwise authorised under this Act to order the reinstatement of the employee.

(5) In this Part:

dismissal includes:

(a) the threat of dismissal, and

(b) in the case of a public sector employee—dispensing with the services of the employee, dismissing the employee as a consequence of disciplinary proceedings against, or the commission of an offence by, the employee or annulling the appointment of the employee.

36 The Full Bench in Moore directed its attention to the meaning of the phrase "any other employee" in s 83(1)(b). For that purpose, the Full Bench determined the context of the whole of the NSW Act had to be considered, and important to that consideration was the use of the word "employee" throughout the statute.

37 At 632-633 the Full Bench stated:

An examination of the use of the world "employee" throughout the statute, it seems to us, evinces an intention to put in place a State scheme applicable to employees within the State industrial relations aegis. Assisting that view are the remarks of the minister from the Second Reading Speeches as set out above. We can find no section of the 1996 State Act which evinces an intention to cross the boundary into the area of Federal regulation so that if s 83 were to be construed as covering Federal award employees it

it would, in the context of the statute as a whole, be unique. That is to say nothing as to the effect of s 152(1A) of the Commonwealth Act not being taken to show an intention to cover the field in respect of the termination of an employee's employment to the exclusion of a State law or a State award, but simply that s 152(1A), and we would add s 170HA, cannot give s 83 a coverage over Federal award employees which s 83 does not otherwise have. That is, and can only be, a matter for the State legislature within the confines of its constitutional powers and limitations.

38 The Full Bench then considered the meaning of "employee", "industry", "industrial instrument" and "award" as those terms were defined and at 633 stated:

We refer again to s 12 of the Interpretation Act which, except in so far as the contrary intention appears, requires the words so defined to refer to matters or things "in and of New South Wales"; as we said earlier, there is no apparent contrary intention in the 1996 State Act. We think it tolerably clear that the only instruments falling within the definition of "industrial instrument", including an award and an agreement, are ones which are generated within the State industrial system. Similarly, an "industry" must mean one "in and of New South Wales" by reason of the employees engaged in it being covered by

State industrial instruments as the relevant and sufficient connection with New South Wales or, if not so covered, as being capable of such coverage: see generally..., an employee under a Federal award, of course, is in an industry, or in part of an industry, of wider or national boundaries and, so, beyond the scope of the "industry" here defined. In other words, it seems to us, an industry located within and employing persons in New South Wales is one in and of New South Wales, unless it be one regulated by a Federal award in which case relevant and sufficient connection with the State has been lost.

39 The Full Bench continued:

In that setting, we consider now the meaning of the phrase "any other employee" in s 83(1)(b) as a person able to claim access to the remedies for an alleged unfair dismissal.

By the statutory definition of "employee" there is defined a general class of person applicable throughout the 1996 State Act. In subs (1)(b) there are some employees who do not fall within that general class, namely those employees falling within the class of exclusion being an employee for whom conditions of employment are not set by an industrial instrument and whose annual remuneration is greater than $62,200. Therefore, the class of "any other employee" referred to in s 83(1)(b) is not co-extensive with the general class of employee as defined. It necessarily follows, in our view, that:

(i) if a potential applicant's conditions of employment are set by an industrial instrument then that applicant falls within the general class and does not fall within the class of exclusion (whether or not the annual earnings exceed $62,200); and

(ii) therefore, such a potential applicant in (i) hereof falls within the class of "any other employee" although also clearly within the general class of "employee"; and

(iii) if a potential applicant earns less than $62,200 per annum and the conditions of employment are not set by an industrial instrument then the potential applicant falls within the class of "any other employee" as being not within the exclusion.

To fall within the class of "any other employee" in s 83, the potential applicant has to satisfy the strictly defined requirements set out above, which comprehend consideration of the definition of an "award" as being an "industrial instrument" made by the Commission under the 1996 State Act. To succeed in this case the applicant, and those supporting him, must show that s 83 was intended to apply to employees covered by Federal awards the provisions of Pt 6 of Chapter 2 of the 1996 State Act. To come to that conclusion it would have to be accepted that the legislature intended to apply the available remedies to those employees under Federal awards because they fall within the group whose conditions of employment are not set by an "industrial instrument" as defined.

The argument so put, based upon the construction of s 83 as we have viewed it and as requiring the legislature to have expressed its intention in the manner described above, is difficult to accept. The result of such a construction would be that "employees" covered by State industrial instruments would fall within the section because their industrial conditions were so regulated yet "employees" covered by Federal awards (as another form of an industrial instrument, albeit one under the Commonwealth Act), would fall within the section because those Federal instruments were not State industrial instruments. Such a result would stem either from syntactical accident or a complex approach to the relationship between the State and Federal systems of industrial regulation, including awards, which was recognised by the 1996 State Act in anticipation of the enactment of the Commonwealth Act, particularly having in mind the inclusion therein of s 152(1A). Such an intention was not revealed to the New South Wales Parliament in what were otherwise detailed and comprehensive speeches during the second reading of the Industrial Relations Bill. We think that an outcome of that nature would need to be compelled by the language of the statute before the usual presumptions against exceeding legislative constitutional boundaries would be found to have been crossed.

A more acceptable construction of s 83, conformably with the particular context and that of the whole of the 1996 State Act, is that what the legislature intended was much simpler and straight-forward, namely, if an employee was covered by an industrial instrument (State), then, without more (and including importantly no limit on annual earnings), access to the remedies provided by Pt 6 of Chapter 2 was to be available; if the employee was not covered by an industrial instrument (State), although otherwise eligible to be so covered, and the annual remuneration was less than $62,200, then that employee could also apply to the Commission for relief against an unfair dismissal. If the intention was to cover employees governed by either Federal awards or State awards, there is no good reason in industrial logic to limit the coverage of Federal award employees to those whose annual earnings are not greater than $62,200 but to impose no annual earnings limit on State award employees. It follows from that construction, we would conclude, that as at the date of the passage of the 1996 State Act those employees who were covered by Federal awards would be outside the scope of that statute.

40 Mr Crow submitted that in Moore, the Full Bench did not find any manifestation of a clear intention that Pt 6 of Ch 2 applied to employment under federal awards. Likewise, he submitted, there was no clear intention manifested in s 137 that it applies to employment under federal awards.

41 Mr Crow was relying on what the Full Bench in Moore said to the effect that it could find no section of the NSW Act that evinced an intention to cross the boundary into the area of federal regulation and on the Full Bench's analysis of the meaning of "employee", "industry", "industrial instrument" and "award". In this latter respect, the Full Bench thought it was "tolerably clear":

[T]he only instruments falling within the definition of "industrial instrument", including an award and an agreement, are ones which are generated within the State industrial system,

and that it seemed to the Full Bench:

[A]n industry located within and employing persons in New South Wales is one in and of New South Wales, unless it be one regulated by a Federal award in which case relevant and sufficient connection with the State has been lost.

42 At the time that Moore was decided, the WRA contained s 152(1A), which was in the following terms:

If a State law or a State award makes provision in respect of the termination of an employee's employment, any provision in a Federal award that also makes provision in respect of the termination of employment of the employee is not to be taken to show an intention to cover the field to the exclusion of that State law or State award.

43 The Full Bench considered that the existence of s 152(1A) did not affect its construction of s 83 of the NSW Act. Section 152(1A) was repealed in 2001 (Workplace Relations Amendment (Termination of Employment) Act 2001, s 3 and Schedule 1, cl 5). The respondent submitted that the repeal of s 152(1A) "confirmed or restored the supremacy of federal awards that deal with termination of employment over State laws and awards that also deal with that matter."

44 The respondent noted the Full Bench in Moore also considered that the existence of s 170HA of the WRA did not affect its construction of s 83 of the NSW Act. Section 170HA is in the following terms:

Subject only to the operation of sections 170HB and 170HC, the provisions of this Division are not intended to limit any rights that a person or trade union may have to appeal against termination of employment or to secure the making of awards or orders relating to termination of employment.

45 The respondent submitted s 170HA applied to the construction of Division 3 of Part VIA of the WRA and not to the construction of the NSW Act. It was submitted the Full Bench in Moore correctly concluded that s 170HA of the WRA could not give the NSW Act a construction that its own terms would not bear.

46 Furthermore, it was contended, s 170HA did not save from limitation, by Div 3 of Pt VIA of the WRA, any rights of the notifier to appeal against termination of employment, because the notifier was not a person or trade union. The respondent submitted that in the context of s 170HA, “person” meant a natural person and not an entity that has legal personality by force of law. If “person” was to be construed otherwise, there would have been no need to separately mention a trade union, because a trade union is an entity that has legal personality by force of law. It was further submitted the notifier was not a “trade union” as defined in s 4(1) of the WRA.

47 Thus, the submission developed by the respondent was that based on Moore, s 137 did not apply to the employment of employees covered by a Federal award. Furthermore, even if it were the case that s 137 did apply to Federal award employees, s 170HA did not save from limitation any rights of the notifier to appeal against termination of employment, because the notifier was not a person or trade union.

48 At the outset, we should indicate with the greatest respect to the Full Bench in Moore we do not agree that it was the legislature's intention to put in place a State scheme that had no application to employees covered by Federal awards. The Full Bench expressed itself in somewhat different language by saying that it seemed to the Full Bench that the legislature intended "to put in place a State scheme applicable to employees within the State industrial relations aegis." But that begs the question of what is the "State industrial relations aegis"? A reading of the decision in Moore, however, makes it plain the Full Bench believed that it was not the legislature's intention that the NSW Act would have any application to employees whose employment was covered by a Federal award. As we have said, we respectfully disagree with that conclusion.

49 The bases of the Full Bench's conclusion in Moore that the legislature did not intend that the NSW Act would apply to Federal award employees were as follows:

(1) The Federal and State systems were two separate and independent systems with the Federal system holding supremacy;

(2) Parliamentary speeches relating to the introduction of the 1995 and 1996 Industrial Relations Bills evinced an intention on the part of the legislature that "for employees under federal award coverage to obtain the benefits of the State system they would have to move to it";

(3) The use of the word "employee" throughout the NSW Act "evinces an intention to put in place a State scheme applicable to employees within the State industrial relations aegis" and the Full Bench could "find no section of the 1996 State Act which evinces an intention to cross the boundary into the area of federal regulation";

(4) Section 12 of the Interpretation Act 1987 (NSW), except in so far as the contrary intention appeared, required the words "employee", "industry", "industrial instrument" and "award" as defined in the Act to refer to matters or things "in and of New South Wales". "Employee" was defined as a person employed in an industry and as "industry" had to be "in and of New South Wales", an industry regulated by a federal award did not have the relevant and sufficient connection with the State. Further, "Industrial instrument" included by definition an award generated within the State system and not a federal award.

50 As to the first basis, it was unexceptional for the Full Bench to conclude that there are two separate systems of industrial regulation in New South Wales, the federal system and the State system, and that, by virtue of s 109 of the Constitution, the federal system holds supremacy (but only, we would add, to the extent of an inconsistency). It does not follow from this alone, however, that the State legislature did not intend to legislate for the benefit of all employees in the State. In this respect, we should say we agree with the decision of the Western Australian Industrial Appeals Court, in particular the judgment of Anderson J (with whom Kennedy J concurred), in City of Mandurah v Hull (2000) 100 IR 406 In that case Anderson J observed at 410:

The judgment in Moore was also relied upon by the appellant as authority for the proposition that the WA State Act should be presumed not to apply to employees covered by Federal awards, having regard to the “supremacy” conferred by s109 of the Constitution. The argument is that the State parliament should not be taken to have intended to pass legislation purporting to affect employees whose working conditions are covered by a Federal award, in view of s109 of the Constitution. It is true that there seems to be some support for such a notion in Moore. At 225, the Commission referred to what it described as “the unquestioned legal position that Federal awards would be paramount in situations of conflict with State laws” as a matter to be taken into account in considering the question whether the State parliament intended to legislate for employees covered by Federal awards. If the Commission was intending to say that there is a rule of construction to the effect that State Acts should be narrowly construed so as to avoid inconsistency with Commonwealth laws, I must say, with respect, that I do not agree (our emphasis). We are not here dealing with legislative competence to which s7 of the Interpretation Act 1984 (WA) refers. That is the section which provides that “every written law shall be construed subject to the limits of the legislative power of the State and so as not to exceed that power ... “. A law made by a State may be within the legislative competence of the State, but, nevertheless, it may be inconsistent with Commonwealth law. The conflict is not to be resolved by reading down the State law by reference to some presumed intent of the State parliament. To the extent that the laws are inconsistent, s109 provides the means for resolving the conflict (our emphasis). As Gibbs CJ pointed out in The University of Wollongong v Metwally (1984) 158 CLR 447:

If there is an inconsistency between a law of a State and a law of the Commonwealth there is no other rule than that laid down by s109 by which the inconsistency may be resolved. (at 458)

In my opinion, the Full Bench was right to conclude that the word “employee” in s29 of the WA State Act is to be given its ordinary meaning and includes employees covered by Federal awards.

51 The second basis relied upon by the Full Bench in Moore related to the Parliamentary speeches introducing the 1995 and 1996 Industrial Relations Bills (following the reading of the 1995 Bill in November 1995 Parliament was prorogued; it became necessary to introduce the Bill a second time in April 1996 following the 1996 State elections). The principal speech relied upon by the Full Bench was the second reading speech by the Minister introducing the 1996 Bill, where the Honourable J W Shaw QC stated (Hansard, Legislative Council, 17 April 1996 at 83):

I should like to say something very shortly about interaction between the State and Federal systems. The bill comes before the House at a crucial time for the State industrial relations system. I have already predicted publicly that there is likely to be a strong interest by employees under Federal award coverage in moving to the State system if the Federal Government's industrial relations proposals are enacted. These proposals will lead to the Federal award system being reduced to minimum core conditions, which the proposed Australian workplace agreements will provide inadequate protection to workers. In such circumstances, it can be argued convincingly that employees will be better off in the State system.

The new State industrial relations system, established on the basis of the Industrial Relations Bill 1996, will provide employees with the security and protection which the Federal Government is seeking to remove in that jurisdiction. I have made it clear that if employees consider that they would be disadvantaged by remaining in the Federal system, then we are prepared to welcome them into the State system. Any such moves would be likely to benefit all parties because they would be going into a system that has a balance, has a certain symmetry, has a fairness about it and is not ideologically driven.

52 The Full Bench in relying on this speech stated at 630:

The continued existence of two separate and independent systems is apparent. Apart from the relative merits of each system, a matter upon which we make no comment, it will be clear that the intention was evinced that for employees under Federal award coverage to obtain the benefits of the State system they would have to move to it.

53 We do not see the Minister's reference to "moving" or "moves" in the same light as the Full Bench in Moore. A move by employees from the federal to the State system need not have involved any amendment to the NSW Act; it may have only involved employees, or their unions more particularly, exiting from the federal system by one means or another (e.g., cancellation or rescission of, or exemption from, binding federal instruments) and upon so doing it would normally mean the employment of employees would most likely be covered by one of this Commission's common rule awards.

54 The third basis upon which the Full Bench in Moore relied for its conclusion that the NSW Act did not evince an intention to cover federal award employees, was that the use of the word "employee" throughout the Act did not evince such an intention.

55 The presumption that the Full Bench in Moore appears to have proceeded upon was that in the context of the use of the word "employee", unless there was an express or implied reference in the Act to its application to Federal awards then it had to be concluded the NSW Act did not evince an intention to cover federal award employees. We do not consider that was the correct approach. We consider the presumption should have been that the legislature intended the Act to apply to all employees in New South Wales, unless the contrary intention was shown. We repeat what Anderson J said in City of Mandurah:

The conflict is not to be resolved by reading down the State law by reference to some presumed intent of the State parliament. To the extent that the laws are inconsistent, s109 provides the means for resolving the conflict

56 In that case Anderson J also observed at 408:

The first question which it is convenient to consider is the question whether the respondent was an “employee” for the purposes of the Industrial Relations Act.

There can be no doubt that the respondent was an employee within the ordinary meaning of that word. He was a truck driver employed for wages. The term “employee” is expressly defined in the State Act by s7, but there is nothing in the text of that definition to suggest that the word does not include Federal award employees. It is worth noting that s7B, introduced for the manifest purpose of placing a limit on the definition of “employee”, limits the definition so as to exclude only employees who are parties to a workplace agreement in force under the Workplace Agreements Act 1993 (WA). The section does not, as it easily might have done, limit the definition so as to exclude Federal award employees.

Prima facie, therefore, the respondent was an “employee” under the State Act and was a person who, pursuant to s29(1)(b), could refer to the Commission a claim that he had been unfairly dismissed from his employment. The appellant’s main argument in support of the proposition that the legislature did not intend “employee” in s29 to include Federal award employees was that the legislature must be taken to have enacted s29 in the knowledge that a separate Federal industrial relations system existed and with the intent that those who chose to have Federal coverage should be confined to rights and remedies provided by the Federal system. In my opinion, the mere fact that separate State and Federal systems exist for the settling of industrial disputes and that parliament must be taken to know of that notorious fact cannot lead to the conclusion that parliament did not intend to legislate for the benefit of all employees in Western Australia who are unfairly dismissed. Of course, there is nothing to stop a State legislature from expressly confining access to statutory remedies for unfair dismissal to employees whose conditions of employment are fixed by State awards or agreements or by the common law. But such legislation is prima facie discriminatory and an intention to legislate in such a manner should not be implied too readily: cf Moore v Newcastle City Council; Re The Civic Theatre Newcastle (1997) 77 IR 210; (1997) 42 AILR 5-139; Cohen v Government Insurance Office of Australia Ltd (1996) 40 AILR 5-104. I am not persuaded there is any sufficient basis for such an implication in this case. On the contrary, there is at least one clear indication in the content of the WA State Act itself that the word “employee” includes employees covered by Federal awards (our emphasis).

57 We respectfully agree with the approach taken by Anderson J. It is true in that case there was in the Western Australian statute under consideration in City of Mandurah an indication that the word “employee” included employees covered by Federal awards (s 37A). But that does not detract from the validity of our opinion that in approaching the interpretation of the NSW Act the presumption should be that the legislature intended the Act to apply to all employees in New South Wales unless the contrary intention is shown.

58 The fourth basis upon which the Full Bench in Moore relied for its conclusion that the NSW Act did not evince an intention to cover federal award employees was the territorial presumption to be applied by s 12 of the Interpretation Act. The Full Bench expressed the view at 633 that:

[A]n employee under a Federal award, of course, is in an industry, or in part of an industry, of wider or national boundaries and, so, beyond the scope of the "industry" here defined. In other words, it seems to us, an industry located within and employing persons in New South Wales is one in and of New South Wales, unless it be one regulated by a Federal award in which case relevant and sufficient connection with the State has been lost.

59 The effect of the reasoning in Moore is that if a federal award regulates an industry, the necessary connection with New South Wales is lost. In other words, an employee working in an industry regulated by a federal award cannot be working in an industry as defined in the NSW Act and, therefore, the NSW Act cannot apply to employees whose employment is regulated by a federal award.

60 We consider the manner of the Full Bench's reliance on s 12 of the Interpretation Act was misplaced. The approach taken by the Full Bench in Moore was to first consider whether the NSW Act evinced an intention to apply to employees whose employment was covered by federal awards. This suggests that the Full Bench proceeded on the assumption that the NSW Act did not apply to federal award employees and then began the search for a contrary intention.

61 The correct approach, in our view, would have been to proceed on the assumption that the Parliament, in the exercise of its plenary powers, enacted the NSW Act to have general application to all employees in the State (including Federal award employees) and then to look for any contrary intention. No such contrary intention presents itself, in our opinion, and so the question then becomes one of constitutional inconsistency to be determined in accordance with the tests laid down by the High Court.

62 Section 12 of the Interpretation Act would be relevant, for example, in determining whether a particular industry was "in and of New South Wales" (that is, whether it had a sufficient connection or nexus with the State) for the purpose of determining whether an employee employed in that industry was covered by a State award. However, we do not consider s 12 can be used as a substitute for the tests laid down by the High Court in respect of constitutional inconsistency. In any event, we consider that if an employee is employed under a federal award in an industry that has a substantial connection with New South Wales, then the industry is "in and of New South Wales" and unless there is an inconsistency between the federal award and the NSW Act, the Act applies to the employment of the employee.

63 For the reasons we have explained, we consider that the reasoning of the Full Bench in Moore underpinning its conclusion that the NSW Act does not evince "an intention to cross the boundary into the area of Federal regulation" was wrong and should not be followed. In our view (subject to the effect of amendments made by s 83(1A) which we discuss below), Parliament intended the NSW Act to apply to all employees (Federal or otherwise) in the State.

Did the ratio in Moore apply to s 137 of the NSW Act?

64 In any event, we do not consider that Moore helps the respondent in this case; in our view, the observations by the Full Bench in Moore regarding the application generally of the NSW Act to employees whose employment is covered by a Federal award were purely obiter dicta.

65 That is to say, even though the Full Bench said it could find no section of the 1996 State Act that evinced an intention to "cross the boundary into the area of Federal regulation", that observation can be regarded as no more than obiter. It is clear that the Full Bench in Moore intended no definitive decision outside Pt 6 of Ch 2. Not only was the language used by the Full Bench equivocal ("We think it tolerably clear"; "it seems to us") but also the Full Bench's purpose in considering the NSW Act as a whole was not to determine the meaning to be assigned to the word "employee" in parts of the Act other than Pt 6 of Ch 2. The Full Bench considered that, in accordance with accepted principles of statutory interpretation, it should consider the statutory context in which s 83(1)(b) existed in order to assist in determining whether the provision covered Federal award employees. In this respect, the Full Bench stated at 625:

Accordingly, we would not construe the general phrase "any other

employee" in s 83(1)(b) of the 1996 State Act as embracing a Federal award employee without considering the statutory context in which it rests. As Mason J remarked in K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 315 in relation to the phrase "any contract" that "the cardinal rule of statutory interpretation ... requires the words of a statute to be read in their context". His Honour relied for that proposition on Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 147 CLR 297 at 304, 319-320 and concluded, by reference to Ross v The Queen (1979) 141 CLR 432 at 440, that "the instances of general words in a statute being so held to be constrained by their context are legion". Having reviewed the legislative scheme established by the 1996 State Act, we are unable to conclude that the subject phrase has a clear and unequivocal meaning so that it is appropriate in attempting to ascertain the legislative intention to consult available extrinsic aids: see Interpretation Act 1987, s 34.

66 Following a consideration of the objects of the NSW Act, its historical background, including its relationship with corresponding Commonwealth legislation, the Full Bench's conclusion that the New South Wales and Commonwealth systems of industrial regulation were two separate and independent systems (a conclusion, in the Full Bench's view, reinforced by the relevant Minister's Second Reading Speech introducing the Industrial Relations Bill 1996) and the paramountcy of Federal awards in situations of conflict with State laws, the Full Bench concluded at 631 that:

[T]o construe s 83 of the 1996 State Act as applying to employees covered by Federal awards would require the manifestation of a clear intention to do so, either expressly or by necessary implication. Such a result could not, in our view, occur as an unintended consequence from competing arguable constructions of s 83 as would lead to the ready adoption of the phrase "any other employee" as being unlimited in its scope. A review of the statements from the Second Reading Speeches above set out does nothing other than to confirm what we see as an intention to maintain two separate (Federal and State), but complementary, systems of industrial regulation.

67 As we earlier observed, the Full Bench found, after considering in a broad sense the use of the word "employee" throughout the statute, that it seemed to the Full Bench that it:

[E]vinces an intention to put in place a State scheme applicable to

employees within the State industrial relations aegis.

68 Whilst the Full Bench's consideration of the statutory context in which s 83(1)(b) rested was extensive, and provided what it considered to be support for its ultimate conclusions regarding the application of the phrase "any other employee" in s 83(1)(b), the outcome in Moore turned on the construction of s 83(1)(b) itself, which provided that Pt 6 of Ch 2 applied to:

69 The Full Bench reasoned that to hold that s 83(1)(b) applied to Federal award employees it would have to be accepted that the legislature intended to apply the available remedies to those employees under Federal awards because they fell within the group whose conditions of employment were not set by an "industrial instrument", such instrument being defined in s 8 of the NSW Act as meaning "an award, an enterprise agreement, a public sector industrial agreement, a former industrial agreement, a contract determination or a contract agreement." An "award" is defined in the Dictionary to the Act as "an award made, or taken to be made, by the Commission under this Act, and includes any order of the Commission under this Act that sets conditions of employment."

70 The Full Bench found this construction difficult to accept because:

The result of such a construction would be that "employees" covered by State industrial instruments would fall within the section because their industrial conditions were so regulated yet "employees" covered by Federal awards (as another form of an industrial instrument, albeit one under the Commonwealth Act), would fall within the section because those Federal instruments were not State industrial instruments.

71 The Full Bench held at 635 that:

If the intention was to cover employees governed by either Federal awards or State awards, there is no good reason in industrial logic to limit the coverage of Federal award employees to those whose annual earnings are not greater than $62,200 but to impose no annual earnings limit on State award employees. It follows from that construction, we would conclude, that as at the date of the passage of the 1996 State Act those employees who were covered by Federal awards would be outside the scope of that statute.

72 It is clear from this analysis that the decision in Moore was obiter in so far as it pertains to the central question in this matter involving s 137 of the NSW Act.

73 Further, the decision in Moore could not be relied upon to conclude that s 137 did not "cross the boundary into the area of Federal regulation", particularly as there is no indication in Moore that the Full Bench gave s 137 specific attention in its consideration of the use of the word "employee" throughout the statute. Nor did the Full Bench give consideration to whether it was within the Commission's power to order an employer to reinstate or re-employ an employee who was dismissed in the course of the industrial dispute or whose dismissal resulted in the industrial dispute, in circumstances where the employee's employment was covered by a Federal award.

If Moore is wrong, does the amendment constituted by s 83(1A) nevertheless indicate a statutory intention consistent with that evinced in Moore or, by its terms, produce the result in Moore?

74 Having concluded that Moore was incorrectly decided (and, by virtue of its ratio, inapplicable to this matter in any event), we turn to consider whether the later insertion of s 83(1A) warrants a different conclusion with regard to the current form of the legislation.

75 Section 83(1A) is in the following terms:

(1A) This Part applies to the dismissal of an employee even if the person was employed in this State under a Federal award. However, this Part does not apply to the dismissal of any such employee if:

(a) the person is entitled to make an application to the Australian Industrial Relations Commission with respect to the dismissal on the ground that it was harsh, unjust or unreasonable, or

(b) the person would have been entitled to make such an application but for the exclusion of the person from the relevant provisions of the Workplace Relations Act 1996 of the Commonwealth (being an exclusion of a kind referred to in subsection (2)).

76 Section 83(5) was amended at the same time to include the following two definitions:

Federal award means an award within the meaning of the Workplace Relations Act 1996 of the Commonwealth.

Industrial instrument includes a Federal award or other Federal industrial instrument.

77 We consider that s 83(1A) does not restrict s 137 from applying to employees covered by Federal awards for the following reasons:

(1) Section 83(1A) was enacted as a result of the decision in Moore and was solely concerned with the availability of remedies for unfair dismissal to a particular class of Federal award employees. Parliament did not vary any other Part of the NSW Act and thereby demonstrated no intention of tangentially limiting the operation of s 137 - a section that has remained unchanged since the original NSW Act. Thus, the opening words of s 83(1A) make clear that the provisions of that section are confined to Pt 6 of Ch 2 of the NSW Act; it does not apply to Pts 1 and 2 of Chapter 3;

(2) The effect of s 83(1A) is to ensure that a certain class of employees covered by Federal awards may seek relief in the Australian Commission for unfair dismissal. This is contrary to any submission that the NSW Act, generally, was not intended to apply to employees covered by Federal awards;

(3) Although it is true that s 83(1A) operates to exclude a sub-set of Federal award employees from Pt 6 of Ch 2, (and hence there is some limitation to the general application of the NSW Act to Federal award employees), the exclusion relates to inter-party contests, in contrast to the collective nature of the disputes which come within the ambit of s 137. There is no basis for extrapolating a limitation in the former area to the latter, qualitatively distinct area of jurisprudence, particularly as earlier analysis of the powers to fashion relief in industrial disputes pursuant to s 137 reveals considerations of a different nature to those applicable to the remedies contemplated in Pt 6 of Ch 2 (see for example s 84);

(4) Our earlier, lengthy, critique of the Full Bench's reasoning in Moore (and the resultant conclusion that Parliament intended the NSW Act to apply to all employees in the State, including Federal award employees), applies equally to submissions that s 83(1A) in some way indirectly limits s 137. Such a submission is contrary to the general intention of the NSW Act.

78 Historical analysis of s 83(1A) also supports our conclusion. Following the decision in Moore, the concern of the New South Wales Government appears to have been that employees covered by Federal awards whose employers were not constitutional corporations were not able, if dismissed, to seek relief in the Australian Commission for unfair dismissal. To overcome this problem the New South Wales Parliament enacted the Industrial Relations Amendment (Federal Award Employees) Act 1998 No 164 which amended the NSW Act to enable the Australian Commission and the Federal Court to perform functions and exercise powers with respect to the unfair dismissal of certain federal award employees, including those employed by employers that were not constitutional corporations. This type of conferral of power was permitted by the WRA.

79 The Industrial Relations Amendment (Federal Award Employees) Act was assented to on 14 December 1998. However, in Re Wakim; Ex parte McNally (1999) 198 CLR 511, the High Court held that legislation such as the Industrial Relations Amendment (Federal Award Employees) Act was invalid. Hence, s 83(1A) was introduced to s 83 by the Industrial Relations Amendment Bill 2000, which commenced operation on 9 October 2000.

80 It is evident from the second reading speeches introducing the Industrial Relations Amendment (Federal Award Employees) Bill 1998 and the Industrial Relations Amendment Bill 2000 that the only matter with which the legislature was concerned was the lacuna created by the decision in Moore as to the availability of a remedy against unfair dismissal in respect of employees covered by federal awards in circumstances where that remedy was not available through the Australian Commission. The exposed employees included those who were employed by employers that were not constitutional corporations (see Hansard, Legislative Assembly, 10 November 1998 at 9568-9569 and 17 November 1998 at 10025-10026).

81 The second reading speech on 10 November 1998 referred to the decision in Moore as having been made "Somewhat unexpectedly", which would suggest that it may have been the expectation of the legislature that the NSW Act would apply to employees covered by federal awards unless rendered inoperative through inconsistency. But what is significant is that the legislature saw no need to amend other provisions of the NSW Act that empowered this Commission to reinstate or re-employ a dismissed employee. These provisions are in Pt 7 of Ch 2, Protection of injured employees (see, in particular, s 94) and Pt 1 of Ch 5, Principles of association (see, in particular, s 213) and, of course Pt 2 of Ch 3, Dispute orders (see, in particular, s 137). Indeed, the legislature expressly limited the scope of s 83(1A) to Pt 6 of Ch 2. If the legislature had accepted the statements by the Full Bench in Moore to the effect that the NSW Act did not evince an intention to cover federal award employees, it seems extraordinary that the legislature would amend Pt 6 of Ch 2 to ensure employees of non-constitutional corporations were covered but not amend the other provisions we have identified.

82 It is evident from this history, and from the opening words of s 83(1A), that (contrary to the suggestion in Moore) the legislature did not intend generally to exclude Federal award employees from access to the dismissal provisions of the NSW Act.

83 It may be postulated as a matter of construction that by expressly including Federal award employees in Pt 6 of Ch 2 by virtue of s 83(1A), and yet remaining silent in relation to the balance of the NSW Act, Parliament intended only that part of the NSW Act to apply to Federal award employees. Such a postulation is, however, difficult to accept; it would mean, in effect, that Parliament agreed with the obiter of Moore but not the ratio; and there is nothing in the relevant extrinsic material (including the second reading speeches) to suggest that Parliament harboured a discrete concern for Federal award employees who were unfairly dismissed. Rather, the extrinsic material suggests that Parliament intended Federal award employees to be able to avail themselves of the entire benefit of the State industrial system to the extent that this would not be inconsistent with Commonwealth law, should such an inconsistency arise in the concurrent operation of the two systems.

84 The better explanation, in our opinion, is that the legislature was not only surprised by the outcome in Moore but also considered that the only amendment necessary to overcome Moore was in relation to the operation of s 83(1)(b), which after all, was the central - indeed the only - issue determined in that case. We consider the legislature's original intention was not to limit the coverage of the NSW Act in the manner suggested in Moore and that it was, therefore, unnecessary following the decision in Moore to further amend the Act beyond what was required in relation to s 83(1)(b). This amendment, by overturning Moore, effectively restored the original position that the NSW Act applied to employees covered by Federal awards, subject to any inconsistency.

85 We are reinforced in this view by the decision of Schmidt J in Fabros and Hotel Intercontinental Sydney (1994) 53 IR 193 which concerned the predecessor to s 93 of the NSW Act, s 237 of the Industrial Relations Act 1991 ('the 1991 Act'). Both sections concern reinstatement orders for employees who have been dismissed due to injury.

86 In Fabros and Hotel Intercontinental Sydney the Federated Liquor and Allied Employees Union of Australia, New South Wales Branch had made an application under s 237 seeking the reinstatement of Mr Fabros, a person employed by the Hotel Intercontinental ('the Hotel'). It was common ground between the parties that Mr Fabros was an 'injured worker' as defined in s 235 of the 1991 Act and that his employment was subject to the provisions of the Hotels, Resorts and Hospitality Industry Award 1992, an award of the Australian Industrial Relations Commission.

87 The Australian Hotels Association ('the AHA'), appearing for the Hotel, argued that Pt 7 of Ch 3 of the 1991 Act did not apply to Mr Fabros by reason of an inconsistency with a law of the Commonwealth, namely the Award. Schmidt J found that there was no inconsistency between the Award and the provisions of Pt 7 of Ch 3, and held that the application could therefore be dealt with on its merits. In other words, an employee covered by a federal award, or the employee's union, was entitled to apply for a reinstatement order under the protection of injured employee provisions in the 1991 Act.

There is no material difference between s 237 of the 1991 Act and s 93 of the NSW Act; nor is the difference between the definition in the 1991 Act of "employee" compared to the definition of the same term in the NSW Act material to whether Pt 7 of Ch 2 of the NSW Act applies to employees covered by federal awards. It follows that if her Honour was correct in Fabros in finding that the protection of injured employee provisions of the 1991 Act applied to employees covered by federal awards, and there is no reason to consider otherwise, there is nothing in the NSW Act that would cause us to take a different view in respect of the equivalent provisions in Pt 7 of Ch 2.

88 The Full Bench in Moore did not consider Fabros. If the legislature had intended only Pt 6 of Ch 2 to extend to Federal award employees, it may reasonably have been expected to amend Pt 7 of Ch 2 to the extent necessary to overturn Fabros. The fact that it did not lends support to our view that Parliament intended the NSW Act to apply to Federal award employees generally, and merely amended Pt 6 of Ch 2 in order to overcome the limited effect of Moore.

89 There is another point that arises from Fabros, which reinforces the limited ambit of Moore. We have already concluded that the circumscribed amendment, limited as it was to Pt 6 of Ch 2, does not evidence a Parliamentary intention to provide limited protection to Federal award employees in relation to unfair dismissal claims on the basis that they remained excluded from the operation of the rest of the NSW Act. On that basis, if the legislature considered that the decision in Moore impugned the decision in Fabros, it may reasonably have been expected it would have amended Pt 7 of Ch 2 rather than leaving injured employees of non-constitutional corporations under federal awards without any protection. The fact that it did not reinforces our conclusion that Parliament considered that the only changes necessary to rectify the lacuna left by Moore were changes to Pt 6 of Ch 2. Neither Moore, nor s 83(1A), could be described as having any effect outside that Part.

Conclusion

90 We return to the first of the three questions referred to us, namely:

Whether the power granted to the Industrial Relations Commission of NSW by s 137(1)(b) of the NSW Act to order the reinstatement or reemployment of dismissed employees is not available in respect of dismissed employees whose employment was regulated by awards made, or agreements certified under the WRA.

91 Putting to one side the question of constitutional inconsistency, which we shall deal with under the other two questions referred, for the reasons we have expressed concerning the correctness of Moore, the limit of its ratio, and the confined effect of s 83(1A), there is nothing in the NSW Act that would indicate a statutory intention that the power of this Commission to order reinstatement or re-employment under s 137(1)(b) is so limited as to not extend to employees whose employment is regulated by awards made, or agreements certified, under the WRA. In particular, there is nothing in the terms of s 137 itself to suggest any such limitation. On the contrary, s 137 (which is directed to the wide spectrum of collective disputes referred to in Sydney Water at [36]-[37]) grants the Commission a broad discretion to fashion appropriate relief in such a variety of disputes by reference to (amongst other things) the public interest in managing the industrial dispute in a just and fair manner with minimum disruption or disputation. It would require plain words indeed to limit such a broad discretion whose purpose strikes at the heart of the objects of the NSW Act.

92 Accordingly, we find as follows:

The power granted to the Industrial Relations Commission of New South Wales by s 137(1)(b) of the NSW Act to order the reinstatement or re-employment of dismissed employees is available in respect of dismissed employees whose employment is regulated by awards made, or agreements certified, under the WRA.

QUESTION 2 - WHETHER AN ORDER UNDER S 137(1)(b) OF THE NSW ACT WOULD BE INCONSISTENT WITH THE FEDERAL AWARD

93 There was no issue that s 137 of the NSW Act is a valid State law. Clause 17 of the Timber Industry – CFMEU Wood Panels – Award 2000 ("the federal Award") is in the following terms:

17. TERMINATION OF EMPLOYMENT

After the first two weeks of employment of a full-time employee other than a casual the following termination provisions shall apply:

17.1 Notice of termination by employer

17.1.1 In order to terminate the employment of an employee the employer shall give the employee the following notice:

Period of continuous service

Per Period of notice

1 year or less

1 week

1 year and up to the completion of 3 years

2 weeks

3 years and up to the completion of 5 years

3 weeks

5 years and over

4 weeks

17.1.2 In addition to the notice above, employees over 45 years of age at the time of the giving of the notice with not less than two years continuous service, shall be entitled to an additional weeks notice.

17.1.3 Payment in lieu of the notice prescribed above shall be made if the appropriate notice period is not given. Provided that employment may be terminated by part of the period of notice specified and part payment in lieu thereof.

17.1.4 In calculating any payment in lieu of notice the wages an employee would have received in respect of the ordinary time the employee would have worked during the period of notice had employment not been terminated shall be used.

17.1.5 The period of notice in this clause shall not apply in the case of dismissal for conduct that justifies instant dismissal, including malingering, inefficiency or neglect of duty, or in the case of casual employees, engaged for a specific period of time or for a specific task or tasks.

17.1.6 For the purposes of this clause, continuity of service shall be calculated in the manner prescribed by subclause 18.10

17.2 Notice of termination by employee

17.2.1 The notice of termination required to be given by an employee unless otherwise agreed shall be the same as that required of any employer, save and except that there shall be no additional notice based on the age of the employee concerned.

17.2.2 If any employee fails to give notice the employer shall have the right to withhold monies due to the employee with a maximum amount equal to the ordinary time rate of pay for the period of notice.

17.3 Time off during notice period

17.3.1 Where an employer has given notice of termination to an employee, an employee shall be allowed up to one day’s time off without loss of pay for the purpose of seeking other employment.

17.3.2 The time off shall be taken at times that are convenient to the employee after consultation with the employer.

94 The federal Award is not a law of the Commonwealth. However, an inconsistency between the terms of a federal award and s 137(1)(b) may arise by virtue of the operation of s 109 of the Constitution and s 152(1) of the WRA. Section 109 is in the following terms:

When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid.

95 Section 152(1) of the WRA is a law of the Commonwealth and expresses the intention of Parliament that constitutional inconsistency will arise where a State law or award is inconsistent with an award made pursuant to the WRA: Australian Education Union v Department of Training and Employment (WA) (1999) 97 FCR 150, 94 IR 386, per French J at [38]-[39]. The section is in the following terms:

Subject to this section, if a State law or a State award is inconsistent with, or deals with a matter dealt with in, an award, the latter prevails and the former, to the extent of the inconsistency or in relation to the matter dealt with, is invalid.

96 As Mason J stated in Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237 at 261 in relation to s 65 of the Conciliation and Arbitration Act 1904 (Cth), a predecessor provision of s 152 of the current WRA:

Inconsistency between a Commonwealth award or an agreement having the force of an award and a State law involves special considerations. They were discussed in Robinson (T.A.) and Sons Pty. Ltd. v. Haylor (1957) 97 CLR 177, at pp 182-183, and they explain the presence of s 65 in the Act. In truth the case which Ansett makes is one of inconsistency between the Act and the State Act, s 109 giving paramountcy to the Act with the result that the State Act cannot operate if, pursuant to the Act, the Commission has exercised its power to the exclusion of the provisions made by State law on the topic. The issue therefore turns upon the interpretation of the Agreement and, despite the emphasis given to the claim of direct inconsistency, the question is whether the provisions of the Agreement were intended to operate, subject to, or in disregard of, the general law.

97 Mr Searle of counsel for Unions NSW submitted that there was no comprehensive or positive right for the employer to terminate employment conferred by the federal Award from which the NSW Act would detract or would impair. Consequently, s 152 of the WRA was not applicable.

98 The respondent, however, submitted the federal Award provisions were comprehensive; they permitted an employer to terminate employment on certain conditions. It was submitted the provisions specified the means by which an employer may dispense with the services of an employee. Mr Crow contended the Award provisions would be defeated if the Commission could order reinstatement under s 137(1)(b). He submitted an order of reinstatement under s 137(1)(b) would alter, impair or detract from the operation of the award provisions: Victoria v Commonwealth (1937) 58 CLR 618 per Dixon J at 630. Consequently, it was submitted, s 137(1)(b) would be inconsistent with the award provisions and invalid to the extent of that inconsistency. Mr Crow also relied on Dao v Australian Postal Commission (1987) 162 CLR 317, Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237, Metal Trades Industry Association Of Australia v The Amalgamated Metal Workers' And Shipwrights' Union (1983) 152 CLR 632 and Australian Broadcasting Commission v Industrial Court (SA) (1977) 138 CLR 399.

99 Mr Crow did not place reliance on any particular test of constitutional inconsistency but relied on the proposition that more than one test could be applicable. It seems to us the thrust of Mr Crow's position was that there was a direct collision between s 137(1)(b) of the NSW Act and cl 17 of the federal Award but also that cl 17 covered the field.

100 In relation to the tests regarding inconsistency, the Full Bench of the Commission in Court Session recently observed in East Coast Brokers Pty Limited v The Commonwealth of Australia (Department of Defence) and another [2005] NSWIRComm 371 at [28]-[30]:

28 The tests for inconsistency are well known and were identified in Barry v Australian Broadcasting Corporation (2002) 112 IR 33 at [20] and in Metrocall Inc v Electronic Tracking Systems Pty Ltd (2000) 52 NSWLR 1 (2000) 101 IR 66 at [39]-[40]. In Barry the Full Bench of the Commission in Court Session referred to the Victorian Court of Appeal's enunciation of the tests in Felman v Law Institute of Victoria (1997) 142 FLR 362 at 381 as drawn from High Court authorities and there is no reason to consider there has been any change to those tests since they were cited with approval in Barry.

29 Hence, a law of a State will be inconsistent with a law of the Commonwealth where:

(1) it is impossible to obey both laws (e.g., R v Licensing Court of Brisbane; Ex parte Daniell (1920) 28 CLR 23);

(2) the law of a State takes away or varies a right, privilege, duty, power or immunity conferred by a law of the Commonwealth or, conversely, a law of the Commonwealth takes away or varies a right, privilege, duty, power or immunity conferred by law of a State (e.g., Colvin v Bradley Brothers Pty Ltd (1943) 68 CLR 151; Australian Mutual Provident Society v Goulden (1986)160 CLR 330); or,

(3) the law of a State invades a field that the law of the Commonwealth was intended to cover exhaustively (e.g., Ex parte McLean (1930) 43 CLR 472; Viskauskas v Niland (1983) 153 CLR 280).

30 Inconsistency established by the first and second tests is known as direct inconsistency. But even where there is no direct contradiction between the two enactments, where the Commonwealth law evinces an intention to 'cover the field', s 109 may still apply because of an indirect inconsistency and this is encapsulated in the third test. The Commonwealth in these proceedings relied on the second and third tests.

101 In considering the question of inconsistency between the federal Award, as a factum of the WRA, and the NSW Act, it is necessary to consider the both instruments read as a whole. The vital provisions, however, are cl 17 of the federal Award and s 137(1)(b) of the NSW Act.

102 We have already touched upon the nature of the provision in s 137(1)(b); it is part of the armoury of powers available to the Commission in its dispute settlement role. The provision exists in order to facilitate the settlement of, or settle, disputes by arbitration. That is to say, in exercising its arbitration powers (see s 136(1)(c)) the Commission may come to the view that the reinstatement or re-employment of an employee or employees is a necessary element in the resolution of a dispute and that it is proper that a dispute order be made effecting reinstatement or re-employment. Alternatively, it may be that the dismissal of an employee has resulted in an industrial dispute and that in order to resolve the dispute, it is proper that the employee be reinstated or re-employed (and in appropriate cases make other orders under s 137(1)). Section 137(1) may be characterised as a law dealing with the power of the Commission to resolve industrial disputes by arbitration. A subset of that jurisdiction is the power to order the reinstatement or re-employment of an employee.

103 The subject federal Award, on the other hand, like many federal awards, deals with an extensive array of employment related matters, including wages, hours of work, overtime, shift work, weekend work, leave of absence and public holidays, communication, consultation and dispute resolution, categories of employment and redundancy. The Award does not, however, determine exhaustively the respective rights of the employer and employees. To begin with, in addition to the Award, Mr Safranek's employment is regulated by a certified agreement (the Carter Holt Harvey Customwood Oberon Enterprise Agreement 2004–2006), which covers a wide range of matters including anti-discrimination, bullying, safety, health and environment, redundancy, transmission of business, right of entry, union delegates, workplace improvements, productivity, payment of wages, leave entitlements, grievance and disputes procedure and no extra claims commitment. Moreover, the Agreement leaves such matters as long service leave, occupational health and safety and workers' compensation to regulation by State laws.

104 As to federal awards covering the field, we note the observations of the learned authors in "Labour Law", Breen Creighton & Andrew Stewart, fourth edition, Federation Press, 2005 at 4.65:

It is reasonably well settled ... that where a federal award or agreement is concerned, a State law should only be invalidated on the ground of direct inconsistency, if at all. In most cases, an award or agreement ought not to be construed as manifesting an intention to cover the field. The reason for this stance, as Mason, Brennan and Deane JJ noted in the MTIA case, lies in the limited nature of the Commonwealth's power over industrial relations, at least under s 51(35). It is illogical to regard an award as an exhaustive code on employment matters, in light of the fact that the federal tribunal's jurisdiction is limited by both constitutional and statutory restrictions as to the matters with which it may deal and by the ambit of the dispute from which each award emanates.

105 The passage in the MTIA case (Metal Trades Industry Association Of Australia v The Amalgamated Metal Workers' And Shipwrights' Union) referred to by the learned authors was at 651:

The difficult case, as we indicated earlier, is that of an award apparently complete on its face and a subsequent State statute which confers new rights on employees in the sense that the new rights have not previously been accorded generally by industrial awards or contracts of employment. It might be said that the Court should not be too ready to conclude that the new statutory rights are consistent with the award because this may disturb the settlement effected by the award. Such an approach is not acceptable, however, for the reason that it disregards the fact that awards are framed to operate in the context of general law, both State and federal. The correct approach in such a case is that the award fails to deal with the matter provided for by the statute, unless the award exhibits an intention that there is to be no benefit of that kind or, alternatively, that the benefits for which it provides are to be a complete and exclusive statement of the employee's entitlement in the relevant area. Such an intention cannot be ascribed lightly to an award. It will not often transpire that the class of benefits provided by the statute was demanded by the log of claims or otherwise made part of the industrial dispute settled by the award.

106 Importantly, like clause 6B that was considered in Wardley, cl 17 of the federal Award does not deal with the substantive right of dismissal. Rather, in our opinion, the clause assumes the right of the employer under the common law to terminate the employment of an employee, and the import of the clause, to use the words of Mason J in Wardley at 262, "is to prescribe the procedure and regulate the means whereby the right to terminate may be effected."

107 The clause provides for:

(1) The period of notice to be given by an employer in order to terminate the employment of an employee, such notice varying according to the employee's length of service and age;

(2) Payment in lieu of the notice if the appropriate notice period is not given;

(3) The basis for calculating the payment in lieu of notice;

(4) The non-application of the period of notice in the case of dismissal for conduct that justifies instant dismissal or in the case of casual employees, engaged for a specific period of time or for a specific task or tasks;

(5) Notice of termination by an employee;

(6) Time off for an employee during a notice period for the purpose of seeking other employment.

108 It may be seen that cl 17 is only concerned with the question of notice of termination, whereas s 137(1)(b) is concerned with reinstatement or re-employment in the context of an extant industrial dispute. The relevant provisions occupy different fields. The respondent, however, submitted that:

The award provisions are comprehensive. They permit an employer to terminate employment on certain conditions. They specify the means by which an employer may dispense with the services of an employee. They would be defeated if the Commission could order reinstatement under s.137(1)(b). An order of reinstatement under s.137(1)(b) would alter, impair or detract from the operation of the award provisions. It would therefore be inconsistent with the award provisions, and invalid to the extent of that inconsistency.

...

[T]he award provisions grant the respondent permission by way of a positive authority to terminate Mr Safranek’s employment. The award maker’s intention that sustains that conclusion, also sustains the conclusion that the positive authority was to take effect to the exclusion of a State law permitting an order reinstating that employment. Inconsistency arises because s.137(1)(b) would undo what the respondent is permitted to do under the award provisions.

109 In Wardley the High Court (Stephen, Mason, Murphy and Wilson JJ, Barwick CJ and Aickin J dissenting) considered whether there was an inconsistency between s 18 of the Equal Opportunity Act 1977 (Vic) and cl 6 of the Airline Pilots' Agreement 1978 certified pursuant to s 28 of the Conciliation and Arbitration Act 1904 (Cth). It was held there was no inconsistency because the provisions of cl 6 concerning the dismissal of employees should be read against the background of the general law including any relevant State laws; by Mason J (Stephen J contra) because cl 6 dealt with matters of procedure relating to dismissal and not with substantive rights; and by Stephen J because discrimination on the ground of sex was not within the purview of the Agreement.

110 Clauses 6A and 6B of the Pilots' Agreement provided:

A. The employer may employ its pilots and the pilots shall serve the employer in any part of the world where that employer may from time to time be operating, subject to the provisions of this agreement.

B. The services of a pilot shall be terminable by either the employer or a pilot -

1. During the first six months of service, by seven days notice in writing;

2. After the completion of six months of service, by one month's notice in writing;

3. By the payment to the pilot of seven days' or one month's salary in lieu of notice as aforesaid

4. By the forfeiture by the pilot of the last seven days' or one month's salary paid to him, in lieu of notice as aforesaid.

Provided that the period of notice set out herein may be reduced or waived by mutual agreement.

A pilot whose services are terminated whether by summary dismissal or notice shall be given the reasons for this dismissal in writing, in the notice of dismissal, and shall have recourse to the Grievance Procedures except as provided in s. 6H.

111 Stephen J considered that cl 6B of the Agreement incorporated the right of the employer to terminate the employment of an employee on notice: see 254-255. His Honour appears to have taken the view that the concept of termination of a contract could not be broken up into separate elements such as the right of termination being sourced from the general law and the period of notice from the award.

112 Mason J took a different view. At 262 his Honour held:

From my examination of the Agreement as a whole, I conclude that it should not be viewed as a general industry award which seeks to determine exhaustively the respective rights of employer and employee. Although the Agreement does deal with many of the matters usually found in an award, such as pay, hours of work and leave, its emphasis is on setting out in exact detail the manner and procedure governing the advancement of a pilot in terms of seniority and rights dependent thereon. Clause 6B does not deal with the substantive right of dismissal. Instead, its opening words assume the right of the employer under the general law to terminate the employment of a pilot and the import of the clause as laid down in pars. 1, 2, 3 and 4 is to prescribe the procedure and regulate the means whereby the right to terminate may be effected.

And at 264:

Consequently, I do not find any direct inconsistency between cl. 6B and the State Act. The Agreement does not confer on Ansett a substantive right of dismissal; it merely assumes the right of dismissal for which the general law provides. The right of an employer under the general law to dismiss an employee has been altered in Victoria by the State Act in that an employer may not discriminate against an employee on the ground of sex in offering employment, refusing to offer employment or in the terms on which employment is offered (s. 18 (1)) or by dismissing an employee by reason of sex (s. 18 (2) (b)). The Agreement is to be read in the light of this alteration in the general law. The grounds on which I have reached the conclusion that there is no direct inconsistency also require the conclusion that cl. 6B of the Agreement does not seek to cover the field of the employer's substantive right to dismiss.

113 Murphy J similarly expressed the view at 266-267:

In my opinion, there is no inconsistency. The Agreement does not give a right to terminate which, apart from the seven days' notice requirement, is unqualified; it leaves the employer to exercise such rights as it has under the general law (with the seven days' notice requirement). The rights under the general law are those under the common law as modified by any Act or State Act.

114 At 287 Wilson J stated:

Leaving aside the Grievance Procedures, the Agreement does no more than declare that the engagement may be terminated by either the employer or the pilot on certain prescribed notice. If that were all, one could probably say of it what Mason J. said of the award in Reg. v. Clarkson; Ex parte General Motors-Holden's Pty. Ltd. (1976)134 CLR 56, at p 72 . There would be no basis for a conclusion that the State law was excluded.

115 The passage that Wilson J was referring to in Clarkson was as follows:

This is the approach which I take to cl. 21 in the present case. It then becomes necessary to consider the argument that cl. 21 is inconsistent with the continued existence under State law of a right on the part of an employee dismissed by notice duly given in accordance with its provisions to apply to a State court for an order under State law that he be re-employed. No doubt in some contexts it may be correct to say that the concession of a right in an employer to dismiss upon the giving of a stipulated notice, with the consequence that the employee dismissed is entitled to wages up to the time of dismissal, is inconsistent with, or excludes, the co-existence of a right in the employee to apply to a court for an order that he be re-employed. This conclusion might be readily reached, as it was by the Full Court of the Supreme Court, in the context of an award which comprehensively sets out the rights of the employer and employee, covering dismissal on notice and summary dismissal for misconduct

But in my opinion a different conclusion should be reached in the context of the claim shortly expressed in cl. 21 of the log which is confined, in accordance with the heading "Contract of Employment", to dismissal on notice or on payment in lieu of notice. In this context I am unable to discern any secure foundation for concluding that cl. 21 is so comprehensive in its scope as to exclude the application of a State law such as s. 15(1)(e) of the Industrial Conciliation and Arbitration Act (S.A.) from applying to the dismissal of an employee pursuant to its provisions.

116 Clause 21 of the log of claims in Clarkson was in the following terms:

21. Contract of Employment

All employment shall be by the week. Employment shall be terminated by an employer by a week's written notice or by paying two weeks' wages in lieu of notice. The employer shall not give an employee notice at the commencement of, or during a period of annual leave, sick leave, or whilst on workman's compensation.

It may be noted that in the present proceedings, the log of claims underpinning the federal Award was not in evidence.

117 The Award with which we are concerned does not endow the employer with any "right" to terminate an employee's employment, nor does it "grant the respondent permission by way of a positive authority to terminate Mr Safranek’s employment." The Award merely requires the employer to adopt certain procedures in respect of notice when terminating the employment and specifies the terms of that notice. In our opinion, in line with the views expressed by Mason, Murphy and Wilson JJ in Wardley and Mason J in Clarkson (and the opinions of Gibbs CJ, Wilson and Dawson JJ in the MTIA case, which we shall come to shortly), the right to terminate resides not in the Award but in the general law. So this is not a case where, on the one hand, the employer has exercised a substantive right of termination of an employee's employment under a federal award and, on the other hand, this Commission is being asked to override that right by ordering the reinstatement or re-employment of the employee.

118 In our opinion, in view of this analysis, there can be no direct inconsistency between the provisions of an award that deal with procedures governing the termination of employment, and the terms of a State statute empowering this Commission to order the reinstatement or re-employment of an employee who was dismissed in the course of the industrial dispute or whose dismissal resulted in the industrial dispute.

119 In the MTIA case the High Court considered whether there existed an inconsistency between the provisions of certain federal awards and a newly enacted Employment Protection Act 1982 (NSW). The awards contained provisions for the termination of employment on notice and the period of notice, dismissal for misconduct without notice and the rights of an employee to wages in consequence of termination or dismissal. The Act required employers to give to the State Industrial Registrar a notice of their intention to terminate the employment of any employee, except in the case of termination for misconduct, and conferred on the New South Wales Industrial Relations Commission the power to make orders in relation to dismissed employees, including orders for severance pay, payment of gratuities and superannuation benefits. The State legislation was held to be inconsistent with the awards.

120 Although the awards contained extensive provisions relating to termination of employment, more so than the Award that is the subject of these proceedings, Gibbs CJ, Wilson and Dawson JJ considered that, with the exception of a provision dealing with termination of employment of an employee on maternity leave, the awards did not contain a provision dealing with the employer's right to dismiss. But in any event their Honours considered at 643 that:

[T]he distinction which we have drawn between the right to dismiss and the machinery of termination (upon which some members of the Court in Wardley expressed different opinions on the effect of the award provisions then under consideration (1980) 142 CLR, at pp 253-254, 263-264, 266-267, 287) is material in the circumstances of this case, because we do not read the State Act as limiting or otherwise affecting in any way the grounds upon which an employer in New South Wales may terminate a contract of employment. It is not concerned with the employer's right to dismiss an employee. Part II of the State Act is concerned with the procedure which an employer is to follow in exercising that right. Section 7 obliges an employer to notify the Registrar of his intention to terminate the employment of an employee. The penalty for failure to do so is $5,000. Section 8 deals with the case where a notice of intention to terminate the employment has not been served on the Registrar under s 7. In such a case, the employer must serve on the Registrar a written notice giving particulars of the reasons for the termination. Again, the penalty for non-compliance is $5,000. The State Act contains some limited exceptions to the exposure of an employer to these obligations but they do not bear on the question in issue. Part III of the State Act confers jurisdiction in some circumstances on the Industrial Commission of New South Wales to make certain orders in relation to a termination.

In our opinion, these provisions plainly interfere with the relationship of employer and employee as established by the awards with respect to the termination of the employment. Both in subject-matter and effect, Pt II of the State Act is dealing precisely with the same topic as is covered by the awards, namely, the procedure which the employer must observe if he wishes to terminate the employment. On their proper construction, the awards do not leave any room for a State law to attach additional obligations on an employer in consequence of a termination of employment under the awards. In attempting to do so the State Act is inconsistent with the awards.

121 The three Justices also considered that in the case of an award that deals with a dispute between parties whose relations apart from the award are ordinarily governed by State law, including the common law, the existence of the State law is for the most part assumed and this assumption will be relevant in discerning any inconsistency. In this respect, it was observed at 642:

The contract of employment itself is the most obvious illustration. To the extent that it is not varied by the award, its obligations will ultimately be derived from State law.

122 Mason, Brennan and Deane JJ noted at 652 that in respect of the principal award under consideration, the Metal Industry Award 1971 (the provisions of the other awards were held to be relevantly indistinguishable):

It is a general industry award. Clause 6 deals in a comprehensive fashion with the "Contract of Employment". It draws a distinction between weekly employment and casual employment, making appropriate provision for each. It deals at length with "Termination of employment", making provision for termination on notice and dismissal for misconduct, including the rights of an employee to wages in consequence of termination or dismissal. The award contains special provisions relating to termination of employment by a person on maternity leave and it prohibits termination of employment on the ground of pregnancy or absence on maternity leave (cl. 24A). Other sub-clauses of cl. 6 deal with standing down of employees, absence from duty, abandonment of employment, prohibition of bans, limitations or restrictions on the performance of work, and time keeping in relation to late comers.

123 Their Honours then considered the provisions of the State Act, in particular s 7, and concluded at 652 that:

19. The effect of s 7 is to derogate from the effective exercise of the rights which an employee has by virtue of cl. 6 of the award to termination by a week's notice or by the payment of a week's wages. It makes it impossible for the employer to exercise his entitlement under the award to terminate without notice or give notice to terminate, as the case may be, the employment at any time. The practical impact of s 7 is to bring about a suspension of the exercise of the employer's right to terminate, or give notice to terminate, the employment at any time. The operation of s 7 alongside cll. 6 and 24A could only be sustained if these clauses, properly understood, are not a complete statement of the rights of the parties with respect to termination of employment and contemplate the possibility that the rights which they confer or recognize might in some circumstances be effectively supplemented by State law.

124 As to the last matter, their Honours found at 653 that:

[T]he provisions of the award governing termination of employment amount to a relevantly complete statement of the parties' rights with respect to that matter and the terms of s 7 of the State Act would derogate from the operation of the award. The section is therefore inconsistent with the award.

125 Murphy J found that the State Act was "clearly inconsistent with the federal award provisions": 655.

126 The Award that is the subject of the proceedings before us does not deal comprehensively with the question of termination of employment in the way that members of the High Court found in relation to the awards in the MTIA case. Rather, the Award confines itself essentially to the question of notice of termination. Clause 17 of the Award could not be considered to be a "complete statement of the parties' rights with respect to" termination of employment.

127 The respondent submitted that its contentions regarding inconsistency were supported by the decision of the High Court in Dao v Australian Postal Commission. In that case the power of the New South Wales Equal Opportunity Tribunal to make an order of, among other things, reinstatement under s 113 of the Anti-Discrimination Act 1977 (NSW), was held to be inconsistent with provisions of the Postal Services Act 1975 (Cth), which gave the Australian Postal Commission power to determine conditions for employment. The Court (Mason CJ, Wilson, Deane, Dawson and Toohey JJ) held at 335-336:

Section 46 of the Commonwealth Act arms the Commission with positive authority to determine the terms and conditions upon which temporary employees hold office. It was therefore competent for the Commission to determine that it was a condition of the continued engagement of the appellants as temporary employees that they achieve the minimum body weight prescribed for a person of their body height and sex. In that circumstance, the State Act cannot be permitted to characterize the dismissal of the appellants, consequent on their failure to achieve that minimum body weight, as unlawful, thereby exposing the Commission to the jurisdiction of the Tribunal to make the orders contemplated by s 113 [of the Anti-Discrimination Act].

128 Dao was a case involving direct collision between s 42 of the Postal Services Act and ss 25 and 113 of the Anti-Discrimination Act. As we have explained, however, no direct inconsistency arises here.

129 Reliance was also placed on Australian Broadcasting Commission v Industrial Court (SA). In Dao the High Court described the issue in Australian Broadcasting Commission v Industrial Court (SA) in the following terms:

Section 15(1)(e) of the Industrial Conciliation and Arbitration Act 1972 (S.A.) empowered the Industrial Court of South Australia to determine whether the dismissal of an employee was harsh, unjust or unreasonable and to order the re-employment of the employee in his former position on terms that were not less favourable to the employee than if he had not been dismissed. The jurisdiction of the Industrial Court was invoked by a temporary employee of the Broadcasting Commission who challenged his dismissal. The question was whether s.15(1)(e) was inconsistent with the provisions of the Broadcasting and Television Act 1942 (Cth). Division 2 of Pt III of that Act conferred detailed powers on the Broadcasting Commission with respect to the engagement, promotion, tenure of office and discipline of its officers. However, the only material provisions which referred to temporary employees were s 43(2) which directed that "The Commission shall appoint such other officers, and engage such temporary employees, as it thinks necessary", and s 43(6) which authorized the Commission, with the approval of the Public Service Board, to determine the terms and conditions of employment of its officers and temporary employees. The Court held that the Industrial Court could not validly direct the Commission to re-employ a former officer or temporary employee.

130 In Australian Broadcasting Commission v Industrial Court (SA), Gibbs J, at 402, succinctly described the inconsistency as follows:

The provisions of s 15(1)(e) [of the Industrial Conciliation and Arbitration Act 1972 (SA)], if they apply to temporary employees of the [Australian Broadcasting] Commission, empower the Industrial Court of South Australia to direct the Commission to re-employ an employee who has been dismissed. In other words, on that construction, the Industrial Court has power to order the Commission to engage a temporary employee, albeit that he was previously employed, whether the Commission thinks it necessary or not. Here in my opinion is a direct inconsistency: the State Act, on the construction suggested, enables the Industrial Court to override the discretion which the Commonwealth Act confides to the Commission.

131 Again, Australian Broadcasting Commission v Industrial Court (SA) was an instance of direct inconsistency, which is not the case here.

132 We observe that the federal Award contains a provision in cl 12 dealing with procedures for the resolution of disputes. No particular reference was made to this provision by the parties but we believe that in light of the issues in these proceedings it is necessary to consider whether provisions in the federal Award relating to dispute settlement give rise to an inconsistency with s 137(1)(b), which also deals with dispute settlement.

133 The first thing to note about cl 12 of the Award is that, in respect of the respondent, it is superseded by cl 13 of the Carter Holt Harvey Customwood Oberon Enterprise Agreement 2004-2006 - Grievance and Disputes Procedure. The Enterprise Agreement is one certified by the Australian Commission and applied to the employment of Mr Safranek. Clause 7 of the Agreement provides:

This agreement shall be read and interpreted wholly in conjunction with the following awards as varied:

* Timber Industry - Wood Panels - Award 2000

* Timber and Allied Industries Award 1999; and the

* Metal, Engineering and Associated Industries Award 1998 - Part I

Provided that to the extent of any inconsistency between the award/s and this agreement, this agreement shall prevail.

134 Clause 13 of the Agreement provides:

Any issue that arises between the parties in relation to any matter covered by this agreement or any matter covered by the appropriate award will be dealt with in the following manner:

...

135 The Agreement goes on the prescribe the process by which a dispute is to be resolved, firstly in respect of a dispute that "affects one or more employees but not a significant proportion of the worksite", secondly in respect of a dispute "affecting a significant proportion of the employees in the worksite" and thirdly, "a dispute concerning a proposed reduction in employment numbers, wages or conditions of employees covered by this Agreement..."

136 Clauses 13.5 and 13.6 of the Agreement, which appear to apply to the three types of disputes, provide:

13.5 If the dispute is not resolved in accordance with the above procedures either party may refer the dispute to the Australian Industrial Relations Commission for conciliation in order to resolve the dispute.

13.6 If the dispute is not resolved by conciliation and in the view of the Commission cannot be resolved by conciliation the parties agree to have the dispute dealt with by arbitration and such decision will be accepted as final.

137 Clause 13 is limited to any issue that arises between the parties in relation to any matter covered by the Agreement or by the Award. Neither the Award nor the Agreement deal with the matter of the reinstatement or re-employment of an employee dismissed in the course of an industrial dispute or whose dismissal resulted in an industrial dispute. The closest the Award comes to dealing with such a matter is cl 17 but that is limited to the question of notice.

138 In any event, even if it could be said cl 13 is wide enough to encompass a dispute about the dismissal of an employee, whilst the clause purports to provide that the dispute is to be dealt with by arbitration, the Australian Industrial Relations Commission has no power under Pt VI of the WRA to deal with an industrial dispute by making an order or award reinstating a dismissed employee. Reinstatement or re-employment of a dismissed employee is not an allowable matter: see s 89A. It is unlikely reinstatement or re-employment of a dismissed employee would be regarded as an "exceptional matter" within the meaning of s 89A(7), given the remedies available in relation to termination of employment in Division 3 of Pt VIA of the WRA.

139 These considerations reinforce the view we hold that reinstatement or re-employment of an employee dismissed in the course of an industrial dispute or whose dismissal resulted in an industrial dispute, do not fall within the purview of the Award (or Agreement) and no inconsistency arises in relation to the operation of s 137(1)(b) of the NSW Act.

140 We find that an order under s 137(1)(b) of the NSW Act for the reinstatement or re-employment of Mr Safranek would not be inconsistent with the Timber Industry – CFMEU Wood Panels – Award 2000.

QUESTION (3) - WHETHER AN ORDER UNDER s 137(1)(b) OF THE NSW ACT WOULD BE INCONSISTENT WITH s 170CH OF THE WRA

141 The third question referred to the Full Bench is whether, in respect of an application for an order under s 137(1)(b) of the NSW Act for the reinstatement or re-employment of Mr Safranek, s 137(1)(b) would be inconsistent with s 170CH of the WRA and invalid, by reason of s 109 of the Constitution?

142 Section 170CH of the WRA is to be found in Div 3 - Termination of Employment of Pt VIA - Minimum Entitlements of Employees. Section 170CH(1) is in the following terms:

(1) Subject to this section, the Commission may, on completion of the arbitration, make an order that provides for a remedy of a kind referred to in subsection (3), (4) or (6) if it has determined that the termination was harsh, unjust or unreasonable.

143 Section 170CH(3) provides:

If the Commission considers it appropriate, the Commission may make an order requiring the employer to reinstate the employee by:

(a) reappointing the employee to the position in which the employee was employed immediately before the termination.

(b) appointing the employee to another position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination.

144 Section 170CB(1) provides:

(1) Subdivision B applies, in so far as it relates to an application to the Commission for relief in relation to the termination of employment of an employee on the ground that that termination was harsh, unjust or unreasonable, if the employee concerned was, before the termination:

(a) a Commonwealth public sector employee; or

(b) a Territory employee; or

(d) a Federal award employee who was a waterside worker, maritime employee or flight crew officer, employed in the course of, or in relation to, trade or commerce between Australia and a place outside Australia, between the States, within a Territory, between a State and a Territory, or between 2 Territories.

It was an agreed fact that the respondent is a constitutional corporation within the meaning of the definition in cl 4 of the WRA.

145 Unions NSW contended that there was no direct inconsistency between an order under s 137(1)(b) of the NSW Act and s 170CH of the WRA and that Div 3 of Pt VIA of the WRA did not cover the field.

146 On the other hand, the respondent submitted:

The company is a body corporate that is a trading corporation formed within the limits of the Commonwealth. It is, therefore, a constitutional corporation...

A federal award and a certified agreement governed the terms and conditions of employment of Mr Safranek. Until his dismissal, he was a Federal award employee employed by a constitutional corporation. Subdivision B [of Pt VIA of the WRA therefore applied, and permitted an application by or on behalf of Mr Safranek for relief in relation to the termination of his employment on the ground that that termination was harsh, unjust or unreasonable.

On 10 June 2005, an application relying on that ground was made to the AIRC by the CFMEU on behalf of Mr Safranek. It was later discontinued, for reasons that have not been explained in the hearing of this matter to date.

Section 170CH of the WRA gave the AIRC power to order the reinstatement or re-employment of Mr Safranek. To the extent that s.137(1)(b) of the NSW Act purports to do likewise it is inconsistent with s.170CH and invalid.

147 It is apparent that Div 3 of Pt VIA of the WRA is limited in its application to providing relief in appropriate cases, where, in arbitration, a termination is found to be harsh, unjust or unreasonable. Moreover, Pt VIA is unconcerned with whether an industrial dispute requires resolution; industrial disputes having no role to play in this part of the Act, which does not rely for its existence on s 51(xxxv) of the Constitution.

148 Section 170CA(1) - Object provides:

(1) The principal object of this Division is:

(a) to establish procedures for conciliation in relation to certain matters relating to the termination or proposed termination of an employee’s employment in certain circumstances; and

(b) to provide, if the conciliation process is unsuccessful, for recourse to arbitration or to a court depending on the grounds on which the conciliation was sought; and

(c) to provide for remedies appropriate to a case where, on arbitration, a termination is found to be harsh, unjust or unreasonable; and

(d) to provide for sanctions where, on recourse to a court, a termination or proposed termination is found to be unlawful; and

(e) by those procedures, remedies and sanctions, and by orders made in the circumstances set out in Subdivisions D and E, to assist in giving effect to the Termination of Employment Convention.

149 It may be accepted that the respondent is a relevant constitutional corporation and that Mr Safranek, immediately prior to the termination of his employment, was employed under the federal Award and Agreement. For Mr Safranek to be entitled to any relief under the relevant terms of the WRA, the Australian Commission must find that his termination was harsh, unjust or unreasonable.

150 Section 137(1)(b) of the NSW Act does not carry with it, either expressly or impliedly, any requirement that in order to make a dispute order reinstating or re-employing a dismissed employee there must first be a finding the dismissal was harsh, unjust or unreasonable.

151 As we adverted to earlier, in an endeavour to resolve or assist in resolving an industrial dispute by making an order under s 137(1)(b), any consideration of unfairness relating to the dismissal of an employee may be quite irrelevant. The Commission, of course, is not precluded from considering whether the dismissal of an employee dismissed in the course of an industrial dispute was harsh, unjust or unreasonable because of the terms of s 83(4) of the NSW Act in Pt 6 of Ch 2 - Unfair dismissals, which provides:

This Part applies to the dismissal of an employee even though it occurred in the course of an industrial dispute and the Commission is otherwise authorised under this Act to order the reinstatement of the employee.

However, the very terms of s 83(4) suggest that s 137(1)(b) provides an alternative source of power to order reinstatement or re-employment not limited by the considerations that govern the operation of Pt 6 of Ch 2.

152 It is readily apparent that s 170CH does not cover the field in relation to the reinstatement or re-employment of an employee given that it is a requirement that the tribunal must first find the dismissal was harsh, unjust or unreasonable and given that s 170CH is not available to the Australian Commission for the purposes of dealing with an industrial dispute involving dismissal in arbitration proceedings. Moreover, there are other provisions in Div 3 of Pt VIA of the WRA that indicate it was not the legislature's intention to cover the field: See for example s170HA, which provides:

170HA Division not to limit other rights

153 Section 170HA makes it clear that the unfair dismissal provisions of the WRA are not intended to limit any other right to appeal against a termination, or to secure an award or order in relation to a termination. This leaves open the possibility of accessing State laws relevant to termination of employment, as well as remedies under other laws such as federal and State anti-discrimination legislation.

154 Further, s 170HB provides:

170HB Applications alleging harsh, unjust or unreasonable termination

(1) An application must not be made under section 170CE in relation to the termination of employment of an employee on the ground that the termination was harsh, unjust or unreasonable, or on grounds that include that ground, if proceedings (the prior proceedings) for a remedy in respect of that termination have been commenced by or on behalf of that employee:

(a) under another provision of this Act; or

(b) under another law of the Commonwealth; or

alleging that the termination was:

(d) harsh, unjust or unreasonable (however described); or

(e) unlawful;

for a reason other than a failure by the employer to provide a benefit to which the employee was entitled on the termination.

155 As to the question of any direct inconsistency between s 170CH of the WRA and s 137(1)(b) of the NSW Act, we do not consider it exists. Section 137(1)(b) empowers the Commission, in dealing with an industrial dispute in arbitration proceedings, to order an employer to reinstate or re-employ any one or more employees who were dismissed in the course of the industrial dispute or whose dismissal resulted in the industrial dispute, unencumbered by any requirement to consider whether the dismissal was harsh, unjust or unreasonable. That is not the case under the relevant provisions of the WRA.

156 The respondent submitted that as both remedies under the WRA and s 137(1)(b) had the common feature of reinstatement, thereby an inconsistency arose in respect of employees whose employment was covered by a federal award. This cannot be so. Subdivisions A and B of Div 3 of Pt VIA of the WRA are concerned with applications to the Australian Commission for relief in respect of a termination of employment that is alleged to be harsh, unjust or unreasonable. The subdivisions are essentially concerned with an individual grievance and not a collective dispute. The Australian Commission, under Pt VIA, has no role in respect of an industrial dispute; a party may not seek relief in respect of any alleged industrial dispute involving the dismissal of an employee under Pt VIA of the WRA.

157 Section 137(1)(b), on the other hand, is concerned with the resolution of an industrial dispute by arbitration and in the course of resolving that dispute the Commission may make dispute orders reinstating or re-employing a dismissed employee. Section 137(1)(b) deals with a different subject matter to that with which s 170CH is concerned. Perhaps, more significantly, the questions to be considered will be substantially different. Under s 137(1)(b) the Commission is ultimately concerned with the resolution of an industrial dispute. The power exercisable under s 137(1)(b) only arises in the context of the resolution of the dispute and will, therefore, ordinarily involve considerations far wider than the dismissal itself. Such is the case in this matter.

158 If the Australian Commission has no power under subdivision B of Div 3 of Pt VIA of the WRA to arbitrate for the purpose of resolving an industrial dispute but it was, nevertheless, held that there was an inconsistency between the Commonwealth legislation and s 137(1)(b) of the NSW Act, it would create a legal vacuum where neither Commonwealth nor State legislation applied. We do not consider such an inconsistency exists and we so find.

CONCLUSIONS

159 In relation to the three questions referred to the Full Bench we conclude as follows:

(1) The power granted to the Industrial Relations Commission of New South Wales by s 137(1)(b) of the Industrial Relations Act 1996 (NSW) to order the reinstatement or re-employment of dismissed employees is available in respect of dismissed employees whose employment is regulated by awards made, or agreements certified, under the Workplace Relations Act 1996 (Cth).

(2) An order under s 137(1)(b) of the Industrial Relations Act 1996 (NSW) for the reinstatement or re-employment of Mr Safranek would not be inconsistent with the Federal Timber Industry – CFMEU, Wood Panel – Award 2000 nor invalid, by reason of s 109 of the Constitution and s 152(1) of the Workplace Relations Act 1996 (Cth).

(3) An order under s 137(1)(b) of the Industrial Relations Act 1996 for the reinstatement or re-employment of Mr Safranek, would not be inconsistent with s 170CH of the Workplace Relations Act 1996 (Cth) nor invalid by reason of s 109 of the Constitution.

160 The matter is remitted to Sams DP for hearing and determination in accordance with the opinions here expressed.

LAST UPDATED: 30/01/2006

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