Donald F Hagans v Old Ugc, Inc and ors [2006] NSWIRComm 329 (17 October 2006)

Last Updated: 17 November 2006

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Donald F Hagans v Old UGC, Inc and ors [2006] NSWIRComm 329



FILE NUMBER(S): IRC 517

HEARING DATE(S): 26/09/06, 27/09/06

DECISION DATE: 17/10/2006
PARTIES:
APPLICANT:
Donald F Hagans

RESPONDENTS:
Old UGC, Inc & ors

JUDGMENT OF: Haylen J


LEGAL REPRESENTATIVES


APPLICANT:
Mr H Dixon SC with Mr Saunders of counsel
SOLICITORS:
Harmers Workplace Lawyers

RESPONDENT:
Mr G Hatcher SC with Mr McGrath of counsel
SOLICITORS:
Thompson Playford

INTERVENOR:
Commonwealth Attorney-General
Mr S Lloyd of counsel
SOLICITORS:
Australian Government Solicitor



CASES CITED: Byrnes v The Queen (1999) 199 CLR 1 at 10-11
Capital Duplicators Pty Ltd v ACT (1992) 177 CLR 248 at 280
Carbines v Powell (1925) 36 CLR 88
Colley v Futurebrand FHA Pty Ltd (2005) 63 NSWLR 291 at [31]
QSR Ltd v Industrial Relations Commission of NSW [2004] NSWCA
Brown v West (1990) 169 CLR 195 at 203
Ex parte McLean (1930) 43 CLR 472
Fisher v Madden (2002) 114 IR 119 at [12]
Hagans v UnitedGlobalcom, Inc and ors [2004] NSWIRComm 164
UnitedGlobalcom, Inc v Industrial Relations Commission (NSW) in Court Session [2005] 142 IR 204
Gould v Brown (1998) 193 CLR 346 at 487 [287] per Kirby J
Maqsood Hussain Kahn v Director-General of Corrective Services, unreported, SC NSW, BC 9002096, Loveday J at 5
Morton v The Union Steamship Co of New Zealand Ltd (1951) 83 CLR 402 at 410
New South Wales v Law (1992) 29 ALD 215
Permanent Trustee Australia Ltd v Commissioner of State Revenue (Vic) (2004) 220 CLR 338
R v Hughes (2000) 202 CLR 535 at 551
Shanahan v Scott (1957) 96 CLR 245 at 250
Something Better v Pyramid Building Society (in liq) (1996) 135 ALR 297 at 303
Victorian Stevedoring and General Contracting Co Pty Ltd & Meakes v Dignan (1931) 46 CLR 73
Visalli v Southwell (1988) 12 NSWLR 502
Wenn v A-G (Vic) (1948) 77 CLR 84 at 120

LEGISLATION CITED: Workplace Relations Act 1996 (Cth) ss 16 & 846
Workplace Relations Regulations 2006 (Cth) - regulation 1.2(5)
Legislative Instruments Act 2003 - s 42



JUDGMENT:

INDUSTRIAL COURT OF NEW SOUTH WALES

CORAM: Haylen J
17 October 2006

Matter No IRC 517 of 2000
DONALD HAGANS v OLD UGC, INC & ORS
Application under s 106 of the Industrial Relations Act 1996

JUDGMENT
[2006] NSWIRComm 329

BACKGROUND
1 More than six years ago, Donald Hagans commenced proceedings under s 106 of the Industrial Relations Act 1996 making a number of claims against a variety of corporate and personal respondents. In March 2006, Mr Hagans, by way of Notice of Motion, sought to join a new tenth respondent following a merger transaction whereby the proposed new tenth respondent became the parent of the existing ninth respondent, a party itself joined by order of the Court in 2004 because of a corporate reorganisation and restructuring. The existing nine respondents ("the respondents") opposed that application for joinder and, in the course of providing written submissions in support of their objection, ultimately an issue was raised as to the jurisdiction of the Court to proceed to hear Mr Hagans' substantive application under s 106 of the Act in light of recent changes made to the Workplace Relations Act 1996 (Cth) and, in particular, because of the operation of s 16 introduced by way of the Work Choices amendments. In short, the respondents argued that s 16 operated with immediate force on its commencement on 27 March 2006 and, to the extent that regulation 1.2(5) in Chapter 2 of the Workplace Relations regulation 2006 (Cth) saved s 106 applications already filed, the regulation was invalid. Notices were duly issued pursuant to s 78B of the Judiciary Act 1903 (Cth) leading to the Attorney-General of the Commonwealth intervening in the proceedings to support the validity of the regulation.

THE LEGISLATIVE FRAMEWORK
2 It is convenient at this point to set out the legislative framework under which this debate was conducted. Section 16 of the Workplace Relations Act 1996 provides as follows:

(1) This Act is intended to apply to the exclusion of all the following laws of a State or Territory so far as they would otherwise apply in relation to an employee or employer:
...

(d) a law providing for the variation or setting aside of rights and obligations arising under a contract of employment, or another arrangement for employment, that a court or tribunal finds is unfair;

(2) However, subsection (1) does not apply to a law of a State or Territory so far as:

(a) the law deals with the prevention of discrimination, the promotion of EEO or both, and is neither a State or Territory industrial law nor contained in such a law: or

(b) the law is prescribed by the regulations as a law to which subsection (1) does not apply;

(c) the law deals with any of the matters (the non-excluded matters) described in subsection (3)

...

3 Section 846 of the Workplace Relations Act 1996 provides as follows:

(1) The Governor General may make regulations, not inconsistent with this Act, prescribing all matters:

(a) required or permitted by this Act to be prescribed; or

(b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.

4 Regulation 1.2(5) of the Workplace Relations Regulations 2006 provides as follows:

(5) Subsection 16(1) does not apply to a law of a State or Territory (including a law relating to appeals) to the extent to which it:

(a) relates to proceedings that commenced before the reform commencement; and

(b) provides for the variation or setting aside of rights and obligations arising under:

(i) a contract of employment; or
(ii) another arrangement for employment
that a court or tribunal finds is unfair.

SUBMISSIONS FOR THE RESPONDENTS AND THE APPLICANT

5 The respondents noted that s 16(1) stated the intention of Parliament to cover the field in respect of matters previously dealt with in State or Territory industrial laws, including unfair contracts, which were specifically mentioned in s 16(1)(d). The respondents described s 16(2) as being essentially a savings provision, - sub-section (a) saved a law from the operation of s 16(1) so far as the law dealt with the topics of prevention of discrimination, promotion of EEO or both and was neither a State or Territory industrial law nor contained within such a law. A State industrial law was defined, so far as is relevant, to mean the Industrial Relations Act 1996 of New South Wales.

6 Section 16(2)(b) envisaged that a law may be prescribed by the Regulations as "a law to which sub-section (1) does not apply". If so prescribed, that law was to be saved from covering the field of operation of s 16(1). The whole of s 16(2) had to be considered for the purposes of interpreting s 16(2)(b). It was therefore relevant that sub-section (2)(c) saved a State or Territory law from the operation of s 16(1) insofar as it dealt with the non-excluded matters described in sub-section (3).

7 It was pointed out that s 17 also operated to cover the field such that a Federal award or workplace agreement would prevail over a law of a State or Territory, a State award or a State employment agreement to the extent of any inconsistency. Section 17(2) contained saving provisions in relation to particular subjects or topics: section 17(2)(d), concerning the extension of a list of those subjects or topics, was quite different to s 16(2)(b).

8 Specific regulation-making powers contained in various provisions of the Act appeared in a variety of sections as well as in Schedules. It was said that those enabling powers were provided usually in respect of particular subjects that were specified within the respective provision itself. The general regulation-making power was to be found in s 846. This section provided a power to make regulations required or permitted by the Act to be prescribed and provided a power to make regulations that were necessary or convenient to be prescribed for the carrying out or giving effect to the Act. In either case the regulation was not to be inconsistent with the Act. The respondents argued that s 16(2)(b) did not itself provide an enabling power for the Governor-General to make regulations, meaning that other enabling provisions in the principal Act had to be found to support the making of regulations for the purposes of s 16(2)(b). Generally, s 16 was no more than an expression of intention with the implementation of that intention to be found in various parts of the Act.

9 The respondents submitted that s 846 was ultra vires to the extent that, by reference to s 16(2)(b), it purported to provide a power for the Governor-General by regulation to override the covering the field operation of the Act stated in s 16(1): it therefore contradicted the intention of the principal Act and was "inconsistent with the separation of powers in the Constitution". For the same reason, Regulation 1.2(5) was repugnant to and inconsistent with the principal Act in purporting to limit the otherwise unfettered intention found in s 16(1)(d) to cover the field in respect of unfair contracts of employment in relation to unfair contract cases that were pending as at the commencement of the Work Choices reforms. The intention of Parliament was that the Work Choices amendments would be paramount save for specific exemptions in the Act. Parliament intended to exclude the operation of s 106 of the New South Wales Act. Section 109 of the Constitution operated upon s 106 of the Act automatically (see Wenn v A-G (Vic) (1948) 77 CLR 84 at 120). A regulation could not remove an inconsistency created by operation of s 109 on a Commonwealth statute.

10 The Regulation enabling power could not be in such a form as to allow the making of whatever regulation on a matter that might seem appropriate to the Governor-General (see Delegated Legislation in Australia, 3rd ed, Butterworths, D Pearce and S Argument, 2005 p 15), nor could the regulation-making power be expressed so widely so as to destroy the purpose of the principal Act. The principle had been enunciated by Kirby J in New South Wales v Law (1992) 29 ALD 215:

It rests upon the notion which I hold of the proper relationship between the executive government, exercising the power to make an order such as this one and the Parliament which conferred that power. That relationship is established by our constitutional law as a result of a long struggle which continues this day. It was explained by Woodhouse P, in words which I would adopt, in Combined State Unions' case [1982] 1 NZLR 742 in the New Zealand Court of Appeal in 1982. Writing with the concurrence of Cooke, Richardson and Ongley JJ, his Honour said at 745:

It is an important constitutional principle that subordinate legislation cannot repeal or interfere with the operation of a statute except with the antecedent authority of Parliament itself. It is a constitutional principle because it gives effect to the primacy of Parliament in the whole field of legislation. And as a corollary, a rule of construction springs from it that the courts will not accept that Parliament has intended its own enactments to be subject to suspension, amendment or repeal by any kind of subordinate legislation at the hands of the executive unless direct and unambiguous authority has been expressly spelt out to that effect, or is to be found as a matter of necessary intendment, in the parent statute.

11 Savings and transitional provisions in regulations dealing with pending unfair contract proceedings, if clearly expressed by the principal Act, may not have been contrary to the Act or the policy moving towards a national rather than a State based system: however, in the absence of a sufficiently certain enabling power of that nature, Regulation 1.2(5) was repugnant to the Act.

12 Regulation 1.2(5) had to have been made under s 846 of the Act as regulation-making powers found elsewhere in the principal Act dealt with particular matters that were unrelated. Section 846 provided a power to make regulations "required or permitted by this Act to be prescribed" or that "were necessary or convenient to be prescribed for the carrying out or giving effect to this Act" and which were not inconsistent with the Act. Section 846 did not include a power to make regulations of a savings or transitional nature. That alone may be determinative of the invalidity of the Regulation (Maqsood Hussain Kahn v Director-General of Corrective Services, unreported, SC NSW, BC 9002096, Loveday J at 5).

13

Regulation 1.2(5) purported to save the operation here, of the law of the State, to the extent to which that law related to unfair contract proceedings that had already been commenced prior to the Work Choices Amendment. The Regulation extended the period of operation of the State law, here s 106 of the Industrial Relations Act 1996 (NSW), until after the completion of the pending proceedings and to save the rights and liabilities under that State Act for particular litigants. If s 16(2)(b) was a valid basis of authority to make this Regulation, it would have a much wider operation than s 16(2)(a) and (b). If the Regulation was valid, s 16(2)(b) would have a "starkly different effect and operation" to s 16(2)(a) and (c). Those sub-sections saved certain laws in perpetuity, or at least until the principal Act was amended by Federal Parliament, but s 16(2)(b) would purport to save the operation of the State law for differing periods for differing litigants.

14 The respondents argued that s 16(2)(b) was not intended to have such a wide effect: its intended purpose was to provide by regulations that laws of the State dealing with matters or topics not specifically mentioned in s 16(2)(a) and (c) may be saved from the operation of sub-section (1). Section 16(2) had to be read in context including sub-section (3) which prescribed that certain "matters" were to be excluded from the operation of s 16(1) and, unless found in s 16(2)(b), no enabling power was provided by reference to s 16 for the making of regulations adding to the list of excluded "matters". On its face, it was argued, a particular class of litigants was not a "matter" within the meaning of that expression in either the Act or under the Constitution. There was nothing in s 16 expressly requiring or permitting the Governor-General to make regulation 1.2(5) and s 856(1)(a) did not support the making of the regulation.

15 The regulation was not supported by s 846(1)(b), that is, the making of regulations as are necessary or convenient for the carrying out or giving effect to the Act. "Necessary or convenient" was a vague expression and decisions in particular cases would depend upon their own facts - the Court would have to consider whether a particular regulation was necessary or convenient in order to carry out or give effect to the particular principal legislation. A power of this kind to give effect to an Act did not enable the delegated authority by regulation to extend the scope or general operation of the principal Act but operated as a strictly ancillary power (Shanahan v Scott (1957) 96 CLR 245 at 250). As a general statement, regulations may complement but may not supplement a grant of power (see Carbines v Powell (1925) 36 CLR 88).

16 A consideration of the entirety of the Act, including its objects and policy, demonstrated that regulation 1.2(5) did not give effect to Parliament's intention or elaborate upon the framework set out in the Act but rather operated to narrow the operation of the Act. There was nothing in the Act revealing an intention to save pending unfair contract proceedings: transitional provisions intended by Parliament were to be found in detail in Schedules to the Act. There were no significant policy considerations against the finding that regulation 1.2(5) was beyond power as it was open to remedy by an amendment to the Act. Other transitional provisions were already dealt with in the Schedules to the Act.

17 A further consideration was the fact that the Act was detailed, complex and specific legislation - consequently, only a limited regulation-making power may be found to be necessary and convenient (Morton v The Union Steamship Co of New Zealand Ltd (1951) 83 CLR 402 at 410). To the extent that regulation 1.2(5) was made by reference to and for the purposes of s 16(2)(d), regard had to be had to the entirety of s 16(2). Viewed in this way, it is "a law" of the State that may be protected from the operation of s 16(1). Whatever enabling power was provided by reference to s 16(2)(b), it was a power to make regulations to exclude State "laws", not "matters" and not laws dealing with particular matters. Regulation 1.2 did not address the continuing validity or operation of the law or part of the law of the State but rather dealt with particular litigation proceedings. It preserved rights and obligations for particular litigants only. The regulation provided for limited operation of the State law or part of the law not contemplated by s 16(2).

18 The respondents then looked to the operation of the regulation as if it was otherwise valid. It was submitted that the regulation did not save the proposed proceedings against the company sought to be added as a tenth respondent. It was submitted that s 16(2) only operated in relation to a State law providing for the variation or setting aside of the rights and obligations arising under a contract of employment or arrangement for employment that a Court found was unfair. Strictly construed, the regulation did not save proceedings under s 106(5) for payment of monies brought against a person or entity who was not a party to the subject employment contract or arrangement. Section 106(5), providing for the payment of money, was not and could not be characterised as a law that "provides for the variation or setting aside" of employment contracts or arrangements. This was particularly so in a case where the claim was made against a non-party to the contract or arrangement. Assuming the regulation was valid, it only saved the operation of s 106 of the Act to the limited extent that s 106 provided for the variation or setting aside of rights and obligations arising under a contract or arrangement for employment.

19 A further issue was that the applicant in the substantive proceedings had sought leave to apply for orders under s 106 in relation to option plans or schemes conducted by the proposed tenth respondent, and orders for payment of monies jointly and severally by the respondents. These were new claims or new causes of action. They did not constitute "proceedings that [had] commenced before the reform commencement". They did not relate to the variation or setting aside of rights and obligations arising under the subject contract or arrangement of employment. Schemes and incentive plans now operated by the proposed tenth respondent could not be characterised as contracts or arrangements whereby the applicant performed work in New South Wales, especially in circumstances where the work performed in New South Wales was performed seven years before the incorporation of the proposed tenth respondent and under contracts or arrangements with different parties. The plans or schemes operated by the proposed tenth respondent were not the subject of these proceedings as at the date of commencement of the Work Choices reforms nor could they now constitute such claims having regard to the provisions of s 108 and s 108B of the Industrial Relations Act 1996 (NSW).

20 Submissions for the applicant in the substantive proceedings (Mr Hagans) attacked the very basis upon which the respondents challenged the operation of s 16(1)(d) and the Regulation. It was noted that the Commonwealth Parliament's power of delegation was well settled. In Capital Duplicators Pty Ltd v ACT (1992) 177 CLR 248 at 280, the High Court held:

Although the Legislative Power of the Commonwealth is confined to the Parliament by s 1 of the Constitution, it has been accepted doctrine, at least since 'Victorian Stevedoring', that the separation of the powers does not restrain the power of the Parliament to make a law 'conferring upon the executive a power to legislate upon some matter contained within one of the subjects of the Legislative Power of the Parliament. (per Brennan, Deanne and Toohey JJ).

21 The terms of s 16 expressly contemplated that the overall legislative intention expressed in sub-section 1 would not be absolute and that it may be subject to exception or exclusion. In accordance with the comments of Kirby J in New South Wales v Law, here authority to so act had been expressly spelt out by the Parliament.

22 Section 16(2)(b) expressly permitted the prescription by regulation of laws to which s 16(1) would not apply. In turn, regulation 1.2(1) specified that for s 16(2) (b), s 16(1) did not apply to a law of the State of a kind mentioned, inter alia, in regulation 1.2(5). There was no contradiction as submitted by the respondents. In Something Better v Pyramid Building Society (in liq) (1996) 135 ALR 297 at 303 it was stated: "... a rule modifying a section is not inconsistent with an Act which provides for the making of such a rule". Although not accepting there was contradiction, the applicant noted that, if contradiction existed, there was a recognised qualification to the principle of repugnancy, namely, that inconsistency may be authorised by an empowering Act through the operation of what has been described as Henry VIII clauses.

23 The applicant challenged the respondents' contention that there was an otherwise "unfettered intention" in s 16(1)(d) to cover the field in respect of unfair contracts of employment in relation to cases that were pending at the commencement of the Work Choices reforms. It was submitted that there was no warrant to read this qualification into s 16(1)(d) and that the contention flew in the face of established principles of construction and interpretation, namely, that it will not be assumed that amendments have retrospective operation so as to affect accrued rights. In any event, the intention in s 16 was not "unfettered". The section as a whole clearly identified an intention to exclude from the operation of s 16(1) certain laws identified in s 16(2)(a) and (c), and laws to be identified by regulation, as per s 16(2)(b). The fact that the legislature intended that there be exceptions to the application of s 16(1) to named and defined laws, and that it was not intended to affect accrued rights, was confirmed by the explanatory memorandum. Indeed, s 16(2)(b) expressly permitted a greater exclusion of the operation s 16(1) than exclusions contemplated by sub-sections (2)(a) and (c). This did not render invalid any regulations permitted by s 16(2)(b).

24 The applicant rejected the respondents' contention that s 16(2)(b) was confined to matters or topics not specifically mentioned in sub-sections (a) or (c) having regard to the clear difference in the wording of the sub-sections and the context in which s 16(2)(b) appeared - that is, a section expressing an intention to apply the Federal Act to the exclusion of certain relevant laws of the State or Territory. Section 16(2)(b) required the identification of the law to which sub-section (1) was not to apply and the regulation properly identified that law.

25 Nothing turned on the different matters dealt with by sub-section (2)(a) and (c) because:

(a) nothing precluded Parliament from drawing such distinction;

(b) saving the operation of State law for existing litigants who have accrued rights was entirely consistent with the presumption against retrospectivity, namely, in the absence of some clear statement to the contrary, an Act will not be assumed to have retrospective operation so as to exclude accrued rights;
(c) different periods for different litigants may arise even on the respondents' own argument that s 16(2)(b) was confined to certain "matters" as it will depend on when and for how long a particular regulation is in existence in respect of those matters; and
(d) Parliament retained the right to disallow a regulation at any later time (see s 42, Legislative Instruments Act 2003).

26 In relation to the operation of s 846, the respondents' submissions overlooked the very wide nature of the regulation-making power contained within that section. Section 16 clearly permitted prescription by regulation of a law to which sub-section (1) did not apply and therefore fell squarely within the provisions of s 846(1)(a). Section 846(1)(b) also had operation and the respondents had not demonstrated the invalidity of the regulation. The clear legislative intention was for the regulations to deal with the extent to which State law was to be excluded from the operation of s 16. In accordance with the presumption that the Act would not operate so as to remove accrued rights, a regulation giving effect to that presumption would be within the presumed field of operation of the Act.

27 To the extent that it was relevant, the respondents' submission, that the transitional provisions were provided in Schedules to the Act, it was clear that there were other places within the Act where transitional provisions were made including Regulation Part 1 Division 2, Regulation 1.2 and Part 4 Divisions 2-12. In any event, the validity of the regulation did not depend upon it being classified as being a savings or transitional provision. Even so, the wide scope of the delegated power in s 846 could not exclude a regulation that met that description and where it was permitted by the principal Act.

28 It was also erroneous to categorise the regulation as addressing litigation and proceedings already commenced rather than the operation of State law. On its face, the regulation was expressly directed to a law of the State.

29 As to the construction of the regulation, it was not open, as suggested by the respondents, to focus upon only one aspect of a law of a State such as s 106(5). In any event, s 106(5), by its very terms, was an integral part of the power to vary or avoid unfair contracts. Further, it was established that the powers to deal with unfair contracts extended to the making of money orders against a non-party to a contract (see Visalli v Southwell (1988) 12 NSWLR 502).

SUBMISSIONS FOR THE COMMONWEALTH ATTORNEY-GENERAL
30 The Commonwealth firstly addressed the objects of s 16 of the Act submitting that, broadly speaking, it was to ensure that the Workplace Relations Act 1996 as amended by the Work Choices amendments was to operate to the exclusion of present and future State and Territory industrial regimes in their application to "employers" and "employees" who fall within the constitutional coverage of that Act. This was made plain by paragraph 70 of the Workplace Relations Amendment (Work Choices) Bill 2005 Explanatory Memorandum.

31 The broad position brought about by s 16(1) was conditional upon the express exceptions contained in s 16(2). A wide range of matters were excepted under sub-section 2(a), (c) and sub-section (3). Section 16(2)(b) provided a flexible mechanism for permitting State or Territory laws that would otherwise be excluded so that they could continue to have operation in the circumstances ("so far as") prescribed in the regulations. It was to be noted that s 16(4) provided a mechanism for specifying additional laws in respect to which the Workplace Relations Act 1996 was intended to apply and to the exclusion of: that specification could be achieved in regulations.

32 In relation to the applicant's submission that he had commenced proceedings under s 106 of the Industrial Relations Act (NSW) prior to the commencement of the Workplace Relations Amendment Act and had thereby accrued a right and that, according to established principles of statutory interpretation, s 16(1) of the Workplace Relations Act should not be read as extinguishing an existing right unless the contrary intention appears, the Attorney-General submitted that s 16(1) was designed to bring about a position that employment and industrial relations between "employers" and "employees" were to be governed by the Workplace Relations Act to the exclusion of State and Territory laws except where the Act specifically permitted such laws to continue to have some operation.

33 In those circumstances, there could be no doubt that pending proceedings under State laws would be rendered nugatory in many instances. For example applications for the variation of an award applying to "employers" and "employees", such variation necessarily involving the creation of new rights between such persons, would be excluded under s 16(1). It was clear that s 16(1) contained a contrary intention to any proceedings in State bodies continuing under State law if those proceedings involved or might involve the creation of new rights as between "employer" and "employee" - it was not an answer that an applicant in such a proceeding had an accrued right to have an application heard and determined.

34 An application under s 106 of the Industrial Relations Act (NSW) involved or could involve the variation of rights and hence the creation of new rights. To this extent, s 106 of the Act would be excluded in its application to "employers" and "employees" by the operation of s 16(1)(a) and (d) subject to s 16(2)(b). It was observed the right that the applicant had accrued was a right to have his application heard and determined (Colley v Futurebrand FHA Pty Ltd (2005) 63 NSWLR 291 at [31]; Fisher v Madden (2002) 114 IR 119 at [12]). There was a clear contrary intention in s 16(1) against such rights continuing, at least where the pending application was the creation of new rights.

35 It was submitted that the construction of the regulation was clear - it provided that s 16(1) did not apply to a law of the State or a Territory, including a law relating to appeals to the extent to which that law related to proceedings that commenced before the reform commencement and provided for the variation or setting aside of rights and obligations arising under a contract of employment or another arrangement of employment that a court or tribunal finds unfair. The provision involved the characterisation of the law or laws in issue. In the present case, proceedings had been commenced before the reform amendments under laws making provision of the kind mentioned in the regulations. There did not appear to be any dispute between the parties that the Industrial Relations Act (NSW) to the extent that it was relied upon for the purposes of the present proceedings as against the first to ninth respondents, was a law of the kind described in the regulation.

36 In relation to the application to join the tenth respondent, the Court was required to identify the relevant provision allowing joinder and that appeared to be either s 170 of the New South Wales Act, or s 185. Given that the New South Wales Act made provision of the kind referred to in the regulation, the Court had to determine whether these laws "relate to" a proceeding that had been commenced: given the breadth of the term "relate to", that would readily be the case. The Attorney-General submitted that the effect of the regulation, in relation to the joinder of the tenth respondent, was that s 16(1) did not apply to s 170 or s 185 of the New South Wales Act to the extent to which they related to the present proceedings.

37 The submission addressed whether or not the regulation was invalid either because it was ultra vires or because the regulation or the relevant regulation-making power was unconstitutional. The question of ultra vires arose in the sense that the regulation was not made pursuant to an applicable source of power or because it was repugnant to the Workplace Relations Act.

38 Workplace Relations Regulations were made under both the Workplace Relations Act and the Workplace Relations Amendment Act (Work Choices). Section 846(1)(a) provided that the Governor-General may make regulations not inconsistent with the Act prescribing all matters "required or permitted" by the Act to be prescribed. Section 16(2)(b) referred to laws which were "prescribed by the Regulations". Section 16(2)(b) thus contemplated and "permits" that law may be prescribed for the purposes of that paragraph. Section 846(1)(a) therefore empowered the Governor-General to make regulations prescribing "laws" for the purpose of s 16(2)(b), this being "a matter" that was permitted by the Act to be prescribed. In light of this position, it was unnecessary to consider the alternative source of power under s 846(1)(b) or the authorities relied upon by the respondents concerning the phrase "necessary or convenient".

39 Whether the regulation was a valid exercise of the power to prescribe a matter for the purposes of s 16(2)(b) depended upon whether the regulation prescribed "a law" in the sense contemplated by s 16(2)(b). It was to be noted that the regulation did not prescribe a "law" by merely identifying a law by name, but prescribed a certain type of law to the extent to which it provided for certain matters and related to certain proceedings. Section 16(2)(b) provided that s 16(1) did not apply to a law of a State or Territory "so far as the law was prescribed by the regulations as a law to which sub-section (1) did not apply". It was submitted that the inclusion of the phrase "so far as" was significant in that it contemplated the regulations may prescribe certain laws to be excluded from the operation of s 16(1) to a defined extent without necessarily excluding the law for all purposes. The Legislature had intended that the regulations could do nothing more or less than identify laws which for all purposes would be excluded in their entirety from the operation of s 16(1): it could have stipulated in s 16(2) that sub-section (1) would not apply to a law that was prescribed by the regulations but, instead, the inclusion of the phrase "so far as" conferred a discretion on the maker of the regulations not only to identify the law which was to be saved from the operation of s 16(1) but also to prescribe the extent to which the law would be so saved.

40 This approach to the regulation-making power under s 16(2)(b) was consistent with the fact that s 16(1) itself dealt with the exclusion of laws "so far as" they would otherwise apply in relation to an employee or employer. Section 16(1) did not purport to exclude law simpliciter but only laws to the extent that they related to an employee or employer as defined. Section 16(2)(b) picked up the same concept in providing that sub-section (1) itself did not apply to the law of the State or Territory "so far as" the law was prescribed by the regulations as a law to which sub-section (1) did not apply. It was entirely consistent with this scheme that the regulation prescribed a law as not applying to the extent to which it provided for certain matters and related to certain proceedings rather than for all purposes.

41 It was noted in the alternative that, if there was some concern that the regulation was not validly made pursuant to the power conferred on the Governor-General by s 846, then there was an alternative source of regulation-making power in Clause 1 Schedule 4 of the Amendment Act. That clause dealt with the making of regulations for transitional provisions and consequential amendments. The regulations were described as being made under both the Workplace Relations Act and the Workplace Relations Amendment Act (Work Choices). There was nothing in the terms of Regulation 1.2(5) to indicate that the regulation was necessarily a regulation made pursuant to s 846 of the Act rather than a regulation made pursuant to Clause 1 of Schedule 4 of the Amendment Act. In any event, delegated legislation was valid if there was a source of power for the legislation even if the source of power had been misdescribed (Brown v West (1990) 169 CLR 195 at 203).

42 The regulations were concerned with preserving pending proceedings that were instituted before the commencement of the Amendment Act - as such, it was a provision of a "savings" or "transitional" nature relating to amendments introduced by the Amendment Act in the sense that it preserved pending proceedings that were otherwise effectively extinguished by the commencement of the amendment. Accordingly, the regulation was within the scope of the power conferred on the Governor-General by Clause 1, Schedule 4 of the Amendment Act. Savings provisions were, of their nature, designed to preserve aspects of the previous legal order, at least for some period, and were authorised to do so. As such, no question of repugnancy could arise from the fact that a regulation made under such a power saved identified matters or proceedings.

43 The respondents' submission that the regulation was repugnant to the Workplace Relations Act was unsustainable when s 16 was read as a whole. Section 16(1) provided that the Act was intended to apply to the exclusion of certain State and Territory laws but s 16(2) expressly provided that sub-section (1) did not apply to a law of a State or Territory so far as that law came within the terms of sub-section (a), (b) or (c). Section 16(1) was therefore clearly expressed to be subject to s 16(2). If a regulation such as regulation 1.2(5) prescribed a law for the purposes of s 16(2)(b) to be a law to which s 16(1) did not apply, that was simply giving the intended operation to the statutory scheme created in s 16: there could be no sound basis for suggesting that, in those circumstances, such a regulation was repugnant to s 16(1).

44 The respondents' contention that s 16(1)(d) manifested an intention to cover the field in respect of unfair contracts of employment in relation to unfair contract cases that were pending at the commencement of the Work Choices amendments failed to take into account that s 16 had to be read as a whole. Having regard to the provisions of s 16(2), it could not be contended that s 16(1)(d) manifested such an unconditional intention.

45 The Attorney-General also submitted that the respondents' suggestion that the regulation purported to remove an inconsistency that was created by the operation of s 109 of the Constitution in fact rested on a mischaracterisation of the regulation in s 16. Pursuant to s 16, the Commonwealth had manifested its intention to cover the field in respect of certain matters. The intention to cover a particular field will in turn affect the operation of s 109 of the Constitution (Ex parte McLean (1930) 43 CLR 472). Section 16 must be read as a whole. To determine the extent of the field intended to be covered by the legislation it was necessary to have regard to s 16(1) and s 16(2) and the regulations made thereunder which determine that extent. The approach did not involve a sequential two-stage process but one process of determining the field to be covered. The regulation came into effect at the same time as s 16 of the Act, contrary to the respondents' argument that this involved removing an inconsistency that arose by virtue of s 109 of the Constitution: rather, it was part of the statutory condition in respect of which s 109 of the Constitution operated. There was no constitutional principle to the effect that the Commonwealth cannot modify, by way of regulations, the statutory manifestation of its intention to cover or not cover a particular field.

46 The respondents had also submitted that any provision purporting to confer power on the Governor-General to make the regulation was invalid because it contravened the separation of powers mandated by the Constitution and/or because it constituted an abdication of legislative power by the Commonwealth. Similar issues had been raised in a recent challenge to the Amendment Act heard by the High Court in which judgment is currently reserved. The Attorney-General noted that the High Court had recognised that the separation of powers affected by the Constitution does not make the Parliament the exclusive repository of the legislative power of the Commonwealth and does not preclude the delegation of the legislative power by the Parliament to the executive in such terms that the repository of the power is free to exercise its own discretion and judgment (see Capital Duplicators).

47 In Victorian Stevedoring and General Contracting Co Pty Ltd & Meakes v Dignan (1931) 46 CLR 73, the High Court upheld the validity of s 3 of the Transport Workers Act 1928 (Cth) which conferred upon the Governor-General the power to make regulations not inconsistent with that Act but which could be inconsistent with other Acts with respect to the employment of transport workers and, in particular, for regulating the engagement, service and discharge of such work, the licensing of persons engaged as transport workers, for the regulating or prohibiting the employment of unlicensed persons as transport workers and for the protection of transport workers. The Act did not lay down guiding principles for the exercise of the regulation-making power that it conferred but the powers were upheld. Dixon J (as he then was) noted (obiter) at 101 the possibility that a regulation-making power might be conferred in terms so broad that:

There may be such a width or such an uncertainty of the subject matters to be handed over that the enactment attempting it is not a law with respect to any particular head or heads of legislative power.

48 It was submitted that the limitation expressed by Dixon J in this passage was addressed to an extreme scenario and should not be misconstrued so as to suggest that there was a general constitutional prohibition against the delegation of legislative power to the executive. In the present case, there was no basis for contending that the power to make regulations conferred on the Governor-General by either s 846(1)(a) and the Workplace Relations Act or Clause 1, Schedule 4 of the Amendment Act infringed the limitation suggested by Dixon J. Section 846 empowered the Governor-General to make regulations prescribing matters "required or permitted" by the Act to be prescribed and this power was necessarily circumscribed by the matters covered by the Workplace Relations Act which must by definition be within the scope of Commonwealth legislative power. In such circumstances, it could not be said that there was such a "width" or "uncertainty" of subject matter delegated to the Governor-General that the regulation-making power was not a law with respect to any particular head or heads of power. In relation to Clause 1, Schedule 4 of the Amendment, Act, the Governor-General was only empowered to make regulations of a transitional, savings or application nature. The power was thus confined by the boundaries of the Act and could not be said to infringe the principles referred to by Dixon J.

49 In relation to the submission that the regulation amounted to an abdication of legislative power, the Attorney-General noted that in Permanent Trustee Australia Ltd v Commissioner of State Revenue (Vic) (2004) 220 CLR 338 the Commonwealth retained the power to repeal or amend at any time any provision of the Act under consideration and there could be no abdication of the legislative power of the Parliament. Further, under that Act, there was a provision that a notice was a disallowable instrument for the purposes of s 46A of the Acts Interpretation Act thereby attracting powers of disallowance exercised by either House of Parliament: thus the submission as to impermissible delegation failed.
50 In Capital Duplicators, Mason CJ, Dawson & McHugh JJ (at 265) stated:

There are very considerable difficulties in the concept of an unconstitutional abdication of power by Parliament. So long as Parliament retains the power to repeal or amend the authority which it confers upon another body to make laws with respect to a head or heads of legislative power entrusted to the Parliament, it is not easy to see how the conferral of that authority amounts to an abdication of power. And, in the present case, Parliament not only retains its power of repeal, but also provides by means of ss 29 and 35, for the disallowance of enactments of the Assembly.

The Attorney-General noted that the passage had been approved by the High Court on a number of occasions (Gould v Brown (1998) 193 CLR 346 at 487 [287] per Kirby J; R v Hughes (2000) 202 CLR 535 at 551 per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ and at 574-575 per Kirby J; Byrnes v The Queen (1999) 199 CLR 1 at 10-11 per Gaudron, McHugh, Gummow and Callinan JJ).

51 In the present case, there was nothing extraordinary about the regulation-making power conferred upon the Governor-General that distinguished this legislative scheme from those which had been upheld in the numerous cases referred to by the Attorney-General. The scope of the regulation-making power was confined by the Workplace Relations Act and the Amendment Act and was properly referrable to the Commonwealth heads of power. Parliament might, if it so wished, repeal the enabling Act. Parliament also had the usual powers of scrutiny and disallowance in respect of any regulations made (Part 5 of the Legislative Instruments Act 2003 (Cth)). In those circumstances, the contention that the Commonwealth had abdicated legislative powers of the Governor-General was unsustainable.

DELIBERATION
52 The starting point for consideration of the issues raised by the respondents is the proper construction of s 16 of the Workplace Relations Act 1996 after its introduction in March 2006. In my view, the approach of the respondents is fundamentally impaired in two major respects: firstly, the respondents treat s 16 as declaring no more than an intention to cover the field in relation to employers and employees, leaving the rest of the Act to give effect to that intention; and secondly, by treating s 16 as expressing an intention to cover the field and leaving no room for the operation of legislation such as the Industrial Relations Act 1996 (NSW) or any part of it.

53 There is no doubt that the Work Choices amendments introduced complex legislation to allow the Commonwealth to exercise extensive power in relation to employers and employees but in so doing Parliament clearly recognised that, in relation to a number of issues, there would be a continuing role for State and Territory legislation. It might be expected that, having regard to the enormity of the task, there were aspects of State legislation which were appropriate to be preserved and, in circumstances where there were well-developed and widespread State legislative provisions, it would be prudent to provide a means of excluding certain aspects of State and Territory legislation especially where unintended consequences might arise. The means by which this could be achieved is the provisions of s 16(2) and (3) and in particular sub-section (2)(b). The other side of that coin is the provisions found in s 16(4) allowing an expansion of State or Territory legislation that is to be excluded thus providing an opportunity to deal with, for example, little known or little used provisions relating to employers and employees or to address new legislation dealing with employers and employees.

54 Having regard to all the provisions contained in s 16, it is not possible to characterise the legislative intention as one directed to exclusively occupying the field of laws relating to employers and employees. On its face, s 16 evinces an intention to occupy that field but with a number of exclusions. The section clearly authorises the making of regulations prescribing State or Territory law to which sub-section (1) does not apply. It is difficult to envisage a more clearly stated legislative intention.

55 Regulation 1.2(5) operates so as to permit the continuance of proceedings that commenced before the Work Choices amendments in relation to a law that provides for the variation or the setting aside of rights and obligations arising under a contract of employment or another arrangement for employment that a court or tribunal finds is unfair. There is no suggestion to the contrary that proceedings under s 106 meet the description of a law that provides for the variation or setting aside of rights and obligations arising under a contract of employment or another arrangement for employment that a court or tribunal finds is unfair. The regulation thereby recognises in a quite unexceptional way the inconvenience and injustice that might flow from s 16 having immediate effect in relation to often longstanding litigation that is frequently brought by an individual at potentially substantial personal cost in relation to arrangements whereby work is performed in an industry as distinct from the award matters brought by employer or employee institutions. The fact that the Regulation operates as a transitional or savings provision does not detract from its validity. Section 16 says with some clarity what it applies to and what it does not apply to and allows regulations to be made, narrowing or expanding the State or Territory laws that are within that field. The respondents' argument looks primarily at the provisions of s 16(1) as demonstrating the intention of Parliament - consideration of the entire section tells another story which is not adequately or convincingly dealt with by the respondents' argument. Ultimately, the respondents' approach offends the basic rules of statutory construction.

56 Two further points raise substantial obstacles for the respondents' argument. Firstly, it is well established that the Courts will look to find a valid operation for legislation, including subordinate legislation and will need to be convinced that the provision is invalid: here, there is a strong case in favour of validity. Secondly, as pointed out by Bennion in Statutory Interpretation (4th Ed. 2002 at p 200), "It is not unknown even for modern Acts to give power to amend, or even repeal general enactments by delegated legislation". It is accepted that direct and unambiguous authority from Parliament is necessary to permit this result, but s 16(1)(d) gives that authority.

57 Alternative and supplementary arguments are raised by the respondents that the provisions of s 106(5) are not a law that comes within regulation 1.2(5) because it does not provide for the variation or setting aside of rights and obligations arising under a contract of employment or another arrangement for employment that a court or tribunal finds is unfair and, further, that the regulation cannot support the joinder of the proposed tenth respondent because that raises a new cause of action. I am unable to accept either of these propositions. Section 16(2)(b) operates so that s 16(1) does not apply to the law of a State so far as the law is prescribed by the regulation as a law to which sub-section (1) does not apply. The regulation made pursuant to this provision specifies a State law where proceedings had commenced before the Work Choice amendments and where the law was one such as encompasses s 106 proceedings. In New South Wales, the law that provides for the variation or setting aside of rights and obligations arising under a contract of employment or another arrangement for employment that a court or tribunal finds unfair is not simply s 106 or s 106(5), but is that part of the Industrial Relations Act 1996 covered by Chapter 2, Part 9 - Unfair Contracts. It is an integral part of s 106 that, under sub-section (5), the Court, in making an order under the section may also make an order as to the payment of money in connection with the contract declared wholly or partly void or varied as the Court considers just in the circumstances of the case. As to the issue of joinder raising a new case, that matter is dealt with below, but there is force in the applicant's reference to the effect of the decision in Visalli and the power to make a money order in respect of a non-party to a contract or arrangement.

58 I also accept that, by s 170 and/or s 185 of the Industrial Relations Act (NSW), the Commission may amend proceedings and may do so by joining parties to proceedings. In accordance with regulation 1.2(5), these provisions are part of the law that relates to s 106 proceedings that were commenced before the Work Choices amendments came into operation. Sections 170 and/or 185 may be regarded as part of the procedural law that supports the substantive provisions of Chapter 2, Part 9 of the Industrial Relations Act 1996 (NSW).

59 Overall, I accept the submissions of the Commonwealth Attorney-General and to the extent they are supported by the applicant, in relation to the construction and operation of s 16, the ambit of regulation 1.2(5) including the validity of that regulation and the arguments as to repugnancy, inconsistency and alleged contravention of constitutional limitations regarding the separation of powers or the abdication of legislative power. Those submissions provide a comprehensive answer to the matters raised by the respondents in their Notice of Motion. The respondents' Notice of Motion is dismissed.

JOINDER OF THE PROPOSED TENTH RESPONDENT
60 By motion filed in March 2006, Mr Hagans sought an order that Liberty Global Inc, a currently listed NASDAQ entity, be joined as the tenth respondent. Consequential orders were sought, including the filing of a second amended Summons for Relief. The Grounds and Reasons in support of the application record that the applicant was employed by the first respondent (Old UGC, Inc) a then publicly listed company pursuant to contracts or arrangements that are the subject of the proceedings. The proceedings involve share options and incentive plans that were conducted by the first respondent for the benefit of its employees. The applicant was a participant in the option plans and the failure to deliver options under the plans and/or to compensate the applicant for his rights under the plans forms a principal element of his claim in the proceedings.

61 In 2002, the ninth respondent (UnitedGlobalcom, Inc) became the formal successor to all share option plans that were initiated by the first respondent and options to purchase stock in the first respondent held by various executives and directors became options to purchase stock in the ninth respondent. By Notice of Motion filed in May 2004, the applicant moved the Court to join the ninth respondent as formal successor of the option plans and, in June 2004, the Court granted that joinder.

62 In June 2005, the ninth respondent and Liberty Media International, Inc concluded a merger transaction forming a new company, Liberty Global, Inc. As a result of the transaction, it was alleged that Liberty Global, Inc became the parent of the ninth respondent and Liberty Media International. The stock of Liberty Media International and the ninth respondent ceased trading and Liberty Global, Inc became the new NASDAQ trading entity. It was alleged that a further result of the merger was that Liberty Global, Inc became the formal successor to all share option plans that were initiated by the first respondent which were subsequently assumed by the ninth respondent and options to purchase stock in the ninth respondent (which had previously been options to purchase stock in the first respondent, held by the various executives and directors) became options to purchase stock in Liberty Global, Inc.

63 In December 2005, through an acquisition of 224,000,000 shares, Liberty Global, Inc became the parent entity of the sixth respondent, Austar United Communications Ltd. It was asserted that the orders sought were necessary so that all parties to the contracts or arrangements before the Court and for all relevant matters and claims arising from the arrangements and related collateral arrangements could be considered and determined as part of the proceedings. It was further alleged that the contracts or arrangements which are the subject of the proceedings involved share options under the option plans and that Liberty Global, Inc controlled the option plans which now deal with options to purchase stock in that company. Any order relating to the option plans therefore required Liberty Global, Inc to be a party. Those Grounds and Reasons for the joinder were supported by affidavit evidence of Mr Stewart solicitor acting for the applicant.

64 Mr Davis, solicitor for the first to ninth respondents, swore an affidavit, in general terms, annexing documents setting out the financial position of the existing respondents. That material was advanced in support of a contention that, having regard to the nature of the applicant's claim, there were ample financial resources available to meet that claim if it was successful in whole or in part, and that, in such circumstances, the joinder of the proposed tenth respondent was unnecessary. It was countered by the applicant that this information provided by the existing respondents also disclosed substantial liabilities and noted the lack of recent financial information as to the ninth respondent.

65 The existing respondents opposed the joinder further, on the basis that Liberty Global, Inc had come into existence some five years after the commencement of the present proceedings and about seven years after the applicant had ceased working in New South Wales under any of the alleged contracts or arrangements. The nature of the applicant's claims concerned share options and arrangements with those who were a party to the alleged contract or arrangement and whatever share option plans or schemes might now be operated by Liberty Global, Inc, the applicant had never been employed by that company. It was submitted that Liberty Global, Inc's schemes and plans could not be the subject of proceedings in the Industrial Court which were directed to the arrangement whereby Mr Hagans performed work in New South Wales.

66 The respondents frankly stated that they repeated the submissions that had been made and rejected by this Court on the joinder of the ninth respondent (Hagans v United Globalcom, Inc and Others [2004] NSWIRComm 164) and also rejected by the Court of Appeal (UnitedGlobalcom, Inc v Industrial Relations Commission (NSW) in Court Session [2005] 142 IR 204. Those unsuccessful submissions, which were repeated, included a reliance on the provisions of s 108; the formation of the proposed new respondent years after the applicant's contract had concluded; that these were new causes of actions and were caught by the prohibition found in s 108B; and that the circumstances were indistinguishable from the decision of the Court of Appeal in QSR Ltd v Industrial Relations Commission of NSW [2004] NSWCA 199. Nothing has been put by the respondents, however, that would significantly distinguish this joinder application from the grounds already argued and rejected in relation to the joinder of the ninth respondent.

67 The applicant submits that the substance of the respondents' case on this joinder application is the mere repetition of the previously unsuccessful submissions in relation to the joinder of the ninth respondent. While there is considerable force in that submission, a submission supported by a comprehensive analysis of the submissions before this Court and the Court of Appeal in relation to the ninth respondent, there are some additional matters raised by the respondents. Firstly, it was submitted that, unlike the circumstances surrounding the joinder of the ninth respondent which came about as a result of corporate reorganisation, there was no such reorganisation or restructure or, at least, not the same type of reorganisation that brought Liberty Global, Inc into the position of being the parent company of the ninth respondent. At the present time, the Court is uninformed about the details leading to that situation and whether those details are so significant as to treat Liberty Global, Inc differently to the present ninth respondent. In relation to this point, the most important consideration is the applicant's allegation that access to the option plans will be or will be likely to be hindered if the tenth respondent is not joined - a submission that was crucial in the joinder of the ninth respondent. In light of the uncontested evidence as to Liberty Global, Inc's position as the new parent company of the ninth respondent, it is appropriate that it be joined to the proceedings notwithstanding the fact that the circumstances of its involvement with the existing respondents, or some of them, may not arise from circumstances identical to those surrounding the ninth respondent.

68 The respondents also raised the purpose of joining the tenth respondent when the proposed Amended Summons seeks no orders against that respondent. That was apparently the position also with the ninth respondent. As I understand the applicant's position, it is the corporate relationship between existing respondents and the ninth respondent, and now the proposed tenth respondent, that makes it necessary for the tenth respondent to be joined. Precisely what order might ultimately be sought against the tenth respondent might have to await the hearing of the evidence in order to assess what difficulties might be faced in granting relief to the applicant if he makes out a case for orders under s 106 of the Act. The applicant has, nevertheless, indicated that, should the joinder application be granted, the Amended Summons for Relief will indicate the nature of orders sought against that entity.

69 On the basis put forward by the applicant and in accordance with the views expressed by the Court in Hagans v United Globalcom, Inc and Others and the views expressed by the Court of Appeal in United Globalcom, Inc v Industrial Relations Commission an order will be made for the joinder of Liberty Global, Inc as the tenth respondent in the proceedings. There was no discussion as to the appropriate orders, other than those set out in the Notice of Motion but not addressed. The parties should have such further discussions as are appropriate in relation to the orders to be made and Short Minutes of Orders should be filed within 14 days. If there are to be no further submissions in relation to those orders, the orders will be made in Chambers without the necessity of the further appearance of the parties.

LAST UPDATED: 17/10/2006