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What is a genuine industrial dispute?
Attorney General for the State of Queensland and the State of
Victoria & Anor v Riordan & Ors; Ex Parte the Australian Liquor
Hospitality and Miscellaneous Workers Union & Ors.
Commentary on an appeal to be heard by the High Court
against a judgment of the Full Court of the Industrial
Relations Court of Australia
by
Amanda Coulthard
Assistant Professor of Law
Bond University
Catchwords:
Industrial law - jurisdiction - application for prerogative relief
against AIRC - dispute finding based on non-compliance with log of claims -
amended finding after second log of claims - whether claims made in logs were
"plainly fanciful" so as to be incapable of giving rise to industrial dispute -
authorisation of log of claims - whether service of second log terminated
dispute arising out of non-compliance with first log - whether claim for career
path capable of creating industrial dispute.
1. Introduction
1. | There is a long standing doctrine that
the service and rejection of a log of claims can generate an industrial dispute
within the meaning of s 4(1) of the Industrial Relations Act 1988 (Cth). It is
the scope of the qualification to this doctrine, namely that the demands in a
log of claims be 'genuine', that is at the heart of this appeal. The appeal
arises out of a finding made by Senior Deputy President Riordan of the
Australian Industrial Relations Commission ('the Commission') that the service
of a log of claims by the Australian Liquor, Hospitality and Miscellaneous
Workers Union ('ALHMWU') and the Ambulance Employees Association of Victoria
('AEAV') on various employers in the States of Queensland, Victoria, South
Australia and Western Australia and the Northern Territory gave rise to an
industrial dispute. |
2. Factual background: the logs of claim
2. | In April 1993, as a consequence of a
decision to pursue federal coverage, the ALHMWU and the AEAV served a log of
claims on the Commissioner of Queensland Ambulance Services. A similar log was
served on employers operating ambulance services in Victoria, the Northern
Territory and Western Australia. The log was accompanied by a letter requiring
that the demands made in the log be observed within seven days. The log was
extensive, containing some 77 items. A number of items are of particular
relevance to the appeal. A demand was made for a weekly minimum wage of $2000
for all employees, together with increases to take into account inflation
calculated in accordance with the Consumer Price Index. Additionally, a further
claim was made for service payments for all employees of $100 a week for each
year of service. A 30-hour week was demanded, with overtime to be paid at treble
rates. Another demand was for a minimum of eight weeks annual leave, with an
additional three weeks leave for employees required to work on a weekend. The
employer was also required to implement a job classification and career path as
determined by the union. |
3. | The demands in the April log were not
acceded to by the employers. Accordingly, the unions notified the Commission of
the existence of an industrial dispute. A dispute finding was made by Senior
Deputy President Riordan on 11 October 1993 based on the service and
non-acceptance of the April log of claims. The employers appealed against that
finding to a Full Bench of the Commission. |
4. | In December 1993, and before the appeal
to the Full Bench, was heard the ALHMWU and AEAV served a new log of claims.
Whilst the log was similar in form to the April log there were some important
differences. Instead of a weekly wage of $2000 a demand was made for a basic
wage of $800 to be increased to up to $2500 depending upon the employee's skills
and experience. The demand in relation to classification and career path was
redrafted so as to make career progression dependent upon certain goals and not
upon union prescription. Other demands such as treble time overtime and a
30-hour week were retained. |
5. | As with the April log, compliance within
seven days was demanded. The employers did not accede to the demands. The unions
gave notice to the Commission of a dispute. Instead of making a new dispute
finding based on the December log, Senior Deputy President Riordan confirmed the
original finding but varied it to include the new parties and reflect the change
in ambit. An appeal against this finding to a Full Bench of the Commission was
dismissed. Applications were then made for prerogative relief against various
members of the Commission. The applications were dismissed by a Full Bench of
the Australian Industrial Relations Court. |
3. Paper disputes and genuine demands
6. | It is a precondition to the exercise by
the Commission of its award making jurisdiction that there is an industrial
dispute extending beyond any one State: s 101 Industrial Relations Act 1988
(Cth). This requirement reflects the constitutional limitation on the
Commonwealth's power to regulate labour found in s 51(xxxv) of the Commonwealth
Constitution. |
7. | It has long been accepted that the
requirement for a dispute does not necessitate that there be an actual or
threatened industrial dislocation or disturbance (see eg Metal Trades Employers
Association v Amalgamated Engineering Union [1935] HCA 79; (1945) 54 CLR 387). This has since
been reaffirmed by the High Court on a number of occasions (R v Cohen; ex parte
A-G (Q) (1981) CLR 331 at 337, R v Ludeke; ex parte Queensland Electricity
Commission [1985] HCA 57; (1985) 159 CLR 178 at 181, Re State Public Service Federation; ex
parte A-G (WA) (1993) 178 CLR 148 per Mason CJ, Deane & Guadron JJ at 267
and per McHugh J at 302). Consequently, the High Court has held that a dispute
may be created by the delivery of a formal written demand (a log of claims) and
a failure to comply with that demand within the time stipulated (R v Ludeke; ex
parte QEC at 181, R v Cohen; ex parte A-G (Q) at 336 and Re State Public Service
Federation; ex parte A-G (WA) at 266 per Mason CJ, Deane & Guadron JJ). This
mechanism is referred to as a 'paper dispute'. It has enabled unions to create
an industrial dispute by the relatively simple expedient of serving a log of
claims on employers in different States. |
8. | In determining the existence of a dispute
based on the making and refusal of a written demand, the High Court has held
that the dispute must be 'real and not a mere fiction'. By this it is meant that
the demands must be 'genuine' demands (see eg R v Cohen; ex parte A-G (Q) at
337-338 and R v Ludeke; ex parte QEC at 181). This qualification serves to
prevent paper disputes being used as a mechanism for giving the Commission a
general regulatory power over terms and conditions, thereby evading the
constitutional restrictions on Commonwealth power. |
9. | The question of whether or not a demand
is genuine cannot be answered exhaustively. The question is approached by
identifying when it is that a demand is not genuine. The role of the Court is to
provide a framework within which to make that judgment, recognising that similar
facts might be given different weight in different cases according to the
industrial context. The High Court has sought to provide this framework by
saying that a demand will not be genuine or bona fide if it is not genuinely
advanced. So, for example, a demand will not be genuine if made for the purpose
of invoking the jurisdiction of the Commission to resolve a dispute over which
it would not otherwise have jurisdiction such as an intra state dispute (R v
Cohen; ex parte A-G (Q) at 337, R v Ludeke; ex parte QEC at 181 and Re PKIU; ex
parte Vista Paper Products [1992] HCA 42; (1993) 67 ALJR 604 at 610). The genuineness of the
demand will not, however, be negatived by showing that the demand was served for
the purpose of creating a dispute to enable the Commission to make an award for
a particular industry. That most logs of claim are served for that very reason
is a necessary consequence of the Commission's jurisdiction being dependent upon
a dispute finding. The fact of service of the log will in most cases lead to the
inference that the union wants to obtain improved conditions (R v Ludeke; ex
parte QEC at 182). Consequently, the demands will be regarded as genuine so long
as the log is genuinely advanced for the purpose of attracting the Commission's
jurisdiction to make an award settling the dispute within the framework of the
log (R v Ludeke; ex parte QEC at 182 & 191, R v Cohen; ex parte A-G (Q) at
340-341 and Re PKIU; ex parte Vista Paper Products at 610). |
10. | The difficulty in providing a framework
for determining whether or not a dispute is genuine is also exacerbated by the
doctrine of ambit. As the Commission's jurisdiction can only be exercised in
relation to disputes, it follows that an award made in settlement of the dispute
cannot go beyond the scope of the dispute (R v Commonwealth Court of
Conciliation and Arbitration; ex parte Kirsch [1938] HCA 41; (1938) 60 CLR 507 at 538). This is
called the doctrine of ambit. Its purpose is not to determine the existence of a
dispute but to ensure that there is the proper nexus between the award made and
the prevention or settlement of the dispute that has been found to exist (R v
Holmes; ex parte Victorian Employers' Federation [1980] HCA 37; (1980) 145 CLR 68 at 76 and R v
Bain; ex parte Cadbury Schweppes Australia Ltd [1984] HCA 9; (1984) 159 CLR 163 at 176). The
doctrine applies not only to the initial award made in settlement of the dispute
but also to any subsequent variation of that award. The original dispute can
therefore be relied upon as the basis of the Commission's jurisdiction and any
award variation will be valid as long as the Commission remains within the ambit
of the original dispute (R v Kelly; ex parte Australian Railways Union [1953] HCA 96; (1953) 89
CLR 461). An obvious consequence of the doctrine of ambit is that demands for
improved terms and conditions are often inflated beyond reasonable expectations.
This serves to give a margin to the Commission in settling the dispute and also
gives a jurisdictional basis for future variations. |
11. | In determining whether or not a demand
is genuine it has been said that the union must 'really want what it demands' (R
v Cohen; ex parte A-G (Q) at 337). This aspect of genuineness focuses on the
quantum of the demands, as opposed to the motive or purpose for serving the log.
In making this determination account must be taken of the doctrine of ambit and
its consequences. It has thus been held that it is not necessary that the union
has or reasonably believes that it has real prospects of successfully obtaining
each item of the claim, nor that it is 'intent on obtaining forthwith every item
which is mentioned in the log of claims'. It is sufficient that the union is
able to show that the demands are made with a view to 'obtaining improved terms
and conditions within the framework of the claims made'. Therefore, a dispute
will be created even where the claims might seem to be extravagant or
unrealistic (R v Ludeke; ex parte QEC at 183). |
12. | There must, nevertheless, be a point at
which the extravagant nature of the claims is such that it cannot be said, even
taking into account the doctrine of ambit, that the demands are being genuinely
advanced. This question was dealt with by the High Court in the 'SPSF' case (Re
State Public Service Federation; ex parte A-G (WA) (1993) 178 CLR 148). There
the High Court was concerned with dispute findings based on the failure of
employers to accede to demands made in three logs of claim. One of the logs made
three simple claims: a minimum wage of $5,000 per week for all employees, a
minimum allowance of $2,500 per week for all employees and a further claim that
pay and allowances be adjusted to take into account cost of living increases in
accordance with the Consumer Price Index. The High Court held that the service
and refusal of this log of claims did not create an industrial
dispute. |
13. | Mason CJ, Deane and Guadron JJ, in a
joint judgment, held that whether or not a claim is fanciful is to be determined
by reference to general industrial standards and general patterns of industrial
regulation. The high rate of weekly earnings applicable to all employees
regardless of level of skill or work performed, which was plainly at odds with
established wage fixing principles, led their Honours to the conclusion that the
claims were fanciful (at 269). The extravagance of the claims could not be
explained by reference to the doctrine of ambit, particularly when a specific
claim was also made for an increase in wages to take account of inflation.
McHugh J took a similar approach. His Honour emphasised that the extravagance of
a claim does not of itself destroy the genuineness of the demand provided that
the demands are a reflection of a genuine desire to provide for changes either
at the time that the demand is made or in the foreseeable future (at 306).
Nevertheless, His Honour went on to say that if the demand is 'so extravagant
that it cannot reasonably be understood as intended to provide for changes in
the foreseeable future, ordinarily the proper inference to be drawn is that the
organisation making the demand does not really want what it demands' ( at
306). |
14. | Given, however, that the union had
obviously taken the pursuit of its claims seriously Mason CJ, Deane and Guadron
JJ concluded that the union was pursuing some more realistic claim; a claim for
increased wages and allowances as determined by the Commission. Their Honours
held that a bare claim for increased conditions could not give rise to an
industrial dispute (at 270). McHugh J agreed with this approach (at 307). Dawson
and Brennan JJ, in separate judgments, concurred with the joint judgment of
Mason CJ, Deane and Guadron JJ . |
15. | Toohey J held that a demand may not be
genuine if it is so 'far-fetched, so lacking in industrial reality that it
cannot be taken seriously' (at 290-291). His Honour recognised that drawing the
line is difficult but that it was nevertheless possible to see on which side a
particular log might fall in a given case. In this case, the unreality of the
demands made, even taking into account the doctrine of ambit, appear to have led
His Honour to the conclusion that the demands were not
genuine. |
4. A consideration of the Appellants'
arguments
16. | The appellants contend that the logs of
claim are at their 'core' fanciful and so cannot be regarded as genuine. This is
to be established by reference to the total overall amount of the claims, which
when viewed by reference to their cost to the employer if granted, are totally
unrealistic and at odds with the Commission's first award principles. From this
the appellants say that it must be inferred that the unions do not genuinely
want what they are demanding. Added to this the appellants argue that the
industrial context in which the logs were served establishes that the demands
were nothing more than a step towards enabling the Commission to exercise
jurisdiction. In this regard the appellants point to the history leading up to
the service of the December log of claims and the existence of adequate State
regulation of terms and conditions of employment. The appellants also suggest
that it was in fact the then recent enactment of the Employee Relations Act 1992
(Vic) which instigated the move to seek federal coverage rather than a desire
for improved terms and conditions of employment. In relation to this latter
point, the evidence supports the conclusion that in serving the logs of claim
the unions' motive was to obtain federal coverage. The authorities discussed
above show, however, that that of itself will not be sufficient to negative the
genuineness of the demands so long as the union seeks both the conditions and
the award making provision for them, even if the claims are optimistic or
extravagant. |
17. | The logs of claim can be described as
ambitious or extravagant. This is particularly so of the demand with respect to
wages in the April log. The unions could not have expected to be successful in
achieving all of the demands made. That is not, however, sufficient to establish
that the demands are not genuine in the sense that the unions did not really
want what they were demanding or that the logs were served merely as a means of
having the Commission determine appropriate increases. The decisions of the High
Court clearly establish that a union need not show that it anticipates that it
will be successful in each of the demands made. It is sufficient that the log
can be seen as presenting a framework of demands on which to base a present
award and any variations to it for the foreseeable future. That would seem to
exclude determining genuineness by a process of analysing the resultant costs to
the employer were the demands to be granted in their entirety. Such an analysis
ignores the doctrine of ambit and its accepted consequences in drawing a log of
claims. The logs of claim here are detailed and cover a wide range of matters
pertaining to the relationship of employer and employee. In that regard they are
similar to many logs of claim on which dispute findings have been made both
before and after the decision in SPSF. There is nothing in the SPSF case which
changes the High Court's approach to determining whether or not a union really
wants what it is claiming. Mason CJ, Deane and Gaudron JJ premised their
approach to ascertaining whether or not demands are genuine by stating that,
given that there is nothing inherently artificial about paper disputes and
taking into account the doctrine of ambit, it will not often be the case that a
written demand is other than genuine (at 268). A written demand will, therefore,
generally be treated as genuine unless it is plainly 'fanciful' (at 268). Toohey
J also did not question that an industrial dispute can be created by the service
and rejection of a log of claims (at 287) and acknowledged that in many if not
most cases it will be sufficient to establish a dispute (at 289). The SPSF case
provides an example of when such claims might fall on the wrong side of the
dividing line between genuine and non-genuine. There is nothing in the judgments
which provides scope for arguing that a log of claims which viewed as a whole or
item by item is extravagant cannot establish a genuine demand and thus provide
the basis for a dispute finding. The decision was exceptional on its facts: the
claims were unrealistically extravagant, bare and
indiscriminate. |
5. Conclusion
18. | In summary then, the nature of the
question of whether or not a dispute based on the service and refusal of a log
of claims is genuine does not allow for a definitive answer which can provide a
blue-print for determining each case. Each case must continue to be determined
on its own facts with due weight being given to the skill and expertise of the
Commission in making that determination. Whilst in this case the demands might
be described as extravagant, the wide range of employer/employee matters dealt
with, the fact that the demands were relatively comprehensive compared with the
bare and simplistic claims made in the SPSF case, point to the conclusion that
the demands were genuinely advanced. |
19. | The appellants' arguments, however, go
further than simply seeking to draw analogies with the SPSF case. They seek to
challenge the accepted approach to the use of the 'paper dispute'. The use of
paper disputes to invoke the Commission's jurisdiction is now well established
and accepted. This has not, however, been without its critics. The paper dispute
has been criticised as a mechanism which encourages a system of dispute
resolution predicated on the creation of disputes (R v Portus; ex parte
Professional Engineers' Association [1959] HCA 47; (1959) 107 CLR 208 per Windeyer J at 268).
To a large extent that result is inescapable, being forced on the parties by the
constitutional and legislative limits placed on the Commission's jurisdiction.
Early decisions of the High Court holding that the Commission could not be given
jurisdiction to make a common rule award led to the view that the Commission
cannot exercise jurisdiction unless it has before it an actual dispute (see for
example Australian Boot Trade Employees' Federation v Whybrow & Co [1910] HCA 53; (1910) 11
CLR 311). Thus the prevention limb of s 51(xxxv) and its scope for enabling the
Commission to intervene before an actual dispute has broken out has largely gone
unutilised by the participants in the industrial relations system (see Mason CJ,
Deane and Guadron JJ in Re Federated Storemen and Packers Union of Australia; ex
parte Wooldumpers (Victoria) Ltd [1989] HCA 10; (1989) 166 CLR 311). This and the desire to
create comprehensive industry-wide awards has perhaps led to an over emphasis or
over reliance upon the paper dispute (Re Federated Storemen and Packers Union of
Australia; ex parte Wooldumpers (Victoria) Ltd per Mason CJ at 321). The
tendency to make extravagant claims can, at least in part, be explained by an
overly rigid approach to the doctrine of ambit and a misconception of the extent
to which that doctrine places limits on the scope of the Commission's
jurisdiction to make an award in settlement of a dispute. As the appellants
contend, there are decisions of the High Court such as R v Bain; ex parte
Cadbury Schweppes Australia Ltd, Re PKIU; ex parte Vista Paper Products and the
Wooldumpers case which demonstrate that the service of ambitious or extravagant
logs of claim are not essential to take into account the doctrine of
ambit. |
20. | It can be said then, that an
unnecessarily rigid approach to the doctrine of ambit and an under-utilisation
of the prevention limb of the labour power has led to the service of logs of
claim which make extravagant demands that are divorced from the real interests
of the union and its members (Re PKIU; ex parte Vista Paper Products [1992] HCA 42; (1993) 67
ALJR 604 per Guadron J at 612 - 613). From an industrial relations perspective,
this is to be regretted. Further analysis and explanation of these issues by the
High Court whilst not rejecting the use of the paper dispute might avoid the
need for unions to continue making extravagant and unrealistic demands. This
would allow the parties to disputes and the Commission to focus on the actual
industrial situation and its resolution. |
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