![]() |
Home
| Databases
| WorldLII
| Search
| Feedback
University of New South Wales Law Journal |
![]() |
[2] Although the decision
re-establishes a broad role for the Commission in workplace dispute resolution,
it simultaneously alters
its significance in an increasingly de-centralised wage
system.
[4] When the Union
referred a wide-ranging industrial dispute at Gordonstone mine to the Commission
in 1997, Gordonstone claimed that
s 89A of the WR Act (which restricts
the Commission’s power to arbitrate to certain ‘allowable award
matters’) limited the Commission’s
ability to mediate the dispute.
Both parties agreed that the dispute included several matters beyond the
Commission’s powers
as set out in s 89A. However, the Full Bench of the
Commission decided, amongst other things, that s 89A of the WR Act did
not restrict the Commission’s powers under the
Agreement.[3] Gordonstone appealed on
constitutional grounds to the High Court of Australia, which remitted the case
to the Full Bench of the Federal
Court. The Federal Court found for Gordonstone
in March 1999, and issued a prohibition order to the effect that the Commission
could
not act in the dispute except as allowed for by s 89A of the WR
Act.[4] The Union then appealed to
the High Court.
[6] The case turned on the interpretation of two key provisions: s 170MH of the IR Act and s 89A of the WR Act. Section 170MH of the IR Act allows ‘[p]rocedures in an agreement for settling and preventing disputes [to] ... empower the Commission to do either or both of the following: to settle disputes over the application of [a certified] agreement [and/or] to appoint a board of reference’. Significantly, dispute settlement procedures are required in an agreement before certification by the Commission, pursuant to s 170MA(1)(c) of the IR Act.[5] Section 170MH was repealed by the Workplace Relations and Other Legislation Amendment Act 1996 (Cth), but was retained for the purposes of Certified Agreements made under the IR Act.[6]
[7] Section 89A(2) of the WR Act purports to limit the Commission’s jurisdiction to ‘allowable award matters’ when exercising its functions under the WR Act. Importantly, s 89A(1) states that these ‘restricted’ functions are arbitration, making awards and orders to settle or prevent disputes, and varying an award or order to maintain a settled industrial dispute.
[8] Gordonstone argued that s 170MH (and hence its continuing application) was invalid on the grounds that it exceeded the constitutional power of the Federal Parliament (by potentially granting judicial powers to a non-Chapter III court) and that s 89A effectively limits the powers of the Commission to arbitrate any dispute.[7]
[9] The High Court found, on the contrary, that s 170MH was in fact constitutional as it authorised the Commission in this case to exercise a power of private arbitration, not a judicial power. The separation of powers issue did not arise as the Court clearly stated that, although the section may be invalid to the extent that it authorises the Commission to exercise a judicial power, the section can validly authorise the Commission’s exercise of private arbitral power.[8]
[10] Furthermore, the
Court held that s 89A had no application to the Commission’s private
arbitration power in the dispute
in CFMEU since, by definition, there was
no industrial dispute for the purposes of the WR Act, as the dispute at
the Gordonstone mine was not an ‘inter-State’ dispute and there was
no application by the parties
for the varying of an award or order. These
findings meant that none of the circumstances outlined in ss 89A(1)(a), (b) or
(c) were
present, and therefore the restrictions in s 89A(2) did not
apply.
[12] In the context of the case, the Court defined judicial power as ‘making a binding determination as to legal rights and liabilities arising under an award or agreement’.[9] Judicial power is ‘exercised independently of the consent of the person against whom the proceedings are brought’,[10] and results in an order that ‘is binding of its own force’.[11]
[13] The Court did not expressly define arbitral power. However, the Court did define private arbitration as a determination that is ‘not binding on its own force’:[12] its enforcement ‘depends on the law which operates with respect to it’.[13] So a private determination of rights is neither final nor determinative, perhaps because it can be ‘appealed’ and the jurisdiction of the arbitrator can be questioned. In some ways, this appears similar to forms of collateral attack on a judicial decision.
[14] It is interesting that the Court in CFMEU states clearly its notion of judicial power but remains silent on the nature of arbitral power. In R v Gough; Ex parte Meat and Allied Trades Federation of Australia (‘Gough’),[14] which dealt with the Conciliation and Arbitration Commission’s exercise of arbitration powers in an unfair dismissal claim and which is referred to by the Court in CFMEU, the High Court considered closely the meaning of both powers. In Gough, Barwick CJ thought that an arbitral power settled a dispute by the making of an award, which may contain new rights other than those that existed before the dispute, while ‘it is the ascertainment and enforcement of existing rights [that is] classically at the very heart of the exercise of judicial power’.[15] Similarly, Menzies J found that a ‘non-arbitral decision’ had been made in Gough because it related to the enforcement of existing rights, although he did not feel compelled to decide that the decision was judicial in nature.[16]
[15] In some ways the arbitral-private arbitral split is similar to the distinction between private arbitration and industrial arbitration discussed by Heerey J in National Union of Workers v Pacific Dunlop Tyres Pty Ltd (‘NUW’).[17] In that case, which was concerned with the unfair dismissal of an employee, Heerey J explained that private arbitration means agreed decision-making by an independent party pursuant to an arbitration agreement, while industrial arbitration refers to a statutory procedure in which a creature of statute, the Commission, determines the dispute between the parties. Typically therefore, the Commission engages in industrial arbitration.
[16] Interestingly, in both
NUW and a later case that applied the decision, Horsman v Commissioner
of Main Roads,[18] the Federal
Court held that the Commissioner in each case was not acting as a private
arbitrator but was in fact acting as a Commissioner.
However, both cases turned
on the fact that there were no express terms establishing a private
arbitration.
[20] Typically, s 89A is viewed as the Federal Government’s means of
restricting the role of the Commission in workplace relations:
by limiting the
definition of ‘industrial dispute’ to the allowable award matters of
s 89A(2), the WR Act limits the jurisdiction of the Commission. Creighton
and Stewart contend that the most obvious omissions in the allowable award
matters
are provisions relating to consultation on workplace change and
redundancy, unfair dismissal and workplace safety, omissions that
the writers
characterise as a ‘reaffirmation of managerial
prerogative’.[22] Section
89A(1) then clarifies these restrictions on the Commission by stating exactly
when this definition of ‘industrial dispute’
is to apply. Yet it is
interesting to observe that, while the form of ss 89A(1)(a)-(c) was intended to
allow the Commission to continue
to exercise an unrestricted conciliation
role (as noted by Creighton and
Stewart),[23] the effect of s 89A(1)
in CFMEU has been to lift the legislature’s significant
restrictions on the Commission in the area of private arbitration of
single disputes.[24]
[22] The Court offers no judicial support for employing a power of private arbitration and the general law to justify the Commission’s ongoing role in the dispute at issue in CFMEU.[25] The statements in the joint judgment to the effect that the general law provides a solution[26] do not seem to consider sufficiently the implications of the decision, although it appears this issue was not pressed by the parties.
[23] Given the Court’s orders in CFMEU, the matter now returns to Commissioner Hodder who originally heard the matter in March 1997 and who must exercise the powers of a private arbitrator in determining the dispute. Yet the general law is far from clear in determining how the matter would proceed. Fundamental questions of contract arise: Is the agreement valid? Was there an intention to create legal relations? Can the union bind its members apart from the operation of the WR Act? Are damages payable for a breach of the agreement’s dispute resolution procedures? It is arguable that a private arbitration agreement could be enforceable under s 178 of the WR Act, however this still requires some form of agreement to be found and for the courts to require compliance with the arbitration clause. It also suggests the possible application of (albeit statutory) penalty provisions in the enforcement of a ‘general law’ agreement. The real question is whether such a private agreement, based in the general law, is properly characterised as a commercial arbitration agreement. This final question raises the possibility that the parties to such an agreement may be bound by the (State-based) commercial arbitration statutes, in this case the Commercial Arbitration Act 1990 (Qld). This then raises the difficult conundrum of the application of State law to an agreement initially created in a federal statutory system and administered by a federal statutory body.
[24] In addition to the interesting permutations of the general law, the deeper, more fundamental, issue in CFMEU is the very notion of private arbitral power. The Court emphasised the distinction between an arbitrated and an agreed dispute settlement procedure. Essentially, this is the difference between the parties deciding that the Commission will mediate any future dispute and the Commission requiring the parties to provide that the Commission will mediate any such dispute. The effect of the Court’s use of the power of private arbitration is that the Commission is able to perform a function it might otherwise be denied. To describe the Commission’s role as ‘judicial’ breaches the separation of powers doctrine; however, to describe that same role, albeit with less ‘finality’, as the Commission exercising a private arbitral power does not breach the doctrine and allows the matter in question to proceed. The parties’ agreement allows the Commission to make a determination because it implies that any such determination is not final.
[25] Even more important than the constitutional implications of the private arbitral power is the hint that it may also provide an escape from the strictures of s 89A. It could be suggested that the general agreement the Court points to as a basis for the Commission’s role authorises the Commission to exercise a wide-ranging power to decide and settle disputes. The Court’s reasoning suggests such an arrangement does not fall foul of constitutional restrictions, but it may also avoid s 89A as well. The real question, left unanswered by the Court, is whether the reinvigorated notion of a power of private arbitration is indeed caught by s 89A.
[26] Ostensibly, the Court answered this question by distinguishing s 89A(1) on the grounds that the dispute in CFMEU was not an inter-State dispute and no order or award was to be varied. The difficulty with the Court’s narrow focus on the lack of an inter-State dispute in order to deny the application of s 89A is that it is in direct contrast with the Court’s earlier reliance on the industrial dispute to consider the Agreement as certified.[27] Implicitly, the Court has concluded that there is sufficient ‘inter-Stateness’ to ground the dispute that led to the original agreement in federal law, but that the particular and individual disputes that occur under that agreement, if presented for private arbitration to the Commission, are not inter-State in nature – unless perhaps the particular dispute occurs at a number of sites in several States.
[27] Interestingly, the Court did not distinguish the relevance of s 89A(1)(a) on the ground that the matter is not an arbitration. It is arguable that s 89A(1)(a) is not applicable as the term ‘arbitration’ in that section may be different from the Court’s concept of ‘private arbitration’, or even the notion of ‘arbitration’ referred to by Heerey J as industrial (workplace?) arbitration. Also, ss 89A(1)(b) and (c) would not be applicable either as the Commission, acting in its private arbitration capacity, would not ‘make an order or award’ for the purposes of the WR Act, nor would it vary an award or order. This suggests that s 89A, in addition to not applying to conciliation by the Commission, may also not apply to private arbitration conducted by the Commission.
[28] Finally, if the Commission, in its private arbitral role, is
bound by the general law, in particular by the State commercial
arbitration
statutes, the Commission may be characterised as no more than another provider
of professional dispute settlement services
in the steadily maturing market for
the provision of such services. What, then, is the reason for choosing the
Commission as a service
provider? Cost and experience are two strong reasons,
however there is no ‘statutory’ advantage. The Commission will
simply be exercising its power under the arbitration agreement, as its
empowerment under ss 170MH and 170LW is limited by the High
Court in CFMEU
to a private arbitral power. This may mean that the ‘private
arbitral’ notion results in another reduction in the special
role of the
Commission in Australian workplace relations. Interestingly, this would be
consistent with the Federal Government’s
continued efforts to create a
more decentralised wage determination system.
[30] But from this situation flows two different courses. One would allow the Commission to again exercise wide ‘arbitral powers’, albeit in the context of private arbitration. This course would re-introduce the Commission to its strong position in workplace relations in Australia and relax to some extent the restrictive life it leads under s 89A and s 170MX. The other course would encourage parties to engage other organisations or bodies in dispute resolution procedures in the future, by suggesting that the Commission is equivalent to any other dispute resolution body or individual when dealing with industrial disputes under Agreements, and that it carries no particular statutory significance or power when it engages in such a role. One advantage the Commission does have over other private sector services is that it costs less than other options. In some ways, however, it is questionable whether the state, through the Commission, has any legitimate role at all in providing tax-payer subsidised services to what is essentially a private sector market for the provision of dispute settlement services.
[31] This decision by the High
Court may encourage and intensify the trend already present in workplace
relations in Australia to
take more and more aspects of the wage determination
process outside of the procedures created by regulation by fostering the notion
that the Commission is one choice amongst many in the settlement of workplace
disputes.
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/journals/UNSWLawJl/2001/21.html