C2002/2306, Transcript of Proceedings [2002] AIRCTrans 3002 (5 August 2002)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

MUNRO J
SENIOR DEPUTY PRESIDENT DUNCAN
COMMISSIONER ROBERTS

C2002/2306

APPEAL UNDER SECTION 45 OF THE ACT
BY NORMAN BRACKEN and OTHERS AGAINST THE DECISION AND ORDER MADE BY COMMISSIONER RAFFAELLI AT SYDNEY ON 24 MAY 2002 IN AG2002/2273 (PR918103) RE CERTIFICATION OF AN AGREEMENT

SYDNEY

2.23 PM, MONDAY, 22 JULY 2002

PN1

MUNRO J: This is the first listing of matter C2002/2306, it is a notification of appeal under section 45 of the Act lodged on 24 May this year. It is the first listing of the matter. I express apologies to the representatives in attendance for any inconvenience that may have been caused through the necessary alteration in the timing of the matter. Could we have appearances please?

PN2

MR R. REITANO: If it pleases the Commission, I appear for the appellants but perhaps shortly we will deal with who the appellants are. I have had my instructions withdrawn with respect to a number of those who appear on schedule A. I can perhaps hand up now, maybe it is just convenient now to hand up the 23 named individuals for whom I act who are all on schedule A. I don't act for anyone who is not on this list.

PN3

MUNRO J: Yes, thank you, Mr Reitano. Has a copy of that been supplied? Yes. We will mark that as R1. If there is any contest about it that can be addressed later.

EXHIBIT #R1 COPY OF LIST OF 23 NAMED APPELLANTS FOR WHOM MR REITANO ACTS

PN4

MR L. DUFFIN: If the Commission pleases, I appear on behalf of the Transport Workers' Union.

PN5

MR G.R. WATSON: If the Commission pleases, I seek leave to appear for Patrick Cargo Pty Limited with MR N. OGILVIE.

PN6

MUNRO J: Any objection to leave to appear in either instance? There being no objection leave to appear is granted to Mr Reitano and Mr Watson. Yes, Mr Reitano?

PN7

MR REITANO: Your Honour, this is an appeal under section 45 of the Act and in particular section 45(1)(g) which relates to the jurisdiction of the Commission. I will need shortly to address in reply some of the distractions that are raised by the respondents to the appeal in respect of want of prosecution of competence and standing and will do so.

PN8

MUNRO J: Perhaps I should rectify an oversight too, Mr Reitano. I note that we have received written submissions on behalf of the appellants. We will mark those as R2. The Commission date stamp notes that they were received on 27 June. On 10 July we received written submission on behalf of Patrick Cargo. We will mark those as W1 and on the same date, 10 June, we received written submissions on behalf of the Transport Workers' Union and we will mark those as D1.

EXHIBIT #R2 APPELLANT'S WRITTEN SUBMISSIONS

EXHIBIT #W1 WRITTEN SUBMISSIONS ON BEHALF OF PATRICK CARGO

EXHIBIT #D1 WRITTEN SUBMISSIONS ON BEHALF OF THE TRANSPORT WORKERS' UNION

PN9

MR REITANO: I was going to say that we have provided the Commission with written submissions that fully deal with the issues that we raise on appeal and I don't intend to read those. I do intend to develop a few points by way of reply but those really go to highlight the very issue between the parties more than anything else. Can I say that the fundamental issue between the parties is the proper construction of section 170LL(1)(a) of the Act. In particular whether or not Commissioner Raffaelli was correct in deciding that the construction to be given to the section meant that a single business is a new business that the particular employer proposes to establish or is establishing when the agreement was made or whether the construction for which my clients contend, and that is that the new business had to be a new business that the employer was proposing to establish or is establishing, that nuances and the subtle difference between the two is starkly illustrated by the circumstances of this case.

PN10

We contended before Commissioner Raffaelli that the business that Patrick Cargo Pty Limited was proposing to conduct was neither a new business and nor was it a business that it proposed to establish or was establishing. My clients contended before Commissioner Raffaelli that the business operated by, to use the short form, Ansett, was a business that had been continuing in operation for some time and all that was happening was that the business was being transferred to Patricks. In that sense the business was neither new, nor was it something that was going to be established, nor was it something that Patricks was establishing.

PN11

It was said against us and ultimately determined by Commissioner Raffaelli against that insofar as this employer was concerned it was a new business because it had never conducted this business before, indeed on the evidence it never conducted any business before. Secondly, somehow it was this employer that was proposing to establish or was establishing the business. As I say having introduced the matter that way could I just deal with the three distractions that are raised against us in the written submissions. The first is that the written submissions were served one day late and obviously filed, I think, three days late by my clients and that the appeal should be struck out for want of prosecution.

PN12

There is no prejudice pointed to by either of the respondents as a result of that lateness. We respectfully apologise to the Commission. We seek leave if leave be necessary to have the timetable modified so as to regularise our position. It is really unnecessary to say anything more about that. The lateness of the submissions in part had something to do with the difficulties of obtaining instructions from so many different people.

PN13

As to the suggestion that the appeal is incompetent can we just say this. Each of the appellants, the 23 that now remain, all contended before Commissioner Raffaelli having been granted leave to intervene that the Commission did not have jurisdiction in the way that I have put it this afternoon. Those submissions were ultimately rejected and the Commissioner proceeded to assume jurisdiction and certify the agreement.

PN14

Having established a relevant interest before the Commissioner against which there is no appeal brought my clients, the 23 remaining appellants, say that they are aggrieved by that decision. They are all but one people to whom the agreement now applies. They have a direct interest in that sense and I have provided the Commission and I'll hand up copies in due course without reading it the judgment in re Arnell [1994] HCA 1; 119 ALR 193 which deals with the question of that interest. I think that was recently followed by a decision of the Commission at Full Bench level in re Electrolux of 3 April, 2002, print 916196, an authority to which I understand my learned friend, Mr Watson, will provide the Commission with copies of.

PN15

We say in the circumstances that the sense of grievance that my clients feel comes about not only because of the direct interest they had in the proceedings below in terms of their intervention and participation but also by reason of the Commissioner's decision to certify the agreement. The third matter relates to the issue of competence. Can we say this, that what is said against us here is that the notice of appeal nor the written submissions refers to paragraph (g) of section 45(1). An assumption is made in the written submissions, a fairly good guess is taken apparently that the appeal involves section 45(1)(g) as it quite frankly does and that is because not only is the word "jurisdiction" and "want of jurisdiction" referred to all over the notice of appeal but also in the written submissions.

PN16

It is clear that it is on that basis that the appeal is pressed, that the Commissioner did not have jurisdiction to certify the agreement because the jurisdictional fact necessary for its certification simply did not arise as is the case and it is referred to in paragraph 13 of Mr Watson's submissions in Tweed Valley. Commissioner Raffaelli's assumption of jurisdiction is to be seen from his certification of the agreement.

PN17

MUNRO J: Does that point go also to the ground of appeal going to the no disadvantage test or is the no disadvantage test ground not pressed?

PN18

MR REITANO: It's pressed and I readily concede your Honour its weaker, certainly in respect of compliance with section 170LL(1)(a) we say the jurisdiction point jumps out at you in respect of a no disadvantage test. It is apparent that what could be said is that the Commission has power, or the Commission's exercise of discretion simply was carried and that wasn't in their regard to jurisdiction. I don't intend in what I have to say this afternoon to address any further the question of the no disadvantage test.

PN19

MUNRO J: Could I take you to one other question. The point taken below that Patrick is not an employer, that isn't pressed on appeal?

PN20

MR REITANO: It's not taken on appeal. It's not pressed on appeal, your Honour.

PN21

MUNRO J: It isn't pressed on appeal, yes, thank you.

PN22

MR REITANO: Could I then go to as I say the substantive point that I really wish to deal with very briefly in oral submissions and could I do that by taking the Commission to Mr Watson's submissions, firstly to deal with a number of matters in reply - sorry, or mainly to deal with a number of matters in reply but the real issue between the parties is starkly illustrated by those submissions. If I could take the Commission to paragraph 34. I think this is higher than something of a High School debating point but something that really illustrates the distance between the parties in terms of the way in which they characterise what is before the Commission.

PN23

In paragraph 34 Mr Watson sets out conveniently some of the factual background to the matter and in particular in paragraph (b) says this:

PN24

At that time -

PN25

Which is 16 May.

PN26

- Patrick Cargo had not commenced any business or acquired any business in relation to air freight operations. However, it was involved in negotiations to acquire the international cargo handling business formerly part of the Ansett Group of Companies from the Administrator of the Ansett Group of Companies.

PN27

So what was happening, and I don't think there was any controversy between the parties below or even in the written submissions here that what was happening was that Patricks was purchasing the international cargo handling business with Ansett, lock, stock and barrel. That is indeed what Mr Watson says in paragraph 34(b) what was happening.

PN28

If I could then jump over to paragraph 30(a) - - -

PN29

MUNRO J: I am sorry, you're saying the international - yes, that's ICH.

PN30

MR REITANO: Yes. If I could then jump over to paragraph 38 which after dealing with some of the legislative framework that is relevant and in particular section 170LL, the submissions characterise the issue as follows:

PN31

The relevant single business or part of the single business to which the agreement was to apply was a new business project or undertaking that Patrick Cargo was proposing to establish.

PN32

Now, our submission essentially is this; that there is an enormous tension, in fact a logical inconsistency between the two propositions. The business was neither new nor was it something that Patrick Cargo was proposing to establish. It was an extant operating known and identifiable business.

PN33

MUNRO J: Mr Reitano, I think it might be a convenient point to interrupt you. One aspect that strikes me about the submissions, including your own and indeed about Commissioner Raffaelli's decision, is that reference to the business is either in terms of ICH or in broad terms about Patrick Cargo's engagement in air freight operations, neither of which formulation goes to the application of the agreement which theoretically at least applies to a single business or part of a single business and perhaps more than theoretically should apply with precision to a single business or part of a single business described with particularity.

PN34

Nor does it go to, as I understand it, to the description in the statutory declarations of the single business in response to the question which is part of the normal questionnaire and I think there the answers were air freight, name of place of business Patrick Cargo, address or place of work at which the business is carried out, and then a list of four locations. Service Road, Melbourne Airport, Victoria, 3045; Link Road, Mascot, New South Wales, post code 2020; Forest Street Brisbane Airport, Queensland, 4007 and Lancaster Road, Darwin Airport, Northern Territory, 0820.

PN35

Then both statutory declarations say that does this agreement imply to whole or part of a single business and in bold on the Patrick statutory declaration there is a reference to whole and on the TWU application there is a little box that is crossed out and that seems to indicate that it is the whole of a single business.

PN36

My question - and I won't take you to the terms so far as one can establish them of the application clause of the agreement because I think it is a little bit more subject to conjecture but 3.1 perhaps read in conjunction with some other provision. With that preamble my question goes to whether there was in the proceeding before Commissioner Raffaelli any fleshing out of that aspect of the application of the agreement or the identity of the single business, in particular can the addresses or place of work, perhaps the work places, be in any way identified with ICH? Or was ICH always treated as a going concern that everybody knew what it meant that it didn't necessarily need to be linked back to the application of the agreement or to the statutory declarations that describe what the single business is or was?

PN37

MR REITANO: There was certainly the latter, your Honour, but there was evidence putting aside submissions that were made by the respondent in the appeal, that is Patricks, that there was also evidence from Mr Luttershmidt. I don't have the precise reference other than to say that Mr Luttershmidt's evidence was consistent with everyone presuming that what was going over was the business that was being, for want of a better phrase, held in trust by the Administrator of Ansett and who was trying to flog the market. That's all that was going over. A series of questions were put to Mr Luttershmidt. People who started work today if you looked at them next Thursday it would look all but the same and things like that.

PN38

MUNRO J: Very well. If we read Mr Luttershmidt's evidence and speaking for myself I haven't but one will find that there is some linkage that would perhaps at least justify the inference that the four places referred to in the statutory declaration are in fact part of an existing set of premises, either leased to or in some way associated with ICH.

PN39

MR REITANO: Certainly that's my recollection as to the basis on which the evidence proceeded.

PN40

MUNRO J: Yes. Perhaps if that's not the case we can be corrected by whoever needs to - yes. That includes Darwin, does it?

PN41
MR REITANO: Yes. Mr Luttershmidt refers to the locations but only the locations at PN572. The question he's asked is probably a little unhelpful:

PN42

At which sites will it commence operations?---The sites I mentioned earlier.

PN43

being Darwin, Brisbane, Sydney and Melbourne.

PN44

MUNRO J: Well, perhaps on the same theme in the body of the agreement itself, previous agreements rescinded and/or varied, 5.2 envisages that:

PN45

The agreement replaces and rescinds any other agreement certified or not, written or unwritten, which applied in any other company prior to the commencement of this agreement, and previously regulated the terms and conditions of employment of employees to whom this agreement now applies.

PN46

What agreements has that provision envisaged?

PN47

MR REITANO: I think it was fair to say that there was no development of that in the evidence in the proceedings before Commissioner Raffaelli. I don't think Mr Luttershmidt was asked any questions about that either. If he was, he didn't know. It wasn't something that was of concern to him, as I recall.

PN48

There was some questioning about the Ansett redundancy payments and the like, and the question I think that the Federal Government's scheme would only meet the TCR requirements and yet Ansett employees had an entitlement to a much more beneficial redundancy payment, and there was some reference to that agreement but not in respect of clause 5.2. That was rather in respect of the operation of schedule 3 to the agreement.

PN49

MUNRO J: Yes. So there was no indication that there were any specific agreements envisaged upon which clause 5 would operate?

PN50

MR REITANO: No. Not as far as I can recall, your Honour.

PN51

HIS HONOUR: Because I think finally in this context, and it's more a matter of drawing attention to it, clause 7, Intent, appears to spell out a bid to acquire Ansett International ICH as part of the substantive provision of the agreement.

PN52

MR REITANO: Yes. Could I just give your Honour another reference. I gave an earlier one. Once again I think there are others, but this one is one that we've been able to find quickly. Paragraph number 556, Mr Luttershmidt is asked:

PN53

In your current position what is the proposed management structure under you for Patrick Cargo?---Beneath myself there's ...(reads)... Darwin, Brisbane, Sydney and Melbourne from Monday.

PN54

MUNRO J: Yes, that ceases the interruption.

PN55

MR REITANO: I think in summary the answer to your Honour's inquiry is that no one proceeded under any different apprehension than as is evident from the written submissions of all parties in the appeal and the submissions below, that what was happening here was that Ansett was selling its business, as I said lock, stock and barrel, via the Administrator to Patricks, and Patricks was, as from Monday as Luttershmidt said, going to operate that very same business in the ports that are identified, in the similar way that's identified throughout Mr Luttershmidt's evidence with questions such as:

PN56

If I saw someone doing the work today, and I saw them doing it next week, would anything be different? Answer: No.

PN57

The entire presumed basis of the proceedings going forward was that there was simply a sale of the existing business, and no one ever quarrelled with that proposition.

PN58

I was dealing with Mr Watson's submission on the logical tension between suggesting that there was a new business in some way, either being established or proposing to be established. And what I then wanted to do was to simply reiterate what was put below and what is dealt with in our written submissions, and that is this, that section 170LL as it were creates the exception to democracy, and creates the exception to the operation of the valid majority provisions that would otherwise operate in the context of a section 170LJ agreement or a section 170LK agreement.

PN59

And our fundamental submission before the Commissioner and on appeal is that the section should be regarded as being something that is exceptional. A question was fielded by the Commissioner during submissions below in which he put the very proposition that what you are suggesting is that this section, section 170LL, is confined to the situation where one has a nice, green, open pasture and a business that's being developed in the middle of it; and we said confidently, and we say on appeal confidently, yes, it is confined to that situation.

PN60

This is not that situation. That is not a situation where Patricks is going out and buying boats or planes or whatever it is to operate a cargo business. It's not a situation where it's buying desks and computers and the like to establish a cargo business. This is a situation where literally the football is being passed and henceforth the football, being the business, will be operated by Patricks and not by Ansett, and in no way can that be said to be the establishment of anything; let alone anything new. And we say that there are powerful policy considerations that we've developed in the written submissions that justify such a construction of section 170LL.

PN61

In particular we refer to the transmission provisions which are usefully said in the respondent's submissions at paragraph 45 to have nothing to do with it, which applied to the transmission of a business, and what we've said in our written submissions is that the settled system of industrial regulation that's applicable to a particular business is not with respect either to be disturbed by sweetheart deals between particular organisations and particular employers except in circumstances where there truly is no settled system of industrial regulation. And section 170LL then has work to do.

PN62

Nor is the rights of people, of a valid majority of workers under section 170LJ or LK likely to be interfered with by recourse to section 170LL and sweetheart deals between organisations and employers where there is truly no new business, or where there is truly nothing that is being established, or proposing to be established. And we say that the policy arguments around the whole structure of the Act, bearing in mind the objects and the like, support such a limited operation for section 170LL.

PN63

True it is in large numbers of cases that come before this Commission, and some of which are referred to by my learned friend, Mr Watson, where the Commission is asked to certify agreements under section 170LL. True it is that many of those have been certified, and true it is that if our argument finds favour with the Commission the world may be different.

PN64

That doesn't take one away from what the Act actually says and nor does it in any way in our submission become persuasive in circumstances where in all of those decisions there is no contradictor. No one has come along, none of the decision that my learned friend points to, none of them have come along and said, well hang on a minute just think about what we are doing under 170LL and whether there is power.

PN65

Could I then finally deal with in respect of what I want to say about the respondent's submissions, finally deal with the submission that is made in paragraphs 43 and 44 and one will see littered not only in these paragraphs but elsewhere throughout the submissions of the respondent, one will see littered the word "acquisition" or "sale and purchase" or "transfer" and in paragraph 43 it is said that:

PN66

The acquisition was a separate legal process ...(reads)... ought take into account.

PN67

A submission with which we concur. The construction sought but the appellants would mean that the validity or otherwise of the agreement would depend on the acquisition of the business, a future event that is yet to be determined. Well with respect in circumstances where what was being acquired and what was being proposed to be acquired at all times was the business. That does no violence to the terms of the Act and in particular 170LL(1)(a). Once it is conceded that what was being done was the acquisition of the business rather than the establishment of a business the argument ceases there in our respectful submission and paragraph 43 does no more than really highlight why that is so.

PN68

It is true and we conceded that if what was being proposed was the establishment of a business by Patrick Cargo the establishment of a new business then our argument falters. But what is conceded here is that there is a mere acquisition and that is what is said all through. Frankly, openly and appropriately all through the respondent's case is what is going on is the acquisition of an existing know, identifiable business. In the written submissions we have developed the contention that was rejected by Commissioner Raffaelli but the word "new" perhaps principally because it appears before the word "business" qualifies the word "business" and not the phrase "business that the employer" and we say to read it any other way is to render the word "new" otiose.

PN69

That is that the section could be quite sensibly be read as, as Commissioner Raffaelli in his decision suggests it should be: The single business is a business that the employer proposes to establish or is establishing. In our respectful submission that can't be a proper reading because it simply gives no work for the word "new" to do. If it pleases the Commission, other than what we have said in the written submissions those are the submissions we wish to make. We say that the words "Greenfields Agreement", that the terms of section 170LL in the scheme of the Act are consistent with the construction for which we contend, we that if that construction is correct Commissioner Raffaelli had no jurisdiction to certify the agreement and his decision and order so certifying the agreement should be quashed.

PN70

HIS HONOUR: Yes thank you, Mr Reitano. Mr Watson?

PN71

MR WATSON: Thank you, your Honour. We rely on the written submissions that have been filed in this matter and we only wish to briefly make some oral submissions covering the matters that my learned friend has dealt with today and we really want to confine our submissions to what my learned friend has described as the principle issue between the parties and we do agree with him to this extent that the determination of that question must fundamentally arise from a construction of the relevant provision of the Act, namely section 170LL. We will be making some submissions about that as well as what we say is guidance as to the policy of the Act gleaned from the provisions of the Act in a broader sense.

PN72

But we say that when one looks at the provisions of section 170LL it is clear that my learned friend's submissions cannot be sustained. The provision enables various types of agreements to be made in certain events and the important one we are talking about here is section 170LL(1)(a) namely whether a single business, the name of a single business covered by the agreement is a new business that the employer proposes to establish or is establishing when the agreement is to be made. Now we say that that is a provision which must be read in accordance with the words used in the section in an ordinary common sense manner and we say with respect that the construction proposed by the appellant in this matter really adopt a very technical and unrealistic interpretation of those provisions in a way which seeks to read down what clearly on its face covers the circumstances of the matter that was before the Commission.

PN73

We say that what is being contemplated in that provision is the notion of a new business being established or proposed to be established and in that situation in circumstances where no employees had at the time of the agreement been engaged and the provision allows for an agreement to be made and be certified under the Act. We say that taken in the context of a common sense view of establishing a business it can readily be seen that an employer can establish a business in any number of different ways. Usually it is not by way of spontaneous combustion, usually there is in establishing a business an employer needs to make an investment of one sort or another in assets which constitute the business and this may take a number of different forms and the possibilities are really infinite as to how a business might be established but invariably it does involve some form of investment, the purchase of assets and the establishment of a going concern by that employer.

PN74

Now we say that the section merely contemplates that sort of situation, the raft of different types of situations which might fall within that description and we say that whether the assets which are purchased come from someone else's business or they constitute some or all of one or any number of different other businesses is really beside the point. The fundamental point is true, that the employer is establishing a new business for itself.

PN75

We say that to read these provisions down in the way that is submitted by my learned friend so that one must sever from any consideration with an employer establishing a business, a notion that some or all of the assets in a business have come from someone else's business, that really is an artificial notion quite remote from commercial reality and a construction which we submit could not possibly have been in contemplation in the enactment of section 170LL.

PN76

Now we say that when one looks at the words in section 170LL(1)(A), it is abundantly clear that attention is to be directed to what it is, what is the employer establishing. If it is establishing a new business for itself then that provision is clearly made out. My learned friend put an argument of construction that the word "new" is otiose. If the construction for which we continue is adopted we submit that that is not true.

PN77

The paragraph should be read as a whole we submit and the notion is whether the single business is a new business that the employer proposes to establish or is establishing as distinct from a business that the employer has already established and is operating. If it has established a business already, is operating a business then that is not a circumstance which falls within the general description.

PN78

We say that the words are abundantly clear and the overly technical approach of reading something into the word "new" which suggests that the assets in the new business have no precedent in any other business or that there is some distinction to be made between different ways in which an employer establishes a business. Depending on what brings to bear and the nature of the investments really is an artificial and technical approach which really is not open on the language and the section itself.

PN79

We also rely on our submissions on the scheme of the Act. We note for example that the object of the relevant division of the Act or part 6B of division 1 is to facilitate the making and certifying by the commission of certain agreements, particularly at the level of a single business or part of a single business. We say that that object lends support for the notion that these provisions are not to be read down so as to exclude certain classes of agreement from being able to be certified.

PN80

Indeed the entire scheme of the Act is to offer a range of different sorts of agreements available to parties. Parties including employees, employers and registered organisations. To make agreements and have them certified with the legal consequences which follow are pursuant to provisions of the Act. We note that the scheme of the Act does not place any priority over any particular form of agreement compared to another in a general sense.

PN81

However, there is section 170LJ(4) that is a provision which says that an agreement must not be made under section 170LJ if it is able to be made under section 170LL. That provision appears to contemplate the possibility of an overlap between circumstances which may justify an agreement under section 170LJ and an agreement under section 170LL and provides that in that circumstance a section 170LL is to be utilised.

PN82

Now we say therefore, that the scheme of the Act really implies an intention to be comprehensive in making available agreements or provisions to certify various forms of agreements. The scheme of the Act is not consistent with the notion of there being gaps through which certain agreements would fall through and be incapable of certification. The submissions of the appellants in this matter are to the effect that there are gaps and that the particular agreement that has been struck is incapable of being certified under the provisions of the Act.

PN83

We say that that is inconsistent with the scheme of the Act and is not a conclusion which the commission could find is consistent with the policy or scheme of the Act. My learned friend did attempt to refer to certain provisions of the Act and construct what said was a policy of consideration in favour of the narrow interpretation proposed in his submissions. He put it in terms of where agreements might be transmitted they are not to be disturbed by sweetheart deals except in the case of a truly new business, one that starts from the middle of a green paddock or however one relates that to real commercial situations.

PN84

We say that those policy considerations cannot effect the wording of the Act and are indeed inconsistent with the provisions of the Act itself and the scheme of the Act, particularly the notion that the provisions of the Act are intended to provide various means by which agreements can be certified under the Act and that's something far more substantial than what has been contended for in this matter, would be required in order to establish than an agreement cannot be certified.

PN85

An example of such a decision, such a circumstance indeed, was found in the CFMEU case where the Federal Court found that an agreement purportedly made under section 170LK of the Act prior to the commencement of employment was not an agreement which was available to be certified under the Act. One can readily understand the logic of that decision in circumstances where there are provisions permitting agreements to be made between registered organisations and employers and the majority of employees and employers, and prior to the commencement of employment only agreements between an employer and a registered organisation.

PN86

One can readily see that in the circumstances of that particular scheme, that the notion of an agreement between an employer and a majority of employees prior to the commencement of employment, was not one contemplated by either of those alternatives. But in doing so and dealing with that particular provision, the Federal Court referred specifically to the exclusion of a Greenfields agreement such as was the subject of this particular matter. In doing so, accepted that agreements can be made pursuant to that provision with a registered organisation.

PN87

One could refer to policy reasons why the situation might be different between an agreement with a registered organisation on the one hand which does involve a representative nature, and an agreement with a majority of employees on the other which ordinarily does not. One can therefore see a logic in the scheme of the Act which supports, we say, completely the construction of the Act to which we contend in this matter.

PN88

Can I mention just briefly, arising from the question of your Honour, the presiding judge, concerning the scope of the agreement. It does appear to us that ascertaining the scope of the agreement, the nature of a single business, does require a consideration of a number of provisions of the agreement, and your Honour mentioned clause 3.1 read in conjunction with some other provisions. We say that those other provisions would include clause 3.3 and 3.4. Clause 3.3 referring to both the type of operations and geographic locations. 3.1 by reference perhaps a little inelegantly, to clause 3.4 to the employees of the company in the operations at the locations mentioned, which are covered by the agreement and therefore describe the single business or part thereof that is covered by this agreement. We say that there is nothing unusual or irregular about that motion although one obviously does need to look at a number of different provisions in order to ascertain its precise scope.

PN89

Can we say by way of loose ends, of the 23 appellants that appear to remain in this appeal, on our instructions, two of the individuals concerned are not employed by my client and therefore are not covered by a certified agreement, certified in this matter. We put our submissions on the question of competence. We do repeat that nothing that has been put to you today in any or in any of the other documentation, indicates the nature of the grievance of the employees who are covered or any notion of what their particular position or other circumstances have been affected adversely or otherwise, by the making of this agreement.

PN90

Simply it seems to us to be something which is asserted by reference to the intervention before the Commissioner, and continued without any real elaboration of the nature in which employees of my client have been aggrieved by the certification of the agreement. Having said that, we do acknowledge that the Federal Court and the Commission has tended to adopt a broad view as to what constitutes an aggrieved party for the purposes of appeals in similar sort of circumstances.

PN91

It is not our intention to deal any further with any of the other matters. For the reasons outlined in our written submissions and elaborated briefly today, we submit with respect, that the appellants have not established a basis for leave to appeal being granted. It is not sufficient simply to say that the appellant makes allegations about jurisdiction, therefore jurisdiction being an important matter leave to appeal should be granted. There needs to be the establishment of substance to the arguments advanced or some other basis to establish leave being granted and we say the appellants have fallen well short of that. In the alternative, we submit, that if leave is granted, then the appeal ought to be dismissed for the reasons outlined in the written submissions.

PN92

MUNRO J: Mr Watson, before you sit down at paragraph 56, you've referred to the explanatory memorandum section 170LL. There was an antecedent of section 170LL was there not, in almost identical terms or am I mistaken?

PN93

MR WATSON: There was an antecedent, but not in almost identical terms. Your Honour, there was a provision formerly in section 170MC.

PN94

MUNRO J: That's the '93 Act?

PN95

MR WATSON: It's in the '98 Act but was inserted in the '93 Reform Act, your Honour - this is the provision that dealt with certification of agreements generally. It was not an express alternative type of agreement as section 170LL is at the moment, but it provided that section 170MC(3) said certain paragraphs, namely requirements for certification as to whether there were reasonable steps taken to consult employees who were to be covered by the agreement, and reasonable steps to inform employees about the agreement explaining terms and those sort of other obligations.

PN96

Those requirements for certification did not apply in the case of what was described as:

PN97

If the Commission was satisfied that (a) the agreement applies only to a new business project or undertaking, and (b) when the application ...(reads)... in connection with the business project or undertaking.

PN98

So your Honour is correct in observing that the words had some background but in a different context in terms of the test for certification.

PN99

MUNRO J: So the then Act can refer to other Greenfield sites or Greenfields Agreement?

PN100

MR WATSON: That is correct, your Honour. Part of that history should be explained further in that what we have set out in paragraph 56 is the explanatory memorandum in relation to the Bill as it was first introduced into Parliament. When that Bill was introduced into Parliament there were other provisions, other requirements. Particularly a requirement to gain the approval of employees after employment commenced for a Greenfield Agreements. Those provisions were never enacted in that form and changes were made to the Bill when it was before Parliament. There were supplementary explanatory memoranda issued which we have looked at and which we don't deal with those changes or elaborate on the matters further.

PN101

It appears that what we have quoted is the extent of a useful guidance that can be gained by reference to all available information, all explanatory memoranda.

PN102

MUNRO J: The expression Greenfields Agreement which is not from the reference you have given to 170LJ(4) is not only a matter of heading, it's an icon for 170LL within the body of the Act, has not been the subject by the statutory definition or interpretation.

PN103

MR WATSON: Not on our research, your Honour.

PN104

MUNRO J: Yes, there is something that is troubling me about that, Mr Watson, I thought there was a statutory version of it or at least an antecedent where some exception was made for Greenfields sites or Greenfields Agreement in contrast with Brownfields. Brownfields wasn't used in the Act but Greenfields I thought was. But you think not, prior to '96. Perhaps it was just something Mr Kelty did.

PN105

MR WATSON: Certainly he was no doubt mentioned numerous times in that context, your Honour. It may have had some earlier history before the '93 Act but it's not something we've gone back and searched every Act. Certainly my recollection is that if it was something which involved a notion of an industrial practice, and would have been a type of agreement able to be certified under previous provisions without a special enactment or a Greenfields Agreement. But only with the '96 Act was there an express provision of the Act dealing with Greenfields Agreements as such using that title. If the Commission pleases those are our submissions.

PN106

MUNRO J: Mr Duffin?

PN107

MR DUFFIN: If the Commission pleases I do not intend to go very far beyond our written submissions either in this matter. The only point that I wish to draw out perhaps which Mr Watson hasn't referred to in his submissions, is in our paragraph 36 of our submissions what we say is that the starting point clearly for all matters of construction, statutory interpretation, must be the very words of the section themselves. If one reads the words as my friend Mr Reitano did at first instance, in a compendious manner, the sentence reads:

PN108

If the single business is a new business that the employer proposes to establish or is establishing when the agreement is to be made.

PN109

What we say is that if you insert the words, Patrick Cargo, where the employer is there, it makes the whole sentence quite clear. Which is that the single business is a new business that Patrick Cargo proposes to establish. That is precisely what has occurred in this instance. Patrick Cargo has proposed to establish a new business which it has never previously operated. That indeed was the approach that the Commissioner at first instance took.

PN110

The alternative way of reading it which my friend would have you adopt is what we say is the effect of paragraph 36 of our submissions which is that the only way of reading that is to say, the new business must be something that neither this employer nor any other employer at any stage has ever operated. If that be right then surely those words would have been inserted into the section. As it is the words presently stand they are a collective section and the nature of them is that they focus on the new business is to be correlated with that employer, not any other employer or at any other stage.

PN111

That's really the only other point that we wish to bring out from our written submissions. There hasn't really been anything further that Mr Reitano has added today which we feel is necessary to address on this appeal.

PN112

MUNRO J: Yes, thank you, Mr Duffin. Mr Reitano

PN113

MR REITANO: Your Honour, could I deal firstly with a matter that arose from some questions your Honour asked me when I was on my feet. There is a couple of references that we found in the time that we've had to the issue that your Honour was asking about the identity of the business if I can put it that way. Neither of which are particularly telling but we provide the references. Paragraph number 786 and 790. There is an acceptance in Mr Luttershmidt's evidence there that if the business isn't acquired the business will continue going in the hands of the Administrator because it was said in the evidence that there was some deadline that the world would end next Monday unless this agreement was certified by then.

PN114

Mr Luttershmidt agreed with the proposition that the business - or in fact he was the one who suggested that if the business wasn't purchased on Monday it would continue on as a concern of the Administrator. And that's at paragraph number 790.

PN115

I don't wish to be very long in reply. There's no a great deal that hasn't been said. Can I say this: Mr Watson a number of times fell into the trap of putting words into section 170LL that aren't there. For example he said, "Here is an employer that is establishing a new business for itself". Now, that once again invites in our submission the substance of the question, and that is that the section simply doesn't say that. The section speaks of a new business, and speaks of establishing, or proposed to be established.

PN116

Secondly, section 170LJ(4) sits neatly, we say, within the submissions that we've made not only because it gives power to the submission we made as to the meaning of Greenfields, by its reference there, but also because it supports the proposition that we have advanced that a valid majority is an important criteria for the certification of agreements. And the reason section 170LJ(4) is there is because it's essentially saying: don't shonk a valid majority under this section if it should be certified as a Greenfields agreement under section 170LL, which was the real point of the discussion of the Full Court of the Federal Court in Gordonstone.

PN117

Finally, can we say this, that the grievance that my clients pressed before the Commission arises because if nothing else the fact that clause 2 of the agreement that was certified purports to bind them in the same way, I think, in the Tweed Valley judgment and in the same way as is contemplated in Arnell, and moreover in precisely the same way in the Electrolux decision that I gave to the Commission earlier. If it please the Commission, those are our submissions.

PN118

MUNRO J: Very well. The Commission will adjourn for a short time.

SHORT ADJOURNMENT [3.34pm]

RESUMES [4.45pm]

PN119

MUNRO J: We apologise for the delay for what was not so short an adjournment, however we have reached a unanimous decision and we thought it appropriate to extend the time of the adjournment. We dismiss the application to strike out the appeal. We hold that the appeal is competent insofar as it goes to jurisdiction. It raises a ground that the Commissioner erred in deciding that he had jurisdiction to certify the agreement and the appeal therefore is competent under paragraph 45(1)(g).

PN120

The matter of the appeal goes to a point of jurisdiction of some substance on a point which we find is reasonably arguable. In the circumstances we are satisfied that we should grant leave to appeal on the basis that the matter of the appeal is of such importance that it is in the public interest that leave to appeal be granted. Accordingly we grant leave to appeal.

PN121

We are satisfied on the hearing of the appeal that an error as to a finding of jurisdictional fact is established. That error is constituted by the construction and application of subsection 170LL(1). The subsection provides if:

PN122

(a) the single business is a new business that the employer proposes to establish, or is establishing when the agreement is to be made; and

PN123

(b) the agreement is to be made before the employment of any of the persons who will be necessary for the normal operation of the business or part, and whose employment will be subject to the agreement, and the employer may make the agreement with one or more organisations of employees meeting the requirements of subsection (2).

PN124

That provision we note links with section 170LL in relation to the certification of agreements of particular kinds and the requirement for the agreement to be made in accordance with in this instance section 170LL. In the decision subject to appeal Commissioner Raffaelli determined an objection against the existence of jurisdiction to certify the relevant agreement by applying the view that, and we quote:

PN125

It will be sufficient that the business to be established is new for that corporation. It will not be relevant whether a structure previously existed at a particular site from which business may be carried out or that persons worked there for another company.

PN126

We consider that that statement reflects both an error of principle and a misapplication of subsection 170LL(1). That subsection requires, or required in the circumstances that arose a finding as to whether or not the single business to which the agreement proposed for certification applied was or was not in fact a, quote:

PN127

...new business that the employer proposes to establish, or is establishing when the agreement is to be made.

PN128

It is not necessary for us here to parse that expression in detail. It is sufficient that it is clear that the expression requires a consideration of the objective character and identity of the business to which the agreement will apply. We do not need to pronounce generally upon what is or is not a Greenfields agreement. However the novelty of the business operation to a particular employer may be a relevant consideration to be taken into account, but it can only be one of a number of relevant considerations that would generally need to be taken into account.

PN129

In this instance it was manifest that at the time the agreement was being made the relevant business was an existing business being conducted by the Administrator on behalf of Ansett. There is little room for doubt that Patrick was acquiring, and did acquire the business of ICH, a part of the business of Ansett, as a going concern. The business to be so acquired appears in fact to have been the whole of the single business to which the agreement to be certified was declared to apply by Patrick.

PN130

We have not found it necessary to address the detail of each of the decisions in the Commission to which the parties made reference. We note that a number of those decisions must be taken to turn upon the facts of the particular case. They are single instance decisions about a jurisdictional fact as to which no issue appears to have been raised.

PN131

On the facts of this case we are satisfied that the decision to certify the agreement was made without jurisdiction. The single business to which the agreement was to apply was not a new business that the employer proposed to establish. In the circumstances the agreement could not be made under section 170LL.

PN132

We grant leave to appeal, and uphold the appeal. We set aside the certification of the agreement. We will publish the reasons that are stated on transcript in due course.

ADJOURNED INDEFINITELY [4.52pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #R1 COPY OF LIST OF 23 NAMED APPELLANTS FOR WHOM MR REITANO ACTS PN4
EXHIBIT #R2 APPELLANT'S WRITTEN SUBMISSIONS PN9
EXHIBIT #W1 WRITTEN SUBMISSIONS ON BEHALF OF PATRICK CARGO PN9
EXHIBIT #D1 WRITTEN SUBMISSIONS ON BEHALF OF THE TRANSPORT WORKERS' UNION PN9