C2003/5355, Transcript of Proceedings [2003] AIRCTrans 4166 (19 September 2003)

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TRANSCRIPT OF PROCEEDINGS


O/N 4572
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

JUSTICE GIUDICE, President

C2003/5355

APPEAL UNDER SECTION 45 OF THE ACT
BY CATHOLIC CHURCH OF THE DIOCESE
OF DARWIN PROPERTY TRUST INC AGAINST
THE DECISION AND ORDER OF SENIOR
DEPUTY PRESIDENT WATSON AT MELBOURNE
ON 25 AUGUST IN BP2003/4047

MELBOURNE

10.09 AM, THURSDAY, 4 SEPTEMBER 2003

PN1

MR M. McDONALD: I seek leave to appear on behalf of the appellant, which is the applicant for the stay order.

PN2

MR W. FRIEND: I seek leave to appear on behalf of the union.

PN3

JUSTICE GIUDICE: Mr McDonald, I have the decision but not much else, so if there are other materials that you are going to refer me to you will need to provide copies of - - -

PN4

MR McDONALD: I have done that.

PN5

JUSTICE GIUDICE: Yes.

PN6

MR McDONALD: I anticipated that was the position, your Honour, and can I indicate in advance to the extent that I will be providing you with any documentary material, it is material which is extracted from the exhibits which were tendered in the proceedings.

PN7

JUSTICE GIUDICE: Yes, thank you.

PN8

MR McDONALD: There is before the Commission an application for a stay of the decision of Senior Deputy President Watson of 25 August 2003 in which his Honour terminated a bargaining period which was initiated by the Independent Education Union of Australia on 27 September 2002, seeking to make an agreement under division 3 of part VIB of the Act with the Catholic Church of the Diocese of Darwin Property Trust Incorporated in respect of persons employed by independent Catholic schools under the auspices of the Catholic Education Office.

PN9

His Honour terminated that bargaining period pursuant to section 170MW(7), which is the provision of the Workplace Relations Act which confers discrete powers of termination in respect of employees broadly speaking regulated by paid rates awards. Section 170MW(7) contains three statutory preconditions to the termination of a bargaining period and in respect of those three preconditions his Honour found, firstly, that the kind of employees for the purposes of section 170MW(7)(a) are school employees within independent Catholic schools in the Northern Territory. That finding is at paragraph 43 of his Honour's decision.

PN10

Secondly, he found for the purposes of section 170MW(7)(a) and (b) the relevant award was the Non-Government Schools Staff Northern Territory Award 1986, which I will refer to as the 1986 award, and he found that that award was operating immediately prior to 31 December 1996 when section 170MW(7) became operative. That finding is at paragraph 49. He found that the 1986 award was a paid rates award, that finding is at paragraph 95, and he found that there was no reasonable prospect of agreement being reached under division 2 or 3 and that finding is at paragraphs 99 and 100.

PN11

The notice of appeal which has been filed challenges each of those findings. As to the kind of employees the appellant submitted before Senior Deputy President Watson that the kind of employees were school employees in independent schools generally in the Northern Territory, not simply confined to Catholic independent schools, and if so characterised those kind of employees could not be regarded as having had their wages and conditions customarily determined by a paid rates award because of the evidence before the Commission that the non-Catholic independent schools were, prior to 1996, award free.

PN12

For the purposes of the stay application, your Honour, I am content to proceed on the basis that you assume that Senior Deputy President Watson was correct in his characterisation of the kind of employees as being those employees, school employees in Catholic non-government schools and that assumption then directs attention to the correctness of his Honour's finding that the 1986 award was, prior to 31 December 1996, a paid rates award. The award was - - -

PN13

JUSTICE GIUDICE: So that means that for the purpose of the stay application ground 1(i) is not something that you rely on?

PN14

MR McDONALD: I am not pressing that.

PN15

JUSTICE GIUDICE: For today's - yes.

PN16

MR McDONALD: For the purposes of establishing an arguable case, your Honour, I am content to focus on the correctness of the paid rates ruling.

PN17

JUSTICE GIUDICE: Yes, thank you.

PN18

MR McDONALD: The award, the 1986 award, was made by Commissioner McKenzie in December of 1986. At the time of the making of the award a paid rates award could be made under the extant national wage case principles as a first award under principle 10. At paragraph 59 of his Honour's decision, if I could take you to that, his Honour has set out an extract from the June 1986 national wage case decision in which the Full Bench made reference to the operation of principle 10 in respect of paid rates awards as first awards and you will note at the extract, placitum 1:

PN19

We do not intend principle 10A to allow for the making of a paid rates award otherwise and by consent of the parties. In addition such an award must be practicable. Where ...(reads)... that the integrity of the paid rates award will be preserved.

PN20

Now can I hand to your Honour the transcript of the proceedings before Commissioner McKenzie.

PN21

JUSTICE GIUDICE: There is a definition of paid rates award somewhere, isn't there?

PN22

MR McDONALD: Yes. It is 170LG and it is to be noted that it is a different definition than that which previously prevailed.

PN23

JUSTICE GIUDICE: Yes.

PN24

MR McDONALD: Prior to the present legislation a paid rates award was defined as one which prescribed actual rates of pay, whereas it is a somewhat broader test now under section 170LG.

PN25

JUSTICE GIUDICE: In any event I take it there is no statement that it is a paid rates award?

PN26

MR McDONALD: That is so.

PN27

JUSTICE GIUDICE: So we are in the territory of 170LG(b)?

PN28

MR McDONALD: That is so. But I did wish to direct your attention to the transcript for the sake of confirming that there is no reference in the transcript of proceedings to the award being a paid rates award. No statutory declarations were provided to the Commission. There was reference in Mr Lyons' submissions - this is on page 7 of the transcript. In the second paragraph of Mr Lyons' submissions, he says:

PN29

As my friend, Mr Turnbull, will concur, the document reflects - that is the draft of the award - reflects existing practices in terms of principle 10A apart from one area which, of course, is wages where a small change has been implemented in respect of school assistants. I refer to page 12 of the draft document, sir. Those salaries have been increased at each point by a couple of hundred dollars to bring them up level with the existing Public Service rates.

PN30

Then the next paragraph:

PN31

Other than that, sir, we believe that all the provisions are within the guidelines and principles established by this Commission and accordingly, sir, we would consent to the document.

PN32

Now, we would contend, your Honour, that the reference to compliance with principle 10A is a reference to the established practice that a first award should reflect the existing rates of pay. There is no reference to and no basis, we would say, on which the award made in those circumstances could comply with the observations of the national wage case bench as set out at paragraph 59 of his Honour's decision. Can I take your Honour to paragraph 62?

PN33

JUSTICE GIUDICE: But the principles in '86 provided that in the making of a first paid rates award the rates should be the rates actually being paid, which is not inconsistent with the, what was said about principle 10A.

PN34

MR McDONALD: No.

PN35

JUSTICE GIUDICE: It is not inconsistent.

PN36

MR McDONALD: No, but can I make this submission, your Honour, and this is linked in particularly with his Honour's reasoning at paragraph 62.

PN37

JUSTICE GIUDICE: Yes.

PN38

MR McDONALD: Perhaps can I go to that first. His Honour in paragraph 62 places considerable weight on a finding that the rates contained in the 1986 award corresponded with rates in the Public Sector Teaching Award.

PN39

JUSTICE GIUDICE: Yes.

PN40

MR McDONALD: And he has made a finding that that was a paid rates award. Now, my submission is this, your Honour, consistent with the reasoning of the national wage case bench in 1986 if parties were going to go to the Commission to seek the making of a paid rates award it wasn't something which they should be coy about, they should clearly - the principles and the decision of the national wage case bench envisaged that the parties would put on the record that it was a paid rates award, that they were consenting to it being a paid rates award and that they would file statutory declarations as contemplated by the national wage case decisions and it is not appropriate by reference of inferential considerations such as those alluded to by his Honour in paragraph 62 to - - -

PN41

JUSTICE GIUDICE: It seems to me to be round the other way, Mr McDonald, doesn't it? Whether or not the wage fixing principles were complied with may not really be to the point. If in fact the rates that were set were the actual rates or the rates prescribed by the actual rates, isn't that the important thing? I mean, of course the Commission's principles are important but - - -

PN42

MR McDONALD: Well, your Honour, I am directing myself to the consideration in section 170LG that one has regard to the way in which the Commission has dealt with the award and there is a fairly strong injunction in the 1986 national wage case decision as to how paid rates awards should be treated.

PN43

JUSTICE GIUDICE: Yes, I follow.

PN44

MR McDONALD: I suppose it is the reverse - I am operating on the current definition rather than the definition that was in place at the time where one does have regard to how it has been treated and my submission is that the treatment of the award-making process in '86, the treatment of the award was inconsistent with the Commission and the parties regarding it as a paid rates award.

PN45

JUSTICE GIUDICE: But do you submit that the finding that the rates that were fixed were actual rates is wrong?

PN46

MR McDONALD: I don't make that submission, your Honour, but the fact that the rates which were included into the award were actual rates doesn't preclude the award operating as a minimum rates award. The actual rates would simply become the floor and we will submit when one has regard to the history of the award subsequently that is precisely what occurred. The rates, albeit they may have been actual rates at that time, became the floor and the award in fact operated as a true minimum rates award for many years after 1986. I will come to that history in due course.

PN47

JUSTICE GIUDICE: Yes.

PN48

MR McDONALD: If I just follow through the history in terms of the treatment of the 1986 award by the Commission in the period up to 1996, there were variations to the award in 1987 and 1988 and, as his Honour finds, the circumstances of those variations shed little light either way as to how the award was characterised. They were regulation award variations if I can put it that way. However, the 1989 variation is of some significance because of the specific consideration given by the national wage case bench to the operation of paid rates awards.

PN49

I have extracted from a number of the National Wage case decisions starting in June '86 the relevant passages that we rely on. I wonder if I could just hand up a bundle of the extracted pages that I would like to take you to. The first decision is the 1986 decision. I needn't trouble you with that because it simply contains the passage in paragraph 59 that his Honour referred to. However, the next decision, the 1989 August national wage case decision reported in 30 IR 81, at page 96 and 97 of the decision there is reference to the position in respect of paid rates awards and at page 97, at about point 7 or point 8 on the page, the fourth bullet point from the bottom of the page, the Full Bench states:

PN50

Statutory declarations will be required from all parties involved to the effect that the integrity of those awards or agreement will be preserved. If breached paid rates awards should be discontinued and appropriate minimum rates should be prescribed.

PN51

JUSTICE GIUDICE: Is that a reference to new paid rates awards?

PN52

MR McDONALD: I thought it went beyond that. I thought it went to any variation as well, your Honour.

PN53

JUSTICE GIUDICE: I don't see that anywhere.

PN54

MR McDONALD: No. I will just ask my instructing solicitor to have a look at that, your Honour, and perhaps I could come back to that. Now, subject to the question of whether or not that requirement of the statutory declarations extends to a variation of the award, the position at the time of the 1989 variation to the award to give effect to the national wage case decision was that there were no statutory declarations provided to the Commission. In December 1989 the parties - the union and the employer - appeared before the Commission in respect of the application for a three per cent increase in rates contemplated by the decision - just excuse me.

PN55

Could I hand up the transcript of the proceedings in 1989 and you will see from the cover page, page 1, Application by the Northern Territory Independent Schools Staff Association to Vary re Wage Rates, National Wage Case August '89, and Mrs Cooper, who was appearing for the union says - this is about point 3 on page 2:

PN56

We have filed an application for the 3 per cent wage increase under the national wage case. We have had negotiations with our employer and the agreement that we ...(reads)... and integrated salary scale.

PN57

Then over the page, in the middle of the page, Mrs Cooper says:

PN58

I would like also to place this submission in front of you, Commissioner. It is our view of the final outcome, if I may. It does show what ...(reads)... to be for the following so may I submit that?

PN59

And then the Commissioner says:

PN60

Right. If you hand that up we will mark that C1.

PN61

And can I then tender a copy of exhibit C1 or hand up a copy.

PN62

JUSTICE GIUDICE: What was the 1989 decision? Was it two 3 per cents, six months apart, or something?

PN63

MR McDONALD: Under the structural efficiency principle.

PN64

JUSTICE GIUDICE: Yes, thanks.

PN65

MR McDONALD: And I wish to take you to the fourth page of this document under the heading, Union's View of the Final Outcome of Award Restructuring, and you will see the reference there:

PN66

The union's view of the final outcome of award restructuring of the teacher is as follows -

PN67

and then it says -

PN68

The minimum annual rate of salary payable to teachers engaged in the undermentioned classifications shall be set out as follows.

PN69

Now, we submit the relevance of this is that in the context of this award if it was in fact the intention that it be operating as a paid rates award it is entirely inconsistent with that for the union to be putting a document before the Commission as part of the processes of implementing the structural efficiency principle for it to be identifying minimum rates of pay. Of course, what underpins all of this, your Honour, is his Honour's finding at paragraph 55 of his decision that in fact at the - this is the fourth bullet point in paragraph 55, his Honour does make findings as to:

PN70

Some employees were afforded benefits beyond those provided in the award in the form such as special allowances and conditions to teachers in remote Aboriginal schools ...(reads)... to some teachers and reimbursement of study costs.

PN71

So we make the submission that his Honour has made a finding that the award, we say is consistent with the award operating as a minimum rates award. The conduct of the union in the context of the structural efficiency principle exercise was consistent with its view that the award should in fact be operating as a minimum rates award. Can I ask you to turn to paragraph 70 to 72 and at this part of the decision his Honour refers to the outcome of the national benchmark exercise which the actual - the actual rates which were included in the 1986 award as the conclusion of the structural efficiency exercise reflected this national benchmark exercise for teachers.

PN72

His Honour in paragraph 70 refers to part of the proceedings in respect of the application of the benchmark rates in the public sector for the Northern Territory Teaching Service Award and you will see the last few lines of what is extracted there. There is reference to:

PN73

...and it is a rate which can be moved through the national wage principles as a paid rates award to maintain the viability of that rate.

PN74

And then his Honour refers to the Full Bench's approval of the benchmark rates and his Honour says at paragraph 72:

PN75

It is inconceivable that the Commission would have applied national benchmark rates determined to apply to public sector teachers' salaries in various ...(reads)... regarded by the Commission as a paid rates award.

PN76

The reason I refer your Honour to that is to the extent that in paragraph 70 there is specific reference to the rates being varied as paid - consistent with the national wage case principles as a paid rates award to maintain the viability of that rate. It is very significant in my submission that from December 1991 until May 2002 the rates in this award were not varied.

PN77

JUSTICE GIUDICE: The Senior Deputy President's conclusion in paragraph 72 is a fairly powerful one, isn't it? You have got - - -

PN78

MR McDONALD: It is a - - -

PN79

JUSTICE GIUDICE: Well, in the sense that - as I recollect it, the point about the distinction between minimum rates and paid rates was that you didn't really have regard to the market in a minimum rates award.

PN80

MR McDONALD: On paper it is a very powerful conclusion but then what - it is drawn into very stark contrast with the reality of the situation which was that for the next 10 years the award operates as a minimum rates award. The rates aren't adjusted even though from March 1994, between March 1994 and December 1996, section 170UB of the - of what was the 1993 Act - - -

PN81

JUSTICE GIUDICE: Part VIC of the 1993 Act?

PN82

MR McDONALD: Yes. Part VIC contained a statutory mandate that where you had a paid rates award in place that the award was to be maintained as such and that matter was something which was referred to in the August 1994 national wage case decision that I have referred your Honour to. It had a copy at 55 IR 144. At 149 in the second paragraph the Commission said:

PN83

Part VIC provides the Commission with a general discretion to make or vary paid rates awards. The Commission is not to make a paid rates award unless ...(reads)... not maintained the Commission may cancel or appropriately vary the paid rates award.

PN84

We make the submission that in circumstances where there were these significant penal consequences effectively for not maintaining the award as a paid rates award, for the parties not to have varied the rates in the 1986 award for a period in excess of 10 years is entirely inconsistent with the parties acting on the basis that it was a paid rates award. The award, with respect, operated during that period as a true minimum rates award underpinning certified agreements.

PN85

I wondered if I might hand up a copy of the order of Commissioner Eames which was made on 3 May 2002 and this is the variation, first time the rates were varied post December '91 to give effect to some five or six safety net review decisions. Furthermore, your Honour, the submissions that I have made as to the way in which the award was operating are reinforced when one has regard to the terms of the first movement in rates provided subsequent to December of 1991 which the vehicle for that was a certified agreement certified under section 170MC of the Act in August 1994. Can I hand that up, please?

PN86

JUSTICE GIUDICE: I am a little bit behind you, Mr McDonald. Commissioner Eames' decision in May 2002 implemented all of the safety net decisions from '94 in one go.

PN87

MR McDONALD: That is right; that is right.

PN88

JUSTICE GIUDICE: And what was the basis on which that was done under the wage fixing principles of that time?

PN89

MR McDONALD: There was a Full - there had been a Full Bench decision - a copy of it is in the file - there had been a Full Bench decision of the Commission which considered the question of whether or not it was possible to make an application which had the effect of bringing an award up to date and the Full Bench determined - - -

PN90

JUSTICE GIUDICE: Concerning, more importantly, the 12 month gaps that were required?

PN91

MR McDONALD: Yes, yes, and the Full Bench held that providing there was consent between the parties and the outcome of the process did not impact on actual rates paid then it was permissible and that was the basis upon which the application was made.

PN92

JUSTICE GIUDICE: Yes. There was no decision, I take it?

PN93

MR McDONALD: I think not. It was simply done by way of a consent order.

PN94

JUSTICE GIUDICE: Yes.

PN95

MR McDONALD: The decision I am referring to of the Full Bench is print T4831, the first award referred to as the Roads Corporation Employees Award 1991, the decision of 20 December 2000 Full Bench on which you were the presiding member.

PN96

JUSTICE GIUDICE: Yes.

PN97

MR McDONALD: I beg your pardon - thank you. My friend very correctly informs me that the document that I have handed you is not a document which was in evidence, however as noted there was a submission put to his Honour - - -

PN98

MR FRIEND: Well, if it wasn't in evidence, your Honour, I don't want it before you on the stay application.

PN99

MR McDONALD: Well, I will - - -

PN100

MR FRIEND: You might have an argument about having it introduced in relation to the appeal. I don't know where it is going but - - -

PN101

MR McDONALD: I am referring to the - there is a submission which was - his Honour notes the submission which was put by the - in his decision his Honour notes the submission which was put by the Catholic Education Office below but the agreements which were made, this is at paragraph 12, sorry, page 12, at point 8 of the page, Regulation of Terms and Conditions Outside the Award, and his Honour notes the submission which was put:

PN102

Enterprise bargaining agreements between the parties specify minimum rates of pay.

PN103

JUSTICE GIUDICE: Sorry, where is that?

PN104

MR McDONALD: On page 12.

PN105

JUSTICE GIUDICE: Page 12.

PN106

MR McDONALD: At page 12 at point 8 there is a heading, Regulation of Terms and Conditions Outside the Award.

PN107

JUSTICE GIUDICE: Yes, thanks.

PN108

MR McDONALD: His Honour here is summarising the submission put on behalf of the CEO and the second bullet point:

PN109

Enterprise bargaining agreements between the parties specify minimum rates of pay.

[10.42am]

PN110

And what I am seeking to put before your Honour is a copy of the 1994 enterprise bargaining agreement and - - -

PN111

JUSTICE GIUDICE: The point is there were agreements.

PN112

MR McDONALD: There were agreements but - - -

PN113

JUSTICE GIUDICE: Is that in dispute, Mr Friend?

PN114

MR FRIEND: No, it is not in dispute, your Honour, but I didn't know where my learned friend was going. If he just wants to make that point in the bullet point - - -

PN115

MR McDONALD: That is all I want to make.

PN116

MR FRIEND: Well, you can rely on the decision of it - - -

PN117

JUSTICE GIUDICE: Yes, thank you.

PN118

MR McDONALD: But I want to ask your Honour to look at page 15 of the document that I have handed you which is the - - -

PN119

MR FRIEND: Your Honour - - -

PN120

MR McDONALD: It is the - is this controversial? It is the - - -

PN121

MR FRIEND: Well, I don't know.

PN122

MR McDONALD: Well, have a look.

PN123

MR FRIEND: It is a stay application, your Honour, and we shouldn't have new evidence introduced on a stay application.

PN124

JUSTICE GIUDICE: Yes, I agree with that; I agree with that.

PN125

MR FRIEND: It takes us completely by surprise. We don't know where it is going or what is happening and that is why I am getting to my feet in this way.

PN126

JUSTICE GIUDICE: Yes. No, look, I agree with that, Mr McDonald, but the point must be for the purpose of today's proceedings a fairly short one, isn't it? That there were enterprise agreements over a period of years which involved wage increases.

PN127

MR McDONALD: Yes, and - - -

PN128

JUSTICE GIUDICE: Is that disputed?

PN129

MR FRIEND: That is not in dispute.

PN130

JUSTICE GIUDICE: No.

PN131

MR McDONALD: All right, and it doesn't appear to be in dispute, your Honour, or his Honour makes no observation to put it in dispute that the enterprise agreements prescribed minimum rates of pay and my submission is - - -

PN132

JUSTICE GIUDICE: Well, I don't know about that.

PN133

MR McDONALD: Well, that - - -

PN134

JUSTICE GIUDICE: I am not going to have regard to that agreement for the purpose of today's proceedings.

PN135

MR McDONALD: Very well.

PN136

JUSTICE GIUDICE: Yes.

PN137

MR McDONALD: I will not pursue that matter. I rely on the fact that - I rely simply on the fact there were agreements and my submission is, particularly in light of the statutory framework between March '94 and December '96, that is consistent with the award operating as a minimum rates award.

PN138

JUSTICE GIUDICE: Yes, and I have noted what you have said about Commissioner Eames' decision.

PN139

MR McDONALD: Yes.

PN140

JUSTICE GIUDICE: The implication being that all of those increases could be put into the award without additional cost.

PN141

MR McDONALD: Yes, your Honour. Now, those are the matters that we wish to rely upon in support of our submission that there is, we submit, a strong arguable case that his Honour was incorrect in concluding that the 1986 award was a paid rates award. There is a further issue raised in the notice of appeal which concerns - we challenge the correctness of his Honour's finding that there was no reasonable prospect of agreement. All I would say in relation to that, your Honour, is that it is clear from his Honour's reasoning in relation to that point that - in paragraph 99 his Honour refers to the fact:

PN142

There is no dispute between the parties at this point in time. Whilst agreement has been reached on a substantial number of matters, that there are four matters remain outstanding.

PN143

And his Honour refers to those four matters. There is substantial agreement been reached. A small number of matters only are outstanding and we make the submission that this case stands in stark contrast to a decision such as that in Yallourn Energy where Commissioner Lewin, with a very eloquent turn of phrase, described the fact that pain and suffering had been the constant companions of the parties during that bargaining period. There is nothing of that ilk which emerges in the material in this case. We submit that there is an, on the face of the material there is an arguable case that his Honour was incorrect in his conclusion at paragraph 99 and 100.

PN144

On the balance of convenience, I submit that the balance of convenience strongly favours the stay order for the reason that if the order of his Honour is not stayed the Commission is obliged by section 170MX to exercise its conciliation and arbitration powers which gives rise to the prospect of arbitral proceedings under section 170MX being rendered nugatory in the event that the appellant were to succeed in its challenge to the termination of the bargaining period. So it is an unscrambling of the egg submission, if I can put it that way, your Honour.

PN145

In circumstances where we submit there is a strong arguable case on the merits of the matter the parties should not be put to the trouble and expense of an arbitration which may be of no practical utility.

PN146

JUSTICE GIUDICE: Well, it may not get to that stage. If you say that there is some reasonable prospect of agreement why should not the Commission be free to carry out the obligation on it under 170MX(2) to attempt to conciliate?

PN147

MR McDONALD: We submit that the termination of the bargaining period has the effect of distorting the whole bargaining process, with respect, for this reason - - -

PN148

JUSTICE GIUDICE: Yes.

PN149

MR McDONALD: - - - that the IEUA as a result of the ruling of his Honour now has before it access to arbitration and where a party has access to arbitration in a bargaining process their inclination - their conduct in that bargaining process and/or indeed when another party is - that is, the employer is confronted with arbitration, the positions which the parties are likely to take in any conciliation is going to be quite different than it would be if they knew that there wasn't the prospect of an arbitrated outcome.

PN150

JUSTICE GIUDICE: Well, people might believe that but if one looks at the decisions under 170MX I suggest there are a range of outcomes and whatever assessments might be subjectively made by parties as to the outcome of arbitration they might be wrong.

PN151

MR McDONALD: Yes, but there is the additional consideration, a very significant one, your Honour, that the union, not surprisingly, in its material in support of the termination of the bargaining period, was emphatic in its position that agreement was not going to be reached, that agreement could not be reached in relation to these four matters. Presumably his Honour has accepted that as being the case. Well, he has accepted. Not presumably; he has accepted that evidence and unless Mr Friend was to make a submission to you that the union now disavowed the position that was put before Senior Deputy President Watson, your Honour should proceed, in my submission, on the basis that further conciliation would unlikely to be productive.

PN152

JUSTICE GIUDICE: Where is the relevant part of the Senior Deputy President's decision about that issue?

PN153

MR McDONALD: Paragraph 99 and 100, particularly paragraph 100. Mr Hall is the union's witness.

PN154

JUSTICE GIUDICE: You see, I don't quite follow your position here, Mr McDonald, or your client's position. Here is a finding that says that within a reasonable period or whatever the precise formulation is agreement can't be reached. You say agreement can be - or at least that conclusion was in error. But you say agreement cannot be reached if arbitration is in prospect. Is that how you put it?

PN155

MR McDONALD: I make these points. Firstly, Dr Griffiths, whose evidence is referred to in paragraph 100, he gave evidence of the preparedness of the CEO to negotiate further in relation to the issues in dispute and that remains the position of the CEO, we are prepared to continue to talk to the union.

PN156

JUSTICE GIUDICE: Yes.

PN157

MR McDONALD: The union has given evidence effectively that they see no prospect of any agreement being reached in relation to the four issues and from that we - implicit in the evidence and the position of the union is that they are not prepared to give ground on the position that they have taken in relation to those four matters.

PN158

JUSTICE GIUDICE: Yes.

PN159

MR McDONALD: Now that those four matters are to be the subject of arbitration, the position of the CEO is, we see, no incentive for them to give any ground even if they are inclined to do so because they have access to arbitration.

PN160

JUSTICE GIUDICE: Well, that may be the view but we know from experience that MX arbitrations take a long time and we also know, as I indicated before, that there are a variety of results. Anyway I suppose people will always make predictions about what they think the outcome will be. Yes, well, I understand, yes.

PN161

MR McDONALD: Those are the submissions. Thank you, your Honour.

PN162

JUSTICE GIUDICE: Mr Friend, at this stage I would like you to address only the balance of convenience.

PN163

MR FRIEND: Thank you, your Honour. I have got a lot to say about serious issue - - -

PN164

JUSTICE GIUDICE: Well - - -

PN165

MR FRIEND: Well, your Honour, I have a great deal to say - - -

PN166

JUSTICE GIUDICE: My view at the moment is that I would be prepared to accept that there was an arguable case. I haven't heard from you on that.

PN167

MR FRIEND: No, your Honour. I have got a lot to say about that.

PN168

JUSTICE GIUDICE: Yes, I know.

PN169

MR FRIEND: Yes.

PN170

JUSTICE GIUDICE: But I am prepared to accept that. But I wouldn't grant a stay unless I was also persuaded in relation to the question of balance of convenience.

PN171

MR FRIEND: Yes.

PN172

JUSTICE GIUDICE: And at the moment I doubt that the balance of convenience does favour a stay.

PN173

MR FRIEND: Yes.

PN174

JUSTICE GIUDICE: So I would like to hear what you say about that.

PN175

MR FRIEND: In relation to the balance of convenience, your Honour, there are a number of things that need to be borne steadily in mind. This bargaining - negotiations in relation to this agreement commenced in May of last year. The bargaining period itself commenced in September. Agreement was reached in respect of most matters, including wage increases, in November of last year. The relevant employees have not had a pay rise since August 2001. It has been a long hard road, your Honour, to get to this point. A stay on the operation of the decision will delay the proceeding of this matter in an orderly way.

PN176

I am instructed, your Honour, that on Monday this matter was set down for conciliation and I have people from the union here who were there and who can give evidence in relation to this, this is a significant factor. The CEO came to that conciliation and said they wouldn't take part in it until after the hearing of the stay application. Now, your Honour, the bargaining period had been terminated. Their position was there was room for agreement, they had things that they could do, and they said they wouldn't take part in conciliation. The union is prepared to take part in conciliation. It has a position and a very strongly held position as set out in the reasons of Senior Deputy President Watson.

PN177

But the response of the CEO was, in effect, to ignore the termination of the bargaining period and the processes of the Act pending this stay application. They didn't lodge an appeal with a great deal of speed - I think it came through on Friday for decision on Monday. There is no reason why it couldn't have been brought on more quickly. They knew the conciliation was coming on. They are not - - -

PN178

JUSTICE GIUDICE: What date was the conciliation notified, as it were?

PN179

MR FRIEND: I will get instructions on that. The day of the decision, your Honour, 25 August.

PN180

JUSTICE GIUDICE: It was part of the - - -

PN181

MR FRIEND: I don't know if it was part of the order - it was part of the order, your Honour. So, your Honour, in effect the CEO come to the Commission having not complied with the Commission's directions in that regard.

PN182

JUSTICE GIUDICE: Just give me a second?

PN183

MR FRIEND: Yes, your Honour. I am told that it is paragraph 108 in the decision but I say that on trust. Yes, your Honour.

PN184

JUSTICE GIUDICE: I see, yes.

PN185

MR FRIEND: Your Honour, it bears some of the hallmarks of another matter your Honour recently determined the stay involving ETRS where the union brought on the appeal within the week but hadn't complied with the order and your Honour found the case strongly arguable but refused to grant the stay on the grounds that the union hadn't complied with the order.

PN186

JUSTICE GIUDICE: Yes.

PN187

MR FRIEND: It really has - it is on all fours with that, your Honour. It is my submission that it would be appropriate to grant no stay and to allow the matter to proceed. We will, however, co-operate, your Honour, in a speedy hearing of the appeal. In fact, my instructions, your Honour, are to seek as speedy a hearing of the appeal as is possible from the Commission but at the same time we - - -

PN188

JUSTICE GIUDICE: Could you hold on a second, Mr Friend?

PN189

MR FRIEND: Yes, your Honour.

PN190

JUSTICE GIUDICE: Yes. Yes, you continue.

PN191

MR FRIEND: At the same time, your Honour, we would want the matters to proceed towards conciliation and, if necessary, arbitration under 170MX in the ordinary course which would in itself ordinarily, in my submission, your Honour, in these circumstances be a relatively quick process. The appeal - your Honour, final submissions in this matter took a morning. There is no reason why the appeal couldn't be dealt with in half a day. We don't want there to be further delay, your Honour. That is our real concern. Further delay in respect of these employees who have been waiting a very long time for wage increases which were agreed last November.

PN192

Now, I think that is what I can say on the balance of convenience, your Honour. As I said I have a good deal to say about the strength of the case but bear in mind your Honour's invitation.

PN193

JUSTICE GIUDICE: Yes. Well, it is not a matter on which at the moment Mr McDonald would have a right of reply because I haven't asked you to address that issue. If you want to address it - - -

PN194

MR FRIEND: No, your Honour, but your Honour said you were against me on that issue.

PN195

JUSTICE GIUDICE: Yes, but if you want to address it by all means do.

PN196

MR FRIEND: Yes.

PN197

JUSTICE GIUDICE: At this stage I would simply like to hear from Mr McDonald on the balance of convenience issue.

PN198

MR FRIEND: As your Honour pleases.

PN199

MR McDONALD: Look, I should have mentioned the fact there was conciliation on Monday. That was remiss of me, your Honour, and it is correct that there was conciliation and the position which Mr Friend puts - I wasn't there - that is not inconsistent with my instructions, that the position taken by the employer was that they had an appeal and a stay application on foot and they wanted to see the outcome of that process before participating in any further conciliation. That is so.

PN200

JUSTICE GIUDICE: Mr McDonald, you heard what I said to Mr Friend about this.

PN201

MR McDONALD: Yes.

PN202

JUSTICE GIUDICE: I am prepared at this stage to concede to you that there is an arguable case in relation to the paid rates point or the paid rates award point but I must say I require quite a bit more convincing that the balance of convenience favours a stay. Do you have anything else to say about that?

PN203

MR McDONALD: Well, can I say this, if your Honour - the first point that I put in relation to the balance of convenience was the prospect of MX arbitration proceedings being rendered nugatory in the event that the appeal is successful. Now, I would concede that if there was a capacity to program an early hearing of the appeal then that concern could be put to one side.

PN204

JUSTICE GIUDICE: Isn't there always the opportunity in this situation for you to at some point in the future say to any Full Bench which might be constituted to deal with the matter, "You should not proceed any further", because the appeal is unresolved or some other reason?

PN205

MR McDONALD: I apprehend that the response might come back from the Full Bench, well, you sought a stay and you were unsuccessful and in circumstances where an order has not been stayed the Commission should proceed in the ordinary way as - - -

PN206

JUSTICE GIUDICE: But at this stage it is not clear that there is going to be any significant inconvenience to the parties because conciliation may be successful. There are any number of scenarios in terms of the time that might be taken either to deal with the appeal or to deal with the MX process. So - - -

PN207

MR McDONALD: Perhaps I can put the submission this way. Your Honour's consideration of the balance of convenience considerations, perhaps the prism through which your Honour considers that issue very much depends on whether or not conciliation is or is not successful. As I stand here now I have to accept your Honour puts to me the proposition, well, there is a prospect that the conciliation may resolve the matter and all your client's concerns will be laid to rest.

PN208

JUSTICE GIUDICE: Including the appeal.

PN209

MR McDONALD: Including the appeal. However, equally, your Honour, Mr Friend has been candid in putting on the record the desire of his client to move things along both through conciliation and arbitration if conciliation is unsuccessful. Now, if it is the point, if the position is reached where conciliation is unsuccessful, and I should say in that respect, your Honour, and this is referred to in the body of the decision, I believe - Senior Deputy President Watson did conciliate with the parties on a number of occasions through, I think, May or June of this year. I think there was some three - I think three conciliation sessions before his Honour which did not resolve the matter.

PN210

Now, if it be the position that conciliation doesn't resolve the matter and then parties are confronted with an arbitration then the concerns that I raise in respect of balance of convenience, in my submission, have considerable force. Now, it may be an option for your Honour to adjourn the stay application with liberty to apply reserved to the applicant or the appellant in the event that the conciliation processes are unsuccessful in which case the first matter that your Honour raises with me in relation to balance of convenience would not be a consideration and the matter could be considered simply by reference to the impact of - what is the impact of a pending MX arbitration on balance of convenience considerations.

PN211

That would be my alternative submission. If your Honour is not minded to grant a stay at this time I would seek an order that the application be adjourned with liberty to apply reserved to the appellant in the event that conciliation is unsuccessful.

PN212

JUSTICE GIUDICE: Yes. All right. Thank you, Mr McDonald. For reasons which I think I have indicated during the exchanges with counsel, but particularly with Mr McDonald, I am not satisfied that the balance of convenience favours a stay of the operation of the order made by the Senior Deputy President on 25 August 2003. To reiterate, I am concerned primarily that any such order might shut off the prospect of conciliation before the Commission pursuant to section 170MX(2) of the Act and I don't intend to elaborate further on the reasons for my decision.

PN213

Mr McDonald has submitted that the matter should or the application for a stay of the order should simply be adjourned with liberty to apply. I don't intend to follow that course. I intend to dismiss the application but I do not, by such decision, intend that the application might not be renewed at some point in the future. Is there anything else before I adjourn? The application is dismissed on that basis and I will now adjourn.

ADJOURNED INDEFINITELY [11.05am]