C2002/4661, Transcript of Proceedings [2003] AIRCTrans 629 (26 February 2003)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114J MELBOURNE Vic 3001)
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TRANSCRIPT OF PROCEEDINGS

O/N VT1622
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER SIMMONDS

C2002/4661
C2002/5210

THE COMMUNITY AND PUBLIC SECTOR
UNION - PSU GROUP, VICTORIAN REGION

and

LMT AUSTRALIA PTY LTD

Notification pursuant to section 99 of the
Act of an industrial dispute re industrial
action by members of the CPSU

THE COMMUNITY AND PUBLIC SECTOR
UNION

and

LMT AUSTRALIA PTY LTD

Application under section 170LW of the Act
for settlement of dispute re wages and
conditions

MELBOURNE

10.15 AM, MONDAY, 10 FEBRUARY 2003

Continued from 30.10.02

PN590

THE COMMISSIONER: There is no changes to appearances since the matter was last before me. The parties have been advised of the decision of the President in relation to the application under section 107, we are clear on that, so the matter is now back before me. Ms Lester?

PN591

MR WATSON: Commissioner, perhaps before my friend starts. There have been some discussions and some correspondence concerning the procedure to be adopted today, and we are not, unfortunately agreed on the way in which the matter should proceed.

PN592

THE COMMISSIONER: So I have to deal with that matter first of all?

PN593

MR WATSON: Yes. Our position, Commissioner, is that we wish to advance a number of arguments as to why the Commission lacks jurisdiction to determine whether my client is bound by the certified agreement, and we wish to advance those arguments, and we say that they are fundamental jurisdictional arguments which go to the heart of the entirety of the rest of the proceedings, and must be determined at the outset.

PN594

Now, we would say therefore that the proper procedure is for us to advance those arguments. It is not a matter in which we intend to leave any evidence on. We do not believe that there is - any of the evidence that has been filed is relevant to these questions, but we say that it is imperative that the Commission determine those issues first.

PN595

THE COMMISSIONER: Can I do that? Don't I have to have a dispute before me about the agreement before the issue of jurisdiction even arises? Otherwise I think it is all - I mean, it just seems to me that the very point you made in the 107 application is probably absolutely correct in terms of the Commission having a power to determine whether or not the agreement applies as an issue on its own. What the Commission has to do is to deal with a dispute and determine whether or not it has jurisdiction to deal with that dispute.

PN596

I mean, it is a bit like that - if I can put it another way - well, probably not very well, but as I apprehend the minority decision in Meter Readers, it was of the view that the question of whether or not there was a transmission of business in the application and agreement of itself was not a matter that was open to the Commission, and, indeed, I am not sure that the majority decision was any different from that, it is just that they had a view about there being a dispute, and then whether the Commission had jurisdiction to deal with that dispute was the issue before it.

PN597

So that I suspect, based on that decision, that a simple finding that there was or was not a transmission of business and that the agreement therefore applies or doesn't apply in the abstract, is not open to the Commission. What is open to the Commission is, is there a dispute between Ms McCallum and Tenix Solutions about the application of the agreement, and do I have jurisdiction to consider that dispute, is the way in which I think I have got to face it, not the way in which you are proposing.

PN598

Because I think it may be that Ms Lester is on all fours with you about the capacity of the Commission to deal with that, what you call a threshold question, in the way in which it is framed.

PN599

MR WATSON: Commissioner, I think what you have said is really consistent with our position. That we have arguments that we wish to develop which says that you cannot proceed to deal with this dispute that has been lodged, or this notice under a dispute settlement procedure in an agreement, and we want to develop those arguments. The reference as to what is the document and what it refers to will be part of the consideration of that issue.

PN600

THE COMMISSIONER: Well, what caused me to intrude was that you said you didn't want to rely on any of the facts. And I would have thought that fundamentally there is an argument that there is a difference between you about the application of the agreement. I think it is in - there is a table C1 in the applicant's contentions of fact and law that I think they would say is a summary of the matters that are in dispute between you.

PN601

MR WATSON: Well, that is part of our argument, Commissioner, as to how it is beyond jurisdiction to purport to establish jurisdiction for an ulterior purpose. We say those matters are a concoction designed to provide an avenue to determine what is the fundamental disagreement between the parties.

PN602

THE COMMISSIONER: Well, how can we get to there without some evidence?

PN603

MR WATSON: Well, because we have got the notice that is there, and we want to say - and we have got the contentions - we want to outline to you why none of that provides a basis for jurisdiction procedure any further to deal with any evidence, that the Commission should not and cannot determine whether there is a transmission of business and whether the agreement applies on any basis whatsoever.

PN604

THE COMMISSIONER: What, that that dispute is some sort of sham, is that what you - - -

PN605

MR WATSON: Yes.

PN606

THE COMMISSIONER: Yes, okay.

PN607

MR WATSON: And, Commissioner, that is part of our preliminary arguments, but it goes far beyond that, and it is independent of - - -

PN608

THE COMMISSIONER: You wouldn't be relying on evidence in relation to that argument that it is a sham. What if the other side says, well, look, we have got evidence that it isn't? Aren't we then into the evidentiary issues?

PN609

MR WATSON: Well, what we are not into is a consideration of whether there is a transmission of business and whether the agreement expires, because we want to argue that you do not have jurisdiction to determine that question one way or the other. We are not into any determination or consideration of any issues in dispute. We say there aren't any because the only issue in dispute has been whether the agreement expires and the parties have fallen over at first base on that question.

PN610

We are in the issue of whether the Commission has jurisdiction to proceed to those later steps at all. And because we want to develop these arguments and they are fundamental to this question, we say we should be allowed the opportunity to do that at the outset. We say that it is the obligation of the Commission to determine those matters as preliminary questions.

PN611

THE COMMISSIONER: I don't argue with that, but it is a question of whether it is - I mean, the obligation may not be there to deal with it as a preliminary matter, the obligation may be there to deal with it, it may not be possible to separate that from the other matters. And clearly the issue must be determined, I don't quarrel with that. It is the question of the circumstances under which it can be. Because as I apprehend what you are saying, and, you know, I don't want to get ahead of you in any sense at all, but it is that in the abstract the Commission hasn't got the jurisdiction to deal with a simple dispute about whether or not the agreement applies to your client. Is that correct?

PN612

MR WATSON: That is part of it, Commissioner, but it is not entirely.

PN613

THE COMMISSIONER: Well, and the bits that hang off that is that the other side have sought to dress up a dispute about the terms of employment of Ms McCallum in order to get that issue resolved, in other words, that that is a sham, and that the only issue that is really before me is whether or not the agreement applies.

PN614

MR WATSON: That is part of it, yes.

PN615

THE COMMISSIONER: Well, I am not quite sure I understand what the other part is then, or other parts are.

PN616

MR WATSON: Well, until we develop the jurisdictional arguments it won't be clear. But that is the point, we say that there is no jurisdiction to proceed any further, and that is the determination of whether the agreement applies, or anything else, and our arguments are directed to this preliminary issue that is very much at the heart of the proceedings.

PN617

THE COMMISSIONER: Well, you say it is at the heart. I mean, I am sure the other side says it is not at the heart. They say that the dispute is about the terms and conditions of Ms McCallum's employment.

PN618

MR WATSON: Well, they can say what they say - - -

PN619

THE COMMISSIONER: Well, just as you can say what you say too.

PN620

MR WATSON: Yes, they can do that.

PN621

THE COMMISSIONER: But it may be we end up being at cross purposes on what you say is a threshold issue, whereas the substantive issue involves a consideration of the sort of factual circumstances that are there.

PN622

MR WATSON: The only factual circumstances that are relevant to the first question are what is the dispute? And they are dealt with in the notice, and they are also dealt with in the contentions. Now, it doesn't matter what sort of dressing up exercise people might undertake here and now, although, you know, it could be that there might be conflicting evidence as to what the issue in dispute is. But we don't wish to call any evidence on that. We wish to rely on the notice that has been filed and the contentions, and we wish to put our arguments.

PN623

I guess we cannot deny the opportunity of the other side, if they wish to, to lead evidence on factual circumstances relevant to the preliminary question. But they can't suddenly go into exhaustive evidence about everything else they want to get to down the track, that would not be permissible. So we say that - - -

PN624

THE COMMISSIONER: Well, on your argument it wouldn't be permissible. Why do you say it wouldn't be permissible?

PN625

MR WATSON: Because it is not confining the evidence to the issue that is before you, and must be, we say, heard and determined as a preliminary question. And it has been made very clear on the authorities that the Commission must determine fundamental jurisdictional issues, those preliminary questions, and must not assume that it has jurisdiction to go further and deal with the matter as if it did have jurisdiction. And I will go to those authorities.

PN626

And we say that that is the very situation that would be involved if my learned friend wants to leave all the evidence till later and do everything that she would in the case in its totality, which we understand is their position, in correspondence to us last week. They wish to have now everything relating to the whole matter, all evidence and all submissions all put in the one big grab bag. Now, we say that that is inappropriate, it is contrary to the authorities which indicate the obligation of the Commission.

PN627

THE COMMISSIONER: I think you probably need to give us those because they are going to want to respond to this, I am sure, and I think - - -

PN628

MR WATSON: Yes, I will go to it. And we also say that it - and I will come back to it - it is not an appropriate exercise of any appropriate time and resources of the Commission and the parties to embark on this, you know, big exercise on the assumption that all of our arguments are going to be dismissed. We say that they should be determined first, if we are correct, we are going to go to all of those things. There is no disadvantage to the other side. If they want to lead some evidence relevant to the jurisdictional question they have that right, but they shouldn't embark on the case in totality.

PN629

And it is made clear, we say, as far as the Commission is concerned, very clearly in a decision of Kirby J in re Boulton v Commission. It is a decision recorded at (1998) 85 IR 468. Commissioner, this was the case where Kirby J referred various matters which ended up being re Pacific Coal to the Full High Court to determine the validity of the award simplification provisions of the processes in the coal industry. So this was the preliminary case which led to that, and there were issues raised by his Honour as to, well, what were the legal issues and what happened in the Commission previously? Were there decisions on these points and the like?

PN630

And I want to refer to paragraph 22, because it sets out an important principle, and I will go to the genesis of that principle. This is in terms of the determination of jurisdictional issues. He says:

PN631

In point of principle it would seem to me that the constitution being part of the law of the land, but if a constitutional challenge to the jurisdiction to the Court or Tribunal is available ...(reads)... the practice of the Commission, if it is now as is described, may need reconsideration.

PN632

And the practice referred to there is the notion that perhaps fundamental jurisdictions aren't determined by the Commission, that jurisdiction is assumed if there is a constitutional element to it. But the important point is, and the relevance here is, we say, just like every Court or Tribunal in the country, where objection to jurisdiction is taken, and we take that objection, and we wish to develop those arguments here today, the obligation is to determine that objection as a preliminary question.

PN633

And we say that the course of simply opening up the case in its totality and dealing with everything, and dealing with such jurisdiction or other issues as may come out, as if it is one case, does involve assuming that there is jurisdiction and/or pretending that it has. So we say it is directly contrary to that important duty which is enunciated by his Honour to adopt the course that we understand my learned friend will contend for.

PN634

Can I just develop that a little bit further to demonstrate the application of that principle and also its genesis, being a long standing principle, and if I may do this by way of some brief extracts from decisions rather than full reports, because it really elucidates the principle rather than takes it that much further. The decision where the principle has been applied by the New South Wales Industrial Commission in Threlfo's case, which is (1960) Arbitration Reports 349, and over the page, Commissioner, which is at page 349, halfway down the page on the left hand side:

PN635

Furthermore, it is well settled that a judicial tribunal should be satisfied that it possesses jurisdiction - - -

PN636

THE COMMISSIONER: Sorry, I am not sure. You are talking about page numbers, but there is no page numbers.

PN637

MR WATSON: No, there is not, Commissioner. On that second page of what I have handed to you, on the left hand side there is a large paragraph around about the middle of the page.

PN638

THE COMMISSIONER: Starting with "Upon the hearing of the appeal?"

PN639

MR WATSON: Yes. And I am taking you right down to the second last sentence in that paragraph, it is a sentence starting with "Furthermore."

PN640

THE COMMISSIONER: Yes.

PN641

MR WATSON:

PN642

Furthermore, it is well settled that a judicial tribunal should be satisfied that it possesses jurisdiction in a matter before it proceeds to adjudicate therein.

PN643

And there is reference to the FEDFA case, volume 12 of the Commonwealth Law Reports, where Griffith CJ said that:

PN644

The first duty of every judicial officer is to satisfy himself that he has jurisdiction, if only to avoid putting the parties to unnecessary risk and expense.

PN645

And there is reference to where that has been applied in The King v Blakely. The principle has also been applied in the South Australian jurisdiction by a Full Bench. Again, if I may hand the Commission extracts. It is the case of Renal Technologists Government Hospitals Appeal case, which is reported at 45 South Australian Industrial Reports at 495. And what I have handed to you, Commissioner, is the relevant parts of it.

PN646

THE COMMISSIONER: Sorry, that is South Australian Industrial Reports, is it?

PN647

MR WATSON: Yes, Commissioner. I want to refer to pages I have handed to you, which is page 500 and 501, and the paragraph commencing at point 9 of page 500, the Full Bench says:

PN648

These must, of course, be applied against the background of the principles related to the jurisdiction and duty of any Tribunal to consider its own jurisdiction. For present purposes the leading decisions concerning this aspect are ordered by Commissioners in Threlfo -

PN649

that I have referred to. And other cases are there referred to. And then the Full Bench says:

PN650

It is well established that when the question of the jurisdiction of a Tribunal to act is placed in issue, the initial process whereby the Tribunal decides whether or not to accept jurisdiction is of a somewhat special nature, it is in the nature of a preliminary inquiry and is one inherent jurisdiction which a Tribunal of limited statutory jurisdiction possesses.

PN651

There is then an extract set out by a judgment of Richards J, which I don't go to. Then the Full Bench says:

PN652

In Threlfo's case, McKeown J pointed out that it was well settled that a judicial tribunal should be satisfied that it possesses jurisdiction in a matter before it proceeds to adjudicate.

PN653

He directed attention to the judgment of Withers CJ in FEDFA. This pronouncement also accords with Lord Goddard in Rex v Fulham, where his Lordship made the point that:

PN654

If a certain state of facts has to exist before an inferior tribunal can have jurisdiction, it can inquire into the facts in order to decide whether or not it has jurisdiction, once again the preliminary nature of an inquiry which needs to be conducted is emphasised.

PN655

So it is not simply a duty to determine the question, it is a duty to determine that issue as a preliminary question, which is the point that really comes in these cases, Commissioner. Can I briefly go to The King v Blakely, which is 82 CLR 55. I have only handed extracts to you of the relevant passage we wish to rely on, Commissioner, page 68. The passage I want to refer to is at the bottom of page 69, where Latham CJ said:

PN656

In the first place it was proper and necessary for the Commissioner to make a preliminary inquiry as to the existence of a dispute in order to make up his own mind whether he had jurisdiction to proceed to deal with the disputes, or should abstain from proceeding.

PN657

And reference is made to FEDFA. Then at the bottom of page 70, seven lines up, there is a sentence beginning "But the first duty," and it is a, by now, well known passage, that:

PN658

The first duty of every judicial officer is to satisfy himself if he has jurisdiction if only to avoid putting the parties to unnecessary risk and expense. The Commissioner is not a judicial officer, but the principles stated apply to him because he now, with some exceptions, exercises the same arbitral powers as were formerly vested in the President of the Court.

PN659

And that much is true from the number of cases which it held that it is necessary for the Commission to act judicially in the course of proceedings. And perhaps it is not entirely necessary, but I will work backwards chronologically to hand you a brief extract from the FEDFA case, which is [1911] HCA 31; 12 CLR 398. I have handed to you pages 414 and 415, in an effort to save a bit of paper, Commissioner. And the relevant extract is on page 415, and the paragraphs that begins at point 8 of that page. And Griffith CJ goes on to say:

PN660

In this respect a grave responsibility rests upon the President whose jurisdiction is limited both by the constitution and the Act ...(reads) ... In dealing with the question of jurisdiction the President must exercise his discretion.

PN661

And maybe I haven't handed you this page, so I won't refer on to what that says because it doesn't really bear on the primary point we wish to make. The points we wish to develop, Commissioner, will take some time to do so, and we say, well, my estimate is that it will take probably the majority of today to develop those arguments before you, and we say that my learned friend will have the opportunity to respond to those arguments because they are of a fundamental jurisdictional nature, and we have raised and developed them. Then we would have a reply to my learned friend on those issues.

PN662

That being the way that jurisdictional issues are usually heard and determined procedurally, there is, of course, an onus on any applicant in any proceedings to establish that there is jurisdiction insofar as these matters may be determined by onus. But in the absence of being satisfied then the Commission would not assume jurisdiction. They are important and complex issues and they, as I say, will take some time by reference to the cases to develop those arguments.

[10.45am]

PN663

We say therefore that the Commission should adopt the procedure of determining that issue as a preliminary question from us and hearing from the other side on those issues, and not assuming that there is jurisdiction by embarking on any broader exercise. And, in particular, we are very concerned to avoid being trapped into a process whereby, on the one hand, we are arguing that the Commission does not have jurisdiction to determine that there has been a transmission of business of the agreement applies, but by the course of the procedure sought to be adopted, that that question is involved in the processes.

PN664

We don't want to be trapped into that process because we say fundamentally that there is no jurisdiction to determine that question, and we want to have the opportunity of explaining exactly why that is the case and have that determined as a preliminary question, as it is a fundamental jurisdictional question. The so that is why we say that should be the procedure, as I have said.

PN665

If my learned friend wants to call some evidence relevant to those questions, we can't deny that right, but we say that it must not be permitted to be any broad ranging evidence that might be relevant to subsequent questions if it is ever necessary to go to subsequent questions, and that considerable rigour should be applied to ensure that the matter doesn't go on and delve into other issues.

PN666

Of course, we would not have to follow suit as such, but it is not a very satisfactory situation to have evidence go beyond the initial questions, it not be responded to or cross-examined, and then a determination made as to what sort of issues might go on, and then deal with issues again. It would be duplication, it would serve no purpose, and we say that the real issue preliminary issue should be heard at the outset, and we seek the opportunity to do so.

PN667

THE COMMISSIONER: Yes. I am not sure that you have actually assisted me at all, and that may be my confusion rather than yours.

PN668

MR WATSON: I will seek to remedy that, if I could.

PN669

THE COMMISSIONER: I think a lot of that is trite, that we have got to be satisfied that we have got jurisdiction before we proceed. I accept that, I think there can be, I think, little argument about that. This case, however, operates on a couple of levels, it seems to me. At one level there is an argument about the jurisdiction of the Commission to determine in the abstract that legal issue, which you quite properly say is a legal issue, of whether there has been a transmission of business.

PN670

I don't think the Commission can make a binding determination about that. It can come to a view, and I think the authorities establish that, it can come to a view as to whether there has been a transmission of business, and thus whether or not there is jurisdiction to deal with the dispute, but not, if you like, the legal question of whether there has been a transmission of business. I think that much - - -

PN671

MR WATSON: We don't accept that, Commissioner.

PN672

THE COMMISSIONER: You surely accept the first bit about it, that the Commission can't determine the issue in the abstract of whether there has been a transmission of business. That is for the Court.

PN673

MR WATSON: What you went on to say, Commissioner, is what you considered could be done, which goes very much - - -

PN674

THE COMMISSIONER: Yes. I was quite happy to do it in two parts. I will go back and - - -

PN675

MR WATSON: Which goes very much to the arguments we want to put to you.

PN676

THE COMMISSIONER: Well, that is where I am getting confused, you see, because I would have thought that the Full Bench in Automated Meter Readers was saying that the Commission had to determine whether there were jurisdictional facts that allowed it to operate.

PN677

MR WATSON: That is the question I want to develop with you, Commissioner. And rather than - and that is part of it. As I say, there are a number of arguments we wish to - - -

PN678

THE COMMISSIONER: But what I don't see is how I can determine whether or not those jurisdictional facts exist without some significant evidence.

PN679

MR WATSON: When you hear our arguments, Commissioner, you will see that we will hope to persuade you that you do not have any jurisdiction to go any further. And we don't wish to rely on the evidence, we wish to rely on the notice that has been filed and the contentions.

PN680

THE COMMISSIONER: Yes. No, you have said that.

PN681

MR WATSON: And that is what we want to rely on, and we want to put the arguments. The are in the order of four arguments, although there is a number of limbs to it.

PN682

THE COMMISSIONER: But isn't that seeking to close off to the other side what they might say? I mean, okay, you might be right about that, you know, I don't want to pre-judge that in any sense at all. But if I adopt your procedure, the procedure that you are proposing, doesn't that close off to the other side the option to put the alternative argument, namely, that there are a series of jurisdictional facts that the Commission must be satisfied exist, and if there are it should proceed to determine the dispute?

PN683

MR WATSON: It doesn't close off anything from the other side. They have every right to respond to the arguments that we are going to raise, and they have the right to do so in the way they see fit, provided it is genuinely in relation to those issues, and they can do that as they see fit. Now, we say when these arguments are developed it will become clear that the overall circumstances are such that for a number of different reasons the Commission can't proceed any further, and that would be the determination that we seek as a result of those arguments.

PN684

But in no way in running those arguments and having them heard and determined, us heard first, is there any disadvantage to the other side or limiting their ability to respond to those arguments in the way they see fit. So what my learned friend, as we understand it, wishes to do is to say don't determine these fundamental jurisdictional points as a preliminary question, hear us run our full case on all issues, and determine - and have the full case before you before you determine any questions.

PN685

THE COMMISSIONER: So as to use an analogy, it would be a bit like coming along and finding a dispute and making an award, they would want to run all of the evidence about both matters all at once.

PN686

MR WATSON: It is very similar to that, in that they have some arguments as - they are saying that there is a disputes procedure in an agreement, and there are issues that they want determined under that. And we say before you can go anywhere down that track we want to argue that the Commission does not have jurisdiction to proceed down that leg, and we want that argument heard and determined as a preliminary question, and we say that there is a duty to do so.

PN687

And we want to make it very clear that in no way are we seeking to prejudice the other side in responding to those arguments in whatever way they see fit, but what we do say is that the Commission shouldn't allow the case to proceed beyond those questions because they are fundamental, they will take time to develop, they are complex, and I think part of the exchange has disclosed that. We will need to develop these arguments with you and explain them so that there is an appreciation.

PN688

THE COMMISSIONER: Well, can I just say there is also a matter that occurs to me, that if the other side is correct, and there is a disputes procedure binding your client, then there are steps in that dispute procedure that have yet to be taken before the disputes can be resolved anyhow.

PN689

MR WATSON: Yes.

PN690

THE COMMISSIONER: That strikes me. I mean, I appreciate the element of circularity that you referred to in the earlier proceeding, but we just have to work our way through that, if you are wrong in your jurisdictional argument, but we will get there.

PN691

MR WATSON: What we have in a nutshell, Commissioner, is, we would put our contentions on, as I said, broad outline. There is no jurisdiction to proceed. The other side has said, oh, well, there is all these other issues, and they have listed a schedule and referred to it earlier in the contentions. Well, that no doubt is going to be part of their arguments in opposition to our arguments. But it is there, and we are not going to - - -

PN692

THE COMMISSIONER: No. But I did hear you say that it was a sham and it was, well, if you like, colouring it.

PN693

MR WATSON: Yes.

PN694

THE COMMISSIONER: That comes down to a question of fact in some ways. You can't always establish that something is a sham by argument.

PN695

MR WATSON: We can't establish that it is not a sham by assertion either.

PN696

THE COMMISSIONER: No. But by evidence you might.

PN697

MR WATSON: Yes. And in that sense my learned friend says, well, we want to lead evidence on that issue. That is not something we can deny. But we do say that it would assist if we actually develop these arguments, because we want to put them without evidence.

PN698

THE COMMISSIONER: I am now not confused in the way I was before.

PN699

MR WATSON: And I think that will assist in an understanding of them, and we will have no objection to my learned friend calling the evidence after we have developed these arguments.

PN700

MS LESTER: Commissioner, these matters were raised in discussions between the parties last week, and what I indicated to my learned friend's colleague Mr Wood at that time is precisely the answer here, which is that the cases make it clear that the application of section 170LW to dispute is a question that must be considered in the context of the entire dispute. You seek to argue that there is, in fact, no dispute and that our client seeks something in the nature of a declaration, but then proposed to prevent our client from putting submission about the nature of the dispute before the Commission.

PN701

Commissioner, you were correct in referring to the Full Bench in Automated Meter Reading Services. I have collated a volume of cases to which I will be referring. You will find the decision at tab 1.3, Commissioner.

PN702

THE COMMISSIONER: Bear with me while I find it. Yes.

PN703

MS LESTER: If I can take you to paragraph 54 and onwards, commencing on page 11, I will commence reading from 55:

PN704

The Commission's legitimate role in making findings about jurisdictional facts and legal rights and remedies is sometimes confused with an invalid intrusion on judicial function ...(reads)... but they are findings that go to the exercise of the jurisdiction, jurisdictional facts.

PN705

The Commission goes on in 56 to refer to the CFMEU v AIRC decision, and follows that through. Over the page at paragraph 67 the Commission refers - what I understand my learning friend to be saying is that we are going to deal with the jurisdictional points one at a time. There are a number of jurisdictional matters in this proceeding. The first is, is the agreement invoked, has there been a transmission of business such that LMT Tenix is bound by it? Secondly, is there a dispute within the meaning of the disputes settlement clause which the Commission is able to deal with? That also involves evidence.

PN706

THE COMMISSIONER: I think you might have them the wrong way round. I think it is that one first.

PN707

MS LESTER: They are both preliminary.

PN708

THE COMMISSIONER: Yes, they are both preliminary, but the absence of a dispute, if there is no dispute of the sort that the disputes procedure invokes, then the other issue doesn't arise, does it?

PN709

MS LESTER: I guess in one sense the proceeding is, is there a dispute over the application of the agreement? So in one sense they are equally preliminary, I would submit. At paragraph 67 the Full Bench talks about whether one jurisdictional point should be led in the absence of all matters pertaining to jurisdiction being established, and I will read 67:

PN710

A finding on a threshold point going to jurisdiction will occasionally be appropriate and expedient, however, to paraphrase paragraph 45(1)(g) ...(reads)... will at least be reluctant to grant leave to appeal against an incomplete finding. Arguably it may not be competent to grant leave.

PN711

Based on the Full Bench's findings - I will go back. We don't dispute that the Commission has to determine jurisdiction as an initial step. That would involve a considerable amount of evidence in relation to the transmission issue and also evidence in relation to the terms and conditions of Ms McCallum's employment, including hours of work, whether she is a shift worker, what classification should be applied to her employment, and other matters.

PN712

But my learned friend wants to submit apparently, if I am understanding correctly, that there is no dispute, it is a sham, based simply on a draft order that has been provided to the Commission, which is, of course, the end point in the proceeding. We do accept that ultimately the questions that would fall to the Commission if those jurisdictional matters were established and the Commission found jurisdiction under clause 32 of the agreement that would relate to questions of interpretation of the agreement and their particular application to Ms McCallum, would be left until after that finding.

PN713

It may well be that in the course of us leading the evidence to establish the dispute that we don't need to lead further evidence on that matter. Our learned friends may wish to do so, and that would be open to them. But the arguments about the meaning of the agreement could be left until after a decision was made on jurisdiction. Would we would respectfully suggest we proceed, and we note initially that we are the applicant in the matter, we have got the onus of establishing jurisdiction, we are prepared and ready to do so.

PN714

To do that we would propose tendering Ms McCallum and Ms Bat's witness statements. We haven't had an indication from our learned friends that they wish to cross-examine on those, subject to how the Commission would proceed. We would submit that in those circumstances they could be tendered. We would also propose calling Mr Law to be cross-examined on his witness statement and providing a summary of the key points of evidence and jurisdictional issues, and the proceeding to make our submissions about the nature of the power under LW, the findings of jurisdictional fact, and addressing the transmission of business issue and the case law on that matter.

PN715

They are all properly preliminary points. We are the applicant, it is appropriate that the evidence is called and then we proceed to submissions. If the Commission pleases.

PN716

THE COMMISSIONER: It seems to me like the only debate is between you, who goes first. Is that right?

PN717

MR WATSON: No.

PN718

THE COMMISSIONER: Well, why am I wrong in that judgment in the face of that submission?

PN719

MR WATSON: Commissioner, we don't want to argue that there is no transmission of business as a jurisdictional argument preventing the Commission determining, presuming the Commission going through that, then the Commission going through that. We don't want to be trapped into a Commission determination of the issues which we say the Commission can't determine. And what we want to do - - -

PN720

THE COMMISSIONER: But how can I, without making findings about the jurisdiction - I mean, you are saying that there is a - I am not quite sure what you are saying now. I thought my understanding was that you were pretty close to being on all fours, but now I am not so sure.

PN721

MR WATSON: For this reason, if I might explain it, and I apologise if I haven't done that well. The arguments we want to advance do not involve the transmission of business question. They are directed to say you cannot determine that question one way or the other. And we want to put those arguments, and we want to - and we say that they are fundamental and need to be determined before the Commission can go further.

PN722

And where we differ from my learned friend, my learned friend is saying that she wants to lead evidence and put arguments that there is a transmission of business as part of an initial jurisdictional hearing.

PN723

THE COMMISSIONER: Which is consistent with that those references you made to Meter Reading Services, it seems to me anyhow.

PN724

MR WATSON: No, Commissioner.

PN725

THE COMMISSIONER: Well, you need to go into some detail in why it is not the case.

PN726

MR WATSON: The arguments we wish to put were not the arguments put in the AMS case, there were different arguments put to what we wish to put.

PN727

THE COMMISSIONER: So are these in your contentions of fact and law in relation to this matter, or is this something - - -

PN728

MR WATSON: In generality, yes.

PN729

THE COMMISSIONER: Well, can you refer me to them.

PN730

MR WATSON: But I will need to develop them in some detail.

PN731

THE COMMISSIONER: Well, I am going to give you every opportunity to develop them, but I want to hear where they are in your original contentions, if I can find those. Bear with me. Yes.

PN732

MR WATSON: Yes, Commissioner. Paragraph 4, item 1, is the issue, one of the issues, paragraph 4, item 3, is one of the issues. And there are a number of limbs to that argument when one analyse by reference to the CFMEU case. These arguments are developed commencing at paragraph 22.

PN733

THE COMMISSIONER: Well, I think this is where we - I did raise this with you before. It seems to me that there is a strong argument that 170LW does not allow the Commission to determine disputes over whether an agreement applies at all. It can't determine that dispute. But it can, it seems to me on Automated Meter Reading Services, it can determine disputes over the application of the agreement if it is satisfied that the agreement does apply.

PN734

MR WATSON: Well, you did say that before, and that is where we took issue with you. The second proposition that we put in argument is one of the issues we wish to develop, and demonstrate that in the circumstances of this matter there is no jurisdiction to proceed.

PN735

THE COMMISSIONER: Okay. But don't we run into the difficulty - now I think I understand - that if you run your case and it is decided on the terms that you propose, don't you then have a second preliminary argument to make if the Commission ends up being against you on your first one? And don't we need to get all of these preliminary issues in as preliminary issues? You can't say that one is more preliminary than the other.

PN736

MR WATSON: Well, we don't wish to argue - - -

PN737

THE COMMISSIONER: You keep talking about being trapped. But what I am saying to you is, that if it is a preliminary issue about whether or not the Commission can determine disputes over the application of an agreement where your client is not a named party to the agreement, and that issue must be resolved ahead of everything else when there are a series of other preliminary issues that must be resolved as well, that is, whether there are jurisdictional facts that give rise to the Commission having jurisdiction in any case.

PN738

You know, it seems to me that - well, do you understand what I am saying? That you are saying that there is a jurisdictional argument that seems to be more preliminary than anything else, and it must be heard separately.

PN739

MR WATSON: And it is a disadvantage to us to have a determination of an issue that we are saying the Commission should not and cannot determine.

PN740

THE COMMISSIONER: Well, it might be a disadvantage to you, but why is it any less - I mean, it seems to me though that is trying to capture the whole preliminary procedure just so we deal with your bit and not their bit. There are a series of preliminary matters going to jurisdiction of the Commission, one of which is the one that you foreshadow, but there are others which I have foreshadowed and which Ms Lester has correctly, in my view, agreed that they are preliminary, such as whether the jurisdictional facts exist, that is, whether there has been a transmission, whether the agreement applies in its terms to those people, whether, in fact, there is a dispute, the one that precedes all of the others in my view, at least arguably.

PN741

I mean, if there is no dispute about the application of the agreement, leaving aside all of the other bits, aren't we putting everyone to unnecessary expense going into all of the complicated legal argument? I mean, if you are prepared to accept that there is a dispute about the application of the agreement, that you say the agreement doesn't apply, I understand that.

PN742

MR WATSON: Commissioner, we say that the procedure should be guided with a complex mix of different arguments. A logical basis which does not involve prejudice to either side, we say that should be the guiding principle.

PN743

THE COMMISSIONER: Look, I can accept that. But doesn't excluding arguments about whether or not there has been a transmission of business mean that they have got to come back and argue yet another preliminary point at some future date? I mean, I would have thought that all of those authorities that you took me to say that the jurisdictional issues having been raised, they must be dealt with as a preliminary point, not that one should be dealt with in advance of the others.

PN744

MR WATSON: Well, these particular arguments are that you do not have jurisdiction one way or the other to determine that other issue, and that is what we want to be heard on.

PN745

THE COMMISSIONER: Well, I accept that that is a preliminary issue. But it is just as preliminary as the others because if I have got - - -

PN746

MR WATSON: No. If you accept we are right on that - - -

PN747

THE COMMISSIONER: I mean, if you are right on that, then that is the end of it. But if you are wrong on that, then you will want to make an argument about the other one. And they are all preliminary issues, and why should one be dealt with separately from the others? I mean, to use my example before, if there is a finding that there is no dispute about the application of the agreement, that is, that the claim that the shift work and all those things, and I am sure that is part of your argument, if there is no dispute about that then the rest of it falls down too.

PN748

That is just as preliminary as saying - I mean, this is where the circularity comes in, I accept that - but it is just as preliminary as saying that it is not open to the Commission to determine whether there is a transmission of business. You fall at the first step if you don't get up on all of them, I mean the applicant falls at the first step if they don't get up on all of them.

PN749

MR WATSON: Well, they might fall on various different - for various reasons. And the cases show that there has been different processes adopted, and we say hardly a sort of a satisfactory approach. But what we say, the reason why these arguments are genuinely preliminary is that if we are right then the transmission of business argument does not need to be entered into. There need to be no evidence, no consideration, no anything else. And as a matter of pure logic therefore, if we are right on that, there is nothing further, it is preliminary to that other issue.

PN750

THE COMMISSIONER: It is just at which point of the circle you come in, isn't it? It is which point of the circle you come in. Because if you come into the circle at the point of whether there is a dispute about the application of the agreement, and you are right about that, there is no need to go to the other matters. Or if you come in at the point of whether or not there is a transmission of business, and you are right about that, there is no point to go to the other matters.

PN751

I mean, there is a circle there, and you are saying that logically the question of whether the Commission can even consider that there has been a transmission of business, is logically the first step. Now, it is not clear to me, it is not as readily apparent to me as it is to you that that is the case. It seems to me that they are all first steps. It is the nature of preliminary jurisdictional arguments.

PN752

MR WATSON: It is not our intention to argue in these preliminary arguments that we wish to develop that there is no transmission of business.

PN753

THE COMMISSIONER: I understand that is what you don't wish to. But it is just as much a preliminary step as the arguments you wish to put.

PN754

MR WATSON: It is not just as much, Commissioner. Because if we are successful, that is the end of the case.

PN755

THE COMMISSIONER: But if you are successful about there being no transmission of business, that is the end of the case. If you are successful about there being no dispute about the application of the agreement, that is the end of the case. That is the point I am making about them, you know, it is at what point of the circle you come in, but they are all issues about jurisdiction.

[11.15am]

PN756

MR WATSON: Our arguments are directed towards the power of the Commission to hear and determine that question. So it is absolutely a step before you get into what other sort of circle that might involve that transmission issue itself. And what we are saying is that we want to be heard on these matters.

PN757

THE COMMISSIONER: I am not suggesting you won't be heard. But you want to be heard separately from the other matters.

PN758

MR WATSON: We don't want to be denied the relief that we seek by the procedure the Commission adopts.

PN759

THE COMMISSIONER: Well, how am I going to deny you from the relief you seek by hearing all of the preliminary matters first?

PN760

MR WATSON: Because, Commissioner, the relief we seek is that you should decline to proceed any further and you should not hear and determine any issue as to the transmission of business. That is the relief we seek, and that, we say, flows from the arguments we wish to develop.

PN761

THE COMMISSIONER: Now, where does that come, using the authorities that you used before, what support is there for that proposition, for any other authorities.

PN762

MR WATSON: Yes. Because the relief we seek is that you not hear and determine that issue, it is a preliminary question as to whether you have jurisdiction to do so.

PN763

THE COMMISSIONER: But that issue is a preliminary question.

PN764

MR WATSON: Whether you have jurisdiction to hear and determine that question.

PN765

THE COMMISSIONER: But that question is a preliminary question surely. I mean, I would have thought that - - -

PN766

MR WATSON: That may be a precursor to jurisdiction, but the preliminary question is, you do not have jurisdiction to hear and determine that question. And we want - the relief we seek is that you determine that you do not have jurisdiction to hear and determine that question. And we would be gravely disadvantaged and our relief would be denied by a procedure which says, well, I will hear and determine that anyway, or I will hear it and I will hear the parties on it, and we will do it in any event, and I might decide the issue on any number of matters or all of them.

PN767

THE COMMISSIONER: Well, they are all preliminary matters. I am not going to decide the issue - I mean, I am not arguing about the substantive issues, I am talking about - I mean, do you agree with Automated Meter Reading Services that there is necessary for the Commission to make findings about jurisdictional facts, and that amongst those jurisdictional facts is the issue of whether or not the agreement itself, whether Tenix Solutions is bound by the agreement, and whether there is a dispute about the application of the agreement?

PN768

MR WATSON: No. That is a misconstruction.

PN769

THE COMMISSIONER: That there has to be a finding about those matters before it can proceed.

PN770

MR WATSON: No. That is a significant misconstruction of a decision. The decision was dealing with different arguments.

PN771

THE COMMISSIONER: I understand it was dealing with different arguments, but that those were preliminary findings it had to make going to its jurisdiction, the Commission had to make those findings. AMRS says that. I am sure that is not a misconstruction of the agreement, and if it is I would be interested to hear you.

PN772

MS LESTER: Paragraph 62, sir.

PN773

MR WATSON: It might have said things like that, but that is not the point I was making.

PN774

THE COMMISSIONER: I understand that is not the point you are making. It is the point I am making, that it is as preliminary, and it is as preliminary as the point that you are making. See, I don't see them in the sequence that you see them. And I have got to ask you, how are you prejudiced and how is your client prejudiced by dealing with all of the preliminary matters, that is, the sorts of preliminary matters that Automated Meter Reading Services says the Commission must be satisfied about, as well as the preliminary matter that you say the Commission must be satisfied about, which hasn't been dealt with, how is your client prejudiced by those matters all being dealt with together?

PN775

MR WATSON: Because we seek - we would be denied the relief we seek.

PN776

THE COMMISSIONER: I understand that. But how are you prejudiced by those - I mean, because you wouldn't be denied the relief you seek. The relief you seek would be dealt with as part of the Commission dealing with the preliminary matters.

PN777

MR WATSON: No, Commissioner. We seek the relief that you do not have jurisdiction to hear and determine the question of whether there has been a transmission of business, that is the relief we seek from these arguments.

PN778

THE COMMISSIONER: Well, I understand that. But how are you prejudiced by - I mean, I understand that you would not get the relief ahead of everything else, and that it would come as part of the Commission dealing with the preliminary matters. But as I understand it, you have mounted an argument in your contentions of fact and law that deal with the issue of whether or not there has been a transmission of business. So it is not a question of you not being prepared for that issue. I don't see any prejudice there.

PN779

As I understand your contentions of fact and law, you have dealt with the issue of whether or not there is a dispute about the application of the agreement. So I don't see any prejudice there. I can see that you wish to have dealt with first and determined the issue that you raise here today and you say is obliquely referred to in your original contentions of fact and law, not up front in the way in which you now put it - and I don't criticise you for that - but you now want that reference dealt with first.

PN780

And I am asking what prejudice comes by not dealing with it first, but by dealing with it as part of the parcel of those three along with the two other matters that I have identified, and there may be others. That is not seeking to close off the body of preliminary matters, but along with those two other jurisdictional points, preliminary jurisdictional points.

PN781

MR WATSON: Because, Commissioner, if all of these matters are just said to be all preliminary and of equal ranking - - -

PN782

THE COMMISSIONER: No, I am not saying they are of equal ranking. I am not wanting to rank them at all, but you are, and that is fine. But you are not saying they are not preliminary, are you? You just say they are less preliminary than yours.

PN783

MR WATSON: Well, there is only one set of preliminary arguments, and they don't involve the transmission issues.

PN784

THE COMMISSIONER: Well, I understand that is your position, but, see, Automated Meter Reading Services talk about those matters being preliminary.

PN785

MR WATSON: They might be preliminary to the further exercise of jurisdiction.

PN786

THE COMMISSIONER: To the exercise of jurisdiction.

PN787

MR WATSON: But they are not preliminary to the arguments we wish to take, or anything else.

PN788

THE COMMISSIONER: Well, I understand you don't consider them to be preliminary.

PN789

MR WATSON: And that is the form of relief we seek.

PN790

THE COMMISSIONER: But I can't make a finding on whether they are preliminary without hearing your arguments. We are going round and round in circles now. I mean, it is pointing up the circularity of this preliminary matter.

PN791

MR WATSON: Well, let me answer the proposition you put when you ask what is the prejudice.

PN792

THE COMMISSIONER: Yes.

PN793

MR WATSON: If all of these arguments are put together we will be denied the opportunity to avoid a hearing and determination of that issue. You may determine any of these issues in any way or order that you see fit. We would say that there is a proper way, but you may determine the issue on one basis. And we say that that is inappropriate, and itself may involve the acting outside of jurisdiction.

PN794

THE COMMISSIONER: Sorry, I have got to ask why is it inappropriate?

PN795

MR WATSON: Because if there is no power, for example, to determine the transmission issue, then the determination of that issue is made without jurisdiction, and in many of the cases, and Automated Reading is one.

PN796

THE COMMISSIONER: I understand that that might intellectually be prejudicial, but clearly if the determination was in favour of your client, which I would think it would have to be, I mean, logically if I was with your client on one of the matters, that is the end of the matter, subject to appeal. Assuming I didn't deal with the other two - let us just for the moment say there is only three preliminary matters - that it seems to me that you are putting a position that says that the Commission could deal with one of the three matters in a way that affected your client adversely, and not deal with the other matters. And that is not so.

PN797

Because you would be arguing that the Commission should not proceed on the whole three, I would guess. I mean, I am not putting it forward, but, you know, that none of the three preliminary areas give the Commission the basis to proceed. And if the Commission upheld you on one of those and didn't determine the other two, and one of those other two was the issue that you wished to raise, then intellectually yes, there would be prejudice, but in practice where is the prejudice?

PN798

MR WATSON: Very significant, Commissioner. And I think the Automated Reading case is an example, and the Geelong Grammar one is another, where ultimately after the appeal processes were held, settling the Geelong Grammar one, ultimately was held that there was no transmission of business. In other words, there was found to be no jurisdiction to proceed on a particular basis. But that followed a very lengthy history of decisions at first instance to the contrary.

PN799

THE COMMISSIONER: Sorry, I would have to give a decision your way on one of the three points, not to go to all of them, or not to go to two of them. That is why I am trying to understand where the prejudice is. That you say I have got to deal with, ought to deal, it is appropriate, proper - they are your words - to deal with what you say is the - I am trying to find a word that doesn't colour - but the first point you say, that is, that the Commission has got no power at all to even consider whether there has been a transmission of business in the context of this matter, and that that precedes everything else.

PN800

Now, if the Commission was against you, not on that but on one of the other two, it would have to make a finding on that matter too, and, indeed, logically it would have to make the finding first on that matter, having considered everything before it because, if you are correct, then it wouldn't have the capacity - I mean, as I understand you - it wouldn't have the capacity to determine the other two matters anyhow. But that goes to the issue of the decision writing, not to the issue of the procedure. And I am trying to understand how you are prejudiced by dealing with the three matters together, at least three matters together.

PN801

MR WATSON: There may be a decision at first instance where all of our arguments are dismissed, and we wish to appeal, and we ultimately get up.

PN802

THE COMMISSIONER: Well, you have already said you are likely to, or one side is likely to.

PN803

MR WATSON: Well, we say these feelings run hot.

PN804

THE COMMISSIONER: Yes. I am not being critical, I will just say don't be coy about it.

PN805

MR WATSON: Thank you, Commissioner. That may be one eventuality, in which case there will be decisions on the transmission of business case against us if that happens, it is one of the eventualities. At the end of the day, Commissioner, we say there is a very serious and significant legal and complex issue as to that transmission issue, and this is not the place to determine it. Ultimately, if we are successful before you or a Full Bench, if there is a desire to pursue it, it may proceed in a different place.

PN806

Now, to say that there has been a consideration of it, unsatisfactory as it is, in this place, we say is prejudicial, when we say the proper place is elsewhere, and we would be prejudiced by there having been a consideration, contrived we say it is, and procedurally done in a way which denies us the actual relief that we want, that we don't get trapped into that exercise here, because we say it is inappropriate, we would be prejudiced. And it goes to the heart of what we are really saying.

PN807

THE COMMISSIONER: It is not apparent to me what the prejudice is, I am sorry, other than the possibility of having a decision against you. Well, that prejudice is always there.

PN808

MR WATSON: But it might be said that Ms McCallum wasn't cross-examined about something. We don't want to get into that exercise, Commissioner, of determining that.

PN809

THE COMMISSIONER: Well, you mightn't want to. But there is a distinction between what you want to do and how you are prejudiced. I mean, that is a bit like saying you are prejudiced by the Commission even having the proceedings. I mean, I am not going to cop that as prejudice.

PN810

MR WATSON: There is the length and time involved, there is a question of a possible determination, there is a question of possible appeals that might also involve that question. For example, the AMRS case applied a decision on transmission which is under appeal, and the appeal can be heard in the Full Court shortly. Now, that just shows how unsatisfactory a consideration of those issues are. But that is the sort of, we say, trap that we will be inveigled into as a device to have the Commission determine the question which is the real dispute between the parties, and that was exactly dealt with in the application. This is a device by the applicants to have the Commission determine this question.

PN811

THE COMMISSIONER: So you assert, and we will hear that argument in due course. And if you are right about that, if you were right about that, then I would be obliged to deal with that argument before I dealt with all the others.

PN812

MR WATSON: And the Commission should not be, by way of a process, allow them to have their day in Court.

PN813

THE COMMISSIONER: Well, that works both ways, doesn't it? If you are wrong about that, then I would be wrong in stopping them having their day.

PN814

MR WATSON: Well, they can have their day for you to rule against us on these preliminary arguments. But we say they are preliminary to the actual question.

PN815

THE COMMISSIONER: But they are all preliminary arguments. I mean, AMRS says that those other issues are preliminary to exercise of jurisdiction.

PN816

MR WATSON: Commissioner, let me deal with AMRS. And I said we would go to different arguments, and let me explain why. The arguments that were developed were that, in one way or the other, a determination of the question of whether there has been a transmission of business, was the exercise of judicial power, and that was what the Full Bench, the majority was dealing with in setting out that. In the course of applying - considering those arguments, the established principles of whether it is appropriate as a first step towards something else, Cramm's case and others, was appropriate to consider in the context of that, not as a determination of the legal issue, but as a step in the process of exercising arbitral power. That is why the argument was put, and let me explain.

PN817

THE COMMISSIONER: Yes. No, I understand that.

PN818

MR WATSON: I think it is paragraph 22. Yes, paragraph 22 of AMRS. The appellant developed the grounds in support of both leave to appeal and merits of the appeal along the following lines:

PN819

The Commissioner has purported to exercise judicial power in making a binding declaration, and this is beyond the jurisdiction of the Commission ...(reads)... deprived the appellant of a full hearing of the merits before reaching a concluded decision.

PN820

Now, really the first two of those, which both relate to judicial power, which the majority was then addressing in saying that there are circumstances, and there can be in certain factual situations, a situation whereby the Commission can consider issues which on their own might be legal questions and involve judicial power, but if they are steps in the process of exercising powers, could be legitimate. And reference to those cases was referred to.

PN821

The arguments we are proposing to develop are not the arguments that are outlined there. So the arguments are of a more fundamental nature, and therefore - and they are directed to show that the Commission does not have jurisdiction to determine the transmission of business issue. Now, we say it is obvious by simply encapsulating the transmission issue into the first part of the case, that it is really giving the applicant the relief that they seek by way of the process adopted by the Commission. They seek to have - - -

PN822

THE COMMISSIONER: That assumes the Commission is going to make a decision in support of the applicant. You have got no basis for coming to that presumption, I wouldn't have thought.

PN823

MR WATSON: If the Commission determines it in favour of the applicant, it gives the applicant the relief they seek by using this procedure to obtain a decision on the transmission of business issue. It plays into their hands, because the very thing that we are seeking to avoid and we want to be heard to demonstrate the power - - -

PN824

THE COMMISSIONER: But doesn't the reverse of that apply? That by adopting your procedure it plays into your hands by avoiding the very thing they want.

PN825

MR WATSON: No, it doesn't. It enables our preliminary arguments, which are preliminary to the determination of that question, because they say you cannot determine that.

PN826

THE COMMISSIONER: Well, I hear that. And the difficulty I have with it is the one I really started with, I think. That I can readily agree that the Commission has no - and, indeed, it is in AMRS - that the Commission has got no capacity to make a binding declaration as to whether or not there has been a transmission of business, full stop. I can readily agree with that, and I suspect Ms Lester would, and she is nodding her head. But AMRS says I have got the capacity - at least I read - that in establishing whether or not I have got the capacity to deal with a purported 170LW dispute, to come to a view about whether the jurisdiction is there for me to do so, and that may involve me in coming to a view about whether there is a transmission of business.

PN827

MR WATSON: But, Commissioner, we are coming here today - - -

PN828

THE COMMISSIONER: And you are saying that I can't do that.

PN829

MR WATSON: We are coming here today saying we don't want to argue here today that there is no transmission of business. We want to show you should not and cannot hear and determine that question. That is what we are coming for, and we are the ones raising the jurisdictional objection.

PN830

THE COMMISSIONER: Well, I understand that you are raising the jurisdictional objection. But the Commission has also got to be satisfied that there is jurisdiction for it to proceed. And, indeed, there is an onus, to the extent that there is an onus, on the applicant to establish that there is jurisdiction for the Commission to proceed. Now, you say that your jurisdictional argument is somehow more preliminary than the others, that the Commission has raised, and I am not seeking to close off that by referring to only two, I am not seeking to close off that category.

PN831

And you keep saying it is logical, but it doesn't seem to me to be as logical as you put it, that it comes first in this circular. I accept that it is one of at least three arguments about jurisdiction, but I don't see that it is paramount that it comes first in time. It seems to me to be - - -

PN832

MR WATSON: Well, you will need to hear our arguments on that.

PN833

THE COMMISSIONER: Yes. I wasn't suggesting I wasn't going to hear your argument, Mr Watson, and I wouldn't want it be thought that I was suggesting that. It is the context in which I hear it that there is the debate going on. And you are seeking to have a context in which I hear it as being one that excludes what I have identified as two other, and maybe others, but one that excludes any discussion of the other arguments that preliminary to the exercise of jurisdiction. That is what you are seeking to have done, and I am not convinced as to why I should do that.

PN834

MR WATSON: Well, let me have one more chance at summarising why we say that is the case, and I think we are at the point where it falls for your determination of the procedure.

PN835

THE COMMISSIONER: Well, I think Ms Lester wants to raise some more matters too. I think you cut her off, at my request you cut her off. I am not suggesting you were rude.

PN836

MR WATSON: Commissioner, the real dispute between the parties is whether the police agreement that used to apply to the police applies to my client now.

PN837

THE COMMISSIONER: Sorry, why do you say that is the real dispute?

PN838

MR WATSON: Because that is what the notification under section 170LW identifies as the dispute.

PN839

THE COMMISSIONER: Where does it do that?

PN840

MR WATSON: Paragraph 1:

PN841

In the party's own dispute they are aware that in the event of AWAs applying to the employment of the persons named in the schedule are terminated, those persons will be paid the wages and conditions set out in the agreement.

PN842

And it mentions then some examples. Then it goes on to say:

PN843

LMT, despite a number of requests, has refused to confirm to the CPSU and the persons named in the schedule that it will apply the terms and conditions of employment contained in the agreement to such persons. Instead LMT has advised that it does not consider that it is obliged to apply terms and conditions of any industrial instrument to the employment of the employees. 3) The preliminary issues of a determination of the dispute described above.

PN844

So it is what is described above which is the dispute:

PN845

The application of the agreement is the following question. Is LMT Australia bound by the agreement as a successor to a relevant part of the business of the State of Victoria being the provision of traffic camera services and associated functions by operation of 170MB of the Act?

PN846

So in this notification the applicant has identified the dispute and it has sought to identify a preliminary question which it says is relevant for the determination of the dispute. Now, we say that the Commission cannot determine what is described there as a preliminary question because we say the Commission lacks the jurisdiction to do so. So every step is preliminary to something else, and you can't say, well - - -

PN847

THE COMMISSIONER: Well, that is right. I mean, they might be asserting that, but there might be an issue about, and there clearly is an issue about whether they should be paid those wages and conditions set out in the agreement.

PN848

MR WATSON: Yes. A UN resolution may be preliminary to - - -

PN849

THE COMMISSIONER: And if I resolved that in favour of your client, that is the end of the matter too. It is just as preliminary. That is the point I am making about I don't see them as being in any logical sense, or any other sense really, being ahead of the other.

PN850

MR WATSON: Well, the example you have used is a good one, Commissioner, because what you have identified and called it preliminary is actually the final position, you know, whether people should be paid certain things. Now, the - and how, you know, how provisions of an agreement applies.

PN851

THE COMMISSIONER: No. Whether they be paid the wages and conditions set out in the agreement. You misunderstood, and I hope it wasn't deliberate.

PN852

MR WATSON: I apologise if that is the case.

PN853

THE COMMISSIONER: But it was whether or not they should be paid those wages and conditions set out in the agreement. If that issue was determined, then you might easily go through some of the steps in the disputes procedure to resolve it. But, you know, that is where the circularity thing comes in at another level, not the level that you originally took, but at another level.

PN854

MR WATSON: Commissioner, it is not circularity because that is the end result, you are going to the end of a process.

PN855

THE COMMISSIONER: Not it is not, because the end result is saying that Ms McCallum should be paid X dollars a week, that her shift allowances be, etcetera. And I wasn't suggesting that the Commission would, at a preliminary process, go that far. It would need to resolve the preliminary issues of jurisdiction first.

PN856

MR WATSON: We cannot go to any merit consideration without considering - - -

PN857

THE COMMISSIONER: It can go to the detail without resolving those preliminary issues and giving you the opportunity to do whatever you are going to do about them.

[11.45am]

PN858

MR WATSON: And our position - and I am taking you to what the notification says - our position is yes, the dispute is over whether the agreement applies or not. We agree with that, and we say not only is it not a preliminary question to determine whether there has been a transmission of business in determining whether the agreement applies or not, but that the Commission cannot do so, and we want the opportunity to argue why that is the case and have a decision that the Commission cannot determine that question, the question described in paragraph 3.

PN859

For the Commission by way of its processes to say, okay, well, I will bundle all the jurisdictional issues up into one and I will hear and determine that issue in the course of everything else, and whether I make a finding on one or the other - - -

PN860

THE COMMISSIONER: No. In the course of the preliminary jurisdictional issues. I wouldn't want you to be - I mean, you are suggesting that I am going to bundle it all up together, and my suggestion is not that. In accordance with the authorities that you have put to me, that the jurisdictional issues, before exercising jurisdiction I have got to be sure I have got it. And there are a number of questions in relation to this matter that seem to me have to be resolved, if you like, in accordance with the authorities that you have put to me, as preliminary matters. There is no argument between us about that.

PN861

The argument arises, as I understand it, at the point where you say - and this is the bit that I am clearly having difficulty coming to grips with your submission about - as to why your submission should be advanced over the other matters, advanced in the - - -

PN862

MR WATSON: Because our arguments are preliminary - - -

PN863

THE COMMISSIONER: Let me make the point. Advanced in the sense of being heard separately and, as I apprehend it, being decided separately and before the other matters.

PN864

MR WATSON: Because our argument is preliminary to the question identified in paragraph 3.

PN865

THE COMMISSIONER: But so too are the others, aren't they? Whether there is a dispute about the application of the agreement, whether the agreement applies, they are all preliminary.

PN866

MR WATSON: No. They would follow from once it is determined, or if it is determined that the agreement applies in the first place.

PN867

THE COMMISSIONER: Are you able to take me to any situation where the Commission has divided up preliminary jurisdictional issues in the way in which you say it should be done on this occasion, because this can't be the first time it has arisen?

PN868

MR WATSON: Well, I am sure there are many instances when the jurisdictional issues are raised later.

PN869

THE COMMISSIONER: Where they are not raised as a preliminary matter, I accept that. But I am talking about where there are preliminary jurisdictional issues, and the Commission has been convinced to separate out some from the others.

PN870

MR WATSON: What we say is, there is two principles. And I can't mention cases which were based on procedural decisions or factual circumstances as to how matters progressed arguments. I mean, there is cases that have 10 years of history where different arguments were raised at different points in time, and I am sure that the very example you have given - - -

PN871

THE COMMISSIONER: Well, that certainly happens. But where we have got before us that there are jurisdictional issues to be resolved as a preliminary step and the decision has been taken to separate them out and decide some before others.

PN872

MR WATSON: There is two principles here. Because we say that the Commission lacks jurisdiction to determine the question in paragraph 3, the arguments in support of that are preliminary to the determination of the questions in paragraph 3, and we say that logically and appropriately they should be heard and determined first because they are preliminary to the question in paragraph 3.

PN873

There are obvious savings of time and effort of the parties if that is the case. But we also say that the Commission should be guided to ensure that there is no prejudice to either side by the procedure it adopts. And what is evident from the notification is that there is a real dispute between the parties as to whether the agreement applies or not, and that the notifier has sought to invoke this process in order to get a determination of the Commission on that question. That is their technique in order to resolve the dispute.

PN874

We for our part hotly contest that technique. We do not want to see the Commission used in this way. We say that it is not an appropriate use of the provisions of the Act or the processes of the Commission, and we want to prevent that occurring. And we have certain arguments that we wish to advance which are directed to preventing that occurring, and they are preliminary to the considerations by the Commission of the question in paragraph 3 because they are directed to preventing the Commission from proceeding further to deal with that question.

PN875

If the Commission were to adopt the procedure proposed by my learned friend, and say, well, everything is preliminary, I will hear them all determined, etcetera - - -

PN876

THE COMMISSIONER: Well, I have already indicated that I am not satisfied that everything was preliminary.

PN877

MR WATSON: No. But there are a range of preliminary issues, and the question in paragraph 3 is one of them, so I will hear from the parties on that in conjunction with all of the other preliminary arguments you wish to raise, then it is effectively delivering, we say, to the applicant the result that they seek by way of an abuse of the process.

PN878

THE COMMISSIONER: By way of procedure yes, but not by way of final determination.

PN879

MR WATSON: No. But it is proceeding - it is delivering the result that they seek. And we wish to prevent - - -

PN880

THE COMMISSIONER: But hey, and the reverse applies. I mean, whichever way I go, one of you is going to lose.

PN881

MR WATSON: No, Commissioner.

PN882

THE COMMISSIONER: In terms of the procedure, if I go your way they are going to be unhappy because they are not going to be able to present all of the preliminary matters.

PN883

MR WATSON: They lose nothing out of this process.

PN884

THE COMMISSIONER: Yes. They lose the issue of whether or not there has been a transmission of business in the context of the dispute.

PN885

MR WATSON: And if we succeed on those arguments, so too they ought to lose that opportunity, because that is the real conflict on jurisdiction.

PN886

THE COMMISSIONER: That is right. No. Because why should they lose that opportunity of arguing their case?

PN887

MR WATSON: Because they are seeking a determination of an issue by the Commission. And if we are successful in our arguments - - -

PN888

THE COMMISSIONER: If you are successful on your arguments they will lose.

PN889

MR WATSON: Yes. And they are denied nothing if that is the case, because they lose. They haven't achieved a technique - - -

PN890

THE COMMISSIONER: And what are you denied if you lose? I mean, it strikes me that all we are talking about is whether we win or lose, and we aren't even at that stage.

PN891

MR WATSON: We are denied the opportunity of stopping that whole process, because that is what we want to do.

PN892

THE COMMISSIONER: How are you denied the opportunity of stopping that process? The process of argument or the process of decision, I am trying to understand now, Mr Watson. Are you saying that you want to deny them the opportunity of presenting their case other than on the terms that you want it presented on?

PN893

MR WATSON: No. We want to show you that you do not have jurisdiction to proceed to hear and determine the question in paragraph 3.

PN894

THE COMMISSIONER: Yes, I understand you want to show me that. But you want to show me that - - -

PN895

MR WATSON: If we are right on that, that is the end of it, if we are wrong on that, proceed.

PN896

THE COMMISSIONER: Yes. But if you are right on whether or not there is a dispute about the application of the agreement, that is the end of the matter. If you are right on whether or not there has been a transmission of business, that is the end of the matter. It is the end of the matter as far as the Commission currently constituted is concerned, it is the end of the matter, if you are right on any of those preliminary issues. Yes, Ms Lester?

PN897

MS LESTER: Commissioner, sorry. This argument has been proceeding for some considerable period of time, and my learned friend hasn't addressed the fundamental point that I raised from paragraph 67, which is that - and all of the authorities that he relied on go to the point that the first step of the judicial officer is to make a finding of jurisdiction. And under section 45(1)(g) that is what can be appealed, a finding that the member has jurisdiction to act.

PN898

What we seek, we seek to invoke clause 32D of the disputes procedure, which is, if the dispute is not settled the dispute may be submitted for arbitration and the parties must accept the decision. All the other matters are preliminary. If my learned friend went to the Federal Court with an argument, look, we have got 17 arguments in this case and we would like to run them all one at a time so that we can have 17 appeals, they would be thrown out. The question of issue, estoppel, is absolutely fundamental.

PN899

What they say here is, we have got three arguments we want to raise about whether you have jurisdiction or not, let us run them all one at a time because we might lose the second one and be a bit embarrassed, and we will have three trips up to the Full Court. Well, let us talk about who is going to be prejudiced. We are going to be prejudiced. We want to run it all, have a decision, if they are going to appeal we will have one appeal, if they want to go off and get mandamus and whatever, they can do it right now, but let us get on with it. This is taking a long time.

PN900

THE COMMISSIONER: Yes. Mr Watson, I will let you reply.

PN901

MR WATSON: Commissioner, the Federal Court every day identifies preliminary questions which are steps towards resolving the issues before it. We have explained how this is genuinely a preliminary question to determine the issue, or the question identified in paragraph 3. And to adopt the procedure of my learned friend would be by way of the processes of the Commission delivering the, effectively delivering the means for relief of, we say, misusing the Commission and the section 170LW to achieve a certain outcome. We want to prevent that.

PN902

We are not looking to prejudice the other side in any way, but we wish to short circuit this process which we say should not get past first base, and our argument is preliminary in that sense and should be allowed to be developed without - and it doesn't involve any prejudice to the other side.

PN903

THE COMMISSIONER: What is your response on this point in paragraph 67 and 45(1)(g)?

PN904

MR WATSON: There are appeals under section 45(1)(g) on the basis of findings by the Commission of jurisdiction on any number of different bases. And if there is one basis for - if the Commission issues a decision that there is jurisdiction to proceed, then that is appellable. In this case, if our arguments are rejected, the Commission would say, I believe I have power to hear and determine the question in paragraph 3.

PN905

THE COMMISSIONER: Look, paragraph 67 talks in these terms:

PN906

A Full Bench on appeal, for reasons touched upon at paragraphs 45 and 64, will at least be reluctant to grant leave to appeal against an incomplete finding.

PN907

Now, there are three preliminary matters that I have identified, and there may be more. I am not wanting to close off that category. And they are talking about an incomplete finding. And it would be an incomplete finding if I was to determine simply on your matter.

PN908

MR WATSON: What this is directed to is a finding of a dispute as a precursor to exercising further powers.

PN909

THE COMMISSIONER: But how do you deal with paragraph 67 in AMR?

PN910

MR WATSON: Because the arguments we wish to advance are that the Commission lacks jurisdiction to hear and determine the question in paragraph 3. It is not a question - I am not saying you cannot find a dispute.

PN911

THE COMMISSIONER: But a failure to exercise jurisdiction is a grounds for appeal too.

PN912

MR WATSON: Yes.

PN913

THE COMMISSIONER: And that is what, if I was with you, that is what the appeal would be about, and there would be an incomplete finding about jurisdiction.

PN914

MR WATSON: No. There would be a finding - if you were against us on the arguments we wish to advance, you would say, I have jurisdiction - - -

PN915

THE COMMISSIONER: No. If I was for you, is more to the point.

PN916

MR WATSON: Well, I will take that. If you are for us you would say, I do not have jurisdiction to hear and determine the question in paragraph 3.

PN917

THE COMMISSIONER: And there would be an appeal.

PN918

MR WATSON: And an appeal is available. And the appeal is available to whichever side loses on the arguments that we raise because the arguments we raise here are that you do not have jurisdiction to hear and determine the question in paragraph 3.

PN919

THE COMMISSIONER: What if it is the other way around?

PN920

MR WATSON: What other way around?

PN921

THE COMMISSIONER: That I was against you.

PN922

MR WATSON: If you were against us you would say, I do have jurisdiction to hear and determine the question in paragraph 3, and we would say that - - -

PN923

THE COMMISSIONER: No. It wouldn't be a complete - - -

PN924

MR WATSON: It would be a - - -

PN925

THE COMMISSIONER: It would not be a complete finding about jurisdiction.

PN926

MR WATSON: It would.

PN927

THE COMMISSIONER: They go on and say:

PN928

A Full Bench on appeal for reasons touched upon will at least be reluctant to grant leave to appeal against an incomplete finding. Arguably it may not be competent to grant leave.

PN929

MR WATSON: In that case it is a question of a finding of a dispute, not whether there is an ability to hear and determine the question. We are putting this quite differently to the arguments in that case, Commissioner. The issue is, we say you do not have jurisdiction to determine the point 3 question. And if you say I do, I do have jurisdiction, then that will be appellable because it is a finding that the member has jurisdiction. And it is a complete answer to that question because jurisdiction can determine the question.

PN930

THE COMMISSIONER: Well, except that then the Bench would - no. Because there would be a question of public interest as to whether the Commission's finding on the other preliminary points.

PN931

MR WATSON: Yes.

PN932

THE COMMISSIONER: Because it might be - I mean, it comes back - I am sorry, because I might be against you on the point you want to raise, but for you on another point, and the Bench would want to deal with, I would have thought that the Bench would want to deal with it all.

PN933

MR WATSON: Usually the Bench is all about preventing the Commission going beyond its jurisdiction. And if there is an argument that we are right on our points, we show that there is error, the Commission, we say, must grant leave and uphold the appeal, and has an obligation to do so because the appeal is directed towards preventing a member of a Commission acting outside the jurisdiction.

PN934

THE COMMISSIONER: So you are saying that this paragraph 67 is wrong, you dispute that?

PN935

MR WATSON: No. No, it is not directed to the same point at all. We are arguing here that the Commission does not have jurisdiction to determine the question in paragraph 3. It is not a question about whether there is jurisdiction to proceed to resolve other matters under the disputes procedure, and whether there is a dispute which ultimately the Commission found should happen, and it didn't have sufficient information to make it, and all that sort of thing. It is, does the Commission have jurisdiction to determine question 3, because we say it does not, it is addressing a different situation.

PN936

And we say whatever your decision on our arguments, that decision would be appellable, and the Full Bench would be obliged to overturn that decision it thought was erroneous. It would be required to consider whether there was error, and it would be required to uphold the appeal if it otherwise satisfied - jurisdictional issue, if it was of the view that the decision at first instance was incorrect, and quash the decision and take it back to the situation in the opposite position, whatever the result.

PN937

Now, this, what was really being addressed is quite a different situation, and the line of authority of Full Benches if there is discretionary judgments and subpoenas, or things like that, yes, there is a discretion and leave that comes in, but just about every decision under section 45(1)(g) involves a question of a particular jurisdiction argument and whether that is right or not, and whether that jurisdictional issue was properly determined so as to be the step in order to go to the next step, whatever that may be.

PN938

We are not in an award making process here. We are in the realms in this Commission under the guise of judicial issues, legal issues. We have the dispute to find as to whether the agreement applies and we have a preliminary question identified that the commitment is sought to be determined, which is whether the transmission of business has arisen. This not - and we are looking at trying to use section 170LW, and agreement to which my client is not a party, as a means to give the jurisdiction to the Commission to determine a judicial issue. That is what we are dealing with here. Now, we say this whole process - - -

PN939

THE COMMISSIONER: Well, that is what you assert you are dealing with here.

PN940

MR WATSON: That is what we are asserting, and that is only what we can submit. We say that this is a device to try to get a determination by the Commission on the issue in dispute, judicial issue, we say the Commission lacks power to determine that question, so therefore our arguments are preliminary to the determination of that question. We say that we would be prejudiced and it would be delivering to the applicants in the proceedings the very outcome that they have, if they are allowed, to bring into the proceedings at this stage the very question that they want determined.

PN941

THE COMMISSIONER: Yes. I don't propose to adopt the course of procedure proposed, Mr Watson. I come to that view not because I don't consider it to be a preliminary jurisdictional issue, but I consider it to be one of a number of preliminary jurisdictional issues that have to be determined in advance of the Commission proceeding with the substantive matter, if it does proceed with the substantive matter. I am also not persuaded that there is prejudice in the sense in which it would be understood in adopting the course that is proposed by Ms Lester.

PN942

And as I understood the course proposed by Ms Lester was that the initial proceedings would be limited to the jurisdictional issues and would be addressing the wider ones. To the extent that she goes beyond that I will hear objections, and might raise them myself. Yes, Ms Lester?

PN943

MS LESTER: Thank you, Commissioner. As I indicated earlier, I propose initially dealing with Ms McCallum's witness statement and Ms Bat's witness statement. Perhaps if I can call Ms McCallum.

PN944

THE COMMISSIONER: As far as relevant to the jurisdictional matters, yes. I take it we have got - it is not an unfair dismissal, but is there no problem about witnesses being in or out?

PN945

MS LESTER: No.

PN946

THE COMMISSIONER: So we are happy for witnesses to be. Yes, that is okay.

<SUSAN McCALLUM, SWORN [12.07pm]

<EXAMINATION-IN-CHIEF BY MS LESTER

PN947

MS LESTER: Ms McCallum, would you please state your name and professional address for the record?---My name is Susan McCallum, my professional address is 120 Spencer Street, Melbourne.

PN948

Thank you. And, Ms McCallum, have you prepared a witness statement for use in this proceeding?---Yes, I have.

PN949

Do you have a copy of that with you in the witness box?---Yes.

PN950

Are the contents of that statement true and correct?---Yes.

PN951

Thank you. I have no further questions.

EXHIBIT #L1 STATEMENT OF SUSAN McCALLUM, WITH 12 ATTACHMENTS

PN952

THE COMMISSIONER: And just for the record, I take it there are 12 attachments, is it?

PN953

MS LESTER: That is so. Commissioner, in the submissions I will be turning to particular parts of that statement as relevant to the preliminary issue. There was a direction by yourself, sir, relating to notification of any intention to cross-examine, and that hasn't been received.

PN954

MR WATSON: Commissioner, we don't propose to cross-examine Ms McCallum, but in doing so we should say that because the issues for determination are jurisdictional in this part of the case - - -

**** SUSAN McCALLUM XN MS LESTER

PN955

THE COMMISSIONER: Sorry, could I just indicate that Ms McCallum ought to be available if the matter does proceed, I would expect that Ms McCallum would be available for further evidence, and in those circumstances - well, we can deal with what happens after the jurisdictional issues later. But certainly the extent to which you are giving evidence today, Ms McCallum, is about these jurisdictional matters, and it would sound like you are no longer required.

PN956

MR WATSON: And we ought not to be taken to accept what is in the statement insofar as it goes beyond those questions.

PN957

THE COMMISSIONER: I think that is implicit in that.

PN958

MR WATSON: Yes. And we also say that we have filed a witness statement as well which in some respects overlaps, and we assume, for the purpose of the proceedings, that there is no objection on technical grounds to us leading that witness statement simply because we haven't cross-examined Ms McCallum.

PN959

THE COMMISSIONER: I am sure there is not. No, there is not.

PN960

MS LESTER: On that basis might Ms McCallum be excused?

PN961

THE COMMISSIONER: Ms McCallum, you are excused from further attendance at this stage of the proceedings.

<THE WITNESS WITHDREW [12.10pm]

PN962

MS LESTER: Commissioner, the other witness statement that we have filed is a witness statement of Ms Karen Bat, the Secretary of the Victorian Branch of CPSU SPF Group. As we haven't had indication from my learned friend that cross-examination would be required, Ms Batt isn't in attendance, but is available to come and attest to the truth of the statement. But in the interests of convenience might I ask that it be marked, and also to ask whether my learned friend requires Ms Batt to attend to attest to that document.

PN963

Essentially Ms Batt affirms the statements of fact from the contentions of fact and law. She refers in paragraph 6 to the situation about the drafting of the agreement. Much of these are matters raised by Ms Batt relate to the actual content of the agreement, what would form the secondary part of the proceeding in any event, attach calculations and like matters, but really all she does that is relevant to the jurisdictional matters is adopt the contentions of fact and law in relation to the contracting out of the function from Victoria to LMT.

PN964

THE COMMISSIONER: So do you really want it in at this stage?

PN965

MS LESTER: I don't believe it is necessary as long as there is not any objection taken to the contentions of fact and law being put on an evidentiary basis as well as the submissions basis. That is really the work that this has to do.

PN966

MR WATSON: We don't want to concede that Ms Batt has the expertise or the necessary knowledge to assert matters of contention, and they somehow then amount to evidence that can't be controverted or met with the argument that we would have. That is simply not relevant, that other evidence could be deferred, or doesn't establish what is sought to be established. They are really, I guess, submissions as to weight and meaning and significance of these sort of assertions.

PN967

So we don't want to make any concession in that regard. We don't wish to require Ms Batt to be here, except to say that she - the contents of her statement to the best of her knowledge and belief are true and correct. And if my learned friend says on instructions that that is the case, we are content for it to be marked and allowed in on that basis. However, there could - - -

PN968

THE COMMISSIONER: The rest of it goes to weight, yes.

PN969

MR WATSON: Correct, the rest has to be - - -

PN970

MS LESTER: I am happy with that course.

PN971

THE COMMISSIONER: I will mark it as exhibit L2. I note that it is not signed, but you have given us the benefit of your instructions in regard to the matters.

EXHIBIT #L2 STATEMENT OF KAREN BATT

PN972

MS LESTER: That is so, yes. Commissioner, the parts of the contentions of fact and law that could be relevant as far as evidence go are set out from paragraph 41 through to 77.

PN973

THE COMMISSIONER: Sorry, this is in - - -

PN974

MS LESTER: These are in the applicant's contentions of fact and law.

PN975

THE COMMISSIONER: Sorry, I was still at that point.

PN976

MS LESTER: Which are dated 19 December.

PN977

THE COMMISSIONER: Now, we are dealing with paragraphs?

PN978

MS LESTER: 41 on page 16. It really sets out the history of the traffic camera, of the introduction of radars, the civilianisation of the traffic camera operations, the entering of the deeds, the recruitment process and like matters, none of which I believe is contentious.

PN979

THE COMMISSIONER: So it is paragraphs 41 to?

PN980

MS LESTER: Through to 77.

PN981

THE COMMISSIONER: Is there any dispute about those matters? I think what is being contended is that they are not in dispute, paragraphs 41 to 77.

PN982

MR WATSON: There is, and I am not able to say whether there is entire consistency with the evidence we may propose to call, but it really is our call as to what we do in response to it, and we don't propose to cross-examine about those matters.

PN983

THE COMMISSIONER: So it is only to the extent to which you challenge that it will be in dispute?

PN984

MR WATSON: Yes, the dispute

PN985

THE COMMISSIONER: And that will come later. Yes, okay.

PN986

MR WATSON: To the extent that it is relevant. It may not be. We may take a view it is not in any way relevant, and we don't go into that area even if we do dispute it.

PN987

THE COMMISSIONER: There is no concession there. Yes. No, I understand that.

PN988

MS LESTER: Commissioner, I have given my learned friend notice that we would require Ms Law to attend for cross-examination, so it might be appropriate that my friend calls his witness, and then we cross-examine.

PN989

MR WATSON: We are content with that course, Commissioner. I call Mr Robert Law.

<ROBERT LAW, AFFIRMED [12.17pm]

<EXAMINATION-IN-CHIEF BY MR WATSON

PN990

MR WATSON: Mr Law, you have given your name and address to the Commission in swearing and affirming. Is that name and address correct?---Yes, it is.

PN991

Have you prepared a statement for the purpose of these proceedings?---Yes, I have.

PN992

Do you have a copy of it with you?---Yes, I do.

PN993

And is it some 91 numbered paragraphs?---Yes, it is.

PN994

And does yours have a date at the end of it?---Yes.

PN995

Being?---4 February 2003.

PN996

Is the contents of your witness statement to the best of your knowledge and belief true and correct?---Yes. There is just one issue I can clarify.

PN997

Yes?---On paragraph 10, it just says that Tenix Solutions contract with the State Government Victoria, 1 October. It is actually that was the date the contract commenced.

PN998

THE COMMISSIONER: Commenced its contract?---Yes, commenced its contract.

PN999

As the amendment.

PN1000

MR WATSON: Commenced its contract in lieu of contracted.

**** ROBERT LAW XN MR WATSON

PN1001

THE COMMISSIONER: Commenced its contract?

PN1002

MR WATSON: Take out the word contracted, and say commenced its contract.

PN1003

THE COMMISSIONER: I was just going to take out the letters ed.

PN1004

MR WATSON: Are there any other amendments or corrections you wish to make?---No.

PN1005

Thank you. No further questions.

PN1006

THE COMMISSIONER: That includes a series of attachments?

PN1007

MR WATSON: Yes, it does.

PN1008

THE COMMISSIONER: Just for the record, it is seven attachments, at least in mine.

PN1009

MR WATSON: That is correct, Commissioner. I don't think the witness has them all with him in the witness box.

PN1010

THE COMMISSIONER: No, I am sure he doesn't. I can see from here he doesn't.

PN1011

MR WATSON: I tender the witness statement with the attachments.

EXHIBIT #W1 STATEMENT OF ROBERT LAW, WITH 7 ATTACHMENTS

<CROSS-EXAMINATION BY MS LESTER [12.20pm]

**** ROBERT LAW XXN MS LESTER

PN1012

MS LESTER: Mr Law, when did you commence employment with LMT?---June 1998.

PN1013

I am sorry, Mr Law?---June 1998.

PN1014

And what was your initial position with LMT?---Human Resources Manager.

PN1015

And were you involved at all with the development of the bid document to tender for this work?---In a minor way.

PN1016

And what was the nature of your involvement?---Some involvement in the human resources part of it.

PN1017

What aspects of the bid to Victoria included human resources components? Was that in terms of selection of staff?---It is a long time ago, I can't recall the detail now, it is quite some time ago.

PN1018

When was the deed that is exhibited to your statement, a very large document, the deed for the development and provision of processing services for fines and judgment debts, to the best of your recollection when was that signed off?---I believe it was signed in September 1998.

PN1019

And took effect from 31 October?---'98.

PN1020

Were you involved in any aspect of the development of that document or its schedules?---No.

PN1021

LMT Pty Limited - I may use LMT and Tenix interchangeable in here, Mr Law. I am afraid old habits will die hard. But LMT had engaged a consultant to assist in the recruitment process and initial offering of AWAs, a Mr Leigh Hocking of Magellan Consulting, is that correct?---He assisted with the development of the AWA, yes.

**** ROBERT LAW XXN MS LESTER

PN1022

Yes. When was Mr Hocking engaged in that process?---I would not be able to give - I don't know the exact date.

PN1023

Was it prior to LMT being awarded the contract by Victoria?---Yes.

PN1024

And the AWAs were in development prior to the contract being awarded to Victoria?---Yes.

PN1025

And was Mr Hocking involved with you in discussions with Victoria Police concerning the recruitment of persons by Victoria Police as casual camera operators?---Not that I recall.

PN1026

Did you have any discussions with representatives of Victoria Police prior to LMT assuming the contract on 31 October regarding the recruitment of any persons by Victoria Police?---Can you clarify what you mean by Victoria Police. And the reason I state that is it was a number of people involved in other parts of the business, and yes, we had discussions with them.

PN1027

From the Department of Justice?---From Victoria Police about other parts of the business, eg, verifications, etcetera, because they had an involvement in that part. So we had - did have discussions with them, but it is in what part, if you can clarify that.

PN1028

Right. Mr Law, in about July of 1998, June or July - I will turn to your witness statement. You refer to at the date of the - this is paragraph 26:

PN1029

At the date of the contract being signed Victoria Police employed approximately 52 civilian speed camera operators as casuals on common law agreements.

**** ROBERT LAW XXN MS LESTER

PN1030

?---Yes. The question I am asking you is, were either yourself or Mr Hocking involved in any way with Victoria Police in the decision to recruit those casual camera operators?---Not that I am aware of. I definitely wasn't.

PN1031

Are you aware of whether Mr Hocking had any involvement in that process?---I can't speak for Mr Hocking.

PN1032

But Mr Hocking was acting as your agent, the company's agent?---Yes. Well, I don't know if he did. I am unaware of it.

PN1033

I would ask you to make some inquiries over the lunch break regarding that matter, if you could, Mr Law, and consult with persons from the company about whether that is the case?---I can do.

PN1034

You can do that. Thank you. I would like to turn to paragraph 21 of your statement. Could you please explain what TCO means in this context?---Traffic Camera Office.

PN1035

And what was the function of the Traffic Camera Office, and who did it employ?---From my understanding, and to explain the full functions of the Traffic Camera Office, I think it would be more appropriate to speak to someone from actually within the side of the Traffic Camera Office. But from my understanding it is involved in a process of infringements relating to a number of traffic related issues.

PN1036

And that was one of the areas that became part of the contract awarded to LMT together with the Fixed Penalties Payments Office and the EMU, which is the?---Enforcement Management Unit.

PN1037

Thank you. Is that the case, those went across?---Yes, as one of the functions, yes.

**** ROBERT LAW XXN MS LESTER

PN1038

You refer to there being 78 employees in the TCO, excluding the speed camera operators, who were offered and accepted employment with Tenix Solutions?---Yes.

PN1039

Do you know the nature of - were those people public servants employed under the Public Sector Management Act?---Those 78 people I believe were employed under the Public Sector Management Act. Again, it is four and a half years ago, but yes, I understand that they were.

PN1040

They were public servants as described?---I understand they were.

PN1041

Yes. And you go on to say that your understanding that the employment of those employees at the TCO was governed by the Victoria Police Force, the Police Administrative Officers and Forensic Officers Certified Agreement '98, which I may refer onward as the certified agreement?---Yes.

PN1042

That is your understanding?---Yes.

PN1043

What is the basis of that understanding, Mr Law?---Prior to the contract commencing we made investigations as to what terms and conditions people were covered by, and the people who were employed at 601 Bourke Street in a number of administrative related functions were informed that was the agreement which covered those people at the time.

PN1044

They were police administrative officers, is that so, non sworn police?---I believe so.

PN1045

So they were covered by the certified agreement?---Those people at 601, I think it was, Bourke Street, yes.

**** ROBERT LAW XXN MS LESTER

PN1046

The Fixed Penalties Payments Office, which was a unit within the Traffic Camera Office, the employees there, what instrument were they covered by when they were with the State of Victoria?---I understand they were covered by the same certified agreement.

PN1047

I see. And when LMT was awarded the contract with Victoria, was one of the obligations on LMT to offer terms and conditions of employment that were comparable to the terms and conditions that persons were employed on while with Victoria?---Yes, it was.

PN1048

And in relation to those people at the Fixed Penalties Payments Office and the employees in the TCO that you refer to in 21, did LMT ensure that the offer of employment was at least equal to the certified agreement?---Yes, it did.

PN1049

Did LMT ensure that the offer of employment that was made to speed camera operators was at least equal to the certified agreement?---No. Because we were told that the speed camera operators were employed under a common law agreement, so we ensured that the offer that was made to those people was comparable to the common law agreement.

PN1050

Right. And I am asking you a question that is really asking your legal opinion, but is your understanding as advised to you that it is possible for an employer and employee to enter into a contract that takes them outside of the operation of an award or agreement that might otherwise apply to them?---I would have to refer to a legal person on that issue.

PN1051

You state in paragraph 28 that you attended a meeting with Mr Patterson from Victoria Police, together with Mr Hocking, who is acting as your agent, and that Mr Patterson advised you that the speed camera operators were not employed under the certified agreement and weren't intended to be covered by it. So did Mr Patterson give you any basis for that view that you say here he expressed to you?---Sorry, can you clarify that?

**** ROBERT LAW XXN MS LESTER

PN1052

Sorry. Did he indicate the basis of his view that he expressed to you that the speed camera operators were not employed under the certified agreement?---No, he didn't go into great detail.

PN1053

I would like to take you - no, I will go back one step. You have referred in your witness statement on a number of occasions to a due diligence exercise that was conducted by LMT prior to the deed being signed off. In terms of the coverage of industrial instruments what inquiries did you make in relation to the speed camera operators or that the company made?---Okay. In regard to the speed camera operators, back then there was a discussion between another consultant used by the organisation, who forwarded a copy of the common law agreement, and I understand that he was told this is the agreement that covered speed camera operators while they were employed by the state, and that is exactly the same document that Garry Patterson showed us just at the end of last year.

PN1054

What was the name of that person who showed you the document?---That was a person named Gary Crooth.

PN1055

From Victoria Police?---He was a consultant too. He was a consultant to LMT.

PN1056

Right. And who - I am sorry, I missed the first part of your answer. So he was a consultant to LMT?---Correct.

PN1057

Did he work with Mr Hocking in the same business, or a separate consultant?---A separate business.

PN1058

And was he engaged by LMT to liaise with Victoria Police in relation to what agreements were in place?---He was engaged on a number of issues, predominantly the contract signing, winning the business, and at the same time he was given this common law agreement, which is the same one that Garry Patterson chose at the end of last year that people were employed under.

**** ROBERT LAW XXN MS LESTER

PN1059

Did you make any inquiries about whether an award or certified agreement applied to traffic camera operators?---Not to my recollection.

PN1060

So if I understand you correctly, once Mr Crooth, was it?---Correct.

PN1061

Showed you this common law agreement, as far as you were concerned that was the only instrument that applied, and there was no need to make any further inquiry?---From my recollection there is - there were a number of informal discussions that we had with representatives of the state as part of the whole LMT commence operations, and I couldn't tell you the exact dates or times or whatever, but during those number of conversations it was quite clearly confirmed that there was a group of people employed by the Enforcement Management who were covered by AWAs. There was a group of people employed at 601 Bourke by the TCO and are employed under certified agreement, and there is a group of people who are casual camera operators who are quite clearly employed under that common law agreement, and that was the understanding of the three groups of people.

PN1062

Do you have an understanding about what mechanism or by what power the State of Victoria can employ people, or more specifically the Chief Commissioner of Police?---I am not familiar how the state government employs people.

PN1063

Are you aware that the traffic camera operators were employed under the Public Sector Management Act as casuals under section 35A of that Act?---I seem to recall that, but I couldn't confirm it.

PN1064

Perhaps if I could just take you to that common law agreement, which is annexed to your statement as attachment 1. Do you have copies of those attachments with you?---No, I don't, no.

PN1065

I have got a copy, an additional copy of that document. It is the same document as annexed in attachment 1 to your statement. I was wondering if you could just read the - or I will read it to you, the first paragraph:

**** ROBERT LAW XXN MS LESTER

PN1066

Under division 5A of the Public Sector Management '92 incorporating section 35A you were offered casual employment at the Traffic Camera Office under the following terms and conditions.

PN1067

Does that confirm to you that those employees were, in fact, public servants as properly described?---It definitely, you know, it definitely says that they were employed as casual employees at Traffic Camera Office. As to the definition of public service, I am not too sure.

PN1068

Yes. Are you aware that the Public Sector Management Act requires a letter of appointment for such persons?---I am not familiar with that detail of that particular Act.

PN1069

I was wondering if you could read paragraph 4 please?---Of this particular letter?

PN1070

This particular document, yes?---

PN1071

The terms and conditions of employment will generally be in accordance with those applying to other public servant employees in Victoria Police.

PN1072

What inquiries did LMT make about what those other terms and conditions were, Mr Law?---Again, it is four and a half years ago, and I couldn't tell you the intricate details, but I know we did have a number of conversations with representatives of the police to make sure that our conditions of employment were comparable in their opinion as to what they were currently employed under, but I couldn't go - I mean, I know we spoke to them about a number of - were there any things that we were unaware of, or anything that we needed to be made familiar with, and we did inquire about that on a number of occasions.

**** ROBERT LAW XXN MS LESTER

PN1073

Did you make any inquiries about what classification was applied to traffic camera operators by Victoria Police?---At the time we were more concerned about making sure the offers of employment were comparable, and therefore it was making sure that the $14.50 was the comparable rate to offer, so we didn't inquire about what particular classification.

PN1074

So you never made that inquiry about what grading was applied to them, it was simply you looked at the dollar rate, you just looked at the dollar rate?---As I mentioned before, we did inquire if there was anything else that we needed to be aware of in regards to the rate of pay for these particular people, as ensuring that the rate that we offered them was comparable to what they were on.

PN1075

Is your understanding of paragraph 1, and the rates set, that the 15 per cent loading referred to thereunder was paid in addition to the $14.50, or whether it was included within the hourly rate of $14.50?---I understand it is included.

PN1076

So it is $14.50 flat rate?---Yes. Sorry, $14.50 flat rate including the loading, yes.

PN1077

Thank you. Mr Law, have you read the witness statement of Susan McCallum that has been filed herein?---Yes, I have.

PN1078

And the attachments to it?---Yes, I have.

PN1079

I would like to take you to one of the documents. It is attachment 6 to Ms McCallum's statement, sir. It is a document headed Victoria Police position description, unsworn positions, effective date 12 June '98. Have you seen this document before?---Yes.

PN1080

Where did you see the document?---Attached to Sue's statement.

**** ROBERT LAW XXN MS LESTER

PN1081

Sorry, I haven't made myself clear. Had you seen it prior to reading it attached to Ms McCallum's statement?---I think Garry Patterson may have shown it to me at the end of last year.

PN1082

End of 2001?---Two.

PN1083

2002?---I don't recall seeing it before that.

PN1084

Were you responsible - did you have sole responsibility for the company for discussions with Victoria Police regarding the terms and conditions of traffic camera operators, or were other persons involved?---I am just trying to think back. I think I was the main person.

PN1085

Was Mr Hocking involved as well?---I don't believe Mr Hocking had direct conversations with the police.

PN1086

You will notice at the top of that document it specifies that the classification is PAO2?---That is correct.

PN1087

And you will note that on the last page of that document, page 5, pursuant to a delegation under the Public Sector Management Act, 51 positions were created at PAO2 classification levels?---Right.

PN1088

And this was never brought to your attention by Victoria Police?---Not that I recall. I would like to emphasise that we didn't adopt that same classification structure, so, again, it is more the rate, we wanted to make sure that people got the comparable rate to what they were getting paid, because we did not have the same classification structure.

PN1089

Mr Law, did you have at any stage an understanding that the - if I refer to interim award, do you understand the award I am talking about? It has been referred to widely in the proceeding?---The particular interim award?

**** ROBERT LAW XXN MS LESTER

PN1090

The Public Service Non Executive Staff Victoria Interim Award '96, that was made in December 1996. Did you at any stage have an understanding that that award applied to traffic camera operators?---My recollection is that it may not have applied, but I know that in a statement to the Office of the Employment Advocate, and I forget the exact date, that I did incorrectly state that I believed that award definitely did apply to speed camera operators.

PN1091

You did, didn't you?---Mm.

PN1092

And you also indicated your understanding that the certified agreement applied to them, didn't you?---No, I didn't.

PN1093

I would like to take you to that letter, which was a letter I think forwarded by you to our office as part of these proceedings, dated 14 April '98, and if I could ask you to read the third paragraph?---So which one are we looking at? The same one, is it?

PN1094

Yes?---So which one, so the fourth paragraph?

PN1095

So the fourth paragraph heading:

PN1096

LMT Australia recently signed a contract with the Victorian government for LMT to supply services to the Victoria Police and the Department of Justice for the operation of the Traffic Camera Office, FFPO and the Enforcement Management Unit. As part of this contract LMT committed to offering employment to the speed camera operators that the Victoria Police had employed on a casual basis. The offer was required to be comparable to the conditions they were employed under while employed by the Victorian government. LMT ensured that the offers of employment that were made to the speed camera operators were at least comparable to those conditions detailed in their employment agreements and -

**** ROBERT LAW XXN MS LESTER

PN1097

I will stop there. What did you mean by employment agreements?---These common law employment agreements. You will see it is plural, and each one had an individual agreement.

PN1098

Yes:

PN1099

And the Public Service Non Executive Staff Victoria Interim Award, as these detailed their conditions of employment while they were performing their current jobs and were employed by the Victorian government.

PN1100

I am sorry, the date of that letter is 14 April '99, I am corrected. I would like to take you to a second letter - - -

PN1101

THE COMMISSIONER: Are you tendering that?

PN1102

MS LESTER: Yes, sir.

EXHIBIT #L3 LETTER RE TERMS AND CONDITIONS OF EMPLOYMENT DATED 14/04/1998

PN1103

MS LESTER: Mr Law, I would like to take you to a second letter, it is in very similar terms. This letter is dated 5 February 1999, it is signed by yourself and addressed to Mr Ferguson?---Yes.

PN1104

This letter, I should say, was produced on summons by the Office of the Employment Advocate. I would like to take you to the fourth paragraph of that letter again:

**** ROBERT LAW XXN MS LESTER

PN1105

LMT ensured that the offers of employment that were made to the potential employees were at least comparable to those conditions detailed in their existing AWAs and a certified agreement made under the terms of the Workplace Relations Act 1996, and the Public Service Non Executive Staff Victoria Interim Award. These agreements and the award detailed their conditions of employment while they were performing their current jobs and were employed by the Victorian government.

PN1106

This letter was extracted from a file held by the Office of the Employment Advocate that related to Ms McCallum's employment.

PN1107

So I am a little bit confused, Mr Law. There appears to be a suggestion at least early on that there was an understanding that this certified agreement did apply.

PN1108

MR WATSON: I think there should be a question for the witness here.

PN1109

MS LESTER: I am sorry. I will ask this question. The letter dated February, to whom does that refer, which employees?---That would refer to the employees, because as I said before, we referred to the TCOs of people employed within 601 Bourke Street. This particular letter referred to those people, because my recollection, as well as that - there were not casuals or no AWAs for speed camera operators attached to that letter. It was purely for people employed by EMU or people employed at 601 Bourke Street by TCO.

PN1110

So comparing those two letters, if I could understand you correctly, your understanding at the time of writing these letters was that the interim award applied to speed camera operators and to the other employees?---I think I said before that I was incorrect in that statement about the award applying to the speed camera operators.

PN1111

But at the time you wrote this letter surely you believed what you wrote?---Sorry, I said I think that was a mistake that I wrote at the time, that the speed camera operators were respondent to that particular award.

**** ROBERT LAW XXN MS LESTER

PN1112

But surely what you wrote at the time you believed to be correct?---I have answered that three times now.

PN1113

It was a mistake?---Correct.

PN1114

And your understanding in relation to the other employees other than the traffic camera operators, so all the other civilian employees who were engaged by Victoria Police, is that they were covered by the interim award, correct, but your understanding in respect of all of the other civilian employees in Victoria Police who were transferred to the employment of LMT was that when they were employed by Victoria they were covered by the interim award; correct?---When they were employed by the government, I believe that is correct.

PN1115

And in the case of some employees they were subject to AWAs while employed by the State of Victoria?---Those employed by the Enforcement Management Unit, yes.

PN1116

And other employees were subject to the certified agreement?---Those employees at 601 Bourke Street, by the TCO, yes.

PN1117

Thanks.

PN1118

THE COMMISSIONER: Did you want to - - -

PN1119

MS LESTER: I would like to mark both of those letters, sir.

**** ROBERT LAW XXN MS LESTER

PN1120

THE COMMISSIONER: Yes. Well, the one dated 4 April is L3, the one dated 5 February is L4.

EXHIBIT #L4 LETTER RE TERMS AND CONDITIONS OF EMPLOYMENT DATED 05/02/1999

PN1121

MS LESTER: Had you been given any indication by anyone that the interim award applied to traffic camera operators whilst they were employed by Victoria?---No.

PN1122

Are you sure about that?---To my recollection, yes.

PN1123

I would like to take you to some correspondence, Mr Law. Correct me if I am wrong, but LMT was a corporation established as part of a joint venture between Transfield Defence Systems and Lockheed Martin?---I think it was developed between Tenix and Lockheed Martin.

PN1124

And Tenix I think is a wholly owned subsidiary of Transfield?---No. It is a long story, but Transfield split two families, and one family formed Tenix.

PN1125

They are related corporations?---Correct.

PN1126

THE COMMISSIONER: Can I just say that it is my knowledge that when they were split one side was called Transfield Defence Systems, and one side was called Transfield. Later Transfield Defence Systems became Tenix. Now, quite how that happened I don't know, but at the time I was in the panel it was dealing with Transfield Defence Systems at Williamstown.

PN1127

MS LESTER: I have had the odd involvement in the wharves, but it has gone out of my head. If I could ask you to look at that letter. It is signed by Karen Bat, Branch Secretary of the CPSU, and she has written to both the companies that I have just read out to you, and she refers at this time and 13 February '97:

**** ROBERT LAW XXN MS LESTER

PN1128

As you may be aware, unsworn staff -

PN1129

I will stop there. Do you have an understanding of what unsworn staff means in this context?---Yes, roughly.

PN1130

Would you please explain?---I understand - I couldn't define it properly because I am not from the police background, but I know that some people who were non police were referred to as unsworn staff, but I don't know the full technical definition.

PN1131

Sure, thank you:

PN1132

As you may be aware, unsworn staff at the TCO and EMU won an interim federal award, the Public Service Non Executive Staff Victoria Interim Award 1996, on 18 December '96, therefore their terms and conditions of employment are regulated by that award and the Workplace Relations Act.

PN1133

Thereafter section 149 of the Act is set out. And in the next paragraph, and I will read:

PN1134

In view of the above the CPSU SPF Group Victorian Branch therefore seeks immediate assurances that should your company be the successful bidder in the TCO EMU outsourcing project and therefore become the successor, assignee or transmittee of the above business, you will abide by section 149 of the Workplace Relations Act, and honour the terms and conditions of the members interim federal award. Please provide a response.

**** ROBERT LAW XXN MS LESTER

PN1135

Have you seen that letter before?---No, I don't recall. I would ask that that letter be marked.

EXHIBIT #L5 LETTER FROM CPSU DATED 13/02/1997

PN1136

MS LESTER: I might just show you another letter, Mr Law. This is a letter dated 23 May 1997, and it is on the letterhead of Transfield Defence Systems. I think the Commissioner indicated before that that was the predecessor company that was renamed Tenix?---I understand, yes, I understand.

PN1137

And who is Mr Chris Thomas?---He was a consultant, I believe, who was instrumental in winning this business.

PN1138

So his title there is Manager, Government Outsourcing, and I understand from your witness statement where you described the business that LMT was involved in, the aim is to go out and tender to different governments and local governments, win work that was previously government run, to conduct on a profit basis. Is that the case?---That is approximately it.

PN1139

That is a response to the letter that I have showed you previously?---Yes.

PN1140

I withdraw that. It is not apparent from the letter, but Mr Thomas indicates in the third paragraph:

PN1141

In the event that we are advised that we are preferred tenderer, and your union is representing former state staff who may elect to take up offers of employment with our company, please be assured that we look forward to meeting with you to discuss terms and conditions of employment.

**** ROBERT LAW XXN MS LESTER

PN1142

Have you seen that letter before?---No, I don't recall seeing it.

PN1143

If I could have that marked, if the Commission pleases, tender that.

EXHIBIT #L6 LETTER FROM TRANSFIELD DEFENCE SYSTEMS DATED 23/05/1997

PN1144

MR WATSON: Can I just say the relevance to the jurisdictional arguments are perhaps eluding us at the moment, and we don't take objection to these letters that have not been identified by the witness going in, but there must be some limit based on both of those points really as to how far we need to go.

PN1145

MS LESTER: There is not very much further to go, Commissioner, on this.

PN1146

It is a letter dated 19 August. I can tell you that this was on CPSU letterhead, a copy letter sent by Mr Johnson to Mr Thomas, and I will just ask you to read the second paragraph to yourself. And there is another reference to section 149. Are you aware of section 149 of the Workplace Relations Act?---I couldn't quote it to you or I couldn't tell you the detail of it off the top of my head.

PN1147

Do you understand that it deals with transmission of business and the effect on awards?---I would need to look at the Act for that. I don't have that intimate knowledge of the Act.

PN1148

Do you recall seeing this letter?---No, I don't.

PN1149

If that letter marked. And my friend is quite correct, it should, I guess, technically be for identification.

**** ROBERT LAW XXN MS LESTER

PN1150

THE COMMISSIONER: I will mark it as L7. The issue of its prominence and weight we will deal with in due course.

PN1151

MS LESTER: The document is extracted from the union's files though.

EXHIBIT #L7 LETTER FROM CPSU DATED 19/O8/1998

PN1152

MS LESTER: And finally, Mr Law, just one further letter. This is a letter signed by yourself. I think you said earlier that you commenced employment in June of '98?---Yes.

PN1153

So would it be correct to say that you have come on board to manage this part of the process and taken it over from Mr Thomas?---No. Mr Thomas had a broad range of functions.

PN1154

Yes. Do you recall how you became involved in responding to this letter?---It is four and a half years ago, I don't remember letters I got four and a half years ago.

PN1155

Just in the first paragraph you refer to the letter of 19 August '98?---Yes.

PN1156

And you note that LMT at this point in time was the preferred bidder?---Yes.

PN1157

That the contract hadn't been approved, and that you would meet with the union at some point, and note that Mr Thomas is no longer involved in the project?---Mm.

EXHIBIT #L8 LETTER TO CPSU FROM MR LAW DATED 1998

**** ROBERT LAW XXN MS LESTER

PN1158

MS LESTER: Mr Law, I would like to take you back to the letter that was marked L7, the letter dated 19 August?---Yes.

PN1159

When you received that letter, which I would just like to confirm that you made no inquiry as to what was being referred to in relation to section 149 of the Workplace Relations Act?---It is four and a half years ago, I can't remember if I received this letter or what thoughts were going through my head at the time.

PN1160

The reason I put this to you, Mr Law, because I would like to respond to a number of matters in your statement and in the contentions of fact and law that have been filed by LMT. You indicated that at no time had any suggestion been made that these employees, the traffic camera operators, were covered by an award or certified agreement. I put to you on the basis of the correspondence I have just tendered that that is an incorrect statement?---I would reply to that, that I think as I mentioned earlier on, the way we defined it, and I think it was defined by the state was, there was the TCO employees, there were EMU employees and there were speed camera operators, and they are employed on separate tools.

PN1161

That is your understanding. But it was put to you in clear terms in those letters, was it not, to the company, the union's position that the interim award applied to the traffic camera operators, was it not?---By the base of that letter I would say yes, it must have been by the base of that letter.

PN1162

And did the company make any further inquiries, having received that correspondence and been put on notice, as to whether that point was correct, that the award applied?---I really don't recall.

PN1163

Mr Law, are you aware that the certified agreement provides for casual employment?---I couldn't confirm I know that, I haven't looked at it in detail, but I assume it would.

**** ROBERT LAW XXN MS LESTER

PN1164

And have you had cause to examine what I would call - are you familiar with the term scope clause or application clause of an industrial instrument?---I am familiar with that, yes.

PN1165

Have you had cause to look at that scope or application clause yourself?---I have probably read it, yes, but I couldn't tell you what it says.

PN1166

Did you read it at the time that you were preparing offers of employment for the staff in the TCO, the traffic camera operators, the Fixed Penalties Payments Office to ascertain whether that agreement did, in fact, apply to them?---I really can't recall looking specifically at that.

PN1167

THE COMMISSIONER: Ms Lester, is that - - -

PN1168

MS LESTER: I have got a little bit more, Commissioner. That is a convenient time, if the Commission pleases.

PN1169

THE COMMISSIONER: Well, he is also - I think you asked him to do something over the lunch break. We will adjourn until 2.15 pm.

LUNCHEON ADJOURNMENT [1.00pm]

RESUMED [2.15pm]

PN1170

MS LESTER: Mr Law, before the lunch break I invited you to, over the lunch break, to obtain instructions over whether Mr Hocking and Magellan Consulting were involved at all in the recruitment process of casual traffic camera operators by Victoria Police. Did you have an opportunity to make those inquiries?---Yes, I did.

**** ROBERT LAW XXN MS LESTER

PN1171

What was the nature of the - - -?---He had no direct involvement in the recruitment of the police or discussions with the police.

PN1172

When you say no direct involvement, was there indirect involvement?---How do you mean, sorry? Can you clarify what you mean.

PN1173

Your answer was you had no direct involvement?---Yes.

PN1174

Are you saying that there was involvement of an indirect nature?---Mr Hocking was aware of the process that we were going through, and we did the process we are doing to see if he had any suggestions as to how we can improve it.

PN1175

Sorry, reviewed the process of?---You know, the AWA, he had involvement with the AWA, making comments to that. I am not too sure of your question.

PN1176

Sorry, perhaps my question wasn't very clear. Victoria Police recruited on casual employment contracts?---Correct.

PN1177

In anticipation that those employees would transfer to the successful tenderer. My question was, did Mr Hocking have any involvement in Victoria Police's selection of those employees?---No, no.

PN1178

Mr Law, do you have your witness statement with you?---Yes.

PN1179

If you could turn to paragraph 72 please. You discuss some improvements in the process, and you state that the contractor was engaged in multi-skilling of its employees?---Yes.

**** ROBERT LAW XXN MS LESTER

PN1180

What is the nature of that multi-skilling?---It obviously varies from a part of the business to a part of the business. I was with speed camera operators. There is not a whole lot of multi-skilling that can go on. But in other parts of the business it is quite significant. People in other parts of the business have been able to rotate between various parts and answer, for example, different phone calls rather than answering one particular type, people working between various departments, etcetera.

PN1181

I see. And in the case of the speed camera operators, you said that wasn't possible. Are they performing essentially the same job as was being performed when they were with Victoria?---Essentially, yes.

PN1182

If you could turn to paragraph 76 of your statement - I am sorry, 74. You state that approximately - and you state that this is partly on information provided by representatives of the State of Victoria. Are they representatives employed within Victoria Police, or can you identify those sources?---That have provided that information?

PN1183

Yes?---Who provided that information was Garry Patterson.

PN1184

You state:

PN1185

In '94 Victoria Police contracted a handful of civilians to operate speed cameras, and otherwise speed cameras were operated by sworn officers of Victoria Police.

PN1186

And you state that those persons were employed on common law individual employment agreements, which you attach as attachment RL5. Do you have that with you in the witness box?---No, I don't.

PN1187

I will just hand a copy of that to you. Mr Law, did you have any involvement in employee relations in Victoria between 1992 and 1996?---In Victoria Police?

**** ROBERT LAW XXN MS LESTER

PN1188

In Victoria generally?---For a period of that, yes.

PN1189

Yes. Are you aware of the Employee Relations Act 1992, the Victorian legislation?---Not in great detail, no.

PN1190

Right. I would just like to point to you that this agreement is not, in fact, a common law agreement as such, but an instrument or agreement that is made as a statutory - made pursuant to the Employee Relations Act 1992, and given statutory force by that legislation. Are you aware that that is the case?---Yes.

PN1191

Just turning within that document, I would like to take you to the second page after the cover, or the first page after the cover sheet, and in one of the boxes there is a heading, terms and conditions?---Yes.

PN1192

This agreement is on the terms and conditions set out in this agreement and all the relevant provisions, including regulations in the Employee Relations Act 1992 and the Public Sector Management Act 1992.

PN1193

?---Right.

PN1194

And then turning over the page to - sorry, I think I have given you my one that had the tag on. It is all right, I will just find it again. I am sorry, Commissioner, I did give my witness the copy with the tag on. This agreement incorporated - - -

PN1195

THE COMMISSIONER: He doesn't have a copy of the agreement, it has been taken away from him without any discussion with me, it would appear.

PN1196

MS LESTER: Look, I might just leave that point actually. Are you aware that the - are you familiar at all with the terms of the interim award 1996 that we have discussed earlier?---I have read it on previous occasions, but I couldn't answer questions of the detail of it now.

**** ROBERT LAW XXN MS LESTER

PN1197

Yes. Are you familiar with clause of that award? I will just give you some context because it was a matter of some discussion between LMT and the Office of the Employment Advocate. That clause incorporated the terms of individual and collective employment agreements that were made under the Employee Relations Act 1992. Do you recall that clause?---I don't recall it, no.

PN1198

I will take you to the award to see if that will refresh your memory. Commissioner, I believe I have got another copy.

PN1199

THE COMMISSIONER: I think that is in, isn't it?

PN1200

MS LESTER: I think it is in. I can't recall it being marked.

PN1201

If you would like to turn to clause 19 of that award, which commences at page 13, and 19.1, that states:

PN1202

Subject to this award the terms and conditions of employment contained in existing collective or individual agreements shall apply to the employees parties to those agreements, and subject to this award all other terms and conditions to be applied to in (u) in 4E, or an employee entering the relevant structure shall be determined as follows.

PN1203

And thereafter there was a method of ascribing a particular agreement to particular employees in various departments. And if you turn over to the very last page in the table there, and you will see in relation to Victoria Police it refers to a collective employment agreement. I would like to put it to you that this individual contract that you have annexed to your statement as attachment 5 is in the types of employment agreement that were incorporated by reference into the interim award, which from December 1996 overrode that document and became the relevant instrument that determined terms and conditions?---So what is the question?

**** ROBERT LAW XXN MS LESTER

PN1204

MR WATSON: I object to that. I mean, it is asking a very complex legal question of a witness in an area of employment that he wasn't involved, and I think it is an unfair question. It can't take us anywhere.

PN1205

MS LESTER: I will withdraw the question, and I will refer to the matter in submissions.

PN1206

I would like to take you to paragraph 88 of your statement. You state there that to your knowledge no employees of Victoria Police who were offered employment with Tenix Solutions made inquiries as to whether they were covered by certified agreement or award?---Yes.

PN1207

In relation to that knowledge is that just referring to inquiries made of the company?---To my knowledge that question has never been asked.

PN1208

Are you aware that employees made inquiries of the Office of Employment Advocate to that effect?---No, I am not aware of that.

PN1209

I would like to take you to paragraph 3 of your statement. You talk about the nature of LMTs business. You state there that:

PN1210

The company was established by the joint venture partners and for the purpose of providing specialist infringement processing services to government instrumentalities in Australia and South East Asia.

PN1211

?---Yes.

PN1212

Over the page at paragraph 9 you state that:

**** ROBERT LAW XXN MS LESTER

PN1213

Tenix Solutions has contracted with the City of Port Phillip and the Wellington City Council in New Zealand.

PN1214

?---Yes.

PN1215

Are there any other contracts that LMT has obtained since preparing your statement?---Not that I can recall off the top of my head.

PN1216

Is your role within Tenix Solutions confined to HR management of the Victorian contract?---No, no. It is involved in the other part. HR practices the business.

PN1217

Yes. What instruments apply to the employees engaged in the City of Port Phillip and Wellington City Council work?---Sorry, can you repeat that?

PN1218

What awards or agreements are in place?---In regard to the City of Port Phillip, any people working on those have Australian Workplace Agreements. The New Zealand people are covered by the New Zealand legislation. I don't know if that is applicable to here.

PN1219

Does Tenix Solutions conduct any other form of business other than what is set out in your statement?---I am unsure what you are leading to, but nothing that I can recall off the top of my head. I mean, we obviously have involvement in cameras in the tunnel. I don't know if that is where you are heading.

PN1220

Yes. It is purely - it's sole business is infringement processing services for traffic?---Correct, yes.

PN1221

To local and state governments?---Mm.

**** ROBERT LAW XXN MS LESTER

PN1222

Later in your statement you refer to the deed that governs the relationship with the State of Victoria. Again I am at a disadvantage because you don't have the copies with you. Commissioner, the deed, Commissioner, is at attachment 2, and I am looking at the page that actually has the signing clause at the top. It comes in a fair way in immediately after the index.

PN1223

THE COMMISSIONER: The pages are numbered, or they are on my copy.

PN1224

MS LESTER: It is page 1 which is after the index, which is about 20 pages or so; the initial pages are Roman numeral.

PN1225

THE COMMISSIONER: Yes. It is the unnumbered page 1.

PN1226

MS LESTER: The recitals of the deed, I would like to read B to you, and then ask you a question. I will read A as well:

PN1227

The state has supported protection, prosecution, court enforcement and warrant enforcement of traffic and other fixed penalty infringements through a number of administrative and support functions provided by the Traffic Camera Office, TCO, and/or the Fixed Penalties Payments Office, FPPO, and the Enforcement Management Unit, EMU.

PN1228

In B:

PN1229

The TCO is a division of the police mandated to change the high risk behaviour of motor vehicle drivers by the deployment of effective detection and prosecution systems which act as a deterrent against speeding and red light offences. The FPPO is a unit within the TCO responsible for receiving and entering onto the database all infringement notices issued by the police and other agencies which have the authority to issue such notices, and for the administration and collection of

**** ROBERT LAW XXN MS LESTER

infringement notice penalties. The EMU is a unit of the Department of Justice of the state, and is responsible for the processing and collection through mainly non adversarial Court processes of fines imposed by pairing a designated venue of the Magistrates' Court. EMU is also responsible for the functions of the Sheriff, including execution of warrants issued by Courts both in criminal and civil jurisdictions.

PN1230

In C:

PN1231

It became apparent to the government that there were efficiencies to be gained by integrating the administrative and support functions of TCO, FPPO and EMU, and outsourcing the provision of these services. The government wishes to have developed a single logical system to support detection, prosecution, Court enforcement and warrant enforcement of infringements together with the collection and enforcement of other criminal and civil Court orders.

PN1232

And I will stop there. Mr Law, that precisely describes the functions or the activities that were previously performed by the State of Victoria and are now activities performed by LMT, now Tenix Solutions, on behalf of the State of Victoria. Would you agree with that?---Yes, broadly, yes. Also part of business I should say. I mean, obviously we do other business, as we have just been talking about, not just this.

PN1233

Are other business in the infringement and detection area for other clients?---Correct.

PN1234

I would like to take you to a document and see if you have seen it before. Mr Law, I can tell you this is a document that was discussed with the CPSU by the State of Victoria, and outlines the business project in anticipation of the outsourcing, it outlines the entire procedure the outsourcing of those functions. Are you familiar with this document?---I see it is dated January '97. I haven't seen it before.

**** ROBERT LAW XXN MS LESTER

PN1235

Right. Accept that for a moment. I would just like to take you to a number of things in the document and ask you some questions about them. Page 2 is a table, and in the dot points at the top under the heading, project snapshot, there is the second last dot point states:

PN1236

Government selling, ie, wanting marketing of its intellectual capital as well as buying services.

PN1237

Do you agree that as part of this contract the government provided under licence significant intellectual property?---I would really refer to our Commission Manager, he has a much greater knowledge of the in depth nature of the contract.

PN1238

I would like to take you to page 18 of that document, under the heading, transfer of public sector staff to the contractor, and there is a heading, issues:

PN1239

Will sufficient staff voluntarily transfer to the contractor?

PN1240

Second dot point:

PN1241

Government has power to use section 81A(6) of Public Sector Management Act, which may effectively require staff to transfer, but bidders have said they don't want conscripts.

PN1242

Do you have an understanding of what that proposition, what that point means?---Again, it is dated January '97, so I don't know. I haven't seen that before. I am not familiar with that sort of terminology about not wanting conscripts.

PN1243

Yes. Are you aware of that section of the Public Sector Management Act?---That section you have just referred, no. Sorry, you mean the 81A?

**** ROBERT LAW XXN MS LESTER

PN1244

Yes, section 81A?---Yes, I am familiar with 81A, yes.

PN1245

So you are aware that under what was called corporatisation, where, or outsourcing of government, the government could require people to transfer their employment to another entity or be deemed to have resigned their employment?---I believe they are words to that effect, yes.

PN1246

Yes. So in that context, and it is a reference to bidders have said they don't want conscripts, are you aware that there were four bidders for this work?---I am aware there were a number of bidders, but I couldn't tell you the exact number.

PN1247

I understand that you came on board a short time - - -?---June '98.

PN1248

June '98, some time after this. Can you make any comment about whether LMT was approached for its view in relation to the use of section 81A?---I became aware of it because we asked what happens if people don't want to accept offers from LMT, so I am aware of it, and it was explained to me about section 81A, and what potentially the ramifications were.

PN1249

So was it explained to you that section 81A could be used if the bidder required it to be used?---I don't recall them saying it could be used, but I was aware it was one of a number of things that could happen.

PN1250

So it was an option in the circumstance?---My recollection, yes, it was an option.

PN1251

But that wasn't LMTs preferred option?---That was the state government issue. We had a commitment to offer people comparable conditions. Now, if people decided to decline that offer, that was really an issue between that employee and the state government.

**** ROBERT LAW XXN MS LESTER

PN1252

Yes. I will just take you to that fourth document, RFP, which I can tell you it stands for request for proposals. So request for proposals states that:

PN1253

Bidders are strongly encouraged to make offers of employment to all public servants within the scope, and that no voluntary redundancy packages will be offered.

PN1254

Do you understand that Victoria Police did not offer redundancy packages to any employee who declined an offer of employment with LMT?---We didn't keep in contact with those people who remained with the state government, so I don't know what the state government chose to do with those people who declined to come across.

PN1255

Thank you. If I could have that document marked, if the Commission pleases.

EXHIBIT #L9 REQUEST FOR PROPOSALS

PN1256

MS LESTER: I would like to take you now to paragraph 79 of your statement, where you summarise the conditions in relation to the contract for casual employment?---Yes.

PN1257

And you purport to summarise those in paragraph 79. I would like to take you to the actual terms of the document. I don't think you have included it in this summary there, but in schedule A to - it is attachment 1 to Mr Law's statement, sir - in the schedule to that one page contract for casual employment, under heading A, general employment arrangements, perhaps if I just read it to you, Mr Law; it is not too long:

**** ROBERT LAW XXN MS LESTER

PN1258

The employees employed under this contract as a casual traffic camera operator within the traffic and operations support department of the Victoria Police Force. 1.2) the employer intends to assign this contract to the Traffic Camera Office and Enforcement Management Unit contractor within 12 months of commencement of this contract. 1.3) the employee understands and accepts that this contract of employment is offered on the condition that the employee transfers to the employment of the contractor.

PN1259

Was there such a purported transfer of that contract to LMT?---Sorry, can you clarify that?

PN1260

Do you understand that that contract states that the State of Victoria intends to assign that contract of employment, or transfer it to the successful contractor?---I don't know what the police's intent was right in that when they offered it to the casual people, but I do know, you know, we did say we would offer them comparable conditions, but I can't answer for the police as to what they were meaning to the individual when they did that.

PN1261

That is fair enough too. I don't think anyone would know. You state in paragraph 88:

PN1262

To my knowledge no employees of Victoria Police who were offered employment with Tenix Solutions made inquiries of whether they were covered by agreement or award.

PN1263

And in 89 you state:

PN1264

100 per cent of civilian speed camera operators previously employed by Victoria Police accepted employment with Tenix Solutions.

**** ROBERT LAW XXN MS LESTER

PN1265

Are you aware of any options for the employees, or what would happen to employees of Victoria Police if they did not accept LMTs offer?---That would be a matter between that person and the Victoria Police.

PN1266

I understand that. But are you aware of what those options were?---I am not aware of any options that were available or what were the options available.

PN1267

Mr Law, it has been put to the company that in the absence of any AWA, such as is now the case for Ms McCallum, as you are aware, her AWA has been terminated in these proceedings. We can do this the hard way or the easy way. I might do it the easy way. Have you seen the schedule put forward by Ms McCallum as to the conditions of employment which she says should be provided to her by the company?---I wouldn't mind a clarification or a bit of a memory jolt if you have got one there.

PN1268

I will just give you a moment to read that. I would just like to pose a number of questions to you. Does LMT accept that the terms and conditions listed in that table should be provided to Ms McCallum?---Sorry, say it again.

PN1269

Does the company accept that the terms and conditions described in that table are terms and conditions that should be applied to Ms McCallum?---No.

PN1270

Does the company accept, as put to it by Ms McCallum, that LMT shouldn't alter or vary - I beg your pardon, I withdraw that - that LMT should not require Ms McCallum to work shifts of less than six hours or more than 12 hours?---Can you say that again, sorry.

PN1271

Ms McCallum asserts that the company should not require her to work shifts of less than six hours?---Okay.

PN1272

What does the company say to that?---I would probably need to speak to some people in the business, but I would say no.

**** ROBERT LAW XXN MS LESTER

PN1273

Does the company agree that it shouldn't require her to work shifts of more than 12 hours?---I would need to consult other people in the business as to how often that occurs, if that occurs.

PN1274

Does the company agree that where Ms McCallum is required to work a shift in excess of 10 hours she should be provided with an additional paid meal break of 20 minutes?---No.

PN1275

Does the company accept that Ms McCallum should be provided with a paid meal break in any shift of more than five hours?---No.

PN1276

Does Ms McCallum regularly work shifts in excess of five hours without a paid meal break?---I don't know. I would have to consult with her supervisor and find out her time sheets. I don't know about that information.

PN1277

I can tell you, Mr Law, that Ms McCallum's time sheets are attached to her witness statement, and they do show that regularly she worked without any meal break?---Okay. Also I know we have told people if you wish to take a break, whether it is five hours or not, please take a break, so we leave it to the individual due to the nature of their work.

PN1278

And are those breaks paid or unpaid?---They would be unpaid.

PN1279

And do you accept, does the company accept that those breaks should be paid?---No.

PN1280

Does the company accept that - if I could take you, rather than read it out, because it is a bit confusing, on page 5, you will see there that this is what has been put to the company as to the loading that should be paid on ordinary time rate of pay in respect of particular shifts worked, described as afternoon shift between three and 11, night shift between 11 and 7, Saturday, Sunday and public holiday work. Does the company accept that those penalties should be paid?---No.

**** ROBERT LAW XXN MS LESTER

PN1281

Does the company accept that overtime should be paid at the rate of time and a half of the ordinary time rate for any hours worked outside of rostered ordinary hours of duty?---Beyond 76 hours in a fortnight you mean?

PN1282

Beyond the hours that have actually been set in the roster. So say a roster has been set for Ms McCallum to work from 10 in the morning till five in the afternoon, and she is requested to stay for an additional two hours, does the company accept that those two hours should be paid at overtime rates?---Only if it was beyond 76 hours in a fortnight.

PN1283

Thank you. Does the company accept that it is obliged to classify Ms McCallum's employment in accordance with the Cullen Egan Dell points factor evaluation system?---We do do that as a practice, but there nothing to say we have to do it.

PN1284

So you have done a points factor evaluation?---Yes, we have on two occasions.

PN1285

Does the company accept that Ms McCallum should be classified as a police administrative officer 2?---No.

PN1286

Does the company accept that Ms McCallum was classified as police administrative officer 2 when she was employed by the Victoria Police?---From the documentation I have seen, they did classify her as level 2, when they classified the position, I should say.

PN1287

And was the company aware of that classification at the time it took over traffic camera operators?---No. We purely focused on the terms and conditions that she had, eg, the $14.50.

PN1288

I think I have asked you that before. I apologise. Is it the position of the company that it refuses to discuss these matters with Ms McCallum and her representatives because the company doesn't accept that the certified agreement applies?---We don't refuse to discuss any issues.

**** ROBERT LAW XXN MS LESTER

PN1289

Has it been put to the company that those conditions ought be applied?---The whole thing?

PN1290

Yes?---I would think - I know there is a lengthy draft agreement. I would imagine that contained this information.

PN1291

And does the company refuse to provide those conditions to her?---Again, can you clarify which conditions. You mean this whole thing?

PN1292

Yes?---As a whole basket, yes.

PN1293

Is it the company's position that in the absence of an Australian Workplace Agreement, that Ms McCallum's only entitlements are to the terms and conditions in schedule 1A of the Workplace Relations Act?---Yes.

PN1294

If the Commission pleases.

PN1295

THE COMMISSIONER: Any re-examination?

PN1296

MR WATSON: No re-examination, Commissioner.

PN1297

THE COMMISSIONER: Thank you, Mr Law. You may be required at some later stage in the proceeding, but for now you are free to go.

<THE WITNESS WITHDREW [2.49pm]

PN1298

MS LESTER: Just to complete the evidence, Commissioner, I would just like to tender one more document. It is a document extracted from the files of the Commission, being the statutory declaration filed by the employer in respect of the Victoria Police Force Unsworn Employees Certified Agreement.

EXHIBIT #L10 VICTORIA POLICE FORCE UNSWORN EMPLOYEES CERTIFIED AGREEMENT

PN1299

THE COMMISSIONER: The contentions of fact and law I will mark as L11.

EXHIBIT #L11 CONTENTIONS OF FACT AND LAW

PN1300

THE COMMISSIONER: And there were some in reply, weren't there?

PN1301

MS LESTER: Yes.

PN1302

THE COMMISSIONER: Yes, dated 19 December, and I will mark that as L12.

EXHIBIT #L12 CONTENTIONS OF FACT AND LAW IN REPLY

PN1303

MS LESTER: I have prepared for the convenience of the Commission and the parties a brief chronology. Some of the documents to which it refers have been tendered in evidence today and aren't referenced, but where applicable there are references to exhibits and annexures that we have filed.

PN1304

THE COMMISSIONER: Without committing anyone to the dates, I will - - -

PN1305

MS LESTER: Yes. It is merely an aide memoir.

PN1306

THE COMMISSIONER: Yes. I will still mark it as L13, without giving it evidentiary status.

EXHIBIT #L13 CHRONOLOGY

PN1307

MS LESTER: Commissioner, I was going to provide a brief overview of the evidence, but given that it is all very fresh I will skip immediately to the submissions in relation to the nature of LW. I will be making some more detailed submissions in relation to some of the evidence when we come to the transmission point. Commissioner, we have probably gone over this ad nauseam, but I would like to turn to clause 32 of the certified agreement, the dispute settlement procedure.

PN1308

The dispute that is before the Commission has been summarised in a reasonably graphic way in the last exchange between myself and Mr Law regarding the terms and conditions that ought be applied to Ms McCallum's employment. My learned friend has foreshadowed an argument that this dispute is a sham, that it is dressed up to obtain a finding about whether the agreement applies, as if that of itself is of any benefit whatsoever to this employee.

PN1309

The situation for Ms McCallum is that her AWA was terminated by order of the Commission as part of a process whereby she would be, in effect, the representative employee of the other employees in the same boat. The company contends that in the absence of that AWA applying that the employee has no, in effect, no terms and conditions because the AWA, the statutory instrument, has been set aside.

PN1310

It says that all it is obliged to apply are the terms of schedule 1A of the Employee Relations Act, which are a bare minimum hourly rate of pay to a maximum of 38 hours per week, annual leave, sick leave and parental leave, from memory. Everything else is silent. The employee says, I should be paid a particular rate of pay which is the rate of pay that derives from the certified agreement. She says, I am entitled to a range of terms and conditions, and the company should be providing these to me, and it is not.

PN1311

Now, it is obvious that the question of whether or not the agreement applies is a key consideration in the dispute, but it is certainly not the only matter. The dispute is outlined in the contentions of fact and law. There are a number of issues to do with the means by which the conditions should be applied, but there is also dispute about what the actual entitlements are. I would invite the Commission to examine our contentions of fact and law which were just marked, and page 2 through to page 11.

PN1312

For example, the question of the classification of the position is an absolutely key matter. The documents that have been tendered show that the Office of the Employment Advocate, on advice from the company, compared the traffic camera position with a PAO1 position, whereas the applicant contends that the position is payable as a PAO band 2. And we have led some evidence that showed that that was the classification previously afforded by Victoria Police.

PN1313

In the contentions in reply that matter is specifically denied. So there is a classification dispute in place of the kind considered by the Commission in a number of matters, including the HSUA v Gribbles Pathology case, which is included in the case bundle I handed to the Commission earlier. The company denies in its contentions that Ms McCallum is a shift employee, denies she is a shift worker, denies she is entitled to any penalties of any kind for shifts. If you turn to the contentions in reply at paragraph 14, the absurdity of the situation - - -

PN1314

THE COMMISSIONER: It might be appropriate if I mark those at this point.

EXHIBIT #W2 VARIOUS AUTHORITIES

PN1315

MS LESTER: At paragraph 14:

PN1316

The respondent submits there is currently no "dispute" between the parties regarding the question of how the police agreement would apply to Ms McCallum's employment, assuming it is binding in some way. There have not been any discussions between the parties on these issues.

PN1317

I will stop there. The reason there haven't been any discussions is because the company has put up a point blank proposition that the agreement doesn't apply and we won't discuss it, we refuse to discuss the terms of the agreement. So it would be a nonsense to be able to say there isn't a dispute because the company won't make that acknowledgment. It becomes circular. Effectively the party could deny or prevent the invoking of section 32 of the agreement by simply refusing to acknowledge that the agreement applies, and every such agreement could be rendered nugatory in the absence of a declaration from the Court. That just can't be correct.

PN1318

But the respondent then goes on at paragraphs 15 and onward to describe in some detail about why it disagrees with the applicant's interpretation of the agreement. It submits that the employees aren't shift workers, but permanent and part-time employees working variable ordinary hours with varying starting and finishing times. It states there is no shift roster, but the required hours of work are determined by the police. It states that clause 15 of the police agreement that refers to current shift penalties is not ascertainable, and that even if the relevant penalties that used to be contained in police manuals, that they don't form part of the agreement.

PN1319

So it sets out in some detail what we are in disagreement about, what we have contended, or the applicant has contended certain things in relation to the meaning of clause 15, and they are denied. In paragraph 18, the standard 7.6 hour roster is discussed, and the detail of the disagreement is again outlined, and again asserts that clause 15 doesn't apply in respect of overtime. The respondent disputes that there is any indication in the agreement of ordinary hours of work.

PN1320

The applicant has put forward its contentions about how the agreement applies and incorporates the definition of ordinary hours of work from the underpinning award. So for the respondent to jump up and say this is all just a sham is, frankly, a bit of fanciful argument. The reality is that, as the Commission has rightly outlined this morning, a finding along the way by this Commission that the agreement applies, is not something in the nature of a Court order.

PN1321

Now, it may be that at some point the respondent in the matter won't accept the Commission's determination and will go and seek relief elsewhere. That is something that is open clearly for it to do. Clearly the approach that it takes is a matter for them, but for the part of the applicant we would clearly be hopeful that this proceeding and arbitration under clause 32 could resolve the actual dispute and it won't be necessary for recourse to the Court.

PN1322

But what the dispute is really about are the wages that are applied to Ms McCallum. She is paid a flat rate of pay that is based upon what is purported to be a common law contract, but which, in our submission, is a letter of appointment made under the, or made subservient to the certified agreement, and paid a rate of pay that in essence hasn't been adjusted since 1994 for the work that has been performed. She has lost penalty rates for weekends, she is not paid overtime rates of pay and not paid meal allowance, not provided with meal breaks, paid meal breaks. And if that is not a dispute, well, frankly, I don't know what is.

PN1323

I haven't referred to authority in relation to the nature of what is a dispute because it is trite to do so, but clearly a dispute is a matter of reality. It is not a pleading, it is not a technical matter, it is a question here of one industrial party saying, I should be paid this wage, I should be provided with these conditions, and another party saying, I refuse to provide them. And, in my respectful submission, that falls entirely within the type of dispute contemplated by section 32 of the dispute settlement procedure, and a matter that can be the subject of arbitration under that provision.

PN1324

Commissioner, the High Court in the matter of CFMEU v AIRC discussed at some length the nature of arbitration under such a dispute settlement clause, and it held in broad terms that the power under an agreed disputes clause is broader in its nature than the power under an arbitrated disputes clause in an award. Essentially the parties to the industrial instrument can agree to submit disputes to a body and agree to accept the decision as binding upon them.

PN1325

The CFMEU case is case 1.2 in the case book. And I refer in particular to paragraphs 26 through to 39, and would just like to read one important extract:

PN1326

There is, however, a significant difference between agreed and arbitrated dispute settlement procedures. As already indicated, the Commission cannot, by arbitrated award, require the parties to submit to binding procedures ...(reads)... the arbitrators award is not binding of its own force, rather its effect, if any, depends on the law which operates with respect to it.

PN1327

Now, of course, it was section 170MH at the time that empowered that effect. The section is now section 170LW. Just skipping ahead to paragraph 34:

PN1328

The parties to an industrial situation are free to agree between themselves as to the terms on which they will conduct their affairs ...(reads)... the validity of the agreement depends on the general law like the legislative provisions which give it effect.

PN1329

So it is a situation where the Commission, in accordance with that disputes clause, is able to make a determination in the nature of a private arbitration as to what the rights of the parties are under that agreement. The clause as enacted under LW and empowered allows that determination. I will move on to another point. I believe it was in the contentions in reply. The respondent foreshadowed an argument that somehow or other the nature of this clause is now different to that contemplated in the High Court case, CFMEU case, because if the agreement applies it applies by successor provision, such that the party that is now bound by the agreement, Tenix, was not the party who voluntarily entered into that private arbitration relationship.

PN1330

We submit that the successorship does not in any way change the nature of the obligation, and that under the Act the successor is bound by the whole of the agreement in its terms, including the disputes provisions, and that the fact of the successorship does not in any way change the nature of the arbitral process before the Commission. We say that it remains the type of private arbitration clause discussed in the CFMEU v AIRC matter.

PN1331

I would like to, on that point, take the Commission to paragraph 80 of the Automated Meter Reading case, the Full Bench decision where this point was considered. Sorry, Commissioner, that is case 1.3. At paragraph 80 on page 17, the Full Bench, the majority stated:

PN1332

On balance there appears to be a relatively substantial linkage between provisions in the Powercor agreement and each of the conditions dispute issues ...(reads)... in dispute over the application of the Powercor agreement.

PN1333

Commissioner, the argument has been foreshadowed at some length, and in one sense I think the parties had a dry run before you in relation to the section 107 reference. In relation to the question of whether in acting as an arbitrator whether the Commission has power to determine a preliminary question of jurisdiction to act under the clause itself, whether LW empowers that response, I believe my learned friend has handed up about six new authorities on that point this morning that I hadn't proposed to take the Commission to, but if I can rely on those and on the proposition that the first duty of the judicial officer is to determine a finding of jurisdiction.

PN1334

What has happened here is the applicant is purported to invoke clause 32 of the agreement, and the first step along the way is this Commission determining whether it has jurisdiction to act under that provision. However, the argument has been foreshadowed previously that the Commission is not so empowered to do that. And I would understand that my friend has changed tack on that question somewhat with the arguments put this morning. But in the event that I am wrong I would like to take the Commission to a number of matters.

PN1335

A summary of some of the cases is set out at page 11 to 16 of the applicant's contentions of fact and law, and also at page 6 to 8 of the contentions in reply. I will be taking the Commission to those cases now. The question of the ability or the capacity of the Commission to determine questions which are of a judicial nature in the course of and for the purpose of exercising arbitration power is the subject of a long line of authority.

PN1336

I haven't extracted these cases in the case book, and these are matters that are referred to in paragraph 59 of the AMRS Full Bench decision in case 1.3, but rely upon the decision in re Cramm ex parte New South Wales Colliery Proprietors Association [1987] HCA 28; (1987) 163 CLR 117, re AMWU ex parte Harwood Bagshaw (1986) 67 ALR 352, and Attorney General for Queensland v Riordan (1997) 146 ALR 445.

PN1337

In the recent Commission decisions on the matter - I won't take the Commission again to Automated Reading Services, I believe we have gone through those passages in the discussion this morning, but the majority Full Bench in that matter clearly held that in the course of determining the dispute under a disputes clause of the kind contemplated in section 170LW, it is perfectly permissible for the Commission to make a preliminary inquiry as to whether jurisdiction exists in the sense of making a decision as to whether the agreement applies by virtue of a transmission of business.

PN1338

That finding, or that question was considered recently in the Geelong Grammar matter. I have included copies of both the decision of Commissioner Whelan, that is in the case book at 1.5 and was print 922401, and also the Full Bench decision which is in the case book at 1.4. And I will refer the Commission to paragraph 62 to 66 of Commissioner Whelan's decision, where the Commissioner referred to earlier case law of the CFMEU v AIRC, and to some of the authorities I referred to earlier, including re Cramm, and also Ranger Uranium Mines, which is another well known case in relation to this point.

PN1339

The Full Bench reviewing that decision determined the appeal in relation to one of the jurisdictional questions in relation to transmission of business, and thus found it not necessary to fully determine the matter on the basis of the second issue, but gave some in a strongly worded obiter at paragraph 24, stated as follows:

PN1340

There is no doubt that the Commission may, without exercising judicial power, decide questions which are "not necessarily foreign to judicial power." Whether the Commission purports to exercise judicial power will depend upon the facts of the case and, in particular, upon whether the decision which is sought to be impugned is in truth an attempt to ascertain, declare or enforce existing rights, or only a step in the proper exercise of the powers conferred upon the Commission by Parliament.

PN1341

It then sets out a quote from re Cramm, which I don't read, but invite the Commission to do so:

PN1342

While this passage analyses the issue by reference to statutory powers of arbitration, the principles apply equally to the exercise of statutory powers such as those conferred by dispute resolutions provisions ...(reads)...accordingly we do not think it desirable that we deal with it further.

PN1343

A further decision of a single member of the Commission that held it was so permissible to make preliminary inquiry over the existing legal rights of the parties was the decision of Senior Deputy President Lacy in the matter of Kodak Australasia v AFMEPKIU, that is print 904035, and that is at 1.6 in the case book. At paragraph 9 of the decision the Senior Deputy President examines the decision of CFMEU v AIRC, and extracts the quote that I read earlier. Anyway, I refer the Commission to the decision in its terms.

PN1344

The respondent in its contentions, although it appears to have changed tack, submitted that the Commission could not proceed to make any inquiry about whether it had jurisdiction at all. It appeared to submit that any inquiry and any purported decision in the nature of a finding of jurisdiction was judicial in nature and alien to this Commission. In our respectful submission that proposition just can't stand in light of the huge weight of authority against it.

PN1345

The Commission on a daily basis makes decisions in the nature of judicial decisions in the course of exercising its arbitral functions. A number of sections of the Act require such an examination to be made. Section 127, for example, regularly requires the Commission to determine whether an award or agreement applies to any employees before determining whether it is able to issue a section 127 order.

PN1346

And there are other provisions of a similar nature that require such a jurisdictional fact to be established and determined as a matter of legal right before the Commission can then proceed to exercise its functions. This is simply one of those, and we would submit it is really bread and butter stuff of this Commission, it is what the Commission does.

PN1347

Commissioner, I would like to turn now to the transmission point. If I could take the Commission to the contentions of fact and law, and to pages 16 through to 26. Commissioner, the history of the traffic camera technology is there set out. That history has been established by examination of the files of the union and other matters. I don't understand that we are in any significant dispute to the history adopted by the respondent in the witness statement of Mr Law.

PN1348

It is not in contention that the State of Victoria for many, many years has conducted a road safety program. That road safety program has involved the detection of road offences, it has involved the issuing of penalty notices and the enforcement of those notices. As technology has evolved, the manner in which that function has been undertaken has changed. Speed cameras were introduced in the early 1990s by way of mounted radar units.

PN1349

Initially all of this function was undertaken by sworn officers of Victoria Police. And if you watch the TV ads you believe that it still was, but we know differently. The traffic camera function was - and I think the inelegant word, civilianised, has been used in some of the documents. But from about 1995 some employees were engaged under the Public Sector Management Act as administrative staff as public servants to operate these cameras and engage in this function.

PN1350

And I read to Mr Law in his evidence the recitals from the deed that operated between the State of Victoria and LMT, and in my submission they provide a very neat and very precise way of describing the activities of the state which are the subject, we say, of a succession within the meaning of section 170MB, that is, it was the administrative and support functions, the Traffic Camera Office, the Fixed Penalties Payment Office and the Enforcement Management Unit that have been outsourced.

PN1351

The terms of the deed are especially important in this context, and I would like to turn now to the actual deed, which is attachment 2 to the statement of Mr Law. And I don't propose to read slabs of this to the Commission, you will be pleased to hear, because it is drafted by commercial lawyers, and they are even more boring than us. But I would just like to point out some of the salient features of it. Firstly are the recitals at the unnumbered page 1 that I read before.

PN1352

At page 34 the purchase price is set out for the assets and the intellectual property licence of 854,000, so it is not an insignificant sum. The state had developed significant intellectual property that was sold or passed under licence to the contractor, it had acquired significant assets in the form of vehicles, cameras, films and like assets that were used in conjunction with the activities, and this part of the deed sets out the purchase price and provision for handover of those assets and the technology that is set out at clause 4.2. The remainder of that part of the deed sets out ancillary provisions to that.

PN1353

In part 2 the services generally to be provided by the contractor are described, and they all fall within the rubric set out in the recital, so I don't go to those in detail. At page 92, clause 57, employment policies, subclause B provides that:

PN1354

The contractor and any person engaged in the provision of the services shall not: 1) engage in unethical work practices -

PN1355

That is nicely undefined:

PN1356

2) engage employees or ...(reads)... to workers upon terms and conditions which are in breach of the applicable industry awards.

PN1357

And we would, of course, submit that that is precisely what has occurred here. In schedule 6 of the deed, which commences at page 148, there is provision that the contractor is to make offers of employment to permanent public service staff in accordance with the contractors proposal. We don't say that the casual camera operators were in that class, but they clearly were all, in fact, offered employment, as Mr Law's evidence has indicated. And there is a procedure for all of that handover of staff.

PN1358

At schedule 15 on page 175 there is provision for a staffing plan for the transfer - I use the word transfer loosely - of staff to the contractor from the public sector. At schedule 31 on page 249, the handover plan for the traffic camera vehicles, motor equipment - sorry, motor vehicles, camera equipment and associated equipment and supplies, and confirmation of a regime for the use of police facilities for that function.

PN1359

At schedule 40 there are other provisions that relate to the EMU and FPPO parts, which I don't take the Commission to. Mr Law, in his witness statement, indicates that there was no payment for goodwill. We would say that is entirely unsurprising in the context of the nature of the business that is involved in this case, which is essentially that enforcement of laws and issuing of fines, it would be very surprising, indeed, if there was a goodwill component in such a contract.

PN1360

Very importantly in Mr Law's evidence he described the nature of the business of LMT. At paragraph 3 of his statement he sets out the nature of the business and states this:

PN1361

The company was established by the joint venture partners for the purposes of providing specialist infringement processing services to government instrumentalities in Australia and South East Asia. He confirmed two other contracts of a broadly similar nature with the City of Port Phillip and Wellington City Council, and confirmed that the company was not involved in any other business.

PN1362

He also confirmed, importantly, that the functions as described in the deed in the recitals, that those activities of government were, in effect, taken over by LMT precisely as described in that recital. And that is very significant when we come to look at some of the case law in the matter. There has also been significant evidence led both in the contentions of fact and law as adopted by Ms Bat, and also, importantly, in the statement of Susan McCallum about the employment process whereby the employees were engaged by the state and then interviewed for and accepted offers with LMT.

PN1363

We think that it is very significant that the state at least in the initial letter of engagement, or my friend refers to it as a common law contract, stated that the state intended to assign the contract to the successful contractor. Clearly that would be unlawful. You can't assign a contract of employment in the manner that that agreement purports to state. You know, the people aren't cows on a paddock that can be moved across. But clearly the intention was that that entire function would be lifted holus bolus to the new contractor to operate in the same manner, and that is what has, in fact, has occurred.

PN1364

Mr Law confirmed in his evidence that the duties and activities of the traffic camera operator as they were performed by Victoria and as they are performed now are to all intents and purposes the same. He also confirmed that the state of Victoria had raised as a possibility the use of section 81A(6) of the Public Sector Management Act. Commissioner, I don't have a copy of that here. I am happy to make an extract available overnight. But indicated that that had been raised as a possibility to, in effect, compel the transfer of the employees to the new operator.

PN1365

So what we have here is a completely classic outsourcing of a government function as a whole. The people have gone, the assets have gone, the work systems have gone, and I invite the Commissioner in that document to examine the very detailed processes that are set out for each of the functions that have been outsourced. This is exhibit L9, Commissioner. That document also describes in precise detail the functions that remained with the state, which essentially are contract overview, statutory powers and some other matters, and then exactly the functions which are to be transferred to the contractor, the activities that were conducted by the state that go to the contractor, and that is what ended up in the deed and delineated in the recitals and the other provisions of the deed.

PN1366

THE COMMISSIONER: I think we might just take a five minute break at this point.

SHORT ADJOURNMENT [3.35pm]

RESUMED [3.40pm]

PN1367

MS LESTER: Thanks for that break. Commissioner, I would like to turn now to the authorities in relation to the transmission of business. But just before I do that I would like to invite the Commission to look at section 170LB of the Workplace Relations Act, because it is particularly pertinent to the matter before the Commission. In part VIB of the Act that relates to certified agreements which, of course, include section 170MB in relation to successor employers and certified agreements, there is a definition of single business and part of a single business provided.

PN1368

And I would like to note at the outset that single business is defined for the purpose of the part as the activities carried on by a state that is a single business. And that part, subclause LB3:

PN1369

Part of a single business is a geographically distinct part of the single business or a distinct operational or organisational unit within the single business.

PN1370

And for the purpose of section 170MB, the question that needs to be determined as the preliminary jurisdictional question, is whether the agreement applies. And the question here is whether a new employer has become the successor, transmittee or assignee of the whole or a part of the business concerned. And the business concerned as covered by the agreement is set out in the agreement itself and the application to certify the agreement, which is exhibit L11.

PN1371

And the single business or part of the single business is set out in the questionnaire, or the declaration rather at 2.1, and:

PN1372

It is the activities carried on by the Chief Commissioner of Police and persons appointed under the Public Sector Management Act 1992 or its successors as amended from time to time, namely, the preservation of law and order in the State of Victoria.

PN1373

And it is the organisational unit that is a part of that that has been transmitted. I note in that regard, Commissioner, just to step back, if you recall the contract for casual employment, it makes it very clear that those persons are employed under the Public Sector Management Act, and I note the declaration filed by the State of Victoria in that regard. Turning to the authorities, and, Commissioner, these are set out. There is an index at the front of the case book under tab 2. George Hudson Limited has made its way into section, but it is clearly in relation to transmission, but the authorities are there set out, so with the leave of the Commission I won't give case citations, but simply refer to that book.

PN1374

Commissioner, there are two primary lines of authorities which need to be resolved. The first line culminates in the decision of North Western Health Care Network v Health Services Union of Australia, which is tab 2, point 8 in the case book. The second line of authorities includes PP Consultants Pty Limited v FSU, which is 2.5 and 2.6 with the High Court authority, and CPSU v Stellar Call Centres, and the appeal decision, which are respectively 2.3 and 2.4.

PN1375

In addition there are authorities which appear to suggest that the Court will adopt a slightly different approach when considering public sector arrangements, and I will turn to these in some detail. These include the Australian Rail, Tram and Bus Industry Union v Torrens Transit Services Pty Limited matter, a decision of the Federal Court of Australia, that is in the book at 2.7, and the Employment National Case, Employment Workplace Relations and Small Business v CPSU, which is 2.2 in the case book.

PN1376

I have also included in the case book for the Commission's convenience R v Calder, the Social Welfare Union case which, of course, set the Commission's jurisprudence in relation to public sector functions, and their nature as an industry. The first line of authority I refer to might be regarded as the purposive approach, and the second as the objective test in which one asks, what is the business or part thereof alleged to have transmitted.

PN1377

The Federal Court, although somewhat constrained by the High Court's decision in PP Consultants, has demonstrated a willingness to continue to inject some elements of the purposive approach into the test, and particularly so in the context of public sector transmission of businesses. The purposive approach was clearly adopted by the Full Federal Court in North Western Health Care Network v Health Services Union. And Nicholson J, in that matter at paragraph 27 - that is case 2.8, Commissioner - at paragraph 27 states that:

PN1378

The purpose of the Workplace Relations Act is to facilitate the resolution of disputes between employers and employees, and that the intention of the WR Act is that a disputation in the area of industrial activity is settled by the making of an award.

PN1379

He then proceeds in paragraph 28 to talk about the purpose of section 149, and states:

PN1380

It is to extend the binding nature of awards beyond the parties who appeared or were represented before the Commission in relation to the industrial dispute. The policy objective of this provision is to make the power to settle industrial disputes effective by extending the instrument of settlement to the ever changing body of persons within the area of such disturbances.

PN1381

And he goes there to cite George Hudson v Australian Timber Workers, which is also extracted in the case book. It does not therefore seem to be the point that outsourcing or mainstreaming may not have been in contemplation at the time the section was enacted. His Honour concluded at paragraph 67 to 68 that in the case of the mental health services that were the subject of the proceeding in that matter, that a transmission of business had occurred. The State of Victoria retained the function of providing mental health services - - -

PN1382

THE COMMISSIONER: Sorry, what paragraph is that?

PN1383

MS LESTER: Sorry, I am just summarising at this point, Commissioner, but it is paragraph 67 to 68 that he reaches his conclusions. So in that case, as in this one, the state retained the ultimate responsibility but had outsourced the provision of the services to the relevant health network. His Honour noted:

PN1384

What was involved was a transmission of the core of the relevant services, not a peripheral activity.

PN1385

Madgwick J, in the same case at paragraph 83 of the judgment, stated that:

PN1386

Unless the term business in section 149(1)(d) be given a broad meaning many award conditions and prescriptions would not survive a change of employer until any conscious change to or abrogation of them ...(reads)... There is no satisfactory rationale as to why parliament would have intended that such a result should follow.

PN1387

His Honour also earlier in the judgment at - I beg your pardon, I believe it was his Honour, Nicholson J, at paragraphs 63 to 69 discussed the Social Welfare Union case, and also the ATOF decision, which also considered transmission of business in the public sector context, and refer the Commission to that passage. Madgwick, in paragraph 84, gave a number of potential examples of public sector transmission, and then discusses the use of the word business in the context of section 149, and he too discusses the Social Welfare Union case in paragraph 83, and also the ATOF case, which is discussed at paragraph 86. And I would like to read one passage in 85:

PN1388

After the Social Welfare Union case -

PN1389

that is commencing about four lines down -

PN1390

it would seem odd and unfortunate to have to attribute a differential effect to awards depending on whether they were or were not made in relation to "businesses" as that term might have been read down ...(reads)... the word business is notorious for taking its colour and content from its surroundings.

PN1391

And I won't read the rest of that passage. I would just like to interpose here again and note that the Act itself in section 170LB particularly contemplates the application of part VIB, including section 170MB, to the business of a state. And a single business of a state is defined as the activities carried on by a state. So reading that together with what the Court has had to say about the context of the word business in the public sector context, reading those cases and the Act in light of the decision in the Social Welfare Union case.

PN1392

It is clear in the case of the functions of a state that the typical indicia of transmission such as the payment for goodwill that have been referred to by my learned friend simply aren't apposite. It is really a question of identifying the functions and identifying the functions as undertaken by the alleged successor and undertaking that analysis. His Honour, Madgwick J, went on in paragraph 97 to look at the rationale underpinning 149(1)(d), section 149(1)(d), and stated that:

PN1393

Settlements by award making -

PN1394

and I summarise -

PN1395

should be kept effective pending conscious variation or replacement of that award regardless of mere changes in arrangements as to which legal entity might be the employer of an unchanged industrial class of employees regardless of such matters as whether the original employer had other classes of employees as well, and may have remained their employer, and regardless of whether the legal ownership of all the plant and equipment used by the employees for their work, and the other resources of the employer utilised in the undertaking have likewise changed.

PN1396

I interpose there. In the facts of this case there has, in fact, been a change in legal ownership of the plant and equipment and change in the legal relationship in terms of the intellectual property and other matters which are, in fact, typical of a private sector transmission, but which the Court has made clear aren't necessarily required. Madgwick J went on to quote from George Hudson, and that is a well known passage:

PN1397

The constitutional power is not so weak in my opinion -

PN1398

I am sorry, this is quoting Starke J:

PN1399

The constitutional power is no so weak in my opinion that it is limited to the settlement of industrial disturbances between the actual participators therein. If so limited the power would be practically ineffective. If industrial disturbances are to be settled or prevented then the power must extend to the ever changing body of persons within the area of such disturbances.

PN1400

His Honour also goes on to quote Isaac J in paragraph 99 from the same case, George Hudson, and notes his Honour's comments about the remedial nature of the statute. Despite there having been a plethora of recent transmission of business decisions, the decision of the Full Court in North Western has not been explicitly overturned. It remains an important decision and, we submit, especially so in the case of transmission of businesses involving governments.

PN1401

We can see there is some tension in the approach of the Court in that matter with some of the later decisions in PP Consultants and Stellar, which I would like to turn to now. I would like to turn first, Commissioner, to the case of PP Consultants, which is 2.6 in the case book. In that matter their Honours, Gleeson CJ, Gaudron, McKeown, Gummow JJ, enunciated a test in relation to transmission of business at paragraph 15 of the decision, and I will read:

PN1402

As a general rule the question of whether a non government employer who has taken over the commercial activities of another non government employer has succeeded to the business or part of the business of that other employer ...(reads)... will usually be the case that the new employer has succeeded to the business or part of the business of the previous employer.

PN1403

The Commission will recall that in this matter it concerned what was referred to as a bragency. It was a pharmacy that took over, in effect, a branch agency of a bank that had closed, and conducted some banking functions from its leased shop. The test that I have just outlined in paragraph 15 appears very similar to that adopted by the Court in North Western, but the manner in which the Court applied it to the bragency, the bank in the pharmacy, was, I would respectfully submit, somewhat surprising.

PN1404

Their Honours concluded that PP Consultants, who ran the pharmacy, were not in the business of banking but were rather merely the bank's agent and that therefore there hadn't been an acquisition of any part of the bank's business. What is important to note is that the High Court in PP Consultants left open the possibility that a different approach might be adopted in the circumstances where a government transfers business activities from one government agency to another. And I would like to refer the Commission to paragraph 13 of the judgment:

PN1405

Whilst the notions of profit and commercial enterprise will ordinarily be significant in determining whether the activity is of a private individual or corporation constitute a business ...(reads)... ordinary language business means or includes activities undertaken in the course of business.

PN1406

So in this passage the Court suggested that the notion of part of a business and the question of whether the alleged transmittee in that business on their own account will be different in the context of public sector. I note also that this case concerned section 149 of the Act, which isn't informed in the same way by the definition in section 170LB that applies to part VIB of the Act.

[4.00pm]

PN1407

I would like next, Commissioner, to return to the decision of his Honour, Wilcox J, in CPSU v Stellar Call Centres, and that is number 2.3 in the case book. I will note that his Honour's decision was later overturned by a Full Court which followed shortly after the decision in PP Consultants, but I would like to turn to some of his Honour, Wilcox Js comments. Firstly, just to briefly outline the facts in the Stellar matter.

PN1408

Stellar was a joint venture between Telstra and Excel Asia Pacific, and Stellar established call centres to perform outsourced Telstra work and other non Telstra business in the telecommunications industry, but at the time of the trial the work performed by Stellar was almost entirely outsourced Telstra work. Telstra maintained a nationwide telephone number, and after Stellar won the contract it commenced to provide call centre services pursuant to a memorandum of understanding.

PN1409

It was paid an amount per inward call, and the staff of the call centre answered the calls as if they were answering the phone directly for Telstra, and received overflow calls from a Telstra national dedicated number. His Honour, Wilcox J, conducted a detailed analysis of the issue of transmission of business and what constitutes a part of the business. At 47, paragraph 47 he held that:

PN1410

Although there was no assignment of assets by Telstra to Stellar, the latter had been appointed agent of Telstra to perform part of the service Telstra offers its customers. The effective arrangement between the two was that Stellar had taken on part of the burden of client contact.

PN1411

Which he held to be a critical part of Telstra's business, and in that regard Stellar was the successor to that part of the business of Telstra. His Honour's decision was overturned on appeal. The appeal is at 2.4 in the case book. And what had occurred, Commissioner, is that between the hearing of the appeal and judgment being reserved. The decision in PP Consultants was handed down by the High Court. On the appeal there was no challenge to the facts as found by his Honour, Wilcox J. The Court extracted some passages from PP Consultants at paragraph 29 of the decision. I do apologise, Commissioner, I think some of the paragraph numbers have dropped off here. Page 310, the judgment.

PN1412

THE COMMISSIONER: Yes, I have it.

PN1413

MS LESTER: Thank you.

PN1414

THE COMMISSIONER: What would appear to be 28, I think.

PN1415

MS LESTER: Yes. In paragraph 29 they concluded that the application of section 149(1)(d) requires that:

PN1416

One must characterise the business or the relevant part of the business of the first employer and see whether so characterised is substantially corresponds with the character attributable to "the transferred business activities in the hands of the new employer."

PN1417

In paragraph 30 - it is smudged, Commissioner, but it is on the next page - their Honours took the view that the High Court had rejected an approach which focused on the identity between the duties and working conditions of the relevant employees. I think that is a fair summary, and although that has occurred in this case we don't rely upon that in relation to the transmission issue.

PN1418

Their Honours, Ryan, Lee and Branson JJ, went on to find that in the Telstra and Stellar case the activities conducted by the business unit were neither the business nor part of the business of Telstra. They took the view in paragraph 32 that they were only activities in support of Telstra's business in the telecommunication industry. They said at paragraph 32:

PN1419

They are not themselves -

PN1420

and I am summarising -

PN1421

the business or part of the business of Telstra. That business can appropriately be characterised as providing telecommunications services to its customers ...(reads)... any more than, for example, cleaning undertaken as a necessary aspect of the conduct of a restaurant is part of a business of the restaurateur.

PN1422

Again their Honours refer to PP Consultants at paragraph 32, and the bragency situation there, and again held that, or summarised the High Court's decision as that the bank's business was banking but the activities of the branch merely facilitated the conduct of the bank's business, and held that the Stellar Call Centre situation was on all fours with that. I submit at this point that the Full Court took a very narrow view of what constituted Telstra's business, and in effect mis-stated the effect of PP Consultants.

PN1423

The High Court didn't at any time of the decision suggest that accepting deposits and processing withdrawals could not be seen as part of the bank's business, which was banking. It would be hard to see how it could be said that those functions were anything but a part of the business of banking. But rather what the High Court found was that the bragency, in conducting those banking functions, was not doing so on its own behalf but rather merely as an agent.

PN1424

I would like to turn now to some of the cases that deal with transmission, particularly in the context of government and in the context of the post PP Consultants, and particularly to the decision of Mansfield J in the Australian Rail, Tram and Bus Industry case, which is 2.7 Mansfield J considered the circumstances of a transmission of business which occurred when public transport was contracted out by the government to a statutory authority.

PN1425

The Passenger Transport Board was a body corporate created by South Australian statute, and the Public Transport Board undertook the letting of various service contracts to companies to provide transport services to the South Australian public in particular geographical areas. The service contracts considered here were in some instances further subcontracted under secondary contracts, so indirect transmission, and this case concerned Torrens Transit Services, who were a subcontractor under these arrangements.

PN1426

His Honour gives a very helpful analysis of the authorities, especially as they relate to the public sector, from paragraphs 35 through to 68 of the judgment which commences on 104 of that print. You will be very pleased to hear I won't read it all, but I do commend those passages to the Commission. His Honour considered the ATOF matter and the North Western Health decision in some detail, and held at paragraph 35 that the substantial identity of activities test could not of itself be viewed as a sufficient reason to regard a subsequent employer as a transmittee, so he had to look a bit further.

PN1427

His Honour held at paragraph 54 that section 149 should be interpreted in a practical and broad way, and he also stated that where the business concerned:

PN1428

If the performance of some functions by or on behalf of the government, the legislative or administrative structure under which the performance of those functions comes to take place, may indicate whether there has been transmission of that part of the business.

PN1429

So in this matter I think it is appropriate, and we submit it is appropriate to have particular regard to the deed under which these functions and activities are performed, and to the associated documentation, which is exhibit, I believe it is 11, Commissioner. It is the one with all the tables in it that establish the tendering arrangements. His Honour went on to consider the approach of the High Court in PP Consultants, and expressed the view at paragraph 55 that the Court had left open the practical and broad meaning approach, and had not closed it off.

PN1430

And he also noted the comment by the Court, the High Court, that the notions of profit and commercial enterprise will play little role in identifying whether one government agency is engaged in the business of government previously undertaken by another government agency. His Honour, considering the facts in the transport case, noted at paragraph 70 that Torrens Transit Services, the contractor, had received nothing, hadn't received any assets nor required a stake in the business, but nevertheless the concluded at paragraph 72 that there was a practical and real connection between the original business and that now operated by Torrens, and a substantial identity of activities between the two businesses.

PN1431

At paragraph 72 he noted that it wasn't a case where a non government employer is alleged to have taken over the business of another non government employer in the open market. It is a case where the government has contracted with a non government employer for the provision of services to the public under terms fixed and controlled by that government. And we submit that the matter before you, Commissioner, is on all fours with that summary.

PN1432

His Honour, in this matter, we submit, like the Court in the Employment National case, which I will come to shortly, appears to have been influenced by the section that a government shouldn't be permitted by statutory arrangement to simply contract out of its application of awards and agreements by devolving its business to statutory corporations.

PN1433

Another factor which appears to have influenced Mansfield - and this is at paragraph 75 to 76 of the judgment - is that the buses and depots that were owned by the states were significant assets that were assigned to the use of Torrens. And I note again that the facts in this matter are on all fours here. There was a significant assignment of intellectual property rights in the form of complex computer software for dealing with the information and also the actual transfer of significant assets. And ultimately his Honour held that a transmission had occurred, and section 149 and 170MB applied.

PN1434

Commissioner, I note the time. I have got one more case to refer to, the Employment National case on transmission, two more short cases and a number of other matters which concern the effect of common law contracts and the nature of the dispute. I will probably be about 10 more minutes on transmission.

PN1435

THE COMMISSIONER: And we might break at that point then.

PN1436

MS LESTER: Thank you, Commissioner. The Employment National case is at 2.2. The majority decision in this matter of their Honours, Ryan and Madgwick JJ, confirms that the decisions of North Western, Stellar and PP Consultants should be read together. Their Honours deal with the complicated facts in this case relating to the creation and status of two entities created by the commonwealth government in order to take over some of the work of Centrelink.

PN1437

Briefly summarising the facts in the case, the Employment Assistance Australia was established in '94 to take over case management of long term unemployed persons, and it had clients referred to it by the CES, and then in '96 some further functions of both the CES and Employment Assistance Australia were outsourced. Again, the government retained some services which were contracted out to the job network of employment service providers, and one of these which was Centrelink, which provided a combination of some of the services of what was formerly the CES and then the EAA.

PN1438

The idea was that Centrelink would operate as a first port of call for the public, and its employees were employed under the Public Service Act. It would actually administer the unemployment benefits scheme, and in addition it would refer persons to various job network entities such as Employment National, which was a new - what was called Public Employment Placement Enterprise. So the facts were quite complicated.

PN1439

Staff of the former CES were split. Some went into Centrelink, others stayed in the department, and others became employees of Employment National. Employment National was created under the corporations law, and was wholly owned by the commonwealth. It in turn owned another company called ENA, which provided services and employees to Employment National in order to allow Employment National to operate its business. ENA offered employment to persons in the department, and those employees commenced to perform the work of employment consultants for Employment National.

PN1440

In addition to Employment National a tendering process led to 310 other agencies being awarded contracts. So the majority, Ryan and Madgwick JJ, expressed the view in the case at 155, that Employment National is another government agency, and that the CES and the EAA were government authorities within the meaning of the phrase used by the High Court in PP Consultants.

PN1441

And in any event, even if they were wrong, at paragraph 158, such that Employment National should be regarded as a non government body, then they would have nonetheless formed the view that PP Consultants permits a different approach in such a case, namely, there is no need to have regard to notions such as profit and competition, as there might be in relation to commercial enterprises.

PN1442

So they started off saying, look we find this is a government to government transmission, but even if it was government to non government, the same notions that profit and competition are not relevant to these types of transmissions apply. I invite the Commission to read paragraph 158 and 159 of that judgment. They went on in paragraph 159 to state that it was open to the Court in light of PP Consultants to identify the activities formerly undertaken by CES and EAA as part of the business of government, and then ascertain whether those activities are substantially identical to the activities or some of the activities of Employment National, and they concluded that there was substantial identity.

PN1443

They said there were some small differences in relation to the mechanisms for control of Employment National because of its origin as a corporation, but these weren't found to be determinative. Nor was the fact that Employment National, as a newly corporatised body, competed against a number of private providers. These findings are set out at 161 and 162.

PN1444

So in asking whether the business or part thereof had the same character in the hands of the new employer, their Honours noted that in the case where there is a government agency involved, the character that its business bears is less capable of identification than the character of the business of many private concerns, or may only be able to be described as the business of government.

PN1445

And again we submit it is a further decision that shows that in the light of industrial jurisprudence, since the Social Welfare Union case, when we are talking about the business of government we are really talking about the activities and functions of government. And the functions in this case are about as close as you can get to the heart of the functions of government. It is about law enforcement and fining people.

PN1446

So concepts of competition, concepts of payment for goodwill simply just don't make sense in this context, so we need to go back to the essence of the activity, back to the definition in 170LB and look at the nature of the activities themselves. Finally, in relation to transmission, I would like to refer the Commission to the decision of his Honour, Grey J, in the Health Services Union v Gribbles Radiology matter.

PN1447

I haven't included that judgment in the case book, but the reference is (2002) FCA 856, it was a judgment of 5 July 2002. I have extracted the summary that his Honour provided of the law, which I think is quite useful, at paragraph 79 of the contentions of fact and law in the matter. I do note that I understand that decision is under appeal, but my researchers haven't found any appeal decision that has been handed down as at today's date.

PN1448

His Honour referred at paragraph 36 to the practice of contracting out and the role of section 149 in the new business, and I invite the Commission to read that extract. Is that a convenient time, Commissioner?

PN1449

THE COMMISSIONER: We will adjourn until 10.15 tomorrow morning.

ADJOURNED UNTIL TUESDAY, 11 FEBRUARY 2003 [4.30pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

SUSAN McCALLUM, SWORN PN947
EXAMINATION-IN-CHIEF BY MS LESTER PN947
EXHIBIT #L1 STATEMENT OF SUSAN McCALLUM, WITH 12 ATTACHMENTS PN952
WITNESS WITHDREW PN962
EXHIBIT #L2 STATEMENT OF KAREN BATT PN972
ROBERT LAW, AFFIRMED PN990
EXAMINATION-IN-CHIEF BY MR WATSON PN990
EXHIBIT #W1 STATEMENT OF ROBERT LAW, WITH 7 ATTACHMENTS PN1012
CROSS-EXAMINATION BY MS LESTER PN1012
EXHIBIT #L3 LETTER RE TERMS AND CONDITIONS OF EMPLOYMENT DATED 14/04/1998 PN1103
EXHIBIT #L4 LETTER RE TERMS AND CONDITIONS OF EMPLOYMENT DATED 05/02/1999 PN1121
EXHIBIT #L5 LETTER FROM CPSU DATED 13/02/1997 PN1136
EXHIBIT #L6 LETTER FROM TRANSFIELD DEFENCE SYSTEMS DATED 23/05/1997 PN1144
EXHIBIT #L7 LETTER FROM CPSU DATED 19/O8/1998 PN1152
EXHIBIT #L8 LETTER TO CPSU FROM MR LAW DATED 1998 PN1158
EXHIBIT #L9 REQUEST FOR PROPOSALS PN1256
WITNESS WITHDREW PN1298
EXHIBIT #L10 VICTORIA POLICE FORCE UNSWORN EMPLOYEES CERTIFIED AGREEMENT PN1299
EXHIBIT #L11 CONTENTIONS OF FACT AND LAW PN1300
EXHIBIT #L12 CONTENTIONS OF FACT AND LAW IN REPLY PN1303
EXHIBIT #L13 CHRONOLOGY PN1307
EXHIBIT #W2 VARIOUS AUTHORITIES PN1315