C2005/1323, Transcript of Proceedings [2005] AIRCTrans 1039 (29 April 2005)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 11301-1

JUSTICE GIUDICE, PRESIDENT
DEPUTY PRESIDENT BLAIN
COMMISSIONER BLAIR

C2005/1323

APPEAL BY COINVEST LIMITED
s.45 Appeal to Full Bench
(C2005/1323)

MELBOURNE

10.00AM, TUESDAY, 19 APRIL 2005

Reserved for Decision

PN1

MR M BROMBERG SC: I seek leave to appear with my learned friend
MS R DOYLE as counsel for the appellant CoINVEST.

PN2

DR C JESSUP QC: I seek leave to appear with my learned friend
MR R CLANCY on behalf of Visionstream Pty Limited.

PN3

JUSTICE GIUDICE: Leave is granted in both cases. Mr Bromberg.

PN4

MR BROMBERG: This is an appeal pursuant to section 45(1)D of the
Workplace Relations Act. The Commission directed that submissions be filed and we have filed a written submission and seek to rely on that submission. My understanding is that you've also been delivered a folder of authorities. In addition to the authorities in that folder can I hand up I think two or three other authorities that we intend to at least deal with in passing in our oral submissions.

PN5

Whilst that's being done, can I identify that the appeal and the competing submissions seem to raise four issues. The first is the standing of CoINVEST to bring the appeal. The second is whether leave to appeal should be granted. The third and fourth issues relate to whether the Commission had jurisdiction to certify the Visionstream Certified Agreement 2004 which I might conveniently call the 2004 agreement. There are two grounds raised as to jurisdiction and each ground focuses upon the last sentence of clause 14(iii) of the 2004 agreement. A convenient place to find that clause is paragraph 4 of CoINVEST's submission.

PN6

If I could take you there, you'll see that at the top of page 2 of our submission the terms of the clause are set out. It provides that all employees covered by this agreement will be entitled to 13 weeks long service leave following completion of 10 years of continuous service and a further pro rata amount for each completed month from when their last entitlement to long service leave arose. Part-time employees are entitled to long service leave on a pro rata basis. Long service leave is to be taken as agreed between the company and the employee having regard to the needs of business.

PN7

It's the next sentence that is the - what we described as being an impugned provision in our submission. It says this:

PN8

This clause operates to the exclusion of any state law in relation to long service leave or which provides any benefits in the nature of or in respect of long service leave.

PN9

It's that impugned provision which raises two matters that go to jurisdiction and they are conveniently summarised in paragraphs 5 and 6 of our submission. The first jurisdictional matter goes to whether the impugned provision pertains to the relationship between employers and employees or as otherwise permissible as being ancillary or incidental or machinery provision. The second issue is whether the making of a certified agreement which is inconsistent with the terms of
section 170LZ, a provision which deals with the interaction between a certified agreement and state laws, whether such a provision is authorised by section 170LZ and can be validly made in circumstances of inconsistency with what parliament have said the interaction between certified agreement and state law should be.

PN10

There is some evidence that we want to rely upon and pursuant to section 45(6) we seek that the Commission accept and we seek to tender the witness statement of John Hartley. Does the Commission have a copy of that?

PN11

JUSTICE GIUDICE: Yes, we have all that material.

PN12

MR BROMBERG: I understand from my learned friend Dr Jessup that there's no objection to the tender of the statement. Mr Hartley's not required for
cross-examination and I do seek to tender that statement, if the Commission pleases.

EXHIBIT #B1 WITNESS STATEMENT OF JOHN ERNVIN HARTLEY DATED 30 MARCH 2005 WITH ATTACHMENTS
1 TO 5

PN13

JUSTICE GIUDICE: Probably not much turns on it, Mr Bromberg, but I don't seem to have any executed copy of that statement. Presumably one was filed. If it's not objected to, perhaps it's only a question of making sure it's the right document.

PN14

MR BROMBERG: It was filed without signature, as I understand it.

PN15

JUSTICE GIUDICE: It doesn't seem to be contentious. Have you anything to say about that Dr Jessup?

PN16

DR JESSUP: No. That aspect isn't contentious, your Honour. I don't have any objection as my friend says but we have assumed that this goes to the question of standing.

PN17

JUSTICE GIUDICE: It may go beyond that.

PN18

MR BROMBERG: It essentially goes to standing although it also conveniently summarises the relevant instruments being the trustee and the rules of the trust. They are exhibited. I suppose technically the summary is unnecessary but it is useful in our respectful submission to properly assist the Commission and unless there are matters in contention about the way in which that's summarised, we would seek to rely on that summary. In order to deal with the question of standing and also with some of the background matters which may helpfully assist in the understanding of the two grounds of appeal here advised. I want to go to the construction industry long service leave scheme, which Mr Hartley's statement deals with. We have at paragraph 7 and following of our submissions, provided a summary of that scheme by reference to Mr Hartley's statement.

PN19

You'll see at paragraph 7 that we say a portable industry long service leave scheme for the construction industry has existed in one form or another in Victoria since 1997. The present scheme created by the Construction Industry Long Service Leave Act which we've abbreviated there. That scheme presently applies. The Act is attachment 2 to the statement of Mr Hartley. Attachment 3 is the trust deed to which the Act refers. Attachment 4 are the rules which govern the operation of the scheme and are referred to in the trust deed. I want to go next, if I may, before coming back to the witness statement, directly, if I may, but I go to the Act because there are a couple of features of the Act that are particularly pertinent to the question of standing.

PN20

You'll see at the start of the Act that it's an act to make special provision in relation to long service leave for persons employed in the construction industry and the way that that has been done is by the Act. The purpose of the Act is set out at part 1:

PN21

The purpose of the Act is to repeal the Construction Industry Long Service Leave Act 1983 and to provide for the scheme established by that Act to be administered in accordance with a trustee by a company incorporated under the Corporations Law.

PN22

That company is identified later as CoINVEST. You'll see that there is a definition for fund, a definition for trustee and if the trustee is executed by CoINVEST Ltd as amended an enforcement time for the time being and trustee is CoINVEST Ltd. If you move to part 2 and section 4 in particular you will see that sub section 1 is the obligation on an employer to pay to the trustee, namely CoINVEST, a long service leave charge in respect of every worker employed by the employer to perform construction work in the construction industry. Construction work and construction industry have been elsewhere defined. That provision is the legal right of CoINVEST to collect a levy or charge. It is a provision that, if the impugned provision is subject to this appeal, is effective, it is a legal right that would be removed or abrogated or ousted. Section 5 deals with recovery of charges and provides a legal right to CoINVEST to recover pay charges. Section 6 deals with entitlements and relevantly every worker is entitled to long service leave and to be paid benefits out of the fund in respect of continuous service in the construction industry. That's 6, subsection 1. Subsection 3 deals with the amount of the entitlement and you'll see that that's to be determined from time to time by the trustee in accordance with the trustee.

PN23

So every worker is entitled - that is every worker in construction industry is entitled if the amount is to be determined in accordance with the trustee itself. Section 10 is a further provision that gives to CoINVEST a legal right, in this case a right to require the provision of information and the provision of documentation. You'll see that by subsection 1:

PN24

The trustee may by notice in writing given to an employer ...(reads)... any other person's rights or liability under the trustee.

PN25

I just draw your attention also to section 13 because I intended to make a passing reference to it later. It is headed Contracting Out Prohibited and provides that:

PN26

Except as otherwise expressly provided by ...(reads)...or modify the operation of this Act for the trustee is void.

PN27

Much of the rest of the Act whilst providing not only important provisions, it is really perhaps administrative in nature and need not be focused upon in terms of the issues relevant today. I would like to return to Mr Hartley's statement because that contains a useful summary, as I said earlier, of the way in which both the Act, the trustee and the rules operate in practice.

PN28

At paragraph 6 he makes the point that the purpose of the scheme was to enable workers within the construction industry to access long service leave benefits to which they would otherwise rarely become entitled, because of the transient nature of the construction industry. So you have here established a particular kind of scheme where benefits, which are admittedly called long service leave benefits, are provided for, but importantly there are long service leave benefits referable to long service in the industry, not long service in the employment of any particular employer. It is because of the transient nature of employment in the industry that parliament has seen fit to provide for a different kind of benefit for time served. That is different to employer provided long service leave and in this case a benefit referable to time served in the particular industry.

PN29

Paragraph 9 after some material about the predecessor provisions in the 1983 Act and the long service leave board which administered those provisions, Mr Hartley explains that the Victorian government determined to privatise the CILSL Board and remove the operation of it from government control. He then identifies who CoINVEST is and I don't think need to go there. At 15 he explains that the fund is established by trustee and that the Commission has a copy of the deed at attachment 3. The trustee authorises the making of rules to regulate the administration fund - a copy of the rules at attachment 4:

PN30

Workers and working subcontractors operating in the construction industry are beneficiaries of the fund subject to the trust deeded rules.

PN31

Then an overview of the CILSL scheme is given at paragraph 20:

PN32

The essential elements are that workers and working subcontractors are entitled to a long service leave benefit.

PN33

It's a benefit as opposed to actual leave:

PN34

A long service leave benefit after a minimum of 7 years continuous service. The Act requires employers to pay CoINVEST a long service leave charge.

PN35

We have seen that in section 4 and he refers to section 5 which we have also seen:

PN36

In order to administer the CILSL scheme CoINVEST may compel employees to provide information

PN37

We have seen that in particular in section 10. At subparagraph 6 of paragraph 21, you will note that workers entitlement to long service leave benefits are maintained notwithstanding any failure by their employers to pay contributions or provide the requisite information.

PN38

It says at paragraph 22 that a more detailed explanation for the above aspects are set out below. I just want to go to 2 aspects of that detail. The first one at paragraph 23 and following Dealing With Entitlement to a Long Service Leave Benefit. He makes a point at 23, as section 6 does, that:

PN39

The obligation to provide an LSL benefit lies on CoINVEST, not on an employer.

PN40

24:

PN41

CoINVEST determines the amount of the entitlement and the method by which it is calculated from time to time in accordance with the trust deed.

PN42

You'll see in the trust deed that, that amount is somewhat at the discretion of CoINVEST. It's ordinarily based on what is defined as the ordinary wage but CoINVEST for instance had the discretion to base the entitlement on a different amount if it's of the view that the pay actually paid to the employee was too much or too little. Construction work and the definition of construction work is touched upon at paragraph 29, and it is there summarised. Once a worker that Mr Hartley tells us, is at paragraph 31:

PN43

Once the worker has served a minimum of a period of continuous service in accordance to paragraph 20, the worker becomes entitled to the benefit at ordinary pay as defined.

PN44

Now 31:

PN45

Long service leave charges are paid by employers into the fund. No entitlement accrues to the worker or is accounted for in respect of work until such time as workers are allowed a continuous service has been performed if ever.

PN46

In other words, when part of it which may ultimately be paid to the worker is not necessarily linked to any contract of employment, with full periods of service with a particular employer. The other aspect that I wanted to touch on - of course I invite the Commission to look at the statement in more detail.

PN47

If you move to page 9 and the heading Payment of Long Service Leave Charges, 49 deals with section 4 of the requirement to pay which is being dealt with. 50, Mr Hartley says under rule 11(ii):

PN48

CoINVEST may establish a fixed rate of charge as prescribed percentage of ordinary pay as required a long service leave charge.

PN49

Ordinary pay is defined. He tells us later on that currently the prescribed percentage is 1.5 per cent, that's at 52. You will see at 51 where insufficient information has been provided to CoINVEST in respect of the nature and length of the service of the work, CoINVEST may estimate the amount of the charge owing and issue an assessment for a relevant employer.

PN50

54:

PN51

Notwithstanding a failure by the employer to pay long service charge in respect of a worker.

PN52

Under section 61 of the Act:

PN53

The worker's still entitled to an LSL benefit as and when a requisite period of continuous service is completed.

PN54

The requirement to pay - as to provide information is dealt with in the next section. Then lastly, you'll see a heading on page 11, No Double Dipping. There are provisions which require CoINVEST to reimburse an employer, where that employer is required to pay under an industrial instrument, the contract of employment or the Long Service Leave Act 1992, where the employer is required to provide long service leave by reference to those instruments.

PN55

There is a provision allowing the employer to seek reimbursement of charges made in respect of that worker and in respect of the equivalent leave taken by that worker. That gives the bench, I hope, some overview of the scheme and brings me directly - - -

PN56

JUSTICE GIUDICE: Actually, how does the scheme operate in conjunction with Federal awards?

PN57

MR BROMBERG: It operates in this way, your Honour. If a Federal award - if pursuant to a Federal Award, an employer provides long service leave to a worker. The employer is entitled to seek reimbursement of the charge made in respect of that worker from CoINVEST. So that the Industry Long Service Leave Scheme provided by the Act requires the payment of a charge, we've seen that but there is a provision specifically deal with the actual provision of employer-based long service leave by an employer to an employee and that is dealt with the
No Double Dipping condition.

PN58

JUSTICE GIUDICE: Yes the statement in paragraph 61 that you have just taken us to, refers to the state long service leave legislation?

PN59

MR BROMBERG: Yes.

PN60

JUSTICE GIUDICE: I take it, the later rules are more general, are they?

PN61

MR BROMBERG: I'm not confined to that - I can check that but at 61, M Hartley's not just dealing with the Act, he's dealing with where an employer's required under an industrial instrument, a contract of employment or the Long Service Leave Act.

PN62

JUSTICE GIUDICE: Yes, I see.

PN63

MR BROMBERG: I think something further said about that at 62.

PN64

JUSTICE GIUDICE: Yes, I follow. I just misread that.

PN65

MR BROMBERG: So that's how the two sit together. Some thought has been obviously been put into that issue and that's how it's dealt with. As to standing, we have made submissions in our written outline on standing beginning at
page 15, paragraph 50.

PN66

JUSTICE GIUDICE: Before you get to that Mr Bromberg, is it common ground that this employer, employs people in the construction industry?

PN67

MR BROMBERG: I'm not sure about that, I did read on the transcript when I think this was set down for directions, hearing of some sort, that your Honour invited some evidence in relation to that.

PN68

JUSTICE GIUDICE: No, I wasn't directed to whether this was going to be an academic question or not?

PN69

MR BROMBERG: Yes, it certainly the position of Visionstream - I'm sorry. It certainly the position of CoINVEST that Visionstream employs construction workers within the meaning of that term and it's a fairly expanded meaning. It includes relevantly, workers involved in the provision of electrical services which specifically includes the installation of telecommunication cables and the like, and that's what Visionstream does.

PN70

JUSTICE GIUDICE: There's no need to be too concerned about it. It's not an issue.

PN71

MR BROMBERG: It doesn't seem to be an issue but if it was an issue, it really would have been for my friend to raise it.

PN72

JUSTICE GIUDICE: Maybe.

PN73

MR BROMBERG: It may not be conceded and it may not be conceded for other reasons. There are as is referred to by Mr Hartley, some proceedings in the magistrate's courts already in relation to what is alleged to be Visionstream's failure to - not instituted, I'm sorry, but threatened - in relation to Visionstream's failure to comply with a section 10 notice requiring provision of information and documentation. So, it may not be a matter conceded but I don't see it as an issue for these proceedings.

PN74

Going to the question of standing, the relevant provision in the Act is
section 45(3)(d). Relevantly the Commission will observe that 3(d) provides that in any other case, that is including the case of an appeal brought under section 45(1)(g), an appeal can be brought by an organisation or person aggrieved by the decision or act concerned. It's not limited to a party. It's open to a person, the only qualification being that the person is aggrieved. At paragraphs 50 and 51 of our written submission we say that CoINVEST is a party aggrieved.

PN75

We would rely on the Tweed Valley Food Processors case; also the Teachers (Victorian Government Schools) Interim Award decision. I think you Honour and I are familiar with that, going back many years, but that was the case in which, your Honour might recall that the Victorian Principals Federation sought leave to appeal in circumstances where the question before the Commission was whether an unincorporated association could be described as a person. We only rely on it to exemplify the broad approach taken to this issue by the Commission generally.

PN76

More relevantly, this identical issue has recently been determined by a Full Bench of this Commission in CoINVEST v Visionstream, which is print PR947076. It's behind tab 3 in the folder. It's a decision of the Full Bench of 25 May 2004. Can I go to it? It helpfully will assist the Commission in understanding some of the background in the litigation between the parties over this very issue.

PN77

It's a decision which Commissioner Blair will be familiar with, and it relates to an application by Visionstream for an order to vary the prior certified agreement - I think it was the 2001 agreement - and the way in which Visionstream sought to do that is identified at paragraph 7 of the decision. It sought to delete clause 15.3, dealing with the provision of long service leave, and replace it with subclause III, which is set out at the bottom of paragraph 7 of the Full Bench's decision. The terms of the replacement paragraph are in identical terms to the provision impugned in this appeal.

PN78

What happened, as is identified in paragraph 9 and following is that Visionstream sought an urgent variation. The urgency apparently related to the threat that Magistrates Court proceedings would be brought by CoINVEST. The variation was granted by Commissioner Smith with one qualification, and that is the granting of leave to the relevant union, the CEPU, to seek to make some further submissions. The matter was set down for later hearing if the CEPU exercised its leave. CoINVEST then sought leave to intervene. The CEPU withdrew its earlier indication that it wanted to say some more about the variation and the question before Commission Smith was whether, in those circumstances, he should allow or decline the intervention of CoINVEST. Commissioner Smith decided to decline that intervention application and that was the subject of this appeal.

PN79

What the Full Bench had to determine was whether or not CoINVEST had standing to bring the appeal. The question of standing is referred to at paragraph 25 of the decision. You'll see that the Full Bench identified two threshold issues, the first concerning the applicant's standing to constitute the appeal. The appeal was brought pursuant to 45(1)(g) and CoINVEST contended that it was a person aggrieved.

PN80

The essence of the appellant's contention is that CoINVEST is statutorily responsible for the administration of the CILSL scheme, the operation of which is directly affected by the variation of the agreement because the variation removes CoINVEST's right to collect relevant information and contributions in respect of employees of Visionstream or at least it should be said purports to do that. We shouldn't be taken to be suggesting that the provision there or here effectuates that purpose, but it certainly purports to so do.

PN81

At paragraph 28 the Full Bench deals with the meaning of "person aggrieved". It relied on the Tweed Valley decision and in particular the passage in Tweed Valley which is here identified at paragraph 28. It might be convenient if I, rather than going to Tweed Valley - I think it is convenient that I deal with it here, because the relevant passage is set out. You'll see that reference was made in the first paragraphs, which is copied in paragraph 28, to the decision of Gibbs CJ in Koowarta v Bjelke-Petersen. His Honour there referred to cases in which it had been held that a person is aggrieved by an act which operates in respect of what would otherwise have been his legal rights. The passage goes on:

PN82

But he also mentioned Attorney-General v N'Jie, where it was said that a person aggrieved ...(reads)... his interest.

PN83

So in essence there are two limbs there identified, the first being an affectation upon or a purported affectation upon a legal right; the second that even where a legal right is not affected, if a relevant interest is affected then the person, the applicant, may nevertheless be aggrieved. The Full Bench here determined, as it concludes at paragraph 29, that:

PN84

The variation to clause 15.3 of the agreement has had the effect of removing CoINVEST's right to collect ...(reads)... member of the public.

PN85

The Full Bench was satisfied that CoINVEST had relevant standing. There is no relevant distinction between that case and this. We're dealing with exactly the same clause and we wouldn't, with respect, say that there is no basis for this Full Bench to come to a different conclusion in relation to what are relevantly identical facts.

PN86

We further deal in our submission at paragraphs 53 to 55, in particular 54 and 55, that CoINVEST is the trustee of a fund designed to provide benefits to employees, including employees who are persons bound by the certified agreement. We say at paragraph 55:

PN87

As a trustee of the fund which is established and maintained for the benefit of employees in the construction industry CoINVEST in essence stands in the shoes of those current and potential employees of Visionstream who are or will be affected by the purported ouster of the CILSL scheme, so it's not only the fact that CoINVEST's legal rights are affected.

PN88

I was reading from paragraph 55, your Honour, and making the point that it's not only the purported affect upon the rights that the Act gives to CoINVEST itself that is a basis for CoINVEST being aggrieved in its own right. It's also aggrieved because it stands in the shoes of the relevant employees, being the trustee of a fund established and maintained for the benefit of those employees. So it also has a representative capacity, an obligation to protect the interests of the beneficiaries and in that capacity as well it has an interest beyond that of the ordinary member of the public.

PN89

We've had a look at the submissions made by my learned friend on the question of standing. I don't want to say too much and may leave most of this to a reply, but it seems that the approach taken here is, firstly, one of ignoring the previous Full Bench's decision. The approach then proceeds to analyse the Tweed Valley case and rather than focus on the principle established by that case, what the submission seeks to do is set out the relevant facts that the Court relied upon in Tweed Valley and then test these facts against the facts relied upon in Tweed Valley. Reference is made to Gummow J's decision in AIMPE at paragraph 14 of my learned friend's submission. The one thing that Gummow J did say which is pertinent, and he said this at page 133.2, is that:

PN90

The meaning of a person aggrieved is not encased in any technical rules.

PN91

In other words, you've got to look at each set of facts and analyse on the basis of each set of facts before the court or tribunal at the time whether or not standing is made out by reference to the principle of whether or not the applicant has shown an interest beyond that of more than any other member of the public. So it is the wrong approach and it's an approach that's based on a search in the Tweed Valley case of whether or not the applicant there had a relevant interest in circumstances where it was clear that the applicant there did not have any relevant legal interest or legal right affected.

PN92

You will see at paragraph 15 of my learned friend's submission a passage from Tweed Valley where the Court said the decision of Commission Redmond did not affect AFMEPKIU's legal interests. The Court then went on to look at whether, that being the case, there was any other relevant interest that might be affected. This is a much clearer case than Tweed Valley. Here we have a number of legal interests that are clearly affected - the right to collect levies, the right to obtain information - and a search beyond that, as was required in the Tweed Valley case, is not really required here at all.

PN93

We have clearly met the first limb of the relevant test. Legal interests have been identified and in that respect it's not necessary to go beyond that. If it were, contrary to what I've just said, necessary to go beyond that, then the facts at hand demonstrate in any event that CoINVEST, standing as trustee with responsibility for the beneficiaries under the trust, has a representative interest in the matters at hand which bring it clearly beyond those of the interests of an ordinary member of the public.

PN94

We would say in relation to paragraph 16 of my learned friend's submission that some aspects of it are in any event incorrect. In paragraph (a) it's said that:

PN95

Employees of Visionstream or otherwise are not members of CoINVEST -

PN96

That's true. It said:

PN97

They are at most potential beneficiaries entitled to payment from the CoINVEST fund in accordance with the rules.

PN98

That's not right. They are in fact beneficiaries. Section 6 makes that clear. The amount of the entitlement is contingent, but section 6 refers to all of the workers in the industry as beneficiaries. The extent of their entitlement is a matter to be determined in accordance with the rules of the trust, et cetera. In (b) it's said that CoINVEST does not:

PN99

hold any property to which any particular worker is or can ever be beneficially entitled.

PN100

That's not so, and that's made out in the trust deed at clause 2.3(b), which provides:

PN101

Notwithstanding anything in this deed, an individual beneficiary does not have any rights, title or interest ...(reads)... under clause 3.3.

PN102

It is not the case that they can ever be beneficially entitled; they become beneficially entitled when they qualify. That's perhaps dealing with matters at the periphery, because our fundamental point here is that in line with the decision of the Full Bench recently made in identical circumstances CoINVEST is entitled to rely on the purported affect upon its legal rights and it does so and that is a matter that seems to have been not dealt with, at least so far, in the approach taken to the question of standing by Visionstream.

PN103

Then can I go to the first jurisdictional issue, and that is the matters pertaining issue. CoINVEST says that by reason of the impugned provisions the 2004 agreement is not an agreement about matters pertaining to the relationship between Visionstream and its employees. Our written submissions commence to deal with that matter at paragraph 17 on page 5.

PN104

You will see in paragraph 18 that what we in essence say is that the impugned provision is really about the relationship between Visionstream and any state law in relation to long service leave or which provide any benefits to employees covered by the 2000 agreement in the nature of or in respect of long service leave; secondly, the relationship between employees covered by the 2004 agreement and any state law in relation to those same matters; and thirdly, the relationship between the 2004 agreement and any state law in relation to those same matters.
We set out the principles to be derived from Electrolux. I don't intend to spend very much time on this. It begins at paragraph 19.

PN105

We also deal with the application of Electrolux, in particular in the recent Full Bench decision in AMF v Rural City of Murray Bridge. I don't think anything there is particularly controversial. At paragraph 24 the Full Bench stated that Electrolux is authority for true propositions, but earlier cases dealing with the construction of the term "pertaining to the relationship between employers and employees" apply to the construction of section 170LI(1), and secondly, an agreement which contains a matter which does not pertain to the relationship between employers and employees cannot be the subject of a valid application for certification, subject to the qualifications set out in paragraphs 16 to 19 of the Full Bench reasons dealing with the machinery of administrative provisions and trivial matters. I think we should have said also incidental or ancillary provisions.

PN106

The Commission's decision in the AMF Full Bench matter is summarised conveniently at paragraph 27. The applicable principles are there set out:

PN107

(a) The Commission has no jurisdiction to certify an agreement unless it answers ...(reads)... in a way which is direct and not merely consequential.

PN108

Then at paragraph 28 and following the duly impugned provision set out why there's no direct connection between it and the requisite relationship. We rather anticipate I think, some of the submissions that came from Visionstream in paragraph 29. We say:

PN109

Other than for the impugned provision clause 14(3) deals with a matter that does pertain.

PN110

What we mean by that is that everything above the sentence which is underlined at paragraph 4 of our submission where we set up clause 14(3) deals with a matter that does pertain. The matter is an obligation as between employer and employee for the employer to provide long service leave to the employee. That's a common obligation and a common entitlement to employer based on employer provided long service leave. The impugned provision is not confined to the matter of employer based long service leave.

PN111

That is, Visionstream's obligation to provide its employees with leave referable to service by those employees with Visionstream. It's not confined to ousting state law dealing with Visionstream's employer based long service leave. We say that:

PN112

It may be the case that a clause ousting a state law...(reads)... but may be incidental to the pertaining matter of employer based long service leave.

PN113

For instance, take the example of the Victorian Long Service Leave Act. It's an Act which deals with the obligation of an employer to provide long service leave to its employees referable to service by those employees with that employer. Now, if the clause had been confined to a provision which indicated the parties' intent that the obligation to provide employer provided long service leave upon Visionstream was here to be comprehensive and exclude any like obligation in the state Act for Visionstream to provide employer based long service leave then may well have been an incidental provision permissible. But that's not this case.

PN114

The impugned provision is not confined to state laws which deal with the obligation of an employer to provide long service leave to its employees. It seeks to oust any state law in relation to long service leave or which provides any benefits in the nature of or in respect of long service. Accordingly, any state law providing benefits referable to time served by employees of Visionstream is caught. That would be so irrespective of who provided the benefits. Whether the obligation was on Visionstream or whether the obligation was on the industry or an industry body or on the state government or anybody else.

PN115

That is the principal vice here that the clause seeks go to beyond a subject matter that does pertain. If it was confined to the pertaining matter of employer provision of long service leave and had an ancillary provision indicating the intent of the parties in relation to state laws dealing with that very subject matter it may be permissible. It wouldn't be the subject of this appeal. but it goes further and it does so impermissibly. In the AMF case at paragraph 17 and the AMF case is behind tab 1. At paragraph 17 the Full Bench dealt with ancillary or incidental provisions and makes the point in the first three or four lines that for a term to be ancillary or incidental it must be ancillary or incidental to a matter that does pertain. That's clear enough. One probably doesn't need authority for that proposition.

PN116

When one looks at my learned friend's submissions and we'll come back quickly to those a little later. The vice in the approach, it seems to us, is that the submission begins by identifying the field that the first part of clause 14 is dealing with and says rather broadly and without distinction , that's dealing with long service leave. More accurately, and it's important to be accurate here, the first part of clause 14 is dealing with long service leave referable to service with a particular employer and the obligation upon the employer to provide employer based entitlements. It is not dealing with long service in the industry. It is not dealing with benefits referable to time served but not payable by the employer.

PN117

The impugned clause goes beyond the field dealt with in the first part of the clause. It is dealing with long service leave or anything in the nature of long service leave, irrespective of whether that benefit is a benefit emanating from the employer and payable by the employer to the employee. Insofar as it travels beyond the field of employer based provision of long service leave, it cannot be incidental or ancillary to a matter pertaining. Once you leave a field of employer based long service leave the subject matter does not pertain to the relationship. It doesn't pertain to the relationship for a host of reasons and we touch upon this in our submissions at paragraphs 28 to 38 and I've dealt through to 31.

PN118

At 32 we make the point that although a court, within its scope, the impugn provision is not confined to the CILSL scheme and its validity is not to be judged solely by reference to that state law alone although in our submission we do seek to illustrate the invalidity in issue by reference to that scheme. The words of the impugn provision are in no sense confined to the CILSL scheme. They deal with any state law and touching upon anything in the nature of long service leave.

PN119

If for instance there was a scheme put in place by parliament which required a benefit for time served to be paid straight out of the revenue, straight out of the budget, without any contribution from employers that would still be caught by the ouster provision and no employees of Visionstream would be entitled if the clause has its purported effect. No employees of Visionstream would be entitled to such benefit so we need to be careful that we don't get too caught up in the particular nature of the CILSL scheme because the clause is not confined to it. Using it in an illustrative way as we do at paragraph 33 and following, the scheme deals with industry long service leave benefits and not Visionstream's employer based long service leave arrangements.

PN120

The scheme is not concerned with terms and conditions of employment but rather with the creation and maintenance of an industry wide benefits fund. It creates an industry benefits scheme, not tied to any particular employment relationship or period of employment. The payment of the benefit is a matter solely between CoINVEST and the worker. The benefit bears no relationship to any period of service with any particular employer. It doesn't affect employment. The provision of information and the making of contributions are solely between CoINVEST and employers, not between the relevant employers and their employees.

PN121

DEPUTY PRESIDENT BLAIN: Mr Bromberg on that submission the employer presumably is the person who pays and I wonder how can it then be solely a matter between CoINVEST and the worker?

PN122

MR BROMBERG: No the payment of the charge or levy is a matter between the employer and CoINVEST. The benefit provided by the scheme to the worker is matter between CoINVEST and the worker. Neither of those subjects matters are matters between the employer and its employees - and that is the point, your Honour. Each relates to a different relationship. On the one hand between CoINVEST and the employer - on the other between CoINVEST and the worker. At no time does the relationship between the employer and the employees come into play. For instance - - -

PN123

DEPUTY PRESIDENT BLAIN: I understand that but in that sentence there, what you are referring to is to quote, it says:

PN124

It is a matter solely between CoINVEST and the worker.

PN125

MR BROMBERG: We are dealing there with the benefit. You see the payment of the benefit - the obligation on CoINVEST to pay the benefit is purely an obligation between CoINVEST and the worker. It doesn't matter whether the employer has paid the charge - makes no difference. The worker is just as entitled to demand the benefit whether the employer has paid the charge or not.

PN126

CoINVEST is obliged to pay the benefit irrespective of whether it has been able to collect any charge from one or more of the employers that that worker, worked for. That illustrates in our respectful submission your Honour that the relationship that is here at hand is in respect of the benefit, a relationship between the employee or the worker and CoINVEST. In relation to the charge it is a matter that goes solely to the relationship between the employer and CoINVEST.

PN127

JUSTICE GIUDICE: If that is so Mr Bromberg why does the last sentence of clause 14(3) affect the position at all? Why would you presume that that sentence has any operation outside the employer, employee relationship?

PN128

MR BROMBERG: Because it purports to have that operation, because it purports to exclude any state law in relation to long service leave. Now if it is not there, one might have assumed that the long service leave being referred to was long service leave of a kind that the clause earlier was speaking of, that is employer based provision of long service leave. The clause goes on though to say:

PN129

Or which provide any benefit in the nature of or in respect of long service leave.

PN130

So it, in our submission purports to pick up a scheme like the CILSL scheme which provides benefit in the nature of long service leave, an industry long service leave scheme which provides long service leave referable to service in an industry rather than service to the employer. That is our apprehension about it, your Honour. I might say that when the earlier proceeding came before Commissioner Smith when the earlier certified agreement was sought to be varied to include this very sentence, my understanding is that Visionstream specifically said that the clause was directed to ousting the CILSL scheme. Our apprehension, your Honour, arises both from the wording and also in part I suppose from the way in which Visionstream obviously would argue that the clause was intended to work.

PN131

JUSTICE GIUDICE: Subjective intention doesn't shed much light on a legal - - -

PN132

MR BROMBERG: I know that, your Honour, but the background might. The background for the variation application was the service of a notice upon Visionstream by CoINVEST of a section 10 notice. If the background was to give some context to the meaning as it might well do, an objective intent might well be found and might lead to the interpretation which we apprehend is the one that Visionstream argued for.

PN133

If the clause intended to do no more than express an intent that the employer shall not be obliged to make any other payment or provide any further long service leave to its employees, other than what is provided in clause 14, it could have easily said that. It could have confined itself to employer based long service leave. The drafter of the sentence has a chosen a particularly broad way of dealing with the issue and, in our respectful submission, done so in a manner which clearly is open. The fact that the clause was intended to oust not only, employer based long service leave provisions but all manner of long service leave provisions, or all manner of things in the nature of long service leave including industry based long service leave.

PN134

It is as we have said already and I ought not repeat a clause designed to deal with different relationships, that is different to that between the employer and the employees. It is really a provision seeking to oust the obligation upon Visionstream under state law to make payments referable to any kind of leave. It's also dealing with the provision of benefits to employees of Visionstream. Benefits that come not from the employer but that come from other sources and to that extent it's dealing with a different relationship.

PN135

One determining way of testing the proposition as to whether the ousting of state law pertains, is to pose this question. Could the employees here have assented to a claim made upon them by Visionstream that Visionstream not be obliged to pay any charge or levy under the CILSL scheme. If assent or dissent by relevantly new employees is irrelevant to the thing demanded from them, then classically there is no matter pertaining involved in the demand. You see, the employees - - -

PN136

JUSTICE GIUDICE: Isn't that more about whether or not an industrial dispute arises?

PN137

MR BROMBERG: It is, your Honour, but an industrial dispute doesn't arise in that circumstance because you don't have a matter that pertains.

PN138

JUSTICE GIUDICE: I thought the assent or dissent was relevant to the question of whether or not there is a dispute and not something pertained.

PN139

MR BROMBERG: It is, your Honour. I'll take your Honour to the Shell decision where the point I'm making is assisted. It might be said, your Honour, that it's not always the case that simply because an employer could assent to something it pertains. That's bright. The same if you put the boot on the other foot. It's not always the case that simply because employees could assent to something, it's a matter that pertains. But where an employer or the employees can't relevantly assent to a demand, the first port of call, in analysing whether the matter involved pertains is by reference to that very fact. Can I take the Commission to the Shell decision AMWU v Shell. It's one of the additional cases that we provided.

PN140

In the decision of the majority and I'm referring here to the case reported at
1991 92 174 CLR at page 345. In a decision of the majority of 357 to 358, at the bottom of 357, second last paragraph, you'll see their Honours say:

PN141

As has been seen the present definition ...(reads)... to the relationship between employers and employees.

PN142

Then they relevantly address the facts of that case. They go on to say:

PN143

It was also argued on behalf of the Shell ...(reads)... hence it is not an industrial dispute.

PN144

Then it was put that the best endeavours part of the claim is entirely dependent upon and thus inseverable from the claim for the appointment of actuaries so that the entire claim must fail even if its best endeavours aspect is otherwise industrial in character. Relevantly, the court then said, it was said in Portus's case:

PN145

The demand which employers themselves have no power to grant could not give rise to an industrial dispute ...(reads)... is completely irrelevant.

PN146

Then their Honours deal with the fact that assent or dissent may not be able to be given is not entirely the issue. It may be, as it was in this case, the best endeavours could be demanded of the employer. But in the middle of the next paragraph the court said this:

PN147

And now that an industrial dispute is defined in terms of dispute about rather than in terms of dispute as to ...(reads)... but that will not always be so.

PN148

So your Honour can see that the court makes specific reference to the fact that in most cases the relevance of assent or dissent, not only go to the question of there being a dispute but also to being a strong indicator as to whether one is dealing with a matter that pertains. The fact that the employees here, if we speak solely about the CILSL scheme, had no capacity whatsoever to assent or dissent. In fact, as I noted in passing, section 13 of the Construction Industry Long service Leave Act specifically says that the employees can't contract out of the provisions of that Act.

I'm not sure that such provision was really necessary but it's there in any event. That makes it abundantly clear that the sort of obligation that Visionstream may well have been seeking to avoid here, that is the provision of the charge or the payment of the charge and or the provision of information, is nothing that the employees in question could have possibly granted in response to a demand made.
That is indicative in our respective submission that the impugned provisions dealing with are non pertaining matter.

PN149

JUSTICE GIUDICE: Is that point dealt with in your written submissions, Mr Bromberg?

PN150

MR BROMBERG: No, it's not your Honour. I think it is a powerful point when one considers it. It was one of those points that all of a sudden bounces into your brain at an unexpected moment. It did in this case your Honour, it just came as a strong indicator of what is, in our respectful submission, an obvious point and an obvious flaw in the approach taken by Visionstream.

PN151

DEPUTY PRESIDENT BLAIN: Mr Bromberg, can you just explain to me, a little further, the phrase, "the employer has no power to grant the claim," the relevance to the case before us.

PN152

MR BROMBERG: The relevance, your Honour, is this. What the High Court is saying is, where the assent or dissent of the party receiving the demand, in that case it was the employer. In this case, relevantly if a demand was made of a kind that was on the subject matter that we're dealing with, in this case it would relevantly have been made to the employees. What the High Court is saying is, that where the party in receipt of the demand can't relevantly assent or not to the demand, that is a strong indicator, in most cases, that the matter does not pertain to the requisite relationship because it's not within the power of the party receiving the demand to grant it. It follows that the subject matter in question, the subject matter raised by the demand, is not a matter that the requisite relationship deals with.

PN153

DEPUTY PRESIDENT BLAIN: I understand that, but I'm asking about the relevance to this case that we're considering today.

PN154

MR BROMBERG: The relevance is that if you construe the provision that state law in relation to long service leave or which provides any benefits in the nature of long service leave - if you construe that provision, the ouster provision of state law dealing with that subject matter - if you construe it in terms of the making of a claim and the acceptance or rejection of a claim, as we say one should, in terms of the industrial relationship involved here, the claim here, if a claim was ever made, would have been a claim upon the employees that state laws dealing with long service leave of whatever kind did not oblige the employer in any way, shape or form. That would have been the nature of the claim the employer would have had to make on the employees in seeking an agreement of this kind.

PN155

Our point is that the employees have no capacity whatsoever to grant that claim. They can't oust state laws. They don't have the power to extinguish the obligation upon the employer to pay the charge that CoINVEST requires as an example. A demand of this sort made in the context of the industrial relationship in question could never have led to assent because the relevant industrial party receiving the demand doesn't have the capacity to assent or not to it, and that is a strong indicator, as the High Court has indicated, that the subject matter of the demand is not a subject matter that pertains to the relationship. You couldn't have an industrial dispute about it, your Honour - you just couldn't. There could never be an award dealing with that subject matter, consent or otherwise, and that's because the subject matter involved does not pertain.

PN156

JUSTICE GIUDICE: The contracting out provision seems to suggest to the contrary, doesn't it - the prohibition on the contracting out?

PN157

MR BROMBERG: That's something that the employer can assent to. You can make a demand on the employer but it continues to produce its produce in house rather than contract with others. The employer has the capacity to decide whether or not to contract out or not, so it is a demand that can be assented to.

PN158

If I can then turn to the submissions made by Visionstream on the matter of pertaining, whether the matter pertains, their submissions begin at paragraph 24. You'll see at paragraph 26 they say that on a proper construction of clause 14.3 the starting point is that the first three sentences conventionally and validly deal with long service leave. We don't disagree with that. We in fact, as I said earlier, anticipated that that would be said and there's no dispute about that.

PN159

Then it's said at paragraph 27 - this is in the last sentence - that it's competent for the parties to make it clear that clause 14.3 is intended to cover the field; this is the purpose of the impugned provisions. Again, we wouldn't have a problem with that if the field was confined to what the first three sentences in clause 14.3 deal with, that is employer-provided long service leave referable to service with the employer, but the problem with the provision, as we said, is that it's not so confined and it seeks to travel beyond the field that the first three sentences are dealing with and thereby beyond the subject matter of a matter that does pertain. Insofar as it travels beyond the field the impugned provision is not ancillary to a matter that pertains but is dealing with a matter that does not pertain.

PN160

If I may move on, the next aspect of the jurisdictional challenge is that the impugned provision is inconsistent with section 170LZ and consequently we say it was beyond jurisdiction for that provision to be included in the certified agreement. If I can take the Commission to section 170LZ, it provides that:

PN161

Subject to this section, a certified agreement prevails over terms and conditions of employment specified ...(reads)... any inconsistency -

PN162

Then certain subject matters are excluded in LZ(2):

PN163

Provisions in a certified agreement that deal with the following matters operate subject to the provisions of a state law -

PN164

then they are identified. What this provision does is travel beyond what 170LZ authorises. It seeks to oust all state laws dealing with the subject matter of long service leave or anything in the nature of long service leave, whether they are inconsistent with the certified agreement or not, and whether they deal with terms and conditions of employment or not. You will see that 170LZ is confined to providing that a certified agreement prevails over terms and conditions of employment specified in the state law, not anything that's other than a term and condition of employment, and it's confined by the words "to the extent of any inconsistency". Neither of those qualifications is to be found in the clause that seeks to oust any state law dealing with this particular subject matter.

PN165

JUSTICE GIUDICE: In terms of 170LT and 170LU are couched in terms of a positive requirement on the Commission in one case and a negative requirement on the other, wouldn't it be necessary to bring the 170L(1) argument or contention somehow within 170LU, for example?

PN166

MR BROMBERG: Only if LU was to be regarded, your Honour, as an exhaustive statement of the circumstances in which certification should be refused. In our respectful submission it should not be read in that way, but can I come to that by developing the submissions somewhat?

PN167

JUSTICE GIUDICE: Yes.

PN168

MR BROMBERG: I understand the point. It is the point that is most starkly against us and I want to come to it. I don't intend to avoid it, but I want to come to it in this way. It seems, your Honour, that the matter between us is not that there's inconsistency between the clause and section 170LZ. The inconsistency is obvious and there is no apparent attempt in my learned friend's submissions to suggest that the inconsistency we point to, is not made out.

PN169

The matter between us seems to be whether the fact of inconsistency goes to the validity of the agreement or, alternatively, to its enforceability. In other words, does the fact of inconsistency go to the power and jurisdiction of the Commission to make such a provision, or alternatively, does the Commission have jurisdiction but the inconsistent provision is simply ineffective at law insofar as it's inconsistent with section 170LZ. That seems to be the context.

PN170

It's our submission that there is no power to validly make a certified agreement including the impugned provision. At paragraph 43 of our submissions we say that the provision in the certified agreement cannot go beyond what is authorised by the Act. The principle that a regulation or determination or other subordinate instrument such as a certified agreement made under an Act cannot go beyond the scope of the power in the Act is uncontroversial. We refer to Moreton v Union Steamship, where relevantly the High Court stated, and we've given the relevant passage at paragraph 43:

PN171

The ambit of the power must be ascertained by the character of the statute and the nature of the provisions ...(reads)... in another way.

PN172

That case was dealing with the power of a governor-general given under the Act to make regulations in furtherance of that particular Act.

PN173

Regulations would not be valid where they attempt to widen the purposes of the Act, to add new or different ...(reads)... attain its ends.

PN174

We refer again to Shanahan's case in the High Court and also a number of Federal Court decisions which are set out in the second note on the page.

PN175

Section 170LZ evinces a legislative intention that parliament has reserved for itself the subject of the interaction between a certified agreement and state laws, and by implication has denied any authority for the Commission to deal with that subject matter, let alone deal with it inconsistently with the way in which section 170LZ does so. If you look at Division V, beginning as it does with section 170LX, that division headed "Effective Certified Agreements", makes it quite clear, in our submission, that parliament intended to reserve to it the subject matter of how certified agreements were to interact at law with other instruments, be they awards, certified agreements, other certified agreements, AWAs or state awards.

PN176

This is a matter that parliament reserved for itself and one should, in our submission, imply from that that Parliament has provided no authority for certified agreements by their own terms to deal with that particular subject matter, that is the effect of certified agreements. To interpolate the words of Jacobs J in R v Gordon; Ex parte Uniworld, which I'll take you to in just a second, we say that it was the legislative intention that section 170LZ should impose an inviolable restraint on the power of the Commission to expressly deal with the interaction between a certified agreement and state law, either at all or at least in a manner inconsistent with 170LZ.

PN177

R v Gordon is decision that we've handed up separately to the book of authorities. The passage that I've just referred to is a passage that you'll see at page 221 in the decision of Jacobs J. The passage referred to - the passage beginning with reference to the R v Metal Trades Employers Association; Ex parte Amalgamated Engineering Union - that paragraph and the next is the passage referred to as distilling the applicable test and that is done by the Full Federal Court decision in Meneling Station v AMIEU (1987) 18 FCR 51 at 58.4. We've also given you a copy of the decision, but it's only relevant in this respect, that the Full Court there refer to the approach taken here and in particular the principles relied upon by Jacobs J. That principle is simple.

PN178

Should one here infer a legislative intent by reference to 170LZ that the capacity of the Commission and the capacity of certified agreements to deal with the interrelationship between a certified agreement and state law is restrained by the fact that parliament has dealt with that matter specifically. The line of authority here is very similar to the line of authority that we've already referred to in relation to regulations. It is about discerning parliament's intent and whether, by reference to parliament's intent, one can discern an exclusion in relation to the power of the Commission to certify a certified agreement dealing with a subject matter already dealt with by parliament in the Act.

PN179

JUSTICE GIUDICE: The cases that Jacobs J was concerned with were in relation to the conferral of a power, weren't they?

PN180

MR BROMBERG: Yes.

PN181

JUSTICE GIUDICE: A power subject to limitations and the issue was whether the conferral of a power subject to limitations excluded the possibility that the power can be exercised otherwise and in accordance with limitations.

PN182

MR BROMBERG: That's right, your Honour.

PN183

JUSTICE GIUDICE: Isn't 170LZ concerned with the legal effect of an agreement once certified?

PN184

MR BROMBERG: It is, your Honour. There is that distinction that one can draw on the facts, but the proposition, the principle that we seek to distil is the same. What one must do is search for parliament's intent. The question for the Commission is whether one distils from the fact that parliament has reserved for itself, as we say, the operative interaction and effect between certified agreement and state law. Does one distil from that a restraint upon the Commission, using its power to make a provision dealing with the subject matter, or at least make a provision dealing consistently with the same subject matter.

PN185

At the end of the day it is a question of discerning the intent. Before leaving the passage that I am referring to, your Honour will note that in the passage taken from Dixon Js decision in the Metal Trades Employers' case, his Honour, noted the transgression from the limitations or restrictions identified in the Act led to invalidity. You'll see, your Honour, in the second sentence when that is the case invalidity effects any transgression.

PN186

So, his Honour was making clear that a transgression did not simply lead to ineffectual operation of the provision. It led to invalidity. That's what we say is the case is here. We say that is particularly so in circumstances where the scheme here for a valid certified agreement to be made requires genuine approval. That is section 170LT(5) and (6). It requires appropriate explanation of the terms and conditions of the agreement to the employee. There is a requirement in 170LT(7) for that.

PN187

This is a scheme which seeks to ensure that people understand what they are asked to agree to and are not misled as to what they are agreeing to in order that there be genuine agreement. It is highly unlikely that in those circumstances in our respectful submission, parliament intended that a gross misstatement in an agreement intended for certification of the effect of the agreement, once certified, could be left to stand, could be left to mislead, and be only amenable to some possible later challenge in a court somewhere, where someone sought a declaration that the provision was inconsistent with the Act and therefore ineffective.

PN188

We say that 170LU and 170LT should be read, your Honour, in that context. Perhaps the best explanation for why this problem is not expressly dealt with in 170LU, might be because parliament just simply didn't contemplate that the subject matter of an effect of a certified agreement rather than subject matters dealing with terms and conditions in employment to be included in a certified agreement. A parliament perhaps just simply didn't contemplate that certified agreements would be used to deal with the subject matter of effect when parliament has expressly and directly done so in the Act.

PN189

DEPUTY PRESIDENT BLAIN: Mr Bromberg, in relation to your submission in relation to Jacob's dictum which was referring to the introduction of 42A into the Act in 1973, would you be of the view that section 170LZ would be a later scheme in terms of when it was introduced by parliament and therefore one would need to look at that later context in relation to the interpretation of 170LZ as you are putting it?

PN190

MR BROMBERG: There is no doubt, your Honour, that one always needs to approach the issue of interpretation in the context of the very provisions that are in force rather than provisions that were in force at an earlier time. There is no doubt about that, but what we draw from Jacob J's decision is the principle to be applied. The principle is based with this, your Honour, and it hasn't changed because the Act has changed. The principle is, look at the Act, take account of the provision in question and in this case it is 170LZ. Can you draw from that provision a conclusion as to parliament's intent in relation to the subject matter dealt with by that section.

PN191

We would say that when you look at the provision - when you look at the way in which parliament has reserved for itself the way in which state laws and certified agreements are to interact, it is highly unlikely that parliament intended to allow the Commission to certify a certified agreement that dealt with that same subject matter especially where the certified agreement deals with it completely inconsistently with the Act. It is really a matter of discerning parliament's intent, your Honour. That is what Jacob J is dealing with.

PN192

Additionally, we say by reference to that passage and in particular the passage referred to in the judgment of Dixon J, that where there is transgression from what parliament intended it leads to invalidity not simply the ineffectual certification of a provision intended to sit there and mislead the world until somebody declares to the contrary. This is an important issue because if my friend were right and there was no invalidity a certified agreement for instance could say that all state occupational health and safety laws are excluded. That would clearly be inconsistent with section 170(2)(a) but according to our friend's submission the Commission must certify.

PN193

According to our learned friend's submission the certified agreement then gets posted on the wall and the world understands that occupational health and safety provisions in the state Act have no application to that workplace and nobody is going to be the wiser until somebody comes along and decides to challenge that interpretation in court.

PN194

In our respectful submission that is not the way in which parliament intended this to operate. It intended the Commission to have regard to what parliament said about interaction between the state law and the certified agreement and have regard to the fact that parliament has reserved that subject matter to itself and ensure that agreements certified are consistent with what parliament has expressed to be the operation between a certified agreement and the state law. It is not just interaction between a certified agreement and a state law which is relevant. If our submission is wrong it would be equally wrong in relation to any matter dealt with in Division 5. For instance LX(1) requires that a certified agreement comes into operation when it is certified.

PN195

Can the Commission certify an agreement that says it doesn't come into operation for 3 years and mislead the world as to when a certified agreement operates. In our respectful submission, no. The Commission in certifying an agreement must have regard to the way in which parliament has dealt with the subject matter of the effect of a certified agreement and deal with the certified agreement consistently. As to the fourth matter, leave to appeal, we rely on all that we've said today and also on our written submissions in relation to that matter. I think we can leave it at that, if the Commission pleases.

PN196

JUSTICE GIUDICE: I'd just ask you one thing about that, Mr Bromberg. I suppose another view that might be taken is that the question of the relationship between this provision and the terms of the Construction Industry (Long Service Leave) legislation could be tested directly, in other words in a prosecution or something like that.

PN197

MR BROMBERG: Yes, that can happen, your Honour and it may well happen irrespective of the outcome here and we acknowledge that, your Honour.

PN198

JUSTICE GIUDICE: You say that if we reach the conclusion that the term is bad
- a shorthand expression - it's in the public interest that we do something about that rather than leave it there.

PN199

MR BROMBERG: It is, your Honour, and it's in the public interest that this tribunal, which is a specialist tribunal, deal with matters that are familiar to it. Questions such as whether a particular clause pertains is a matter that this tribunal has significant expertise in determining, and in our submission it's in the public interest that if it's open to the Commission to determine it, given in particular the Commission's expertise on those issues it is better determined here than left for determination elsewhere.

PN200

JUSTICE GIUDICE: Dr Jessup?

PN201

DR JESSUP: If the Commission pleases, we have filed an outline of our submissions and we would refer without further comment to paragraphs 1 to 5 of those submissions. We would turn straight to the question of standing, with which we deal at paragraph 6 and following. We appreciate, of course, that we have something of an uphill battle on this point because of the earlier Full Bench upon which my learned friend relied, and in that respect it was probably good reason for us to ignore that Full Bench and the unknown submissions in reply, although we apologise that that tends to depreciate the importance of the precedent in any way.

PN202

JUSTICE GIUDICE: Isn't the scheme a bit like an insurance scheme in the sense that it relies on the breadth of the collection of the contributions to make the scheme operate effectively and that if one assumes for the moment that your client would otherwise be liable to make contributions and on the appellant's submission would not be liable if the clause had the effect that's contended for - isn't that a matter which would affect the trustee of the scheme?

PN203

DR JESSUP: Yes, and of course, your Honour, more directly than that the trustee, as my friend points out, has the benefit of a section of the state Act which sets up a civil debt in relation to any charge which remains unpayable, but the point which we make here and which with respect wasn't dealt with at all by the earlier Full Bench is that on the assumed scenario which concerns the appellant - whether or not that is of course the way things pan out is not for this Commission to determine - but on that assumed scenario this agreement will render ineffective or inoperative the state provisions as to collection of charges and things of that nature. It is not this agreement which does it. It is not the certification - it is not the assumption of jurisdiction by the Commission to certify which does that. At base it is section 109 of the Constitution.

PN204

Section 170LZ itself only expresses a statutory intention as to the scope of agreements made under it and even if you accept everything that my learned friend says, it can only be through the operation of section 109 that his client's rights under state legislation are affected in any way. In other words, he's no different from anyone who has a benefit under a state law and that law is supplanted by a federal law or by a subordinate instrument or by an award or certified agreement.

PN205

If the federal parliament decided to pass a dog act - if they found somewhere in section 51 to have justification for a dog act and it relevantly excluded the operation of state provisions as to dogs, the question is would the state registrar of dogs, or whatever there is, for the City of Melbourne or whatever it might be that collects fees and charges for the registration of dogs - would they have standing to come to whatever functionary it was under the federal act which put in the relevant subordinate legislation.

PN206

Obviously, whenever there is federal law which operates through section 109 of the Constitution to replace state law someone is going to be affected and when Gummow J and others said the interest must be something greater than that which he or she would have as a normal member of the public, the impact or benefit of legislation always only applies to some people. Even the traffic laws only apply to people who drive cars or other vehicles. So everyone is an ordinary member of the public insofar as they are addressed by state legislation. We submit this is no more than a case in which we have made an agreement under federal legislation and under section 109 of the Constitute it might have an impact, it might not, we think it does, obviously the appellant thinks it does, but we submit that doesn't give an appellant a grievance within the structure of the Workplace Relations Act.

PN207

JUSTICE GIUDICE: But it has more of a grievance than you or I, for example, does it not?

PN208

DR JESSUP: It does in the context of this case, but that's simply because it happens to be the people to whom the state legislation is addressed. It's not the person to whom the federal award is addressed. Now your Honour, this is quite different from a number of cases which have previously come before the Courts and this Commission in which, for example, a federal award or agreement which is binding upon a range of employees brings in a different regime of benefits for those employees than that which they had enjoyed previously under state law.

PN209

Their grievance might be that they are worse off now than they were previously and that the operation of the federal award brings that about, but the fact that they are persons aggrieved is because the award operates on them. I'm not for a moment wanting to deny that in some cases, such as the one that Gummow J dealt with, the Maritime case concerning some maritime legislation of some kind - it's referred to in the Tweed Valley case - I'm not for the moment denying that you might have a body with a representational character and in that case the union was a party aggrieved because they made submissions to the body below. It is completely different if the party claiming to have a right of appeal in locus standi has been involved in the proceedings and in effect has had the point decided against it.

PN210

That is also where Tweed Valley stands apart. In Tweed Valley the AMWU not only made a submission on the certification or the approval of the enterprise flexibility agreement, but was statutorily entitled to do so under the Act as it then existed. So those categories of case in which someone actually participated and had the point decided against them must be put to one side. This, we submit, is more in the case of a quasi-legislative instrument which doesn't operate with respect to the party, doesn't operate with respect to any of this party's members or privies or representational interests.

PN211

It only operates with respect to our employees and our client itself and it happens to oust - it doesn't, but the Constitution happens to oust state laws which would otherwise provide a different range of benefits. That's out point, your Honour. It's either a good one or a bad one. I don't think I can elaborate on it any further, but it really is the distinction between this case and many cases previously. My learned friend made a number of submissions on this point which took issue with what at that stage we were about to say and which at this stage we have said.

PN212

DEPUTY PRESIDENT BLAIN: Dr Jessup, just before you leave that point, if we accepted the logic of what you're putting in terms of the constitutional argument and the argument about the cases, what would your response be to the proposition that nevertheless what you're putting could be reading into 45(3)(d) something which the parliament has not expressly considered or included?

PN213

DR JESSUP: We would hope we're not making that mistake, your Honour. We'd be trying very hard to avoid adding anything into 45(3)(d). What we're trying to do is to bring ourselves within the words of the paragraph. We're trying to point out that by reason of the fact of the things that we've said the appellant isn't a person aggrieved by the act of the Commission. So we say that they don't have a grievance as that expression is properly understood in the context of 45(3)(d).

PN214

My learned friend said that his client stands in the shoes of employees, that it has a representative capacity and that it protects the interests of employees. The difficulty with that is that it is contradicted by his own earlier submission in which he pointed out that employees have a right of action against CoINVEST regardless of whether any contributions have been made with respect to them by any employer or by sufficient employers to fund the entitlement in question. Although the rules talk about beneficiaries, they are obviously not talking about beneficiaries with respect to any previous interest which the law would recognise.

PN215

The moment an employee has an entitlement under the Victorian Act it has an entitlement against CoINVEST, so in no respect is CoINVEST looking after the employees' interest. It's the employee who will be suing CoINVEST to get that entitlement. Up until that point the employee has no entitlement and this is the point that we wanted to make in our submissions, that it's not as though this funded something in an ongoing sense which any identifiable employee could say, "I'm the owner of this little square of the fund" either inequity or in any other sense.

PN216

It's not until they actually clock over the years of entitlement in the industry as a construction worker that they then have an entitlement and their entitlement is not to any specific part, but they can't say, "These assets here" or "The property here is my property". Rather they stand in the shoes of a creditor as against the fund. My learned friend's attempt to paint this case as though it were similar to the maritime case in which you had a representative organisation claiming standing in our submission should not be accepted by the Commission.

PN217

Subject to those elaborations, that is all we wish to say on the question of standing and we otherwise rely on the outline running through to paragraph 16. We have dealt with section 170LZ before we've turned to Electrolux because 170LZ is a statutory provision and if my friend's submissions are right it's a short answer to the whole case. In our submission my learned friend's case on this point doesn't withstand .....

PN218

We submit CoINVEST's submissions are misconceived in three respects. Firstly, they treat section 170LZ as though it was a source of power to include provisions in a certified agreement with respect to the relationship between such an agreement and state laws. It clearly isn't. The Commission's power, if power is the right word - "obligation" is probably a better word - to certify an agreement arises under Division 4, part 6B. Once you have a valid certified agreement then section 170LZ operates with respect to it.

PN219

My learned friend's second point is the one which arises out of the Moreton case, and I think if associate ourselves with what the presiding member said, this is not a case in which the Commission is the repository of a power in order to make an award or to promulgate a regulation or something of that kind. This is a case in which the Commission's obligations are clearly set out in Division 4. The Commission simply has to certify the agreement if the requirements are satisfied. Thirdly, my learned friend is mistaken in that they have misconstrued, we submit, what they described as the "impugned provision" and we deal with that in greater detail in the next sections to which we come with respect to Electrolux.

PN220

My learned friend said that there was between himself and ourselves a consensus that the provision they attack in clause 14.3 is inconsistent with section 170LZ. The Commission should not be under any such misapprehension. There is no consensus about that whatsoever. In our submission no question of inconsistency arises. They pass each other like ships in the night. They are simply dealing with different things. It is section 170LZ that gives effect or otherwise to this agreement and no part of clause 14.3 attempts to do that. Clause 14.3 is only an attempt to express the intention of the parties with respect to the scope of the clause.

PN221

DR JESSUP: If having looked at the construction clause 14.3, you've come to the conclusion that it is inconsistent with some state law, then section 170LJ operates to the extent that it can under section 109. That's all that operate - there is really no inconsistency point between the provision and section 170LZ. The letter print went on to say, that - I don't know whether this was the point that the friend thought of this morning, bubbled to the top of his head was his best point but anyway it was one which - - -

PN222

COMMISSIONER BLAIR: No, no think Dr Jessup - - -

PN223

DR JESSUP: I think I have travelled a bit beyond his written outline but that's fine. He said that parliament have reserved to itself, the whole question of the interaction between federal awards and state awards. There is no question that parliament has dealt with the whole question of the interaction between federal awards and state awards but that doesn't mean that federal awards and federal agreements powered expression intention as to how far they travel and in fact, many do. What we ought to do is to show the Commission some extracts from various awards of agreements.

PN224

Could we hand up to the Commission a bundle of two certified agreements - two Federal certified agreements which have a long service leave clause which state that they override state long service leave statute completely. The first one was actually certified by your Honour, Blain DP on 7 February this year -the Hog's Breath Café Certified Agreement, under clause 1.3:

PN225

Does this agreement replace the award? Yes. The agreement operates to the exclusion of any award or industrial instrument or State legislation that purports to apply to any of the employees.

PN226

So that presumably not only is invalid but would then the whole certification invalid. The next one is the AFL Player's Long Service Leave Agreement, that's at Collingwood Football Club. I would think there are a lot of people at that club that would wanting to rely on this agreement. The Commission will see in the last page, under clause 10:

PN227

The provisions of this agreement apply to the exclusion of the relevant long service leave legislation.

PN228

No claims or demands shall be made or pursuant to long term agreement entitlements or accruals to rise under a base, under such long term legislation after certification of this agreement.

PN229

Those are two that we found that are quite directly on the point. Then may we hand up five examples of certified agreements with long service leave clauses and which state that they override long service leave clause to the extent of any inconsistency.

PN230

The first is the Macquarie University Enterprise Agreement Certified Agreement 2003 to 2006. We haven't copied the whole of these agreements. We copied only what we thought were the relevant parts. Clause 11.05 deals with long service leave and if the Commission turns about four pages on to the end of that particular extract, you will see 11.05.22. This overrides any provision of the New South Wales Long Service Leave Act 1955 which is inconsistent with these clauses. Again if my friends submissions are accepted that wouldn't give up.

PN231

The next is the Hutcheson Telecom's Agreement, clause 5.3 Long Service Leave on the first page:

PN232

Subject to this clause, all employees covered by this agreement entitled to long service leave on full pay and in accordance with the provisions of the Industrial Relations and as amended in time to claim these entitlements and subject to the provisions contained therein.

PN233

That actually picks up the State legislation that deals with the subject of the relationship between the two.

PN234

The next one is the Diocese Schools in Canberra and Goulburn Agreement, certified in November 2004, clause 12 deals with long service leave. Clause 12.1:

PN235

Applicability of a Long Service Leave Act, acceptance have those expressions varied by the provisions ...(reads)... shall apply to principles employed under this agreement.

PN236

So that clearly overrides those Acts to the extent that they are dealt with by the specific provisions of that clause. The next one is another one with a - this one was actually certified by you, Mr Commissioner. This is the Australian Paper Agreement 2003 to 2006. You will see that clause 17 deals with long service leave. 17.1:

PN237

This clause shall be read in conjunction with Tasmanian Long Service Leave Act. This agreement shall apply over a Long Service Leave Act 1976 to the extent of any inconsistency.

PN238

I beg your pardon, sir.

PN239

COMMISSIONER BLAIR: I reluctantly draw your attention to clause 17.1 of that certification of the agreement.

PN240

DR JESSUP: 17.1?

PN241

COMMISSIONER BLAIR: Yes. It says:

PN242

The clause shall be read in conjunction with the Tasmanian Long Service Leave Act. This agreement shall ..... the Long Service Leave Act 1976 to the extent of any inconsistencies.

PN243

DR JESSUP: Yes, yes- - -

PN244

COMMISSIONER BLAIR: As I said that's why I was reluctant to draw it to your attention.

PN245

DR JESSUP: I don't think you should be reluctant. I think it's a perfectly normal provision in an agreement that has - we'll show the Commission, that it's in lots of agreements and then the final one in this bundle is the Westbourne Grammar School Agreement. Clause 32 dealing with long service leaves and then over the page, you've got clause 32.4, payment in lieu of leave. It says in lieu of section 74 of the Long Service Leave Act 1992 Victoria:

PN246

The school and the teacher may agree and the teacher will receive payment in lieu of taking long service leave and there are certain conditions attached to that.

PN247

Those are a number of federal agreements which deal in different ways, some in a permissive way, some in an overriding way, but they do deal with the subject of the relationship.

PN248

We also want to hand up a folder of other instruments. I think these are all awards, but the principle is the same. The principle for which my learned friend contended applies to awards as much as it does to agreements, and of course agreements and awards - the relationship between awards and state legislation is covered comprehensively in section 152 of the Act. There's always been a provision of that kind. It used to be in section 65 of the 1904 Act. Many of these provisions are in similar terms. The first one is the Optus Award, and on the second page of the extract, clause 6.2:

PN249

This award shall apply to all the employees referred to in clause 6.1, including employees who are ... (reads)... federal and state awards.

PN250

We draw your attention to 21.8 on the next page, which applies the long service leave legislation in the state of residence, but clause 6.2, the coverage provision, deals not only with long service leave but with all things in awards.

PN251

The next one is the Fiserve Solutions of Australia. I don't know who Fiserve are or what they do, but Commissioner Smith made this award in March this year and you will see on the second page of the abstract under clause 4:

PN252

The award prevails over and operates to the exclusion of any other state or federal industrial awards ...(reads)... binding on Fiserve.

PN253

The next is the Supermarket Meat Employees Consolidated Award. That would be an important award. It would cover a log of employees. Under clause 5.7 on the second page of the extract:

PN254

In the state of New South Wales any statute relating ...(reads)... are not inconsistent with this award.

PN255

So they deal only with what is not inconsistent. Over the page under special rates, clause 4.1 casual rates, the first paragraph of clause 4.1.1 deals with certain casual rates and then it says:

PN256

The preceding paragraph shall operate to the exclusion of the Holidays Act 1958 from the parliament of the State of New South Wales.

PN257

That's very close to what we've got here. The next one is the WTH Agreement, July 1989 certified by Commissioner Peterson. This is a superannuation one. Can I say that the provision which you find in clause 12 is in very similar terms to those of a number of others to which we'll refer the Commission in a moment. It is headed, unashamedly, Precedents of Awards:

PN258

Insofar as the company and superannuation is concerned, this award shall have precedence to the exclusion of any other provisions in any federal and or state awards and or agreements.

PN259

So that's the precedents provision and you'll find a similar one in other awards to which we'll refer. The next is the Teachers English Language Centres' Award made by Commissioner Lewin in December 1998. On the second page of that, clause 4.2 provides:

PN260

It is a term of this award that subject to clause 18 it shall apply as a complete code of award entitlements ...(reads)... that might have any application whatsoever to the employee.

PN261

The next was a fairly bearable award. It was an award made by Munro J in 1988 dealing with Pirelli cables. In clause 11 you get that same precedence provision which is in other awards to which we've referred. The next is the Offshore Workers' Drilling Rigs Superannuation Award. In clause 8 we get a precedence provision, although I think the heading mistakenly refers to it as preference. The next is the Meadow lea Foods Superannuation Award in clause 9 you get the standard form precedence provision. The next is the Higher Education Practice Teaching Supervision Award. In clause 3(b) on the second page:

PN262

Except as specifically provided herein to the contrary the terms of this award shall cover exhaustively the subject matter concerned and are to the exclusion of state laws.

PN263

Then there's the Murray Golden Award made by Commissioner Myer in 1988. That deals with superannuation and clause 12 of that has what I'd call a standard precedents provision there. Finally, in 1989 an award was made by Commissioner Leary, the Offshore Platform ..... Starship Superannuation Award Clause 8 has a precedence provision, although they apparently mistakenly referred to as preference.

PN264

So the proposition that the legislature has reserved to itself the entire question of the interaction between particular instruments made or certified under this Act and state laws, state awards, state agreements, et cetera and that the Commission itself can't say anything about the subject and that the parties can't say anything about the subject, is a proposition which is completely at odds with the practice of the Commission, both in relation to awards and certified agreements.

PN265

If it is right then so be it, but it is completely at odds with the practice of the Commission. How is it that the Commission can engage in this practice apparently unchallenged for so long if my learned friend's submissions are right. The answer is, with respect to him, that his whole approach, with respect to the construction of clause 14.3 is mistaken and begs the question. We will move now on to what we say about Electrolux. But fundamentally, both the 170LZ and Electrolux is an understanding of what these words actually do at 14.3. What my friend has said, begs the question in this sense. He treats those words as though they were an attempt to expand the field beyond the subject of the clause itself.

PN266

By definition, you can't expand the field because a provision which only evinces an intention to cover the field, is in itself a definition of the field. For example, with annual leave, the Commission might say in an award, you're entitled to
4 weeks annual leave full stop. Then state law might provide for an annual leave loading and the question will arise, does this cover annual leave loading or is it only annual leave as such. Which is the field which the Commission intended to occupy? People will say, what did the Commission have in mind? Did they have in mind that, in awarding annual leave, they should be everything they are awarding, so that they in a sense award a negative as well as a positive, or were they really only saying, you must give 4 weeks annual leave but we're not going to say anything about any add-ons that anybody else might want to require you to do.

PN267

That is why provisions of this kind are put in awards and that is specifically why this provision clause 14.3 has been included. To make it clear that this is a complete statement of rates ands benefits, of obligations with respect to long service leave. Our client certainly would contest if proceedings were brought elsewhere, the appellant's right to levy a long service leave charge if this federal certified agreement had been validly certified. But that question really doesn't arise before the Commission here. The clause deals with the obligation of the employer to grant long service leave to or in relation to its employees or to grant benefits or to make payments in that context. My friend says, the particular nature of his client's interest in his submissions in this case, a focus which in our submission, they shouldn't have.

PN268

This is a perfectly genuinely expressed provision which applies in relation to other state clause and awards, whatever they may be and whatever state, whether it's the 1992 Act in Victoria or the 1997 Construction Industry Act. My friend's attempt to give a categorisation to these words, in our submission, is only setting up an Aunt Sally, so that he can knock it down. He tries to say, that parties in this agreement are dealing with the subject of the operation of state legislation in the broad. As I understand, he is saying that we've attempted in this clause to say that by the provision in this agreement, we will insulate Multiplex from any liability under the State Long Service Leave Act. Clearly, it relates only to the parties to the agreement.

PN269

There may be a question of whether it relates only to obligations which pass directly as between them but the Commission doesn't need to determine that. We would say if it is important to know that if CoINVEST come to our client and say we are going to levy a charge on you, in the nature of a long service leave provision calculated by reference to people who are in your employ, calculated by reference to the amount of time they worked and to the amount of money they earned, then we would say that, that comes within clause 14(3) because it is doubling up upon us a long service leave obligation calculated by reference to our then existing employees.

PN270

That doesn't mean that the purpose of these words in clause 14 is to deal with the subject of the validity of state legislation. We can't do that. We can only express an intention to cover the field and we can define the field. We can define what we mean by the scope of clause 14(3). This particular problem has actually arisen once before. We hand up a copy of R v Railways Appeal Board(1957)
[1957] HCA 22; 96 CLR 429. This was concerning someone's rights of promotion under
New South Wales railways legislation. Can I take the Commission to the foot of page 429 where the terms of the Railways Professional Officers Board made under the Federal Act was set out:

PN271

Promotion and reduction in consequence of a surplus of officers in any classification ...(reads)... appointing an officer from any such position shall be final and conclusive.

PN272

It was held that there was no constitutional basis for the inclusion of that provision in the award. That finding was because there was never a relevant industrial dispute. The provision for which I wish to refer the Commission isn't I think, the one that I have just read out. The passage on which I rely is at the top of
page 439 where their Honours said:

PN273

To subclause 1 of clause 4B there is a proviso which in spite of its position and its form contains a statement...(reads)...what was said in Collins v Charles Marshall.

PN274

Now Collins v Charles Marshall, which I have your Honour. I hand the Commission a copy of that - 1955, 92..... 29. We have photocopied only pages 549 and 550 and I think the passage in question really starts on page 548, but it is a well known case and the Commission will probably be familiar with it. It was referring to what was then section 65 of the Act and if I can take the Commission to half way through page 549, just after footnote (6), their Honours said:

PN275

The provision may be used as indicating an intention on the part of the federal parliament...(reads)... of any other ventilation.

PN276

That's the underlying jurisprudence so far as the Act is concerned. If the Act can say that then the arbitrator can. The arbitrator can make it clear that when he or she is talking about annual leave they are including the loading. When he or she is talking about long service leave they are including all matters which relate to the provision of long service leave benefits. In that sense the aside of the joint judgment 10, the Railways Board case is exactly our case on this appeal. If I can just again read it on the relevant part:

PN277

This direction may conceivably be taken into account...(reads)... to invalidate a state enactment.

PN278

That is all we say about clause 14. Clause 14 as so understood must we submit, be valid in fact my learned friend came as close as could be to admitting that in paragraph 31, I think it was - paragraph 30 of his outline.

PN279

DEPUTY PRESIDENT BLAIN: Dr Jessup can you just clarify for me, not having read the case just before we commenced today, what the direction is which is referred to there?

PN280

DR JESSUP: In the railways case, your Honour?

PN281

DEPUTY PRESIDENT BLAIN: Yes. The passage you just read out, the first direction. What is that direction?

PN282

DR JESSUP: I suppose one can find clause 4B if one goes back to the old Commonwealth Arbitration Court, but I don't think clause 4B is set out in judgment and I don't think it is set out in the head note but apparently it is to the effect stated at the top of the page, namely the proviso which contains a statement that is publicly intended to operate positively. It includes a direction and when - so there were something in the Railway Officers Award that said that where any provision of the New South Wales Railways Act conflicted with something in the award, the latter was to prevail. That was the direction itself.

PN283

DEPUTY PRESIDENT BLAIN: Thank you.

PN284

DR JESSUP: Our primary case with respect to Electrolux is that this isn't an Electrolux problem at all. This is not a situation in which you can incise out of a clause, a particular sentence and hold that sentence in isolation up to the light and say, there you are. It doesn't pertain. What is required is that every provision of an agreement be about a matter to which it pertains and the matter of clause 14.3 is long service leave for employees of the respondent.

PN285

The concluding sentence of the clause, no less than any other part of it, pertains to that matter. In that sense my learned friend's submissions fail to make a distinction between the nature of the matter, which is really an attempt to classify or to put a genus on the industrial issues covered by the award on one hand and the detailed mechanism and the way in which a particular provision of it operates. That's not an Electrolux issue at all. Electrolux will not come near this clause because it deals with long service leave.

PN286

Alternatively, we say that the impugned provision is a machinery provision or is incidental or adjectival apropos the main provisions and we deal with this at paragraph 30 and following. We won't elaborate or read to the Commission those passages, but we want to say that the Full Bench in the Murray Bridge case examined the extent to which the ancillary or incidental exception might apply and they gave as an example of a machinery provision a table of contents. Of course the Full Bench wasn't attempting to be exhaustive or definitive in what it said, but rather indicative of the kind of provisions which might be machinery provisions.

PN287

In our submission, if anything could be regarded as a machinery or adjectival provision it is the so-called impugned words in clause 14.3. They have absolutely no freestanding role and purpose whatsoever. Take them outside clause 14.3, they would be irrelevant and pointless. Their only purpose is to give scope and definition to the field or subject matter covered by clause 14.3 and that is a completely legitimate, proper and for that matter time-honoured purpose which awards and agreements have dealt with. I expect I'll only be about another 4 or 5 minutes. I don't know if you wish to take the adjournment at this point or some other.

PN288

JUSTICE GIUDICE: I think on the assumption, perhaps, that we'll be able to finish, including Mr Bromberg's reply, within a reasonable period of time we'd all prefer to sit on if that - - -

PN289

DR JESSUP: Yes, your Honour.

PN290

JUSTICE GIUDICE: Does anybody have any problems with that?

PN291

DR JESSUP: What we've then dealt with in paragraphs 35 and following is some of the High Court cases that deal with incidental and ancillary matters, admittedly in a different context but they might be of some assistance to the Commission. We draw the threads together at paragraph 39 by saying that the necessary - the particular words in clause 14.3 are calculated to maintain the agreement, to secure the effective operation of clause 14 and to ensure that the operation of 14.3 is not frustrated by the operation of other awards and clauses relating to long service leave.

PN292

In many ways this appeal is an echo of 1964, when the employers in the graphic arts industry had to fight so hard to get long service leave provisions in federal awards and one of the paradigm applications of section 109 of the Constitution has been in relation to long service leave. Pre-eminently it is something that lends itself to coverage by federal awards because it covers people whether they've been working in one state or another and historically people who have had usual employers and often also employees and their unions that want to get out of all the confusion of different state standards and things of that kind have the best of reasons to have federal long service leave awards. There is nothing either unusual or novel about any of that.

PN293

Just if I could deal with a couple of points made by my learned friend, there's no Manufacturing Grocers point here. We accept that the issue has to pertain to relations between employers as such and Visionstream as an employer, but there's no suggestion that clause 14.3 deals with employers and employees in any other capacity. The appellant said that the impugned words were not confined to state laws which deal with the obligation of an employer to provide long service leave to his employees. They deal with the obligation of the employer in relation to long service leave for its employees. It would be extraordinary if, in light of a clause which provided for long service leave, there were scope for a sorting out of the obligations, as though some didn't relate to ..... leave. What it applies to the long service leave entitlements of employees of Visionstream and to Visionstream's obligations with respect to long service leave in relation to those employees.

PN294

Similarly - I think this was the point my friend thought of after he'd done his written submissions. It was the Graziers case point - the question of whether the employers accept an imputed demand which has never been made. This is a division 2 agreement and the question of disputation is simply completely irrelevant to this. If you look at the Shell case you will see that they were really dealing with the Graziers' point and it didn't have anything to do with the question of whether something obtained in the absence of any necessity for an industrial dispute. Paragraphs 40 and 41 of the outline deal with public interest and I don't think I can pursue that any further on that paragraphs. Those paragraphs are quite clear as to how we say the matter should be disposed of. Unless there's anything further where I can assist the Commission, those are our submissions.

PN295

JUSTICE GIUDICE: Thanks, Dr Jessup. Mr Bromberg?

PN296

MR BROMBERG: As to the issue of standing, can I just briefly say that my learned friend put the submission that it is section 109 of the Constitution and section 170LZ of the Act that operate upon the loss of right of retirement. That's not so in our submission. 109 and 170LZ only operate where there's a federal law at issue, that is a federal law upon which any relevant inconsistency can be established and where the federal law has been made in a manner that is contestable and where a particular person is aggrieved by the making of that law and in particular where that person can show that he or she or it is aggrieved in a manner beyond that of the ordinary person then there is standing.

PN297

My learned friend went to a number of examples, but none of them indicate why our friend says that in relation to the dog act that he referred to - none of them indicate why persons who were particularly affected by the law, affected in a manner not equal to the ordinary person but aggrieved in a manner beyond that of the ordinary person, would not have standing.

PN298

It can't be determinative of the issue, the fact that CoINVEST did not appear below should affect the question of standing. It's somewhat surprising that in circumstances where Commissioner Smith had a reserved decision on the same issue CoINVEST wasn't notified. No-one instructed CoINVEST. It simply didn't know about it and the fact that a hearing was held in Sydney certifying this agreement and CoINVEST didn't know about it and wasn't there can't in any way, in our submission, be determinative of the question of standing.

PN299

My learned friend then sought to suggest that the workers weren't beneficiaries in a true sense because they could have a claim against the trustee. The fact that beneficiaries may have a claim against the trustee does not deny in any relevant way the fiduciary relationship that a trustee has or the representative capacity that a trustee has for beneficiaries involved. There's no difference, really, between the nature of the worker beneficiaries under the CILSL scheme and the nature of the relationship between beneficiaries and the trustee in a discretionary trust. In a discretionary trust there's no entitlement until the trustee exercises a discretion. The beneficiaries of the discretionary trust are nevertheless beneficiaries.

PN300

Then can I turn to the section 170LZ matter. We don't treat section 170LZ as a source of power but we do refer to it as a source of identification of how parliament intended the question of the effect of a certified agreement to be dealt with and a source of identification that parliament gave to itself the responsibility to deal with the interaction between a certified agreement and a state law, and in that context the implication that the Commission does not have the power to deal with that subject matter in an inconsistent manner.

PN301

My friend went to a number of certified agreements and awards. Can I make a number of points about that? I suppose if I were here prior to Electrolux and the decision of the High Court in Electrolux seeking to defend the practice of the Commission in certifying certified agreements that the decision in Electrolux would now tell us were not able to be certified - - -

PN302

JUSTICE GIUDICE: Some members of the Commission. I haven't picked the wrong bench to raise that point.

PN303

MR BROMBERG: Nevertheless, your Honour - - -

PN304

JUSTICE GIUDICE: Things change. I understand, yes.

PN305

MR BROMBERG: Although I might not be able to point to any decision of your own, your Honour, I could no doubt come up with a bundle greater than this one. The point that my learned friend wants to make is not made good by reference to a practice. A practice might be right or wrong. One needs to evaluate that in accordance with the statute. That's the first thing I want to say about them. The next thing I want to say is when you look at the certified agreements and awards that my learned friend went to, some of them are merely a restatement of the Act. Some of them are entirely consistent with section 170LZ or section 152 and can I make the point that section 152, which deals with awards and their relationship with state laws is very different to 170LZ. The state law or the state award is overridden not only where there is inconsistency but also where the award, federal award, deals with the matter dealt with in the state law, so that if the state law deals with superannuation or hours of work you don't need to show inconsistency. The federal law prevails simply because it's dealing with the same subject matter. There's an entirely different test there than the one provided in 170LZ.

PN306

JUSTICE GIUDICE: Just on that inconsistency point, is there any significance in the point that long service leave isn't listed in 170LZ(2)?

PN307

MR BROMBERG: No, your Honour. What 170LZ does in relation to long service leave is provide for that subject matter through 170LZ(1) and provides for the chain of precedence by giving a federal award that deals with long service leave precedence but only to the extent that the state law deals with terms and conditions of employment and only to the extent that there is inconsistency. I don't think that anything can be drawn beyond that from the fact that 170LZ(2) does not deal with long service leave.

PN308

Clearly it's not an area that was intended to have precedence. That is where state law is intended to have precedence. The matters covered in 170LZ(2) are areas where state law has precedence. The matters covered under 170LZ(1) are matters where federal law or a federal certified agreement has precedence but only to the extent of inconsistency and only to the extent that the state law deals with terms and conditions of employment.

PN309

JUSTICE GIUDICE: Does 170LZ(2) mean that occupational health and safety provisions in a certified agreement inconsistent with provisions of state legislation would be enveloped to the extent of the inconsistency? It's the reverse, isn't it?

PN310

MR BROMBERG: Arguably, your Honour, it doesn't require inconsistency.
It doesn't raise it.

PN311

JUSTICE GIUDICE: It says they operate subject to.

PN312

MR BROMBERG: Yes, I suppose that' right, your Honour. That does refer to an inconsistency in that way.

PN313

JUSTICE GIUDICE: You say there's no significance in the fact.

PN314

MR BROMBERG: No. 170LZ- - -

PN315

DEPUTY PRESIDENT BLAIN: Mr Bromberg, just to clarify it further, would those provisions operate even if there was consistency as distinct from inconsistency?

PN316

MR BROMBERG: I'm sorry. On which part of 170LZ?

PN317

DEPUTY PRESIDENT BLAIN: I'm referring to 170LZ(2). The reference to occupational health and safety workers compensation and apprenticeship.

PN318

MR BROMBERG: Yes, the state law and the federal certified agreement operates but where there's inconsistency between the two the federal certified agreement operates subject to the state law.

PN319

DEPUTY PRESIDENT BLAIN: My question was, what if there is consistency. Are you saying then, this does not apply.

PN320

MR BROMBERG: Then both operate. Both operate, there's no need for one to prevail over the other. My learned friend took you to a number of these clauses and as I say, they fall into different categories. Some are merely a restatement, as it were of what the act relevantly provides. Some are no more in essence than a restatement of the terms of 170LZ. Some, in relation to the awards are no more than a restatement of the way in which section 152 operates. Those clauses are inconsequential. They are in the nature of clauses which are trivial in the sense that all they do is repeat the operation of the Act. They don't deal with the subject matter as such. All they do is mirror the way in which that subject matter has been dealt with by parliament.

PN321

There's nothing offensive in those provisions and it's in no way inconsistent with our argument that parliament has reserved for itself the manner in which the interaction between the state award and the federal instrument is to be dealt with. All they do insofar as they are consistent with 170LZ or insofar as they are consistent with 152 is they mirror the provisions; they don't deal with the subject matter in any other way. Those clauses which are inconsistent with section 152 in relation to awards or are inconsistent with section 170LZ are impermissible. The fact that in some cases certified agreements have been made or awards have been made of that character doesn't further my learned friend's argument at all. My friend says that the parties are entitled in a certified agreement to make it clear that they intend that section 170LZ has full effect.

PN322

That might be so but that's not what this clause does. It's not a clause that says the parties intend that section 170LZ shall have effect to its fullest degree. It's a clause that makes it clear that the parties intend that clause 14 operate in a way entirely inconsistently with section 170LZ. For my friend to say that this is simply a clause that seeks to make clear that the act operate according to its terms is denied by the impugned provision and the words of the impugned provision itself. That's not what it says. That's not what it can be reasonably read as saying.

PN323

It makes it clear that it seeks something more than 170LZ provides. It seeks the ouster of state law, irrespective of inconsistency, irrespective of whether the state law deals with terms and conditions of employment. It seeks to oust state law dealing with long service leave or any benefit in the nature or in respect of long service leave, irrespective of the way that section 170LZ operates. That, in our respectful submission, is impermissible, it is not a clause confined to identifying an intent that the Act apply and relevantly 170LZ apply in the manner which the Act allows.

PN324

When one turns to Electrolux, my learned friend's submission began by asserting that the first part of clause 14.3 is concerned with long service leave and that therefore, the whole clause is concerned with long service leave. His submission ultimately did identify that it was an open question to repeat his words, whether the clause related only to obligations that passed directly between Visionstream and its employees. He went on to say that the clause did, and would extend to exclude the CoINVEST scheme in terms of any requirement made upon Visionstream by CoINVEST to have Visionstream pay levies or charge.

PN325

Whilst on many occasions, my friend dealt with the clause as though it was confined to obligations that passed between the employer and the employee in relation to long service leave, it's clear from his submission, that in truth the clause as understood by Visionstream is a clause which goes beyond the obligations that pass directly between Visionstream and its employees and is intended to deal with obligations that pass between Visionstream and other parties including CoINVEST. Whilst my friend says that it is for the parties to define the field that the clause is intended to deal with, our point is that field can only be defined with respect to a matter that pertains.

PN326

The parties and the certified agreement can't extend the field beyond those matters that pertain. So far as the parties wanted to make it clear that they covered the relevant field. That is, the obligations that directly passed between Visionstream and its employees in relation to long service leave that may well be permissible. That's not how this clause is structured and as my learned friend,
Dr Jessup candidly told us, it's not confined to obligations that pass between the employer and its employees directly. It extends and is intended to extend to any obligation that may be made upon Visionstream, for instance by CoINVEST
because the impugned last sentence does that it travels beyond the permissible field.

PN327

It travels to a field unrelated to the matter of employer based long service leave which is dealt with in the earlier part of the clause. The effect of this clause if it operated would be extraordinary. One example that we give is that one might have worked in the industry for 6 years and 9 months, 3 months short of getting a long service leave benefit under the CoINVEST scheme. You then spend the rest of your working days with Visionstream, because of this ouster if it is effective that worker never gets any long service leave entitlement from the scheme. If that worker for instance worked for a year or 9 years with Visionstream and then retires the fact that the worker worked for 6 years, 9 months or a day short of
7 years in the industry before they began working for Visionstream would count for nothing and the person would be excluded.

PN328

DEPUTY PRESIDENT BLAIN: Doesn't that point you are making relate more to the merits than to jurisdiction?

PN329

MR BROMBERG: It exemplifies the broad operation of the clause and it demonstrates in our respectful submission that the clause intends to deal with a different subject matter than the entitlement of that employee to long service leave provided by Visionstream. It will be excluding for that employee, access to the other subject matter involved here and that is access to an industry-wide long service leave benefit referable to long service in the industry and it makes a point your Honour, that the clause because it has that operation travels beyond a matter that pertains, because it is no business of the industry. It is no business of the relationship between Visionstream and its employees that the employee should be either denied or entitled to benefits provided elsewhere by another party in relation to time served, not with that employer but in the industry.

PN330

The example in our respectful submission identifies why we are dealing with potentially two subject matters and why the impugn clause because it deals with the subject matter of long service leave beyond that provided directly by the employer is not dealing with a matter that pertains to the ..... relationship. I'm not sure of the point that my friend seeks to make by reference to the
R v The Members of the Railway Appeals Board. At 439.2 the court said this and this is what my friend went to:

PN331

This direction may conceivably be taken into account ...(reads)... left to
section 109 of the constitution.

PN332

That is our point here. This subject matter is to be left to 170LZ. It is to be left to section 109 of the constitution. It is not a matter to be dealt with by the certified agreement and certainly not a matter to be dealt with by the certified agreement in a manner inconsistent with the way the parliament has expressed its intention on the subject matter. The impugned sentence is not saved because it is machinery or ancillary - to be machinery or ancillary it has to be a provision which properly relates to a matter that does pertain. It only does so to the extent that it is dealing with state laws which deal with employer provided long service leave such as, for instance the Victorian Long Service Leave Act. Because it goes beyond the obligation of Visionstream to provide long service leave to its employees as part of the obligations that pass directly from Visionstream and its employees. It does not relate and is not incidental, ancillary or machinery to a matter that pertains. If the Commission pleases.

PN333

COMMISSIONER BLAIR: Mr Bromberg can I just get a practical question about - Visionstream says in its submission at paragraph 26. They operate across a range of states where there are different pieces of legislation dealing with long service leave. As I understand it payment into the CoINVEST fund is whilst they are working in the construction industry in Victoria.

PN334

MR BROMBERG: Yes, I can assent to that proposition.

PN335

COMMISSIONER BLAIR: Right. If, for instance, Visionstream secure a big contract in Victoria where they need to bring staff from interstate, for say a
12 month period, what is the practical application of payment into CoINVEST for that group of staff and then at the end of the 12 months they go back to their respective states, what happens to that if Visionstream are compelled to pay into CoINVEST. I understand it is not assigned to the individual but there's monies that are paid into CoINVEST by the company Visionstream that is probably over and above what they would normally be required to pay if they operated on a fixed staff level in the state of Victoria.

PN336

Then they go back to their respective states where they have got different pieces of legislation operating again, whether it is Western Australia or whether it is
New South Wales, Queensland, whatever. If one follows what Visionstream are saying it's - as an example some years ago the auto manufacturing industries sought to make a federal occupational health and safety award to get some consistency within their operations because their operations ran interstate, rather than rely on several different pieces of legislation based on states' legislation. Is Visionstream not entitled to have that consistency in terms of an application of long service leave.

PN337

MR BROMBERG: Your Honour, I don't think its - - -

PN338

COMMISSIONER BLAIR: Don't make me any higher than what I am.

PN339

MR BROMBERG: I'm sorry, Commissioner. I haven't looked at it directly, but I'm instructed that there are reciprocal arrangements in all of the states that recognise the entitlements and arrangements in the respective states. That's not to say that the eligibility rules in each state are entirely the same, but there is some level of reciprocity as I understand it.

PN340

The other point is that if the employee, the worker you're referring, the worker that's brought in from interstate who goes back interstate, in relation to which Visionstream has paid a charge, the other point to make of course is that, if that employee ultimately receives long service leave from Visionstream then, irrespective of the fact that that employee may go back to New South Wales or wherever he goes, Visionstream is entitled to a credit.

PN341

COMMISSIONER BLAIR: Thank you.

PN342

JUSTICE GIUDICE: Thank you both for your submissions, gentlemen. We shall reserve our decision and we will adjourn.

<ADJOURNED INDEFINITELY [1.20PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #B1 WITNESS STATEMENT OF JOHN ERNVIN HARTLEY DATED 30 MARCH 2005 WITH ATTACHMENTS
1 TO 5 PN12