C2007/3669, Transcript of Proceedings [2007] AIRCTrans 580 (29 October 2007)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 17642-1

JUSTICE GIUDICE, PRESIDENT

C2007/3669

s.120 - Appeal to Full Bench
Appeal by Regis Group Pty Ltd
(C2007/3669)

MELBOURNE

10.02AM, MONDAY, 15 OCTOBER 2007

MR G MCKEOWN: If your Honour pleases, I seek leave to appear on behalf of Regis Group Pty Limited.

MR P GARDNER: If the Commission pleases, I seek leave to appear on behalf of the respondent, Australian Nursing Federation, together with MR P GILBERT.

JUSTICE GIUDICE: Thank you.

MR MCKEOWN: Your Honour, if I might be allowed a short adjournment. I was actually briefed by telephone shortly prior to coming up to the Commission. I haven't had the benefit of - I've asked your associated and I've had a brief look at the appeal notice. If I could be just granted a short - - -

JUSTICE GIUDICE: Yes, well it came on at pretty short notice. I think it was listed late Friday.

What is your attitude to that, Mr Gardner?

MR GARDNER: Well, I'm in the same position your Honour, but it depends on how long, that's all.

JUSTICE GIUDICE: Yes.

MR GARDNER: I mean, I don't have a difficulty with a short adjournment, but I'm not going to spend all morning.

JUSTICE GIUDICE: Yes. I've had a look at the decision and the notice of appeal and it seems to me, subject to whatever anybody might wish to submit, that the issue is whether as a matter of construction of the relevant statutory provisions the Commission can make a new allowance. I may be wrong about that but that seems to me to be the real preliminary issue, if I could put it that way.

If it can, then obviously the Commissioner can go ahead and consider whether or not a new allowance is justified in this case. If it can't, then that's the end of the application most likely.

MR GARDNER: Your Honour, could I just sort of foreshadow our attitude to it?

JUSTICE GIUDICE: Yes.

MR GARDNER: We would be saying that a serious prematurity issue arises on the stay application because whilst the parties said well, the Commissioner should go ahead and deal with this as a preliminary point, in truth the provision isn't a jurisdictional fact as a precondition type of provision. It's a provision that you have to deal with and make an inquiry in the course of looking at it, and no order has been made of course.

JUSTICE GIUDICE: Yes.

MR GARDNER: So I just want to foreshadow that that's what we would be saying.

JUSTICE GIUDICE: Yes. Well, I don’t want to go into it any further at this stage. If you would both feel you would benefit by a short adjournment, how long do you think?

MR MCKEOWN: I would only seek to 10.25, your Honour.

JUSTICE GIUDICE: I will give you till 10.30.

MR MCKEOWN: Thank you, your Honour.

JUSTICE GIUDICE: Does that suit you, Mr Gardner?

MR GARDNER: Yes.

MR MCKEOWN: Your Honour, if I might have access to the appeal notice and the appeal book.

JUSTICE GIUDICE: That seems a reasonable request. You're uninstructed are you?

MR MCKEOWN: No, I'm instructed but I received it by telephone, your Honour. I'm instructed by Mr Rahilly.

JUSTICE GIUDICE: Yes. No, I mean you're uninstructed in the sense there's nobody here instructing you.

MR MCKEOWN: No, I don't see a familiar face, your Honour.

JUSTICE GIUDICE: Very well. My associate will make copies of those available to you and I will adjourn until 10.30.

MR MCKEOWN: Thank you, your Honour.

<SHORT ADJOURNMENT [10.07AM]
<RESUMED [10.28AM]

JUSTICE GIUDICE: Mr McKeown.

MR MCKEOWN: Your Honour, thank you for that indulgence in terms of time. Your Honour, in regard to the stay application it's submitted that when one looks at the appeal notice in terms of the leave to appeal grounds, it's submitted that quite clearly there is an arguable case. This involves what I would submit is a very important matter concerning the construction of section 553 of the Workplace Relations Act. In particular, in terms of 553(4) and what I would submit in regard to that particular subsection, your Honour, is that if one looks at the subsection, in my submission it can be compartmentalised in terms of the jurisdictional arguments.

The first part of section 553(4)A refers to:

The variation is essential to the maintenance of minimum safety net entitlements.

Your Honour, you briefly touched upon that prior to the adjournment and it is really the nub of the whole appeal in that what has occurred in Commissioner Cribb's decision of 25 September 2007, what has occurred in regard to that particular decision is that in essence she has found that - and this is at paragraph 25, your Honour:

Accordingly it is my view the Commission can consider the application by the ANF as a precondition of the legislative requirements of section 553.

Your Honour, it's submitted that that is one aspect of the jurisdiction that she has found, that she has jurisdiction to continue to hear the application. It doesn't seem to be in dispute that the parties to the matter conceded that there was a procedural preliminary issue to be dealt with, and that's referred to in paragraph 5 of her decision.

Your Honour, it's submitted that when one looks at the decision by Commissioner Cribb there is, in my submission, in leading to her conclusion at paragraph 25 a difficulty, I would submit, in terms of the logic that the Commissioner goes through in terms of paragraphs 21, 22, 23 and 24. What I mean by that, your Honour, is essentially it appears from my reading of the decision there that Commissioner Cribb has accepted that the minimum safety net entitlements is a moveable feast, in effect. That it is not a base set of entitlements and that indeed she refers at paragraph 22 to the concept in terms of which describes terms and conditions which act as a floor or minimum below which parties may not go.
She refers to:

As such it is not and cannot be a static entity.

Then she refers, in paragraph 23 your Honour, to:

For the employer's interpretation of section 553(4)A to be correct, the word existing would need to be inserted.

In my submission, your Honour, clearly there's a flaw in that logic because the counterpoint to that would be to say that there must be also non-existing minimum entitlements. It's submitted that in fact what is happening with this application by the ANF - - -

JUSTICE GIUDICE: Excuse me for a moment, Mr McKeown. Mr McKeown, you haven't got my copy of the appeal book, have you?

MR MCKEOWN: I think I might, your Honour. Your associate was good enough - - -

JUSTICE GIUDICE: Well I wonder if you could exchange it for this one.

MR MCKEOWN: There was no handy notations or anything, your Honour.

JUSTICE GIUDICE: Wasn't there?

MR MCKEOWN: Not that I saw.

JUSTICE GIUDICE: Good.

MR MCKEOWN: I was only looking at the appeal notice, your Honour, and your Honour would know that if there was I would inform your Honour.

JUSTICE GIUDICE: Yes.

MR MCKEOWN: Your Honour, so what we submit is that quite clearly in terms of Commissioner Cribb's decision there is clearly an arguable case of error on the basis of the interpretation that minimum entitlements is, in effect, not what we would submit, which would be as set out in this particular award, if I could put it in terms of they would be the minimum safety entitlements. I think the Commissioner is probably correct where she says that in terms of the minimum safety net entitlements it's not defined in the Act or elsewhere. However I would submit, your Honour, that quite clearly minimum entitlements are those referred to in the award that existed. In this particular case the award is the Nurses (Victorian) Health Services Award 2000.

Also, your Honour, more particularly Commissioner Cribb also makes a finding in paragraph 24 of her decision that she refers to the - because this new allowance as I understand the decision, your Honour, is a new allowance that has been sought by the ANF in terms of reimbursement of an expense for the obtaining of a police certificate.

JUSTICE GIUDICE: Mr McKeown, the Commissioner sets out in paragraph 6 of the decision what she says the question is, the preliminary question. Do you have any quarrel with that statement of what she was deciding?

MR MCKEOWN: If you could just bear with me, your Honour, I'll read it again.

JUSTICE GIUDICE: Yes.

MR MCKEOWN: No, I don't take issue with that.

JUSTICE GIUDICE: No. Well she seems to be paraphrasing what Mr Rahilly had said there.

MR MCKEOWN: Yes, your Honour.

JUSTICE GIUDICE: Yes, thank you.

MR MCKEOWN: Your Honour, in terms of just going back to paragraph 24 of her decision.

JUSTICE GIUDICE: Yes.

MR MCKEOWN: She refers to the fact that she seems to equate - there seems to be some sort of assessment made as to costs and she refers to:

The cost of the certificate if not reimbursed would therefore result in reduction of minimum safety net entitlements of the employees concerned. As it is a reimbursement of a work related expense the proposed new allowance would restore the minimum safety net entitlements which the new requirement for a police certificate has reduced The absence of the new allowance would result in an award not acting as a proper minimum safety net.

In my submission your Honour, the logic there is flawed because in fact the minimum safety net entitlements are those set in the particular award in this particular matter. Because otherwise, and this probably also lends itself to my argument supporting for leave to appeal as well as on the substantive appeal, your Honour, this is not a case that affects just these parties. If jurisdiction is found by this mechanism it means in effect, if one flows through on the logic presented, that arguments or applications could be made where there is a summing up, if you like, in terms of, "Well, if there's going to be an increase in expenses, that's going to reduce the safety net minimum entitlements, we should be allowed to enter a new allowance to balance up those reductions".

JUSTICE GIUDICE: As I said earlier, it seems to me that the overall question is whether there can be new allowances. If there can be, then there might be a number of arguments as to the merits and whether or not there could be, or a new allowance ought to be awarded. But it seems to me that's still the underlying question. Now if the matter had been argued quite in those terms, I'm not sure. In any event, isn't the Commissioner simply indicating that if there is a change which affects the safety net such as here, where it's an employer requirement in order to be employed that you have the certificate, that that's capable of affecting the level of the safety net? Isn't that all she is saying? She is saying a bit more, but - - -

MR MCKEOWN: I think she's saying, in my submission, a bit more than that, your Honour.

JUSTICE GIUDICE: Yes.

MR MCKEOWN: Because we are getting into a balancing exercise in terms of award variations for new allowances.

JUSTICE GIUDICE: Yes.

MR MCKEOWN: In this case it's a police certificate. In another case it might be for some allowance on the basis that there has been a reduction in annual leave allowance, a minimum safety net entitlement. What is to say there shouldn't be introduction of another variation which will try and balance up?

JUSTICE GIUDICE: But I mean the preliminary point must be whether you could do it at all.

MR MCKEOWN: Yes. Definitely, your Honour.

JUSTICE GIUDICE: I must say at this stage I'm not persuaded that there's a strong argument there that the legislation indicates an intention that there could be no new allowances. This Act is full of do's and don'ts.

MR MCKEOWN: Yes your Honour.

JUSTICE GIUDICE: You usually get a pretty strong indication of a don't. There's nothing much in this that I can discern at the moment. But in any event continue.

MR MCKEOWN: Thank you, your Honour. In terms, your Honour, we would say that quite clearly there is both an arguable case for leave to appeal and an arguable case for the substantive. In terms of the second requirement of stay applications in terms of the status quo, we say that clearly - and this comes back to what I submitted to before, your Honour - section 553(4) can be compartmentalised, in my submission, in terms of 4A and 4B. Clearly the Commissioner has found she has got jurisdiction under 4A and she refers to the fact that under 4B(iv) she rejected the submissions made before, in terms of the variation would not operate as a disincentive.

I think it was Mr Gardner made a submission this is all a bit premature in terms of the stay application. In my submission it's not premature at all because the Commissioner has found in one part of the application that she does have jurisdiction, but then proceeds on in terms of the sub-requirements of 4B(i) to (v). But you don't get there, in my submission, if in fact under A which precedes B and in my submission it must be dealt with(sic).

JUSTICE GIUDICE: But the arguments that were raised included arguments about 553(4)B(iv) did they not?

MR MCKEOWN: They did and that's why - - -

JUSTICE GIUDICE: That's actually why she addressed - - -

MR MCKEOWN: Yes, I don't take issue with that, your Honour.

JUSTICE GIUDICE: Yes.

MR MCKEOWN: I don't, because quite clearly the way I've read the decision the Commissioner indicates at paragraph 29:

Accordingly I'm satisfied the conditions contained in 553(4)B(iv) has been met.

With respect, I only submit in terms of the leave to appeal and the substantive appeal that it's an issue that we say is of error in terms of that disincentive.

JUSTICE GIUDICE: Yes, I follow. Yes.

MR MCKEOWN: Your Honour, in terms of the balance of convenience argument we say that clearly the stay should be granted to maintain the status quo, because it is that fundamental issue that your Honour correctly identified earlier. In our submission quite clearly the Commission does not have jurisdiction in terms of the operation of section 553 in regard to this particular application.

JUSTICE GIUDICE: Yes.

MR MCKEOWN: Your Honour, they are the submissions.

JUSTICE GIUDICE: Mr McKeown, one of the arguments that was advanced - I think the Commissioner sets them out. The first of them is in paragraph 7 of her decision where she paraphrases Mr Rahilly's arguments. He argued that the objects of the division infer that there already was, "A set of minimum safety net entitlement to contain and assist enforce all awards made by the Commission". The argument being that somehow or other time stopped on 27 March - I think that was the date - - -

MR MCKEOWN: It was.

JUSTICE GIUDICE: - - - 2006, and that that was the safety net that was to be maintained. Do you have any submission to make about that argument?

MR MCKEOWN: I'm slightly reticent, your Honour, in terms of it appears on its face to be a valid submission to make in terms of that interpretation.

JUSTICE GIUDICE: Yes.

MR MCKEOWN: Because of the situation, as I understood it, and I stand to be corrected because I'm not sure whether it was raised as an issue before the Commission, and that's why I'm reticent to go there, your Honour, but as I understand the situation in terms of the situation with this Commission, issues have been raised before Full Benches in terms of the ability to vary pre-reform awards as opposed to transitional awards. My understanding of the distinction between the two being the pre-reform awards are in effect respondent to corporations, and the transitional then covered awards which - - -

JUSTICE GIUDICE: Yes.

MR MCKEOWN: But again, your Honour, I don't think that was raised as an issue. As I understand it there's no dispute; this is a pre-reform award. No doubt my learned friend will correct me if I'm wrong on that. But in terms of the appeal grounds, your Honour, we would say that this does involve a situation where it's an inappropriate mechanism, we would say, in terms of the use of section 553(1) and those preconditions in 553(4)A have not been met.

JUSTICE GIUDICE: Yes, thank you. Mr Gardner.

MR GARDNER: Your Honour, just picking up my learned friend's submissions. The first observation seems to be that it's submitted that the minimum safety net entitlements can't be a moveable feast and that there's this concept of being frozen in time. It's submitted that that's wrong. Among other reasons, the second reading speech extract that the Commissioner sets out at paragraph 9 of her decision makes it clear that the Commission can make variations and gives the example of including a variation arising from test case decisions of the Commission, and it gives the example of the reasonable hours test case. To submit that the award at the time, the nurses' award or any award, represents a frozen in time set of entitlements runs plainly contrary to that.

There's nothing in the legislation, in our submission, to suggest that there is this frozen in time basis. There's certainly no definition of what these minimum safety net entitlements are. Furthermore, the Act itself seems to contemplate decisions of the Australian Fair Pay Commission as being considerations relevant to the question of maintenance of minimum safety net entitlements. So it's submitted that there's no basis in the legislation for that submission.

The second submission goes to the question of what really is the form in which the Commission is permitted to maintain the safety net entitlements. Objection was taken below and now to what is described as the insertion of a new allowance. In our submission, your Honour, there's nothing in the legislation that proscribes the manner in which the Commission might go about the task of maintaining the safety net entitlements so that if in order to do the job it's necessary to introduce a new allowance, that's perfectly acceptable. There's no proscription about that at all.

It's submitted that the real issue is one whether it involves the maintenance of the safety net, it doesn't matter how you go about it but it needs to involve the maintenance of the safety net entitlement. If that's a new allowance so be it. If it's a variation of an existing allowance, so be it. The second point is that of course it must comply and meet the requirements for allowability. That's a separate sort of condition and exercise. The third requirement would be that it would need to ensure and protect the integrity of preserved conditions. But apart from those constraints it's submitted that the manner or means by which the Commission goes about its task of maintaining the min entitlements is unconstrained.

Associated with that submission is the point that my learned friend really didn't come to grips with, and that is that this case, it's submitted, is about maintaining the wages. There's no argument that the wages in the relevant award constituted a part of the minimum safety net of entitlements. It is those entitlements that are being protected by the application of this allowance, and it's submitted that is the appropriate analysis. The minimum safety net entitlements are prescribed by the award at the relevant time, namely the wages. It is this allowance which is seeking to maintain them.

As to the status quo we make the observation that the status quo is completely unaffected by the Commissioner's decision. There is no order and nothing arises from it at this stage.

JUSTICE GIUDICE: But presumably your client agreed to the preliminary issue being dealt with on the basis that - - -

MR GARDNER: Yes, your Honour.

JUSTICE GIUDICE: One could see an argument of convenience there; that if the argument is ultimately successful then you don't have to go to the merits of the case involving I'm not sure how much by way of witnesses and so on.

MR GARDNER: I think that's right, your Honour. That is that if my client's position had been unsuccessful that would have been subject to rights of appeal obviously.

JUSTICE GIUDICE: Yes.

MR GARDNER: That would have been the end of the matter.

JUSTICE GIUDICE: Yes.

MR GARDNER: But having been successful, it's submitted that now on the stay the balance of convenience favours letting the Commission get on and finish its job. There's a further reason for that, your Honour; if this matter does ultimately find its way to a Full Bench to consider the issue, it's submitted that the form of the order really is relevant to the way in which the whole matter might be approached. There's issues about whether it's truly a reimbursement issue, the timing of it and so on. It's submitted that if a Full Bench is going to consider this issue, it would be certainly assisted by having a form of order rather than observations that the Commissioner has made about her being capable of being satisfied as to jurisdiction, in effect.

The further reason, which I foreshadowed your Honour, prior to the adjournment, is the question of the way in which section 553(4) operates and whether what my client agreed to was a splitting of the case by way of jurisdiction, or whether really it was a splitting of a case into two parts. That is, whether 553 involves preconditions of jurisdictional fact before you embark on the exercise of the discretion; or whether it's one of those familiar provisions where they are considerations to be dealt with in the course of the Commission's inquiry. We say it's the latter and in those circumstances the Commission should continue with the course of inquiry, including whether it should make such an order, the form of the order, to completion rather than granting a stay on something that we say doesn't affect the status quo at the moment at all.

JUSTICE GIUDICE: Can I just ask the coverage of this award, Mr Gardner?

MR GARDNER: It's nursing really, public and private, right across Victoria, and aged care. So you have got this acute care, aged care, public and private, so it's a sort of comprehensive award.

JUSTICE GIUDICE: Yes.

MR GARDNER: Your Honour will notice that the Commissioner makes a couple of observations right at the end of her decision about the scope of any order she might make, because of the significance of being in the aged care sector.

JUSTICE GIUDICE: Yes.

MR GARDNER: Your Honour, there's just one further observation I want to make about the question of the safety net and the frozen in time point. In a decision of O'Callaghan SDP's of 15 November 2006 he actually addresses the issue, and I provide that to the Commission. The relevant passage is at paragraph 11 of the decision. It was in the context of an ASU application seeking adjustments to expense-related allowances and of course, your Honour, subsequent to this decision of O'Callaghan SDP, the Full Bench and the Wages and Allowances Review 2006 made it clear that allowances could be adjusted. But the passage I refer to there is that he makes it clear that the union are entitled to maintain the award:

Again for the possibility that the award would be relied upon, it's simply the case that the Commission must be satisfied that the variation is essential -

and so on. Then paragraph 16 refers to the principles as a means of identifying what the safety net provisions are. The reason I raise that, your Honour, is that lying behind my learned friend's submission about a frozen in time set of minimum entitlements seems to be a suggestion harking back to the Commission's wage fixing principles, where at various times the Commission said the award safety net is the safety net.

JUSTICE GIUDICE: Yes.

MR GARDNER: In the 2006 safety net review the Commission really makes it pretty clear that those principles need to be read very much subject to the comprehensive prescription in the Act. I think there's a little passage where it's repeated in the 2007 safety net review.

JUSTICE GIUDICE: But even so, the principles did permit the making of new allowances under the Act.

MR GARDNER: Indeed, and they permitted the incorporation of safety net - test case decisions.

JUSTICE GIUDICE: Yes.

MR GARDNER: Consistently with the second reading speech observation, to which I drew your Honour's attention.

JUSTICE GIUDICE: Yes.

MR GARDNER: Unless there are any questions, I think those are the submissions, subject to just asking Mr Gilbert. No, they are the matters, your Honour.

JUSTICE GIUDICE: Yes. I will just ask you, and perhaps Mr McKeown might be able to answer this equally, what is planned in relation to the proceedings? But for the appeal, what was the program, do you know?

MR GARDNER: As I understand it, your Honour, it was to be heard today and that there were outstanding issues relating to some parts of 553(4)B.

JUSTICE GIUDICE: Yes.

MR GARDNER: There were to be issues about the form of the order itself. I think there were issue about that, and certainly there were issues about the timing. Can I just give the example of that, that a lot of the - just about all of the employees - will have had to incur the expense already in order to continue to be employed. But the question is what is the timing of the operation of any order to be made, and that obviously would have been an issue.

JUSTICE GIUDICE: Yes, I see. Thank you.

Mr McKeown, is there anything you want to add to that issue of the programming and what the future course of this application would be?

MR MCKEOWN: I don't have instructions on programming.

JUSTICE GIUDICE: No.

MR MCKEOWN: But I did wish to reply to some of the points raised by my learned friend, your Honour.

JUSTICE GIUDICE: Yes.

MR MCKEOWN: Firstly, in terms of when one looks at the particular section, and this is section 553(4)A, in my submission your Honour the critical word there is the maintenance of minimum safety net entitlements. Not the creation of, in effect, new minimum entitlements by way of a new allowance. What is referred to, my learned friend referred to the AFPC decisions and yes, that is a mechanism by which wages increase and then they are flowed on to the awards. Not through the operation of section 553(4).

Again he referred to the fact that this case is about maintaining their wages. This is not a case about maintaining wages. This is a case where there is an allowance that didn't exist before. There is a certificate requirement that didn't exist before. Then in terms of my learned friend made the point there's no point - the Commissioner should be allowed to finish the job, in other words finish the program. But the error and flaw in that argument is that it's an exercise in futility if in fact there's a failure at the first hurdle in section 553(4)A. That is not, in my submission, a proper use of the Commission's time and other resources. It is an issue that has to be ventilated, in my submission, before a Full Bench.

Your Honour, they are the submissions.

JUSTICE GIUDICE: Yes, thank you, Mr McKeown.

I'm in a position to give a decision on the application. This is an application by Regis Group Pty Limited for an order staying the operation of a decision made by Commissioner Cribb on 25 September 2007, in which the Commissioner decided a preliminary question in the proceedings. The question she was asked to decide was whether the Commission had jurisdiction to vary the Nurses (Victorian) Health Services Award 2000 pursuant to section 553(1) of the Act, to insert a new allowance in order to maintain the minimum safety net entitlements.

In considering the application for a stay of operation of that decision, I've adopted the conventional tests. The first is whether there is a sufficiently arguable case that leave would be granted to appeal and the appeal would succeed. Secondly, that the balance of convenience favours a stay of operation of the decision under appeal. Both tests must be satisfied.

The Commissioner's decision was in truth a preliminary one and should not be considered as going beyond the preliminary question, which I set out earlier. The Commission answered that question in the affirmative. I have not been persuaded on the submissions put this morning that there is a sufficiently arguable case that the Commissioner's conclusion was wrong. Her decision, on one view, strayed into the merits of the application. On the other hand she was required to deal with submissions which raised merit issues; for example, concerning the nature and operation of the allowance being sought in this case.

I have dealt with this application, that is the application for a stay of operation of the decision on the basis of the jurisdictional question only. In my view all issues of merit remain to be finally determined. In the circumstances it is unnecessary to consider the balance of convenience. The application is dismissed and I shall now adjourn.

<ADJOURNED INDEFINITELY [11.06AM]