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High Court of Australia Transcripts |
Sydney No S137 of 1998
In the matter of -
An application for Writs of Certiorari, Prohibition and Mandamus against THE HONOURABLE JUSTICE ALAN J. BOULTON, a Senior Deputy President of the Australian Industrial Relations Commission and the Full Bench of the Australian Industrial Relations Commission consisting of the Senior Deputy President JOHN W. MACBEAN, Senior Deputy President COLIN G. POLITES and GREG HARRISON, Commissioner, all of the Australian Industrial Relations Commission
First Respondent
PACIFIC COAL PTY LIMITED
Second Respondent
CAPRICORN COAL MANAGEMENT PTY LTD
Third Respondent
CALLIDE COALFIELDS PTY LTD
Fourth Respondent
COLLINSVILLE COAL COMPANY PTY LTD
Fifth Respondent
ENSHAM RESOURCES PTY
Sixth Respondent
BLUFF MINING PTY LTD
Seventh Respondent
LEO AND GREEN PTY LTD
Eighth Respondent
NEWLANDS COAL PTY LTD
Ninth Respondent
OAKY CREEK COAL PTY LTD
Tenth Respondent
SOUTH BLACKWATER COAL LIMITED
Eleventh Respondent
YARRABEE COAL COMPANY PTY LTD
Twelfth Respondent
COAL OPERATIONS AUSTRALIA LIMITED
Thirteenth Respondent
WARKWORTH MINING LIMITED
Fourteenth Respondent
COALPAC PTY LTD
Fifteenth Respondent
DRAYTON COAL PTY LTD
Sixteenth Respondent
WAMBO MINING CORPORATION PTY LTD
Seventeenth Respondent
COAL AND ALLIED OPERATIONS PTY LTD
Eighteenth Respondent
ULAN COAL MINES LTD
Nineteenth Respondent
LIDDELL PREPARATION COAL PTY LIMITED
Twentieth Respondent
MUSWELLBROOK COAL CO LTD
Twenty-first Respondent
HARTLEY VALLEY COAL CO PTY LTD
Twenty-second Respondent
COOK RESOURCE MINING PTY LTD
Twenty-third Respondent
CURRAGH QUEENSLAND MINING LIMITED
Twenty-fourth Respondent
NORTH GOONYELLA COAL MINES LIMITED
Twenty-fifth Respondent
ROCHE HIGHWALL MINING PTY LTD
Twenty-sixth Respondent
OCEANIC COAL AUSTRALIA LIMITED
Twenty-seventh Respondent
STRATFORD COAL PTY LTD
Twenty-eighth Respondent
THE CORNWALL COAL COMPANY NO LIABILITY
Twenty-ninth Respondent
CENTENNIAL COAL CO LTD
Thirtieth Respondent
BERRIMA COAL PTY LIMITED
Thirty-first Respondent
CHARBON COAL PTY LTD
Thirty-second Respondent
CLARENCE COLLIERY PTY LTD
Thirty-third Respondent
IVANHOE COAL PTY LTD
Thirty-fourth Respondent
AIRLY COAL PTY LTD
Thirty-fifth Respondent
PEABODY COAL LIMITED
Thirty-sixth Respondent
LEMINGTON COAL MINES LTD
Thirty-seventh Respondent
NOVACOAL AUSTRALIA PTY LTD
Thirty-eighth Respondent
MOUNT THORLEY OPERATIONS PTY LTD
Thirty-ninth Respondent
and
KANDOS COLLIERIES PTY LTD
Fortieth Respondent
Ex parte -
CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
First Prosecutor
GARRY WILLIAM BARNES
Second Prosecutor
Office of the Registry
Sydney No S138 of 1998
B e t w e e n
CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
First Plaintiff
GARRY WILLIAM BARNES
Second Plaintiff
and
THE COMMONWEALTH OF AUSTRALIA
Defendant
GLEESON CJ
GAUDRON J
McHUGH J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON TUESDAY 9 NOVEMBER 1999, AT 10.20 AM
Copyright in the High Court of Australia
MR R.C. KENZIE, QC: May it please the Court, I appear with my learned friend, MR I. TAYLOR, for the prosecutors in matter 137 and the plaintiffs in 138. (instructed by R.L. Whyburn & Associates)
MR D.M.J. BENNETT, QC, Solicitor-General for the Commonwealth: May it please the Court, I appear with my learned friends, MR I.M. NEIL and MR L.H. HARDIMAN, for the defendant in the second matter and for the Attorney-General of the Commonwealth intervening in the first matter. (instructed by the Australian Government Solicitor)
MR C.N. JESSUP, QC: May it pleases the Court, I appear with my learned friend, MR M.P. McDONALD, for Pacific Coal Pty Limited to show cause in No 137 of 1998. (instructed by Freehill Hollingdale & Page)
MR P.A. KEANE, QC, Solicitor-General for the State of Queensland: May it please the Court, I appear with my learned friend, MR S.J. LEE, on behalf of the Attorney-General for the State of Queensland. (instructed by the Crown Solicitor for Queensland). And I appear with my learned friend, MR S.G.E. McLEISH, on behalf of the Attorney-General for the State of Victoria, intervening in each matter in the interests of the prosecutors and plaintiffs respectively. (instructed by the Victorian Government Solicitor)
MR R.J. MEADOWS, QC, Solicitor-General for the State of Western Australia: May it please the Court, I appear with my learned friend, MS J.C. PRITCHARD, on behalf of the Attorney-General for the State of Western Australia intervening in support of the second respondent in matter S 137 of 1998 and in support of the Commonwealth in the other matter. (instructed by the Crown Solicitor for Western Australia)
MR N.J. WILLIAMS: May it please the Court, I appear with my learned friend, MR P. GINTERS, on behalf of the Attorney-General for the State of New South Wales intervening in support of the prosecutors in the first matter and the plaintiffs in the second matter. (instructed by the Crown Solicitor for New South Wales)
MR R.J. BUCHANAN, QC: May it please the Court, I appear with my learned friend, MR G.C. MARTIN, SC, for 38 companies which apply to be joined as parties or, alternatively, be granted leave to intervene in the matter first called. (instructed by Freehill Hollingdale & Page)
GLEESON CJ: Their application to be joined as respondents would commence with what number and end with what number?
MR BUCHANAN: It would commence with number - - -
GLEESON CJ: No, application to be joined as the what respondent?
MR BUCHANAN: As the third.
GLEESON CJ: The third to the?
MR BUCHANAN: To matter 137 of 1998 and there are 38 companies, so it would be 3 to 41.
GLEESON CJ: The 3rd to 41st.
MR BUCHANAN: Yes.
GLEESON CJ: And do you have a list of their names?
MR BUCHANAN: They are listed, your Honour, in the schedule to the notice of motion which was filed on 30 June 1999 from which two names have been deleted by a notice of discontinuance which was filed subsequently. We could provide a further list, of course.
GLEESON CJ: Very well, would you do that. What is the attitude of the other parties to the application by Mr Buchanan's clients to be joined as respondents? Does anybody oppose that?
MR KENZIE: Your Honour, we have no objection to our friend being heard as an intervener. Not all of - - -
GLEESON CJ: What I asked was: does anybody have any objection to the application for these people to be added as respondents?
MR KENZIE: Yes, your Honour. It is our position that it would be appropriate for them to be heard as interveners. Not all of Mr Buchanan's clients were parties to the proceedings below. They are all parties to the award that was the subject of the proceedings. In those circumstances, it is our submission that it would be appropriate to hear Mr Buchanan on behalf of his clients, but as an intervener.
KIRBY J: Is he the party that wishes to raise the question of section 7A?
MR KENZIE: That is the only - - -
KIRBY J: That is a matter that the substantive parties do not put before the Court and was not in the order nisi?
MR KENZIE: That is right.
GAUDRON J: But if they are parties to the award why were they not parties to your application in any event?
GUMMOW J: It is not a question of what happened below; "below" is not the right term to use.
MR KENZIE: Well, that is our submission, your Honour; we certainly do not oppose them being heard in the proceedings.
GLEESON CJ: Does anybody else oppose them being added as respondents?
CALLINAN J: I notice on the list that there is a reference to South Blackwater Coal. I was a director of a company of which South Blackwater Coal was a wholly owned subsidiary though, I believe. Does anybody have any objection to my sitting in those circumstances? That is before I was appointed, of course?
MR KENZIE: No.
GLEESON CJ: Well then, your application to add the parties whom you represent as respondents to the proceedings is granted. Will you, in due course, provide a list of those additional respondents and the numbers they will have in the proceedings.
MR BUCHANAN: I shall do that, your Honour. Might I indicate that we have prepared a relevantly short written submission on the 7A question which, in the circumstances, we will now provide to the Court officer and to the other parties.
GLEESON CJ: Thank you, Mr Buchanan. Yes, Mr Kenzie.
MR KENZIE: Yes, thank you, your Honour. Your Honour, written submissions have been provided to the Court in these matters pursuant to orders made earlier by your Honour Justice Kirby. In addition to those written submissions we have provided, for the assistance of the Court, a legislative chart which your Honours, I hope, have there and it is convenient at the outset to go to that. The proceedings in question involve a challenge to the validity of provisions contained within Schedule 5 of the Workplace Relations and Other Legislation Amendment Act 1996. Those provisions are among the provisions identified in the first three pages of the legislative chart, which otherwise deals with various provisions of the Workplace Relations Act 1996 and the - - -
KIRBY J: Could I just get it clear? As I understand it, the two matters upon which the order nisi were granted and that is to say the validity of the provisions and then the position in relation to acquisition on unjust terms, the second is not back before the Court?
MR KENZIE: That is right.
MR KENZIE: That is right.
KIRBY J: So the two issues now before the Court relate to validity on section 51(xxxv) and section 7A?
MR KENZIE: That is so, your Honour. In both matters the challenge based on section 51(xxxi) is not pressed. The provisions challenged are, as I have said, set out on the first two pages of the legislative chart and I will come to the detail of those in a moment. As I have said, the balance of the chart concerns changes and non-changes to the Workplace Relations Act which will provide, hopefully, an understanding as to the background against which the provisions of the WROLA Act operate and those provisions of the Workplace Relations Act that remain in relation to the processing of federal awards, and I will come to the detail of that.
Matter 137 is the return of the rule granted by your Honour Justice Kirby on 6 November, and as has been indicated, the challenge is pressed only in relation to 51(xxxv), and the rule nisi in question is found on pages 271 to 273 of the application book. As to the respondency, Justice Boulton, the first identified respondent - - -
GLEESON CJ: I might interrupt you to say, Mr Kenzie, that there is a certificate from the Senior Registrar saying that she has been informed that the first respondents in matter S137 of 1998, that is to say Justice Boulton, Justice Macbean the Senior Deputy President, Mr Polites, and Commissioner Harrison do not wish to be represented at the hearing of the application and will submit to any order of the Court save as to costs.
MR KENZIE: Thank you, your Honour. There is a correction that will need to be made to the title of the proceedings. Senior Deputy President Macbean has in fact been misdescribed as the Honourable Justice John Macbean, and that has escaped everyone's attention until now, so that we will need to seek the leave of the Court to amend the title so that Senior Deputy President Macbean is correctly described, your Honour.
GLEESON CJ: You have that leave.
MR KENZIE: Thank you, your Honour. Justice Boulton, a member of the Commission, in the course of presiding over proceedings identified as award simplification proceedings, made an order on 1 July 1998 varying an award known as The Coal Mining Industry (Production and Engineering) Consolidated Award 1997. In varying that award, as is agreed on all hands, Justice Boulton was exercising power under Item 51 of Part 2 of Schedule 5 to the Workplace Relations and Other Legislation Amendment Act. It is called - - -
KIRBY J: There is an agreed statement of facts, and I take it that is still agreed?
MR KENZIE: There is. Yes, your Honour.
KIRBY J: Have the added respondents been consulted as to whether they have any objection to the matter set out in the agreed statement of facts? Perhaps that could be checked.
MR KENZIE: Yes, your Honour, I had a - - -
KIRBY J: It would be useful if we can assume that it is agreed by everyone.
MR KENZIE: That will be checked, your Honour. I had a recollection that there was some difficulty but it related only to the 51(xxxi) matter and I think can be put aside for present purposes, your Honour. The agreed statement of facts is on page 262 of the application book and I will come to it now. Paragraphs 1 to 7 on pages 262 to 263 detail the identity of the respondents and the history of the award simplification proceedings. Then if your Honours would go to paragraph 15, your Honours will see that the application that was before the Commission on 265:
was to vary the Award in the manner required by items 47, 49, 50 and 51 of Schedule 5 -
I will come to the chronology of that - - -
GUMMOW J: When it talks about item 49 and when you talk about the Act, are you talking about the 1996 Act as amended by 198 of 1997 or not at all?
MR KENZIE: We are talking about the provisions of the WROLA, that is the Workplace Relations and Other Legislation Amendment Act. The relevant provisions as to 49 are summarised on the - - -
GUMMOW J: I know, but in what form? In the form as originally enacted or in the form as amended by 198 of 1997? I am just looking at your chart, that is all, and I wonder why the second column is there.
MR KENZIE: It is both, your Honour, and the items were amended. Item 50 was amended to remove a doubt that - - -
GUMMOW J: Yes, I know that, but that is what I am trying to find out. From the Act in which form was the Commission deliberating, and in respect of the Act in which form do you seek relief here as to invalidity?
MR KENZIE: The amendment came into effect in December 1997 and the orders were made in the middle of 1998, so that it is the Act as amended by the Workplace Relations and Other Legislation Amendment Act, including the amendments in the second column.
GUMMOW J: Do you say there was relevant invalidity of the Act in its initial 1996 form so that there was nothing to amend by the 1997 Act? Think about these things if you want us to say laws are invalid.
MR KENZIE: We submit that the vices that are the subject of complaint were vices that were found in the Workplace Relations and Other Legislation Amendment Act . It is relevant to go to paragraph - - -
GUMMOW J: What is the consequence of those vices, that the amendment had nothing upon which to operate?
MR KENZIE: That would appear to follow, your Honour.
GUMMOW J: Well, there is a question reserved. It is just how it is to be read, that is all.
MR KENZIE: The legislation was invalid at all relevant times and nothing turns, for present purposes, upon the amendments that were made by the Act in the 1997 amendment, in our respectful submission.
GUMMOW J: When you say "nothing turns" what does that mean, as a legal proposition as distinct from a forensic proposition?
MR KENZIE: Legally, in our respectful submission, following the invalid enactment of Item 50, and the relevant part of Item 51, there was nothing valid to amend so that the amendments that appear in the second column in relation to Item 50 were themselves invalid.
GUMMOW J: Invalid. So there are two pieces of legislation that are invalid.
MR KENZIE: And then there is section 7A, your Honour, yes.
GUMMOW J: Yes.
MR KENZIE: Now, coming to the agreed statements of facts, could I just direct the Court's attention to paragraph 19 on page 265.
there were bargaining periods in effect at 1 July 1998 -
and that is relevant because there was an application to vary the award before the Commission, also, pursuant to section 113 of the Act, the normal variation provisions other than the Workplace Relations Act 1996 but those arbitration powers were not available during the bargaining period because of a provision of the Act, namely section 170N and it is agreed on all hands that the amendments to the award that Justice Boulton made on 1 July 1998 were made exercising powers under Item 51 of Part 2 of the Act and that agreement you will see is contained in paragraph 31 of the agreed statements of facts on page 268.
His Honour acted in accordance with the request of the parties to avoid any question that might arise as to whether he was acting under Item 49 which has discretionary elements within it. He was plainly asked to act under Item 51 and he did so. It was clear, and made clear by his Honour in proceeding - paragraph 23, if the Court would be good enough to go back for a moment, although the decision was made earlier in May 1988, it was made in anticipation of the order that would be made after the expiry of a transitional period on 1 July and when Justice Boulton handed down his decision he stated that:
These decisions have been made in accordance with the legislative requirements as to award simplification and do not necessarily reflect an assessment by the Commission of the merits of arrangements which provide rights and obligations in relation to the treatment of retrenched workers in the Coal Industry.
KIRBY J: I am not familiar with the Act as it now stands, but is the position that under the Act the general powers of the Commission remained to perform conciliation and arbitration, but that a specific gloss was grafted onto the Act to confine the area in which that would be performed; is that how was it done?
MR KENZIE: Yes, your Honour, and that is made clear in the chart to which we have referred and it is convenient now, if I may, to take your Honours to that chart. The first pages are the Workplace Relations and Other Legislation Amendment Act. Then we have included the provisions that answer your Honour Justice Kirby's question as to the former Industrial Relations Act provisions and the present or the subsequent provisions providing for awards found in the legislation after it was renamed the Workplace Relations Act. So, coming briefly to those, the definition of industrial dispute, "foundational", was not relevantly amended by the Workplace Relations Act.
On page 5, the "Objects of Part VI - Dispute Prevention and Settlement" were changed to change the focus of the Commission in relation to dispute prevention and settlement and we have underlined significant aspects of the change. Section 89 on page 6 put arbitration as further down the pole, as it were, and provided that arbitration was a last resort and within the limits specified by the Act disputes could be resolved by arbitration. Then, most significantly, section 89A, as to the scope of industrial disputes, prior to the introduction of the workplace relations regime, there was no section 89A, so that the scope of the powers of the Commission to deal with an industrial dispute were determined by reference to the definition of industrial dispute and the definition of industrial matters which have been features of the legislation over many years. Part of the Workplace Relations Act, and an important part, included the introduction of the section 89A. The - - -
KIRBY J: Just before you get to that, one would read, would one not, normally, section 89 as amended to speak in futura so that it only spoke to the future functions, the functions of the Commission after that was enacted?
MR KENZIE: Yes, your Honour.
KIRBY J: Would you be submitting that such a provision as the new section 89(a)(ii) in relation to the functions of the Commission would be invalid in relation to future awards?
MR KENZIE: No, your Honour.
KIRBY J: It would be within the Parliament's power to, as it were, define the territory within which the Commission could perform the functions of conciliation and arbitration.
MR KENZIE: That is right, most clearly.
KIRBY J: But you say that what is not within its power is that function having been given and lawfully exercised to cut back.
MR KENZIE: In a nutshell the legislation in the latter case makes the subject matter of the arbitrator's decision the subject of the legislation but there can be no complaint about legislation confining the area in which arbitrators operate. The area may be confined, the arbitrator is given a power; the result of the exercise of that power is an arbitration. It does not
cease to be an arbitration or any less an arbitration because the area of operation, the area within which the arbitrator can operate, is affected. This much must follow from many decisions of this Court over the years in which the Court has commented on the extent to which federal Parliament has gone to utilise the power available under section 51(xxxv). The definition of "industrial matters" has waxed and waned over the years - - -
KIRBY J: Mainly waxed.
MR KENZIE: Yes, but one can think of other exceptions.
KIRBY J: I have taken you off your path. I think it is useful for you to outline the legislation, then come back to speak to us about your theory of the Act.
MR KENZIE: Yes, your Honour. It is not off the path though, your Honour; it is a fundamental part of our argument that the distinction that your Honour identifies exists. The device that is used in section 89A is the narrowing of the scope of industrial disputes for arbitral purposes so that industrial disputes are taken only to include matters covered by subsections (2) and (3) and they are then set out. It is not really necessary, at least in our submission, for the Court to examine closely the extent of section 89A. It is clear, on any view, that very many matters which had hitherto been matters available for inclusion in federal awards are not within the purview of section 89A.
Matters relevant to this case included the system for selection for redundancy, preference, right of entry, and then other limitations emerge from 89A that are not relevant to this case, including limitation of employment in classifications, matters relating to termination being harsh, unjust or unreasonable - various matters of the kind. There is a substantial narrowing of the Commission's jurisdiction affected, or at least the capacity of the Commission to make an award affected, by the means set out in section 89A, although the list is, on its face, lengthy.
KIRBY J: You are not submitting that that narrowing is so antithetical to the constitutional notion of conciliation and arbitration that it is outside the power of the Parliament?
MR KENZIE: No, your Honour, there is nothing in our submission - - -
KIRBY J: Your complaint is ex post operation as distinct from in futuro operation?
MR KENZIE: Yes, your Honour. Next, your Honour, perhaps I should mention that there are exceptions within 89A, what are known as exceptional matters. An exceptional matters order can be made pursuant to section 89A(7) and within the limits of that section, so that there has to be an exceptional matter produced or identified before the Commission and within those limits the Commission can go beyond section 89A. Section 104 we have set out on page 11. At all material times, under the old legislation and the new, there was provision for resolution of industrial disputes by arbitration as appears from section 104(1). Section 110 on page 12 provides for the "Procedures of Commission" and the Commission required to:
investigate the industrial dispute and all matters affecting the merit, and right settlement, of the industrial dispute.
Section 111(1)(b) on page 13, the Commission's power:
in relation to an industrial dispute:
(b) make an award or order -
and so on.
Section 113 on page 14 deals with setting aside or varying awards. These provisions are all important, in our respectful submission, because they proceed on the basis of and in accordance with the time-honoured understanding of the limits imposed by section 51(xxxv), namely that that provision provides for the prevention and settlement of disputes by arbitration as understood - we will come to the authorities in a moment - and provide for the exercise of a discretion by the Commission in dealing with making an award or varying or setting aside an award. So it is that section 113(1) provides for the setting:
aside an award or any of the terms of an award -
and (2):
The Commission may, and shall if it considers it desirable for the purpose of removing ambiguity or uncertainty, vary an award.
Again, the discretionary aspect is apparent.
Section 120 on page 16 is the provision that was always there making it clear that the:
Commission is not restricted to the specific relief claimed by the parties -
so that it could mould an award to deal with the actual dispute and was not bound by the words. That has now been subjected to section 89A, and we have underlined the amendment to section 120.
Section 148 on page 17 is the provision dealing with continuation of awards about which it will be necessary to say something further. It provides that:
Subject to section 113.....an award dealing with particular matters continues in force until a new award is made dealing with the same matters.
Section 149 deals with:
persons bound by awards -
It is one of the provisions dealing with the effect of awards and identifies various classes of persons who are bound by awards that the Commission makes. Section 152 I think one can pass over but we have inserted that because it is the provision that deals with the relationship between State and federal awards, and its predecessor has been examined by this Court on a number of occasions.
Section 178 on page 21 deals with the question of:
Imposition and recovery of penalties -
and remains relevantly unamended. Section 179 on page 22 provides for:
Recovery of wages etc -
and finally, section 187, your Honours, deals with the:
Cancellation and suspension of awards and orders -
and provides for ultimate discretion by a Full Bench asked to suspend or cancel an award, as it were, for cause. So that there are two means of changing an award under the Act; there is the section 113 setting aside or varying, providing for discretion and then, for cause, section 187 provides that an application can be made to a Full Bench which will then exercise discretion in accordance with the section to determine whether the award ought to be set aside or not.
KIRBY J: Given that you do not raise any objection to prospective application of these provisions, a question of severability may arise, may it not? Has that been addressed somewhere? I do not remember reading it in the written submissions. Do you say that it is so integrated that it is impossible to sever or would one not, as it were, say these provisions can operate in future or is it all an omelette that has been mixed and cannot be unscrambled?
MR KENZIE: No, your Honour. The statutory framework is one that is designed to make the awards made under the old regime look like awards that would be permitted under the new.
KIRBY J: May not that be the provision upon which unconstitutionality attaches, if your submission is right?
MR KENZIE: That is right.
KIRBY J: Leaving the sections which are, in general terms, to apply in futuro but not retrospectively, in awards that have already been made on the footing that to do that is an attempt by the Parliament to make a law in respect of industrial conditions, not with respect to arbitration.
MR KENZIE: In our respectful submission - and we will come to this certainly in the context of the discussion about Kartinyeri, your Honour - the vice is found in Items 50 and 51.
GLEESON CJ: I was going to ask: what precisely is it that you are saying is invalid? Anything that you have shown us so far?
MR KENZIE: No, your Honour. But it is necessary to understand those submissions to understand two things: firstly, the departure from the system of arbitration that is involved in Items 50 and 51; and secondly, because the Court, in the course of these proceedings, will be invited by the respondents, or some of them, to proceed on the basis that Items 50 and 51 are relevantly to be regarded as provisions that amend or repeal the provisions that I have been identifying.
GLEESON CJ: But you have not yet shown us where Items 50 and 51 fit in, and you are no doubt coming to that now.
MR KENZIE: Yes, your Honour.
GLEESON CJ: But you do not submit that any of the provisions you have taken us to so far are invalid?
MR KENZIE: No, your Honour. Could I then come to Items 50 and 51?
GUMMOW J: You have to come to section 3, do you not, of the 1996 Act? They are just in a schedule. The enacting provision is section 3, is it not? You have to read down section 3 in a fashion so as to leave unamended by the schedules some previous statute.
KIRBY J: Which precise 1996 Act is this? Is this the consolidated or the amending provision?
GUMMOW J: Section 3 has several branches to it, as Justice Hayne points out to you.
MR KENZIE: Yes, I see your Honour is suggesting that Schedule 3 is the schedule that, in effect - - -
GAUDRON J: No, section 3.
MR KENZIE: Section 3 is, in effect, the provision.
GAUDRON J: And what you would be concerned with, would you not, are the words "and any other item in a schedule" et cetera, "has effect according to its terms", and you have to say "has effect subject to the Constitution", or something to that effect.
MR KENZIE: Yes, your Honour, I suppose we would say that Items 50 and 51 are not validly there and are not picked up by section 3.
HAYNE J: But amendments or repeals are provisions, are they, under section 3 caught by the last clause rather than the first parts?
MR KENZIE: Yes. We say that they are not amendments or repeals. They are new substantial provisions, your Honour, and they carry the vice. That, as I say, takes us ultimately to the debate in the Kartinyeri debate, to which I am coming. So we challenge the items as changes to the substantive law, not as repeals, not as amendments in the sense contemplated, but as provisions which substantively add a new species of award to the Act.
KIRBY J: Would you identify the 1996 Act which incorporated the schedule that you complain of because the version I have of the Workplace Relations Act section 3 is just the principal objects. This is the Workplace Relations and Other Legislation Amendment Act 1996 , No 60 of 1996.
MR KENZIE: That is so, your Honour. Could I come to Items 50 and 51?
GUMMOW J: Am I right in thinking what you say is that section 3 is invalid to an extent in so far as it says that any item in Schedule 5 has effect according to its terms? You say it does not have effect according to its terms and it is invalid in so far as it requires that.
MR KENZIE: To the extent that it seeks to pick up Items 50 and 50(1), (2) and (3), we do, your Honour.
If it please the Court, Item 50, the interim period was an 18 month period ending on 30 June 1998. Firstly, the effect of Item 50(1) was to deem those provisions in every award not allowable award matters to be of no effect. I should say that it is accepted by all parties that the expression "allowable award matters" appearing in Item 50 and 51(3), though not defined in the Workplace Relations and Other Legislation Amendment Act, is a reference to the allowable award matters identified in section 89A of the Workplace Relations Act.
GUMMOW J: How do we know that, in terms of a statutory train of provisions?
MR KENZIE: Because of the notion that the legislation is to be read with the provisions of the principal Act in accordance with the Acts Interpretation Act.
GUMMOW J: Which provision in the Acts Interpretation Act?
MR KENZIE: Section 15.
GAUDRON J: So you say to this extent it is not an amending Act.
GUMMOW J: That is what mystifies me.
MR KENZIE: It amends the Act but it does so by adding a substantive provision and does not amend the provisions giving effect to the awards that is claimed by the respondents.
GAUDRON J: It calls itself an amendment Act, anyway.
MR KENZIE: Your Honour, "allowable award matters" is an expression that does not otherwise present itself and it has appeared on that basis to the parties, that the reference is a reference to section 89A.
The remaining subitems of Item 50 provide exceptions to (1) and as such they are dependent on the first subitem. One does not, I think, need to pause too long on Item 50(2), (3) and (4). Subitem (2) operates to exclude from the effect of (1) those matters which are exceptional matters. Subitem (3) excludes from the operation of (1) particular types of awards which are now permitted to be made under a provision of the Act following the termination of a bargaining period, but in very specific circumstances. Subitem (4) has the effect of extending the interim period for certain types of award provisions so that the effect of (1) is delayed with respect to those provisions. They are called special consent provisions and they are defined in Item 48 but one submits that they can be left aside for present purposes. There are some awards that would fall into that category but not the mass of awards that the Commission would concern itself with.
Then Item 51 in subitems (1) to (3) directs the Commission to strip from awards those matters which as a result of the effect of Item 50 have ceased to have effect and to make some consequential amendments.
GAUDRON J: They have ceased to have effect?
MR KENZIE: Yes, your Honour.
GAUDRON J: Then Item 51 is simply a tidying-up mechanism?
MR KENZIE: So it is said against us, your Honour.
GAUDRON J: Yes, so one really has to look to Item 50.
MR KENZIE: In our submission, your Honour, the result will be the same whether one considers, in accordance with our primary submission, the effect of the Act as a whole, namely Items 50 and 51 together, or Item 50 alone.
GAUDRON J: There may be a different method of analysis in relating it to the conciliation and arbitration power, depending upon whether you concentrate on Item 50 or Item 51.
MR KENZIE: Yes, your Honour, that is right. It is put against us, if I can summarise the case, that Item 50 simply deals with the effect of awards, that a Parliament can give awards whatever effect it wants, it can narrow the effect, it has done so in Item 50 and all that Item 51 is is a tidy-up. That is the argument put against us. We submit in accordance with authority that it is necessary to consider the effect of the Act as a whole, that is the scheme that one sees in Items 50 and 51, and what you see in Items 50 and 51 is an interrelated scheme in which the Commission is directed to - is firstly a provision whereby awards cease to have effect to the extent selected by Parliament and then as soon as practicable after the end of the interim period - of that period - that is as soon as Item 50 has bitten, the Commission is required to review each award, and in relation to any matter affected by Item 50 the Commission by subitem (2) is directed to:
vary the award to remove provisions that ceased to have effect under item 50.
I will come to subitem (3) in a moment. So, what you see is a scheme whereby in one step the award is deprived of part of its effect and we will come to the legitimacy of that in a moment, independently. Then, as soon as that has taken effect, the Commission is directed to remove those parts from the award so that they not only cease to have effect but they are out of the award. So that the net result is that as soon as practicable after the interim period is over, the award is reduced - - -
KIRBY J: And this, although this is an award which is the end product of both statutory and constitutional labour, that is to say the determination by arbitration of the dispute under the Act and under the Constitution.
MR KENZIE: Yes.
McHUGH J: Was it by arbitration? Was this not a consent award?
KIRBY J: It could be either though for the purposes of the Act, could it?
MR KENZIE: It does not matter for the purposes of the argument, your Honour. It is an award that exists and validly exists by a process that is constitutional and in accordance with the Act and the item fixes on an award, however made, by consent or as a result of arbitration and by a process other than arbitration, as we would submit. It requires the Commission to bring it into a situation that is chosen by Parliament.
GLEESON CJ: Is a way of testing this, whether it is valid or invalid, to look at, for example, section 89A(2)(s), superannuation, if Parliament should amend 89A to remove superannuation - and it is not difficult to think of a reason why it might do that - as an allowable award matter, then the effect of this would be that not only for the future could awards not cover superannuation, but it would the obligation of the Commission to go through existing awards and remove provisions about superannuation in them. That is the way it works.
MR KENZIE: Yes, and, your Honour, that gives rise to other questions and submissions to which we have not yet come. If Item 50 were further amended, but amended the other way, if section 89A was broadened so that matters were added to the available list, the scenario had changed in the Workplace Relations Act, then the respondents' case presumably would be that there would be nothing wrong with the Commission being directed to follow that, because - - -
KIRBY J: Adding a specific provision.
MR KENZIE: One strains to see that there is any difference, for relevant purposes, assuming it is within the dispute - - -
HAYNE J: A provision about a specific subject matter, or a provision having specific content? The two might be radically different, surely?
MR KENZIE: Your Honour, I suppose a provision requiring the Commission to restore the award provision would be indistinguishable - - -
HAYNE J: That is to have a specific content as opposed to having content about a particular subject matter.
MR KENZIE: No, it is the converse of Item 50. Item 51 says, "If it answers this description and you have it in the award, take it out." Could Parliament say, "Well, look, we have changed our mind and in so far as any matters not identified by reference to particular awards were taken out by that means, then they should be put back". That could not happen, in our respectful submission, and neither can this. There is no logical difference between the two. You either add or subtract and you end up with a situation whereby Parliament selects what is going to be in an award and then it says, "Well, we will deem it to have an effect as much as we like and then we will direct the Commission to subtract it", and we would say, add to it, if they choose. There is no difference, in our respectful submission, between the two.
McHUGH J: You appear to see no difference between an arbitrated award and a consent award but at the moment I am not convinced that there may not be a difference. Are consent awards not made under the power to conciliate, and even though they get an expanded operation by the Act, are they not at heart based on contract?
MR KENZIE: Your Honour, it does not matter how the award came to be or how an award came to be in the form that it is. It has got into that form under the Act pursuant to legislation validly enacted under section 51(xxxv) for the prevention and settlement of disputes by conciliation and arbitration; and it does not matter whether it is a consent award or it has been the subject of violent disputation prior to its making. What then follows is a mechanism for changing awards. That is what Item 50 and 51 deal with. They do not say consent awards or - - -
McHUGH J: I appreciate that, but supposing the Parliament removed the enforcement provisions out of the legislation, would not the consent awards continue to operate by way of contract and may not that raise questions about the Parliament's capacity to legislate with respect to that underlying contractual arrangement between parties?
MR KENZIE: No, your Honour. The subject matter of Item 50 is not contracts.
McHUGH J: I know.
MR KENZIE: The subject matter of Item 50 is awards that have been made by legislation enacted under section 51(xxxv), whether by conciliation or arbitration.
McHUGH J: But it says the award ceases to have effect.
MR KENZIE: Yes, your Honour.
McHUGH J: But is the award not a contract between the parties?
MR KENZIE: Your Honour, the learning of this Court flowing from Byrne v Frew tells you the contrary so far as is relevant to this debate.
McHUGH J: Yes, but strip away the legislative framework, what happens? Does the agreement between the parties come to nothing?
MR KENZIE: If the agreement between a union and an employer is not an agreement but it has found its way into contracts of employment as between members of the union and their employers, then the answer is "yes". It is a different regime, and Item 50 operates on the regime.
KIRBY J: The question would be whether the agreement was solely for the purpose of effecting a statute and was not intended to have any other inter partes operation. It was a statutory agreement as the Act contemplated.
MR KENZIE: Yes, your Honour. I further answer to your Honour, if an award had been made as a result of a process of conciliation it would not matter for the purposes of our argument, because a provision of the Act that was designed to sweep away that award by these means, as we would put it, is not a law for the prevention and settlement of disputes by conciliation or arbitration.
McHUGH J: I do not know what the effect of Byrne's Case might be on some of the earlier authorities, but in the Insurance Staff's Case and Herald and Weekly Times Cases in the Arbitration Commission, was it not decided that consent awards are based on contractual arrangements between parties?
MR KENZIE: Yes, between the parties of those awards. But, your Honour, could we submit that, we are probably not meeting the debate, but our contention is that that, whilst interesting, is not relevant to provisions which are not intended to operate on that. These provisions do not affect any contract that has been made between parties. They say they deal with that which is the subject of the statutory regime and they purport to effect it, and only it, that is the affect of the award and what the Commission has to do in relation to that award. That is the level of debate that one is having here, and it is silent in relation to the residue as to whether there was a contractual relationship between the parties.
GLEESON CJ: Parliament can validly say for the future "no awards may contain anything about superannuation", but it cannot say "and existing awards to the extent to which they contain provisions about superannuation cease to have effect".
MR KENZIE: That is right.
KIRBY J: But is that so if the Parliament has a power under some other head of power, to make a law with respect to superannuation and does so, then that law will, of its own force, operate upon any other laws, including subordinate laws such as awards, to supervene. So to that extent, the Parliament does effect it but it does not do so by way of interfering with the determination of an arbitrated award.
MR KENZIE: Your Honour, that gets us to the question of whether a provision could be protected by a reference to other heads of power, that is other than section - - -
KIRBY J: As that is not in the principal argument, you may want to deal with that in reply rather than dealing with it now.
MR KENZIE: We do have some submissions about the validity of - - -
KIRBY J: But you said earlier to the Court that that is not a law for conciliation and arbitration, but the Constitution is not so expressed, it is a law with respect to it, and a lot of the argument of your opponents is that, as the Court has so often said, they are very wide words of connection and you have to grapple with that problem.
MR KENZIE: Indeed, your Honour, and we are about to. Our submission is that it does not matter that you regard those words as having the operation indicated by your Honour. The authorities are completely against the proposition that legislation of this nature - and this is so whether you look at Item 50 alone or the scheme - can be valid and operative under section 51(xxxv).
McHUGH J: Well, the reason I was putting to you that there may be a difference is because of what was decided at least by Chief Justice Brennan and myself in Kartinyeri. If the enforcement of the award depends upon legislation, why cannot the Parliament withdraw the authority contained in that legislation?
MR KENZIE: Yes, your Honour, it can. We are not here to argue that what can be done cannot be under; that is not the debate that we are here to have and we do have to meet that, your Honour, and I am not seeking to evade what your Honour is putting, it is part of the plank of our case. This is not a law that can be characterised as undoing what Parliament has done. There would be no objection to Parliament removing or repealing section 178 of the Act so that awards were not enforceable in courts of law. There would be no objection to Parliament changing the list of parties on who an award is binding, subject to other constitutional problems.
That is because the subject of such legislation - first of all, there is the power to undo what you have done, which is Kartinyeri, but leaving aside totally Kartinyeri for the moment, the reason that those things are able to be done, without constitutional question being asked, is because they leave on foot and they are laws in relation to the prevention and settlement of disputes by conciliation and arbitration. But if you seek to amend to add to the Act a provision that says whatever the arbitrator has done, only those bits of the settlement that Parliament think ought to survive will survive, no authority of this Court comes close, your Honour, to supporting that as something that is able to be done under 51(xxxv); indeed, the authorities are dead against it.
GUMMOW J: Well, why could not Parliament repeal the whole Act?
MR KENZIE: It could. I am sorry, your Honours, the authorities to which I am coming will make, we hope, some of this a little clearer.
GUMMOW J: Well, I am not sure they do actually.
MR KENZIE: Well, Victoria v The Commonwealth is some assistance, your Honour. The Parliament could have done a number of things.
KIRBY J: Well, it did repeal the 1904 Act.
MR KENZIE: Yes, it could have repealed the Act completely and said - - -
GUMMOW J: Well it has not done so, has it? I know it is called the Workplace Relations Act. In fact, if you track it back it is the 1904 Act.
MR KENZIE: Yes it is; yes, they have changed the name of the Act and by the means set out in the WROLA - I am sorry, I keep using - - -
KIRBY J: Is that how the Industrial Relations Act was changed? It was grafted onto the 1904 Act, was it?
MR KENZIE: Yes, your Honour. So the Act has gone on, and hence our chart, your Honour, but when I say that the authorities do make some of this a little clearer, there are some aspects of the discussion in Victoria v The Commonwealth that bear on what I am now putting and which we hope will clarify the matter.
McHUGH J: But you seem to be saying this, if I understand you correctly: If Parliament gives the Commission a general authority to arbitrate, it can repeal that authority.
MR KENZIE: Yes.
McHUGH J: But if it gives it a general power of authority, it cannot repeal its authority in respect of any specific items.
MR KENZIE: No, your Honour, that is far from what we are saying.
McHUGH J: That seems to be the substance of it.
MR KENZIE: If it is characterised as a repeal of part of section 149, for example, that section that gives awards effect, and so the effect of item 50 is to say, "Yes, they're given effect, but only to the extent Parliament agrees", then, if that is regarded as a repeal - we say it is not because it is not a case where Parliament has legislated and said, "Under this head of power there will be provision for A and B and C, and a subsequent Act removes C, whether textually or not, it is not that case. This is quite a different case.
If you removed the effect of an award on a person, that is the arbitrated result on a group of people, the effect of it, then it might be said that you were repealing the legislation but, if the result of your endeavours was to create an award which was a hybrid of what the arbitrator wanted and what Parliament wanted, that is not a repeal. Arbitration is not severable in that way.
HAYNE J: Does it then follow that you say that Parliament cannot in any respect alter the outcome of an arbitrated award?
MR KENZIE: No. The Parliament could decide that the award, henceforth, had no effect.
HAYNE J: The award as a whole?
MR KENZIE: The award as a whole.
HAYNE J: But it cannot alter part of the outcome; is that the central proposition you put?
MR KENZIE: That is right, that is the proposition.
GAUDRON J: But is the rationale for it that that which is left must be capable of being identified as the product of conciliation and arbitration for the prevention or settlement of an interstate industrial dispute?
MR KENZIE: In Kartinyeri terms, your Honour, in this argument, it does not matter how you approach it.
GAUDRON J: It does in terms of constitutional validity. There must be some nexus with the head of power.
MR KENZIE: Can I put it this way, your Honour. In the instance that we are dealing with, what is left is not a law for the prevention and settlement of disputes by conciliation and arbitration - - -
McHUGH J: That is what Justice Gaudron was putting to you.
GAUDRON J: I think not quite. What I was putting to you is what is left is not the product of conciliation and arbitration - - -
MR KENZIE: Absolutely right.
GAUDRON J: - - - for the prevention or resolution of interstate industrial disputes.
KIRBY J: Justice Boulton rather suggested that by what he said.
MR KENZIE: That is right. Why I answered your Honour in the way I did before is that if you look at it from the point of view of what is left - and I am now thinking of the debate in Kartinyeri - if you look at it in terms of what is left on this argument of 149, let us say, then the proposition that your Honour puts in argument is correct. What is left is not a law for the prevention and settlement of disputes by conciliation and arbitration. If you look at it from the point of view of the amendment, or call it what one will, item 50 and 51 is itself not a law for the prevention and settlement of disputes by conciliation and arbitration. So, it does not matter how you look at it, the result is the same.
GAUDRON J: Item 50 does not have to be a law with respect to, other than as incidental to, the conciliation, incidental to a law for prevention of disputes by conciliation and arbitration.
MR KENZIE: Yes. Your Honour, is coming, I think, to a question that was left open or that did not have to be resolved in Kartinyeri and that is the question of whether, if you had a law that was either a repealing or an amending law, that changed the character of the legislation that it was amending, could that be validly done and that is changed its character to a character beyond.
GAUDRON J: Yes. So, ultimately, you do not look at Item 50 or 51, you look to see how that operates in the overall legislative scheme, is that right?
MR KENZIE: Different things were said in Kartinyeri, to which I will have to come. Our submission would be that if you are dealing with something that is not, when properly understood, an amendment or a repeal appeal, and we say that this does not amend or repeal section 148 or 149, it leaves those sections in force but it simply deals with the award that is the subject of the exercise of the arbitrator's power. It would be the same if the arbitrator changed the award. The award is still there and it still has effect. The section is unaffected. It is not an amendment or a repeal of those sections. On our understanding of Kartinyeri that means that you examine the legislation, the amending legislation, and if that cannot be identified or defended, constitutionally, then that is an appropriate inquiry. I am referring, I think, in particular to something that your Honours Justices Gummow and Hayne had to say but I think we would venture to suggest implicit in the other judgments in Kartinyeri.
GAUDRON J: But, on that analysis, it may be the whole Act that fails and not simply the additional provision.
MR KENZIE: Yes. That is another way of looking at it. It is not the way we have approached it. It would be the way that you would look at it if you accepted that what one was dealing with was a relevant repeal or amendment of defined provisions, whether texturally identified or not, then you could have that inquiry and you would get to the debate that was had in Kartinyeri as to whether the discovered invalidity affected the provision that was sought to be amended but our primary position, your Honours, is that this is not such a case.
GLEESON CJ: Mr Kenzie, when Item 50(1) says:
each award ceases to have effect -
what is the source of the effect that that purports to negate?
MR KENZIE: In one sense that could be said to relate to every reference in the Act to an award but there are certainly provisions that in particular deal with effect. On their face they include sections 148 - - -
KIRBY J: Which is the provision that says an award will continue after? Is that 148?
MR KENZIE: 148, your Honour.
KIRBY J: That has been upheld, I think, by the Court. That was the case early in the life of the old Act.
MR KENZIE: Yes, it has.
GAUDRON J: And they include those provisions which enable people to bring proceedings to enforce an award to recover wages and penalties and they would include those provisions if the parties are bound by an award as well.
GUMMOW J: And the section 109 provision, too.
GAUDRON J: And the 109. They would affect the 109 operation.
HAYNE J: And in which Act would you find them? Would you find them in the Act as it stood immediately before Item 50? Do you look to the Act as it stands after Item 50 for this purpose? It would be the former, would it not, when we are considering the validity of Item 50?
MR KENZIE: Yes, your Honour, because Item 50 was - one would venture to suggest it was to the Act in the form it was when Item 50 had effect.
HAYNE J: That is, when it speaks of ceasing to have effect, it means ceases to have the effect it would have had under the legislation before these changes, if that is a neutral term, were made?
MR KENZIE: That is right. If you had an award that, under the legislation, as in force on 30 June 1998, Item 50 affected that and that award ceased to have effect to the extent selected by Parliament.
CALLINAN J: Mr Kenzie, could I ask you this? Do you say that it would have been permissible for the previous legislation to have been repealed and to state that all awards made under it cease to have any effect, and then Parliament could have enacted an 89A but, so long as they did not enact any provision of the kind to be found in 50 and 51, what was done would be acceptable?
MR KENZIE: Yes, that is right. But they had other options open to them, your Honour.
CALLINAN J: No, but that is one that would have achieved perhaps the position that the respondents would no doubt contend for.
MR KENZIE: Certainly, but there were other options.
CALLINAN J: What would the other options have been, Mr Kenzie?
MR KENZIE: Your Honour, one of the other options is the sort of approach that was looked at in Victoria v The Commonwealth, to which I will come, a provision which required the Commission to examine awards against a background of the changed objects of the Act and consider whether they ought to remain in force having regard to those new objects.
CALLINAN J: Even though there may not have been current dispute to be conciliated or arbitrated?
MR KENZIE: Yes, your Honour, because this Court in Victoria v The Commonwealth would have upheld a provision such as that, and did. So there were ways forward. But what has happened here is, in our respectful submission, the Parliament, in its haste to bring the old into line with the new, has arbitrarily cut the settlements, that is the product of arbitration, at a point, and regardless of what those settlements were, and regardless of the significance that the allowable or non-allowable matters played in relation to those settlements, to cut those awards down the middle for present purposes and to say that will be your award - - -
KIRBY J: But I think that has resonances of the sort of objection that Justice Isaacs mentioned in that early case, that it is saying that if you continue the award after a certain time beyond the time of its original award period, then you are not necessarily providing for the prevention settlement of a dispute, and yet that has been upheld. Now, what is the difference between simply saying it can continue of its own force, and it can continue, but only as to certain provisions?
MR KENZIE: All the difference in the world, with respect, your Honour. There is no complaint about a provision that does something with the arbitrator's settlement and gives it effect, or does not give it effect as such, but there is no constitutional foundation at all for choosing those bits of the arbitrated result to which effect will be given.
McHUGH J: Why? Supposing Item 50 had said, "At the end of the interim period, sections 148 and 149 of the Act shall have no effect in respect of items such as a superannuation, such clauses of the award as provide for superannuation"?
MR KENZIE: Well, your Honour, one is having the same debate and, in our respectful submission, once you cross from the identification of those parameters within which an arbitrator can work to the field of interfering with the effectiveness and selectively determining which bits of the result will be effective, you move into the area of invalidity, in our respectful submission.
McHUGH J: Yes, but it is the use of the word "effectiveness" which is very ambiguous. Does it mean any more in Item 50 than sections 148, 149 and perhaps 178 and 179?
MR KENZIE: Well, your Honour, whatever it means, it must mean enough to justify a provision thereafter requiring the Commission to remove them from the award as a tidy-up, otherwise it is invalid.
McHUGH J: Well, query whether or not Item 51 has any effect other than an administrative, clerical function, in effect, just crossing out, because Item 50 says that the awards have no effect.
MR KENZIE: Your Honour asked what does that effectively mean, and it presumably means that they are deprived of legal effect in relation to the areas that are - or any effect that is given to them under the Act in relation to the areas that are then identified by Parliament, so that Item 51 can come along and - - -
GAUDRON J: But you could not make this argument if Item 50 said the awards have no effect, could you? You could only make this argument because it says they have no effect "to the extent that".
MR KENZIE: Yes, your Honour.
GAUDRON J: And you could only make that by saying - am I correct - what is left is something that is holding you and 51(xxxv) will not allow you to pass a law giving effect to what is left.
MR KENZIE: That is right.
GAUDRON J: But that leads you to lose the whole award, I think, unless you find some basis for saying no, that was not what the Parliament intended. What the Parliament intended was something like dependent relative revocation in wills.
GUMMOW J: That is right.
HAYNE J: Mr Kenzie has turned a distinct shade of grey, I think.
MR KENZIE: Greyer, your Honour.
GUMMOW J: It is a clever doctrine, though.
MR KENZIE: I do not think I can answer your Honour in any way other than I have. Plainly, Item 50 was intended to effectively remove the effect for statutory purposes of those parts of the award and provide the foundation for what our friends say is a tidy-up. It cannot be done.
McHUGH J: Your argument has to be that because of this singling out of various items, then Item 50 is not a law with respect to section 51(xxxv) of the Constitution.
MR KENZIE: That is right, and, your Honour, hopefully life becomes a little easier and clearer when I go to the cases because it is our respectful submission that this proposition receives emphatic support from the authorities.
KIRBY J: Just before you do that, I can understand your clients do not like the amendments that have been made and therefore you are bound to put these submissions, but superannuation has been mentioned. But what if, at an earlier time, the Parliament had said that provisions in awards providing for unequal pay for aboriginal Australians or provisions in awards providing unequal pay for women in Australia shall, in effect, be deleted. Why would that not be a law with respect to conciliation and arbitration attaching, as it does, to the award that has already been made?
MR KENZIE: Your Honour, because that approach looks at only half of the constitutional requirement. The provision is the prevention and settlement of disputes by conciliation and arbitration. It is not enough - and this is the fallacy - for our friends to say it is a law that relates to arbitration, it has something to do with arbitration. The authorities are clear on this and the insistence has been rigid and consistent. The requirement is that Parliament cannot intrude and that the placitum has the limitation that it requires disputes to be prevented or settled by conciliation and arbitration, and leaves no room for the Parliament to come in and say, "Yes, except for this bit". It does not do it. That is a line, it is a bright line, your Honours, in the authorities, and it is crossed here.
McHUGH J: Until now I do not think your oral arguments has put enough emphasis on that latter point.
MR KENZIE: That is when I was coming to the authorities, your Honour.
CALLINAN J: Mr Kenzie, just before you do, what do Item 51(1) and (2) add to Item 50? Why would the legislature need - I do not think this affects your argument, but I would just like your submissions on it. Why are Item 51(1) and (2) needed at all? They do not seem to me to add anything, that is all.
MR KENZIE: Your Honour, this is my deficiency. It is because I have not gone further and developed the items by reference to subitem (3).
CALLINAN J: You probably have not had a chance, Mr Kenzie.
MR KENZIE: I am getting a fair go, your Honour.
CALLINAN J: Item 51(3) could stand without (1) and (2) with perhaps some variation to the introductory words.
MR KENZIE: But the scheme is this, that following the effect of Item 50 the Commission is firstly required to remove the affected provisions and then (3) is the - - -
CALLINAN J: Item 50(1) simply provides that each award ceases to have effect except for allowable award matters. So, it seems to me - and that is at the end of the interim period - that as a matter of law, giving effect to Item 50 those non-allowable matters would cease to have effect, and you do not need 51(1)(a), for example.
MR KENZIE: Your Honour, one would think that what is intended is that Item 50 having bitten, the provisions of an award may be interrelated. The settlement may have involved quid pro quo. It may have been that allowable award matters or non-allowable award matters were foundational to the award.
CALLINAN J: I can understand why it might be very prudent to have a look at the matter afresh and pursuant, say, to subsection (3), but I simply ask what does 51(1)(a), for example, add to Item 50(1)? It seems to me that you simply do not need it.
MR KENZIE: Well, 51(1)(a) simply provides that the Commission is to review and is the gateway to what follows throughout Item 51. It provides for certainty. What follows is the machinery for how you are going to accomplish the removal of the provisions and what the removal of those provisions and their ceased effect is going to mean for the remaining provisions of the award. So it is that subitem (3) says you can tidy up the award as to what is left, but subitem (3) does not entitle you to reintroduce non-allowable matters, it simply says the knife has come down, now fix up around the edges, numbering whatever - - -
CALLINAN J: Well you say you need 51(i) and (ii) in order to make intelligible and sensible the operation of subsection (iii)?
MR KENZIE: Yes, because the award may take a variety of forms and there may be a variety of interrelationships between terms allowable and non-allowable. Now the effect of the removal of the non-allowable matters may or may not be to remove from the settlement the foundation of the settlement leaving only matters which, whilst they were properly included in the award as a result of the settlement, were not the true foundation of the settlement but were off-sets or a quid pro quo.
Now, your Honours, could I come to the authorities and I do not need to go to many, but in paragraphs 23 and 24 of our written submission, which we would ask your Honours to just have regard to while we are doing this, we have looked at the authorities in relation to the conciliation and arbitration power and, your Honours, some of the authorities are older authorities, for which we make no apologies, because we say that it is the fact that Parliament has forgotten the foundations of the arguments that have been accepted under 51(xxxv) that takes you back to these authorities.
In paragraph 24 we have set out in our submission an extract from Alexander's Case and if your Honours would be good enough to actually go to the report of Alexander's Case [1918] HCA 56; (1918) 25 CLR 434, the passage that is set out in our submissions, which is a passage at page 463, is, in fact, preceded by a discussion by Justices Isaacs and Rich of the arbitration power. Their Honours said at page 462 - it is a little lengthy, your Honours, but I need to read it. At about point 4 Their Honours said:
The power conferred by section 51(xxxv) of the Constitution, like every other power, is complete in itself. But like every other power granted, it needs its own interpretation in order to find the nature and extent of the subject matter. Placitum xxxv does not give power in general terms to the Commonwealth Parliament to legislate with respect to industrial disputes beyond the limits of the State. The power is limited to legislation with respect to a particular method of dealing with such disputes. The method so specified is "conciliation and arbitration." The reason of the limitation is on the surface. Industrial disputes extending beyond the limits of any one State embrace so many possible divergencies, of industry, of conditions, of claims, of surrounding circumstances at home and abroad, and of constant changes, that direct legislation in advance is incapable of being applied to them. No one can foresee for any appreciable period the legislative requirements of industrial peace in any one industry, much less in all industries of the Commonwealth which are common to more than one State. Any attempt at detailed regulation, applicable to all industries even if suitable today - practically an impossible hypothesis - would certainly be less suitable a month hence. Nevertheless, it was thought necessary that such disputes should not go uncontrolled but that the control should be exercised only by means of conciliation and arbitration. That is essentially different from the judicial power. Both of them rest for their ultimate validity and efficacy on the legislative power. Both presuppose a dispute, and a hearing or investigation, and a decision. But the essential difference is that the judicial power is concerned with the ascertainment, declaration and enforcement.....whereas the function of the arbitral power in relation to industrial disputes is to ascertain and declare, but not enforce, what in the opinion of the arbitrator ought to be the respective rights and liabilities of the parties in relation to each other.
GUMMOW J: But what was the specific issue which provoked this passage?
MR KENZIE: It was the separation of powers argument which was one of the arguments that was along the trail to which the Boilermakers' line of - - -
KIRBY J: Was this because the Conciliation and Arbitration Act provided that the judges of the old court were only appointed for a specific period?
MR KENZIE: Yes, your Honour, that is right.
KIRBY J: This was the very important decision that held that federal judges had life tenure.
MR KENZIE: That is right and, as I say, it is one of the cases along the line leading to the discussion - - -
KIRBY J: Leading ultimately to a referendum.
MR KENZIE: Yes.
McHUGH J: But how do you make use of these cases, because is not the critical question here whether a law which repeals the binding effect of part of an award, or a law which repeals the affected award on certain parties, a law with respect to conciliation and arbitration? Is that the issue?
MR KENZIE: Well, in two ways, your Honour. We have read Alexander's Case for two purposes. Firstly, it is the reminder of the point that I was making in discussion with Justice Kirby a short time ago and, secondly, it is a reminder of the notion or nature of arbitration as something that involves a decision by an arbitrator as to what shall be the outcome of the industrial dispute between the parties.
KIRBY J: Not a decision in part by an arbitrator and in part by legislators.
MR KENZIE: Exactly.
McHUGH J: Yes, I know, but you have to face up to the fact that what this legislation's purpose to do is to repeal the binding effect of the award.
MR KENZIE: Your Honour, I have taken step one. Step two, in answer to your Honour's question, is revealed if I open the Waterside Workers' Case which, in my respectful submission, goes directly to that. But all I have done at the moment is go to, really, the foundational points about arbitration. But an examination of how the provisions of the Federal Act providing for the term of federal awards interacted with 51(xxxv), in fact, took place in the Waterside Workers' Case [1920] HCA 20; (1920) 28 CLR 209. We would invite your Honours to actually go to the authority although we have extracted various aspects of their Honour's decisions in paragraphs 26 to 34 of our written submission.
Could I say this, and this, in our respectful submission, is important? That the decision in the Waterside Workers' Case was complicated by the fact that the members of the Court differed as to the proper interpretation of the provision in question which was section 28(2) and that provision is set out at the bottom of page 233 of the report. Your Honour, it was 28(2) and the words of 28(2) are as follows:
After the expiration of the period so specified, the award shall, unless the Court otherwise orders, continue in force until a new award has been made.
So, it was the provision that dealt with the continuation of the award, your Honours, the whole award - and that is important when we come to read the judgments - until a new award has been made. So there are two points - - -
GLEESON CJ: Was not the provision about the duration of the award part of the award?
MR KENZIE: There was division about that, your Honour. Some members of the Court thought it was and some members of the Court thought that it was simply part of the machinery and it was because - - -
GLEESON CJ: Well, it might have been a matter critical to the resolution of the dispute.
MR KENZIE: It was, your Honour. It was. It was because members of the Court took different views about the very matter your Honour identifies that you get the different results and it is important to an understanding of the decision, in our respectful submission. But, your Honour, there are two things about the provision I just invite your Honours to focus on right at the outset. The first is that it is a provision about the continuation in force of the award.
McHUGH J: But that seems to me to be why the case is quite distinguishable from the present case - - -
MR KENZIE: Yes.
McHUGH J: - - - because this case is not about continuation. It is about the repeal of the binding effect.
MR KENZIE: Your Honour, it is a continuation in force of the award. It is the effectiveness of the award as an award of the arbitrator and it is distinguishable, in our respectful submission, from a provision of the Act that gives effect to the award. It would have been no different if the words of 28(2) had been "the award shall, unless the Court otherwise orders, continue in force and have effect until a new has been made".
McHUGH J: Well, supposing this legislation had merely said "these awards shall not be binding upon the assignees of a business". Would that be valid?
MR KENZIE: Yes.
McHUGH J: Supposing it said "it shall not be binding on members of an organisation". Would that be valid?
MR KENZIE: Yes, because it is not fundamental to 51(xxxv) that disputes be settled with organisations.
McHUGH J: Supposing it said "it shall not be binding on employees or the trade union, but binding on employers".
MR KENZIE: Well, it might - leave aside the trade union. If the machinery selected by Parliament was an empty pronouncement, one might get into the area of debate as to whether it was truly a law for the prevention and settlement of disputes by conciliation and arbitration, but subject to that, there is certainly no vice that is raised by these proceedings, your Honour, in that. That the difference - and it is a fundamental difference, which, in our respectful submission, cannot be ignored - the difference is between the solution chosen by the arbitrator and a solution that is partly chosen by the arbitrator and partly chosen by Parliament. That is the hurdle that has to be climbed by those who would seek to defend legislation giving rise to that result, in our respectful submission.
Could I come to the relevant parts of the judgment. The decision was complicated, as your Honour the Chief Justice really - in the manner suggested by the question asked by your Honour the Chief Justice because the Court members differed as to the proper interpretation of the subsection. The majority, the Chief Justice, Justices Isaacs, Rich and Gavan Duffy, interpreted the subsection as preventing the settlement of disputes by the Court on such terms as the Court thought fit as from the date of the expiration of the term for which the Court settled the old dispute under a prior award. It really is construed as tying the hands of the arbitrator during the period.
In those circumstances, your Honours, the Chief Justice at page 218 point 3 simply regarded the provision as part of the machinery whereby Parliament was imposing a limitation on the court of conciliation to settle industrial disputes and he said at about point 3, point 4:
It is clear that this power -
that is 51(xxxv) -
does not authorize the Commonwealth Parliament to regulate conditions of employment by direct legislation, eg, to prescribe by Act of Parliament the minimum rate of wage to be paid or the maximum number of hours to be worked. It is, I think, equally clear that the power in question does authorize the Commonwealth Parliament to set up a tribunal with plenary and unrestricted power to prevent or settle two-State industrial disputes by conciliation and arbitration. It follows, in my opinion, that the Commonwealth Parliament has power to prescribe by legislation the manner in which, and the conditions on which, the tribunal so constituted shall carry out its functions and exercise the jurisdiction conferred upon it. The Commonwealth Parliament cannot settle a dispute or make an award by legislative enactment, but it has power, in my opinion, to enact that the tribunal which is set up for the purpose of settling industrial disputes shall, if it makes an award, comply with conditions prescribed by Parliament.
So, your Honour, he was a member of the Court that did not treat the term of the award as an essential part of the arbitration. He regarded that as standing apart. There was a division of opinion on this, indeed, a stark division of opinion.KIRBY J: Why are not those last words against you? That is to say that the Parliament can require that it be performed within a certain ambit, it can do so prospectively. Why can it not do so retrospectively?
MR KENZIE: Because in the first place the Parliament is defining the area of operation within which the arbitrator operates and the result of the arbitrator's exercise of power is an arbitration. It is the choice of the arbitrator within the constraints, validly chosen by Parliament. The second is altogether different and constitutionally different, your Honour. The second involves taking as the subject of the legislation the arbitrated result and slicing it up according to Parliament's will.
McHUGH J: You want to throw the whole weight of your argument on the notion of settlement of the dispute but it seems to me that this legislation is dealing with the enforcement of the award and that the legislation as such does not interfere with the settlement. The settlement remains. It is its enforcement that is affected.
MR KENZIE: In our respectful submission, the effect of this legislation is to remove from the equation - that is, if you look at the effect of the legislation in the sense your Honour and other members of the Court were discussing in Kartinyeri, if you look at the effect, not the text necessarily as governing, but you look at the effect of the legislation of the scheme, the effect of this scheme is clear. You start on day one with an award which is totally the result of the arbitrator's deliberations and the effect of this scheme - I am putting this in Kartinyeri terms or perhaps Leask or Fairfax v Federal Commissioner of Taxation terms, looking at the effect of the legislation, the effect of it is to move from day one where you have got the settlement to day two where you have a hybrid, and it is an award with is bereft of the provisions inserted by the arbitrator, no matter how important they were to the settlement.
GLEESON CJ: Did this case decide that you can give awards along with prospective operation they were intended to have?
MR KENZIE: I am not sure I understand. I am sorry, your Honour.
GLEESON CJ: If an award said, "These will be the wages for the next 12 months", does this case mean that Commonwealth Parliament can legislate to say those wages will apply for a further 12 months after that too?
MR KENZIE: Yes, if the - - -
GLEESON CJ: So, you could impose a wage freeze by that technique.
MR KENZIE: Yes, I mean - - -
KIRBY J: That is what led Justice Isaacs, I think, to say that you cannot do that, but that is against the authority of the Court.
MR KENZIE: Yes, your Honour, that is right. Your Honour is identifying the point of debate in the Waterside Workers' Case, the other members of the Court. What led them to disagree with the majority was that they identified the term of the award as very much an important part of the settlement and they said it being an important part of the settlement, it cannot be the subject of legislation, it is not a matter for Parliament. That was the division, and it is an important one. If you pass from the term of the award this case makes it clear unless it is done away with - this case makes it clear that Parliament has no role in relation to things that are legitimately terms of the award in saying they will not apply. Perhaps I could read on, your Honour, and - - -
CALLINAN J: Mr Kenzie, could I just ask you this. I think I understand your argument that you say there cannot be a hybrid, and this is a hybrid.
MR KENZIE: Yes.
CALLINAN J: Can we identify what the hybrid is? It would be the terms and conditions of the award which would fall within the definition of an "allowable matter" as now defined by 89A, is that correct?
MR KENZIE: Yes.
CALLINAN J: And what would be the additional matters that would constitute the rest of the hybrid, because it does not seem to me that Parliament has been prescriptive by 89A? It has merely stated some conditions which would fall within the description of conditions in the two cases you have referred us to.
MR KENZIE: Yes.
CALLINAN J: So that the arbitrator can still arbitrate in respect of those allowable matters.
MR KENZIE: Yes.
CALLINAN J: What is wrong with that?
MR KENZIE: But, your Honour, the arbitrated result that we are talking about here, that these by definition are arbitrated results - - -
KIRBY J: Already arbitrated.
MR KENZIE: - - - already arbitrated and under a scheme that was not limited by allowable matters.
CALLINAN J: But always subject to rearbitration at any time either party, once a dispute arises, the matter would be - - -
KIRBY J: By arbitration.
MR KENZIE: Certainly, by arbitration.
CALLINAN J: By arbitration.
MR KENZIE: Yes, not by legislation.
CALLINAN J: No, but does not the Act, does not 89A not prescribe? It merely says that there may be future arbitrations and that they will be within these boundaries, as it were.
MR KENZIE: Yes, but Item 50 - - -
KIRBY J: You have no complaint about that?
MR KENZIE: None at all. Item 50 then goes further and says, "See, look what Parliament has done in 89A to prescribe the regime from here on. Now we want the old awards that were made by arbitration without the limits of 89A to look like the new ones, and we are going to cut them off to the extent they do not, regardless of the significance of the allowable matters to the settlement".
KIRBY J: And it did not do that by sending it back to the arbitrator to, as it were, rearbitrate. It did it by parliamentary fiat which you say is legislating in respect of industrial conditions which Parliament cannot do.
MR KENZIE: In a word, your Honour, yes.
KIRBY J: Just give me a clue. I do not really understand what happened with award simplification. As I understand it, a very large number of provisions in awards were cut down. Is there anywhere here where we can get some, as it were, overview of how the award simplification operates?
MR KENZIE: Yes, your Honour.
KIRBY J: Not in detail, but just tell us or refer us to where we can see what actually happens. I mean was it a major surgery on the award that your clients enjoyed, or was it a different characterisation?
MR KENZIE: No, it was very significant on the award in question because it dealt with matters that were fundamental in the coal industry, issues of seniority and the right to retain position based upon the number of years in the job and the like.
CALLINAN J: Last on first off, very significant matters to your clients.
MR KENZIE: Absolutely.
CALLINAN J: Sick leave, I think.
MR KENZIE: Preference of employment was also dealt with, preference was a matter that was removed. You cannot complain about its removal, but it was removed from matters that could be the subject of arbitration.
KIRBY J: And you say the package deal which then ensues by reason of Item 50 is not an arbitration within the Constitution or the Act, but is a parliamentary fiat prescribing the award conditions of your clients which Parliament cannot do and this Court has always said cannot do.
MR KENZIE: Always said, your Honour, yes. Your Honour, there are perhaps two answers to your Honour's question. The award simplification process as a process is a significant industrial process. The current status report issued by the Commission on 30 September shows that about 741 awards have been through the process and another 1,224 are currently being simplified, so there are a large number of awards either processed or still to be processed under this matter.
KIRBY J: I suppose one can test it thus: that on this occasion the Parliament has done it by, as it were, taking out items from the award, but one has to ask what occurs if the Parliament has a new Item 50 that adds many provisions to an award?
MR KENZIE: I have already put that submission, your Honour, and it would be indistinguishable, in my view, and would strike at the foundations of section 51(xxxv), in my submission.
KIRBY J: You cannot have one without the other. You cannot take it out and not put it in.
MR KENZIE: Absolutely. Could I, as briefly as I can, come to the other decisions in the Waterside Workers' Case. Justices Isaacs and Rich dissented - their judgment is extracted in part in paragraph 29 of our written submission - and they considered it clear that part of the award was the time for which it would endure, and that because they considered that it was part of the award, 230 point 5, they thought that Parliament could not make any provision that dealt with it. It was a matter for the arbitrator. At the bottom of page 232:
The words in sec. 51 which precede the enumeration of powers, namely, "with respect to," are words not of enlargement but of indication. They indicate that you are to look to the following enumeration to see the actual subjects of power. Among them is pl. xxxv., which has to be interpreted as it stands according to its own terms, which bear their own limitations. Parliament has no more power to enlarge the meaning of "arbitration" than it has to enlarge the meaning of "industrial disputes" -
and so on. So their Honours clearly held that once you regarded that item as part of the award, it was a matter for the arbitrator. Your Honour, the other significant thing is, this is the whole award we are talking about here. We are not now talking about breaking up the award in a way that suits Parliament. This is the whole award their Honours are talking about. Justice Higgins, one of the members of the Court who considered that the provision did not prevent the settlement of disputes by the Court as and from a date fixed by the Court for the award's expiry, saw a distinction between a provision stating the duration of an award and one fixing the terms of settlement of the dispute. We have extracted the relevant part of his Honour's decision in paragraph 31 of our submission. His Honour was impressed by the words "unless the Court otherwise orders" which was part of section 28(2), so that 28(2) always gave, in his Honour's view, a discretion of the court, as it then was, to make a contrary decision by arbitration. But if your Honours would be good enough to turn - - -
McHUGH J: Why do you keep throwing the weight of your argument on settlement? It is a power not to make laws with respect to the settlement or the prevention of settlement, it is a power to make laws with respect to conciliation and arbitration form. So the reason why the Parliament cannot directly prescribe conditions of employment is because it has no power to arbitrate and no power to conciliate itself. It can only make laws for those things to be done.
MR KENZIE: No, your Honour. We do not much care where in the order of debate the references to conciliation and arbitration come in. Whether they are looked at first or second, they are words of limitation and have been construed as such consistently and cannot be left out of account.
McHUGH J: But from your point of view it seems to be easy to say that this repealing legislation is not a law with respect to conciliation or arbitration, rather - - -
KIRBY J: I thought you did put that.
MR KENZIE: I did, I do.
KIRBY J: So you say you cannot characterise it as such?
MR KENZIE: It cannot be characterised as a law relating to conciliation and arbitration.
KIRBY J: With respect to.
MR KENZIE: With respect to conciliation and arbitration.
McHUGH J: Conciliation and arbitration are the operative words; the other words are adjectival really.
MR KENZIE: No, no, but cannot be ignored, your Honour. It is conciliation and arbitration for the prevention and settlement of industrial disputes; in other words, it is relevant conciliation and arbitration, and those words do not disappear from the equation.
GUMMOW J: His Honour is not suggesting they do, Mr Kenzie.
MR KENZIE: No.
GUMMOW J: He is trying to focus you on the front door and you keep looking at the back door.
MR KENZIE: Well, your Honour, we have submitted something about the front door; we have said it is not a law for the prevention and settlement of disputes, because that contemplates the process discussed by the Court in Waterside Workers. Could I just ask your Honours to look at page 242 in the judgment of Justice Higgins and at about point 7 his Honour says, about four lines down into the last paragraph:
It is agreed on all sides that Parliament cannot affirmatively or directly prescribe conditions of employment by its own enactment; but it can make any laws that it thinks fit "with respect to" conciliation and arbitration. Here Parliament does not even say that a certain minimum rate shall "continue in force," but what it says is that a certain award shall continue in force.
His Honour is drawing the distinction between Parliament nominating a part of an award and Parliament looking at the award, the subject of the exercise. His Honour says:
It is unnecessary in this case to decide how far Parliament can put limitations and conditions on the power of the Court which it creates to prescribe the terms of settlement of the dispute; for in this case all that Parliament has done is to state the duration of the award, not any terms of settlement of the dispute.
It may have been unnecessary for his Honour to add this, but, in fact:
The duration of the award was not one of the industrial matters in dispute.
But one might think that that did not bear upon the more general debate, but, in any event, his Honour said that.
GUMMOW J: It looks as if from what Justice Higgins says at page 243 about point 3, that this case started out as a case of construction not validity.
MR KENZIE: Yes, it certainly did, and it in a sense ended as a case of construction too, your Honour. Justice Gavan Duffy agreed with the Chief Justice. Justice Powers dissented. He would have held that the provision was valid on the construction that he and Justice Higgins preferred, but on the construction accepted by the majority, his Honour thought that the provision was clearly invalid. In other words, once you moved to accepting it as part of the settlement, it was invalid.
Justice Starke agreed that the term of the award was in many respect a material factor in the dispute, but he did not think that that consideration affected the question. As his Honour put it at page 253 point 2, the question of whether:
the prescription.....the character of a law with respect to, or in relation to, or, if you will, upon the subject of arbitration.
And, your Honour, it might be said that his Honour was focusing on the question of whether the matter was a law "upon the subject of arbitration", whereas other members of the Court were focussing on the question of whether it was a law with respect to the prevention and settlement of disputes by conciliation - - -
GUMMOW J: But why do you say an Act with respect to the repeal of all awards would be an act within the meaning of section 51(xxxv)?
MR KENZIE: Yes, your Honour, it would be difficult to argue - - -
GUMMOW J: I thought you said that would be valid.
MR KENZIE: It would be valid.
GUMMOW J: Why? Why would it be an Act for the conciliation and arbitration?
MR KENZIE: No, your Honour, it would be valid because it would be identifiable as a provision that did no more than to do away with the effect of the legislation giving awards effect.
HAYNE J: Does not this bring us to the central point, or a central point, in this case? The present case does not concern the processes of conciliation or arbitration, it concerns the legal effect that is to be given by statute to the outcome of those processes. That is the focus of the present case, is it not?
MR KENZIE: As it was in the Waterside Workers' Case, your Honour.
HAYNE J: Yes, and the provisions in question are characterised against you in this way, are they not? Certain arbitrated provisions, that is, certain provisions representing the outcome of a process, were given a particular legal effect by Parliament.
MR KENZIE: Yes.
HAYNE J: Parliament now says that some, but not all, of those provisions are not to have that legal effect.
MR KENZIE: Yes, and if that is able to be - - -
HAYNE J: The questions becomes: how far does 51(xxxv) go to permit giving or withholding effect to the outcome of processes?
MR KENZIE: Yes, your Honour, but we would have no complaint, nor could we have complaint, if the legislation could be described as in truth undoing what Parliament did. Kartinyeri would be applicable. The central point in the case, if I might venture this, your Honour - - -
HAYNE J: But the undoing you complain of is partial undoing. Is that not the core of your complaint?
MR KENZIE: Yes, your Honour, but it has a dimension other than partial undoing, if I can put it that way. There are two aspects. It is impossible to characterise the legislation that leaves you with the hybrid that we have described as a partial undoing of the legislation which creates a general arbitrated result and says there it is. If you cut it in half, or cut it in one does not know what, it is not, relevantly, simply part of a whole. It is a new - - -
HAYNE J: So the only effect Parliament can validly give to the outcome of processes is complete effect or no effect. Is that where the argument takes you or does it - - -
MR KENZIE: In terms of settlement, it takes one there, yes.
KIRBY J: I thought you had a fall-back position that if the change is to so alter the outcome that it is a different product - this is the hybrid type argument - then it is not a law with respect to conciliation and arbitration.
MR KENZIE: Yes, your Honour, but the last point that was left untouched in Kartinyeri which - - -
GLEESON CJ: If that proposition is right, then what Justice Starke said on the bottom of page 252 and the top of 253 was wrong.
MR KENZIE: Well, yes, your Honour, but his Honour did not seem to see the problem that the rest of the members of the Court did in - - -
GLEESON CJ: He said, "I don't care whether the duration of the term of the award was an important part of the resolution of the dispute or not".
MR KENZIE: I accept that, your Honour. His Honour certainly did not - I accept that. Can we say this, that at least two things emerge from the decision in the Waterside Workers' Case. Firstly, it is clear that the provision was only saved because some members of the Court, certainly Chief Justice Knox and Justice Gavan Duffy, did not relevantly treat the term of the award as part of the resolution of industrial dispute, but only as part of the machinery. Plainly, we submit, if the subject matter of 28(2) had been the term of a settlement of dispute, and regarded as such, the Court would have struck the provision down, in our respectful submission.
The second thing we ask the Court to note is that it was a debate about the continuation of the effect of an award and that is a provision that has a relationship with the sort of thing that is done in Item 50. Our further submission is that you could not say that Item 50 was valid even if Item 50 is considered alone without doing violence to the decision of all members of the Court in Waterside Workers' other than Justice Starke.
GUMMOW J: Suppose this Act is so constructed that there was deemed always to have been absent a capacity to bring about an award containing these allowable award matters so that it was retrospective, rather than simply prospective.
MR KENZIE: If the legislation was able to be perceived by that means as a device, really, for achieving the sort of end that has been achieved, then the effect of the authorities, in our respectful submission, would be that the Court would look at, not the text, but the effect of what Parliament has sought to achieve. That was our reference. We have not given the particular references before, your Honour, but that was the source of our reference to authorities such as Leask and Fairfax and the like, and Kartinyeri. You look at, not the text - for the purposes of characterising a law you look at its substance and the substance of its effect, and the substance of the effect of this is to take you from day one to day two, and you have two different animals. On day one you have an award with effect selected by the arbitrator, and on day two you have not, you have a different animal selected by Parliament as well as the arbitrator. At best for our opponents it is selected by both. At worst for them it is an animal selected by Parliament in the wake of the arbitrated result.
KIRBY J: I realise you are putting this at a level of theory, but it might be helpful for me to get a concrete idea. If after lunch you can say where I can find what was the award as it originally was, and what is the award as a result of 51.
MR KENZIE: Yes, your Honour. We have not focused on that but the departure from our argument under 51(xxxi) we have not focused on the actual effect.
GLEESON CJ: Is not a convenient place to find that in the decision of the Full Bench?
MR KENZIE: Yes, your Honour.
GLEESON CJ: They focused on two clauses, did they not?
GAUDRON J: That was the appeal. A lot more had gone before that, had it not?
MR KENZIE: I am sorry, your Honour?
GAUDRON J: Other provisions had gone before it got to the Full Bench, had it not?
MR KENZIE: Yes, one needs a wider appreciation of what had happened to the award. Is that a matter I might deal with after the luncheon adjournment, your Honour?
KIRBY J: Yes, yes.
MR KENZIE: Now, your Honours, could I pass beyond - - -
GUMMOW J: So the answer to my question is that would be invalid as well?
MR KENZIE: Yes, I am sorry. The proper answer to your Honour's question was, if it could be so categorised as giving rise to the same result, and that would be the search, then the same result would flow.
GUMMOW J: So, if 51(xxxv) has within it some exception to Kidman's Case, does it?
MR KENZIE: It is not so much an exception but a matter of proper characterisation of the legislation. If the legislation is properly characterised - and, your Honour, one is dealing with hypotheticals - but, if you looked at the legislation with a deeming provision and looking at it you were satisfied that it was an attempt by a device to achieve this result, then one result would follow, if you were not then a challenge would be unsuccessful, but it would be a matter of looking at the substance of the legislation.
GLEESON CJ: But if an Act of Parliament that says "for the future, awards may not deal with the subject of superannuation, has the character of a law with respect to conciliation and arbitration", et cetera, why does not the law that says "and provisions of past awards dealing with that subject will have no effect" bear the same character?
MR KENZIE: Well, your Honour, because they are two different things. Because the first is a provision that deals with the parameters within which an arbitrator works and the second is a provision that takes the result of the arbitration and turns it into something that is partly selected by Parliament and partly selected by the arbitrator and - - -
GUMMOW J: It is only selected by the arbitrator because - arbitrators do not come from heaven. It is only selected by the arbitrator because he is an officer of the Commonwealth acting under an Act.
MR KENZIE: Yes. Your Honour, if - - -
KIRBY J: But the law is, is it not, that arbitrators in disposing of - settling disputes, can add provisions, that they are not bound strictly and only to the matters that the parties claim would count?
MR KENZIE: As long as they are reasonably related to the industrial dispute.
McHUGH J: Yes, and you say it is a mistake to just concentrate on conciliation and arbitration or.....and settlement. It is a whole compound perception. You have got to look at the dispute as well, which is important. So if the dispute was whether or not workers should get $300 a week rise and the arbitrator said, "I will give them $150 a week and reduce their working hours by two hours a week," Parliament could not then come along and say, "So much of the award says that the hours reduced is enforceable."
MR KENZIE: Yes, your Honour, and, indeed, can I pick up your Honour's example. We had rather thought of - - -
McHUGH J: But you would say Parliament has then - what is left is no longer what was authorised under 15A?
MR KENZIE: Yes, and we have looked at it rather in the context of a manning dispute and a question of hours. A claim for manning - - -
GUMMOW J: But why does that not pull the whole down? You have got to face up to that, Mr Kenzie.
HAYNE J: It takes the whole award out, does it not?
McHUGH J: No, you would say what it knocks down is the legislation seeking to have that effect on the award.
MR KENZIE: Yes, your Honour.
McHUGH J: The original award stands. It is what Parliament subsequently seeks to do that falls.
MR KENZIE: Yes, your Honour.
GAUDRON J: But how do you reach that latter conclusion is what interests me.
MR KENZIE: We reach it because the Act, the provision, Item 50, is discernibly invalid, as we put, and - - -
GAUDRON J: No. Item 50 is just an item. You have got to go back to section 3.
MR KENZIE: But taking your Honour's point, the - - -
GAUDRON J: And you have to read that down some way.
MR KENZIE: Yes.
GAUDRON J: And the only basis you have got for reading it down is section 15 of the Acts Interpretation Act, is it, 15A?
MR KENZIE: Yes, that is so. I mean, we have not really considered the arguments of severability in terms of section 3.
GAUDRON J: Well, that is where it comes to on - - -
GUMMOW J: I do not think you can escape it.
GAUDRON J: That is ultimately, I think, crucial to your case.
GUMMOW J: One is going to have to write a judgment, Mr Kenzie.
MR KENZIE: Well, if we are right and - - -
GAUDRON J: You see you say it may also depend upon every Act. Now, are we looking at the amending Act in isolation for the purposes of this or do we look at the Act as amended?
MR KENZIE: We have put it, and we have not yet come to Kartinyeri, that the invalidity is discernible and you are looking at the amending Act and we turn to Kartinyeri - - -
GAUDRON J: But why? That is - - -
MR KENZIE: Because it is discernibly invalid because it seeks to create something that Parliament cannot create. It is not like Kartinyeri where you had the creation of a power to make a ministerial reference in general circumstances and it was removed in one such case. You could then say that is an amendment or a repeal and then you get to the debate which was had in Kartinyeri as to whether you are looking at your Honour's point or whether you are looking at the amendment but where you are looking at something not like Kartinyeri but where you are looking at something which has discernibly got a vice, on its face, which we submit is the case here, then - - -
GAUDRON J: That all has to be related at some time, I should imagine, to section 15A of the Acts Interpretation Act.
MR KENZIE: If it leads to invalidity in section 3 terms, then it may have an impact - whether it is severable is maybe more a matter for our friends but it is - - -
GAUDRON J: No. You have come here seeking prohibition and you have brought the proceedings. It is your job to think your argument through.
MR KENZIE: If the effect of what we have put is that section 3 has a vice, then section 3 has a vice and if it is not severable - - -
GAUDRON J: No. The effect of what you put may be that a variety of the provisions as they stand by an implied repeal or amendment are invalid.
MR KENZIE: Yes.
GAUDRON J: That may be the problem that you go right back to the principal Act, you determine its operation and say, "Well, as a whole, as they operate now, these sections are no longer laws with respect to the conciliation and arbitration".
MR KENZIE: The Workplace Relations Act provisions, in so far as they are affected by Item 50, are no longer because they are invalid.
GAUDRON J: Yes, are no longer. Then they fall. But it depends on section 15A.
MR KENZIE: Our submissions have been founded - I keep saying that I will come to Kartinyeri - on the basis that we can discern a vice in the amending Act and we say that the appropriate focus is on the amending Act.
GAUDRON J: But that does not stand alone. It is not a separate law, is it? It does not have any effect except in so far as it bites on the first Act.
MR KENZIE: Well, your Honour, there are passages in Kartinyeri that are to the effect that if you can discern invalidity that that is an approach, that is a relevant search and can be made without regard to the process of inflation of the two provisions and we have - - -
McHUGH J: A clear example would be if the Parliament sought to amend the Act by providing for common rule throughout the industry.
GAUDRON J: Yes.
MR KENZIE: Yes. But, again, it would be something that gave a new effect beyond that which was found anywhere in the legislation. Our submission, and we cannot really make it any better, is that this is, although in different terms, something to the same effect because it does bring about a new thing and the proper focus of the debate is that new thing.
GAUDRON J: But the question really is Parliamentary intention. Did it intend to leave the old thing in place? Answer: no. So, it tended to bring about a new thing - this is one way of putting it. In terms of the reading down, you search for the intention of Parliament, and: did it intend to leave the old thing in place? Answer: no. Can it bring about the new thing? No. Therefore, it all goes. That is one way of looking at it.
MR KENZIE: Yes, that is one way of looking at it, your Honour, and indeed, in Kartinyeri some members of the Court looked at it both ways. In our respectful submission, a proper understanding of that decision leads to the conclusion that it was appropriate to examine Item 50. I have really put the submission, your Honours.
CALLINAN J: Mr Kenzie, I am sorry to go back to the this, but the Parliament has taken away certain provisions of the award, there is no doubt about that, but it has not actually prescribed any new provisions, has it?
MR KENZIE: No.
CALLINAN J: So, really, the only effect is an effect of a repeal with the possibility of new provisions, so long as they are allowable award matters. Is that right?
MR KENZIE: Your Honour, we would resist the notion that we are talking about repeal here, your Honour.
CALLINAN J: I know that. All right, well, delete reference to "repeal" and use some neutral word. The effect of the legislation, if it is effective, is to delete certain provisions of the existing award.
MR KENZIE: Yes.
CALLINAN J: But the legislation itself does not add any new award provisions.
MR KENZIE: No, your Honour, but it - - -
KIRBY J: Your point is, as I took it, taking Justice McHugh's example, that the end product of a deleted award is an entirely different beast.
MR KENZIE: Exactly, and the second thing is that it is indistinguishable, constitutionally, from a provision that says, "go the other way".
CALLINAN J: It may well be so but you do seem to accept that legislation could have been enacted to repeal existing legislation and to provide that the whole of the award could cease to have any effect.
MR KENZIE: Yes, your Honour, the whole could have been removed. There could be no complaint because what you had left, you could not look at something there and say, "Well, that is something that does not look like a law with relation to conciliation and arbitration", but here what you have left is something that falls into a different bucket.
CALLINAN J: You say, on any view, it is not an arbitrated result.
MR KENZIE: That is right.
CALLINAN J: It ceased to be arbitrated result, is that the argument?
MR KENZIE: Yes, your Honour. Your Honour, could I come to Victoria v The Commonwealth 187 CLR 416. This is relied on by the respondents as suggesting that the Court has thrown its weight behind provisions requiring reviews of awards in a relevant sense. The provision in question in Victoria v The Commonwealth was section 150A and was summarised at page 527 of the report at the top of the page. Section 150A(2) required the Commission to:
remedy any deficiency identified in the review process by taking "the steps (if any) prescribed by the regulations". Section 150A(3) authorises the making of regulations prescribing steps which "may include varying the award after giving any party to the award who has a genuine interest in the matter an opportunity to be heard".
There were regulations made and one of the regulations was set out or summarised on page 527 as involving the allowance of parties and interveners:
to be heard and, thereafter, must remedy the deficiency by varying the award or taking such other action as it considers appropriate.
That is the Court's summary of the provision. Now, what brought the challenge forward before the Court was the suggestion by the Western Australian Government that section 150A(2), read strictly, would have authorised a variation of the award which took it beyond the ambit of the relevant industrial dispute, and the Court read down the provision to avoid that result, and at 528 at about point 4, the Court said that:
the first step is to determine whether, as contended for by the State of Western Australia, the Commission may be required to vary an award in such a way that it no longer has a relevant connection with an interstate industrial dispute. As already indicated, that would result in invalidity.
Just pausing there for a moment, if the Commission was required to vary an award to deprive it of any connection with the industrial dispute, then there are questions of invalidity able to be avoided in that case by reading the legislation down because it was concerned with deficiencies and the like. There are some difficulties involved in reading the legislation here down in that way because of the whole context in which the legislation appears. The legislation does not manifest any intention to choose as between awards. The whole focus of the legislation is to bring the old, whatever it is, as long as it has no non-allowable award matters in it, into line with the new. But lurking behind the construction point was the question of whether, leaving aside that argument, a provision such as this would have been valid.
We submit that - and we take this up in our written submissions - the provision in question was completely distinguishable from the sort of provisions we are dealing with here. The passage in question is at 529 of the Court's judgment at about point six:
It was not argued that it was beyond the power conferred by s51(xxxv) of the Constitution for the Parliament to legislate to require regular revision and variation of awards to reflect current industrial standards, so long as the award as varied retains the required connection with an interstate industrial dispute. Nor, in our view, is such an argument open. A law requiring regular review and variation, within the limits indicated, is clearly a law with respect to conciliation and arbitration. And it makes no difference whether the direction to vary is expressed in terms of industrial standards generally or, as here, is directed to some specific matter which may pertain to the relations of employers and employees.
There can be no quarrel with that, of course. What we have to say about it is that there can be no complaint about the Parliament requiring a process of review and requiring the Commission to look at whether awards meet the current industrial standards. So for example, it would have been appropriate and valid in the present case for the Parliament to have said, we have a new set of objects in the Workplace Relations Act post-1996 and it is a requirement that the Commission look at those objects and give attention to the question of whether the award should be modified to accord with those objects, and no complaint could have been made. But the complaint is that that is not what Parliament did.
Parliament has acted in a way that has no relationship to the relationship between the expunged provisions and the settlement of the industrial dispute. It simply said, these are the matters and they will go out of the award. It is distinguishable and relevant only because it provides some indication of some of the difficulties that underlie Item 50, unless it is construed in some way so that it is read down so as not to allow the Commission to take a result outside the ambit of the dispute.
McHUGH J: Is not the fundamental principle for which you contend really set out in the judgment at 528 which relate the Commission's powers but must apply - about point two on the page:
Ordinarily, the question asked with respect to the variation is whether the variation is valid. That is a convenient course if, as is almost always the case, the variation can be severed from the award. But the fundamental question is that of the relationship between the award, as varied, and the dispute. And because that is the question, it is always necessary to relate the Commission's power to vary awards to the conciliation and arbitration power.
MR KENZIE: Yes, your Honour, and they said that that is the principle. This does not do that, this does not strike at that principle.
GAUDRON J: But you say an analogous principle applies where it is a legislative change to the award - a legislative variation.
MR KENZIE: It must. It cannot get better because it is the legislature that has devised the change. It is worse.
KIRBY J: Except that it is the power that is given by the Constitution is to the Parliament to make laws with respect to and the question is, is it with respect to the original dispute and the settlement of the original dispute for Parliament to come in later and, in view of its high objectives, to, as it were, get into the detail of the award?
McHUGH J: It is not merely with respect to the dispute. It must be with respect to the conciliation or arbitration for the settlement of the dispute.
MR KENZIE: That is right, and the legislation pays no regard to that, in our respectful submission.
KIRBY J: Unless it is with respect to it because it is dealing with it as it was originally. I mean, take 51(xxxv) plus (xxxix), and you have a very large conundrum of power.
MR KENZIE: Yes, your Honour, could I answer that in two ways? Firstly, if what we have put so far in relation to the Waterside Workers' Case and everything that it stands for is put to one side, then one could understand that being said, but you could not get to that conclusion without doing violence to the decision of the court in that case, in our respectful submission. Justices Isaacs and Rich looked at the words "with respect to" and said that they would not get you to the stage of alteration affecting, parliamentarily, the whole award.
How could they get you to the stage of picking and choosing a few terms? They could not do it, and things are no better if you start to talk about 51(xxxix). It cannot be incidental to the prevention and settlement of an interstate industrial dispute to provide that only part, designated by Parliament, of the settlement will prevail and have relevance, have effect. That cannot be regarded as incidental for the prevention and settlement of a dispute.
CALLINAN J: Mr Kenzie, does 89A(1)(c) have anything to say about this aspect? It provides that:
an industrial dispute is taken to include only matters covered by subsections (2) and (3) -
which would be allowable for award matters and then, (c):
maintaining the settlement of an industrial dispute by varying an award or order.
MR KENZIE: Yes, well that takes one back to the point that was made by Justice McHugh. I mean, it does not get any better if you are talking about varying the industrial dispute and maintaining the settlement. If the arbitrator has achieved a settlement, a statutory provision that says only this bit will remain, which might have no relationship to the central plank of the settlement, cannot be seen as legislation that is supportable - - -
CALLINAN J: You say it neither settles nor maintains the settlement of - - -
MR KENZIE: It has got nothing to do with having any focus on the settlement or maintenance of a dispute; it makes that entirely irrelevant.
KIRBY J: Well you could say it is the settlement of the dispute, but within parameters which retrospectively Parliament has said for its own high objectives. I mean, we have to test this against the objectives the Parliament has here and other objectives which may be - I mean, it is not for us to judge the desirability of the objectives.
MR KENZIE: Certainly not. They may be the most worthy objectives here, but the question is, is it constitutional, of course, but the reason - - -
GUMMOW J: This power is concurrent, is it not? It is not an exclusive federal power, is it?
MR KENZIE: No, your Honour.
GUMMOW J: Well, do you say it is open to a State Parliament to pass an order to this effect, of the law which you say the Commonwealth cannot?
MR KENZIE: Yes.
GAUDRON J: Well, in relation to a federal award though?
MR KENZIE: No.
GUMMOW J: Why not? So no one can legislate; you have achieved the ultimate of an inviolable law, have you?
MR KENZIE: It is not inviolable, with respect, your Honour; the award has the - - -
GAUDRON J: You say you can repeal it in whole?
GUMMOW J: Just tell me why the State cannot do it, in terms of constitutional principle? Why is it beyond the concurrent State power?
GAUDRON J: Once there is an award.
MR KENZIE: If the legislation gives the award effect to the extent that is chosen by the federal Parliament, then section 109 considerations would arise as to whether Parliament has intended to cover the field in relation to the coverage and force of federal awards.
GUMMOW J: That is right and it has covered the field and it covered it in cement so far as the Commonwealth is concerned; is that right?
MR KENZIE: Yes, but one assumes validity for the purpose of answering your Honour's question. We say it is not validly.
McHUGH J: Does this legislation contain a provision that was in the earlier legislation that no State law or award inconsistent with an award shall be - - -
MR KENZIE: We put that provision into our chart, actually. It is 152 and it has been modified to take account of State laws providing for designated subject matters. So, under the old prescription section 152 was the sort of provision that was examined in cases like the Metal Trades Case, which your Honour would be familiar with; Duncan's Case and the like. The provision that actually tells you what the rules are in relation to a federal award. That has been modified now in the manner that is indicated in our chart to make it clear that federal awards are not intended to cover the field with respect to certain designated matters; to leave State Parliaments free to make various kinds of laws in relation to unfair dismissals and matters like that.
GUMMOW J: Have you not achieved the result that you have an award which cannot be touched in this fashion by anybody or any legislature?
GAUDRON J: Except by the arbitrator.
MR KENZIE: That is right.
KIRBY J: Or by total - - -
MR KENZIE: Repeal or the arbitrator, your Honour.
GUMMOW J: The arbitrator is only acting under another Act.
HAYNE J: And that notwithstanding the award is expired by effluxion of time?
KIRBY J: That could be taken away too.
MR KENZIE: That is right. There is no doubt that Parliament could repeal the equivalent of section 28(2), that dealt with the extent and duration of awards. Your Honour, we have put our submission, it is not inviolable. It certainly can be affected by arbitration and it can be affected by repeal but it cannot be dealt with by this third method. But it does not mean that it is a counsel of despair, that nothing can be done.
GLEESON CJ: Is that a convenient time to - - -
MR KENZIE: Yes, your Honour.
GLEESON CJ: We will adjourn until 2.15 pm.
AT 12.45 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.16 PM:
GLEESON CJ: Yes, Mr Kenzie.
MR KENZIE: Thank you, your Honour. Could I go back for a moment, briefly, to remind the Court of the matters dealt with in paragraphs 38 to 40 of our written submission. That is a summary and some extracts from the decision of two members of the Court in the Amalgamated Engineering Union Case. I do not think the Court needs to go beyond our written submission for this purpose. In the case which is summarised, relevantly, in paragraph 38 a question arose as to whether if Parliament had in fact mandated not a particular award provision but a particular method of determining wage outcomes it had the power to do so. So, we were not in the territory here of getting down to the tintacks of what a particular provision would be that would be inserted in the award but the methodology that would be used to resolve an industrial dispute.
Two members of the Court attended to that question but the other members of the Court did not touch upon it. We have extracted those parts of the judgment of Chief Justice Barwick and Justice Windeyer which inform that such an attempt would be attended with invalidity because it would effectively deprive the arbitrator of the discretion to resolve the relevant industrial dispute. We have extracted the parts of the judgment, your Honours, and I do not read it but I ask the Court to note what their Honours had to say there and submit that it is entirely consistent with the approach to the case that the prosecutors have put forward.
KIRBY J: Most of the cases in the past have been cases of Parliament trying to barge in to industrial matters; here Parliament is trying to barge out, but I suppose you say that by what it is doing it is altering the composition of the award.
MR KENZIE: Yes, both have the impact and the question of whether they have the relevant constitutional impact is not dependent on the question of whether one is talking about a particular award provision. Arbitration as contemplated by section 51(xxxv) contemplates the capacity of the arbitrator to determine and exercise a general discretion always within the parameters of the legislation as to how the dispute that the legislature has allowed to be put before him or her is to be dealt with, and the judgments in the AEU Case are informative in that regard.
If I could then make one further submission about the submissions mounted against us by the Commonwealth and the second respondent which are to the effect that Item 50 does no more than alter or modify the effect of federal awards and it is generally open to the Parliament to determine what effect is to be given to the awards that it creates, the award is a factum and that is what has been selected by Parliament as the means whereby disputes will be resolved under the Act. Another means could have been selected, but Parliament has selected awards; they are given whatever effect, so it is put, that Parliament has determined, and it is basically up to Parliament to determine that effect.
May we put the submission that that is an oversimplification. That approach, indeed, treats the award as nothing, effectively, more than a piece of paper. It is an approach, we do respectfully submit, that is inconsistent with the approach in the Waterside Workers' Case and inconsistent with the notion that a law which provided that an arbitrator's award was to be given effect as a common rule throughout an industry would be invalid.
GAUDRON J: That relates to the notion of arbitration, does it not? But I am just wondering if there is not something similar in operation here. That is to say that it would not be a law with respect to arbitration, at least, if an award had no effect.
MR KENZIE: Yes, we would put, at one end of the spectrum, and I think we suggested as much this morning, that that would be certainly arguable, your Honour. That if you erected a mechanism that gave rise to some form of result that had no legal operation, it could be said that it did not answer the description of a mechanism that prevented or tended to the prevention and settlement of industrial disputes because it was a nothing in a sense.
GAUDRON J: But would it not be by reference to the notion of conciliation and arbitration, or at least arbitration? There might be different considerations for conciliation.
MR KENZIE: It might be said, your Honour, to be relevant to the question of whether the legislation tended to the prevention and settlement of industrial disputes but we would respectfully submit that a law which provided that an arbitrator's award was, for example, to be given effect as a common rule throughout an industry would clearly be invalid as per Whybrow, but it would not be invalid - - -
GAUDRON J: But why is it invalid?
MR KENZIE: It is not invalid because it did not or may not tend to the prevention of further industrial dispute but, as we would put it, because it would not be a law for the prevention and settlement of those disputes by conciliation and arbitration and we say that that suggestion comes from Whybrow itself. Could I give your Honour a reference to that and that emerges from Whybrow [1910] HCA 53; (1910) 11 CLR 311 at 338. Your Honours, likewise, the law which takes the arbitrator's award designed to settle a dispute and give it selective effect is not a law for the prevention and settlement of any dispute by a process of conciliation and arbitration, and the fact that such a law might tend to the prevention and settlement of a dispute will not save it. The passages in Whybrow we had in mind included those at 338 point 6, where - - -
HAYNE J: It must be 38, is it?
MR KENZIE: Page 338.
GUMMOW J: The case begins at page 1. Mr Kenzie, while that is being found - and this is related to what you are saying, I think. Take the present situation. If a fresh dispute is to break out and if that went through the processes, that could produce a new award, could it?
MR KENZIE: Yes.
GUMMOW J: And that could not have in it these matters which are now removed from the old award?
MR KENZIE: Could not have, I am sorry, your Honour.
GUMMOW J: Could not have in it that which has been taken out of the old award.
MR KENZIE: That is so.
GUMMOW J: Why is not what is being done here preventative in that sense?
MR KENZIE: Effective?
GUMMOW J: Prevention.
MR KENZIE: Because the award is not the dispute. The fact that things can or cannot be included in the award is not relevant to the question of whether a dispute may in fact occur in relation to those matters, your Honour.
GUMMOW J: When is anything ever going to be valid as for prevention?
MR KENZIE: There are passages in the authorities, I think O'Toole's Case, your Honour, which suggests that the notion of prevention, may go a very long way - - -
GUMMOW J: Wooldumpers, I think.
MR KENZIE: Wooldumpers, yes, your Honour, those passages. But we would submit that they do not - a question of whether a fresh award could or could not be made and the limitations that might apply in relation to any such award that is made in exercise of the power under 51(xxxv) do not bear upon the question of the validity of the provision that says out of the old award you must take these things. We would submit they are separate questions. True it is that Parliament could select a width of section 89A that suited itself and thereby widen the scope for prevention, but whether it could do that or did that does not bear upon the validity of anterior steps for the purposes of this argument, removing without relevant involvement of the arbitrator from the old award without any regard to the question of whether it tends to the prevention and settlement of any further dispute, provisions which are selected for their subject matter and nothing else.
KIRBY J: The question Justice Hayne asked you is a question that occurred to me, that there are two Whybrow Cases in volume 11 and the one you want is the second one.
MR KENZIE: Yes, I am sorry, your Honour.
KIRBY J: I think some of us have the printout of the earlier case. It is 338 you are taking us to, is it not?
MR KENZIE: It is the case that commences at page 311 and at 338, and the passage we had in mind was Justice Isaacs saying:
Where both end and means are strictly marked out, there is no right either to use other means to attain the specified end, or to use the specified means for unauthorized ends.
And that:
It is not open to the grantee of the power actually bestowed to add to its efficacy, as it is called, by some further means outside the limits of the power conferred, for the purpose of more effectively coping with the evils intended to be met.
That passage was picked up and referred to with approval by a Full Court in Kelly's Case [1950] HCA 7; (1950) 81 CLR 64 at 80. That was by the Full Court, of course.
We say that it is not an appropriate or sufficient answer to our case to say that one is talking about the question of effect of awards, and one can effectively put down the glasses. One was talking about the same thing in Waterside Workers, and the result we have indicated, and the same would apply in relation to common rule provisions, which after all are provisions dealing with the effect of an award. Further questions need to be asked, namely, are they provisions of effect of awards answering the description in 51(xxxv).
Could I then come to the question of asserted partial repeal, or amendment, and make some submissions about Kartinyeri. Firstly, it is asserted against us that all that has happened in relation to Item 50 is that there has been a partial repeal of provisions like sections 148, 149, 178 and 179. We have already put during the discussion this morning that our submission, at least, is that that is not a correct characterisation of what has happened, and that Item 50 stands as a substantive provision affecting awards and creating a new species of award, and is not in the same category, for example, as that discussed in Kartinyeri.
If Item 50 stands, the awards of the Commission are varied in their effect as contemplated by Item 50, but the provisions of the Act themselves remain unaffected. It has the same effect as if the Commission, for example, varied the award.
HAYNE J: Confining attention to Item 50, how does that item have that effect, an effect of variation?
MR KENZIE: Because it constitutes the award as one that is effective only to the extent chosen by that part of it, whereas the - - -
HAYNE J: That is, it varies the effectiveness that is to be given to the award?
MR KENZIE: Yes, it has that effect, but it goes beyond it, in our respectful submission. It creates out of the arbitrated result a mixture as between the result selected by the arbitrator and the result selected by the Parliament. We have suggested in paragraph 46 of our submission in reply that if, on the other hand, Item 50 was said to be a repealing position, your Honour - it is our submissions in reply at page 11 - then it would repeal that part of 148 that gives the whole award continuing effect so that it might be read, "Subject to section 113 in any order of the Commission, an award dealing with particular matters other than those matters which are not allowable award matters, continues in force until a new award is made dealing with those matters".
But our primary submission, your Honours, is that it is not the sort of situation that was contemplated in Kartinyeri. It creates something new because there is a fundamental difference between a law which operates to vary the effect of an arbitrator's decision as a whole and a law which involves a picking and choosing as to which pieces of the arbitrator's decision will be given effect. That is our primary submission and it is that that takes us to - - -
GAUDRON J: And it is a different type of constitutional power under 51(xxxv) from that which was engaged, say, by Kartinyeri.
MR KENZIE: Yes. It has limitations in it that are relevant.
GAUDRON J: Yes.
MR KENZIE: Yes, your Honour, making that distinction not an empty distinction but one that is constitutionally relevant, in our respectful submission. I need to come to Kartinyeri which - - -
HAYNE J: Just to delay you one moment more before you come to it. Do you say that the reading you give at paragraph 46 of your reply submissions is one that is open but not preferred?
MR KENZIE: Yes, because it does more. Properly understood, the amendment does more. Your Honour, may I say that if we are wrong in that, then the only effect of that is to take us to the last unanswered question in Kartinyeri to which we will come and that raises other questions as to the question of what is invalid but it does not save validity; it refocuses attention on the proper subject of challenge. Could I invite the Court to go to Kartinyeri in [1998] HCA 22; 72 ALJR 722. We ask the Court to perhaps note some features of the decision which will be obviously well recalled by your Honours. Firstly, just staying with the headnote for the moment, a perusal of the headnote is sufficient to reveal that the effect of the legislation was that the Bridge Act was simply to preclude the making of any declaration by the Minister. In the case of the Hindmarsh Island Bridge it simply removed from the coverage of the Heritage Protection Act the Hindmarsh Island Bridge situation.
So, it was a simple situation of the Act providing for A plus B and the amending Act saying, "No, not B". The approach that led to some differences of approach or suggestions of a different approach in some of your Honours' judgments, Chief Justice Brennan and your Honour Justice McHugh in paragraph [8] page 727 - I should perhaps pause to note that paragraph [7] which is consistent with our earlier submission that:
In order to determine the validity of the Bridge Act, it is necessary in the first place to determine "its operation and effect (that is, to decide what the Act actually does)" -
That harks back to the earlier submissions we made as to the appropriateness of considering the substantial effect of the legislation under attack and is to be read together with similar pronouncements in Fairfax and the other authorities that we mentioned.
In paragraph [8] the Chief Justice and your Honour observed that:
The operation and effect of the Bridge Act can be ascertained only by reference to the Heritage Protection Act, the operation of which it is expressed to affect.....denies the Minister the authority -
et cetera, and further down in paragraph [8] at about point 9:
The Bridge Act restricts the operation of Pt II of the Heritage Protection Act so that no step can be taken towards the making of a declaration that would prohibit or restrict the construction of a bridge -
et cetera, and that was said to be an example of indirect express amendment and the judgment went on on page 728 at about point 2 column 1:
an amendment which permanently reduces the ambit of any of the provisions of an Act involves a repeal of it in part. That is because after the amendment the statute no longer operates as it formerly did; and the only way by which a statute which has come into operation can cease to operate is by repeal, express or implied; or by its expiry in the case of a temporary statute; or by something that was made a condition of its continued operation coming to an end. An Act that excludes from the operation of a former Act some matter formerly within its purview thus repeals it pro tanto -
and we have put submissions about the relationship between the Workplace Relations and Other Legislation Amendment Act and sections 148 and 149.
We refer also to the passage at the bottom of paragraph [9] which provides that you do not focus on the text, but:
the operation and effect in substance of the impugned Act which are relevant to its validity -
and here we say the operation, in effect, in the substance is to create something new, whereas section 149 contemplated an award as an award having effect. What is attempted in the Workplace Relations and Other Legislation Amendment Act is something different.
In paragraph [10] the point is made that you must consider the amending Act by reference to the former Act, a proposition with which, of course, the prosecutors accept but add that when you look at what it does to the old Act, we say it is invalid. In paragraph [11], and this is important, in our respectful submission, your Honours focused on the fact that:
the only effect of the Bridge Act is partially to repeal the Heritage Protection Act -
and then that led to the question being put in the way that it was in paragraph [11], which looked at the matters together, and then at [11] line D:
Putting the question in another way, are the restrictions on the operation of Pt II of the Heritage Protection Act created by the Bridge Act so connected with the subject matter of power contained in section 51(xxvi) of the Constitution that the Bridge Act can properly be described as a law "with respect to...the people of any race for whom it is deemed necessary to make special laws"? Whichever way the question be put, the answer is the same.
And, your Honour, we say, in our case, that it is a case that goes beyond that in Kartinyeri and at least makes relevant the question that their Honours were asking, putting the matter the other way, and when you put that question in our case, and you put that question by reference to Items 50 and 51 or taking your Honour Justice Gummow's point, relaying it back to section 3, then the answer is that it is not a law relating to the head of power in the sense that has been put.
Could we also refer your Honours to paragraph [12] where the principle that the power to make laws involves the power to unmake them is accepted on paragraph [29], not disputed for the purposes of this case, of course, or at all and then, finally, paragraph [15], which, in our respectful submission, is important for the purposes of the present debate and I should read it:
Once the true scope of the legislative powers conferred by s 51 are perceived, it is clear that the power which supports a valid Act supports an Act repealing it. To the extent that a law repeals a valid law, the repealing law is supported by the head of power which supports the law repealed unless there be some constitutional limitation on the power to effect the repeal in question. Similarly, a law which amends a valid law by modifying its operation will be supported unless there be some constitutional limitation on the power to effect the amendment.
Now, could I pause there. The example given in the judgment is an example of a limitation that flows from another head of power under the Constitution. In that case the limitation is flowing from the tax power, but there is no reason in principle, in our respectful submission, why the limitation cannot be found in the power that is the subject - - -
McHUGH J: The acquisition of property is the classic illustration. The Lands Acquisition Act provides for just terms. You have an amending Act that would have attempted to take that out, well, it is invalid.
MR KENZIE: That is right. So it can be the same head or another head of power and, your Honours, if I could go onto this, that your Honours will note the important last sentence of paragraph [15]:
It is not necessary to consider the hypothetical case postulated by Mr Jackson QC of a repealing or amending Act which so changed the character of an earlier Act as to deprive that Act of its constitutional support.
Now, in our respectful submission, this is a case which falls within the description of an amending Act that - - -
GUMMOW J: Brings about the destruction of the primary Act. That is what is postulated there.
MR KENZIE: Well, your Honour, we would - - -
GUMMOW J: In other words, it amounts to a repeal of the earlier statute.
MR KENZIE: Your Honour, we would respectfully - - -
GUMMOW J: By sapping it of any constitutional - - -
MR KENZIE: Well, we would submit that it is, for reasons we have advanced, not a repeal and on its face the attempted - - -
GAUDRON J: It is not simply a repeal, but one way of looking at it is as a retrospective, a pro tanto appeal with retrospective force, which is - and then the question then seems to me, if you look at it that way, to be not so much whether the Act - in this case whether the prior Act loses its constitutional support, as whether the award loses its constitutional support.
MR KENZIE: Your Honour, in our respectful submission, you could not spell out of the legislation an intention on the part of Parliament that if Items 50 and 51 were bad, that that was to have the consequence of rendering either the awards that were made under the original power invalid. I mean, the Act erects a complete structure for the purposes of the creation and maintenance of awards.
GAUDRON J: But we can only operate within section 15A, can we not? But, anyway, perhaps you will come to that.
MR KENZIE: I am coming to that, your Honour. The only effect of - 15A applied to section 3, in our respectful submission. That yields the answer.
GLEESON CJ: Do questions of materiality intrude into this? You pointed out in relation to an earlier case we were looking at that there was a difference of opinion as to what might be called the materiality of the duration provision in an award.
MR KENZIE: Yes.
GLEESON CJ: There may be cases in which, without these non-allowable provisions in the award, the other provisions would have been exactly the same and there may be different cases.
MR KENZIE: Yes, quite so, your Honour. Touched upon in debate is the notion that awards may or may not be a package. There may be a simple provision that is simply inserted to resolve an industrial dispute.
GLEESON CJ: Am I right in thinking that, on your argument, there would be no problem about Item 50 if it had said, "At the end of the interim period each award which contains any matter other than an allowable award matter ceases to have effect", full stop?
MR KENZIE: Yes, that would simply describe a category of awards, each award having been the subject of the process of arbitration and deciding that that category of awards was to have no further effect and would fall into a different basket, your Honour, and would not be able to be challenged, certainly on this basis, and on our argument, at all.
GLEESON CJ: And the vice, in your argument, whether it is right or wrong, lies in the attempt to sever the allowable award matters from the non-allowable award matters and leave the awards standing to that extent.
MR KENZIE: Yes, however significant the allowable award matters were or were not to the resolution of the industrial dispute, your Honour.
GLEESON CJ: Yes, whether they were material or immaterial.
MR KENZIE: Whether they were material or immaterial, the Act does not care - I mean the Parliament does not care for the purposes of the debate, and that is the vice, your Honour.
Your Honour Justice Kirby asked before lunch if I can deal with that. I will come back to Kartinyeri if I may but it is timely in view of the question your Honour Justice Kirby asked, really a question about a similar matter. A question about the example of provisions before and after the effect of Items 50 and 51. One of those is the last-on first-off provision which was dealt with in clause 16.2 of the award.
KIRBY J: We know the bits and pieces. I mean, we are aware of that, but I wanted to get a look at the overall shape of the award before and after. Is there somewhere where that is collected in the material that is before the Court? If it is not, it is not and we do not have to worry about it.
MR KENZIE: I think that from recollection, your Honour, all that one has is those pieces that were thought to be the subject of the legislation and some parts did not need to be looked at.
KIRBY J: Yes. Well, you go ahead with what you want to say.
MR KENZIE: Yes, your Honour, I will come back to - - -
KIRBY J: First on and last off.
MR KENZIE: Yes, your Honour. That was clause 16.2, set out, as the Chief Justice suggested, in the appeal decision at page 243 of the materials. At line 44 there is a "Reduction of Hands" provision and it is the last-to-come first-to-go principle which, before the application of Item 50 was in the award and was taken out, the practical effect of the removal of that is revealed at page 270, paragraph 34 of the agreed facts. You can see that what actually happened was that immediately or soon thereafter in July 1998 the removal was acted upon. If there was a dispute about redundancy, that is a dispute that could rise to a "reduction of hands" provision, obviously it would be open to an arbitrator to settle it in different ways. To come back to your Honour the Chief Justice's question, it might be done by the award of high redundancy pay for long service, for example. Or it might be done by last on, first off.
If the arbitrated settlement went forward on the basis that low redundancy pay was fixed and then you have 16.2 deleted, it impacts upon the settlement of the arbitrator in a way that could not have been intended by the arbitrator, your Honour. That is just an example of materiality. Could I come back to Kartinyeri and - - -
KIRBY J: I suppose you say that you do not have to look at the whole impact if one item is a significant variation and change and it is done by parliamentary fiat as distinct from the arbitrator and it is outside the statutory and constitutional power.
MR KENZIE: That is right, you do not necessarily need to go further and see that that provision is related to various other provisions. Indeed, to take your Honour's example, to look at the whole scope of the award and to find some point of reference in other parts of the award which may or may not be there.
KIRBY J: It is just that forensically one would have thought that if you can show that this an absolutely and utterly different creature at the end of the process, then that really shows the mischief that you are complaining of.
MR KENZIE: I suppose forensically that would have been so, your Honour, but could I respectfully submit that one knows the variety of matters that can go to resolve an industrial dispute.
KIRBY J: Well, I have forgotten, I used to know, but I - - -
MR KENZIE: I wish I had, your Honour. It must be accepted that the variety of - - -
KIRBY J: And they had picnic day provisions and all sorts of strange things in awards in my day.
MR KENZIE: Not these days, your Honour. They are not allowable award matters: blood donor provisions, jury services, they are not allowable award matters any more and would be matters that go. But all that we need to say is that it would be common knowledge that there would be a variety of matters that would have the potential to intrude into an industrial settlement. It would also be common knowledge that industrial settlements being what they are, that the accomplishment of an award, an arbitrated award as a package or a series of set-offs or quid pros quo, is the rule rather than the exception, certainly in the case of a general industrial dispute, and you do not need to go beyond an individual item - - -
KIRBY J: I think the plural of quid is quid.
MR KENZIE: Quid pro quo, yes, your Honour. But in any event that is the point, your Honour, if I may say that you do not need to look beyond an item. The point may well be made by reference to an item.
Could I come to the other judgments in Kartinyeri and make some very brief submissions about them. Your Honour Justice Gaudron, indeed foreshadowing, I think, the question your Honour has been asking me, in paragraph [47] of the decision at page 736 column 2, it is at about point 7, said that:
Subject to two matters shortly to be mentioned, a plenary power to legislate on some topic or with respect to some subject matter carries with it the power to repeal or amend existing laws on that topic or with respect to that subject matter. The first qualification to that proposition is.....manner and form requirement. The second is that, in the case of the amendment or partial repeal of a law enacted under s 51, a question may arise whether the law, as it stands after its alteration, retains its character as a law with respect to a matter within Commonwealth legislative power.
Your Honour is then saying one goes back to the - - -
GAUDRON J: I am not sure that I am, but I am not too sure what the proper approach is.
MR KENZIE: It certainly excited some obvious debate and the possible differential in terms of approach, but in any event, it was your Honour's observation. Your Honours Justices Gummow and Hayne dealt with the matter in paragraphs [66] to [73]. In paragraphs [66] and [67] your Honours suggested that it was not necessary to dwell too much on whether one was talking about repeal or amendment. In [68] the fact that one does not get carried away by the actual text. In [68] your Honours said:
The earlier statute also will be amended by a law which does not identify the text it amends but produces the need to conflate the two texts to arrive at the combined legal meaning. The Bridge Act is such a law.
It was clearly such a law because it simply took away one of the items granted. Then in paragraph [69] your Honours said that:
the Bridge Act is to be "construed as part of" the Heritage Protection Act as indicated by s15 of the Interpretation Act. However, the Bridge Act is not within that class of statutes which makes textual changes to the principal statute, so that it is "exhausted" upon its commencement and the incorporation of those textual changes.
These considerations may bear upon but cannot dictate the course of inquiry as to the validity of the Bridge Act. If it be invalid, then there is no scope for the process of conflation referred to above.
Then in paragraph [73] your Honours said:
The question then is whether the Bridge Act, characterised in this way, so operates that it can be said to be connected to the heard of power in s 51(xxvi). If a connection exists, then the law will be "with respect to" that head of power unless the connection is so insubstantial, tenuous -
et cetera. We would put it that that is the approach that is appropriate here. The alternate way of approaching the matter is suggested in the judgment of the Chief Justice and your Honour Justice McHugh is to like effect. When applied to the legislation here, and when the question is asked, "How could it be said to be relevantly related to conciliation and to the prevention of settlement of disputes by conciliation and arbitration then the respondents are faced with the authorities that we have gone to.
I was pressed before the luncheon adjournment to identify with greater precision what we had to say about the impact of section 3 of the Workplace Relations and Other Legislation Amendment Act, what the impact of that legislation was and the impact of our submissions was.
Taking your Honour Justice Gummow's point to note that it is section 3 that gives the items effect. It provides:
Subject to section 2, each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.
Our submission, as your Honours know, has focused on Items 50 and 51(1) to (3), but the logical extension, and inevitable extension of our submission is that section 3 is invalid to the extent that it attempts to give effect to Items 50 and 51(1) to (3).
We do submit, as we have by reference to Kartinyeri, that Items 50 and 51 are relevantly characterised within section 3 by the last words:
and any other item in a Schedule to this Act -
which are given effect according to their terms.
GUMMOW J: But to give it effect according to its terms may involve an amendment of other provisions.
MR KENZIE: Your Honour, in our respectful submission, Items 50 and 51(1), (2) and (3) if declared invalid are separate, for example, from the other items, 51(4) to (6) and the like, which can stand on their own and if section 15A is applied in this case, the effect in relation to section 3 is that it is capable of being read down by section 15A without doing any violence whatsoever to any other item.
GUMMOW J: Why would not the intention of the Parliament have been, I suppose on one way of looking at it, "Unless this legislation is effective to bring about this result on its face, there will be no awards and everyone has got to get a new award which cannot have these matters in them", that, one way or another, that is what the legislature was trying to bring about.
MR KENZIE: In our respectful submission, that approach would involve an unlikely approach to the parliamentary intention which - - -
HAYNE J: Why, when it is in Part 2 headed "Transitional" matters and it is in a part which contains Item 49 dealing with what might be termed voluntary variations and if you do not apply voluntarily to vary, well, this is what happens; Item 50 bites in this way. Do we not have to see 50 in its context, particularly in the context given it by Part 2 of Schedule 5?
MR KENZIE: That fails to recognise that Item 49 was intended to operate during the 18 month period leading up to Item - - -
HAYNE J: And Item 50 bites at the end of the interim period. That is, you can do it voluntarily during 18 months and if you have not the guillotine comes down in this way.
MR KENZIE: Well, your Honour, that is an unlikely construction, in our respectful submission, because the impact of the legislation was to retain otherwise the provisions of the Act that have been identified in our chart.
HAYNE J: I am sorry, I do not understand the point you have just made.
MR KENZIE: It is that you cannot spell out of the items an intention to destroy entirely the awards that have been made and subsisted, in the event that the processes of Item 49 and, thereafter, Item 50, are not applied.
GLEESON CJ: Does not Item 47 support the suggestion that has been made to you by Justice Hayne?
GAUDRON J: The difficulty is, in relation to what the Chief Justice has said, you cannot spell out an intention that if Item 50 did not work the awards were to stay as they were, particularly in that context.
HAYNE J: One thing that is emerging clearly from 47 and following is Parliament saying, "We want things to change".
MR KENZIE: But you could not spell out of the item an intention that, to the extent that matters that were identified for removal, that is, non-allowable award matters were not removed, that the whole fabric of the award system in relation to these various awards was going to be swept away.
HAYNE J: Is that right? Is that the conclusion? Is not the conclusion that if all this fell over, and the awards fell over as well, it would be open to the organisation of employers or the organisation of employees to log a dispute at once and a new award would be made, but a new award made on the changed basis.
MR KENZIE: Your Honour, the legislation proceeds carefully on the basis that there is a clear division between a retention of allowable award matters and non-allowable award matters.
GLEESON CJ: The key provision is Item 11, is it not? The provisions with which we are concerned are aimed at working out the consequence of that.
MR KENZIE: Yes. I mean, Parliament's aim is to go from the old to the new. It is to move from a situation in which you have a broad based award system to a narrower based award system by the means in Item 50, but you cannot, anywhere - and, indeed, fundamental is section 89A which draws the differential between that which you can have and that which you cannot have. Parliament, on any view, is concerned to draw that differential. That is fundamental to the change. Section 89A is the pivot. It cannot have been Parliament's intention that if you did not move from the old to the new, everything went.
GAUDRON J: Well, it may not be a question so much of what was Parliament's intention as whether, whatever one does, one is rewriting the law and, therefore, the entirety of the provisions which give effect to awards finally, but on that view you might say that too ceases to be a law with respect to, we will say arbitration by way of shorthand, because it cannot be that you have can have a mechanism for resolution of - you cannot have a law for the resolution of disputes which give rise to no right, which then brings you back, I suppose, to your argument that the only thing you can do is concentrate on Item 50. At least you know how things stood before.
MR KENZIE: Yes.
GAUDRON J: There is no reason why you should not treat it as a separate Act and say it is an Act for the purposes of 15A and you clearly could not enact a substantive provision saying awards shall only have effect, for example, with respect to public holidays and annual leave because that in itself would not be a law with respect to conciliation and arbitration for the resolution of industrial disputes, talking about a retrospective operation only.
MR KENZIE: I understand, your Honour. Only that approach and one which recognises the pivotal role of section 89A would result in truly giving effect to the objects of the part in Schedule 5 in section 88A, which provides that:
The objects of this Part are to ensure that:
(a) wages and conditions of employment are protected by a system of enforceable awards established and maintained by the Commission; and
(b) awards act as a safety net of fair minimum wages and conditions of employment; and -
there is provision for simplification. So, your Honours, it is clear that the fundamental consideration is the maintenance of the award provision - that is in the same part - by reference to the differential - the preferred provision is 89A, that the attempt on our argument has not been perfected, that that takes one back per medium of the reasoning in Kartinyeri, as we would submit it, to the question of the examination of the amending provision and section 15A is appropriately applied to section 3, in our respectful submission, and that is in circumstances where we have identified or suggested that Items 50 and 51 relevantly fall within the last words of section 3.
I suppose, your Honours, there is no perfect answer, but that conforms with the basic structure of the legislation and the retention of preservation of rights of employees, which is the fundamental plank upon which the legislation proceeds.
KIRBY J: What is the consequence of that, that section 3 lives but that the items fail?
MR KENZIE: Well, section 3 is affected so that it picks up and it gives effect to any other Item in a schedule to the Act other than Items 50 and 51(1) to (3), your Honour.
GLEESON CJ: Is a law that forbids parties to an industrial dispute to agree between themselves to settle it on particular terms within section 51(xxxv)?
MR KENZIE: Yes, your Honour; such a law can provide the part of the formed parameters for the resolving of industrial disputes and it - - -
McHUGH J: It would have to be a condition that the dispute would be submitted to arbitration.
GLEESON CJ: Or conciliation.
MR KENZIE: Yes. I took it that your Honour's question - - -
GLEESON CJ: I meant agreement within conciliation.
MR KENZIE: - - - involved the process of conciliation and arbitration, but forbade - - -
GAUDRON J: The Clarke Preference Case rules that, I think.
MR KENZIE: Yes.
GAUDRON J: And you could define "industrial dispute" in such a way also as to put it outside.
GLEESON CJ: I just wondered whether that is, on a possible view, the true character of Item 50. If you look at the context in Part 2, what they seem to be saying is, you begin with 89A, for the future you cannot have these things in an award; in other words, you cannot agree in the area of conciliation, but you then say arbitrators cannot make awards about these matters, then the transitional provisions work by beginning with the proposition that the Commission is encouraged to see if it is desirable to get people to agree on appropriate variations to their awards during an interim period.
MR KENZIE: That is Item 49.
GLEESON CJ: Item 47 and then Item 49. Then Item 50 says if they have not agreed on appropriate variations to their awards during that interim period, perhaps because both parties are perfectly content with the existing non-allowable provisions as well as allowable provisions, then we are going to strike those provisions out of their awards, having, in the meantime, given them ample opportunity to agree between themselves on the form that the awards would take if they did not have these provisions struck out.
MR KENZIE: Yes, your Honour, certainly. It proceeds on the basis that that has happened and the parties have had an 18 month period to come to grips with these matters. They might agree that they want the provisions and would not act themselves to get rid of them, or they might be in violent disagreement as to a number of matters, namely, whether they are or are not allowable, or whether they want to get rid of them. All of that is true, but saying and accepting all of those things does not carry you to the conclusion that at the end of that period, by a process which gives the arbitrator no power to decide, no residual discretion to decide on public interest or other grounds, that provisions should not be deleted from awards but requires the arbitrator to do it.
GLEESON CJ: But if it is a material matter and the parties are not in agreement that it should just disappear from the award, then the arbitrator has the opportunity to deal with the consequences of that dispute.
McHUGH J: That is a fresh dispute.
MR KENZIE: That is true and if, for example, something is taken out of the award as a consequence of the exercise, then subject to 89A further disputes can arise. Again, we accept all of that, but at the end of the day one cannot run away from the terms of Items 50 and 51 requiring a situation whereby on day one there was an award with these provisions to be supplanted on day two by the Commission without having any discretion and regardless of whether the Commission thinks it is the best idea in the world that these provisions remain, the Commission is compelled to take them out of the award.
McHUGH J: You would concede, would you not, that Parliament would have the power to require the parties to an award to submit it to the Commission to determine whether or not it should vary it?
MR KENZIE: Yes, we would, and, indeed, not only that, your Honour, but vary it having regard to the changing objects of the legislation.
GAUDRON J: Well, subject to the dispute and so forth.
McHUGH J: As long as it was in the ambit of the original dispute and had the history.
MR KENZIE: That is right. But this goes further. It has never been suggested before that any legislative provision can successfully compel a federal arbitrator to put anything in or a class of thing in, or take anything out or a class of things out of a federal award. This is new. This flies in the face and, indeed, flies in the face of the old authorities because it so fundamentally departs from the principles that have long been accepted and insisted upon by this Court.
McHUGH J: The way you put it now, as I gather it, is that the appropriate test is that applied by Justice Kitto in Fairfax's Case and you ask of this amending legislation, what does it do by reference to the nature of the rights, duties, powers and privileges which it changes and the effect of this legislation is it keeps the award on foot, it makes it enforceable but only enforceable as to part and then the question is, is that a law with respect to the conciliation and arbitration for the prevention and settlement of the earlier dispute back in 1990 or whenever it was.
MR KENZIE: That is right. In a nutshell, your Honour, starting with an examination of the substantial effect of the legislation as suggested by Justice Kitto and your Honour in Kartinyeri. Subject to any questions your Honours have, those are the matters.
GLEESON CJ: Thank you, Mr Kenzie. Yes, Mr Solicitor.
MR KEANE: Your Honours have our submissions. We do not propose to go to them. We would propose to address some of the matters that have arisen in the course of the argument, hopefully, briefly. First we submit that it is neither a complete nor an accurate description of what Item 50 does, to say that it repeals an award or varies the effectiveness of an award. In the language of Chief Justice Brennan and Justice McHugh in Kartinyeri it has another effect or operation. It does not vary the effectiveness of awards or this award. This award is just as effective as it always was, just as effective as all the other awards are that draw their effect from the other provisions of the Act. What has been changed with this provision is that the content of the decision previously made has been varied.
Item 50 alters the content of the award which continues to have effect as, we would submit, a different charter of rights. Provisions that are significant - self-evidently significant to one side, such as security of employment and preference to unionists are removed and are removed in circumstances where the Commission is not required to determine whether that has any relevance to the resolution of the original dispute and in circumstances where the Commission is left no discretion to determine whether there should be some adjustment for that intervention. In that regard in relation to the issue of materiality, bearing in mind the question your Honour the Chief Justice asked our learned friend, can we refer your Honours to the provisions of Item 51(3) which provides that:
When varying the award under subitem (2), the commission may also vary the award so that, in relation to an allowable award matter, the award is expressed in a way that reasonably represents the entitlements of employees in respect of that matter as provided in the award as in force immediately before the end of the interim period.
That seems to us to be the only provision which might relevantly be invoked in relation to an adjustment, as it were, and it seems to us, with respect, to be quite distinctly contrary to the notion that there should be any adjustment. Rather, indeed, it seems to be simply concerned to ensure that there is a suitable expression of the situation in relation to allowable award matters.
McHUGH J: How do you read 51(3)? Is it purporting to give the Commission a general power to vary in relation to an allowable award matter, even if it is not within the ambit of the original dispute, or must it be within the ambit of the original dispute?
MR KEANE: Your Honour, it seems to us, with respect, that it is careless as to that. It is simply concerned with expressing the original award matter in a way that reasonably represents the entitlements of employees in respect of that matter, not as part of a charter where there are quid pro quo. Further, in relation to that, if we can turn to a question that your Honour Justice Callinan asked our learned friend earlier, as to what is the significance of Items 51(1) and (2), your Honour, can we suggest this possibility.
Those provisions are there to ensure that it could not be argued that the effect of Item 50 is to, in fact, bring these awards down altogether. They are there to make it clear that when Item 50 has done its work so that each award ceases to have effect to the extent that it provides for matters other than allowable award matters, it does not come down altogether in the sense that having rejected parts of it, the whole thing comes down. It is there to ensure that it continues and that one appreciates that it continues. That is why the Commission must vary it to remove the provisions that cease to have effect.
KIRBY J: But there is an important distinction in 51(1) and (2) where the verb is "must" and (3) where the verb is "may".
MR KEANE: Yes. The only discretion that 51(3) gives, in our respectful submission, is in relation to the manner of expressing the relevant entitlements in relation to allowable award matters, not an adjustment to reflect some attempt to restore the industrial balance.
HAYNE J: In considering restoring the industrial balance, what, if any, account then is to be taken of Item 49? That is, if one party considers that with these items taken out there would be some disturbance to the industrial balance, may it be argued that Item 49 offers that party the path to seek the consequences that are justly its?
MR KEANE: Your Honour, that might be argued and it might be that contention about that might lead to a fresh industrial dispute which might fall to be resolved by reference to the provisions of section 89A. That might be the case but Item 50 in its terms does not depend upon parties having attempted to reach agreement on under Item 49.
HAYNE J: But it depends upon expiration of the time within which such attempts may be made - - -
MR KEANE: Yes, it does - might be made.
HAYNE J: Might be made.
MR KEANE: If the parties are minded to enter into that process.
HAYNE J: Yes.
MR KEANE: Your Honours, section 51(xxxv) empowers the making of laws with respect to:
conciliation and arbitration for the prevention and settlement of industrial disputes -
It concerns the making of laws in respect of framework by which one reaches the factum, as it has been described, of conciliation or arbitration. Thus laws may structure the process leading to a conciliation or arbitration, and provide for giving effect to it. In that regard, in the Waterside Workers' Case in the judgment of Justice Starke, in 28 CLR at 253, in the passage following that to which your Honour the Chief Justice adverted this morning, at the top of the page, five lines down, his Honour said:
Provisions setting up the arbitral tribunal are laws with respect to arbitration, and so are provisions limiting the jurisdiction of the Court as to the duration of its awards or giving them force or compelling their performance.
These are provisions concerned with structure and effect. They are different from what those provisions seek to provide for, reaching or giving effect to the factum of conciliation and arbitration and, in relation to conciliation and arbitration, the factum is one of a decision made by the parties or by the third party arbitrator, not by legislative prescription in relation to the factum of the decision involved in conciliation and arbitration, and that, in our respectful submission, is a critical distinction. It means that the decision constituting the conciliation or arbitration is the decision either of the parties or of the arbitrator are not a hybrid, as your Honour Justice Callinan characterised it earlier.
There must be a relevance between the decision and the prevention or settlement of the dispute. That was the point emphasised in the passage in the joint judgment in Victoria v The Commonwealth read to the Court by our learned friend earlier. We do not propose to read it again. This is the passage in 187 CLR. Our learned friend read particularly at 529. Pages 527 to 529 contain the full discussion. It is relevant to a point your Honour Justice Kirby raised with our learned friend, and that is this: your Honour said, would it not be open to the Parliament to provide that awards which contained discriminatory provisions should be repealed. Now, the first answer to that is, yes, it would. The Parliament could do so. It could repeal the awards in toto but, of course, we are not concerned with that and Victoria v The Commonwealth and section 150A of the legislation there in question was upheld in terms of its validity on the footing that provisions for discrimination might be removed by the Commission in the event that the Commission reached the view that those provisions rendered the awards deficient, but only so long as that was relevant to the settlement of the dispute, so that - - -
KIRBY J: Parliament did not there purport to move in and deal with it itself?
MR KEANE: No, your Honour, and with respect, that is the point, the nice but accurate point of distinction between this case and that because - - -
McHUGH J: That is why we had to discuss the question of variation in the context of - - -
MR KEANE: Quite, your Honour, because it was a question of variation of the settlement of the dispute. Here there is no need to worry oneself about variation because the legislation is careless as to the connection with the dispute, and, a fortiori, this is not something being done by the third party arbitrator.
GUMMOW J: How does Item 49 fit in with your scheme of construction of these transitional provisions, Mr Keane?
MR KEANE: Item 49 makes provision for a variation that may occur and in the events which have happened here did not.
CALLINAN J: Because Item 49 really deals with a dispute, does it not? There would inevitably have to be a dispute because you cannot get the arbitrator to act unless there has been a failure to agree.
MR KEANE: And one would probably apply the same sort of reasoning that the majority applied in Victoria v The Commonwealth to read that - perhaps to uphold it, but by reading it down by requiring that the variation that is provided for be a variation that is referable to the original dispute - or apt to settle it.
GUMMOW J: The original dispute?
MR KEANE: Unless it gave rise to a new one.
CALLINAN J: But must it not give rise to a new one because the jurisdiction under 49 can only be exercised if there has been a prior failure to agree?
MR KEANE: Quite, your Honour.
CALLINAN J: Pursuant to subsection (4).
MR KEANE: So that absent a new dispute, 49 can operate validly on the footing that one reads it down as the majority read down section 150A of the previous Act.
GUMMOW J: What is the source of the jurisprudence in constitutional terms of this variation idea? I know the Act has talked about variations for a long while.
MR KEANE: It is a variation to the settlement which is, itself, referable to the ambit of the original dispute.
GUMMOW J: Referable how?
MR KEANE: The language used in Victoria v The Commonwealth is reasonably appropriate to settle it relevant to the resolution of that dispute. That language is the language used at the bottom, I think, of - - -
McHUGH J: Well, Galvin's Case is the classic case about variation. I think it is in 86 CLR from recollection.
MR KEANE: I am not sure whether the passage in Victoria v The Commonwealth picks that case up, but the relevant passage commences at the bottom of 527 in 187 CLR.
CALLINAN J: "Reasonably incidental", "relevant" "or `appropriate' to the settlement of the differences".
MR KEANE: Yes, and when one goes over the page, one sees that in the - - -
GUMMOW J: But you could have an award that was made many, many years ago.
MR KEANE: Quite, your Honour.
GUMMOW J: It seems to me there is some detachment from reality in a lot of this jurisprudence.
MR KEANE: Your Honour, that appreciation - - -
GUMMOW J: And in particular, detachment from section 51(xxxv).
MR KEANE: Your Honour, that appreciation has led to a number of attempts which have not proved successful to have the Court review the jurisprudence in relation to the matter. We are content, for present purposes, to accept the notion, the concepts of ambit and paper claim and so forth.
CALLINAN J: Paper dispute.
MR KEANE: Quite.
KIRBY J: All of this is built around the fact that (xxxv) is a very peculiar power. There is nothing quite like it except it be (xxxvii) and (xxxviii) where the State Parliaments have a function. It is a power which is in a sense a crippled power. It is not plenary to the federal Parliament. It is a power which can only be exercised to confer power on others to arbitrate and conciliate.
MR KEANE: Yes, your Honour.
KIRBY J: And in that sense it is a very peculiar power.
MR KEANE: Your Honour Justice Gummow, to return to your question, to give you one reference that may be of some assistance. In R v The Commonwealth Court of Conciliation and Arbitration and Australian Railways Union; Ex parte Victorian Railways Commissioners - it is not a case on our list - [1935] HCA 24; (1935) 53 CLR 113 in the judgment of Justice Dixon, as his Honour then was, at page 141 to 142 his Honour said:
To empower the Court of Conciliation and Arbitration to make alterations in the terms of the award so kept alive seems a further incident of the power -
that is the section 51(xxxv) power -
because, if it is right to retain in force by direct enactment an expired award, it is a reasonable consequence that, in case of unfairness or hardship, the Court should be allowed to exclude or modify the operation of the terms or conditions found inappropriate. But it must be remembered that all this is a result of the expiration of the industrial settlement effected by the arbitration.
KIRBY J: There is a lot to be said for the dissenting view of Justice Isaacs and Justice Rich, I think in terms of logic, that they have been around for so long now that it is very difficult - in terms of practicality, it is a very sensible result.
MR KEANE: Your Honour is referring to the Waterside Workers'?
KIRBY J: Yes.
MR KEANE: In relation to that, your Honour, we would submit that - - -
KIRBY J: Because after the award period what is settled the dispute may be entirely different five, seven years later and the conditions may well be entirely different, yet you continue it by force of the Act, not by force in a sense of the arbitrator's decision.MR KEANE: There may be some force in what your Honour says. For the purposes of a use of that decision as an authority, it is relevant to bear in mind that, as was made clear in the passage from Justice Higgins read to the Court before lunch, the question of the duration of the award was not a matter determined by arbitration in that case. But to return to your Honour Justice Kirby's point, whatever be the position in relation to the merit of the views of the majority and minority in the Waterside Workers' Case, it is our submission that a law which alters the place, which an award may have as an instrument of preventing or settling industrial disputes, is to be distinguished from a law which alters the outcome of a decision reached by conciliation and arbitration.
The first kind of law is the kind of law upheld by the majority in the Waterside Workers' Case and it is the kind of law - I think your Honour Justice McHugh adverted to this earlier when you referred to laws that extend the operation of an award to successors entitled to the parties. That is George Hudson v Australian Timber Workers' Union Case [1923] HCA 38; 32 CLR 413, in particular in the judgment of Justice Isaacs at page 453, which upheld that extension on the footing that it is a power to make laws for conciliation and arbitration for the settlement of industrial disputes - not just individual disputes.
GUMMOW J: But disputes in general. Why has it always been said that it is this dispute rather than that dispute? The section in the Constitution just says "disputes".
MR KEANE: Yes.
GUMMOW J: This whole structure has been directed to dealing with particular disputes and these genealogical descents of organisations and employees and so on and so forth. It seems to me what on the face of it is not a particularly complicated power has been made enormously complicated by the legislation, but I suppose we are stuck with it.
McHUGH J: Well, it is also a question of the practicalities. To have an interstate dispute roping in all the respondents is a problem, and that is why the variation power is used rather than trying to have a fresh dispute every time you have some disagreement among some of the parties, and sometimes awards are varied, only to apply to a couple of parties to it; it may apply only in New South Wales or may only apply here.
MR KEANE: Quite, your Honour. And the last case that we would add to that first category of laws would be Victoria v The Commonwealth for the reasons that have been advanced by Mr Kenzie. This case, on the other hand, is concerned with a law which seeks to alter the substance of the decision, having continuing effect otherwise than by conciliation and arbitration, and we apprehend from the submissions that have been filed by the other parties that it is common ground that the Commonwealth Parliament may not directly legislate the terms of an industrial settlement. We would submit nor may it vary a decision by running a blue pencil through material provisions so as to alter the balance struck by the decision of the arbitrator or by the decision of the parties. Just as it is no part of the function of a court which severs ineffective provisions from a contract to remake or to make a new charter for the parties, it is our submission that it is no part of the business of the Parliament to make a new charter, a materially different charter, for the parties.
To come then to the question that your Honour Justice Gaudron was agitating with our learned friend Mr Kenzie before lunch, it is our submission that section 15A applies here, really, with respect, as a matter of routine in that section 15A provides that an Act of the Commonwealth Parliament shall be read and construed "so as not to exceed the legislative power of the Commonwealth", so that it shall be a "valid enactment to the extent" that it is not in excess of power. Now, absent an indication, express or implied, in the legislation which enacts section 3 and Items 50 and 51, that it is to be all bound or all set free, then section 15A would operate routinely to preserve that which is within power, notwithstanding that some provisions are not.
As to whether the intention of the legislation was that it should be a package which operates in toto or not at all and, indeed, that everything should come tumbling down, we submit, with respect, that when one looks at the provisions which set out the objects of the legislation in section 3 and section 88A, then it is apparent that that was not the intention of the legislation.
GAUDRON J: My problem is not really that. It is a question why, whether, when you have an amending Act, you look at the amending Act as the Act to which section 15A applies rather than the Act as amended, in any context.
MR KEANE: Well, your Honour, perhaps because there are two possibilities. There are two possible ways of proceeding. One is to amend by explicit repeal and no one suggests that that cannot be done. The submission that is being made is that that was not done. The question then is, having regard to what was done, is the evident intent of the Parliament, in amending, and when one looks at the legislation as amended, was it the evident intent of the Parliament that the new provision should take effect or one should treat the totality as having been repealed. Both those steps - - -
GAUDRON J: No, as being invalid - we are talking invalid.
MR KEANE: Yes, for want of power rather than intention to repeal.
GAUDRON J: Because the end product no longer bears its character.
MR KEANE: Well, your Honour, that is why we submit that the answer is in section 15A because one looks at what it affects to do and one looks at it as a piece of legislation which purports to have a particular effect and section 15A tells us that it can have effect to some extent but no further and absent some indication of an intention that the Act which it amends is to stand or fall with the efficacy of those bits that do not work, then we submit the bits that are capable of working do their work, but no more. I am afraid I am not dealing with your Honour's difficulty.
GAUDRON J: Yes. No, I just do not know what "the Act" means in 15A when you have an Act which repeals, amends, let us say partially repeals. Let us take a situation where an Act partially repeals something so that some is left standing. What is left standing is no longer a law with respect to some subject matter or topic within power. Do you strike down the amendment so that you are left with the old law or do you strike down the new amended law which is not a law with respect to a topic within legislative power? And it is really a question of what 15A means in that context.
MR KEANE: Well, your Honour, we submit that is so, with respect, and that is because the question is, first of all, one of construction of the intention of the legislation.
GAUDRON J: It is the intention of 15A?
MR KEANE: Yes, and 15A is an aid to determining the intention of Acts of Parliament and then one must use 15A to determine the intention of the Parliament and see whether the Parliament has said all or nothing and, in our respectful submission, in this case it is plain, we would submit with the greatest respect, that the Parliament has not intended it to be all or Armageddon.
CALLINAN J: Mr Keane, you called the varied award varied in accordance with the items and 89A a new charter. Do you say it is a new charter because it is so different in character from the previous award that one has to regard it as a new - - -
MR KEANE: Your Honour, we say it is a new - - -
CALLINAN J: - - - because the alternative might be simply to say it is the same charter with some deletions from it. Do you say it is because of the massive nature or the importance of the deletions that it is a new charter?
MR KEANE: Well, your Honour, there are provisions which are plainly material which were removed with the avowed object, apparent from the second reading speeches which we have set out in our submissions, of changing the character of the award from one which was a comprehensive regulation of various rights and duties that arise between employers and employees to a safety net minimalist arrangement.
CALLINAN J: I understand that, but without worrying about what was said in the speeches, just looking at what you had before and what you have got now, you say it is a new charter because the character is so different as a result of the deletions or do you say that it is sufficient if there are one or more material changes or something else?
MR KEANE: Your Honour, in our written submissions we argue by analogy with contract that if one takes out provisions, if one renders provisions ineffective, then applying the test which your Honour Justice McHugh discussed in Humphries v "Surfers Palms North", one reaches a situation where one cannot say that where what is left is a charter to which both sides would have agreed.
CALLINAN J: Any material change is enough then to create a new charter.
MR KEANE: That is our submission.
KIRBY J: Do you understand - - -
MR KEANE: And there has to be material. I mean, for example, it might well be argued that it would not be material to make a provision in relation to removing provisions in relation to jury service, for example.
KIRBY J: Is there common ground between the parties, as you understand it, on the operation of section 15A?
GUMMOW J: As to Schedule 5, what do you say is left of Part 2 of Schedule 5, beginning at Item 46 and running through to Item 55?
MR KEANE: Your Honour, the only provisions which we say are denied effect - are ineffective - are Items 50 and 51(1), (2) and (3).
GUMMOW J: That makes Items 47 and 49 operate very differently, I think, because in a way the presence of Item 50 is the goad that makes 49 achieve its practical effect.
MR KEANE: Your Honour, it might be the goad but it is interesting that it is not its operation. Item 50's operation is not expressed to be conditional upon the exercise in 47 or 49 having been attempted or even having failed.
GUMMOW J: But they are sequential in time?
MR KEANE: They are, and, indeed, your Honour, it has to be acknowledged that 47 refers to Item 50.
GUMMOW J: Yes.
KIRBY J: 51(3) falls because it is linked into 51(2) even though it is a "may" and leaves it to the Commission to vary the award.
MR KEANE: Because it is linked to 51(2) and because the nature of what it involves is simply ancillary to an obedience to the "must remove these provisions" and does not actually involve any substantive determination by the Commission of the party's rights.
KIRBY J: I am not quite sure how invalidity works, given that the schedule is just a schedule that the governing effectuation of the schedule is section 3. Does invalidity work on section 3? And, you say, "Well, to the extent that section 3 purports to give effect to 50 and 51(1), (2), (3), section 3 is invalid", or do you say, "Excise 50 and 51(1), (2), (3) and then section 3 has no problems"?
MR KEANE: Your Honour, we say that consistently with section 15A of the Acts Interpretation Act, the way it works is that section 3 is fine in so far as those provisions which it enlivens - - -
KIRBY J: It can lawfully enliven.
MR KEANE: - - - can lawfully enliven.
KIRBY J: It does.
MR KEANE: - - - and these it cannot, so it fails.
KIRBY J: Then the subsidiary question is, if you excise 50 and 51(1), (2), (3), is the net result something which was so integrated that it cannot operate in a way that would be consistent with Parliament's purpose?
MR KEANE: Yes.
KIRBY J: If the answer to that last question is yes, then it may be that the whole schedule or other provisions fall with 50 and 51(1), (2), (3).
MR KEANE: If that view were taken. It is not a view we would urge. Your Honours, that is all we propose to say about section 51(xxxv).
In relation to the attempt to rely on section 51(xx), the corporations power, the argument that draws attention to section 7A of the Act, we would rely upon the submissions that are made by our learned friends for New South Wales. Could we give your Honours just one further reference which we do not think has been mentioned in the authorities that have been referred to in this context. It is not directly related to section 7A but it is relevant. The observations of your Honour Justice McHugh in Dingjan; Ex parte Wagner [1995] HCA 16; 183 CLR 323 in the passage which begins the second-last paragraph on 368:
It does not follow, however, that s 51(xx) authorises any law that operates on conduct that relates to the activities, functions, relationships or business of trading, financial or foreign corporations. The law must be a law "with respect to" a corporation of the kind described by s 51(xx). That means that the law must have "a relevance to or connection with" a s 51(xx) corporation. It is not enough, however, that the law "should refer to the subject matter or apply to the subject matter".
Can we invite your Honours to read on to the end of the next paragraph. The point we seek to draw from that is that section 51 of the Constitution proceeds on the footing that a Court called upon to determine the validity of a law when made proceeds in the way that your Honour has indicated there. It is not enough, that the law may accidentally, coincidentally, apply to a particular subject matter.
In determining whether a law is "with respect to" a head of power in s 51 of the Constitution two steps may be taken. First, the character of the law must be determined. That is done by reference to the rights, powers, liabilities, duties and privileges which it creates. Secondly, a judgment must be made as to whether the law as so characterised so operates that it can be said to be connected to a head of power conferred by s 51.
Your Honours, to give section 7A the operation for which the mining companies would contend, would, in our submission, effectively deny the ordinary process of judicial review. Whatever the function that the Court might be called upon to perform in determining whether this law has some ambulatory operation - accidentally, as it turns out, because the law has not - - -
KIRBY J: It is scarcely accidentally, as you said, the mining companies. I mean, the overwhelming operation of a law of this kind in industrial awards will be on companies. I mean, this is a tremendously important question for federal power over corporations, far bigger than this case.
MR KEANE: It is, your Honour. The point is though, with respect, that this Act has not affected relevantly to make laws that discrimen in relation to which is corporate status or satisfaction of the description of a constitutional corporation. It has not sought to do that. The question is whether section 7A can operate to require this Court to exercise some sort of roving function to identify whether the law can operate by reason of facts that might be the case and we submit that that is not the conventional process; that is indeed antithetical to the conventional process of the exercise of judicial power, in terms of judicial review, which is, in our respectful submission, described conventionally in the passage at the bottom of page 368 and the top of 369 in Re Dingjan; Ex parte Wagner.
GUMMOW J: Well I suppose one question is, what head of power in section 51 supports 7A?
MR KEANE: Quite, your Honour.
GUMMOW J: And you are saying it is not incidental to the execution of any power vested in the judicature or in the legislature.
GAUDRON J: Well, is it part of the express incidental power in relation to - - -
GUMMOW J: Each head.
GAUDRON J: Yes, so that it tells you, for example, how to read an Act. Is it any different from 15A of the Acts Interpretation Act?
MR KEANE: Your Honour, the express incidental power authorises the making of laws incidental to the execution of the executive function, the legislative function or judicial function.
GAUDRON J: It must be incidental to the legislative function, for example to spell out something like section 15A in the Acts Interpretation Act. That must be incidental to the legislative functions, is it not?
MR KEANE: Because that is a direction to the Court as to how as to construe legislation that otherwise is referable to a head of power, at least to some extent.
GAUDRON J: Yes. Is 7A not the same sort of thing?
MR KEANE: We would submit not, because it affects to operate in a way that would give the legislation validity even though one could not say, by looking at it, that it was a law with respect to corporations.
GAUDRON J: You say it cuts across the nature of judicial power and offends Chapter III - - -
MR KEANE: Well, yes.
GAUDRON J: But we do not need to explore that in this case.
KIRBY J: I think we may have to under the 7A argument.
MR KEANE: It goes to the validity of section 7A because the section 51(xx) argument cannot succeed, in our respectful submission, unless the Court can be required by section 7A to determine the validity of the law on the footing that it occasionally applies to a subject matter.
KIRBY J: Is my understanding correct that the actual Workplace Relations Act and its predecessor, and its predecessor before, does not assign or purport to claim validity by reference to the corporations power, or it does? Is the substantive Act reliant in part principally on (xxxv), but in part on (xx) or is 7A purporting to do the whole job and say, "Well, we have relied on (xxxv) but if that does not work then you, a court, can go rummaging around looking for a section 51(xx) power"? How does 7A work?
MR KEANE: Your Honour, there are some particular parts, we think, that do.
KIRBY J: I thought there were.
GAUDRON J: In Dingjan there were provisions that clearly related to section 51(xx). The question was whether section 7A would save them whilst not saving other provisions.
MR KEANE: Yes, but in Dingjan the validity of section 7A was not determined because it was enacted after the relevant events and was held not to apply retrospectively.
GAUDRON J: It may be that there is a construction issue with section 7A and only if that is decided one way could a constitutional question apply. It may be that the real question is whether it should be construed as where this Act purports in its terms to have several applications.
MR KEANE: As opposed to not in its terms purporting to create rights and duties referable to a head of power.
GAUDRON J: Yes.
MR KEANE: Well, your Honour, if one were to construe it that way, its validity might be saved but it would not get the section 51(xx) argument up.
KIRBY J: But there is nothing in the Constitution that says to the Parliament, "You must not only have power but you must express in your statute where your power is".
MR KEANE: No, quite, your Honour. It is not necessary that they - I suppose it is like Shepherd v Felt & Textiles.....as long as the Parliament has the power it does not matter that it does not expressly invoke it. But the question is whether one, when one performs the function of judicial review, the first step one takes is to look at the law and say, "Is this a law with respect to a designated head of power?". One does that by seeing what rights and duties it creates or affects and then determines whether that can be said to be a law with respect to a head of power. If one looks at this provision, one sees that it does not make in its provisions any attempt to identify corporations as a person singled out from all the other persons in the community upon whom this law operates.
KIRBY J: It would be a very messy outcome given that awards have traditionally for a 100 years been based on (xxxv), and therefore operate on natural persons as well as corporations. One would think that if that were the purpose of Parliament it would have said so either in the principal Act or in the reforms that were introducing workplace relations amendments, that they would say, "Well, we rely on (xx) as sustaining this to the extent that (xx) will sustain it, and we deal in this way for those cases which (xx) will not sustain if on the premise that (xxxv) does not sustain it at all. That is not dealt with in the Act.
MR KEANE: No. Your Honour there are some references in the pieces of legislation that your Honour referred to where it is apparent that the prescription relates to corporations. Could we put those in a schedule and provide them to the Court?
KIRBY J: Yes, that would be helpful, I think.
GUMMOW J: And territories, too.
GAUDRON J: For a long time there have been provisions in the Act which said you could have conciliation and arbitration of disputes in the territories relating to Commonwealth Government employees and so forth.
McHUGH J: Training, air pilots.
GAUDRON J: There have been provisions enacted under the trade.....power, air pilots and so forth, which is what led me to suggest that what 7A might well be talking to is a situation in which the Act, itself, does specify a range of applications. Say, for example, if it specified for the resolution of disputes in which companies were employers then that would operate even if there were an interstate element to it, but you would look to see that the Act's specification of the various ways in which it is to apply before you look to 7.
MR KEANE: With respect, we adopt that, your Honour. The additional operation of the Act is actually addressed in section 5 and 5A, 5AA. Section 7A seems to have a distinct operation. It may be, that as your Honour says, it assumes these other provisions have done their work but, nevertheless, one still has to be able to see that it is a law with respect to those matters.
KIRBY J: Has section 7A been referred to in any other case but Dingjan?
MR KEANE: I do not think so, your Honour. We are not aware of it.
GUMMOW J: There is a provision in the Native Title Act, is there not? It did not have to be decided but I think it is discussed in Western Australian - - -
MR KEANE: Yes, I am not sure that it is quite in the same terms but it certainly was not decided. Your Honours, those are our submissions unless the Court has something further for us.
GLEESON CJ: Mr Williams, you are supporting. Yes, Mr Williams.
MR WILLIAMS: May it please the Court. We adopt the submissions put on behalf of the prosecutor in the State of Queensland and otherwise rely upon our written submissions.
GLEESON CJ: Is there anybody else intervening on that side? Mr Solicitor for the Commonwealth.
MR BENNETT: If your Honours please. My submissions will be divided into seven parts which I will list now.
I will deal first with the structure and purpose of the amending Act; secondly, with the nature of awards, particularly consent awards; thirdly, the cases on the section 51(xxxv) power; fourthly, the Kartinyeri principle; fifthly, the nature of the power of variation and its relevance; sixthly, the submission about not doing indirectly what one cannot do directly in my friend's submissions; and lastly I will make a few remarks about section 7A.
Might I hand to your Honours two additional sets of submissions. They are both very short. One is supplementary submissions in answer to the submissions of Queensland dealing with the question of consent orders and the other is supplementary submissions in relation to doing indirectly what cannot be done directly.
Now, returning to the first of my seven points or seven areas. The objects of the 1986 Act are set out in section 88A, which is added by Item 8 of Schedule 5, and that provides that the wages and conditions are to be maintained by a system of awards; that awards are to act as a safety net; awards should be simplified and so on, but most importantly, the fourth, for present purposes, is that:
the Commission's functions and powers in relation to making and varying awards are performed and exercised in a way that encourages the making of agreements between employers and employees at the workplace or enterprise level.
That can be put in very simple constitutional terms. Section 51(xxxv) refers to conciliation and arbitration and the settlement of disputes by way conciliation and arbitration. The key theme of this set of amendments is a shift of emphasis from arbitration to conciliation and it is that which largely lies behind the provisions in Items 50 and 51 which we are concerned in this litigation because the issue is not as was referred to in the course of argument this afternoon, the forbidding of parties to reach certain agreements, it is rather the encouraging of parties to reach agreements on certain matters but for those matters to be dealt with outside the award structure and, where necessary, inside the certified agreement structure. It is that basic approach which lies behind the transitional provisions in section 50 and section 51.
Your Honours can see the amendments to section 89 on page 6 of the prosecutors' schedule where, in relation to the functions of the Commission described in that section, the former provision was:
to prevent and settle industrial disputes:
(i) so far as possible, by conciliation; and
(ii) where necessary, by arbitration - - -
GUMMOW J: Yes. Now, the principal objects you set out in (3) are remarkable because they do not refer to disputes.
MR BENNETT: Yes, it is perhaps assumed, your Honour, in the wording of it, it assumes that as the basis of what follows but the amendment to section 89 changes the words "where necessary" to even stronger words and it puts in the words:
as a last resort and within the limits specified by the Act - - -
GLEESON CJ: Where are you reading from, now?
MR BENNETT: I am reading from page 6 of the prosecutors' schedule which contains the amendments to section 89 which deal with the functions of the Commission.
The starting point, when one looks at these sections and when one looks at their purpose, is not that it is designed to have some specific effect one way or the other, but rather that it is designed to move the means of settlement of particular types of dispute from arbitration to conciliation and, ultimately, where appropriate, by certified agreement. Now, in that context, one had to have a transitional provision and the transitional provision says, in our submission, that where you have an existing award, what one wishes to do is bring it, so far as possible, within the new structure, the new structure being a perfectly permissible constitutional structure under which the awards do not deal with certain matters and those are left to agreement and it provides, as has been pointed out in Items 47 and 49, for the Commission to exercise its powers in such a way that the matters which are outside the scope of awards under the new provisions are dealt with by agreement, and that is the point of Item 47, which provides for:
the Commission is to have regard to the desirability of assisting parties to awards to agree on appropriate variations to their awards, rather than -
having Item 50 operate. In other words, there is an 18 month period in which parties are invited to existing awards or invited to agree on these matters preparatory to the new system taking over in which awards will not cover these matters.
GAUDRON J: Yes, but what do you say to what was put against you, that even those provisions need to be read down by reference to the conciliation and arbitration power in the same way as a reading down was effected in Victoria v The Commonwealth?
MR BENNETT: Your Honour, it has to comply with the conciliation and arbitration power, but we submit that it does, and I will demonstrate that in the course of the - - -
GAUDRON J: Well, what has ultimately got to conform to the notion of conciliation and arbitration is the award that is made.
MR BENNETT: Yes.
GAUDRON J: And that was what led to the reading down in Victoria v The Commonwealth of section 150A. Now, do you accept that these items would have to be read down as well?
MR BENNETT: No, your Honour, they do not have to be read down because all that happens is that there is a Kartinyeri style removal of the effect of certain types of provision.
McHUGH J: You will have to convince me that that is its only effect, Mr Solicitor. If one applies the test of Justice Kitto, the operation of Schedule 5 through Item 50 is to change the rights of the parties. Immediately before the enactment of Item 50 they had an award which gave them certain rights in respect of various matters. That was enforceable under the legislation. Now another piece of legislation comes in and it affects their rights. It does not abolish their rights which the Parliament could obviously do and which it has conceded it could do, but it seeks to keep on foot the award by taking out of it certain parts which are not enforceable. Now, the question is, is that a law with respect to conciliation and arbitration or has the Parliament itself directly intervened in the process unconstitutionally?
MR BENNETT: We say the former, your Honour. But what I will be putting in relation to that aspect, and this involves the second and fourth aspects of my argument, is that what one is doing is saying, "Here are a set of rights given by Commonwealth legislation. The Commonwealth legislation says - - -
McHUGH J: No, they are not given by Commonwealth legislation. In one sense it is not right to say that. It is rights given by an arbitrator, rights which the Commonwealth itself could not give, rights given pursuant to a framework, an institutional framework, set up by the Parliament. The Parliament could never have enacted this award, this original award.
MR BENNETT: No, it could not, your Honour, but it has enacted the means by which the award is enforced.
McHUGH J: Well, arguably, as part of the jurisdiction of the Commission.
GAUDRON J: And in the same area, arguably, if the Act did not give an award effect, some legal effect, it would not be a law with respect to conciliation and arbitration. It would not be a law for the prevention and settlement of disputes by conciliation and arbitration.
MR BENNETT: Yes, that may well be so but the Commonwealth Act, nevertheless, gives certain rights of enforcement in three areas. It makes awards enforceable, it has penal provisions and it has provisions for enforcement of wages and the like.
Now those provisions are laws of the Commonwealth which say, when taken with the awards, that there is a range of enforcement rights given to various parties - employers and employees. It then says, having created those rights, we will remove some of them and we will remove some of them as part of a law which is directed towards the encouragement of conciliation at the expense of arbitration.
McHUGH J: But does that not mean in the end, once the Parliament seeks to do that that it has, itself, varied the award or settlement of the arbitrator? Do you concede that Parliament cannot do that?
MR BENNETT: Yes, your Honour.
McHUGH J: So the question then is, you having conceded that point, the only question is whether that is the effect of this legislation.
MR BENNETT: Your Honour uses the word "effect", the - - -
McHUGH J: I will use what Justice Kitto says, "the operation of". Does it operate so as to change the existing rights and duties?
MR BENNETT: No, your Honour. We say all it does is take away certain enforcement provisions. We say you have to separate Items 50 and 51.
GUMMOW J: But the problem is, enforcement of what, you see? Provisions for enforcement of what? A creature that now has three legs, not four. That is what is put against you.
GAUDRON J: And it is not just enforcement provisions. These are substantive rights and obligations. The enforcement provisions are simply the means by which they are given legal effect or by which remedies are assigned for their breach really. The enforcement provisions are just not enforcement provisions at all. They are remedies for breach.
MR BENNETT: Your Honour, my friend concedes three quarters of the way of what we can do. He concedes that we can repeal all the enforcement provisions and say no existing awards can be enforced. He concedes that we can repeal the provision which extends existing awards to transferees and other third parties. He does not concede, although we submit, that one could limit the enforcement of existing awards by saying only employees can enforce them or only employers can enforce them.
GLEESON CJ: But his proposition is that the greater does not include the lesser.
MR BENNETT: I understand that, your Honour, and that is ultimately the question in this case.
KIRBY J: May I ask you, if you have not in your written submissions so far sought to sustain the legislation on the basis of section 7A, I could not bear to wait until the morning to know whether on your seventh point you are going belatedly to come forward with this other source of power. Are you going to do that or not?
MR BENNETT: Your Honour, I would prefer to reserve my final position on that until the morning, in view of the discussion which has taken place this afternoon.
KIRBY J: Yes, very well. I think you had better.
MR BENNETT: But I had not intended before that discussion to make any submissions on it. In view of what has been said I may do so.
McHUGH J: You are going to give Justice Kirby an unsettled night?
KIRBY J: Just another one.
MR BENNETT: Yes, if your Honour please.
GLEESON CJ: Is that a convenient time?
MR BENNETT: Yes, your Honour.
GLEESON CJ: We will adjourn until 10.15 in the morning.
AT 4.21 PM THE MATTER WAS ADJOURNED
UNTIL WEDNESDAY, 10 NOVEMBER 1999
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URL: http://www.austlii.edu.au/au/cases/cth/HCATrans/1999/470.html