PR944901

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AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Workplace Relations Act 1996

s.45 appeal against decision PR937858

issued by Deputy President McCarthy on 12 September 2003

Finance Sector Union of Australia

(C2003/5655)

s.170LW application of settlement of dispute

Finance Sector Union of Australia

and

Australian and New Zealand Banking Group Limited

(C2003/3943)

Banking services

   

VICE PRESIDENT ROSS

 

SENIOR DEPUTY PRESIDENT O'CALLAGHAN

 

COMMISSIONER WHELAN

MELBOURNE, 22 MARCH 2004

Appeal - s.45(1)(g) - s.170LW application for settlement of dispute - refusal to make a recommendation - errors and misconceptions about the conciliation process and the role of recommendations - but errors not jurisdictional in nature - leave to appeal granted - appeal dismissed.

DECISION

Background

[1] This decision deals with an appeal by the Finance Sector Union (the FSU) pursuant to s.45 of the Workplace Relations Act 1996 (the WR Act) against a decision [PR937858] issued by Deputy President McCarthy on 12 September 2003.

[2] In the decision subject to appeal his Honour rejected a request by the FSU that the Commission issue a recommendation in respect of a dispute which the union had notified pursuant to s.170LW of the WR Act and clause 18 of the ANZ/FSU Agreement 1998 (the Agreement).

[3] The Agreement was certified by the Commission on 12 August 1998 and has a nominal expiry date of 12 February 2001. The Agreement remains in operation pursuant to s.170LX. Clause 18 of the Agreement provides as follows:

[4] Clause 10 of the Banking Services - ANZ Group - Award 19981 (the Award) sets out a dispute settlement procedure which culminates in the referral of an unresolved dispute to the Commission, as follows:

[5] The facts which led to the relevant dispute notification are, generally speaking, uncontested. The main factual dispute between the parties is whether a Ms Sherborn, a member of the FSU and an employee of the Australian and New Zealand Banking Group (ANZ), was entitled to a severance payment.

[6] The dispute was the subject of proceedings before Deputy President McCarthy on 1 and 14 July 2003. At the conclusion of the proceedings on 14 July 2003 his Honour said:

[7] The parties subsequently filed written submissions directed at the two issues identified by his Honour. Both parties accepted that the Commission had power to make a recommendation in respect of the matter in dispute,3 but ANZ submitted that his Honour should not exercise that power in the circumstances of this case.

[8] In the decision subject to appeal his Honour declined to make a recommendation.

The Appeal

[9] It is important to recognise that this is an appeal pursuant to s.45(1)(g), which states:

[10] In order to succeed the appellant must show that the Deputy President erred in refusing or failing to exercise jurisdiction. It is not enough for the appellant to show that his Honour fell into legal error.

[11] To succeed the appellant must establish jurisdictional error in the decision subject to appeal. The majority of the Full Federal Court in Tweed Valley Fruit Processors Pty Ltd v Ross and others dealt with the scope of an appeal under s.45(1)(g) in the following terms:

[12] The question of whether a particular error constitutes an excess of jurisdiction or a failure to exercise jurisdiction is often difficult to determine.5 The mere fact that a member at first instance has made a mistake of law, even as to the proper construction of a statute or an agreement, does not necessarily constitute constructive failure to exercise jurisdiction.6

[13] The essence of the appeal before us concerns the proper characterisation of the Deputy President's decision. The appellant contends that despite a formal acceptance of jurisdiction his Honour in fact held that he did not have jurisdiction to make a recommendation in respect of the dispute between the parties. In the course of oral argument Mr White, counsel for the FSU, put the appellant's contention in these terms:

[14] There are two broad limbs to the appellant's argument. The first concerns observations made by his Honour at paragraph 41 of the decision subject to appeal. The second limb concerns what are said to be a number of errors in his Honour's reasons for decision at paragraph 34 to 40. We will deal with each limb of the appellant's argument in turn.

1. Whether the Deputy President erred by concluding that the Commission was not empowered by clause 18 of the Agreement to settle disputes over the application of the Agreement which was a matter that the parties were not called upon to address.

[15] Paragraphs 41 and 42 of the decision subject to appeal are in the following terms:

[16] The FSU contend that paragraph 41 is fundamental to its appeal. It is argued that in this paragraph the Deputy President held that the Commission was not empowered by the operation of s.170LW to settle disputes over the Agreement. In its written submission in support of the appeal the FSU says:

[17] It is also argued that his Honour's determination in paragraph 41 was one of the reasons why he declined to make any recommendation in respect of the matter in dispute. This is said to follow from the use of the expression "for the reasons expressed above" in the concluding paragraph of the decision subject to appeal.

[18] In the alternative the appellant contended that in the circumstances his Honour was empowered to arbitrate the dispute before him. This contention flows from the appellant's construction of clause 18 of the Agreement. It will be recalled that clause 18 requires the parties to apply clause 10 of the Award in the event of a dispute in relation to any matter arising out of or concerning the Agreement. The appellant advanced the following interpretation of clause 18:

[19] The appellant's alternative argument is premised on the proposition that in paragraph 41 of the decision subject to appeal the Deputy President made a determination in respect of the meaning of clause 18 without providing the FSU with an opportunity to put submission in respect of the matter. During the course of oral argument Mr White, appearing on behalf of the appellant put the proposition in these terms:

[20] In reply ANZ submitted that while it is not clear what opinion his Honour is expressing in paragraph 41 it is apparent that it is no more than an opinion and hence no appeal lies.

[21] The Agreement was certified under the provision of Part VIB of the WR Act. Sections 170LT(8) and 170LW are relevant to ascertaining the Commission's role in clauses such as clause 18. Those sections read as follows:

[22] A disputes procedure in a certified agreement that complies with s.170LT(8) will not necessarily have within it a role for the Commission and, where such a procedure does provide a role for the Commission, s.170LT(8) does not prescribe what that role will or should be.11

[23] In paragraph 41 of his decision the Deputy President appears to be expressing the view that clause 18 of the Agreement was not a procedure which empowered the Commission "to settle disputes over the application of the agreement".

[24] We agree with the respondent's characterisation of paragraph 41. It seems to us that it is apparent from his Honour's use of the word "arguably", and the fact that the matter he was addressing was not in issue in the proceedings and had not been the subject of argument, that his Honour was simply expressing an opinion rather than making any determination as to the meaning and effect of clause 18.

[25] We acknowledge that there is some force in the appellant's argument that part of paragraph 41 supports the contention that his Honour made a determination, particularly the use of the expression "I consider the Commission is not so empowered . . .". But this expression ought not be viewed in isolation. In this regard it is relevant to note that his Honour characterised the decision subject to appeal as being about "the propriety of making recommendations from the conciliation proceedings".12 Absent jurisdiction questions of propriety do not arise. Hence his Honour's characterisation of the matter before him supports the view that in paragraph 41 he was merely expressing an opinion as to his jurisdiction to deal with the matter.

[26] We do not know why the Deputy President felt it necessary to express an opinion in respect of a matter that was not in issue before him and without providing the parties with an opportunity to make submissions on the matter. It would have been better had he not done so. Particularly as, on its face, the opinion expressed appears to be inconsistent with Full Bench authority.13 The failure of a member at first instance to follow an authoritative Full Bench decision is a serious error of principle.14

[27] But as his Honour was merely expressing an opinion no appeal lies in respect of his observations in paragraph 41 of the decision subject to appeal.15 Contrary to the appellant's contentions we do not think that the opinion expressed in paragraph 41 was integral to his Honour's decision to decline to make a recommendation in respect of the matter in dispute.

[28] In the circumstances it is unnecessary for us to express a view about the appellant's alternative argument. The point was not argued at first instance and his Honour did not make a determination as to the meaning of clause 18, he merely expressed his opinion on the matter.

2. Whether the errors in his Honour's reasons, at paragraphs 34 to 40, were jurisdictional in character.

[29] The second limb to the appellant's argument concerns what are said to be a number of errors in the Deputy President's reasons for decision at paragraphs 34 to 40. It is convenient to deal with each paragraph of this part of his Honour's decision in turn.

[30] The FSU contends that implicit in his Honour's reasoning is the proposition that making a recommendation would not facilitate the parties reaching agreement. The reliance on the distinction between arbitration and conciliation as a reason for not making a recommendation shows an acceptance of the proposition that making recommendations would do something other than facilitate the parties reaching an agreement, and indeed, as falling within what might be characterised as arbitration.

[31] We do not think that paragraph 34 of his Honour's decision has the meaning ascribed to it by the appellant. Whilst the language used lacks precision we think that his Honour was simply expressing the view that in the circumstances of this case a recommendation would not facilitate the parties reaching an agreement. We do not think that this part of his Honour's decision stands for any broader proposition.

[32] We make it clear that in our view the making of a recommendation is often a useful tool in the conciliator's armoury and can facilitate the parties reaching agreement. As the President of the South Australian Commission said in Re: Clerks Customs Agents (SA) Award:

[33] We agree with the above observations.

[34] Further, the making of a recommendation does not require the agreement of all parties, though such agreement is of assistance as it increases the likelihood of the recommendation being accepted and implemented by the parties as a means of resolving their dispute.

[35] We now turn to paragraphs 35 and 36 of his Honour's decision.

[36] The FSU contends that in these paragraphs the Deputy President erred by concluding that he should not make a recommendation because to do so would amount to an "imposition" on a party. It is said that his Honour also erred in concluding that expressing an opinion as to what should occur would take the role beyond that of "facilitating the parties to reach their own consensus".

[37] What the Deputy President meant in paragraphs 35 to 36 is not immediately apparent to us. His Honour does not say what would be imposed or what the nature of any imposition would be.

[38] Clearly a recommendation cannot create a legal right or obligation; nor can it enforce an existing right or obligation. It may be that his Honour considered that making a recommendation would impose an obligation on the parties to consider their position and in the circumstances he did not think that the imposition of such an obligation was appropriate.

[39] It seems to us that this part of the decision demonstrates some confusion in his Honour's mind as to the legal effect of a recommendation. The fact that the parties have, by agreement, excluded compulsory arbitration does not mean that the parties did not envisage the Commission making a recommendation during the course of conciliation proceedings. To the extent that his Honour thought that the Agreement had that effect he was in error. But we do not think that the error was jurisdictional in character.

[40] The decision subject to appeal must be read as a whole and approached fairly. As Kirby J said in Minister for Immigration and Ethnic Affairs v Wu Shan Liang:

[41] Reading his Honour's decision as a whole, it is apparent that he accepted that he had the requisite jurisdiction to make a recommendation. At paragraph 15 he says that: "This decision concerns the propriety of making recommendations from the conciliation proceedings". As we have already observed the "propriety" of making a recommendation in the circumstances only arises if it is assumed that the requisite jurisdiction exists.

[42] Further, at paragraph 20 his Honour says:

[43] The use of the word "inappropriate" suggests that his Honour has declined to exercise his discretion to make a recommendation. It does not suggest that he has refused to make a recommendation because he lacks the power to do so. This construction is supported by his Honour's juxtaposition of the jurisdiction to make a recommendation and the appropriateness of doing so, in paragraph 21 of his decision:

[44] We acknowledge that in paragraph 36 the Deputy President used language suggesting that he did not have the requisite jurisdiction. For example, the expressions "it is not allowed" and "would take the role beyond that envisaged for the Commission". But in the parlance of Wu's case these are verbal slips and when seen in the context of the decision read fairly and as a whole, do not constitute jurisdictional error.

[45] It may be that his Honour was simply expressing the view that the fact that the dispute settlement procedure excluded compulsory arbitration was, in the circumstances of this matter, a relevant consideration in deciding whether or not to exercise his discretion. If so, such a statement would not amount to a jurisdictional error.

[46] We now turn to paragraphs 37 to 40 of his Honour's decision.

[47] The FSU contends that in the above extract the Deputy President held that he should make no recommendations because any opinion or conclusions reached would be based on material, comments and submissions made in conciliation proceedings. It is argued that by agreeing to conciliation the parties have agreed to behave consistently with the obligations imposed by engaging such a process. The making of recommendations is a common incident of the conciliation process.

[48] It seems to us that his Honour's reliance on the authorities cited is misconceived. The cases referred arose in very different circumstances to those which he confronted. The fact that a recommendation may be based on material, comments and submissions made during the course of the conciliation is not a sound reason for refusing to issue a recommendation. If it were, recommendations would rarely be made. As it is they are a common feature of the conciliation process.

[49] The disclosure of a party's negotiating position is quite a different matter. But there is no need for any "without prejudice" offers to be referred to in a recommendation. By its nature a recommendation need not set out all of the reasons which have led the conciliator to recommend a particular course of action.

[50] Further, the circumstances in Wright's case are very different from those in the present matter. Wright's case concerned the appropriateness of relying on what was put in conciliation as a basis for dismissing an unfair dismissal application. The making of a recommendation in the present matter would not adversely affect the rights of either party.

[51] Finally, we do not agree with his Honour's observation that:

[52] As we have noted the making of a recommendation does not require the agreement of all parties. Expressed as a general proposition his Honour's observation is incorrect. But that is not to say that the absence of consent by all parties is not a relevant consideration in deciding whether or not to exercise a discretion to make a recommendation.

[53] It follows that we think his Honour's comments at paragraphs 37 to 39 are erroneous and that he has had regard to an irrelevant consideration. But we think that the errors in question are not jurisdictional in nature. Rather his Honour has made an error within jurisdiction.

Conclusion

[54] It is regrettable that what should have been a routine matter, namely whether it was appropriate or not to make a recommendation in the circumstances, has become the subject of such protracted proceedings.

[55] While the decision subject to appeal contains a number of errors and misconceptions about the conciliation process and the role of recommendations, we do not think that the errors identified are jurisdictional in nature. We have reached this view having regard to the reasons for decision, read fairly and viewed as a whole.

[56] We are satisfied that the matters raised on appeal are of sufficient importance that it is in the public interest to grant leave to appeal.

[57] We grant leave to appeal, but for the reasons given we have concluded that the decision is not characterised by jurisdictional error and we dismiss the appeal.

Appearances:

E White of Counsel with M. Maloney for the Finance Sector Union of Australia.

J Tuck for the Australian and New Zealand Banking Group Limited.

Hearing Details:

2003.

Melbourne:

November 18.

Printed by authority of the Commonwealth Government Printer

<Price code E>

1 AW770930.

2 Transcript PN417-418

3 See FSU's written submission, Appeal Book at pp. 68-70 and ANZ's written submission, Appeal Book at p.103; also see the transcript of proceedings on 14 July 2003 at PNs 407-410.

4 (1996) 137 ALR 70 at 94-95 per Wilcox CJ and Marshall J.

5 As illustrated by the division of opinion in Public Service Association (SA) v Federated Clerks' Union (SA Branch) (1991) 173 CLR 132.

6 R v Minister of Health [1939] 1 KB 232 at 245 - 246; R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170 at 268 per Aicken J.

7 Transcript, 18 November 2003 at PN123.

8 Exhibit A1 at paragraphs 44 and 45.

9 Ibid at paragraph 54 and 55.

10 Transcript of 18 November 2003 at PN 46.

11 CFMEU v Warkworth Mining Pty Ltd, Print PR916526, 8 April 2002 per Harrison SDP, Cartwright SDP and Cargill C; Re: Australian Broadcasting Corporation Journalists and Reporters (Salaries) Award 1990, Print M3463, 11 July 1995 per Williams SDP, Maher DP and Larkin C; FSU v GIO Australia Limited, Print PR928618, 12 March 2993 per Ross VP, Watson SDP and Larkin C.

12 PR937858 at paragraph 15.

13 See Ampol Refineries (NSW) Pty Ltd v AIMPE, Print P8620, 9 February 1998 per Giudice P, McIntyre VP and Raffaelli C.

14 See Pacific Access Pty Ltd v CPSU, Print Q4738, 11 August 1998 per Giudice J, MacBean SDP and Lewin C.

15 Re: Shire of Deakin appeal, Print H5027, 5 October 1988 per Ludeke J, Marsh DP and Merriman C.

16 [1993] AILR 346.

17 (1996) 185 CLR 259 at 291; also see Drake Personnel (1999) 90 IR 432 at 457 (NSWIC); and ALH Group Pty Ltd t/as The Royal Exchange Hotel v Mulhall, PR919205, 21 June 2002 per Ross VP, O'Callaghan SDP and Redmond C.