Bannister v Department of the Treasury [1995] IRCA 327

CATCHWORDS INDUSTRIAL LAW - Termination of employment - Claim of unlawful termination - Redundancy - Implied Limitation of Powers - Senior Officer Holder, Definition of - Jurisdiction Applies to State Employees terminated on basis of operational requirements. Industrial Relations Act 1988, S170DE, S170ED, S170EDA, S170EA. CONSTITUTIONAL LAW - Implied limitations in legislative power of Commonwealth - Division 3 Part VIA Industrial Relations Act 1988 does not impair capacity of a State to function as a government. CASES: The Australian Education Union [1995] 128 ALR 609 Beshara v Budget Couriers Equity Management Employee Relations Commission of Victoria (unreported) 22 July 1993 Hunt v STA Technical Engineering Pty Ltd (t/a Boyd Steel), (IRCA, Ryan JR, (unreported) 23 September 1994) Gregory v Philip Morris [1988] 80 ALR 455 Papadopoulos v The Colonial Mutual Life Assurance Society Ltd (IRCA, Ryan JR, (unreported) 16 August 1994) Bunnetts v Henderson Federal Springs [1989] 4VIR 364 BANNISTER v DEPARTMENT OF THE TREASURY No. VI-1504/95 Before: Ryan JR Place: Melbourne Date: 14 July 1995

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY Matter No VI-1504/95 B E T W E E N: PETER BANNISTER Applicant AND: DEPARTMENT OF THE TREASURY Respondent RYAN JR MINUTES OF ORDER 14 JULY 1995 THE COURT ORDERS THAT: The application be dismissed. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY Matter No VI-1504/95 B E T W E E N: PETER BANNISTER Applicant AND: DEPARTMENT OF THE TREASURY Respondent COURT: RYAN JR PLACE: MELBOURNE DATE: 14 JULY 1995 EX TEMPORE JUDGMENT (Revised from Transcript) TERMINATION ON GROUNDS OF REDUNDANCY I propose to rule on whether the termination of the applicant occurred on grounds of the operational requirements of the employer and on the grounds of redundancy, and I will do that at this stage. And in doing it, I will not go into the details and background of the application for remedy for unlawful termination of employment. That is not to say at some later stage the details may not be gone into in a written determination of the Court. On 1 June 1995 a notice of motion from the respondent returnable on 23 June was filed in the Court but on that date, that is on 1 June, a Duty Judge, Gray J, determined that the motion was inappropriate and that the issue should be canvassed at trial. ISSUE OF IMPLIED LIMITATION OF POWERS The issue to which the Judge referred was the motion that the applicant's application be dismissed. This motion was founded on the following propositions (1) the employment of the applicant was terminated on the ground of redundancy, (2) Division 3 part VIA of the Industrial Relations Act 1988 has no application in relation to the applicant's termination of employment (3) the Court lacks jurisdiction to deal with the applicant's application for remedy (4) the lack of jurisdiction is based on the implied constitutional limitation against laws of general application of the Commonwealth which operate to destroy or curtail the continued existence of the States or their capacity to function. PRE TRIAL ORDERS On 8 June the Court made a number of orders designed to allow the trial to proceed on 13 July. Among other things, reasonable time had to elapse for the giving of notice to the Attorneys General of the Commonwealth and the States of a cause pending in this Court arising under the constitution and involving the interpretation of the constitution. I refer there to the requirements of section 78B of the Judiciary Act 1903. The matter proceeded yesterday with the respondent, through his counsel, Mr Parry, agreeing to call evidence and make submissions designed to demonstrate that the applicant was terminated on the grounds of his redundancy, and thus establish in the respondent's submission a lack of jurisdiction in this Court based on the doctrine of implied limitation of Commonwealth legislative power. PROCEDURE AT TRIAL Both parties agreed that, while certain respondent witnesses were brought to Court, the applicant could begin his case by giving evidence as to why he alleges the termination of his employment was unlawful. After the applicant gave evidence, Mr Parry, counsel for the respondent, cross-examined but confined his cross-examination to matters relevant to the respondent's claim of termination on the grounds of redundancy. Mr Parry then called evidence but again primarily confined evidence-in-chief to issues relevant to the claim of termination on the grounds of redundancy. TERMINATION BASED ON OPERATIONAL REQUIREMENTS I have concluded that the termination of the applicant was indeed for valid reasons based on the operational requirements of the employer, the Crown in the Right of State of Victoria, and that the termination was on the grounds of redundancy and probably redundancy in the sense in which that word is used in the State Employees case 128 ALR 609. I will not at this stage provide citations to the authorities on which I rely, but I will say that these authorities are cited in Papadopoulos v The Colonial Mutual Life Assurance Society Ltd (IRCA, Ryan JR, (unreported) 16 August 1994) and include consideration of the extended definition of redundancy as outlined by Deputy President Lawrence in Bunnetts v Henderson Federal Springs [1989] 4VIR 364 at 376. At this stage, I will simply say that the operational requirements of the State government led to a total restructure of the Departments of both Finance and Treasury, following change of government in October 1992. JURISDICTIONAL ISSUE I will turn next to the jurisdictional issue, and to the applicability of the doctrine of implied limitation of Commonwealth legislative power, and I expect to be able to rule on that issue at 2.15 pm today. And if I rule that the doctrine does not apply so as to prevent the Court having jurisdiction, I would anticipate and hope that this matter could continue immediately and be resolved today. DOCTRINE OF IMPLIED LIMITATION OF POWER The respondent's position is succinctly put in the last three paragraphs of counsel's outline of submission and is as follows: Division 3 of part VIA of the Industrial Relations Act gives powers to the Court to deal with applications in respect of termination of employment. These powers the respondent submits should be read consistently with the Australian constitution. There is an implied limitation on the exercise of Commonwealth legislative powers which prohibits discrimination against placing special burdens or disabilities on States and prohibits laws of general application which operate to destroy or curtail the continued existence of the States or their capactiy to function as governments. STATE EMPLOYEES CASE This implied limitation has recently been considered by the High Court in The Australian Education Union [1995] 128 ALR 609 hereafter referred to as the State Employees case. As noted in that case at 630, the majority stated as follows: It seems to us that critical to that capacity, (i.e. the capacity to function as a government), is the government's rights to determine the number and identify of persons whom it wishes to employ, the term of employment of such persons and, as well, the number and identity of the persons whom it wishes to dismiss with or without notice from its employment on redundancy grounds. An impairment of a State's rights in these respects would, in our view, constitute an infringement of the applied limitation. Counsel for the respondent had also referred to other passages at 630, 631, 632 and 637. In any event, the Court has read all of the case and read it thoroughly. The respondent submits that the High Court concluded that the Australian Industrial Relations Commission could not make an award in respect of redundancy of public servants, nor could the Commission make an award binding the States in relation to the terms and conditions of employment of senior office holders. Ultimately the Court overturned awards which restricted the State's right as an employer to terminate the employment of employees on the ground of redundancy. The respondent submits that the State Employees case decision makes clear that a Commonwealth law cannot restrict a State in selecting persons for termination on the grounds of redundancy and terminating such persons on those grounds. Further, the more senior the employee, the more control the State has over the regulation of the terms and conditions of the employee's employment as well as the terms on which the employment may be terminated. Given that it is clear that the position formerly held by the applicant was redundant, (and the Court has already held that), then the respondent submits the Court does not have power to make orders restricting the powers of the State of Victoria to terminate the employment of the applicant, or indeed power to make any orders at all. The Court notes that the respondent's general argument of interference with State power to dismiss seems to be based on a passage in the majority judgment at 630. CONCILIATION AND ARBITRATION POWER Before going to it, the Court notes that the case deals specifically with the applicability of the doctrine of implied limitation in respect of the Commonwealth legislative power under section 51 (xxxv) of the Constitution, namely the "industrial relations power" the conciliation and arbitration power. The Court also notes that Division 3 part VIA of the Industrial Relations Act 1988 is not based on that Commonwealth legislative power.