Industrial Relations Commission of New South Wales CITATION : Re Hotel &c Employees (State) Award [2001] NSWIRComm 284 FIRST APPELLANT Employers First SECOND APPELLANT Restaurant and Catering Association of New South Wales PARTIES : FIRST RESPONDENT Australian Hotels Association, NSW Branch SECOND RESPONDENT Australian Liquor, Hospitality and Miscellaneous Workers Union, Liquor and Hospitality Division, New South Wales Branch FILE NUMBER: IRC 663, 3747 & 3750 of 1999 and 5063 & 5338 of 2001 CORAM: Wright J President; Walton J Vice-President; Sams DP; O'Neill C CATCHWORDS : Award - Section 19 Notices of award reviews - Hotel industry - Application for leave to appeal and appeals - Application for extension of time to appeal - Jurisdiction of Commission pursuant to s19 of the Act - Whether changes to an award beyond Commission's powers - General award making powers under ss10 and 17 of the Act - Conduct of parties - Consent award - Whether Commission "functus officio" - Consenting parties' failure to inform Commission of award changes sought - Obligations on parties to properly inform Commission of intentions - Changes to award not available under s19 of the Act - Commission exceeded powers pursuant to s19 of the Act - Reaffirmation of distinction between s19 and award making powers - extension of time to appeal granted - Leave to appeal granted - Appeals upheld - Award set aside - Further proceedings ordered - Delegation of powers to single member - New award made - Related awards rescinded. LEGISLATION CITED : Industrial Relations Act 1996 s10 s17 s19 Re Principles for Review of Awards - State Decision (1998) 85 IR 38 Bizuneh v Minister for Immigration & Multicultural Affairs [2000] FCA 126 Hachem v Cimojotta (unreported, NSWCA, No 40532 of 1995, 3 July 1996) Poultry Industry Preparation (State) Award and Other Awards (unreported, Wright J President, Walton J Vice President, Harrison DP and Patterson C, Matters IRC2001/2882, 2883, 2884 and 2885, 5 July 2001) CASES CITED : Metal, Engineering and Associated Industries (State) Award [2001] NSWIRComm 26 Tennis Strings and Sutures Industry (State) Award (unreported, Walton J Vice President, Matters IRC6129 and 1281 of 1999, 15 March 2001) Warehouse Employees - Drug (State) Award [2001] NSWIRComm 37 Rock & Ore Milling and Refining (State) Award and Other Awards [2001] NSWIRComm 54 Bootmakers and Heel Bar Operatives &c (State) Award [2001] NSWIRComm 114 Pastoral Industry (State) Award (2001) 104 IR 168 HEARING DATES: 08/20/2001; 08/28/2001; 08/30/2001 DATE OF JUDGMENT: 12/11/2001 FIRST APPELLANT Mr T McDonald, Employers First SECOND APPELLANT Mr R Rogers, Restaurant and Catering Association of New South Wales LEGAL REPRESENTATIVES: FIRST RESPONDENT Mr A Rogers of Counsel for Australian Hotels Association of New South Wales SECOND RESPONDENT Mr J Barry, Australian Liquor Hospitality and Miscellaneous Workers Union, Liquor and Hospitality Division, New South Wales Branch JUDGMENT: - 15 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: WRIGHT J, President WALTON J, Vice President SAMS DP O'NEILL C Tuesday 11 December 2001 Matter No IRC99/663 HOTEL &c EMPLOYEES (STATE) AWARD Notice of award review pursuant to section 19 of the Industrial Relations Act 1996 Matter IRC99/3747 HOTEL &c EMPLOYEES (STATE) WAGES ADJUSTMENT AWARD Notice of award review pursuant to section 19 of the Industrial Relations Act 1996 Matter IRC99/3750 HOTEL &c EMPLOYEES REDUNDANCY AND TECHNOLOGICAL CHANGE (STATE) AWARD Notice of award review pursuant to section 19 of the Industrial Relations Act 1996 Matter IRC01/5063 EMPLOYERS FIRST v THE AUSTRALIAN LIQUOR, HOSPITALITY AND MISCELLANEOUS WORKERS UNION, LIQUOR AND HOSPITALITY DIVISION, NEW SOUTH WALES BRANCH AND OTHERS Application for leave to appeal and appeal against a decision of Justice Marks given on 6 July 2001 in matters IRC99/663, IRC99/3747 and IRC99/3750 Matter IRC01/5338 RESTAURANT AND CATERING NEW SOUTH WALES v AUSTRALIAN LIQUOR, HOSPITALITY AND MISCELLANEOUS WORKERS UNION, NEW SOUTH WALES BRANCH Application to extend time to appeal and appeal against a decision of Justice Marks given on 6 July 2001 in matters IRC99/663, IRC99/3747 and IRC99/3750 DECISION OF THE COMMISSION [2001] NSWIRComm 284 1 On 20 August 2001, the Full Bench of the Commission heard applications for leave to appeal and, if leave be granted, appeals by Employers' First (the "first appellant") and the Restaurant and Catering Association of New South Wales (the "second appellant") against a decision of Marks J given, in transcript, on 6 July 2001 to make a new award in proceedings under s19 of the Industrial Relations Act 1996 ("the Act") in Re Hotels Employees (State) Award and Other Awards (Matters IRC 99/663, 99/3747 and 99/3750). The second appellant also sought an extension of time for its appeal. In addition, before the Full Bench were various matters referred by Marks J in relation to award review proceedings concerning those awards. 2 The decision the subject of the appeal concerned award review proceedings determined by his Honour, pursuant to s19 of the Act, in which the Australian Hotels Association of New South Wales and the Australian Liquor, Hospitality and Miscellaneous Workers Union, Liquor and Hospitality Division, New South Wales Branch ("the Union") were principal parties and who, for convenience, are referred to as the first and second respondents respectively. 3 After considering the parties' submissions, the Full Bench that day made the following orders: 1. In relation to the appeal by the Restaurant and Catering Association of New South Wales, the application for the extension of the time for the filing of the application for leave to appeal and appeal is granted. 2. In relation to the appeals of both the Restaurant and Catering Association of New South Wales and Employers First, we order that: (a) leave to appeal is granted, and (b) the appeals are upheld. 3. The decision and award of the Honourable Justice Marks in relation to the subject award as delivered and made on 6 July 2001 is set aside. 4. In lieu thereof a variation to the subject award is made in terms of annexure A to exhibit 2, operative from today with a nominal term of one year, together with other relevant provisions such as standard provisions relating to anti discrimination, family and carers' leave, and also including relevant amendments to reflect test case decisions et cetera. 5. Employers First is directed as soon as practicable, but no later than 4pm on Wednesday, 22 August 2001, to file and serve, both in hard copy and electronic form, a document embodying the new award made in terms of these orders. 6. The Full Bench delegates its powers, authorities and functions in relation to the whole proceedings to the Honourable Deputy President Sams to finalise the making of the award in terms of the orders of the Full Bench and the award referred to earlier herein. 7. We determine that the orders made herein, when reflected in the award to be made by Deputy President Sams, will result in the subject award having been reviewed pursuant to s19 of the Industrial Relations Act 1996. 8. As part of the foregoing process, we direct that the splinter awards which are the subject of these proceedings, being the Hotel &c Employees Redundancy and Technological Change (State) Award and the Hotel &c Employees (State) Wages Adjustment Award will be comprehended within the award referred to earlier, and we also determine that when that award is made the latter two awards will have been dealt with pursuant to s19. 9. It is noted that the application in Matter No IRC2001/4552, an application by the Australian Liquor, Hospitality and Miscellaneous Workers' Union, New South Wales Branch, for variation of the Hotel &c Employees (State) Award as to the State Wage Case 2001 which has been allocated to his Honour the Vice President, will be re-allocated by the President to Deputy President Sams, who will deal with that application after the making of the award earlier referred to in these orders has occurred. It should be made clear that the reasons for the decision we have made in these matters and for the orders we have made will be given in due course. To that extent only we reserve our decision and reasons. Subject to the processes earlier referred to in the orders above and the giving of reasons, these proceedings are concluded. BACKGROUND 4 The original proceedings before Marks J commenced on 20 March 2000 by way of a notice of review, pursuant to s19 of the Act in respect to the Hotel Employees (State) Award. In accordance with Principle 6 of the Principles enunciated by a Full Bench of the Commission in Re Principles for Review of Awards - State Decision (1998) 85 IR 38, the notices of review for two related awards - the Hotel Employees (State) Wages Adjustment Award and Hotel Employees Redundancy and Technological Change (State) Award were joined to the parent award proceedings. 5 All three s19 matters were listed on a number of occasions from 1 March 2000 to 6 July 2001. These proceedings were primarily in the form of "report backs" to the Commission of negotiations being conducted between the parties. No submissions relevant to the matters to be considered under s19 of the Act were put before his Honour. Apparently, it was the intention of the parties to bring a consent document before the Commission for approval. 6 On 6 July 2001 the matters were listed before his Honour for mention. It is relevant to our consideration of these appeals to outline the nature of the proceedings on the day on which his Honour determined them. 7 On that day, Mr Lees, then appearing for the first respondent, announced that a consent document had been negotiated with the second respondent. Ms Weber, appearing for the first appellant did not consent to the making of an award in terms of the document and raised issues concerning casual loadings, part time employment and the relationship of the award to its Federal counterpart, the Federal Hospitality Industry Accommodation, Hotels, Resorts and Gaming Award 1998 ("the Federal award"). 8 After his Honour received the document Mr Lees submitted that: Actually - well, we have completed the section 19 process and gone a little further in some areas of the agreement. Obviously it is not the perfect document we would like. 9 Notwithstanding this submission, the document actually provided for: i) an extension of the Award's coverage beyond hotels to nightclubs and wine saloons; ii) allowances to be increased by a minimum of 300 per cent; iii) the introduction of new conditions for annual leave loading, paid stop work meetings and jury service; iv) substantial wage increases, including $73.10 per week for the bar attendant classification and $106.80 per week increase for the chef classification. At no time during the proceedings on 6 July 2001 was his Honour informed of the extent and magnitude of the changes proposed. 10 His Honour then asked Mr Lees about the involvement of Employers First. Mr Lees responded: We are opposed to the involvement of Employers First on the basis that the two principal parties are the union and ourselves. We don't know that Employers First have any members with an interest in this particular award. We say that we cover the field with all members of ours being members of the AHA New South Wales. 11 After a discussion with Ms Weber about the concerns of the first appellant his Honour said: If the only objection relates to conditions or rates which are contained in the existing award, and which are not increased or varied by virtue of this new proposed award then obviously, consistent with what the Full Bench has said, I must reject any arguments that you wish to put forward on the ground as to why the section 19 review should not be concluded. 12 A short adjournment was granted and Ms Weber made a brief submission on the relationship of the Award to its Federal counterpart. His Honour declined to delay the s19 process any longer and in determining the matter said: I note the submissions which have been made by Ms Weber on behalf of the Employers First in this matter, and the submissions are rejected for the reasons which are set out in the transcript, which contains fully the dialogue between Ms Weber, Mr Lees, Mr Barry and the Commission. I hereby make the Hotel Employees (State) Award in the form of the award handed up to the Commission this day which I have noted accordingly and placed with the Commission file. I note the intention of the parties to create a fresh nominal term. I acknowledge receipt of a copy of the award on disk for the assistance of the Registry staff. This now concludes the section 19 review process and I thank all parties for their assistance and co-operation. 13 In the result, his Honour made a new award known as the Hotel Employees (State) Award ("the award"). It is from this decision and the award made that the appeals have been brought. SUBMISSIONS ON APPEAL 14 Mr McDonald, who appeared for the first appellant, submitted that, while the majority of hotels were covered by the Federal award, the State award had application where hotels are not members of the Australian Hotels Association or are not named respondents to the Federal award. 15 In referring to the proceedings on 6 July, 2001, Mr McDonald submitted that the matters were listed for mention, although the first appellant had understood the proceedings to be a conciliation conference. His Honour had treated the proceedings as a hearing. 16 Mr McDonald said it appeared his Honour approved the consent arrangement between the first and second respondent, on the premise that it merely reflected existing rates of pay and conditions and the changes necessary to give effect to s19 of the Act. He submitted that neither of the respondents had disclosed to his Honour that this was not the case. His Honour therefore fell into error, albeit unintentionally. 17 Mr McDonald submitted that the award as purportedly reviewed pursuant to s19 was contrary to the decision of the Full Bench in Re Principles for Review of Awards in a number of respects - most particularly, that it was not limited to the express purpose of s19 of the Act. 18 Mr McDonald referred to paras 9 and 10 of the Principles in respect to the procedures to be followed by parties in s19 review proceedings. He said the respondents failed to comply with the procedures. In particular they: (a) did not file their award proposal; (b) did not serve their award proposal: only handing it to Employers First midway through proceedings; (c) did not allow seven days for Employers First to consider the document; (d) did not provide a list of award provisions which require review; and (e) did not provide an Outline of Contentions. It followed, Mr McDonald submitted, that the appellant had been clearly prejudiced and denied procedural fairness. 19 Further, he submitted, the changes proposed in the document could only ever be processed through the Special Case principle. Large wage increases were not accompanied by any cost offsets or efficiencies in accordance with the State Wage Case principles. 20 He submitted that the Commission failed to take account of the award being a counterpart award and that the changes made, in line with the Federal award, were only those advantaging employees. 21 Mr R Rogers, who appeared for the second appellant, supported the submissions of Mr McDonald. He said the second appellant had not been a party to the original proceedings, despite having a clear interest in what was proposed. As to the grant of the application for extension of time to appeal, Mr Rogers submitted that the second appellant was never made aware of the nature of the proceedings before Marks J and was not aware of the changes made until well after the time to appeal had expired. 22 The impact of the changes affecting the second appellant were such as to warrant the Commission granting an extension of time to appeal, and granting leave to appeal. 23 The second appellant's primary concern went to the proposed award coverage extending to nightclubs and wine saloons. Mr Rogers submitted that this extension directly impacted on the coverage of employees covered by the Restaurant Employees (State) Award. He said the second appellant was not given an opportunity to be heard, as an interested party in the s19 proceedings, so as to permit it to raise objections to the changes proposed by the respondents' consent award. The second appellant had, therefore, been denied natural justice. He submitted that Marks J was not given an opportunity to take account of all issues relevant to the matters before him. Respondents' Submissions 24 Mr A Rogers of Counsel made the primary submissions on behalf of both respondents. He submitted that, even if the appeals were competent, the matters remaining to be determined were purely procedural. Mr McDonald had not been able to establish that there was a denial of natural justice on 6 July 2001. It was clear, Mr Rogers contended, that Ms Weber (then appearing for the first appellant) on that day, only objected to one matter and appeared "unfazed" by other changes, particularly as the document was substantially similar to one the first appellant had been provided with on 22 May. She did not oppose the making of the Award. It was not open for the first appellant to now complain: see Bizuneh v Minister for Immigration & Multicultural Affairs [2000] FCA 126 (per Burchett, Carr and Nicholson JJ) and Hachem v Cimojotta, (unreported, NSWCA, Clarke, Meagher and Cole JJA, No 40532 of 1995, 3 July 1996). 25 Mr Rogers conceded that the complaint of the second appellant may be legitimate if the extension of the award impinged on the Association's coverage. If this was established it may be open for rectification on appeal, but only as to the coverage of the award. 26 Mr Barry, who appeared for the second respondent, supported Mr A Rogers' submissions and added that, as the first appellant had consented to the Award made by Marks J, it was not permitted to now, on appeal, challenge the decision. The appellants had not identified any aspects of the proceedings constituting a denial of natural justice. Had the first appellant believed so at the time, it should have, but did not, seek an adjournment of the proceedings. 27 Mr Barry submitted that the Award made by Marks J was within the scope of s19 of the Act and that the Commission's Award Review Principles were not mandatory. 28 Mr Barry challenged the jurisdiction of the Commission in respect to the referred matters, arguing that Marks J had concluded the s19 Review process. The Commission was, therefore, functus officio. 29 He submitted that the first appellant had listed some twelve matters it took issue with, but provided no reasons why such matters should be further considered by the Commission. 30 In any event, Mr Barry submitted, the first appellant had failed to establish that it had a sufficient interest in the proposed Award. 31 Mr Barry submitted that there was no substance to the complaint of the second appellant as the premise of the award was based on liquor, and not food consumption. 32 Mr Barry strongly rejected any proposition that the Union misled Marks J. The principal parties had tried to accommodate everything sought by the first appellant, save for matters that were offensive and which would require substantive application. 33 Mr Barry resisted the award being sought by the first appellant as it sought a reduction in penalty rates and casual loading which adjustments were not permissible under s19 of the Act. 34 He submitted the first appellant was not interested in an award, but simply wanted a Federally imported award. This was not possible under the State Wage Fixing Principles or the legislative requirements of the Act. Leave to Appeal and Extension of time 35 In our opinion, the issues canvassed in these appeals raise important matters as to the operation of s19 of the Act and the Commission's powers in reviewing awards under that section. Specifically, the appeals raise the question of whether the award made by Marks J on 6 July 2001 exceeded the Commission's powers and functions under s19 of the Act. 36 We are satisfied that the matters are of such importance that, in the public interest, leave to appeal should be granted in respect to the Employers First appeal. We also extend time for the bringing of the appeal by the second appellant as that organisation was not made aware of matters adversely affecting its interest until some time after the time had elapsed for an appeal. We also grant leave in relation to that matter. CONSIDERATION 37 A convenient starting point for our consideration of the merits of the appeal concerns the differences between the obligations reposing in the Commission under its general award making powers under s10 and s17 of the Act and those arising under s19 as exempted by the stated purpose of that provision, namely "to modernise awards, to consolidate awards relating to the same industry and to rescind obsolete awards" (s19(2)). 38 In Re Principles for Review of Awards the dichotomy between the Commission's two functions was expressly referred to as follows: We immediately remark that it follows from this statutory framework that the review process established by s19 of the 1996 Act gives the Commission a particular role in reviewing awards which is different to the opportunity which parties to awards themselves are given, by the other sections mentioned, to bring forward applications for the making of new awards or the variation of existing awards. Section 19 is neither an alternative to nor a substitute for such applications. Applications brought by award parties in order to meet the needs of employers and employees in the circumstances of a particular industry or enterprise are pursued and determined in accordance with the provisions of the 1996 Act, particularly s10, together with our applicable legislation and applicable principles, including those established in State Wage Case decisions, State decisions and test case decisions. By way of contrast, the process established by s19 has a stated and limited purpose - namely "to modernise awards, to consolidate awards relating to the same industry and to rescind obsolete awards". In s19(3) and (4), matters which the Commission must take into account in giving effect to the purpose are specified. Care must be taken, it seems to us, to ensure that those two processes are not confused. 39 The need to adhere to this distinction has been confirmed and restated in numerous subsequent decisions of the Commission: see, for example, Poultry Industry Preparation (State) Award and Other Awards (unreported, Full Bench, Matters IRC2001/2882, 2001/2883, 2001/2884 and 2001/2885, 5 July 2001); Metal, Engineering and Associated Industries (State) Award [2001] NSWIRComm 26; Tennis Strings and Sutures Industry (State) Award (unreported Walton J Vice President, Matters IRC6129 and 1281 of 1999, 15 March 2001); Warehouse Employees - Drug (State) Award [2001] NSWIRComm 37; Rock & Ore Milling and Refining (State) Award and Other Awards [2001] NSWIRComm 54 and Bootmakers and Heel Bar Operatives &c (State) Award [2001] NSWIRComm 114. 40 Section 19 of the Industrial Relations Act is neither an alternative to, or a substitute for, applications under s10 and s17 of the Act. Such applications must be brought in the customary manner in accordance with the requirements of the Act, although such applications may, in appropriate circumstances, be heard in conjunction with s19 proceedings. 41 It is plain that changes proposed to be made to an award under s19 of the Act which go to matters such as expanding the award's coverage, increasing rates of pay outside State Wage Case Principles and significantly increasing casual loadings, are not contemplated or permitted by the terms of s19 of the Act. Changes of that character, irrespective of whether they are said to be necessary to preserve a counterpart relationship with a Federal award, are only capable of being processed under the relevant provisions of the Act and in accordance with State Wage Case Principles (see Pastoral Industry (State) Award (2001) 104 IR 168). So much was recognised by his Honour, Marks J, in the proceedings at first instance. However, the parties to those proceedings moving for the making of a consent award provided no assistance to his Honour as to the true character of the changes proposed to be made to the existing award in those proceedings. 42 His Honour was moved to act upon the proposed consent award after the failure of the respondents to disclose to him that the document did much more than simply reflect existing rates of pay and conditions with changes legitimately arising under s19 of the Act. Even after his Honour expressed an intention to proceed with the matter based on his understanding that there were no significant changes to existing rates and conditions, no steps were taken by the consenting parties to disabuse his Honour of his incorrect assumption. 43 We would express our concern with the conduct of the proceedings on 6 July 2001 and, in particular, the inappropriate and incomplete submissions made by the respondents to his Honour. On a review of the transcript of proceedings, there was an absence of candour as to what the parties were asking his Honour to approve. Ultimately, the only reference to what the respondents were seeking, in reality, was Mr Lees' submission, that the parties had completed the s19 process and "gone a little further in some areas of the agreement". 44 We would stress that there is an obligation on parties appearing before the Commission to properly and comprehensively advise the Commission of what is being sought in the proceedings and inform the Commission of all relevant matters. It is, in our opinion, a particularly serious matter when parties to proceedings do not disclose the intended consequences of documents filed by consent, and for which ratification is being sought by the Commission in the form of a binding common rule award. 45 It was left to the representative of the first appellant (Ms Weber) to raise some concerns although it appears that these concerns were not put with any specificity, and were criticised by the respondents as being obstructive and of little moment. In view of the time constraints, and the other circumstances to which we have referred, no criticism could have been or could now be made of that party's approach. 46 We observe that Mr A Rogers' submissions dealt, in large measure, with whether the first appellant had consented to the award being made by Marks J. That being so, he submitted, the appellant can not now complain about the outcome. 47 A balanced analysis of the proceedings on that day clearly demonstrates that the first appellant did not consent to the award being made. In any event, the question to be determined on appeal is not whether consent was forthcoming, but rather what occurred was an appropriate exercise of the powers and functions provided by s19 of the Industrial Relations Act. As will be evident from our earlier findings the answer must be in the negative. 48 We note in the proceedings before his Honour that the particular concern of the second appellant as to the proposed award's extended coverage to nightclubs and wine saloons was not addressed at all. The second appellant was not a party to the proceedings, nor was his Honour informed by the principal award parties of what was being proposed in this regard. In this respect, as was properly conceded, the proceedings miscarried. The appeals should therefore be upheld. 49 In view of the decision we have reached in relation to the appeals, it is unnecessary to make findings on whether the Commission is functus officio in relation to the referred matters. The foregoing are the reasons for the orders made on 20 August 2001; see paragraph 3 above. 50 We note that pursuant to those orders the s19 proceedings have now concluded with an award made by Sams DP on 30 August 2001, taking effect from 20 August 2001, and orders of rescission made in respect to the Hotel &c Employees (State) Wages Adjustment Award and Hotel &c Employees Redundancy and Technological Change (State) Award. _____________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.