Industrial Relations Commission of New South Wales CITATION : Club Employees (State) Award and other Awards, Re [2002] NSWIRComm 362 APPLICANT: Labor Council of New South Wales RESPONDENTS: Employers First Australian Business Industrial Australian Industry Group Electrical Contractors' Association of New South Wales NSW Farmers' (Industrial) Association PARTIES : Clubs NSW Australian Retailers' Association, New South Wales Division Real Estate Employers' Federation of NSW New South Wales Road Transport Association Inc Restaurant & Catering Association of NSW (and other private employers) Health Administration Corporation Public Employment Office Department of Education and Training New South Wales TAFE Commission FILE NUMBER: IRC 3204 of 2001 CORAM: Wright J President; Sams DP; Boland J; Redman C Award - Conditions of Employment - Registered Organisations - Deduction of union fees - Jurisdiction - Award making power - Application to vary a number of awards to provide a facility for the deduction of union fees from wages by employer upon authorisation by employee - Definition of "industrial matters" - Objects of the Industrial Relations Act - Obligation when exercising powers to have regard to objects of the Act - Industrial merit - Application to vary granted. Conditions of Employment - Deduction of union fees - Registered Organisations - Jurisdiction - Award making power - Application to vary a number of awards to provide a facility for the deduction of union fees from wages by employer upon authorisation by employee - Definition of "industrial matters" - Objects of the Industrial Relations Act - Obligation when exercising powers to have regard to objects of the Act - Industrial merit - Application to vary granted - CATCHWORDS : Statutory interpretation - Award making power - Purposive construction - Interpretation Act 1987 - Purposive construction in order to facilitate the objects of the Act - Definition of "industrial matters" - Application to vary within jurisdiction. Words and phrases - "industrial matters" Industrial Arbitration Act 1940 LEGISLATION CITED : Industrial Relations Act 1991 Industrial Relations Act 1996 s 3 s 6 s 10 s 11 s 118 s 193 Interpretation Act 1987 s 33 s 34 Alcan Australia Limited & Ors Ex parte Federation of Industrial, Manufacturing and Engineering Employees, Re (1994) 181 CLR 96 Australian Builders Labourers Federation v Archer (1913) 7 CAR 210 Australian Ship and Wharf Workers Association v Waterside Workers' Federation of Australia (1919) 13 CAR 4 Australian Tramway Employees Association and Brisbane Tramways Company Limited (1912) 6 CAR 35 Bermingham v Corrective Services Commission of New South Wales (1988) 15 NSWLR 292 Bolton, Ex parte Beane (1987) 162 CLR 514 Byrne & Frew v Australian Airlines Limited (1995) 185 ALR 410 Byrnes v The Queen (1995) 183 CLR 501 Campbells Cash and Carry Pty Ltd v National Union of Workers, New South Wales Branch (No.2) (2001) 53 NSWLR 393, 106 IR 430 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award, Re [2002] NSWIRComm 144 Federated Clerks Union of Australia v Altona Petrochemical Company Pty Limited (1973) 150 CAR 387 Federated Clothing Trades of the Commonwealth v Archer (1919) 13 CAR 647 Four Sons Pty Ltd v Sakchai Limsiripothong (2000) 98 IR 1 Hornsby Shire Council v Porter (1990) 19 NSWLR 716 CASES CITED : Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586 Mills v Meeking (1990) 169 CLR 214 Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 New South Wales Public Service Clerical Officers' Association, Re [1951] AR (NSW) 331 North Ganalanja Aboriginal Corporation v The State of Queensland (1996) 185 CLR 595 Operational Ambulance Officers (State) Award, Re (2001) 113 IR 384 Pastoral Industry (State) Award, Re (2001) 104 IR 168 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Public Hospital Nurses (State) Award [2002] NSWIRComm 100 R v Holmes, Ex parte Public Service Association of New South Wales (1977) 140 CLR 63 R v Portus, Ex parte ANZ Banking Group (1987) 127 CLR 358 Repatriation Commission v Vietnam Veterans' Association of Australia NSW Branch Inc (2000) 171 ALR 523 Retail Trade Union Training Leave (State) Award, Re (unreported, 15 December 1994) Storeworkers - Campbells Cash & Carry Pty Limited (NSW), NUW (NSW Branch) Award 2000 (2000) 104 IR 367 Storeworkers - Campbells Cash & Carry Pty Limited (NSW), NUW (NSW Branch) Award 2000 (No. 2) (2001) 104 IR 385 Thompson v Byrne (1999) 196 CLR 141 Thompson v Goold & Co [1910] AC 409 HEARING DATES: 03/06/2002; 03/07/2002; 03/08/2002; 03/15/2002; 03/25/2002; 03/26/2002; 03/27/2002 DATE OF JUDGMENT: 12/20/2002 APPLICANT: The Hon J W Shaw QC and Mr A A Hatcher of counsel Jones Staff & Co., Lawyers (Mr Conrad Staff) RESPONDENTS: LEGAL REPRESENTATIVES: Mr J N Gallagher SC and Mr R S Warren of counsel (Mr Tim McDonald, Employers First and other private employers) Ms K T Nomchong of counsel (for Health Administration Corporation and Public Employment Office) Mr R Hitchen for Department of Education and Training and NSW TAFE Commission JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH CORAM: WRIGHT J, President SAMS DP BOLAND J REDMAN C Friday 20 December 2002 Matter No IRC 3204 of 2001 CLUB EMPLOYEES (STATE) AWARD AND OTHER AWARDS Application by the Labor Council of New South Wales for variation re union contributions STATEMENT OF THE FULL BENCH [2002] NSWIRComm 362 1 These proceedings concern an application by the Labor Council of New South Wales, a State Peak Council, under s 11 of the Industrial Relations Act 1996 to vary five major awards by inserting a clause relating to the deduction by the employer of union members' membership fees from employees' pay. 2 On 6 March 2002, the parties indicated that there had been a consent position reached in relation to the public sector awards the subject of the application. On 7 March 2002 the President, on behalf of the Full Bench, varied seven public sector awards to provide for the deduction by the employer of union members' membership fees from employees' pay. 3 Consequently, the private sector awards that are the subject of this decision are the: 1. Club Employees (State) Award; 2. Electrical, Electronic and Communications Contracting Industry (State) Award; and the 3. General Construction and Maintenance, Civil and Mechanical Engineering (State) Award. 4 The application was amended, with the consent of the parties, on a number of occasions throughout the course of the proceedings. In its final form, the application sought to insert the following clause in the above awards: Deduction of Union Membership Fees (i) The employer shall deduct Union membership fees from the pay of any employee who is a member of the Union in accordance with the Union's rules, provided that the employee has authorised the employer to make such deductions. Any such authorisation shall be in writing. Where the employee passes any such written authorisation to the Union, the Union shall not pass the written authorisation on to the employer without first obtaining the employee's consent to do so. Such consent may form part of the written authorisation. (ii) Monies so deducted from employees' pay will be forwarded to the Union forthwith together will all necessary information to enable the reconciliation and crediting of subscriptions to employees' membership accounts. (iii) Where an employee has already authorised the deduction of Union membership fees from his or her pay prior to this clause taking effect, nothing in this clause shall be read as requiring the employee to make a fresh authorisation in order for such deductions to commence or to continue. (iv) The Union shall advise the employer of any change to the amount of membership fees made under its rules. The Union shall give the employer a minimum of one month's notice of any such change. (v) An employee may at any time revoke in writing an authorisation to the employer to make payroll deductions of Union membership fees. (vi) Where an employee who is a member of the Union and who has authorised the employer to make payroll deductions of Union membership fees resigns his or her membership of the Union in accordance with the rules of the Union, the Union shall inform the employee in writing of the need to revoke in writing the authorisation to the employer in order for payroll deductions of union membership fees to cease. Outline of Parties' Contentions 5 The Labor Council's contentions were in the following terms: 1. The Commission has jurisdiction to grant the claim. The subject matter of the deduction of union dues falls within the definition of "industrial matter" within s 6(2) of the Industrial Relations Act 1996 ("the Act"); consequently it also falls within the definition of "conditions of employment" in the Dictionary to the Act, and can therefore be the subject of award provision under s 10: Campbells Cash and Carry Pty Ltd v National Union of Workers, New South Wales Branch (No 2) (2001) 106 IR 429. 2. The effect of the claim, if granted, would be to require an employer bound by the subject awards to deduct union membership fees on behalf of any employee who authorises the employer to do so. As such, the claim facilitates voluntary membership of unions and is consistent with the provisions of Part 1, Principles of Association, of Chapter 5 of the Act. 3. By virtue of s 146(2) of the Act, the Commission is required to take into account the public interest, and for that purpose must have regard to, inter alia , the objects of the Act. The claim is consistent with the objects of the Act, and in particular advances the object stated in s 3(d), in that by facilitating voluntary union membership it would serve to encourage participation in industrial relations by unions. In addition, by providing an efficient and accessible method for the payment of union fees, it would encourage the responsible management of unions. 4. Many employees remunerated by the subject awards are relatively lowly paid. Their financial circumstances often make it difficult for them to pay annually-charged amounts, such as union contributions, by way of single lump sums. Deductions of union fees from an employee's pay each pay period makes it easier for employees to afford union membership, and thereby to become and remain union members if they wish to do so. 5. For unions themselves, payroll deductions provide a relatively simple and inexpensive way of collecting membership fees from members, and by providing a regular cash flow enhances financial administration and long term planning. Unions whose members have access to payroll deduction facilities are able to reduce administrative costs and thus allocate greater resources to the servicing of members. 6. The direct debit of union fees is generally regarded as a less satisfactory alternative for union members than payroll deductions, because it involves dealings with financial institutions, bank charges, the disclosure of bank account details, and the maintenance of minimum balances in personal accounts. It is also far more administratively complex for unions. 7. Although many employers bound by the subject awards have voluntarily agreed to introduce payroll deductions of union membership, some have refused to do so. The claim if granted would compel non-consenting employers to make available a payroll deduction facility to their employees. The imposition of such an obligation on employers would not be onerous or inhibitive of their business efficiency. 8. The creation of an award obligation on an employer to provide a payroll deduction facility would prevent the arbitrary and unilateral withdrawal of such a facility by the employer. On a number of occasions, employers who have voluntarily agreed to payroll deductions have stopped them with little or no notice in the context of an industrial dispute or in response to legitimate action being taken by the relevant union. Such conduct by employers can have a seriously detrimental effect on the financial stability of unions. If the claim were granted, it would still be open to an employer to apply to the Commission to vary the relevant award to have the payroll deduction facility withdrawn in a particular case; however the onus would be on the employer to demonstrate a proper basis for such an application. 9. The public interest favours the facilitation of voluntary union membership, particularly in circumstances where: (i) The statistical evidence demonstrates that the proportion of employees in the workforce who are members of unions is in decline; and (ii) Evidence from opinion polling shows that a greater proportion of the workforce would like to be members of a union than actually are members of a union. 10. The provision of a payroll deduction or "check-off" facility by employers is a common international labour practice. 11. For the above reasons, the award provisions sought by the Applicant constitute fair and reasonable conditions of employment such as to permit the claim to be granted (see s 10 of the Act). Furthermore, to the extent that any of the subject awards are within their nominal term, the grant of the claim would not be contrary to the public interest, and there is a substantial reason for the grant of the claim, thus satisfying the requirements of s 17(3)(c) of the Act. To the extent that any of the subject awards are outside their nominal term, the grant of the claim would not be contrary to the public interest, thus satisfying the requirements of s 17(3)(d). 6 The contentions of the respondent employers were: 1. The Industrial Relations Commission of New South Wales lacks jurisdiction to grant the claim. The deductions of union dues does not fall within the definition " industrial matters " contained in section 6(2) of the Industrial Relations Act 1996 (the Act). 2. Section 6(2) of the Act cites examples of " industrial matters " as including "Section 6(2)(i) The authorised remittance by employers of membership fees of industrial organisations of employees." 3. The Application requires an employer to " deduct Union membership fees " and to forward " moneys so deducted " to the Union. 4. There is a distinct difference between the act of remitting, or forwarding, moneys from the act of deducting money from an employee's wages. 5. Section 118(1) of the Act, requires an employer to pay remuneration to an employee in full. Section 118(2) permits an employer to deduct and pay an employee's remuneration in certain circumstances. The wording of section 118(2) of the Act is explicit in terms: - "… an employer can deduct …". This wording is deliberate and permissive, but falls far short of obligating an employer to deduct. 6. If Parliament wanted to make the deduction of union fees obligatory it would have done so, but did not. 7. In any event, even if Parliament had expressed such an intention, which it did not, sound authority exists for the proposition that the Court cannot impose a will or an inference contrary to statute (re Bolton; Ex parte Beane (1987) 162 CLR 514 at 515 - 516). 8. The employer respondents to the application support voluntary membership of unions and are opposed to employers being compulsorily involved in the employee's membership of trade unions. 9. It is not in the public interest that employers be obliged, by force of law, to deduct and remit union fees on behalf of their employees. 10. If union members face financial difficulties in paying union membership fees on an annual basis, the respective union ought address that problem by allowing its members to remit on a smaller and more frequent basis. This is an administrative consideration for the union and should remain none of the employer's concerns or knowledge. 11. If employees wish to pay their union fees weekly, fortnightly or monthly, arrangements could be made by them and their union to have the moneys deducted and remitted by the employee's financial institution. If the employee incurs a charge at source for this deduction, the union should look at reducing, or discounting the fees by the amount charged by the financial institution. 12. It is inappropriate and unreasonable that employers be forced to become the " banker " for the union. 13. The imposition of the compulsory deduction and remittance of union fees on employers would be an onerous and intrusive imposition on the operations of many employers in the state. 14. There is no evidence that employers have arbitrarily withdrawn their previous voluntary deduction and remittance of union fees in the context of industrial disputes. Unions do not have a legitimate right to adversely affect the economic wellbeing of employers. Unions who embark on action aimed at imposing economic pressure on an employer cannot legitimately or seriously suggest that that same employer should continue to financially support the union by continuing to deduct and remit union fees of its employees. 15. There is no international labour practice whereby an employer is obliged by law to deduct and remit union fees, other than those arrangements entered into on a voluntary basis. 16. The award provisions sought would impose by legal force an unwelcome, unreasonable and unwanted burden on many employers in the state. Such an imposition cannot be justified on the evidence sought to be brought before this C ommission. 17. The employer respondents do not oppose the voluntary deduction and remission of union fees by an employer who wishes to so act. 7 All of the parties approached the proceedings on the basis that it dealt with the issue of award provisions providing for the deduction of union fees as a test case and presented evidence and submissions accordingly. This decision deals with the issue in the same way as did the parties. Evidence for the Applicants 8 Statements of evidence were provided on behalf of the applicants by: Mr Russell Collison, State Secretary of the Australian Workers' Union, New South Wales, and Secretary of the Australian Workers' Union, Greater New South Wales Branch (AWU); Mr John Hennessy, General Secretary of the New South Wales Teachers Federation; Mr Bernard Riordan, State Secretary of the Electrical Trades Union, NSW Branch (ETU); Mr John Barry, Divisional Secretary and Assistant Branch Secretary of the Liquor and Hospitality Division of the Australian Liquor, Hospitality and Miscellaneous Workers Union, New South Wales Branch (LHMWU), and; Mr Mark Lennon, Assistant Secretary of the Labor Council of New South Wales. Evidence of Respondents 9 The respondents led evidence from: Mr Gerard Boyce, Industrial Relations Manager for the Electrical Contractors' Association of New South Wales, the National Electrical Contractors Association (New South Wales and ACT Chapters) and the Refrigeration and Air-conditioning Association of New South Wales; Mr Duncan Fraser, Vice President of the NSW Farmers' Association and executive committee member of the NSW Farmers' (Industrial) Association; Mr Barry Harridge, Deputy Director - Construction and Special Projects of Employers First; Ms Tanya Marshall, Divisional Manager - Employee Relations of Employers First; Mr Robert Morgan, former Industrial Advocate for the Registered Clubs' Association of New South Wales (now Clubs NSW); Mr David Ritchie, Director of Employee Relations of the Australian Retailers' Association, New South Wales Division; Mr Bryan Wilcox, President of the Real Estate Employers' Federation of NSW; Mr David Hargraves, Executive Officer, NSW of the Australian Industry Group; Mr Andrew Woods, Legal Officer of the New South Wales Road Transport Association Inc; Mr Paul Greenwood, Registered Tax Agent and Company Auditor; Mr Ian Martin, Managing Director of The Avocado Group Pty Ltd, Vice President of the Restaurant & Catering Association of NSW; Mr Adrian Scott, Business Relations Manager of Camsons Pty Ltd. Jurisdiction 10 A major feature of the respondents' case was that the Commission had no jurisdiction to award the variations sought. We find that the Commission has jurisdiction to make an award in the terms of the amended application. Discretionary considerations and conclusions 11 The touchstone in determining an application for a new award or a variation to an existing award, is whether the award provides "fair and reasonable conditions of employment for employees". As has been emphasised on numerous occasions, in making that assessment, there is a presumption that the conditions in an existing award are 'fair and reasonable'; the evidentiary onus of rebutting that presumption being, in the ordinary way, on the applicant. 12 Senior counsel for the applicant contended that the Commission, would be acting in accordance with its "legislative charter" if it positively encouraged not only the formation of such bodies but their vibrant, lively and continued existence by facilitating ease of membership and the maximum migration of membership. We agree. 13 Although we have had regard to earlier authorities and the dicta in them as to positively facilitating and encouraging registered organisations, or as to taking such aspects into account in the exercise of the tribunal's functions and jurisdiction, and readily recognise that observations upon the construction of statutes in similar form may be of assistance to our task, we would emphasise, in accordance with our observations on the appropriate construction of statutes, the Commission must relate the exercise of its jurisdiction to the statutory mandates and limitations in the Industrial Relations Act. 14 The respondents' submissions appeared to be prefaced, at least in part, on the idea that for the application to succeed it must, of itself, positively encourage the joining of a union by non-members or result in an improvement of the financial viability of a registered organisation. We do not consider that this is the only means by which the objects of the Act may be facilitated or fostered. We would accept the submission of the applicant that the statistical evidence is suggestive of some practical difficulty to persons joining a registered organisation. We consider that in granting this application, we may be providing a convenient or a more convenient means by which persons could choose to remit their membership fees to a registered organisation. Providing such assistance may remove one of the practical difficulties to persons joining a union and in so doing, the Commission would be acting consistently with the legislative charter to encouraging participation in industrial relations by representative registered organisations. 15 The evidence makes it plain that there is already widespread adoption of payroll deduction facilities by agreement (although such agreements are by no means universal), currently pertaining to employment relationships under the awards. The extent to which the evidence demonstrated the existence of these facilities belies the respondents' contention as to these arrangements being onerous on employers. We are satisfied that the facility would be of benefit both to individual employees in that it may be of assistance in managing their finances, and to unions themselves which on the evidence find these facilities provide greater membership retention and more efficient administration. 16 Other than the jurisdictional objection, the most significant matter which was raised against the application was the burden which it would place on some businesses. Whilst we are sympathetic to the plight of small business and accept the evidence shows that many such businesses were heavily burdened by the introduction of the Goods and Services Tax and associated changes in the taxation system, and the Commission is very mindful of any potential increased administrative burden that may be placed upon them by the granting of the application, we consider that it is also relevant that the nature of what would be required by the granting of this application is not novel or unprecedented. There are a number of deductions referred to during the proceedings that employers already make from employees' pay either by compulsion or agreement. The evidence shows many employers already have adopted such a facility for the payment of union membership fees and, indeed, there are a number of awards of this Commission which already contain similar provisions. 17 We do not consider any increase in administrative burden associated with granting the application is so significant as to warrant its rejection and particularly so if the effect of any requirement is mitigated by ameliorating terms of appropriate phasing in. Any such administrative burden can, in any event, be further ameliorated to a significant extent by granting the application in an appropriate form. For example, whilst we consider deductions from payroll should be made each pay period (be it weekly, fortnightly or as otherwise presently adopted by the employer), remittance to the union may be on a weekly, fortnightly or perhaps in rare cases, quarterly basis, at the employer's option. Provision for the retention of an appropriate percentage of monies raised by way of the payroll deduction facility would clearly, on the evidence, significantly defray the costs an employer may bear upon the adoption of such a facility. Further, an appropriate delay by phasing in the implementation of the facility, dependent upon the nature of the payroll system presently adopted by an employer, would provide sufficient time to permit appropriate administrative arrangements to be made. The submission of the respondents to the effect that the increased burden is more than small business can bear was not made out on the evidence and does not, give appropriate credit to the State's small business sector. 18 The Act directs the Commission to "encourage" the "participation in industrial relations by representative bodies of employees and employers". In our view, the high proportion of union members which generally adopt a payroll deduction facility where it is made available, lends support to the submission that payroll deduction is the preferred option for payment of union membership fees. This contention is further supported by the evidence showing a significant drop in membership subscriptions when longstanding payroll deduction facilities are removed. 19 Such an approach, whilst it might affect the financial situation of the union, has the potential consequence of leaving individual members of the union unfinancial and potentially unable to access the significant benefits which membership of the union bestows upon them. 20 However, we do recognise that there may be situations where industrial misbehaviour could well lead to a loss of the benefit provided by a payroll deduction facility. Whilst we are mindful of the respondents' submission that it would be "a bit much" for an employer to be required to continue to remit monies to a union when that union is co-ordinating a campaign of industrial unrest, we consider that the withdrawal of a payroll deduction facility is more properly dealt with, as any other industrial matter regulated by award, by an appropriate orderly process which could, in an appropriate case, lead to the suspension or cancellation of the benefit by an appropriate application to the Commission which would in relevant circumstances be dealt with expeditiously. 21 In our view, the evidence establishes that it would be fair and reasonable for payroll deduction facilities, an industrial matter within the meaning of the Act, to be inserted into the awards of this Commission. We also consider that the encouragement of membership in registered organisations is an appropriate reason to grant the application and that it is in the public interest to do so. The application has considerable industrial merit and should be granted. The question then becomes one of form. 22 Having regard to the application in the form as finally amended and set out earlier in this decision, we consider that the parties, and in default of agreement between the parties the applicant, should be directed to formulate a further draft clause in light of observations as to appropriate amendments which we will now make. 23 Firstly, the draft provision should be varied to provide for the proportional deduction of union membership fees each pay period. Remittance to the relevant union is to be made on either a weekly, fortnightly, monthly or quarterly basis at the employer's option. As identified in the application the employer should forward to the relevant union all necessary information to enable the reconciliation and crediting of subscriptions to an employee's membership account. 24 Whilst the union shall be under an obligation to advise the employer of any change to the amount of membership fees made under its rules, the union shall give the employer a minimum of two months' notice of any such change before it is to come into effect and there shall not be more than one such change in any calendar year. 25 Provision should be made for retention by the employer of a percentage of the fees deducted by way of the facility. The percentage of monies remitted to the union should, in our view, be made relative to the frequency of remittance of monies by the employer to the union. Where the employer elects to remit monies on a weekly or fortnightly basis the employer should be entitled to retain up to five per cent of the monies remitted. Where the employer elects to remit monies on a monthly or quarterly basis the employer should be entitled to retain a maximum of 2.5 per cent of the monies deducted. 26 Whilst a matter for the individual union, since the union will be required to provide the requisite information to enable appropriate deductions to be made, the facility should generally be available to all types of employee; that is, employees engaged on a full or part time basis, with the exception of casual employees until they have been employed by the employer, continuously or otherwise, for a period of two months. Calculations for the deduction of union membership fees should only take account of days for which payment is to be made to an employee. 27 The provision will be inserted into awards, other than those varied in these proceedings, upon application. The application should not be granted unless the Commission is satisfied that the proposed provision is consistent with the registered rules of the relevant union or unions and will not be in a form which will render a union member unfinancial under the rules. No doubt an affidavit from the union secretary verifying the relevant matters will usually be sufficient. 28 As for employers which are bound by these awards, as earlier identified, there should be appropriate phasing in arrangements in an effort to minimise any administrative difficulties associated with the granting of the application. In our view, it is appropriate for such a phasing in arrangement to take account of the size and any administrative systems applicable at the particular workplace and in this regard we propose a three stage process for the commencement of this provision, as follows: (a) For those employers which currently deduct union fees or whose payroll facilities are carried out by way of an outsourcing arrangement or where payroll calculations are made through the use of computerised means and as such should be able to implement the clause granted by the application relatively easily, this clause shall come into effect from the beginning of the first pay period to commence on or after 1 February 2003. (b) For those employers who have a payroll system involving some other non-computerised means but currently make other deductions or have in place facilities which permit deductions from employees' wages by agreement, other than deductions that are mandatory (such as taxation instalments or superannuation contributions) this clause shall come into effect from the beginning of the first pay period to commence on or after 1 May 2003. (c) For all other employers, the clause shall come into effect from the beginning of the first pay period to commence on or after 1 September 2003. These dates, of course, only apply to those employees who have provided an appropriate written authorisation to permit such deductions to occur. 29 We make the following directions: 1. The parties, or in default of agreement the applicant, shall file within 28 days of this decision an award provision in terms reflecting this decision; 2. These proceedings are stood over to a date to be fixed in the week commencing 28 January 2003 for the purpose of varying the subject awards in terms of this decision. - 73 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH CORAM: WRIGHT J, President SAMS DP BOLAND J REDMAN C Friday 20 December 2002 Matter No IRC 3204 of 2001 CLUB EMPLOYEES (STATE) AWARD AND OTHER AWARDS Application by the Labor Council of New South Wales for variation re union contributions DECISION OF THE COMMISSION [2002] NSWIRComm 362 1 These proceedings concern an application by the Labor Council of New South Wales, a State Peak Council, under s 11 of the Industrial Relations Act 1996 to vary five major awards by inserting a clause relating to the deduction by the employer of union members' membership fees from employees' pay. The matter was referred to the Full Bench pursuant to s 193 of the statute. The Full Bench determined that, in the circumstances of this matter, particularly in view of the anticipated length of the hearing, it was appropriate that the evidence be heard on delegation and that the parties' submissions in the proceedings be heard by the Full Bench. 2 The application as initially framed sought to vary the following awards: 1. Club Employees (State) Award; 2. Public Hospital Nurses (State) Award; 3. Electrical, Electronic and Communications Contracting Industry (State) Award; 4. General Construction and Maintenance, Civil and Mechanical Engineering (State) Award; and 5. Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award. 3 Upon the matter being called for the taking of evidence on 6 March 2002, the parties indicated that there had been a consent position reached in relation to the public sector awards the subject of the application. On 7 March 2002 the President, on behalf of the Full Bench, varied the following awards: 1. Public Hospital Nurses (State) Award; 2. Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award; 3. Crown Employees (Institute Managers in TAFE) Salaries and Conditions Award; 4. Crown Employees (Saturday School of Community Languages) Award; 5. Bradfield College (Department of Education and Training) Salaries and Conditions Award; 6. Crown Employees (National Art School, Academic Staff) Salaries and Conditions Award; and the 7. NSW Adult Migrant English Service Crown Employees (Teachers and Related Employees) Award 2001. 4 The variation to those awards was in the following terms: (i) The union shall provide the employer with a schedule setting out union fortnightly membership fees payable by members of the union in accordance with the union's rules. (ii) The union shall advise the employer of any change to the amount of fortnightly membership fees made under its rules. Any variation to the schedule of union fortnightly membership fees payable shall be provided to the employer at least one month in advance of the variation taking effect. (iii) Subject to (i) and (ii) above, the employer shall deduct union fortnightly membership fees from the pay of any employee who is a member of the union in accordance with the union's rules, provided that the employee has authorised the employer to make such deductions. (iv) Monies so deducted from employee's pay shall be forwarded regularly to the union together with all necessary information to enable the union to reconcile and credit subscriptions to employee's union membership accounts. (v) Unless other arrangements are agreed to by the employer and the union, all union membership fees shall be deducted on a fortnightly basis. (vi) Where an employee has already authorised the deduction of union membership fees from his or her pay prior to this clause taking effect, nothing in this clause shall be read as requiring the employee to make a fresh authorisation in order for such deductions to continue. 5 Consequently, the awards that are the subject of this decision are the: 1. Club Employees (State) Award; 2. Electrical, Electronic and Communications Contracting Industry (State) Award; and the 3. General Construction and Maintenance, Civil and Mechanical Engineering (State) Award. 6 The application was amended, with the consent of the parties, on a number of occasions throughout the course of the proceedings. In its final form, the application sought to insert the following clause in the above awards: Deduction of Union Membership Fees (i) The employer shall deduct Union membership fees from the pay of any employee who is a member of the Union in accordance with the Union's rules, provided that the employee has authorised the employer to make such deductions. Any such authorisation shall be in writing. Where the employee passes any such written authorisation to the Union, the Union shall not pass the written authorisation on to the employer without first obtaining the employee's consent to do so. Such consent may form part of the written authorisation. (ii) Monies so deducted from employees' pay will be forwarded to the Union forthwith together will all necessary information to enable the reconciliation and crediting of subscriptions to employees' membership accounts. (iii) Where an employee has already authorised the deduction of Union membership fees from his or her pay prior to this clause taking effect, nothing in this clause shall be read as requiring the employee to make a fresh authorisation in order for such deductions to commence or to continue. (iv) The Union shall advise the employer of any change to the amount of membership fees made under its rules. The Union shall give the employer a minimum of one month's notice of any such change. (v) An employee may at any time revoke in writing an authorisation to the employer to make payroll deductions of Union membership fees. (vi) Where an employee who is a member of the Union and who has authorised the employer to make payroll deductions of Union membership fees resigns his or her membership of the Union in accordance with the rules of the Union, the Union shall inform the employee in writing of the need to revoke in writing the authorisation to the employer in order for payroll deductions of union membership fees to cease. Outline of Parties' Contentions 7 It is useful, prior to discussing the evidence tendered in the proceedings, to set out the outline of contentions that were helpfully provided by the parties. They set out in a succinct way the basis on which the respective cases were put. The Labor Council's contentions were in the following terms: 1. The Commission has jurisdiction to grant the claim. The subject matter of the deduction of union dues falls within the definition of "industrial matter" within s 6(2) of the Industrial Relations Act 1996 ("the Act"); consequently it also falls within the definition of "conditions of employment" in the Dictionary to the Act, and can therefore be the subject of award provision under s 10: Campbells Cash and Carry Pty Ltd v National Union of Workers, New South Wales Branch (No 2) (2001) 106 IR 429. 2. The effect of the claim, if granted, would be to require an employer bound by the subject awards to deduct union membership fees on behalf of any employee who authorises the employer to do so. As such, the claim facilitates voluntary membership of unions and is consistent with the provisions of Part 1, Principles of Association, of Chapter 5 of the Act. 3. By virtue of s 146(2) of the Act, the Commission is required to take into account the public interest, and for that purpose must have regard to, inter alia , the objects of the Act. The claim is consistent with the objects of the Act, and in particular advances the object stated in s 3(d), in that by facilitating voluntary union membership it would serve to encourage participation in industrial relations by unions. In addition, by providing an efficient and accessible method for the payment of union fees, it would encourage the responsible management of unions. 4. Many employees remunerated by the subject awards are relatively lowly paid. Their financial circumstances often make it difficult for them to pay annually-charged amounts, such as union contributions, by way of single lump sums. Deductions of union fees from an employee's pay each pay period makes it easier for employees to afford union membership, and thereby to become and remain union members if they wish to do so. 5. For unions themselves, payroll deductions provide a relatively simple and inexpensive way of collecting membership fees from members, and by providing a regular cash flow enhances financial administration and long term planning. Unions whose members have access to payroll deduction facilities are able to reduce administrative costs and thus allocate greater resources to the servicing of members. 6. The direct debit of union fees is generally regarded as a less satisfactory alternative for union members than payroll deductions, because it involves dealings with financial institutions, bank charges, the disclosure of bank account details, and the maintenance of minimum balances in personal accounts. It is also far more administratively complex for unions. 7. Although many employers bound by the subject awards have voluntarily agreed to introduce payroll deductions of union membership, some have refused to do so. The claim if granted would compel non-consenting employers to make available a payroll deduction facility to their employees. The imposition of such an obligation on employers would not be onerous or inhibitive of their business efficiency. 8. The creation of an award obligation on an employer to provide a payroll deduction facility would prevent the arbitrary and unilateral withdrawal of such a facility by the employer. On a number of occasions, employers who have voluntarily agreed to payroll deductions have stopped them with little or no notice in the context of an industrial dispute or in response to legitimate action being taken by the relevant union. Such conduct by employers can have a seriously detrimental effect on the financial stability of unions. If the claim were granted, it would still be open to an employer to apply to the Commission to vary the relevant award to have the payroll deduction facility withdrawn in a particular case; however the onus would be on the employer to demonstrate a proper basis for such an application. 9. The public interest favours the facilitation of voluntary union membership, particularly in circumstances where: (i) The statistical evidence demonstrates that the proportion of employees in the workforce who are members of unions is in decline; and (ii) Evidence from opinion polling shows that a greater proportion of the workforce would like to be members of a union than actually are members of a union. 10. The provision of a payroll deduction or "check-off" facility by employers is a common international labour practice. 11. For the above reasons, the award provisions sought by the Applicant constitute fair and reasonable conditions of employment such as to permit the claim to be granted (see s 10 of the Act). Furthermore, to the extent that any of the subject awards are within their nominal term, the grant of the claim would not be contrary to the public interest, and there is a substantial reason for the grant of the claim, thus satisfying the requirements of s 17(3)(c) of the Act. To the extent that any of the subject awards are outside their nominal term, the grant of the claim would not be contrary to the public interest, thus satisfying the requirements of s 17(3)(d). 8 The contentions of the respondent employers were: 1. The Industrial Relations Commission of New South Wales lacks jurisdiction to grant the claim. The deductions of union dues does not fall within the definition " industrial matters " contained in section 6(2) of the Industrial Relations Act 1996 (the Act). 2. Section 6(2) of the Act cites examples of " industrial matters " as including "Section 6(2)(i) The authorised remittance by employers of membership fees of industrial organisations of employees." 3. The Application requires an employer to " deduct Union membership fees " and to forward " moneys so deducted " to the Union. 4. There is a distinct difference between the act of remitting, or forwarding, moneys from the act of deducting money from an employee's wages. 5. Section 118(1) of the Act, requires an employer to pay remuneration to an employee in full. Section 118(2) permits an employer to deduct and pay an employee's remuneration in certain circumstances. The wording of section 118(2) of the Act is explicit in terms: - "… an employer can deduct …". This wording is deliberate and permissive, but falls far short of obligating an employer to deduct. 6. If Parliament wanted to make the deduction of union fees obligatory it would have done so, but did not. 7. In any event, even if Parliament had expressed such an intention, which it did not, sound authority exists for the proposition that the Court cannot impose a will or an inference contrary to statute (re Bolton; Ex parte Beane (1987) 162 CLR 514 at 515 - 516). 8. The employer respondents to the application support voluntary membership of unions and are opposed to employers being compulsorily involved in the employee's membership of trade unions. 9. It is not in the public interest that employers be obliged, by force of law, to deduct and remit union fees on behalf of their employees. 10. If union members face financial difficulties in paying union membership fees on an annual basis, the respective union ought address that problem by allowing its members to remit on a smaller and more frequent basis. This is an administrative consideration for the union and should remain none of the employer's concerns or knowledge. 11. If employees wish to pay their union fees weekly, fortnightly or monthly, arrangements could be made by them and their union to have the moneys deducted and remitted by the employee's financial institution. If the employee incurs a charge at source for this deduction, the union should look at reducing, or discounting the fees by the amount charged by the financial institution. 12. It is inappropriate and unreasonable that employers be forced to become the " banker " for the union. 13. The imposition of the compulsory deduction and remittance of union fees on employers would be an onerous and intrusive imposition on the operations of many employers in the state. 14. There is no evidence that employers have arbitrarily withdrawn their previous voluntary deduction and remittance of union fees in the context of industrial disputes. Unions do not have a legitimate right to adversely affect the economic wellbeing of employers. Unions who embark on action aimed at imposing economic pressure on an employer cannot legitimately or seriously suggest that that same employer should continue to financially support the union by continuing to deduct and remit union fees of its employees. 15. There is no international labour practice whereby an employer is obliged by law to deduct and remit union fees, other than those arrangements entered into on a voluntary basis. 16. The award provisions sought would impose by legal force an unwelcome, unreasonable and unwanted burden on many employers in the state. Such an imposition cannot be justified on the evidence sought to be brought before this C ommission. 17. The employer respondents do not oppose the voluntary deduction and remission of union fees by an employer who wishes to so act. 9 Although the form of the proceedings was limited initially to five awards, and were later reduced to the three awards identified in paragraph [5], following the award variations referred to above, all of the parties approached the proceedings on the basis that it dealt with the issue of award provisions providing for the deduction of union fees as a test case and presented evidence and submissions accordingly. This decision deals with the issue in the same way as did the parties. Evidence for the Applicants 10 There was a considerable amount of evidence in the proceedings. Statements of evidence were provided on behalf of the applicants by: Mr Russell Collison, State Secretary of the Australian Workers' Union, New South Wales, and Secretary of the Australian Workers' Union, Greater New South Wales Branch (AWU); Mr John Hennessy, General Secretary of the New South Wales Teachers Federation; Mr Bernard Riordan, State Secretary of the Electrical Trades Union, NSW Branch (ETU); Mr John Barry, Divisional Secretary and Assistant Branch Secretary of the Liquor and Hospitality Division of the Australian Liquor, Hospitality and Miscellaneous Workers Union, New South Wales Branch (LHMWU), and; Mr Mark Lennon, Assistant Secretary of the Labor Council of New South Wales. 11 For the purposes of this decision, it is sufficient to set out a brief summary of the evidence given by each witness: Russell Collison - AWU · The AWU conducted a survey of its members employed in construction companies or businesses within the boundaries of the Greater New South Wales Branch, where a substantial number of employees are covered by the General Construction and Maintenance, Civil & Mechanical Engineering (State) Award. Payroll deduction occurs at almost all of these 'construction shops', regardless of size. All but three union members at these shops remit their membership dues by way of payroll deduction. There had been no evidence of any disputation or difficulties surrounding the operation of the arrangements. · As evidenced by the large numbers of employers in the construction industry that had voluntarily agreed to deduct union dues from wages, employers do not regard the question of union dues as purely one between the union and its members. The fact that there have been no enterprise agreements or disputes in the construction industry regarding union fee deductions did not mean that there has been no demand by members for such deductions. · Approximately 75 per cent of all members of the AWU remitted their membership dues by way of deduction at the source, 15 per cent paid their dues directly to union delegates, with the remaining 10 per cent opting for various other methods of payment. · Whilst there were various methods available by which an employee could arrange for automatic or direct payment of union fees through various financial institutions, these methods often involved a greater time commitment or financial cost to the employee. · All members were provided with a range of options for the payment of dues upon joining the union and that the vast majority opted for the payment method of deduction at the source. · Payroll deduction offered substantial administrative advantages to the union. It encouraged union membership as employees could manage a regular, small contribution each pay period more easily than larger, singular or less regular contributions. These arrangements also benefited employees by avoiding the additional costs that result from other payment methods, such as direct bank account debits. It also allowed for easier taxation management with regard to union fees. · Union delegates and organisers received a 5 per cent commission for collecting union dues. However, the union was opposed to the idea of an employer receiving some form of commission payment to cover the administrative costs associated with the payment deduction facility. Some companies had been afforded such commission in the past. The only employer to have that facility at the present time were various arms of the Boral group of companies. · The itinerant nature of employment in the construction industry would not lead to any administrative problems, as union dues are charged for a set rate on a weekly or fortnightly basis. Members and employers were notified of any changes well before they take effect. · The suggestion by Mr Harridge that the union would use payroll deduction to steal money from its members was offensive, and ignored the democratic and accountable nature of the union. · Employers have either withdrawn or threatened to withdraw the voluntary arrangements for the deduction of union dues from wages as an "industrial weapon" in times of disputation. Such action has been taken by BHP in disputes at the Port Kembla steelworks and by Qantas in disputes involving the Australian Manufacturing Workers' Union (AMWU). Such action caused "significant problems for the financial viability of the union" and placed the membership status of many people in a "precarious position". Such conduct requires a significantly greater union presence on construction sites in the form of union organisers and delegates attending to the collection of membership fees so as to permit the continued viability of the union. John Hennessy – Teachers' Federation · The deduction of fees at source commenced in 1953 and is currently available across all categories of members engaged in permanent and permanent part-time employment within the Department of Education and Training. · However, these arrangements had twice been rescinded by the government "as a political weapon", from 1972 to 1977 and from 1994 to 1995. Further, whilst the stoppage of deductions was related to "an attack on the effectiveness of the New South Wales Teachers Federation as an advocate for public education which at the time was against the interests of the government", he conceded that to an uninformed bystander, the stoppage could have been attributable to the taking of industrial action by the Federation. Further, it was conceded that this was the publicised justification for the action taken by the Department at the time. · In 1973 the Federation appealed to the International Labour Organisation (ILO) against both the threat of deregistration and the removal of the deduction of fees at source. The ILO recommended that the government reconsider the issue, since the system "has prevailed for many years" and "its reintroduction may contribute to more harmonious industrial relations". (Complaint Presented by the Australian Council of Trade Unions and the New South Wales Teachers' Federation against the Government of Australia, 1974, Case No 757, par 156.) · Whilst the greatest numbers of members paying by cash were casuals, 55 per cent of permanent full time teachers in schools also paid their dues in cash despite having payroll deduction available. · The Federation preferred members to pay by payroll deduction or by direct debit as this significantly improved the proportion of members who remain financial. There are substantial administrative and convenience benefits that accrue to the Federation and to members by the payroll deduction method. Under normal employment circumstances, a member who has completed a deduction form need take no further action on his or her membership for the rest of his or her career. Payroll deduction also plays a significant role in reducing tension between members and non-members, as the Federation representatives at the school level do not have to become fee collectors. Bernard Riordan - ETU · The ETU currently has approximately 30 per cent of its membership on payroll deduction schemes. However, well over 80 per cent of members would be prepared to move to payroll deduction if their relevant employer would agree to such a facility. · Of the 70 per cent of members that were not on payroll deductions, most members were sent quarterly accounts and the fees would be paid to onsite delegates directly, or by cash or credit card at the union office. A small proportion of the ETU membership paid dues by way of a direct debit facility. However, the direct debit system was subject to a number of difficulties. For example, members had been debited twice in a one-month period, leaving members with insufficient funds in their account. · Union delegates were paid a 10 per cent commission of monies directly collected by them. They received a further 6 per cent commission for those members of the union who had their fees paid by way of direct payroll deduction. · Most companies covered by the Electrical Electronic and Communications Contracting Industry (State) Award permit the payroll deduction scheme to be established. Some, but not all of the companies that participated in a scheme of payroll deduction also received a commission from the monies remitted to the union. Twenty-seven companies - the first that the union established the scheme with - are paid a commission of approximately 2.5 per cent of the fees paid each year. Companies no longer request commission because of the difficulties it causes for them in relation to the Goods and Services Tax (GST). · Opposition to payroll deduction was strongest from smaller companies, but this was generally a bargaining position used in negotiations, as all companies now have the technology to perform the task. · The payroll deduction schemes currently in place were voluntarily adopted by the relevant companies. Whilst payroll deduction facilities were a part of the union's "pattern bargaining" approach adopted over several years, there had been no industrial action specifically for the achievement of a payroll deduction scheme with any employer. · The voluntary arrangements had generally operated without difficulty. However, there had been a number of occasions where companies that had adopted voluntary payroll deduction had either removed, or threatened to remove, the facility to further a bargaining position during periods of industrial disputation. Specific examples included Qantas and Telstra. · Members at mass meetings in both 1997 and 1999 warmly welcomed the inclusion of payroll deduction facilities in upcoming campaigns surrounding pattern enterprise bargaining agreement discussions. · Payroll deduction was beneficial to the union and helped to encourage union membership. It also benefited employees who were relieved of the burden of making billed payments. It provided the most stable way for employees to balance home accounts, bills and union fees. · Direct debit facilities did not work as well as payroll deduction. It required members to give out personal bank account details and caused difficulties for both the member and the union if funds in the account are ever insufficient for the direct debit to proceed. John Barry - LHMWU · Payroll deductions occur in approximately 60 per cent of all clubs in New South Wales. Somewhere in the vicinity of 80 per cent of the members of the Union's club's division pay their dues by way of a payroll deduction facility, with the remaining members remitting their dues primarily by direct payment to an onsite delegate at the workplace. A small minority pay by way of a direct debit facility. · Most clubs now had computerised weekly payroll systems that would result in a minimal administrative cost to provide the facility. In any event, the Union usually paid a commission to the club for the deduction facility. The current rate of commission provided to clubs that adopt a payroll deduction facility is 5 per cent (noting that it had been greater in the past). · Payroll deduction provides clear benefits for the Union, and where deduction occurs there is generally a greater number of employees in each club who are union members. Payroll deduction also benefits members, who prefer to pay bills weekly and appreciate being more easily able to access all relevant information on union membership fees for taxation purposes. · Most members prefer payroll deduction over direct debiting by the bank, as it required outsiders to know their personal banking details and can result in additional fees if insufficient funds are available in an employee's account. · Whilst the payroll deduction facilities were generally uncontroversial, the facility has been withdrawn, or the Union has been threatened with the withdrawal of the facility, on a number of occasions by several clubs in times of industrial unrest. · The Blacktown RSL Club Ltd and the Fairfield RSL Club Ltd had each removed the payroll facility following action by the Union, as a form of retribution by the clubs. There had been attempts to have the facility reinstated whilst negotiating for a new enterprise agreement at each of those facilities; however, Clubs NSW has indicated that it would refuse to continue to negotiate as long as payroll deductions remained an issue. As a result, the issue was not pressed and those clubs continue to resist a payroll deduction system. · The cessation of the payroll facility at each of these clubs resulted in a "significant drop" in the union membership throughout the respective workforce. At the Blacktown Club, prior to the facility having been removed, the union represented approximately 98 per cent of the workforce. Following the removal of the facility, the union representation dropped to around 50 per cent. The remittance of fees was dealt with by way of payment to an onsite delegate. Further difficulties had occurred when that delegate misappropriated the union dues paid to him. Following that incident the union representation at that particular Club dropped to almost nothing. The union membership now represents around 30 per cent of the Club's employees. A similar pattern was evident in the union membership of employees engaged by the Fairfield Club. Again, when the payroll deduction facility was removed as retribution for union action, the union representation dropped from over 90 per cent of the workforce to around 30 per cent. Mark Lennon – Labor Council · Surveys from 1996 to the present were conducted by independent organisations commissioned by the Labor Council, in which four questions were asked of some 1001 participants. The sample population included both union members and persons not members of a union. In each year of the survey, when participants were asked whether they would choose to be a member of a union, if they were free to do so, between 43 per cent and 57 per cent responded affirmatively. This polling has consistently shown that a greater proportion of the workforce would rather be in a union than are presently members. · Voluntary payroll deduction facilities have not worked well. There have been a number of disputes, including a dispute involving Campbell's Cash & Carry which had been subject of decision at first instance by Maidment J and Wright J, President and ultimately by the Full Bench of the Commission on appeal: see, Storeworkers - Campbells Cash & Carry Pty Limited (NSW), NUW (NSW Branch) Award 2000 (2000) 104 IR 367; Storeworkers - Campbells Cash & Carry Pty Limited (NSW), NUW (NSW Branch) Award 2000 (No. 2) (2001) 104 IR 385; Campbells Cash and Carry Pty Ltd and National Union of Workers, New South Wales Branch (No.2) (2001) 106 IR 430. · Various operators in the meat industry in Dubbo as part of the tactics used during times of industrial disputation repeatedly rescinded voluntary arrangements surrounding payroll deduction facilities. · In a recent industrial dispute between the Municipal Employees' Union and Sydney City Council the Council, as "a clear industrial tactic" to force the union to return to negotiations ceased the deduction of union dues. There was a real prospect of such tactics increasing throughout various industries. · In re-examination, Mr Lennon gave the following evidence: Q. Can you identify what are the problems in your experience that union members do encounter in meeting their obligations to pay their union fees? A. Well it's often that they either - because of budgetary reasons, because of time factors, because of the fact that they have to take the trouble to mail off a cheque or whatever for the union dues, that they often actually, through no fault of their own, become unfinancial and therefore have problems complying with the rules and being able to participate in the trade union as a member. Q. Do you find that those problems arise with any particular payment of union fees? A. It generally tends to arise in situations where fees are paid annually or half-yearly or quarterly. Often members find it difficult to comply with those sorts of rules when they are asked to do it on that basis. Q. And again based on your experience, has the availability of a payroll deduction facility assisted or otherwise with respect to the problem you have identified, of union members being able to pay their fees? A. I have no doubt that the payroll facility is of great assistance for members in paying their fees. The fact that they have the facility for periodical deductions, whatever be the cycle, means it is very easy for them to comply with the union rules in terms of being a financial member and when we talk about the services unions provide, if they can provide facilities such as that, that enhances in the member's mind the services overall that the union provides. Q. Mr Gallagher also asked you a question as to whether you think the current voluntary arrangements with respect to payroll deduction worked well and you said, no. Why did you give that answer? Why do you think they don't? A. Just from my experience, from some examples, from the evidence that has been tendered by my colleagues in this witness box in the last few days, from my own personal experience going back 20 years, the voluntary system is just that and it's not in any sense - a voluntary system relies on obviously the good will of the employer and when we have had it at times arbitrarily and unilaterally withdrawn, then a member is disadvantaged. Evidence of Respondents 12 The respondents led evidence from: Mr Gerard Boyce, Industrial Relations Manager for the Electrical Contractors' Association of New South Wales, the National Electrical Contractors Association (New South Wales and ACT Chapters) and the Refrigeration and Air-conditioning Association of New South Wales; Mr Duncan Fraser, Vice President of the NSW Farmers' Association and executive committee member of the NSW Farmers' (Industrial) Association; Mr Barry Harridge, Deputy Director - Construction and Special Projects of Employers First; Ms Tanya Marshall, Divisional Manager - Employee Relations of Employers First; Mr Robert Morgan, former Industrial Advocate for the Registered Clubs' Association of New South Wales (now Clubs NSW); Mr David Ritchie, Director of Employee Relations of the Australian Retailers' Association, New South Wales Division; Mr Bryan Wilcox, President of the Real Estate Employers' Federation of NSW; Mr David Hargraves, Executive Officer, NSW of the Australian Industry Group; Mr Andrew Woods, Legal Officer of the New South Wales Road Transport Association Inc; Mr Paul Greenwood, Registered Tax Agent and Company Auditor; Mr Ian Martin, Managing Director of The Avocado Group Pty Ltd, Vice President of the Restaurant & Catering Association of NSW; Mr Adrian Scott, Business Relations Manager of Camsons Pty Ltd. Again, we propose to provide a brief summary of the evidence of each witness: Gerard Boyce – Electrical Contractors' Association · None of the awards to which the Electrical Contractors' Association is a party deal with the deduction of union fees. Further, he was not aware that there had been any demand or claim by the Electrical Trades Union for payroll deduction clauses in the relevant awards. · No claim for payroll deduction facilities was included in the log of claims, nor the negotiations surrounding the last round of enterprise agreement "pattern bargaining" in the Sydney region. However, some claims were made for such a provision in enterprise agreements after the conclusion of substantive negotiations. As a result, some of the larger members of the Electrical Contractors' Association agreed to insert such clauses into their Enterprise Agreements. The terms of the provisions inserted into the relevant enterprise agreements varied considerably in their form. · There were approximately 70 out of the 1300-1400 members of the Electrical Contractors' Association that would have had payroll deduction facilities available to members of the relevant union. It was estimated that approximately two-thirds of those members employed persons pursuant to the award and paid wages by way of electronic funds transfer. · Contrary to the claims by Mr Riordan, most companies covered by the Electrical Electronic and Communications Contracting Industry (State) Award do not operate a payroll deduction facility. Those that do have such a facility mostly operate under enterprise agreements. · The objections of small companies to payroll deduction are not made for tactical reasons. The main reason for objecting to the introduction of a payroll deduction facility was administrative inconvenience, particularly for companies without a computerised payroll system. That administrative burden was not only related to the remittance of the dues collected, but also to other administrative tasks such as record keeping, payroll and banking errors, the checking and reconciling of accounts, maintenance of current authorities, staff training and the like. Many of the Association's members do not utilise adequate computer-based payroll facilities, with some still using a manual payroll. · The administrative costs and effort associated with the introduction of a payroll deduction facility would be more than nominal. · Employers wish to remain neutral when it comes to the union membership of their workforce and do not wish to become involved in a union member's financial affairs so as to constitute themselves as some "middleman" for the union. · As to those companies that currently provide voluntary payroll deduction facilities, they appear to have gained no industrial relations benefit from having done so. The current arrangements whereby the issue of payroll deduction is determined during enterprise agreement negotiations are working well, are not and have not caused any disputes in the electrical, electronic and communications contracting industry, and should be maintained. Paul Greenwood · Over the last fifteen years small businesses have been subject to a wide array of legislative reform, at both state and federal level, imposing significant administrative costs and inconvenience. · Whilst conceding there had been an increase in the level of computerisation in the small business sector, there remained a great deal of frustration, and even a mood of despair, in the small business sector over the complexity and extent of compliance obligations, particularly following the introduction of the new tax system. The proprietor, who often performs accounting and administrative work at night and weekends, most commonly administers small businesses. In some sectors bookkeeping is not computerised and payments are made by cheque; the present application would therefore substantially increase the number of cheque payments required to be made. · Whilst there are a number of deductions that employers are required to make from an employee's pay due to various legislative interventions or matters regulated by instruments such as industrial awards, union fee deduction facilities are not currently a common practice amongst small businesses. Small businesses typically employ persons under different awards, and could be required to remit dues to a number of unions. · The proposed clause would be an additional burden on small business and seems unnecessary, particularly since many employees could organise deductions for union dues by the bank if they wished. David Hargraves - AiGroup · It was not uncommon for members of the Australian Industry Group to have some employees covered by federal and some by state awards, which often causes confusion, particularly for small employers. Mr Hargraves was not aware of any federal awards that contain deduction clauses. The existence of deduction arrangements varied considerably both within and across industry sectors. It was reasonably common in construction sector certified agreements, for example, but uncommon in other industries such as airlines. · Within the metal industry sector, logs of claims from the Australian Manufacturing Workers' Union commonly contain payroll deduction clauses. Approximately 25-30 per cent of certified agreements in that sector would contain deduction clauses. Many employers do not agree to such clauses, and the issue is rarely a high priority in negotiations. · It was rare that the issue of payroll deduction was so significant an issue as to warrant industrial action. Large companies are more likely to agree, and often do so even if not required by the certified agreement. Companies often allow payroll deduction for "historical" reasons, and not because they see it as enhancing industrial relations. · It is now a common practice for employees to elect to pay union fees by credit card or electronic funds transfer. All unions have these facilities available and they are becoming increasingly popular with employees. · Members of AiGroup indicated opposition to the insertion of deduction clauses in awards for a number of reasons, ranging from simple broad philosophical differences to more specific tangible matters including that: (a) It would create different provisions for those employees covered by the federal awards to those covered by state awards. (b) The need to have such a provision has been overtaken by electronic technology. (c) The costs incurred by the employer in providing such a facility whilst not enormous are an additional burden that the employer should not have to bear. There are also administrative costs and inconvenience on the employer in processing the deduction authority. (d) There are no benefits to the employer in having such a facility available to employees. · Employers often feel that the relationship between the employee and the union is a matter between them and not one for a third party; they need not act as an agent of the union. · The issue of deduction of union fees was more appropriately dealt with at enterprise agreement level. When agreements do not provide for such a facility, or the relevant employees are not covered by an agreement, the unions ought market alternative arrangements. · In relation to the evidence that was given on behalf of the applicant relating to Qantas having rescinded voluntary union deduction facilities during times of industrial disputation, the action taken by Qantas was not blanket action involving all relevant unions involved in the disputation but rather related to specific unions which had refused, in the companies view, to comply with the disputes resolution procedures in the relevant enterprise agreements. David Ritchie – Australian Retailers' Association · None of the awards to which the Australian Retailers' Association is a party have deduction clauses, and he was not aware of the issue being raised in the negotiation of these awards. A number of larger retailers have various agreements for the deduction and remittance of union fees. For those members who do have payroll deduction facilities in place the inclusion of such a provision was a part of a "package deal" reached during negotiations. · Nearly 90 per cent of the Association's members have less than 10 employees, and most do not have computerised payroll systems. Compulsory deduction would therefore add to the existing burden on small businesses by increasing administrative time and business costs, without any obvious benefit to the employer. Union membership is a personal matter for employees who should bear all the costs of membership. It is not appropriate to impose costs on a third party for an employee's membership of a union. · If the present application is successful, the retailer must be entitled to retain a percentage (10%) of the payment to offset the administrative costs of compulsory payroll deduction. Barry Harridge – Employers First · Employees under the General Construction and Maintenance, Civil & Mechanical Engineering (State) Award (`the General Construction Award') can work alongside other employees covered by a number of other awards. None of these awards contain provisions for payroll deductions, and there had not been any demand for payroll deductions in these awards. Many enterprise agreements and awards relating to the construction of major projects do not contain deduction clauses and there was no demand for such clauses when these agreements and awards were being negotiated. · Where deductions occur by agreement, unions provide pro-forma deduction authorities which do not specify the amounts to be collected and only provide that the employer be notified of any fee increases. The amount deducted - as in the present application - can be increased without the employee's consent or knowledge. However, it was to be acknowledged that the deductions that could be made by an employer were limited to the form of the authority that was provided by the employee. · Payroll deduction in the construction industry has occurred as the result of cooperation rather than disputation, and has had a neutral effect on industrial relations. Although it was to be conceded that the adoption of such a policy was "one step" adopted by employers in attempting to build a co-operative relationship with unions in the construction industry. · As to the burden imposed upon employers by the adoption of a payroll deduction facility, Mr Harridge acknowledged that there were a number of both mandatory and voluntary deductions made by employers from an employee's pay. His evidence continued: Q. And none of that is unremarkable or unusual. It's a fairly common feature in the construction industry? A. Well, I don't know it's common but it could be a feature, yes. Q. And notwithstanding the nature of employment in the [construction] industry which you have described in your statement as "itinerant", employers are able to make those deductions without a great deal of difficulty? A. They can make those deductions. Q. And they do make those deductions? A. They do make some of those deductions. I don't think it's common, but they do. To say "without a great deal of difficulty", I think employers would disagree. They don't like the administrative burden of making any deductions but they obviously have to. They see it as being a cost, clerical time wise, and they don't like it and another deduction that is imposed upon them just adds to that weight, so to speak. Q. Can I suggest to you that once an employer has set up a system, a payroll system to commence deductions to be made, it is not a particularly onerous burden simply to make one further deduction? A. It may be not onerous but it is just another blip in the program that has to be made if it is a computer program or if it is a manual payroll system, it's another entry that has to be remembered to be done by the payroll administrator. "Onerous" would be putting too strong a weight on it admittedly but it is still a burden. Q. I think you used the word "blip"? A. I couldn't think of the correct term for doing things on programs in computers. Because if it is a payroll that is on computer it's programmed to make deductions. To adjust the program can be a tiresome exercise, so I am told. Q. It doesn't need the program to be changed, simply another deduction to be set into the program? A. That's right, in whatever fashion. Andrew Woods – Road Transport Association · None of the awards relevant to members of the New South Wales Road Transport Association Inc. contain payroll deduction provisions. He was not aware of any enterprise agreements that have deduction provisions. · Whilst a number of large companies have deduction arrangements with unions, over 80 per cent of the Association's membership is comprised of companies with fewer than 20 vehicles. These smaller companies, which are already contending with the GST and other substantial legislative changes, would be faced with significant additional administrative charges and loss of time should payroll deduction be required. · Although he had not undertaken any substantial survey of members, Mr Woods considered it fair to say that where payroll deduction facilities were available, it was the method overwhelming adopted by union members for the payment of their union membership fees. · If the application succeeds, the employer should be entitled to retain a percentage of the union dues to offset administrative costs. Mr Woods accepted that where an employer's payroll system was computerised, the requisite administrative action required would be a relatively simply task. · Union membership is a private matter, and it is "unhelpful" for employers implementing performance management strategies to have information on union membership, as it may create a perception among employees that the employer discriminates on the basis of union membership or is in breach of freedom of association laws. Mr Woods conceded that many employees in the transport industry actively promoted the fact of their union membership to their employer, however, such a practice was not universal, particularly on smaller sites. Further, Mr Woods acknowledged that should the application be granted in its present form, there was nothing to prevent an individual's union membership remaining secret from their employer. Duncan Fraser – NSW Farmers (Industrial) Association · Whilst none of the awards under which members of the NSW Farmers (Industrial) Association operate have been listed in this "test case", the Association formally opposed the application. · The vast majority of primary producers employ only a limited number of permanent employees, and rely heavily on casual employees during harvest times. Primary producers still rely predominantly on manual rather than electronic methods for administering employment records. Payments to unions would have to be made by cheque rather than by funds transfer, adding to the general administrative and record-keeping burden. Whilst conceding that there were already a number of other deductions that employers were required to make from an employee's pay, including voluntary arrangements for the deduction of union dues, to make it mandatory for such a facility to be imposed upon employers would be a burden on employers. · Mr Fraser did concede that should the application be granted and should primary producers be required to deduct and remit union membership fees for casual or seasonal staff, it would affect the employers' operations only for a 'very small proportion' of a total year. Further, he agreed that there may well be no difficulty arising from the application, at least so far as his operations were concerned, as in the last 14 years he has only once been requested to provide payroll deduction facility for union dues. His operation was, in his view, reflective of a significant number of small farms. · Some farmers adopt a 'don't ask don't tell' approach to union membership, which could not be maintained under a payroll deduction system. Some also don't believe that they should act as de facto debt collectors for unions. Mr Fraser was not aware of any occasion of an employee's request to have an employer forward on union dues refused. The Association is not opposed to voluntary agreements for payroll deduction but does not believe that there is any benefit in requiring employers to take on the new responsibility of collection union subscriptions. · As to the 'don't ask don't tell' approach in relation to union membership, in cross-examination Mr Fraser accepted that there would be employees who would want to make their union membership known to their employer in order to "deter any possible improper conduct towards them by the employer" or to give some authority to statements about a particular award which are made by an employee after having obtained the advice of their union. Mr Fraser accepted, in the same way, members of the Association were encouraged to make reference to their membership in discussions with employees in order to provide authority to statements they may make about wage rates or other award conditions. Robert Morgan – Clubs NSW · Throughout the registered club industry, where a payroll deduction facility was in place, commission is paid to the relevant club - this should continue if the deduction of union fees facility is to remain. · Payroll deduction occurs primarily in the larger clubs with approximately half of the medium sized clubs also providing payroll deduction. Such a facility is rarely available in smaller clubs, which are frequently managed on a voluntary or part time basis. These clubs would have difficulty complying with any additional administrative payroll function. · None of the awards currently applying to registered clubs contain deduction clauses. During the negotiations that resulted in the making of the Club Employees (State) Award on 2 July 1999, the union sought a provision requiring employers to make payroll deduction of union dues. At that time there were two disputes relating to union dues before the Commission. The Registered Clubs Association determined that it was not appropriate to continue negotiating on this question until determined by the Commission in the current proceedings. These matters were disputes concerning deductions at the Fairfield RSL and the Blacktown Workers Club. The Commission arbitrated neither of these disputes. However, it was conceded that the removal of the payroll deduction facilities at both the Rooty Hill RSL and the Fairfield RSL Clubs had occurred as the direct result of the action taken by the union on an unrelated industrial issue. · Payroll deduction has occurred cooperatively in the registered club industry, and has generated very few disputes in the past five years. This cooperative regime should be allowed to continue. Ian Martin – Restaurant and Catering Association · Neither of the two main State awards relating to members of the Restaurant & Catering Association of NSW contained payroll deduction provisions, and he was not aware of the issue having been raised in negotiations for the new Restaurant Employees (State) Award. He was not aware of any restaurants or catering establishments that deducted union dues. · Smaller companies, already burdened with administrative compliance, particularly with the GST, would be faced with increased administration costs should the application succeed. To use the example of his own business, Mr Martin considered it would be burdensome due to the high proportion of casual labour, and because of costs incurred such as payroll administration, bank fees for transferring money, cheque fees, staff administration costs and costs associated with the storage of records. Other business may also face difficulties associated with having employees under more than one award and because one company may have a workforce which contained members of a number of unions. Adrian Scott - Camsons · Neither the agreement nor the award covering Camsons contained provisions relating to the deduction of union dues. However, a significant proportion of its workforce who are union members have their dues deducted automatically each week at source. The company agrees to this as a sign of good faith to the union and its employees - no pressure or disputation was applied to establish the deduction of the payment of union dues facility. · The voluntary deduction arrangements, however, have led to a "variety of serious administrative problems". The difficulties appear to arise mainly from the fact that the union requires deductions to be paid to it annually, whilst the dues are deducted from the employees' pay weekly. This causes difficulties in relation to casual employees, to employees who take leave without pay and those who resign or withdraw their union membership mid-year - although it was conceded that these matters were a very infrequent occurrence in practice. Automatic deductions were done only as a sign of goodwill, but are a cost to business. Tanya Marshall – Employers First · The majority of employers in the children's services sector have between five and fifteen employees. · None of the awards in the application apply to the industry, however, if the proposed clause is inserted into the awards relevant to that industry it would impose an additional burden on small employers who are already heavily regulated in terms of their operations and record keeping requirements. · None of the several awards applying to the sector contain deduction clauses and there were no demands for such a clause when the awards were negotiated. · Whilst conceding that the level of unionisation in the industry was minimal, Ms Marshall stated that many childcare centres were not computerised and compulsory deduction would add to the already significant administrative operations of these centres. Where payroll deduction does occur it is as the result of cooperation and not of any industrial disputation. Where this does occur it was Ms Marshall's understanding that a commission was paid to the company. Should the application be granted, these payments ought continue. · Employers in the industry had refused requests for a payroll deduction facility due to a lack of administrative resources. · Payroll deduction neither assisted nor hindered industrial relations in the child care sector. Brian Wilcox – Real Estate Employers Federation · Neither of the awards applying to the real estate industry contained deduction clauses, and there have been no requests of which he was aware for any such alteration in the relevant awards. He was not aware of any requests having been made by employees for payroll deduction. · Whilst the present application would not directly affect the real estate industry, the Real Estate Employers' Federation is concerned at potential flow-on effects to the industry should the application succeed. · The industry is dominated by small businesses, with 96 per cent of businesses employing less than 20 persons. Over 30 per cent of businesses do not have access to general financial accounting computer packages. The requirement to deduct fees would impose real administrative inconvenience and financial imposts. · The application would impose unnecessary and unreasonable burdens on real estate agents already struggling to cope with the challenges faced by the GST and various other regulatory requirements. Applicant's Submissions 13 The Hon J W Shaw QC, who appeared with Mr A A Hatcher of counsel for the applicant, contended that the provision sought in the application was a fair and reasonable prescription as between employers and registered unions reflecting, as it did, an explicit example of an industrial matter in accordance with the legislative prescription in s 6(2)(i) of the Industrial Relations Act. 14 The claim, if granted, would confer an obvious benefit and convenience upon the individual employee that, in the applicant's submission, would not be oppressive, unjust or unfairly burdensome upon employers. Statistical evidence demonstrated that the rate of union membership in Australia has dropped significantly in recent years. Paradoxically, however, the surveys conducted by independent research bodies at the behest of the applicant demonstrate that the proportion of employees who want to be members of unions remains relatively high. In the period of the surveys, that is 1996 through to 2001, more employees wanted to be a member of a union than actually were members of unions. This was, in the applicant's submission, an unsatisfactory situation and suggestive of significant practical impediments to a large number of persons joining a union. 15 The evidence in this case strongly suggested that the cost of union membership and the methods available to meet those costs might be relevant in that regard. In Mr Shaw's submission, the evidence in these proceedings indicated that many employees have some difficulty in paying union fees, as with other expenses, in a single yearly lump sum and prefer to pay it in weekly instalments by way of payroll deduction. Direct debit facilities, whilst available, are considered by members to be less advantageous and more costly than payroll deduction. These facilities were also unpopular as members were very reluctant to disclose their personal banking details. 16 Mr Shaw submitted that if payroll deduction facilities were made universally available to employees under the relevant awards by the grant of the application, the membership of unions would be facilitated. In light of the evidence that there were a large proportion of employees who want to be in a union, it was likely that the grant of the application would serve to increase the rate of union membership. 17 Further, senior counsel submitted unions found payroll deduction the preferable means of members remitting dues. In relation to the contention that granting the claim would increase the administrative work required by employers by an unreasonable extent, the applicant submitted that the evidence did not support such a contention. Whilst various witnesses made assertions about the nature of this "burden", none were able to give it any real particularity or substance. 18 The applicant contended the evidence demonstrated a reasonably widespread voluntary practice on the part of employers, of making available a payroll deduction facility. The extent to which employers have voluntarily acceded to payroll deductions belies the alleged widespread employer opposition to the claim. 19 The starting point of any consideration of increased administrative burden must be that all employers already make a wide variety of deductions and remittances both as required by law and voluntarily upon request. Indeed, some State awards already require payroll deduction for union fees to be made upon request. Accordingly, the grant of the application would not require employers to undertake administrative tasks that are novel; it was, it was contended, simply one addition to a normal and longstanding requirement upon employers. In the applicant's submission, employers already have in place administrative systems to cope with this task. 20 For employers with computerised or outsourced payroll systems in place, it would be a "comparatively simple" matter to add an additional payroll deduction for union fees. As to those employers who do not have access to computerised facilities, the applicant contended that even taking these employers into account, there was no evidence of some clear or real difficulty that would arise with the introduction of payroll deduction of union fees. 21 The applicant contended that in considering the possible effect of the application, should it be granted, it was important to remember that it would not necessarily affect all employers. Many employers, particularly those small employers with only a handful of employees, will not have any employees who are union members. Further, some union members may, for various reasons, not want to reveal their union membership to their employer and would not adopt a payroll deduction facility if it were made available. 22 In Mr Shaw's submission, some industries would be afforded "tangible productivity benefits" if payroll deductions were adopted. For example, in the construction industry the evidence disclosed a widespread practice of union delegates being allowed to collect union fees during working time - time which could be put to more productive use if union fees were collected by payroll deductions. Further, the evidence demonstrated that many employers who have adopted a payroll deduction system have done so in an attempt to improve productivity by fostering a positive relationship with unions and employees. No employer witness was of the opinion that granting the application would have any detrimental effect upon the industrial relations in their relevant areas; at its worst, the view was that its effect would be neutral. 23 Despite the regularity of payroll deduction facilities in Australian industrial relations the evidence in these proceedings demonstrated that the adoption of such voluntary practices was not universal. The current position whereby the employer may agree to the introduction of payroll deduction or not as it sees fit is unsatisfactory. It puts the employer in a position where it can unilaterally withdraw the facility as it sees appropriate, thus causing damage to the union's financial position. 24 Further, some employers would simply not accede to the request to establish a payroll deduction facility. This divergence was not based on rational criteria but rather on subjective considerations. It was submitted a more uniform and coherent approach was justified so as to place equal or comparable obligations on employers and place unions in a position of parity with regards employers within an industry and as between industries. Mr Shaw submitted that the application is one of substantial industrial merit; noting that it is reflective of and calculated to give effect to the encouragement of trade unionism, being one of the objects of the Act. 25 The applicant made a number of submissions relating to the Commission's jurisdiction to grant the claim. Much of these submissions were in response to the respondents' challenge to jurisdiction. We propose to deal with the question of jurisdiction later in this decision as a discrete issue and in doing so refer to the parties' submissions in that respect. Respondent's Submissions 26 Mr J N Gallagher SC who appeared with Mr R S Warren of counsel for the respondents, resisted the application on principally two grounds. Firstly, the respondents contended that the Commission had no jurisdiction to award the variations sought in the application. Secondly, if the Commission found it did have jurisdiction, in the exercise of its discretion, it should refuse to grant the variations as sought. As we have already indicated we propose to deal with jurisdiction in a separate part of this decision. 27 As to the exercise of the Commission's discretion, the respondents contended that there had not been the difficulties in the operation of voluntary payroll deduction schemes as contended by the applicant. The evidence of so called "difficulties" arising from the employer ceasing deduction facilities in the context of an industrial dispute did not amount to an "arbitrary" or "illegitimate tactic". The respondents contended that there was no evidence that would warrant an employer being compelled to deduct and remit union fees on behalf of an employee, simply because the employee chose to authorise such deduction and remittance. 28 The evidence did not demonstrate any impediment to people joining a union. The respondents contended it was inappropriate to remove from employers the choice of whether to offer a payroll deduction facility to their employees. That, in the respondents' submission, would not be a fair and reasonable result in contemporary industrial relations. 29 In Mr Gallagher's submission, apart from some recent decisions of this Commission, there had been over 100 years of industrial jurisprudence where a clause such as that now sought, was not a feature of the award system. In his submission, nothing in terms of the industrial relationship between employees and employers has changed which would warrant the granting of the application. 30 On the evidence, at the present time an employee may pay union fees by various means including, cash, cheque or credit card, collection by a union official or delegate at the workplace, direct debit to credit card, cheque account or savings accounts, phone payments, B-pay or Electronic Funds Transfer and payroll deduction facilities. Each of these methods was submitted to be "simple" and "convenient" - none more so than any other. The respondents drew attention to the fact that there had been no evidence from any employee highlighting the difficulties associated with paying union fees by methods other than a payroll deduction facility. The only evidence came from officers of the relevant unions. The complete absence of any evidence from an employee tells against the case brought by the applicant. 31 The respondents contended the reality that emerged from the evidence was that payroll deduction facilities were more convenient for the union and had nothing to do with employees and their relationship with their employer. In the respondents' submission, the application had nothing to do with encouraging participation in industrial relations by representative bodies of employees. 32 The three unions involved in the public sector aspect of the application are all bodies that have participated actively and fully in the New South Wales industrial relations system over the years without the assistance of the clause sought in this application. 33 There was no evidence to suggest that unions had not been able to remain financially viable without the introduction of a payroll deduction facility. There was no evidence to suggest that the granting of the application would assist the financial viability of those organisations. Further, there was no evidence that the clause sought would somehow encourage employees to join industrial organisations of employees. Mr Gallagher contended there was simply no impediment to such voluntary membership at present. There was no evidence that there had been a decline in the membership of the unions in this case. In fact the contrary would appear to be so for the AWU. 34 It was submitted that under the voluntary schemes that currently exist, employers were able to negotiate a commission to be paid when adopting a payroll deduction facility, defraying some of the associated increases in administrative costs. These amounts of commission may be, on the evidence, reasonably significant. If the application were granted, this capacity to negotiate for a commission would be removed. The Commission would not accept that as being in the public interest. 35 The respondents contend that if union members have difficulty remitting union dues on an annual basis it would be more appropriate for the union concerned to set up a direct debit against a credit card; a credit union account; a savings account; a cheque account; or to make arrangements to charge union fees on other than an annual basis. If the employee bears a cost associated with these facilities then it would be appropriate for the union to make some allowance for that. There was no evidence that the change as sought will make any difference to the administrative costs to the union or that greater resources would be allocated to servicing members. 36 Similarly, there was no evidence to demonstrate that the union officials who gave evidence in these proceedings have such familiarity with the financial situation of their members as to permit them to properly give evidence as to whether employees found direct debit facilities an acceptable means of remitting union fees. There was also no satisfactory evidence that the direct debit method was in any way administratively complex for the unions concerned. 37 The respondents rejected the submission that the adoption of a payroll deduction facility would in some way encourage participation in unions by their members; indeed, quite the contrary in the respondents' contention. The method of paying union fees sought in the application was a "do nothing" option for the member. 38 The respondents contended that the evidence in these proceedings demonstrated that the voluntary payroll deduction and remittance system in place had worked, by and large, without difficulty. Whilst some employers have chosen not to involve themselves in such a system, there was no evidence that such action has been to the detriment to the union concerned. 39 On the other hand, the respondents submitted that there was evidence that the imposition of a compulsory payroll deduction system would be onerous and inhibitive of business efficiency, with particular difficulties being experienced by small business. 40 Turning to the contention that payroll deduction facilities had been withdrawn on an "arbitrary" or "unilateral" basis, the evidence of such a practice was almost non-existent and, in any event, ought be considered of little weight. 41 Further, little weight should be placed upon the general statistical material relied upon by the applicant for the contention that union membership was in decline. There was no evidence that the proportion of employees who might belong to the unions involved in the proceedings had been in decline. Without specific evidence of the difficulties contended, the Commission would give little, if any, weight to general statistical material. 42 The Commission ought reject the contention that the evidence of "opinion polling" demonstrated that a greater proportion of the workforce wanting to join a union than actually were members. This was a complex sociological issue requiring extensive research and analysis, absent from the evidence in these proceedings. In the respondents' contention, it could not be seriously suggested that providing a payroll deduction and remittance facility, had anything to do with such a contention. 43 The evidence of the applicant does not support the contention that there was some "common international labour practice" of employers providing a payroll deduction facility. Indeed, in the respondents' contention, the evidence demonstrated "overwhelmingly" that the deduction of union dues was considered to be a matter best left to agreement between the employee, the union, and the employer. The international material was supportive of the respondents' position. Jurisdiction 44 In addressing the fundamental question of whether the Commission has jurisdiction to grant the application in this matter, it is convenient to begin by considering the respondents' case. There were essentially five main elements to the respondents' submission that the Commission lacked jurisdiction. These elements were: 1. The definition of "industrial matters" in s 6(1) of the Act does not extend to the provision in awards of a payroll deduction facility. This is because: (a) The High Court in R v Portus: Ex parte ANZ Banking Group (1987) 127 CLR 358 stands as authority for the proposition that a provision of the type sought in the present application was not an "industrial matter" as defined in the Industrial Relations Act 1988 (Cth); (b) That definition has been considered as sufficiently similar to the definition of "industrial matters" found in the Industrial Arbitration Act 1940 as to make Portus authority for the proposition that a payroll deduction facility is not an industrial matter under the 1940 Act: In Re Club Managers & Secretaries (State) Conciliation Committee [1976] AR (NSW) 196, In Re Clerks (State) Award [1976] AR (NSW) 417 and In Re Sydney City Council (Salaried Division) Conciliation Committee [1977] AR (NSW) 781; (c) The High Court subsequently affirmed Portus in Re Alcan Australia Limited & Ors Ex parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 181 CLR 96; (d) The definition of "industrial matters" in s 6(1) of the Act is in sufficiently similar terms to its equivalent in the 1940 Act such that Portus and Alcan should be considered binding on this Commission. 2. The definition of "industrial matters" in s 6(1) has, however, been extended by s 6(2)(i) to include "the authorised remittance by employers of membership fees of industrial organisations of employees": see Storeworkers – Campbell's Cash and Carry Pty Ltd v National Union of Workers, New South Wales Branch per Wright J, President. 3. Whilst s 6(2)(i) would provide power to make an award relating to the "remittance" of union dues it does not extend to "deduction" of monies from an employee's pay for the purpose of remitting those monies to a union. 4. The respondents' construction of s 6(2)(i) does not rob it of any practical efficacy. Where an authorised deduction had been made as a consequence of an agreement reached between the parties for the deduction of union membership fees as contemplated by s 118(2) of the Act and the employer failed to remit those monies to the relevant union, the Commission could, in reliance upon the power in s 6(2)(i), vary an award to compel such remittance. 5. The provision as sought in the application could be construed as conferring a benefit on union members that was not available to non members and thereby be a breach of the freedom of association provisions of the Act, in particular, s 211. 45 It is to be observed that Mr Gallagher's starting point in arguing the jurisdictional objection was that deduction of union dues from an employee's pay was not an industrial matter within the meaning of s 6(1) of the statute. Mr Gallagher sought to make out his case in this respect by carefully drawing a link between the statutes considered by the High Court in Portus and Alcan and the terms of s 6(1) of the current Act and asking the Commission to accept that the High Court's finding that a payroll deduction facility was not an industrial matter under the relevant Commonwealth statutes, applied with equal force to s 6(1). Senior Counsel accepted, however, that s 6(2) extended the meaning of industrial matter to include "the authorised remittance by employers of membership fees of industrial organisations of employees". So much is clear from the Campbell's Cash and Carry cases, to which we will refer in more detail shortly. 46 We intend to take, as the appropriate starting point in our consideration of the jurisdictional issue in these proceedings, the provisions of s 6(2)(i) and whether they provide the jurisdictional basis for granting the applicant's claim. It will be seen that this essentially involves the question whether the power to make an award providing for the authorised remittance of union membership fees carries with it, by necessary implication, the power to make an award providing for the deduction of such fees from an employee's pay. 47 The relevant provisions of the Industrial Relations Act here under consideration are s 6(1) and s 6(2)(i), s 10, s 118 and the definition of conditions of employment in the Dictionary to the Act. Those provisions are in the following terms: 6. Definition of industrial matters (1) General definition In this Act, "industrial matters" means matters or things affecting or relating to work done or to be done in any industry, or the privileges, rights, duties or obligations of employers or employees in any industry. (2) Examples Examples of industrial matters are as follows: (a) the employment of persons in any industry (including the employment of minors, trainees, apprentices and other classes of employees), (b) the remuneration (including rates of pay, rates for piece-work and allowances) for employees in any industry, (c) the conditions of employment in any industry (including hours of employment, qualifications of employees, manner of work and quantity of work to be done), (d) part-time or casual employment (including part-time work agreements), (e) the termination of employment of (or the refusal to employ) any person or class of persons in any industry, (f) discrimination in employment in any industry (including in remuneration or other conditions of employment) on a ground to which the Anti-Discrimination Act 1977 applies, (g) procedures for the resolution of industrial disputes, (h) the established customs in any industry, (i) the authorised remittance by employers of membership fees of industrial organisations of employees, (j) the surveillance of employees in the workplace. 10. Commission may make awards The Commission may make an award in accordance with this Act setting fair and reasonable conditions of employment for employees. 118. Employees to be paid in full (1) Payment of remuneration to an employee is to be made in full without any deduction for goods, board or lodging or any other services supplied by the employer in payment (or part payment) of remuneration. (2) However, an employer can deduct and pay on behalf of an employee from any remuneration payable to the employee: (a) any payments principally for the benefit of the employee that are authorised in writing by the employee to be deducted and paid, or (b) any payments that are authorised by an industrial instrument to be deducted and paid. (3) An employer must not pay remuneration to an employee contrary to this section. Maximum penalty: 100 penalty units. 48 The Dictionary to the Act defines "conditions of employment" as follows: "conditions of employment" includes any provisions about an industrial matter. 49 In Storeworkers - Campbells Cash & Carry Pty Limited (NSW), NUW (NSW Branch) Award 2000 (No. 2) (2000) 85 IR 198 it was contended by the respondents that there was no power to grant a claim expressed in the following terms (at par [4]): The company undertakes, upon authorisation, to deduct union membership dues, as levied by the union in accordance with its rules, from the pay of employees who are members thereof. Such moneys will be forwarded to the union at the end of each accounting period with all necessary information to enable the reconciliation and crediting of subscription to members' accounts. 50 In outlining the respondent's submission in Storeworkers regarding jurisdiction, Wright J said at pars [10] and [11]: [10] The respondents submit that there is no basis to grant the claim made by the union as to this issue. Their submissions are put on a number of bases. It was submitted that there is no power in the Commission to grant such a provision and that in enacting s 6(2)(i) of the Act, Parliament had not done so in a way which provided relevant power to the Commission. Reference was made in that respect to the judgment of the High Court in Re Alcan Australia Limited; ex parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 181 CLR 96. It was submitted that in the light of the general definition of industrial matters in s 6(1) of the Act, which parallelled the provision considered by the High Court in the judgment in Re Alcan , there was no intention in s 6(2)(i) of the kind that would have been necessary to displace the requirement for the Commission to follow the judgment of the High Court. [11] Reference was also made to the opening words of s 6(2) which described the sub-paragraphs of sub-section (2) as "examples of industrial matters". This, it was submitted, did not provide the necessary intention to extend the general definition of industrial matters in a way which gave the Commission relevant jurisdiction. 51 In rejecting the respondent's contentions regarding jurisdiction his Honour said: [17]… I consider that the Commission does have the necessary jurisdiction. The effect of the submissions of the respondents would be to give no meaning to the words in s 6(2)(i) of the Act. That would be a remarkable and therefore entirely unlikely result. It is trite that 'words are not lightly discarded as unintended verbiage': see, for example, the judgment of Moore J sitting in the Industrial Relations Court of Australia in Western Newspapers Pty Limited v Warren (1994) 1 IRCR 393 at 410, (1994) 56 IR 340 at 356 - 357, and the decision of a Full Bench of this Commission in Re Hospital Employees Conditions of Employment (State) Award (1999) 96 IR 245 at 257. As the judgment of Moore J indicates, that approach is relevant, whether the verbiage is to be found in a statute or in a contract. His Honour also observed the role of a Court or tribunal in the construction of a document "involves a search for what the framers of the document meant by the words adopted". [18] I consider that it is clear that Parliament intended that the Commission was to have relevant power as to this subject matter. I also consider that the statement by Moore J represents a stronger presumption when a statute is being considered than when other documents such as contracts or deeds are in issue. Section 6 of the Industrial Relations Act 1996 is to be read with the conferral of power in the Commission by s 10 to make awards setting conditions of employment as defined by s 4 and the Dictionary to the Act as including "any provisions as to an industrial matter" … [19] I consider that the legislature in enacting s 6 intended, by the structure of the section, to provide a general definition in sub-section (1) but to include in sub-section (2), by reference to "examples of industrial matters", matters which fell within that description either by elaboration of the general words in sub-section (1) or by an extension of those words. That is, the legislature, although using the word 'examples', approached the matter in a way which might have earlier occurred by use of the word 'includes'. The usual construction of the word 'includes' or the word 'including' is that it is intended to be read as a word of extension (compare R v Holmes; Ex parte Public Service Association of New South Wales (1977) 140 CLR 63 at 72 - 73) but that does not necessarily mean that all of the areas or concepts following the use of the word 'includes' must involve an extension in meaning. Some of the relevant words may be mere examples. However, the usual approach adopted when the word 'includes', or one of its variants, is used, is that amongst the words following it are words which extend the meaning of the term or terms defined. 52 The respondent appealed the decision of Wright J and in doing so sought a stay of his Honour's decision. The stay application was heard by Walton J, Vice-President in Campbells Cash and Carry Pty Limited v National Union of Workers, New South Wales Branch (2001) 104 IR 400. In refusing the application for a stay his Honour observed at 412: [66] In my view, the appellant's contentions as to jurisdictional limitations are attended by some real difficulties. If s6(1) does not confer jurisdiction upon the Commission to make an award for the deduction of union dues (having regard to Re Alcan Australia Limited), then the construction of s6(2)(i) contended for by the appellant (whereby the words "examples of industrial matters" do not extend the scope of s6(1) to include the matters referred to in that sub-section) would have the effect of rendering provisions of s6(2)(i) nugatory. As a matter of statutory construction, such an approach would not usually be preferred. 53 The appeal by the respondents was dismissed: Campbells Cash and Carry Pty Ltd v National Union of Workers, New South Wales Branch (No.2) (2001) 53 NSWLR 393; (2001) 106 IR 430. In dismissing the appeal the Full Bench said (at 433): [15] In our opinion, the conclusions by Wright J concerning the construction of s6 of the Act are correct. We adopt also his reasons thereto. As to the matters otherwise addressed in the parties' submissions on the appeal, we would add only the following. [16] First, the decision in Alcan held that the deduction of union dues was not an industrial matter within the meaning of a federal statute. It is nonetheless clear, as Mr Shaw submitted, that the New South Wales Parliament may enact provisions that reverse the effect of the decision in Alcan . [17] Second, the inclusion of the authorised remittance of union membership fees is addressed in unambiguous terms in the Act. Having regard to the plain words of s6 of the Act, it seems to us that the only properly available construction of that section is to conclude that the authorised remittance by employers of membership fees of industrial organisations is an industrial matter. We consider this conclusion derives from the plain words of s6(2)(i) of the Act, allowing for the use of modern language to convey the statutory intention by the use of the word "examples" in the preamble to that sub-section. [18] As Mr Shaw's submission noted, the use of "examples" is an approach that is becoming more common in contemporary legislative drafting, possibly in response to issues of statutory construction that may sometimes arise from the use of the word "includes". In D C Pearce and R S Geddes' Statutory Interpretation in Australia (Butterworths, 4th ed) such drafting issues with respect to the statutory use of the word "includes" were described as follows (at [6.36]): Particular confusion has arisen where the word "includes" has been used in a definition and then one or more items that would usually fall within the accepted meaning of the word have been specified together with some items that would not. The problem has then arisen whether the definition, notwithstanding the use of the word "includes", was intended to be exhaustive. From the drafter's point of view this practice can be defended simply on the basis that it is not always clear precisely what items will be regarded as falling within the scope of the word. Hence caution advises that doubtful items should be listed among those "included" lest they be regarded as not covered by the word defined. But if some items that would normally fall within the scope of the defined word are included, is another item that would also normally be covered by the term defined, but which is not mentioned, to be treated as not falling within the definition. [19] In any event, and thirdly, by adopting a purposive approach to construction, we would conclude that the authorised remittance by employers of membership fees of industrial organisations of employees is an industrial matter. Such a construction is consonant with the legislative intention or purpose, with respect to s6 of the Act. The construction of s6(2) proposed by the appellant would render nugatory the provisions of s6(2)(i) thereof. [20] It may be noted the second reading speech for the Industrial Relations Bill 1995 (which was adopted and incorporated for the purposes of the Industrial Relations Bill 1996) emphasised the definition of industrial matters was expansive. The then Minister for Industrial Relations, the Hon. J W Shaw QC MLC stated: Chapter 1 also includes a definition of industrial matters, which, although shorter than the definition in the 1991 Act, is also intended to be expansive in its operation and not narrower than the definition in the present legislation ( Hansard - Legislative Council, 23 November 1995) [21] Fourth, the Parliament may be presumed to have legislated with knowledge of decisions of the High Court, and other courts and tribunals; and, relevantly in this instance, of the 1994 decision in Alcan. 54 The respondents in the Campbell's Cash and Carry cases argued from the standpoint that s 6(2) of the Act, by listing a number of examples, did not thereby intend to extend the meaning of industrial matters in s 6(1) and that as "industrial matters" did not include a payroll deduction facility (see Portus; Alcan) the Commission did not have power to make an award in the terms sought. The Commission held that such an interpretation was untenable because it meant that the pertinent paragraph in s 6(2) had no work to do. 55 Mr Gallagher contended that he was adopting a different approach to the interpretation of s 6 to that taken by the respondents in the Campbell's Cash and Carry cases and it was essentially this: that the Commission may make an award in respect of conditions of employment (which includes any provisions about an industrial matter, which in turn by virtue of s 6(2)(i) includes "the authorised remittance by employers of membership fees of industrial organisations of employees"). However, whilst the Commission has power to make an award that enables an employer to remit membership fees, the Commission does not have power to make an award that enables an employer to deduct from an employee's remuneration any payment that constitutes union membership fees. 56 Further, senior counsel for the respondents submitted that s 118 is not a source of power for the Commission to make an award enabling an employer to deduct from any remuneration payable to the employee and pay on behalf of that employee any payments that are authorised by an industrial instrument (which includes an award) to be deducted and paid. The respondents' submission was that, by agreement (pursuant to s 118(2)(a) – although Mr Gallagher had some reservations about whether union membership fees could be said to be "principally for the benefit of the employee") an employer may deduct monies from an employee's pay for the purpose of remitting those monies to a union as payment for membership fees. If such deductions are made but the employer does not remit the monies to the relevant union, it was Mr Gallagher's submission that s 6(2)(i) may then be used as the source of power to make an award requiring remittance, thereby avoiding the valid criticism made by the Commission in Campbell's Cash and Carry that s 6(2)(i) had no work to do. 57 Mr Gallagher said that because the respondents in Campbell's Cash and Carry did not argue their case on the basis that a distinction is to be drawn between the concepts of "remit" and "deduct", the Commission's attention was not drawn to any such distinction. Therefore, he submitted Campbell's Cash and Carry could be distinguished. 58 As to the distinction between "remit" and "deduct" Mr Gallagher referred to the Macquarie Dictionary, Third Edition, which relevantly defines the words as follows: " Deduct " . to take away, as from a sum or amount. "Deduction" is relevantly defined as "the act of deducting; subtraction; abatement "Remit". 1. to transmit or send (money etc.). "Remittance" is defined as 1. the remitting of money, etc., to a recipient at a distance. 2. money or its equivalent sent from one place to another. 59 Senior counsel submitted that the words in s 6(2)(i) are clear and unambiguous and it was not open to the Commission to read additional words into the provision. In this respect it could be said that Mr Gallagher favoured the approach in Thompson v Goold & Co [1910] AC 409 at 420, where Lord Mersey said, "It is a strong thing to read into an Act of Parliament words which are not there, and in the absence of clear necessity it is a wrong thing to do." 60 Mr Gallagher relied on a line of cases that might be said to represent the pre-eminence of the literal approach to statutory interpretation. In this respect he referred primarily to Re Bolton; Ex parte Beane (1987) 162 CLR 514, which was referred to with approval in Byrnes v The Queen (1995) 183 CLR 501; Thompson v His Honour Judge Byrne (1999) 196 CLR 141; Byrne and Frew v Australian Airlines Limited (1995) 185 CLR 410 and North Ganalanja Aboriginal Corporation v The State of Queensland (1996) 185 CLR 595 61 The respondents' submissions regarding statutory construction rely on the proposition that the cardinal rule is that "[t]he purposes of a legislature must be ascertained from the language of the legislation which it enacts": Byrnes v The Queen per Kirby J at [80]. 62 The factual circumstance of Re Bolton; Ex parte Beane are instructive. In those proceedings, the applicant (Beane) had made application for habeas corpus and prohibition. He had absented himself from the United States Armed Forces in the Republic of South Vietnam on 28 February 1970. On or about 28 April 1970 he arrived in Australia, and since that time had continuously resided in this country. On 22 November 1982 a request was made by the United States for assistance in his apprehension. Following this request the applicant was arrested on warrant and subsequently detained by Australian naval forces. He was held in custody pending a threatened delivery of him into the custody of service authorities of the United States. 63 The respondents had submitted that s 19 of the Defence (Visiting Forces) Act 1963 (Cth) authorized the arrest in Australia of a deserter or absentee without leave from the forces of a country to which the section applied notwithstanding that the desertion or absenting occurred outside Australia. The majority of the High Court decided otherwise. In the course of their judgment Mason CJ, Wilson and Dawson JJ said at 517 - 518: Furthermore, given that s 19 is ambiguous, consideration may be given in ascertaining the meaning of the provision to the second-reading speech of the Minister when introducing the Bill for the Act into the House of Representatives in 1963: Acts Interpretation Act 1901 (Cth), as amended, s.15AB. That speech quite unambiguously asserts that Part III relates to deserters and absentees whether or not they are from a visiting force. But this of itself, while deserving serious consideration, cannot be determinative; it is available as an aid to interpretation. The words of a Minister must not be substituted for the text of the law. Particularly is this so when the intention stated by the Minister but unexpressed in the law is restrictive of the liberty of the individual. It is always possible that through oversight or inadvertence the clear intention of the Parliament fails to be translated into the text of the law. However unfortunate it may be when that happens, the task of the Court remains clear. The function of the Court is to give effect to the will of Parliament as expressed in the law. 9. In our opinion, notwithstanding the expressed intention of the government in introducing the law into the Parliament - an aspect of the matter which, as we have said, must give the Court cause for earnest consideration - we would not be justified in reading an implication carrying such serious consequences for the liberty of the individual into s 21(1) of the Act. The decision in Peterson must stand, with the result that Mr Beane is entitled to be released. 64 It is this passage upon which Mr Gallagher particularly relies. Of course, Re Bolton does not stand for the proposition that legislative purpose may only be determined from the words of the statute and not otherwise. First, one of the issues that the High Court was called upon to consider was a second reading speech that the respondents in that case contended threw light on what was said to be an ambiguity in s 19. However, it is clear from the joint judgment of Mason CJ, Wilson and Dawson JJ that their Honours regarded the Minister's second reading speech merely as an aid to interpretation and not a substitute for the words of the legislation. So much, with respect, is unexceptional. Second, the majority were concerned a restriction on the liberty of an individual in the absence of clear legislative warrant. Deane J said (at 532): The second further matter is that it was submitted on behalf of the respondents that the second reading speech of the responsible Minister, to which reference should, so it was said, be made pursuant to the provisions of s.15AB of the Acts Interpretation Act 1901 (Cth), discloses that the powers of arrest, detention and delivery up to a foreign force which the Act confers were intended to be applicable regardless of whether desertion from that force had occurred elsewhere than in Australia. The simple answer to that submission is that such a construction of s 19(1) would involve, as Newton J. pointed out in Peterson, a substantial derogation from the rule that, "subject to extradition and migration legislation, every person coming from abroad, as soon as he sets foot in Australia without breach of Australian law, is free". A legislative provision should not be construed as effecting such a derogation from fundamental principle relating to the freedom of the subject in the absence of a clear legislative intent that it should be so construed. No such clear legislative intent is to be discerned in the provisions of the Act and, notwithstanding s.15AB of the Acts Interpretation Act , the second reading speech of the responsible Minister cannot supply the deficiency. 65 We note that Gaudron J in Re Bolton took the view that there was no ambiguity in s 19(1). Therefore, according to Gaudron J (who constituted part of the majority), there was "no necessity for resort to extrinsic material as provided by s.15AB of the Acts Interpretation Act 1901 (Cth)". Accordingly, her Honour's approach was that the purpose of the legislation and the clear words of s 19 were directed at persons who deserted or absented themselves without leave from a visiting force, not persons who deserted whilst overseas and who later came to Australia. Consequently, in the absence of any ambiguity, her Honour did not see any need to refer to the Minister's second reading speech. 66 Re Bolton has to be seen in the light of the very particular circumstances of the case. And whilst a literal approach to statutory construction was appropriate in that case, Re Bolton does not elevate the rule to one that has exclusive or, in light of s 33 of the Interpretation Act, even dominant operation in other circumstances. We hasten to add that we do not consider that Mr Gallagher was contending that the literal approach to statutory interpretation is exclusive. What we understand him to say is that where the words of a statute are clear, it is unnecessary to resort to questions of purpose or context; that the words should be given their natural and ordinary meaning unless that would result in absurdity. 67 Mr Shaw, on the other hand, submitted that in interpreting s 6(2)(i) the Commission should adopt what he described as the modern approach to statutory interpretation, namely, the purposive approach. Mr Shaw referred to Pearce and Geddes Statutory Interpretation in Australia, Fifth Edition, 2001, and the comment that "Some of the most enthusiastic support for the purposive approach has come from New South Wales courts." (See [2.15] where Pearce and Geddes list a number of examples to support the proposition). Mr Shaw made specific reference to Newcastle City Council v GIO General Ltd (1997) 191 CLR 85; Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 320 - 321 per Mason and Wilson JJ; CIC Insurance Ltd v Bankstown Football Club Ltd (1995-1997) 187 CLR 384 at 408 per Brennan CJ, Dawson, Toohey and Gummow JJ; and Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586 at 592 per Lord Nicholls. 68 Mr Shaw also referred to s 33 of the Interpretation Act 1987, which provides: 33. Regard to be had to purposes or objects of Acts and statutory rules In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object. 69 The role of the Victorian equivalent to s 33 in the interpretation of statutes was considered by Dawson J in Mills v Meeking (1990) 169 CLR 214. In that case the majority judges gave s 49(1)(f) of the Road Safety Act 1986 (Vic) a literal interpretation. Dawson J and McHugh J dissented. The minority thought that the paragraph should be given a purposive construction. In taking that approach Dawson J explained (at 30-31) what he considered to be the effect of s 35 (a) of the Interpretation of Legislation Act 1984 (Vic) (which is the Victorian counterpart to s 33 of the New South Wales Act): The difficulty has been in ascertaining the intention of Parliament rather than in giving effect to it when it is known. Indeed, as everyone knows, the intention of Parliament is somewhat of a fiction. Individual members of Parliament, or even the government, do not necessarily mean the same thing by voting on a Bill or, in some cases, anything at all. The collective will of the legislature must therefore be taken to have been expressed in the language of the enactment itself, even though that language has been selected by the draftsman, who is not a member of Parliament. 18. In the past this has meant that preference has been given to the literal meaning of a statute, this being the only safe guide to the intention of the legislature. Such was the approach of Gibbs C.J. in Cooper Brookes (Wollongong) Pty. Ltd. v. Federal Commissioner of Taxation (1981) 147 CLR 297 at p 305, where he said: "... if the language of a statutory provision is clear and unambiguous, and is consistent and harmonious with the other provisions of the enactment, and can be intelligibly applied to the subject matter with which it deals, it must be given its ordinary and grammatical meaning, even if it leads to a result that may seem inconvenient or unjust. ... On the other hand, if two constructions are open, the court will obviously prefer that which will avoid what it considers to be inconvenience or injustice." Perhaps that approach gives insufficient emphasis to the purpose of the legislation, for as Mason and Wilson JJ in the same case observed (at p 321): "Quite obviously questions of degree arise. If the choice is between two strongly competing interpretations, as we have said, the advantage may lie with that which produces the fairer and more convenient operation so long as it conforms to the legislative intention. If, however, one interpretation has a powerful advantage in ordinary meaning and grammatical sense, it will only be displaced if its operation is perceived to be unintended." 19. However, the literal rule of construction, whatever the qualifications with which it is expressed, must give way to a statutory injunction to prefer a construction which would promote the purpose of an Act to one which would not, especially where that purpose is set out in the Act. Section 35 of the Interpretation of Legislation Act must, I think, mean that the purposes stated in Pt 5 of the Road Safety Act are to be taken into account in construing the provisions of that Part, not only where those provisions on their face offer more than one construction, but also in determining whether more than one construction is open. The requirement that a court look to the purpose or object of the Act is thus more than an instruction to adopt the traditional mischief or purpose rule in preference to the literal rule of construction. The mischief or purpose rule required an ambiguity or inconsistency before a court could have regard to purpose: Miller v. The Commonwealth (1904) 1 CLR 668 at p 674; Wacal Developments Pty. Ltd. v. Realty Developments Pty. Ltd. (1978) 140 CLR 503 at p 513. The approach required by s 35 needs no ambiguity or inconsistency; it allows a court to consider the purposes of an Act in determining whether there is more than one possible construction. Reference to the purposes may reveal that the draftsman has inadvertently overlooked something which he would have dealt with had his attention been drawn to it and if it is possible as a matter of construction to repair the defect, then this must be done. However, if the literal meaning of a provision is to be modified by reference to the purposes of the Act, the modification must be precisely identifiable as that which is necessary to effectuate those purposes and it must be consistent with the wording otherwise adopted by the draftsman. Section 35 requires a court to construe an Act, not to rewrite it, in the light of its purposes. 70 In Thompson v Byrne at [48], Gaudron J observed: The second argument for Mr Thompson was directed to what was said to be the purpose of the Act. As Dawson J pointed out in Mills v Meeking , the Act is to be construed observing the command in s 35 of the Interpretation of Legislation Act 1984 (Vic). That section requires that "a construction that would promote the purpose or object underlying the Act ... be preferred to [one] that would not". That requirement is independent of any other rule of construction and gives greater emphasis to legislative purpose than do the general rules of statutory interpretation (emphasis added) . As with the general rules, however, the problem is to identify the legislative purpose. 71 There are a number of cases that, whilst not referring to s 33 of the Interpretation Act or its equivalents, are not inconsistent with the approach taken by Dawson J in Mills v Meeking. The cases refer to the need to construe a statutory provision in its context and to do so "in the first instance, not merely after 'ambiguity' is identified". 72 For example in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69] it was said (per McHugh, Gummow, Kirby and Hayne JJ): The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute [See Taylor v Public Service Board (NSW) (1976) 137 CLR 208 at 213 per Barwick CJ]. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole"[ Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 320 per Mason and Wilson JJ. See also South West Water Authority v Rumble's [1985] AC 609 at 617 per Lord Scarman, "in the context of the legislation read as a whole"]. In Commissioner for Railways (NSW) v Agalianos [(1955) 92 CLR 390 at 397], Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed [ Toronto Suburban Railway Co v Toronto Corporation [1915] AC 590 at 597; Minister for Lands (NSW) v Jeremias (1917) 23 CLR 322 at 332; K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 312 per Gibbs CJ, 315 per Mason J, 321 per Deane J]. 73 In CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408, Brennan CJ, Dawson, Toohey and Gummow JJ observed: Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses "context" in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy [ Attorney-General v Prince Ernest Augustus of Hanover [1957] AC 436 at 461, cited in K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 312, 315. Instances of general words in a statute being so constrained by their context are numerous. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Ltd (1986) 6 NSWLR 363 at 388, if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent [ Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 320-321]. 74 In Repatriation Commission v Vietnam Veterans' Association of Australia NSW Branch Inc (2000) 171 ALR 523 at 548, Spigelman CJ observed: 107 The Australian law of statutory interpretation requires a court to consider context in the first instance, not merely after "ambiguity" is identified. 108 As Sir Anthony Mason put it in K & S Lake City Freighters supra at 315 (in dissent, but not with respect to the law of statutory interpretation): "Problems of legal interpretation are not solved satisfactorily by ritual incantations which emphasize the clarity of meaning which words have when viewed in isolation, divorced from their context. The modern approach to interpretation insists that the context be considered in the first instance, especially in the case of general words, and not merely at some later stage when ambiguity might be thought to arise." 75 Cooper Brookes was another case where the High Court opted for a purposive rather than literal approach and is a particular case in point. In that case the appellant had argued that the words of s 80C(3) of the Income Tax Assessment Act 1936 (Cth) were clear and that the court should not depart from the literal meaning of the words. The Court was prepared to imply additional words in s 80C(3) to avoid an "incongruous" result (Gibbs CJ at 305) or a "capricious and irrational" result (Mason and Wilson JJ at 321). In the course of his judgment, Gibbs CJ at 304-305 said: 6. It is an elementary and fundamental principle that the object of the court, in interpreting a statute, "is to see what is the intention expressed by the words used": River Wear Commissioners v. Adamson (1877) 2 App Cas 743, at p 763. It is only by considering the meaning of the words used by the legislature that the court can ascertain its intention. And it is not unduly pedantic to begin with the assumption that words mean what they say: cf. Cody v. J. H. Nelson Pty. Ltd. (1947) 74 CLR 629, at p 648. Of course, no part of a statute can be considered in isolation from its context - the whole must be considered. If, when the section in question is read as part of the whole instrument, its meaning is clear and unambiguous, generally speaking "nothing remains but to give effect to the unqualified words": Metropolitan Gas Co. v. Federated Gas Employees' Industrial Union (1925) 35 CLR 449, at p 455 There are cases where the result of giving words their ordinary meaning may be so irrational that the court is forced to the conclusion that the draftsman has made a mistake, and the canons of construction are not so rigid as to prevent a realistic solution in such a case: see per Lord Reid in Connaught Fur Trimmings Ltd. v. Cramas Properties Ltd. (1965) 1 WLR 892, at p 899; (1965) 2 All E.R. 382, at p 386 . Examples of that sort of case may be found in Maxwell on the Interpretation of Statutes, 12th ed., (1969), at p. 228 et seq., and Craies on Statute Law, 7th ed., (1971), at p. 520 et seq. However, if the language of a statutory provision is clear and unambiguous, and is consistent and harmonious with the other provisions of the enactment, and can be intelligibly applied to the subject matter with which it deals, it must be given its ordinary and grammatical meaning, even if it leads to a result that may seem inconvenient or unjust. To say this is not to insist on too literal an interpretation, or to deny that the court should seek the real intention of the legislature. The danger that lies in departing from the ordinary meaning of unambiguous provisions is that "it may degrade into mere judicial criticism of the propriety of the acts of the Legislature", as Lord Moulton said in Vacher & Sons Ltd. v. London Society of Compositors [1913] AC 107, at p 130; it may lead judges to put their own ideas of justice or social policy in place of the words of the statute. On the other hand, if two constructions are open, the court will obviously prefer that which will avoid what it considers to be inconvenience or injustice. Since language, read in its context, very often proves to be ambiguous, this last mentioned rule is one that not infrequently falls to be applied. 76 Mason and Wilson JJ, in the same case, said at 320: 23. In some cases in the past these rules of construction have been applied too rigidly. The fundamental object of statutory construction in every case is to ascertain the legislative intention by reference to the language of the instrument viewed as a whole. But in performing that task the courts look to the operation of the statute according to its terms and to legitimate aids to construction. 77 We consider that in interpreting s 6(2)(i) there is abundant authority for preferring the purposive approach to the literal approach, especially in the light of s 33 of the Interpretation Act. In this respect, we agree with the approach proposed by Dawson J in Mills v Meeking and we consider that it is consistent with the approach referred to in Project Blue Sky, Cooper Brookes and other cases, namely, that the primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The approach enunciated by Dawson J in Mills v Meeking, as it applies to the Interpretation Act, may be summarised as follows: 1) That the literal rule of construction must give way to the statutory injunction in s 33 of the Interpretation Act to prefer a construction that would promote the purpose of an Act to one that would not. 2) The approach required by s 33 does not require an ambiguity or inconsistency before a court could have regard to the purpose or object of an Act. 3) If the literal meaning of a provision is to be modified by reference to the purposes of an Act, the modification must be precisely identifiable as that which is necessary to effectuate those purposes and must be consistent with the wording otherwise adopted by the draftsman. Section 33 requires a court to construe an Act, not to rewrite it, in the light of its purposes. 78 Allied to these propositions is the observation by McHugh JA in Bermingham v Corrective Services Commission of New South Wales (1988) 15 NSWLR 292 at 302: [I]t is not only when Parliament has used words inadvertently that a court is entitled to give legislation a strained construction. To give effect to the purpose of the legislation, a court may read words into a legislative provision if by inadvertence Parliament has failed to deal with an eventuality required to be dealt with if the purpose of the Act is to be achieved. 79 However, in Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 423 McHugh JA said that the "reading in" of words into a statute was subject to certain conditions: First, the court must know the mischief with which the Act was dealing. Secondly, the court must be satisfied that by inadvertence Parliament has overlooked an eventuality which must be dealt with if the purpose of the Act is to be achieved. Thirdly, the court must be able to state with certainty what words Parliament would have used to overcome the omission if its attention had been drawn to the defect. 80 Similarly, in Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586 Lord Nicholls, with whom Lords Jauncey, Steyn, Clyde and Millett agreed, said at 592: I freely acknowledge that this interpretation of section 18(1)(g) involves reading words into the paragraph. It has long been established that the role of the courts in construing legislation is not confined to resolving ambiguities in statutory language. The court must be able to correct obvious drafting errors. In suitable cases in discharging its interpretative function the court will add words, or omit words or substitute words… This power is confined to plain cases of drafting mistakes. The courts are ever mindful that their constitutional role in this field is interpretative. They must abstain from any course which might have the appearance of judicial legislation. A statute is expressed in language approved and enacted by the legislature. So the courts exercise considerable caution before adding or omitting or substituting words. Before interpreting a statute in this way the court must be abundantly sure of three matters: (1) the intended purpose of the statute or provision in question; (2) that by inadvertence the draftsman and Parliament failed to give effect to that purpose in the provision in question; and (3) the substance of the provision Parliament would have made, although not necessarily in the precise words Parliament would have used, had the error in the Bill been noticed. 81 We also refer to Four Sons Pty Ltd v Sakchai Limsiripothong (2000) 98 IR 1 at 4 where the Full Bench referred with approval to the judgment of Samuels JA in Hornsby Shire Council v Porter (1990) 19 NSWLR 716 at 725 where his Honour cited with approval the following passage from Craies on Statute Law, 7th edition, 1971, at 111: If a statute is passed for the purpose of enabling something to be done, but omits to mention in terms some detail which is of great importance (if not actually essential) to the proper and effectual performance of the work which the statute has in contemplation, the courts are at liberty to infer that the statute by implication empowers that detail to be carried out. 82 In adopting a purposive approach to the interpretation of s 6(2)(i) we observe that the provision exists in the context of a remedial statute that has as one of its objects the following: 3. Objects … (d) to encourage participation in industrial relations by representative bodies of employees and employers and to encourage the responsible management and democratic control of those bodies, … 83 Moreover, whilst the Industrial Relations Act contains extensive provisions dealing with the rights of the individual (for example, Ch 2 Pt 6 - Unfair dismissals, Ch 2 Pt 9 - Unfair contracts, Ch 5 Pt 1 - Principles of association) it has a strong collective theme running through it. That is, embodied in the statute is a system of industrial relations that relies for its operation on collective representation through registered bodies of employers and employees. This is manifested in the fundamental processes for dealing with industrial disputes and the making of awards and enterprise agreements. 84 Given the object of the Act expressed in s 3(d) and the importance, perhaps necessity, of representative bodies to the machinery of industrial relations in this State, an award provision enabling payroll deductions for the purpose of facilitating the payment of an employee's union membership fees could not be said to be inconsistent with either the Act's object or the policy framework in which it operates. Indeed, such a payroll deduction facility may be seen as a means of directly encouraging representative bodies of employees. 85 In this context we come to consider s 6(2)(i). In our opinion, the Legislature's purpose in including s 6 (2)(i) as one of the examples of an industrial matter was to enable the Commission to make awards that authorise an employer to deduct monies from an employee's pay for the purpose of remitting it to the relevant union as payment for membership fees owed by the employee to that union. In other words, we consider that the word "remittance" carries with it the implication that before there can be any remittance the employer has to make a deduction from the employee's pay. This is consistent with what happens in practice. That is, the employee authorises the employer to deduct monies from his or her pay and the amount is then remitted to the relevant union. It is also consistent with the assumption by Wright J in Storeworkers and by the Full Bench on appeal in Campbell's Cash & Carry that "remittance" in s 6(2)(i) included the concept of deduction. 86 We consider that s 6(2)(i) would be otiose if its purpose was merely to provide a jurisdictional foundation for the making of awards limited to remitting union dues. It seems to us, notwithstanding the respondents' submissions in this respect, that it could not be supposed that it was the Legislature's intention to give the Commission power to make an award to require an employer to remit union dues, but to withhold the power to make awards enabling an employer to make authorised deductions in order that the union dues could be remitted. 87 As we have already explained, Mr Gallagher submitted that s 6(2)(i) was not without work to do. He contended that s 6(2)(i) enabled the Commission to make an award in the event that the employer had deducted the union fees in accordance with s 118(2)(a) but had failed or refused to remit the fees to the relevant union. But we consider to accept that it was Parliament's intention to include, in the list of examples of what are quite substantial industrial matters capable of being made the subject of an award, a matter that would more appropriately be seen as an award enforcement provision under the provisions of Ch7 - Pt 6 - Criminal and Other Legal Proceedings of the Act, is so unlikely that it may be rejected. The only significance of the argument is it demonstrates the substantial difficulties in the submissions seeking to deny the jurisdiction here. 88 Further, we noted earlier that it is accepted by the respondents that s 6(2)(i) extends the meaning of industrial matters in s 6(1) of the Act. This extension should be seen against the background of the decision of the High Court in Alcan in 1994. As the Full Bench said in Campbell's Cash & Carry, "the Parliament may be presumed to have legislated with knowledge of decisions of the High Court, and other courts and tribunals; and, relevantly in this instance, of the 1994 decision in Alcan." In Alcan, of course, the High Court held that "Even though a dispute as to the deduction of union dues falls within s.51 (xxxv) of the Constitution (at least if it relates to authorized deductions)" such a dispute was not a matter "pertaining to the relationship between employers and employees". We consider that, in extending the meaning of industrial matters by including s 6(2)(i) in the list of examples of industrial matters, the Parliament was intending to overcome the effect of Alcan. So much is clear from the Hansard record of Committee debate in the Legislative Council on the Bill on 30 April 1996. The Attorney General and Minister for Industrial Relations, the Hon J W Shaw QC, in responding to a motion by the Leader of the Opposition, Mr Hannaford, to remove s 6(2)(i) said at 512: The Leader of the Opposition is right in the sense that the Government is seeking to confer a jurisdiction on the independent Industrial Relations Commission to determine collective disputes about the question of payroll deduction of union dues. … What we seek to do is simply maintain a broad view of the jurisdiction of the Industrial Relations Commission to determine in appropriate cases whether the payroll deduction mechanism ought to be continued. 89 Section 34 of the Interpretation Act allows the use of extrinsic material in the interpretation of Acts and statutory rules. The section provides: 34. Use of extrinsic material in the interpretation of Acts and statutory rules (1) In the interpretation of a provision of an Act or statutory rule, if any material not forming part of the Act or statutory rule is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material: (a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made), or (b) to determine the meaning of the provision: (i) if the provision is ambiguous or obscure, or (ii) if the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made) leads to a result that is manifestly absurd or is unreasonable. (2) Without limiting the effect of subsection (1), the material that may be considered in the interpretation of a provision of an Act, or a statutory rule made under the Act, includes: … (h) any relevant material in the Minutes of Proceedings or the Votes and Proceedings of either House of Parliament or in any official record of debates in Parliament or either House of Parliament. (3) In determining whether consideration should be given to any material, or in considering the weight to be given to any material, regard shall be had, in addition to any other relevant matters, to: (a) the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made), and (b) the need to avoid prolonging legal or other proceedings without compensating advantage. 90 Whilst the extrinsic material to which we have been referred is not determinative and cannot be a substitute for the language of the statute, it does assist the Commission in showing that an alternative interpretation to the literal approach to the meaning of the provision is to be preferred as being consistent with Parliament's intention. 91 Further evidence that, in extending the meaning of industrial matter, the Legislature had regard to the High Court's decision in Alcan is the particular reference to the word "authorise" in s 6(2)(i). At [15] the High Court said: 15. It is arguable, however, that the popular meaning of "industrial disputes" does not extend to a claim for the deduction of union dues unless the deductions are in some way authorized by employees. That is because, prima facie, a union is acting in its own interest, not that of its members as employees, when it pursues a claim for the deduction of dues and it may well be that, even in popular understanding, it is necessary for the employees' interests to be seen as coinciding with the union's if the matter is to be regarded as industrial. On the other hand, if some employees have authorized the deduction of union dues or the union is acting with the support of some employees, there is obvious force in the argument that the dispute is an industrial dispute for the purposes of s.51(xxxv). It is, however, unnecessary to resolve that question for the purposes of the present case. 92 We consider that the Legislature has opted to use the word "authorised" in s 6(2)(i) because without it, on the authority of Alcan, it would have been open to contention that a dispute about deduction of union dues under the Industrial Relations Act 1996 was not an industrial dispute. 93 Mr Gallagher submitted that if it had been the Legislature's intention to overcome the "mischief" of Alcan that it had plainly failed to do so by omitting the word "deduction" from s 6(2)(i). But just as the Court of Appeal in Hornsby Shire Council v Porter decided that the statutory obligation to permit a person to inspect plans for a building application on adjoining land carried with it the implication that the owner would be notified that such plans had been lodged, we take the view that in order to give s 6(2)(i) practical effect it is necessary to construe the provision as to permitting the making of an award provision for authorised deductions of union dues. 94 The remaining jurisdictional issue concerns the respondents' submission that the provision as sought in the application could be construed as conferring a benefit on union members that was not available to non-members and thereby would be a breach of the freedom of association provisions of the Act, in particular, s 211. 95 Section 211 of the Act provides: 211. No preference to members of employee organisations over non-members (1) An industrial instrument cannot confer a right of preference of employment in favour of a member of an industrial organisation of employees over a person who is not a member of such an organisation. (2) This section applies to industrial instruments in force on the commencement of this section. (3) For the purposes of this section, a member of an industrial organisation includes a person who has applied to become a member of the organisation. 96 Mr Gallagher referred to the judgment of the Full Commission in Re Retail Trade Union Training Leave (State) Award (unreported, 15 December 1994). The applicants in that case had sought an award provision relating to trade union training leave, such leave to be with pay. At 49 - 50 the Full Commission addressed a claim that the provisions sought would conflict with the relevant provisions of the 1991 Act relating to discrimination and preference of employment: It is also unnecessary to express any final opinion on whether a grant of the claims would conflict with the relevant provisions of the 1991 Act concerning discrimination and preference of employment. We should, however, in deference to the detailed arguments presented by all parties deal very briefly with the latter question. One area of difference between the statutory frameworks within which the Federal and New South Wales industrial systems operate is demonstrated by the Objects of the 1991 Act (s.3); they include the following: (m) to promote the conduct of industrial relations in a non-discriminatory manner and to provide for equality of opportunity in employment matters; (n) to ensure that employees are free to choose whether or not to join unions by prohibiting preference in employment for union members and by preventing victimisation of persons on the ground that they are or are not union members. Division 5 - Voluntary unionism of the 1991 Act commences with s.480: No preference for unionists in awards or agreements 480(1) An award or agreement cannot confer a right of preference of employment in favour of a member of an organisation of employees over a person who is not a member of an organisation of employees. 480(2) This section applies to awards or agreements made before or after the commencement of this section and so applies despite any provision made before the commencement of this section in an award or agreement. 480(3) Nothing in this Act limits or in any way affects any law relating to preference in employment to persons who have served as members of the Naval, Military or Air Forces of the Commonwealth. We incline to the view that the grant of the claims would run counter to the spirit and intention of the Act as manifested in the aforesaid Objects, and possibly also to the terms of s.480. 97 In having regard to these observations it is, of course, necessary to understand that they were made in a different statutory context, in relation to a claim for paid trade union training leave and that they were obiter dicta. Nevertheless, there is an obvious similarity between s 480(1) of the 1991 Act and s 211(1) of the 1996 Act. 98 It does not appear to us, however, that an award provision in terms of the claim would "confer a right of preference of employment in favour of a member of an industrial organisation of employees over a person who is not a member of such an organisation." The provision is no more than a payroll deduction facility. It does not confer on a union member any right to be preferred over a non-union member in relation to any aspect of his or her employment. We do not accept there is any inconsistency between the claim and s 211 of the Act. 99 Finally, on this matter, we should observe that we have determined it in accordance with the way it was argued by the parties; that is, by the reference in s 6 to "industrial matters" and the effect of the examples in s 6(2). In dealing with the matter in that way, it should not be taken as foreclosing an alternative approach to this issue; that is, the jurisdiction to make awards or award provisions by reference to the expression "conditions of employment" (see for example the reference to that expression in s 10 and the relevant definitions in the Dictionary to the Act) and the possibility that the expression "conditions of employment" comprehends deductions from salary. This is particularly so when regard is had to the history of the statutes regulating industrial relations in this State from the Industrial Arbitration Act 1940 to the Industrial Relations Act 1996 via the 1991 statute of similar title, with a tangible transition from jurisdiction dependent upon "industrial matters" to a jurisdiction dependent upon the expression "conditions of employment" simultaneously with the disappearance of references to the Commission having restricted or limited powers to make award provisions authorising deductions from wages. 100 We find that the Commission has jurisdiction to make an award in the terms of the amended application. The question then becomes whether we should grant the application and if so on what terms. Discretionary considerations and conclusions 101 The application, whilst framed as an application under s 11 of the Act, essentially seeks a variation to a number of awards during their nominal term. The starting point for consideration of the merits of the application should, therefore, be a recognition of the limitation imposed on the Commission by s 17 of the Act; that is, pursuant to s 17(3)(c) the Commission may vary an award during its nominal term only if it considers there is a "substantial reason to do so" and that the variation "is not contrary to the public interest". 102 The touchstone in determining an application for a new award or a variation to an existing award, is whether the award provides "fair and reasonable conditions of employment for employees". As has been emphasised on numerous occasions, in making that assessment, there is a presumption that the conditions in an existing award are 'fair and reasonable'; the evidentiary onus of rebutting that presumption being, in the ordinary way, on the applicant: see Re Operational Ambulance Officers (State) Award (2001) 113 IR 384, Re Pastoral Industry (State) Award (2001) 104 IR 168, Public Hospital Nurses (State) Award (2002) 115 IR 183, Re Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award (2002) 116 IR 361. 103 Mr Shaw contended that the provision sought in the application was a fair and reasonable prescription as between employers and registered unions reflecting, as it did, an explicit example of an industrial matter in accordance with the Act. He contended that the claim confers an obvious benefit upon the individual employee which is not oppressive, unjust or unfairly burdensome to employers. Further, the evidence demonstrated there is an increasing proportion of the workforce who would belong to a union if given the choice, suggesting that there may be practical impediments to persons joining unions, such as the cost of membership. 104 These matters are of significance, on Mr Shaw's submission, as the Act expressly recognised that organisations of employees and employers are "fundamental to the purposes of the Act" and ought be encouraged. The Commission, would be acting in accordance with its "legislative charter" if it positively encouraged not only the formation of such bodies but their vibrant, lively and continued existence by facilitating ease of membership and the maximum migration of membership. We agree. 105 We have earlier referred to the strong collective theme which underlies the Act. Whilst Mr Shaw took us to a number of authorities dating to the earlier parts of last century in support of his construction of the Act: see Australian Tramway Employees Association and Brisbane Tramways Company Limited (1912) 6 CAR 35, Australian Builders Labourers Federation v Archer (1913) 7 CAR 210, Australian Ship and Wharf Workers Association v Waterside Workers' Federation of Australia (1919) 13 CAR 4, Federated Clothing Trades of the Commonwealth v Archer (1919) 13 CAR 647, Federated Clerks Union of Australia v Altona Petrochemical Company Pty Limited (1973) 150 CAR 387, it is not necessary to embark upon a detailed historical analysis to determine the object or purpose of the current statute. 106 Although we have had regard to those authorities and the dicta in them as to positively facilitating and encouraging registered organisations, or as to taking such aspects into account in the exercise of the tribunal's functions and jurisdiction, and readily recognise that observations upon the construction of statutes in similar form may be of assistance to our task, we would emphasise, in accordance with our observations on the appropriate construction of statutes, the Commission must relate the exercise of its jurisdiction to the statutory mandates and limitations in the Industrial Relations Act. 107 The objectives of the Act are contained within s 3 and in the circumstances of these proceedings, particular reference ought be drawn to the following provisions: 3. Objects The objects of this Act are as follows: (a) to provide a framework for the conduct of industrial relations that is fair and just, … (c) to promote participation in industrial relations by employees and employers at an enterprise or workplace level, (d) to encourage participation in industrial relations by representative bodies of employees and employers and to encourage the responsible management and democratic control of those bodies, (e) to facilitate appropriate regulation of employment through awards, enterprise agreements and other industrial instruments, … 108 We approach the evidence in these proceedings with a view to determining whether the applicant has provided evidence which permits a conclusion to be drawn as to whether the application as framed would further the objects of the Act and, in particular, would foster the development and maintenance of registered organisations of employees. 109 The respondents contended that we should pay little regard to the applicant's statistical evidence; there was no evidence that the granting of the application would foster growth in union membership and there was no evidence that the application, if granted, would foster the responsible management of such organisations. Whilst we would agree that there is a limit to which statistical evidence of the kind received in these proceedings can be relied upon, and note that we would prefer to rest our decision on a more concrete evidential foundation, we do not consider that this evidence is of no moment or that it is irrelevant to the task at hand. 110 We would agree that declining union membership, should it be demonstrated, would be a complex social issue and that it would be difficult to suggest that the granting of this application would be the cure to all that ails the union movement. However, the respondents' submissions appeared to be prefaced, at least in part, on the idea that for the application to succeed it must, of itself, positively encourage the joining of a union by non-members or result in an improvement of the financial viability of a registered organisation. We do not consider that this is the only means by which the objects of the Act may be facilitated or fostered. We would accept the submission of the applicant that the statistical evidence is suggestive of some practical difficulty to persons joining a registered organisation. We consider that in granting this application, we may be providing a convenient or a more convenient means by which persons could choose to remit their membership fees to a registered organisation. Providing such assistance may remove one of the practical difficulties to persons joining a union and in so doing, the Commission would be acting consistently with the legislative charter to encouraging participation in industrial relations by representative registered organisations. 111 The evidence makes it plain that there is already widespread adoption of payroll deduction facilities by agreement (although such agreements are by no means universal), currently pertaining to employment relationships under the awards. The AWU indicated that 75 per cent of all its members paid their dues by way of deduction at the source. The LHMWU estimated that in the vicinity of 80 per cent of its members in the division relevant to this application remit membership fees by way of payroll deduction. The ETU indicated that 30 per cent of members remit dues by way of such a facility, although Mr Riordan considered that that figure would rise to somewhere in the vicinity of 80 per cent if more members were given the option. 112 The extent to which the evidence demonstrated the existence of these facilities belies the respondents' contention as to these arrangements being onerous on employers. We are satisfied that the facility would be of benefit both to individual employees in that it may be of assistance in managing their finances, and to unions themselves which on the evidence find these facilities provide greater membership retention and more efficient administration. 113 Other than the jurisdictional objection, the most significant matter which was raised against the application was the burden which it would place on some businesses. Whilst we are sympathetic to the plight of small business and accept the evidence shows that many such businesses were heavily burdened by the introduction of the Goods and Services Tax and associated changes in the taxation system, and the Commission is very mindful of any potential increased administrative burden that may be placed upon them by the granting of the application, we consider that it is also relevant that the nature of what would be required by the granting of this application is not novel or unprecedented. There are a number of deductions referred to during the proceedings that employers already make from employees' pay either by compulsion or agreement. The evidence shows many employers already have adopted such a facility for the payment of union membership fees and, indeed, there are a number of awards of this Commission which already contain similar provisions. 114 We do not consider any increase in administrative burden associated with granting the application is so significant as to warrant its rejection and particularly so if the effect of any requirement is mitigated by ameliorating terms of appropriate phasing in. Any such administrative burden can, in any event, be further ameliorated to a significant extent by granting the application in an appropriate form. For example, whilst we consider deductions from payroll should be made each pay period (be it weekly, fortnightly or as otherwise presently adopted by the employer), remittance to the union may be on a weekly, fortnightly or perhaps in rare cases, quarterly basis, at the employer's option. Provision for the retention of an appropriate percentage of monies raised by way of the payroll deduction facility would clearly, on the evidence, significantly defray the costs an employer may bear upon the adoption of such a facility. Further, an appropriate delay by phasing in the implementation of the facility, dependent upon the nature of the payroll system presently adopted by an employer, would provide sufficient time to permit appropriate administrative arrangements to be made. The submission of Mr Gallagher to the effect that the increased burden is more than small business can bear was not made out on the evidence and does not give appropriate credit to the State's small business sector. 115 Whilst we acknowledge the respondents' submission that there are already a number of methods and means by which a union member may choose to remit their membership payments to their union, we consider that the applicant has made out a case for the granting of the application. We find that, on balance, the applicant has demonstrated that none of the other methods is as satisfactory or effective as that proposed. The Act directs the Commission to "encourage" the "participation in industrial relations by representative bodies of employees and employers". In our view, the high proportion of union members which generally adopt a payroll deduction facility where it is made available, lends support to the submission that payroll deduction is the preferred option for payment of union membership fees. This contention is further supported by the evidence showing a significant drop in membership subscriptions when longstanding payroll deduction facilities are removed. 116 Such an approach, whilst it might affect the financial situation of the union, has the potential consequence of leaving individual members of the union unfinancial and potentially unable to access the significant benefits which membership of the union bestows upon them. As was observed by the Full Bench in Re New South Wales Public Service Clerical Officers' Association [1951] AR (NSW) 331 at 363 "[i]t has long been recognised both by this and other industrial tribunals that a registered industrial union fills a peculiar and important role in the community". Whilst the evidence demonstrated that the respective unions have usually not taken issue with individual members accessing benefits in such circumstances, we consider that this is an unsatisfactory situation. 117 However, we do recognise that there may be situations where industrial misbehaviour could well lead to a loss of the benefit provided by a payroll deduction facility. Whilst we are mindful of the respondents' submission that it would be "a bit much" for an employer to be required to continue to remit monies to a union when that union is co-ordinating a campaign of industrial unrest, we consider that the withdrawal of a payroll deduction facility is more properly dealt with, as any other industrial matter regulated by award, by an appropriate orderly process which could, in an appropriate case, lead to the suspension or cancellation of the benefit by an appropriate application to the Commission which would in relevant circumstances be dealt with expeditiously. 118 In our view, the evidence establishes that it would be fair and reasonable for payroll deduction facilities, an industrial matter within the meaning of the Act, to be inserted into the awards of this Commission. We also consider that the encouragement of membership in registered organisations is an appropriate reason to grant the application and that it is in the public interest to do so. The application has considerable industrial merit and should be granted. The question then becomes one of form. 119 Having regard to the application in the form as finally amended and set out earlier in this decision, we consider that the parties, and in default of agreement between the parties the applicant, should be directed to formulate a further draft clause in light of observations as to appropriate amendments which we will now make. 120 Firstly, the draft provision should be varied to provide for the proportional deduction of union membership fees each pay period. Remittance to the relevant union is to be made on either a weekly, fortnightly, monthly or quarterly basis at the employer's option. As identified in the application the employer should forward to the relevant union all necessary information to enable the reconciliation and crediting of subscriptions to an employee's membership account. 121 Whilst the union shall be under an obligation to advise the employer of any change to the amount of membership fees made under its rules, the union shall give the employer a minimum of two months' notice of any such change before it is to come into effect and there shall not be more than one such change in any calendar year. 122 Provision should be made for retention by the employer of a percentage of the fees deducted by way of the facility. On the evidence, the ETU formerly paid relevant employers 2.5 per cent commission of the monies deducted by way of a payroll facility, however such an amount was no longer sought by employers due to difficulties associated with the GST. The ETU did, however, pay its union delegates a commission of six per cent of monies collected by way of payroll deduction facilities. The LHMWU provided a five per cent commission to employers who provide a payroll deduction facility. The AWU resisted the notion that employers should receive any payment for the operation of a payroll deduction facility but paid 5 per cent to the delegates who collected dues. Whilst most of the employers contended for the retention of some percentage of fees deducted if the application were granted, Mr Ritchie provided the only evidence from that side of the record as to a relevant percentage - seeking that employers be permitted to retain a 10 per cent commission on the monies remitted to a union if the application were granted. 123 The percentage of monies remitted to the union should, in our view, be made relative to the frequency of remittance of monies by the employer to the union. Where the employer elects to remit monies on a weekly or fortnightly basis the employer should be entitled to retain up to five per cent of the monies remitted. Where the employer elects to remit monies on a monthly or quarterly basis the employer should be entitled to retain a maximum of 2.5 per cent of the monies deducted. 124 Whilst a matter for the individual union, since the union will be required to provide the requisite information to enable appropriate deductions to be made, the facility should generally be available to all types of employee; that is, employees engaged on a full or part time basis, with the exception of casual employees until they have been employed by the employer, continuously or otherwise, for a period of two months. Calculations for the deduction of union membership fees should only take account of days for which payment is to be made to an employee. 125 The provision will be inserted into awards, other than those varied in these proceedings, upon application. The application should not be granted unless the Commission is satisfied that the proposed provision is consistent with the registered rules of the relevant union or unions and will not be in a form which will render a union member unfinancial under the rules. No doubt an affidavit from the union secretary verifying the relevant matters will usually be sufficient. 126 As for employers which are bound by these awards, as earlier identified, there should be appropriate phasing in arrangements in an effort to minimise any administrative difficulties associated with the granting of the application. In our view, it is appropriate for such a phasing in arrangement to take account of the size and any administrative systems applicable at the particular workplace and in this regard we propose a three stage process for the commencement of this provision, as follows: (a) For those employers which currently deduct union fees or whose payroll facilities are carried out by way of an outsourcing arrangement or where payroll calculations are made through the use of computerised means and as such should be able to implement the clause granted by the application relatively easily, this clause shall come into effect from the beginning of the first pay period to commence on or after 1 February 2003. (b) For those employers who have a payroll system involving some other non-computerised means but currently make other deductions or have in place facilities which permit deductions from employees' wages by agreement, other than deductions that are mandatory (such as taxation instalments or superannuation contributions) this clause shall come into effect from the beginning of the first pay period to commence on or after 1 May 2003. (c) For all other employers, the clause shall come into effect from the beginning of the first pay period to commence on or after 1 August 2003. These dates, of course, only apply to those employees who have provided an appropriate written authorisation to permit such deductions to occur. 127 We make the following directions: 1. The parties, or in default of agreement the applicant, shall file within 28 days of this decision an award provision in terms reflecting this decision; 2. These proceedings are stood over to a date to be fixed in the week commencing 28 January 2003 for the purpose of varying the subject awards in terms of this decision. ___________________ 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.