Industrial Relations Commission of New South Wales CITATION : Thomas and Consulate General of India [2002] NSWIRComm 24 APPLICANT - Respondent to notice of motion PARTIES : Colleen Daphne Thomas RESPONDENT - Applicant to notice of motion Consulate General of India FILE NUMBER: 4318 of 2000 CORAM: Sams DP Termination of employment - unfair dismissal - notice of motion - jurisdiction of the Commission - interpretation of Federal Act - diplomatic immunity for a foreign State - whether the Commission is a "court" - whether Commonwealth powers vested in a State court - whether respondent validly served with initiating process - waiver of right to object to service - rights and obligations under the contract of employment. CATCHWORDS : Held, the Commission is a "court" for the purposes of the Foreign States Immunities Act - rights and obligations on employee and employer arise from the contract of employment, notwithstanding the contract has been terminated - transfer of Commonwealth judicial power not relevant - Federal Act prevents reinstatement, but not compensation - initiating process not properly served - respondent waived right to object to ineffective service - application properly before the Commision - notice of motion dismissed - jurisdiction confirmed - further proceedings programmed. Industrial Relations Act 1996 Foreign States Immunities Act 1985 LEGISLATION CITED : Diplomatic Privileges and Immunities Act 1967 (Cth) Judicial Officers Act 1986 Constitution Act 1902 Industrial Relations Act 1988 (Cth) R v Davidson, 90 CLR 367 GIO Australia Ltd v O'Donnell, 70 IR 1 Hollingsworth v Commissioner of Police, 81 IR 276 Virtue v NSW Department of Education, 92 IR 428 Packer v The Greater Murray Area Health Service, CASES CITED : NSW IRComm 149 Heath v Hanning 1999 NSWSC 719 Brian Rochford Ltd (Administrator Appointed) and Textile, Clothing and Footwear Union of New South Wales, 47 NSWLR 47 Robinson v Kuwait Liaison Office, 73 IR 33 HEARING DATES: 02/07/2002 DATE OF JUDGMENT: 02/22/2002 APPLICANT (Respondent to notice of motion) Mr Byrnes, Solicitor Clayton Utz Lawyers LEGAL REPRESENTATIVES: RESPONDENT (Applicant to notice of motion) Mr Potts of counsel SOLICITORS Dominic David Stamfords Solicitors JUDGMENT: - 2 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: SAMS DP 22 February 2002 Matter No IRC00/4318 COLLEEN DAPHNE THOMAS AND CONSULATE GENERAL OF INDIA Application by Colleen Daphne Thomas re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2002] NSWIRComm24 1 This is an application, pursuant to section 84 of the Industrial Relations Act 1996 ("the Act"), filed by Colleen Daphne Thomas ("the applicant"), seeking relief in respect to her alleged unfair dismissal on 12 August 2000 by the Consulate General for the Republic of India ("the respondent"). 2 The application was filed on 30 August 2000 and originally allocated to Hungerford J. His Honour listed the matter on ten occasions from 8 September 2000 to 26 November 2001 in proceedings directed towards encouraging a settlement of the claim in accordance with the Commission's statutory obligation to "endeavour by all means it considers proper and necessary to settle the applicant's claim by conciliation" (s86). Agreed Matters 1) The respondent is a foreign State for the purposes of the Foreign States Immunities Act 1985 ("the Federal Act"). 2) The Industrial Relations Act 1996 is a law of Australia for the purposes of the Federal Act. 3) The applicant is a citizen and permanent resident of Australia. 4) The applicant was employed under a contract of employment performed wholly within Australia for the purposes of the Federal Act. 5) The applicant was employed from 25 October 1982 as a secretary/typist. 6) The applicant was employed under the terms and conditions of the Clerical and Administrative Employees (State) Award , 296 IG 619, an award of the New South Wales jurisdiction. 7) The applicant was dismissed by the respondent on 12 August 2000. 8)The applicant was 66 years of age at the time of dismissal. Proceedings before Hungerford, J 3 The earlier proceedings before his Honour will be a relevant factor in one aspect of my decision in the current proceedings. 4 His Honour first listed the matter on 8 September 2000. Mr Archer (Solicitor) appeared for the applicant and Mr Potts of Counsel appeared for the respondent. Mr Potts informed the Commission that the respondent was only notified of the proceedings on the previous day and he was not in a position to put any specific instructions. However, he foreshadowed the likelihood of a challenge to the jurisdiction of the Commission on the grounds of the respondent's status as a foreign State and immunities it had under the Diplomatic Privileges and Immunities Act 1967 (Cth). 5 His Honour adjourned the matter on the basis that the respondent wished to clarify its position and for the parties to undertake settlement discussions. 6 The matter was listed for a directions hearing on 9 October 2000. Mr Potts submitted that he had no instructions to conciliate the claim. He pressed the respondent's jurisdictional challenge under the Foreign States Immunities Act, 1985 insofar as the Commission not being "a court" as defined under the said Act. He also challenged the validity of the service of documents upon the respondent in accordance with s23 and s24 of the said Act. He described his appearance in the proceedings as a "conditional appearance." 7 His Honour issued directions for the filing and service of a notice of motion and adjourned the matter until 24 October 2000. 8 On this occasion, the applicant was represented by new solicitors (Clayton Utz) - Mr Wetherell now appearing. Mr Potts was granted leave to file, in court, the respondent's notice of motion and accompanying affidavit. His Honour invited the parties to undertake meaningful discussions as to settlement and was not prepared to make a finding that conciliation had been unsuccessful. The proceedings were adjourned until 9 November 2000 when the Commission was informed that no settlement had been reached. His Honour directed that the notice of motion be heard as a preliminary point and issued directions for the filing and service of an agreed statement of facts and outline of submissions. The hearing was set for 1 March 2001. 9 His Honour was informed on 1 March that negotiations were continuing and both parties wished the matter to be adjourned. His Honour agreed to the adjournment. The matter was adjourned again on 4 June and on 17 July with his Honour impressing on the parties the desirability of the matter being determined one way or the other. 10 On 31 August, his Honour was informed that no conciliation conference had taken place. Mr Darams, for the applicant, requested a date for hearing but still wished to discuss the matter with the respondent. His Honour encouraged the parties to enter discussions in good faith, with an open mind and adjourned the matter to 3 October 2001. 11 On this occasion, while the matter was said to be progressing slowly, Mr Darams sought a further adjournment. His Honour emphasised that on the next occasion the parties would be required to indicate their final positions. 12 On 26 November, Mr Darams informed the Commission that, as a result of a number of unreturned calls to the respondent, no conciliation conference had occurred. He sought to proceed to arbitration. After Mr Potts indicated he had no instructions, his Honour expressed his serious concern at the delays in processing the matter and his intention to have the matter dealt with by another member of the Commission. 13 The matter was reallocated to me by his Honour, the President on 27 November 2001. This decision concerns a notice of motion filed by the respondent, (the applicant on the notice of motion) on 24 October 2000 in the following terms: 1) A declaration that the tribunal has no jurisdiction over the respondent in respect of the subject matter of the proceedings. 2) A declaration that the originating process has not been duly served on the respondent 3) An order that the proceedings herein be dismissed. 14 It is unnecessary for the purposes of this decision to detail or consider the merits of the applicant's claim. SUBMISSIONS 15 Both parties filed written submissions and relied on an extensive list of authorities. The written arguments were developed in oral submissions. 16 Mr Potts, for the applicant to the notice of motion, summarized the applicant's case as follows: a) The applicant, being a consulate of a foreign State in Australia has a general immunity from the jurisdiction of Australian courts. b) The Foreign States Immunities Act 1985, which makes exceptions to a foreign State's general immunity from the jurisdiction of Australian courts and in particular in the present proceedings in relation to contracts of employment, is a Commonwealth Act. c) The Federal Act invests state courts with the judicial power of the Commonwealth. d) The Federal Act has effect only in relation to the exercise or performance of a court of a judicial power or function or activities ancillary to those powers or functions. e) The New South Wales Industrial Relations Commission does not exercise judicial power and therefore is not a court as defined in the Federal Act and cannot be invested with the judicial power of the Commonwealth. As a consequence, the Commission has no jurisdiction to entertain the proceedings before it. f) Further the proceedings do not concern the employment of a person under a contract of employment, but are concerned with the manner in which the relevant contract of employment was terminated. The proceedings are post contractual. The general immunity of the applicant to jurisdiction is not displaced and as a consequence, the Commission has no jurisdiction to entertain the proceedings before it. g) The Federal Act prescribes the manner in which service of an initiating process is to be affected on a foreign State (s23, s24). Service was not affected in accordance with the Act. The originating process should therefore be set aside. h) The applicant did not waive its objection to the service of the originating process (s26). It entered or appeared in the proceedings in order to resist the Commission's jurisdiction. There is no facility for entering a conditional appearance. i) From 9 October 2000 the applicant had consistently raised its objection to the service. j) Given that the applicant had only received 2 days' notice of the first listing the respondent was not afforded reasonable time to consider its position. 17 Mr Byrne, for the respondent to the notice of motion, put the following submissions: a. It is not possible to frame a definition of judicial power, which is both exclusive and exhaustive ( R v Davidson 90 CLR 367). b. The Commission, when determining applications under s84 of the Industrial Relations Act 1996, has functions or powers, which are judicial functions or powers, or at the very least are "of a kind similar to judicial functions or powers." c. The Commission is not exercising the judicial power of the Commonwealth. It is exercising the judicial power pursuant to a law of the state of New South Wales. d. Immunity from proceedings relates to proceedings concerning the employment of a person under a contract of employment s12(1) of Foreign States Immunities Act 1985 e. Section 12(2) of the Federal Act is to be read in conjunction with a proceeding concerning "a right or obligation conferred or imposed by a law of Australia on a person as employer or employee." f. Relief from unfair dismissal is an obligation on an employer under the Industrial Relations Act 1996, a law of Australia. g. The applicant cannot object to the actual service of the originating process when it has appeared in the proceedings and not objected to service. h. The wording of s26 requires a foreign State to object to the actual service, rather that merely claiming immunity from the proceedings themselves. i. The notice of motion should be dismissed. CONSIDERATION 18 It is necessary to firstly consider, whether in the exercise of its powers and functions under Pt 6 ch 2 of the Act, the Commission is a "court" as defined in the Foreign States Immunities Act. The definition is to be found in s3: "court" includes a tribunal or other body (by whatever name called) that has functions, or exercises powers, that are judicial functions or powers or are of a kind similar to judicial functions or powers; 19 The Industrial Relations Act 1996 establishes two separate and distinct tribunals with different and distinguishable powers and functions namely the Commission and the Commission in Court Session: GIO Australia Ltd v O'Donnell 70 IR 1 at 9-10; Hollingsworth v Commissioner of Police 81 IR 276 at 292, 309-310; Virtue v NSW Department of Education 92 IR 428 at 448; Packer v The Greater Murray Area Health Service NSW IR Comm 149 and Heath v Hanning 1999 NSWSC 719. 20 Pt 6 ch 2 Unfair Dismissals of the Act, vests powers in the Commission to make orders for reinstatement, reemployment, compensation and on what terms, when determining an application under s84 of the Act. 21 In my opinion, the issue here is, not whether the Commission is a court that exercises judicial functions or powers, but rather whether the Commission is a "tribunal or other body (by whatever name called)" that exercises functions and powers "of a kind similar to judicial functions or powers." Obviously, this is a much wider definition than courts, which only exercise judicial powers and functions. 22 The answer to this question is assisted by an examination of the functions and powers of this Commission. These include the power to: 1. Compel the attendance of witnesses and examine them on oath or affirmation (s164(1)). 2. Compel witnesses to answer questions and directing that a witness be prosecuted for perjury (s164(1)(a)). 3. Compel the production, discovery and inspection of records and documents. (s164(1)(b)). 4. Award costs (s181). 5. Reserve decisions (s177). 6. Make amendments and correct irregularities (s170). 7. Make awards and orders (s10) 8. Make dispute orders (s137). 9. Determine any question concerning the interpretation, application or operation of any relevant law or instrument (s175). 23 There are other sections of the Act, which assist towards a conclusion that the Commission is a court, or at the very least, undistinguishable from a court. These include: a) Decisions of the Commission are final and may not be called into question by any court or tribunal (s179) (save for appeals from a single member). b) Section 364 of the Act defines the Commission as an "industrial court" for the purposes of recovery of remuneration and other amounts under s380. c) All members of the Commission are defined as judicial officers under s3 of the Judicial Officers Act, 1986 . d) Members of the Commission have the same protections and immunities as judicial members (Schedule 2.8 of the Act). e) Members of the Commission may only be removed from office in the same manner as judicial officers under Pt 9 of the Constitution Act 1902 and part 7 & 8 of the Judicial Officers Act 1986 (Schedule 10(1) of the Act) 24 As Mr Byrne correctly put, each of these matters on their own, might not be determinative of the question. But taken cumulatively, they paint a picture of a tribunal very closely resembling a court. 25 I am further assisted to this conclusion by a judgment of Austin J, of the Supreme Court of New South Wales; in Brian Rochford Ltd (Administrator Appointed) and Textile, Clothing and Footwear Union of New South Wales 47 NSWLR 47. His Honour was there dealing with s440 of the Corporations Law in the context of a s84 unfair dismissal application before the Commission. After identifying the distinguishing features of the Commission and the Commission in Court Session, his Honour said: On the other hand, some of the functions of the Commission suggest that it is a court, quite apart from those functions, which can be exercised only by the Commission in Court Session. The Commission's power to deal with unfair dismissal cases is defined by reference to criteria, which would be familiar to any court, and the orders, which the Commission may make, are similar to the kinds of orders which can be made by the Supreme Court or other superior courts of record. To the extent that compensation may be awarded for unfair dismissal, there is a similarity between proceedings before the Commission and proceedings for common law damages. The Commission is empowered to make mandatory orders for reinstatement or re-employment, but the fact that the orders are mandatory in nature does not separate the Commission from a court, since courts are well accustomed to make mandatory orders by prerogative writ or mandatory injunction. Counsel for the defendant relies upon the fact that in dealing with an application for unfair dismissal, the Commission has at all times the duty to endeavour to settle the claim by conciliation (s 86), and indeed the "determination" of the claim only commences when conciliation has failed, according to Johnston's case. It is said that the function of conciliation separates the Commission from a court. I disagree. If the Commission's function were only to conciliate, acting as a mediator of competing claims, the position may be different, but the Commission's duty to encourage conciliation is a step to be taken along the way to resolving the dispute, if necessary by making a determination and orders under s 89. While conciliation is no doubt given greater emphasis before the Commission than before other tribunals, the process of conciliation is well-known to superior courts of record, which are accustomed to refer matters to arbitration, or to referees, and in recent times to other procedures for mediation or dispute resolution. What is significant is that despite these procedures, the tribunal has the ultimate authority to determine the dispute by making binding orders. Therefore in my opinion there are sufficient structural indications in the Act for me to conclude that the Commission is properly described as a "court" even when it is not the Commission in Court Session, at any rate when it is discharging the sort of function conferred by Chapter 2, Pt 6 with respect to unfair dismissals. (My emphasis) 26 I respectfully concur and adopt his Honour's conclusions. 27 Accordingly, I find that at the very least, the Commission is a tribunal or body that exercises functions and powers of a kind similar to judicial functions or powers. Consequently, the Commission is a court for the purposes of the Foreign States Immunities Act 1985. 28 Moreover, when this definition of a court is considered in the context of s12 of the Federal Act dealing with employment matters, it is difficult to imagine that the section intended to exclude the very tribunals and bodies that exercise powers and functions over employment related matters. 29 It seems unarguable, in my view, that the various state industrial tribunals and the Australian Industrial Relations Commission are "courts" for the purposes of this definition. Section 12 of the Foreign States Immunities Act 1985 30 I turn then to the provisions which deny immunity to a foreign State as an employer in particular proceedings. The relevant provisions of s12 of the Federal Act are expressed as follows: Contracts of Employment 12(1) A foreign State, as employer, is not immune in a proceeding insofar as the proceeding concerns the employment of a person under a contract of employment that was made in Australia or was to be performed wholly or partly in Australia. (2) A reference in subsection (1) to a proceeding includes a reference to a proceeding concerning: a) a right or obligation conferred or imposed by a law of Australia on a person as employer or employee; or b) a payment the entitlement to which arises under a contract of employment. 31 Counsel for the applicant, as I understand his submission, argued that because the powers of the Commission under s89 of the Act are made after dismissal, they are not obligations on employers relating to the contract of employment. They are post contractual. The contract of employment, it was said, only relates to its actual term, and not future rights or obligations. It was submitted that this case involves the creation of new rights and obligations and it is properly viewed as an exercise of arbitral power, and not judicial power. It followed, Mr Potts submitted, that s12 has no application to the present proceedings. 32 In my view, this narrow interpretation of the section cannot be accepted. There is no limiting of the rights and obligations on an employee or employer to those arising during the term of a contract of employment. In my opinion, the unfettered wording of s12(2)(a), based on its proper construction, must include rights and obligations arising from the contract of employment, notwithstanding the contract may have been terminated. 33 An order under s89 of the Act could be logically viewed in two ways. It is an obligation on an employer and a right conferred upon an employee. 34 It follows that an order of compensatory relief for unfair dismissal is an obligation on an employer, which is contemplated by the provisions of the Foreign States Immunities Act 1985. 35 Mr Byrnes referred me to Robinson v Kuwait Liaison Office 73 IR 33, a judgement of Moore J concerning s12 of the Foreign States Immunities Act 1985 and the unlawful termination provisions of the Industrial Relations Act 1988 (Cth). I quote the salient passage: The use of the word "concerning' indicates that the proceedings must be about or relate to the employment: see Sungravure Pty Ltd v Middle East Airlines Airlibian SAL (1975) 134 CLR 1; Australian Securities Commission v Lord (1991) 33 FCR 144. The reference to the "contract of employment" in s 12(1) is not intended to limit the operation of s 12 to contractual claims. Rather it is intended to remove any ambiguity or uncertainty about what "employment" means. It does not mean, for example employment in the sense of engagement under a contract for services. That s 12(1) is not limited to contractual claims is made clear by s 12(2)(a) which indicates that a proceeding to which s 12(1) applies includes a proceeding concerning a right or obligation conferred or imposed on a person by an Australian Law. It is, however, necessary that the right or obligation be imposed by virtue of the person being an employer and employee. Section 3 of the Immunities Act defines "law of Australia" and it plainly includes a Commonwealth statute. Part 3 of Div VIa of the Act imposes certain obligations on employers who are proposing to terminate the employment of an employee. Those obligations effectively limit the circumstances and the manner in which employment can lawfully be terminated. Part 3 also confers on an employee the right found in s 170EA to institute proceedings to seek a remedy. There is no reason to doubt, in my opinion, that proceedings arising from an application under s 170EA are proceedings of the type referred to in s 12(1). 36 Mr Potts argued that this judgment is to be distinguished from the present circumstances in that it deals with unlawful terminations under the Industrial Relations Act 1988 (Cth), whereas here the Commission is considering unfair dismissal provisions under a different statutory framework. True it is that there are clear distinctions between the legislative framework of the two Acts. However, the legislative intention of both statutes is conceptually the same. That is to provide relief (a right) to an employee for unfair dismissal by requiring an employer to pay compensation (an obligation). 37 Notwithstanding the obvious legislative distinctions, to my mind Robinson v Kuwait Liaison Office is demonstrably to point. It effectively negates the validity of Mr Potts earlier submission concerning obligations on employers under a law of Australia arising after the termination of the contract of employment for the purposes of the Federal Act. 38 Mr Potts argued that the Commonwealth Constitution (s77(iii)) provides the Commonwealth Parliament with power to make laws investing any court of a state with federal judicial powers. It followed that the Commonwealth Parliament could not invest the judicial power of the Commonwealth in bodies that do not fit the constitutional description of "any court of a state". 39 There can be absolutely no doubt about these propositions. However, with respect, the question is not answered by reference to the transfer of Commonwealth judicial powers to a state court. The concept of a transfer of power simply does not arise. Rather it is the identification of powers which arise under a State act - the Industrial Relations Act, 1996. 40 As earlier discussed the definition of a court is not that it has judicial powers and functions, but that it is "a tribunal or other body (by whatever name called) that has functions or exercises powers of a kind similar to judicial powers and functions". 41 It is plain therefore that the provisions of the Foreign States Immunities Act 1985 do not require a court to be a court, or tribunal exercising "federal judicial power". 42 Mr Potts' submission is therefore rejected. Power to reinstate an employee 43 Section 29(2) of the Federal Act prohibits the reinstatement of an employee by a court. It is expressed in plain and unequivocal language. 29. Power to grant relief. (1)………… (2) A court may not make an order that a foreign State employ a person or re-instate a person in employment. 44 While neither party addressed the Commission on this question, it would seem an inescapable proposition that the Commission in this matter would be prevented, by virtue of s29(2) of the Federal Act, from ordering the re-instatement or employment of a dismissed employee under s89 of the Industrial Relations Act 1996. However without finally ruling on the matter, it is my prima facie view, that relief in the form of compensation for unfair dismissal would not be caught by the prohibition in s29(2). I note that it is compensatory relief, which the employee here is seeking (see pages 3 and 21 of transcript). Validity of Service 45 Counsel for the applicant sought a declaration from the Commission that the originating process had not been properly served on the applicant, in accordance with the provisions of the Federal Act. 46 Pt III of the Federal Act prescribes two means by which an initiating process may be served on a foreign State; namely, where service is to be effected in accordance with an agreement to which the foreign State is a party (s23): 23. Service of initiating process on a foreign State or on a separate entity of a foreign State may be affected in accordance with an agreement (wherever made and whether made before or after the commencement of this Act) to which the state or entity is a party. or through diplomatic channels (s24): 24(1). Initiating process that is to be served on a foreign State may be delivered to the Attorney General for transmission by the Department of Foreign Affairs to the department or organ of the foreign State that is equivalent to that Department. 47 Purported service by any other means is deemed to be ineffective. 48 A foreign State may waive its rights to object to service not affected by s23 and s24 by entering an appearance in a proceeding. This waiver arises in s26: Waiver of objection to service. 26. Where a foreign State enters an appearance in a proceeding without making an objection in relation to the service of the initiating process, the provisions of this Act in relation to that service shall be taken to have been complied with. 49 On any view of it, service of the originating process in these proceedings was not affected according to s23 and s24 of the Act. But that is not the end of the matter. 50 In my opinion, the applicant in this case has effectively waived its right to objecting to the service of the initiating process, as provided for in s26 of the Federal Act. I have formed this opinion by reviewing the documents filed and transcripts from the earlier proceedings before Hungerford J. 51 The applicant did not at any time in the proceedings before Hungerford J, on 8 September 2000 put, or foreshadow, an argument as to whether it had been correctly served with the initiating process filed in the proceedings. The Commission's records disclose that the applicant was notified of the listing at 11am on 6 September and that it filed a Form 37 Notice of Appearance on 7 September. 52 I note the applicant was represented by counsel on 8 September, 2000. Mr Potts complained at the short notice (2 days) the applicant had received and foreshadowed the applicant's challenge to jurisdiction on general immunity grounds, but did not, as I said, object to service. It wasn't until one month later that Counsel for the applicant first raised the validity of the initiating process. In these circumstances, the applicant must have waived it's objection to service under s23 and s24 of the Federal Act. 53 The Commission finds that this application for relief from unfair dismissal is properly before the Commission, being a court, as defined by the Foreign States Immunities Act 1985, and should be processed according to the provisions of the Industrial Relations Act 1996 and the Commission's Rules. 54 The notice of motion is formally dismissed and matter IRC00/4318 is listed for further conciliation and directions on Friday, 8 March, 2002 at 11am. PETER SAMS Deputy President 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.