Industrial Relations Commission of New South Wales in Court Session CITATION: Yetzotis v Crown in the Right of the State of New South Wales (Commissioner of Corrective Services) [2005] NSWIRComm 302 APPELLANT: Nick Yetzotis PARTIES: RESPONDENT: The Crown in the Right of the State of New South Wales (Commissioner of Corrective Services) FILE NUMBER(S): IRC 6634 of 2004 CORAM: Wright J President; Walton J Vice-President; Schmidt J CATCHWORDS: Appeal - Application for leave to appeal and appeal against a decision dismissing an application for recovery of money - Section 371 of the Industrial Relations Act 1996 - Proper construction of s 371 - Importance of conciliation of proceedings under Part 2 of Chapter 7 of the Act - Leave to appeal granted - Appeal upheld. Industrial Relations Act 1996 Local Courts (Civil Claims) Act 1970 LEGISLATION CITED: Public Sector Management Act 1988 Public Sector Employment and Management Act 2002 Colley v Futurebrand FHA Pty Ltd & Anor [2005] NSWCA 223 CASES CITED: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 HEARING DATES: 08/01/2005 DATE OF JUDGMENT: 09/23/2005 APPELLANT: Mr M Gibian of counsel SOLICITORS: Jones Staff & Co LEGAL REPRESENTATIVES: RESPONDENT: Mr J W Nolan of counsel SOLICITORS: I V Knight Crown Solicitor JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION FULL BENCH CORAM: Wright J, President Walton J, Vice-President Schmidt J Friday 23 September 2005 Matter No IRC 6634 of 2004 NICK YETZOTIS v CROWN IN THE RIGHT OF THE STATE OF NEW SOUTH WALES (COMMISSIONER OF CORRECTIVE SERVICES) Application by Nick Yetzotis for leave to appeal and appeal against a decision of Magistrate Quinn given on 22 October 2004 in Matter No 58331 of 2004 JUDGMENT OF THE PRESIDENT [2005] NSWIRComm 302 1 I agree with the reasons of the Vice-President and Schmidt J about to be delivered in this matter and the orders their Honours propose. I consider it appropriate, however, to add some short observations as to one particular matter. 2 The judgment of their Honours makes plain the obligation of an Industrial Magistrate or Local Court dealing with proceedings under Part 2 of Chapter 7 of the Industrial Relations Act 1996 to first conciliate those proceedings prior to embarking on a hearing of the substantive claim; further, that failure of the Magistrate to comply with the obligation invalidates the proceedings in the sense that the proceedings are liable to be set aside on appeal. 3 As their Honours observe, because it was common ground in the appeal that no steps had been taken to give effect to the requirements of s 371(1), it is unnecessary to determine in these proceedings the precise effect of the obligation in s 371(1) on the court to use "its best endeavours to bring ... the parties ... to a settlement acceptable to those parties". However, in very many cases, the practical obligation on the court dealing with the matter to use its best endeavours will be of great significance and may require the court to expend significant energy and perhaps ingenuity, although not necessarily a great amount of time, in assisting the parties to reach an appropriate settlement. 4 The present case may well have fallen into this situation. It is appropriate to observe, without entering into the precise merits of the matter because of the possibility it may return to this Court for final determination, that because of the nature of the proceedings there was a real potential for settlement if the required steps had been attempted at first instance. 5 The scope for a rigorous conciliation of the proceedings in the present matter is manifest when reference is made to the course of the proceedings at first instance. The appellant's claim was that he should have been paid as a Legal Officer rather than as an Administrations and Clerical Officer under the pertinent Crown industrial instruments. Her Honour essentially dismissed the appellant's claim because she considered that what in substance was being sought was a regrading of the appellant's position and that was not possible because the proceedings before her were brought pursuant to s 365 of the Industrial Relations Act which empowered her merely to order "an employer to pay any amount payable under an industrial instrument that remains unpaid to the person to whom it is payable"; that is, her powers were limited to ordering restitution of any underpayment of award rates. 6 One may readily sympathise with her Honour taking the approach she did because the terms of many public sector awards depend, for their application and enforcement, upon the relevant employee being classified at a particular level or grade. However, in the present case, although the relevant award provisions appear to have varied over time, for periods relevant to the appellant's claim the operative provisions of the award referred to it applying not only to "employees appointed to" positions covered by the relevant Awards or Agreements but also, pertinently, to "employees ... performing the duties ..." of such positions. 7 In addition, there was evidence in the proceedings at first instance that, on a number of occasions whilst still in the employ of the respondent within the Department of Corrective Services, the employer expressly relied for the performance of the appellant's duties on his possessing a current practising certificate as a solicitor. In that context at least, it is understandable that her Honour in her reasons for dismissing the claim, expressed the opinion that the appellant's position should have been regraded earlier, that the appellant's work was certainly of high standard and, inferentially, that the work he performed was of a legal professional nature. 8 It is undoubtedly regrettable that litigation of the scope that appears to have been before the Magistrate at first instance should have to be returned for further consideration. Nevertheless, this case is clearly an appropriate one for the full exercise of the powers of conciliation under s 371 and when the matter returns for further consideration it will occur in the circumstances contemplated by the legislature; that is, in the context of a conciliation process in a case which may well be eminently suitable for that purpose. Further, in the event that the matter needs to proceed to a formal hearing, no doubt the parties will agree to the tender of much, if not all, of the initial record for the purposes of the re-hearing. JUDGMENT OF THE VICE-PRESIDENT AND SCHMIDT J 9 This is an application for leave to appeal and appeal from a decision of Industrial Magistrate Quinn, given on 22 October 2004, dismissing an application by Mr Yetzotis for recovery of money under s 365 of the Industrial Relations Act 1996 ('the Act'). The claim related to payments allegedly due under the provisions of the Crown Employees (Public Sector Salaries June 1997) Award, the Crown Employees (Public Sector Salaries June 2000) Award and the Crown Employees (Public Sector Salaries January 2002) Award ('the Salaries awards'), during a period from 1 June 1998 to 23 July 2003. 10 The claim made was for 'the sum of $19,745 plus accrued superannuation plus accrued annual leave plus interest plus costs'. 11 Her Honour's decision flowed from an acceptance of the respondent's case, that irrespective of the work which Mr Yetzotis was performing at the time, his entitlement to remuneration flowed from his actual classification. At the time Mr Yetzotis was classified and paid as a clerical officer grade 9/10 and not as a legal officer grade IV, the rate claimed. His position was later regraded, to the claimed grade. On Mr Yetzotis' case, the regrading should have occurred earlier, given the work he was performing. Her Honour took the view that this was not a matter available to her to deal with, given the provisions of s 365 of the Act. Questions raised by the Appeal 12 Questions raised by the Appeal were as follows: 1. Whether the entitlement to be paid a particular rate of salary specified in Crown Employments (sic) (Public Sector - Salaries) Award and related instruments is entirely dependent upon the classification assigned to an employee by the employer regardless of the nature of the work actually performed? 2. Whether the Crown Employees (Public Sector - Salaries) Award and related instruments confer complete discretion upon the employer to select a classification and rate of salary at which to pay an employee regardless of the nature of work the employee is required to undertake? 3. Whether the Industrial Magistrate erred in determining that the appellant had not been underpaid because he was appointed and paid as a clerk even though he performed work of a legal nature? 4. Whether the Industrial Magistrate erred in failing to determine whether the appellant was performing work properly falling within classifications under the Legal Officers - Various Departments Agreement No 2375 of 1982 rather than classifications under Crown Employees (Clerical and Administrative Officers - Salaries) Award ? 5. Whether the Industrial Magistrate erred in failing to determine whether the appellant was performing work properly falling within the classification of Legal Officer Grade IV? 6. Whether the Industrial Magistrate erred in refusing to admit various documents entitled "Position Description" for the positions of Legal Officer Grade I-III in the Attorney General's Department of New South Wales (Crown Solicitor's Office), Legal Officer Grade IV in the Attorney General's Department of New South Wales (Crown Solicitor's Office), Legal Officer Grade IV in the Attorney General's Department of New South Wales (Anti-Discrimination Board of NSW), Legal Officer III in the Department of Local Government. The appellant's case 13 Before the Magistrate, the case was argued on all grounds. The parties' respective cases depended upon evidence led by both parties as to work performed from time to time by Mr Yetztois; provisions of the Act and of the Public Sector Management Act 1988, the Public Sector Employment and Management Act 2002; as well as provisions of various industrial instruments. 14 Mr Yetzotis argued that he had been remunerated in accordance with the provisions of the incorrect industrial instrument, having been paid in accordance with a classification provided by the Crown Employees (Administrative and Clerical Officers - Salaries) Award, rather than in accordance with a classification to which the Legal Officers, Various Departments Agreement No 2375 of 1982 applied. Rates for the latter classification were fixed by the Salaries awards. 15 On appeal Mr Yetzotis' case was that Her Honour's rejection of his claim involved an acceptance of the respondent's case, that his salary depended upon his classification by the respondent, not the work he performed and the provisions of the relevant industrial instruments, which that work attracted. This demonstrated appellable error, sufficient to warrant leave to appeal and a decision, on appeal, in his favour. 16 On Mr Yetzotis' case, the Full Bench was in a position to itself make the orders sought below, given the evidence and cases there argued by the parties; the Magistrate having failed to come to a view on the money orders sought under the industrial instruments relied upon, based upon the views she reached as to the proper construction of the statutory scheme. Section 371 of the Industrial Relations Act 1996 17 During the course of argument, a question arose as to the jurisdiction of the Industrial Magistrate to make any orders in the proceedings, having regard to the operation of s 371 of the Act. The section provides: 371 Conciliation to be attempted before order made (1) The industrial court is not to make an order under this Part until it has brought, or has used its best endeavours to bring, the parties to the application for the order to a settlement acceptable to those parties. (2) If such a settlement is made, the industrial court is required to make an order that, to the extent authorised by this Act, gives effect to the terms of the settlement. 18 Industrial Court is defined in s 364(1) as: industrial court means: (a) the Commission in Court Session, or (b) in the case of proceedings under section 380 (Small claims during other Commission proceedings)—the Commission, whether or not in Court Session, or (c) a Local Court constituted specially for the purposes of this Part by an Industrial Magistrate sitting alone. 19 It was common ground between the parties that no steps had been taken to give effect to the requirements of s 371(1), before the case was fully heard below as to both jurisdiction and merits. The appeal was adjourned to give the parties an opportunity to consider their position and to make written submissions as to the issue of non-compliance with the requirements of the section. 20 The appellant filed his submissions on 19 August, submitting that the failure to take any steps to bring the parties to a settlement, in accordance with the requirements of s 371, resulted in the court below exercising power without jurisdiction. The result was that the order made dismissing Mr Yetzotis' application was invalid. The appeal must be upheld and the matter remitted to the Chief Industrial Magistrate's Court. 21 The respondent filed a submission to similar effect on the same day. Consideration 22 The question which has arisen requires consideration of the proper construction of s 371 of the Act and whether or not it is in mandatory terms, so as to preclude the making of final orders, including orders of dismissal of the application, without the Magistrate first taking the steps contemplated by s 371(1). 23 We are satisfied that the language of the section is both clear and unambiguous. It requires that the statutory duty imposed be met, before an order is made by the "industrial court". That duty is in positive terms, requiring the industrial court to bring, or use its best endeavours to bring the parties to a settlement acceptable to them. It was common ground between the parties that there were no steps taken by the court, either before or at the hearing, to ensure that the duty was satisfied. 24 How the court's obligation to use 'its best endeavours' to bring the parties to a settlement may be satisfied in a particular case need not here be determined. It is sufficient to dispose of this appeal, to observe that a failure to take any steps to bring about a settlement between the parties cannot result in the statutory obligation being met. 25 Whether the failure to satisfy the requirements of s 371 renders the orders made dismissing the application invalid, also arises for consideration. The question depends on a consideration of the statutory purpose - was it intended that an order made by an industrial court in breach of s 371 be invalid? Both the language of the section and the scope and objects of the Act must be considered. (Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [91] - [93].) 26 The words of the section are straightforward and mandatory. They appear in a statutory scheme which emphasises conciliation and the prompt and fair resolution of disputes in its objects (s 3). The Act provides for resolution of disputes of various kinds, initially by endeavours at settlement, before resolution by order of a court or tribunal, in contested proceedings, in various of the provisions made - see s 87; s 109; s 135; s 332; s 348 and s 371. 27 The language of s 371, is in terms which does not leave room for doubt, that a failure to comply with the obligation imposed, renders the decision invalid. A comparison of the language used in s 371, with that used in the other sections mentioned, reinforces this conclusion. The phrase 'The industrial court is not to make an order' is not replicated elsewhere in the Act and in our view, can only be read in the context of this statutory scheme, as prohibiting an industrial court from making an order, until the requirements imposed have been met. 28 This conclusion is reinforced by the definition of 'industrial court'. The obligation imposed by s 371 falls not only upon Industrial Magistrates, but also the Commission in Court Session and the Commission, when dealing with small claims which arise during other proceedings before the Commission. 29 We note that a similar requirement in relation to small claims to which s 23A of the Local Courts (Civil Claims) Act 1970 applied, was considered by Young J in Gould v Kok (Unreported, 23 May 1994). His Honour also concluded that the statutory duty there imposed had to be carried out, before final orders were made (at p2). 30 A similar conclusion was recently reached by the Court of Appeal in Colley v Futurebrand FHA Pty Ltd & Anor [2005] NSWCA 223, where it was concluded at [4] that the emphatic language of s 108A (1) of the Act was 'so clear that the jurisdictional preclusion must be respected'. The words there in question, 'An application cannot be made for an order', in our view are sufficiently similar to the words used in s 371, 'The industrial court is not to make an order', to preclude any different view being reached. 31 The consequence of the conclusion that we have reached is that leave to appeal must be granted and the appeal upheld. In accordance with s 197(4) of the Act, the matter must be referred back to the Local Court, to be dealt with in accordance with the requirements of s 371 of the Act. 32 Given the circumstances in which the issue on which the appeal turned had arisen - having been raised by the Court - the respondent resisted any order for costs being made against it. The appellant made no submission as to costs. We have, accordingly, not dealt with that issue. Orders 33 For all of the reasons given, we order that leave to appeal is granted and the appeal upheld. The matter is to be referred to the Local Court at the Downing Centre to be dealt with in accordance with the provisions of the Industrial Relations Act 1996, including s 371 thereof. ------------------------ 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.