Industrial Relations Commission of New South Wales in Court Session CITATION : Kevin Graham Scott v Bruce Wallace Picone and ors. [2002] NSWIRComm 239 APPLICANT: Kevin Graham Scott RESPONDENTS: Bruce Wallace Picone First Respondent Thelma Mary Picone PARTIES : Second Respondent Bruce W. Picone Pty Ltd Third Respondent Nabogu Pty Ltd Fourth Respondent FILE NUMBER: IRC 3028 of of 2001 CORAM: Haylen J CATCHWORDS : Unfair contract - s 106 Industrial Relations Act - Notice of Motion alleging inconsistency with Federal award - s 109 constitution- consideration of nature of s 106 proceedings - lack of identicality of matter covered by minimum rates award and orders under s 106 - failure to establish applicant covered by award or that respondents covered by award - mere assertions insufficient basis for s 109 challenge - prospect of amended orders - premature to strike out or stay proceedings - notice of motion dismissed. Constitution s 109 LEGISLATION CITED : Industrial Relations Act 1996 s 106 Workplace Relations Act 1996 (Cth) s 89A s 149(1)(f) s 152 s 170CM APSA v Lawrence (1982) 2 IR 166 Baker v National Distribution Services Ltd (1993) 50 IR 254 Burgess v Mount Thorley Operations Pty Ltd [2002] NSWIRComm 106 Burgess v Mount Thorley Operations Pty Ltd (Marks J - unreported, 24 May 1999) Byrne v Australian Airlines Ltd (1995) 185 CLR 410 Colvin v Bradley Bros Pty Ltd (1943) 68 CLR 151 Clyde Engineering Co Pty Ltd v Cowburn (1926) 37 CLR 466 Davies v General Transport Development Pty Ltd (1967) AR (NSW) 37 Devane v Gati and anor (1956) 95 CLR 174 CASES CITED : Ex parte McLean (1940) 43 CLR 472 at 403 Incitec Ltd v Industrial Court of New South Wales (1992) 45 IR 155 Legal and General Assurance v Stock (1993) 49 IR 465 Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd (1992) 28 NSWLR 443 Mt Thorley Operations Pty Ltd v Burgess & ors (2001) 103 IR 184 Stevenson v Barham and anor (1977) 136 CLR 190 at 199 Telstra Corp Ltd v Worthing (1999) 197 CLR 61 Thornthwaite v Australian National Credit Union Limited [2002] NSWIRComm 240 Troja v AMIEU (Vic Branch) (1976) 46 FLR 340 Westfield Limited and anor v Sidney Helprin (1996) 68 IR 25 HEARING DATES: 08/16/2002 DATE OF JUDGMENT: 09/17/2002 APPLICANT: Stephen Rothman SC with Ms K Nomchong SOLICITORS: McCabe Partners Ms N McCabe LEGAL REPRESENTATIVES: RESPONDENTS: Mr JJ Fernon of counsel SOLICITORS: Toomey Pegg Drevikovsky Mr R Pegg JUDGMENT: - 24 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: HAYLEN J 17 September 2002 Matter No. IRC 3028 of 2001 KEVIN GRAHAM SCOTT v BRUCE WALLACE PICONE & ORS Application under s 106 of the Industrial Relations Act 1996 JUDGMENT [2002] NSWIRComm 239 1 This is another case where respondents to a summons for relief under s 106 of the Industrial Relations Act 1996, by notice of motion, allege that any order made on the summons would result in an inconsistency under s 109 of the Constitution and enter upon a field covered by a Federal award made under the provisions of the Workplace Relations Act 1996 (Cth). 2 The applicant is now 53 years old. The summons asserts that he is illiterate and during his life he has relied on the assistance of others in relation to the content of written documents. From late 1988 the applicant was employed as a cotton farmhand which involved him, amongst other things, driving tractors and running the irrigation system as well as being a station hand on a property operated by, it was alleged, the four respondents. The first two respondents are natural persons with the third and fourth respondents being corporations. It was said that at all material times the four respondents were the registered proprietors of a business trading as Picone Pastoral Company. Picone Pastoral Company carried on the business of farming and grazing at a property in Moree. 3 Between 1989 and 1998, the applicant was not provided with payslips, nor provided with rosters as to the work to be performed. He was not given access to the time and wages books in respect of his employment and was not provided with group certificates or other documents indicating the level of his wages. 4 The original agreement under which he commenced work for the respondents provided that he would work for 40 hours per week, would be paid $10 per hour, would be permitted to set up his three caravans on the property and have access to power and water from the property and the respondents would pay the applicant's grocery bill at the local store. It is alleged that for first 12 months the applicant was required to work approximately eleven hours per day seven days a week. He did not receive overtime but his wages remained a constant $400 per week gross. From about mid-1989 it is alleged that the first respondent advised the applicant that from then on the applicant would receive $80 per week in cash and that the balance of his pay would be put into a superannuation fund on his behalf. From mid-1989 for the rest of his employment until August 1998, the applicant continued to work approximately 77 hours per week and received $80 per week cash. He continued to have access to power and water to his caravans and had his grocery bill at the local store paid for by the respondent. During the course of this employment the applicant was only provided with two weeks' annual leave per year for which he received $200 for each week of holidays. No leave loading was paid and the money was not given to him in advance of the leave. The applicant during this period was not provided with any documentation concerning the superannuation fund into which payments were being made on his behalf by the respondents. The applicant did purchase groceries for himself from the local store and this account was apparently paid by the respondents. 5 In March 1998, the applicant consulted an accountant in Moree in order to have his tax returns prepared. This was apparently the first time that the applicant had ever sought to have tax returns prepared and the firm he approached was the firm of accountants also used by the respondents. It is alleged that the accountant's enquiries of the respondents revealed that there were no records kept in relation to the applicant. 6 The applicant then sought group certificates from the first respondent who is said to have told him not to worry and that they had all been fixed up. When questioned about long service leave the applicant was told by the first respondent that he did not have to worry about that because the first respondent did not pay long service leave and he had no record of the applicant working for him. 7 The only group certificate supplied to the applicant was for the year ending 30 June 1996 in which his employer was described as "Picone Pastoral Company" and the applicant was described as a casual worker. Tax returns prepared for the applicant showed the following: in 1990/1991 net weekly payments of $89.59; in 1991/1192 and 1992/1993 net weekly payments of $39.21; in 1994/1995 net weekly payments of $270.51; in 1995/1996 net weekly payments of $131.67 and in 1997/1998 net weekly payments of $239.47. 8 In February 1998, the applicant lodged a complaint in relation to underpayment of wages and non-payment of annual leave which found its way to the Commonwealth Department of Workplace Relations and Small Business. In March 1998 it is alleged that the first respondent wrote out a facsimile to the Department's Inspector handling the claim, wording the correspondence as if it had been written by the applicant. This facsimile is said to have advised the Department that a meeting had taken place between the applicant and the first respondent and that there had been complete agreement on the dispute over the unpaid wages. The facsimile was signed by both the applicant and the first respondent. 9 The first respondent is alleged to have advised the applicant that he would pay him an amount of $14,000 in settlement of his claim for underpayment of wages, annual leave and long service leave. It was said to be on this basis that the applicant agreed to sign the facsimile. Because the applicant was unable to read he relied on what was said to him by the first respondent as to the contents of the facsimile. In answer to enquiries from the Department a further facsimile, apparently in similar terms, was written by the first respondent and signed by the applicant late in March 1998. 10 A further document was said to have been executed by the applicant and witnessed by the accountant who was also the respondents' accountant. The document is said to have been undated but was addressed to the Inspector from the Department stating that the applicant's dispute had been resolved and that he had been paid all outstanding monies. Again, it was alleged that the applicant relied on the first respondent as to the contents of the document before signing it. 11 At the end of March 1998, the applicant received a letter from the Department's Inspector in which he confirmed receipt of the facsimile which stated that the applicant had been paid $10,000 in relation to "back wages" and an additional payment of $4,000. That letter stated that because of the settlement, the Department would take no further action in the matter. 12 During March 1998, the respondents gave the applicant a cheque said to be in the sum of $1400 rather than $14,000 as referred to in the correspondence with the Departmental Inspector. 13 Following the complaint to the Department the first respondent is alleged to have told the applicant he would be paid $337 per week in cash together with the other benefits he had been given over the years. The first respondent also said that he would give the applicant $1,000 in AMP shares. The summons alleges that the applicant received only $200 per week cash thereafter and was advised that the remaining $137 per week was being used to pay off the AMP shares. At about the same time the first respondent informed the applicant that he was not to leave the property without permission and was not allowed to have any visitors. In addition, when the first respondent directed the applicant to collect machinery or parts from the store in town, he demanded that the applicant pay for them. 14 In about July 1998, the applicant contacted an organiser from the Australian Workers Union and sought his assistance in relation to the dispute. It is said that a letter was sent to the Departmental Inspector asking him to re-open the investigation. A letter in response to that request advised that the case was regarded as closed because of the advice received that the matter had been resolved. 15 The applicant ceased working for the respondents on 13 August 1998. Upon cessation of the employment the respondents made no payment to the applicant in respect of annual leave, long service leave or outstanding wages. The applicant was not provided with any documentation as evidence of the payment of outstanding monies into a superannuation fund. 16 In paragraph 43 of the summons for relief, the applicant set out in detail the alleged unfairness of the contract between the applicant and the respondent. It is appropriate that the terms of the alleged unfairness be recounted for the purposes of the challenge to jurisdiction mounted by the respondents. The unfairness was said to be constituted by the following matters: (a) it failed to require the Respondents to devise, maintain and implement a standard, rational, fair and transparent approach to its contract with the Applicant (b) it permitted the Respondents to impose an arbitrary and discriminatory approach to the payment of wages under the contract in that the Respondents unilaterally withheld a significant proportion of the Applicant's wages; further it permitted the Respondents to continue to withhold those monies after the cessation of the contract; (c) it permitted the Respondents to avoid payment of reasonable rates for -work performed by the Applicant ; (d) it permitted the Respondents to avoid its obligations in respect of the provisions and payment for annual leave and long service leave to the Applicant: (e) it permitted the Respondents to deduct monies from the Applicant's wages purportedly for AMP shares without consulting with the Applicant or obtaining his agreement to that course of payment; (f) it allowed the Respondents to avoid giving the Applicant any opportunity to negotiate the terms and conditions upon which payments should be made to him; (g) it allowed the Respondents to impose unilateral and arbitrary conditions upon the Applicant including a restriction on visitors, requiring the Applicant to obtain permission to leave the property and requiring the Applicant to pay for machinery and parts that were to be used in maintenance of the Respondents' equipment; (h) it failed to provide any measures to compensate the Applicant in respect of the deduction from his wages for alleged payments to a superannuation fund and for the alleged purchase of AMP shares; (i) it failed to provide the Applicant with any information as to the level of equity achieved in an alleged superannuation fund or the sum of the payment made during the course of the contract, particularly taking into account that any amount in excess of $80.00 per week was allegedly being put into such a superannuation fund and that the Applicant had worked significant periods of overtime during the course of the contract; (j) it was on its face unfair, harsh and unconscionable and contrary to the public interest in that it permitted the Respondents to pay the Applicant only $80.00 per week (together with electricity, water and groceries) for working approximately 77 hours per week; (k) the First Respondent exerted influence and pressure on the Applicant to withdraw his complaint to the DWR and misled him as to the monies that were to be paid to the Applicant in respect of outstanding wages and leave, in circumstances which were unjust and unconscionable; (l) the First Respondents exerted influence and pressure on the Applicant not to make further complaints to the DWR by imposing unreasonable conditions upon the Applicant including those referred to in sub-paragraph (g) above, in circumstances which were unconscionable; (m) it failed to provide for any or any adequate or reasonable compensation, in respect of length as well as prospective years of service, to the Applicant by the Respondent upon termination of employment for any reason; (n) it invested the Respondents with significant discretionary powers which have been used to the substantial disadvantage of the Applicant particularly in the circumstances relating to the withdrawal of the complaint to the DWR and/or the failure to compensate the Applicant in respect of monies withheld from wages under the contract; (o) the Applicant was at all material times in a position of unequal and inferior bargaining power in respect of his dealings with the Respondents and was specifically in such a position at the time of withdrawing his complaint from the DWR; (p) without limiting the generality of sub-paragraph (o) above the Applicant was at all material times in a position of unequal and inferior bargaining power in that: (i) the Respondent refused to allow any negotiation of the conditions which would prevail under the contract; (ii) the Respondent advised the Applicant of the changes to the contract in a manner which caused distress, anxiety and humiliation to the Applicant; (iii) the Respondent refused to compensate the Applicant in respect of the monies that had been withheld from his wages pursuant to the contract at the time the contract was terminated despite the fact that the Respondent had agreed to a term in the contract that provided that the portion of the Applicant's wages in excess of $80.00 per week would be paid into a superannuation fund on behalf of the Applicant; (q) it failed to protect the Applicant against the harsh, unjust or unreasonable operation of the contract; (r) it was otherwise unfair, harsh and unconscionable and contrary to the public interest upon such grounds and for such reasons as this Honourable Court may find. 17 In relation to that unfairness the summons for relief sought the following orders: 1. An order declaring that the contract between the Applicant and the Respondent, whereby the Applicant performed work for the Respondent in the agricultural industry, was unfair, harsh or unconscionable or contrary to the public interest. 2. An order declaring void in whole or in part or varying in whole or in part and either from its commencement or from some other time the said contract between the Applicant and the Respondent. 3. Further, or in the alternative, an order varying the contract between the Applicant and the Respondent from its commencement or from some other time in order to include the following term: (a) The Applicant's total annual remuneration package shall be comprised of: Base Salary: $54,600-00. Superannuation: rates in accordance with Superannuation Guarantee (Administration) Act, 1992 Annual leave: 4 weeks per annum. Long Service Leave: 2 months leave for every 10 years of service, payable pro rata after the first 5 years of service. (b) In the event that the Respondents (or any of them) have (by agreement or otherwise) withheld any part of the Applicant's total remuneration package between the date of commencement of employment and the date of termination, the Respondents shall pay to the Applicant the amount so withheld together with interest on that sum calculated using the interest rates prescribed by Schedule J of the Supreme Court Rules. These monies shall be payable on the date that the contract between the Applicant and the Respondents is terminated. (c) Upon termination of the Applicant's employment for any reason, the Respondents shall pay to the Applicant a notice/severance payment equivalent to nine months total remuneration. 4. An order declaring void in whole and ab initio the agreements and releases executed by the Applicant in favour of the Respondent indicating that the dispute as to outstanding wages and leave had been resolved. 5. Further, or in the alternative, an order that the Respondent pay to the Applicant such amount of money in connection with contract so avoided or varied as may appear to be just in the circumstances. 6. An order that the Respondent pay to the Applicant interest upon such amount of money as is ordered to be paid to the Applicant in connection with the contract at such rates and in respect of such period of time as this Honourable Court considers appropriate. . 18 The amended summons for relief said that the contract of employment was one whereby the applicant was employed by the respondents as a "cotton farmhand". The applicant's duties were said to include, amongst other things, driving tractors and running the irrigation system as well as being a station hand on the property. These duties were carried out in accordance with directions from the first and/or second respondent and their employees for the benefit of all the respondents. The respondents read and relied upon the affidavit of the applicant already filed in the proceedings as containing certain admissions upon which they relied. He described his experience on various farms in New South Wales and Queensland including working on cotton farms and working in factories putting sugar cane machinery together. He stated that most of the work he had performed was of a labouring nature working on farms as a farmhand, driving tractors to work and planting cotton seeds from a tractor. He had commenced work on Bruce Picone's property in 1988-9 which was a cotton farm at Moree. He said that each day part of his duties were to water and feed Mr Picone's exotic birds and that would take about an hour a day and in addition he would have to clean out the birdcage each week and this would take the whole of the day. Mr Picone was said to have over 500 birds and during the busy irrigation season he had to do this work after the day's work had ended. He said that the work of looking after the birds was payment for the electricity and water he used while living on Mr Picone's property. His work for Mr Picone involved labouring work which required him to assist with the irrigation of the farm. This involved preparing irrigation systems and checking irrigation gates every two hours for 24 hours during October to March each year. This involved him working night shift, working from approximately 4.00 pm through to 8.00 or 9.00 am the next morning. 19 In his affidavit the applicant descried how the first respondent raised with him the complaint that had been made to the Department about under payment of wages. He said the first respondent had opened his mail and after he had seen the paper work from the Department of Industrial Relations had said to him words to the effect: "You're the one who put me through the cleaners". Apparently some time later the applicant was asked to attend the house for a cup of tea but when he arrived he found the first respondent and one of his sons. They stood either side of him while the first respondent told him to: "Sign these or I shall take action against you". This was a reference to a document which was mostly covered by a newspaper so the applicant could not see the contents of the document. He said he signed the document because he was scared what would happen to him if he did not sign it. He was later told that a facsimile was sent to a Departmental Inspector stating that he had resolved all his difficulties with the first respondent, but stated that he was never told the contents of that facsimile. Further, he had not resolved any difficulties with the first respondent in relation to underpayment of wages, leave entitlements including a lack of long service leave. The applicant also said that he was then told by the first respondent to sign further documents in the presence of an accountant, with the first respondent saying words to the effect: "If you don't sign these papers, I'll take legal action against you". 20 Documents annexed to the applicant's affidavit indicated that the first respondent, Mr Picone, also fielded as a bookmaker and that the applicant was required, from time to time, to drive the first respondent to and from hotels and working destinations. There was also evidence that the applicant was involved in the maintenance as well as the operation of machinery on the property. 21 The applicant also tendered and relied upon the terms of the registered rules of the New South Wales Farmers' (Industrial) Association. Rule 2 of the registered rules provides as follows: The industry in connection with which the Association is established is the Pastoral, Agricultural, Orcharding, Dairy farming, Poultry, Piscicultural, Fishing, Vegetable, Forestry, Mushroom Growing, Horticultural and Livestock Industries (which are hereafter collectively referred to as 'the Industry') within the State of New South Wales and the Australian Capital Territory. Rule 7 defines "member" as meaning: "… a natural person, partnership or company in membership with the Association". The membership eligibility rule provided as follows: The persons, partnerships and companies eligible for membership of the Association shall be financial members of the New South Wales Farmers Association who are or are usually employers in or in connection with the industry (as defined in Rule 2) or any part thereof, together with such other persons or companies as have been appointed officers of the Association . 22 Rule 9 deals with membership applications and provides that the Executive Committee shall prescribe forms of application for membership and that such forms shall include a requisition "that every person or every partnership or the proper officer of every family company or the proper officer of every company other than a family company shall therein declare whether or not he or the partnership or the company is the owner or occupier of property in the Association's sphere of operation and, if so, the name and address of each and every such separate property …. Every person, partnership or company shall upon applying for membership, pay the annual contribution therein after prescribed". Rule 2, dealing with membership admission, provides as follows: All applications for membership will be subject to acceptance by the Executive Committee which may refuse such application on any of the following grounds: (i) That the applicant is not eligible for membership; (ii) that the applicant is of general bad character; (iii) that the applicant has failed to observe the requirements of membership application herein contained; (iv) the applicant has failed to register all properties owned or occupied by him or failed to pay the prescribed contribution in respect of each or any property. Rule 19 deals with how membership contributions are set and provides in sub-rule (ii), as follows: (ii) Each member whether a person, partnership or company engaged in wool, livestock, grain or other agricultural production who is the owner or occupier of a property or properties, shall pay an annual contribution which shall be the minimum general contribution together with a progressive amount calculated on livestock and agricultural production as provided below. Sub-rule (v) states that for the purpose of this Rule, membership contributions in respect of a person, partnership or company operating two or more separate properties, shall be assessed separately in respect of each and every property owned or occupied unless total stockholding and grain and agricultural produce sales are consistently less than 20,000 sheep equivalents, in which event they may at the Executive Committee's discretion be registered and assessed collectively. 23 In written submissions the respondents claimed that s 106 of the Industrial Relations Act and any order made pursuant to it in the present proceedings would be inconsistent with a law of the Commonwealth and, by reason of the operation of s 109 of the Constitution, invalid to the extent of that inconsistency. 24 Reference was made to the nature of the relief claimed being in effect a right to a nine months' notice or severance payment on termination of employment for any reason and an annual remuneration package calculated by reference to base salary, superannuation, annual leave and long service leave. 25 It was submitted that the respondents were the registered owners of Picone Pastoral Company which was a member of the New South Wales Farmers' (Industrial) Association. Both the applicant and the respondents were bound by the terms of the Pastoral Industry Award 1986. It was submitted that the award made specific provision with respect to the claims made by the applicant in the present proceedings: rates of pay, annual leave, superannuation and termination were all governed by the award. Those provisions were allowable matters under s 89A of the Workplace Relations Act. 26 Section 152 of the Workplace Relations Act, a Commonwealth law, provided: [s 152] Awards to prevail over State Laws and State awards 152(1) [Awards to prevail] Subject to this section if a State law or a State award is inconsistent with, or deals with a matter dealt with in, an award, the latter prevails and the former, to the extent of the inconsistency or in relation to the matter dealt with, is invalid. (1A) [State laws making provision in respect of termination] If a State law provides protection for an employee against harsh, unjust or unreasonable termination of employment (however described in the law), subsection (1) is not intended to affect the provisions of that law that provide that protection, so far as those provisions are able to operate concurrently with the award. (2) [State employment agreement previously in force] If: (a) but for this subsection, an award would become binding on an employer in respect of an employee at a particular time; and (b) immediately before that time, the wages and conditions of employment of the employee were regulated by a State employment agreement; then the award is not binding on any person in respect of the employee, while the wages and conditions of employment of the employee continue to be regulated by the agreement (3) [State employment agreement made after commencement of subsection (3)]. If, at a particular time, a State employment agreement that is made after the commencement of this subsection would regulate wages and conditions of employment of an employee but for the fact that an award is binding on an employer in respect of the employee, then: (a) the award does not prevent the agreement from coming into force and regulating the wages and conditions of employment of the employee; and (b) while the agreement continues to regulate those wages and conditions, the award is not binding on any person in respect of the employee. (4) ["award"] In subsection (3), "award" does not include an award made under subsection 170MX(3) (5) [Requirements for application of subsections (2) and (3)]. Subsection (2) and (3) do not apply to a State employment agreement unless the agreement is one that was approved by a State industrial authority under a State Act that required the authority, before approving the agreement, to be satisfied: (a) that the employees covered by the agreement are not disadvantaged in comparison to their entitlement under the relevant award; and (b) that the agreement was genuinely made, or that the agreement was not made under duress or that the agreement was made without coercion; and (c) that the agreement covers all the employees whom it would be reasonable for the agreement to cover, having regard to matters (if any) specified in the State Act (such as the nature of the work performed under the agreement and the relationship between the employees in the part of the business covered by the agreement and the remainder of the employees in the business). 27 By reference to the judgment of Kirby P in Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd (1992) 28 NSWLR 443 it was submitted that an inconsistency exists where there is a "textural collision" between the provisions of a Commonwealth and State Act. Even if there was no such collision an inconsistency would arise where the intention of a paramount legislature was, by its enactment, to completely exhaustively or exclusively express the law governing a particular conduct or matter (Clyde Engineering Co Pty Ltd v Cowburn (1926) 37 CLR 466; Ex parte McLean (1940) 43 CLR 472 at 403). An inconsistency arose where a law purports to confer a legal right, privilege or entitlement which the other law purports to take away or diminish (Colvin v Bradley Bros Pty Ltd (1943) 68 CLR 151). 28 Reference was also made to the judgment of the High Court in Telstra Corp Ltd v Worthing (1999) 197 CLR 61 and the two propositions put forward by Dixon J in Victoria v The Commonwealth namely - When a State law, if valid, would alter, impair or detract from the operation of a law of the Commonwealth Parliament, then to that extent it is invalid. Moreover, if it appears from the terms, the nature or the subject matter of a Federal enactment that it was intended as a complete statement of the law governing a particular matter or set of rights and duties, then for a State law to regulate or apply to the same matter or relation is regarded as a detraction from the full operation of the Commonwealth law and so is inconsistent. It was pointed out that in Worthing the High Court stated that the second proposition may apply in a given case where the first proposition did not, but in any event if the first proposition applies then s 109 of the Constitution operates without the need to consider whether the second proposition applies. 29 Section 152 of the Workplace Reactions Act evinced a clear intention that any matter dealt with in the award is to prevail over provisions made under State law to the extent of any inconsistency. Similarly, this Commission had recently considered this precise question in Burgess v Mount Thorley Operations Pty Ltd [2002] NSWIRComm 106 and concluded that an application made by former employees under s 106 of the Act could not proceed because of an inconsistency arising between the State law under which any order would be made and the Commonwealth law. That was said to be precisely the situation that arose in the present matter. 30 In oral submissions the respondents submitted that because of the duties performed by the applicant he was "probably a station hand Grade 3" under the award. It was further submitted that the 1998 award made limited provision for the termination of employment and therefore attention was focussed on s 170CM of the Workplace Relations Act where the employer must not terminate an employee's employment unless the required period of notice has been given or the employee has been paid the required amount of compensation instead of notice. Quite apart from the fact that s 152 itself evinced a legislative intention to exhaustively deal with those matters which were regulated by Federal award, a consideration of the terms of the awards themselves showed that they deal exclusively and exhaustively with the subject matter of rates of pay, annual leave and superannuation. In such circumstances there was both direct inconsistency and indirect inconsistency - in relation to indirect inconsistency there was a clear intention to cover the field with respect to those matters covered by the Federal award. It was accepted that the 1998 Award made no provision in relation to termination but that was covered by s 170CM of the Act. It was also accepted by the respondents that the 1998 Award was a minimum rates award but nothing was said to turn on that point. 31 Finally, the respondents relied on the approach of the High Court in Devane v Gati and anor (1956) 95 CLR 174 for the proposition that the substance of the employer entity should be considered in determining respondency to an award. The four respondents here carried on business as a pastoral company: for all relevant purposes it was to be considered to be a partnership as defined by the Partnership Act. Even if it were not technically a partnership the four respondents were the owners of the business name and while the business name is not a legal entity it is therefore appropriate to look to the persons behind the business name to establish respondency to the award. The respondents say this approach was appropriate both for establishing respondency to the award and for the purpose of construing the Rules of the registered organisation - the effect was the same. 32 Written submissions for the applicant contended that neither individually nor collectively were the respondents bound by the provisions of the Pastoral Industry Award at the relevant time in mid 1998 until August 1998. Even if one or more of them were respondents to that award the operation of s 106 of the New South Wales Act was not ousted by the concurrent operation of a Federal industrial award simpliciter. 33 The applicant submitted that the onus rested with the respondents to prove respondency to the award. The individual respondents were not named as respondent to the award but the New South Wales Farmers' (Industrial) Association was a respondent. The argument for the respondents appeared to be that they were bound by the Federal award by virtue of the fact that the "Picone Pastoral Company" was a member of the Association. However, it was pointed out that s 149(1)(f) of the Workplace Relations Act 1996 provided that an award would be binding on all members of an organisation. While it was accepted that the Association was an organisation for the purposes of that section of the Commonwealth Act, that was not sufficient to demonstrate that the respondents were themselves respondents to the award. 34 The evidence demonstrates that the Picone Pastoral Company has been a member of the Association since 1986 but none of the individual respondents in the present proceedings were, during the relevant period, members of the registered Association. There was no evidence that the respondents, being the current owners of the business name "Picone Pastoral Company" were owners of that business name or operating the business during the relevant period. 35 The "Picone Pastoral Company" is a business name - it is not a person nor a partnership nor a company. It was submitted that its membership of the Association was invalid as being contrary to the combined operations of Rules 7, 8 and Industry Rule 2. The Picone Pastoral Company was neither a natural person, a partnership nor a company. Rules prescribing membership to an industrial organisation were to be read strictly and the respondents' approach in this regard was misconceived (Troja v AMIEU (Vic Branch) (1976) 46 FLR 340; APSA v Lawrence (1982) 2 IR 166). 36 The applicant pointed out that the amended summons attacked the contract between the applicant and the respondents and specified the way in which that contract was alleged to have been unfair thus enlivening the jurisdiction under s 106 of the New South Wales Act. The width of the definition of the term "contract" in s 105 of the Act allowed the Commission to determine applications not only in relation to legally binding contracts but also collateral arrangements and conditions related to contracts or even arrangements generally (Legal and General Assurance v Stock (1993) 49 IR 465), where the Commission stated: "… the authorities make it clear that the term 'arrangement' where used in the section is a wide one and encompasses transactions and plans which are not legally enforceable agreements" (at 480 - 481). 37 The applicant said that the amended summons was not limited to seeking a review of the remuneration and inclusion of payments due under the contract - it also sought a review of that part of the contract or arrangement or collateral arrangement between the applicant and respondents, where the respondents withheld monies payable to the applicant and allegedly placed them in a trust fund or superannuation fund on behalf of the applicant. A review was also sought of the Deed of Release entered into with the first respondent to settle his claim for unpaid wages of $14,000 where the first respondent paid only $1,400 to the applicant. The superannuation aspect of the claim and the Deed of Release arrangement were not covered by the award or otherwise within subject matters dealt with by the award. 38 It is now well established that the terms of the contract of employment and the provisions of an award covering the terms of that same employment are fundamentally different (Byrne v Australian Airlines Ltd (1995) 185 CLR 410). The co-existence of a Federal award and a contract where work is performed did not detract from the applicant's ability to seek relief pursuant to s 106 of the New South Wales Act. 39 All that was necessary to invoke the jurisdiction under s 106 of the New South Wales Act was that there be a contract or arrangement and that the contract or arrangement be one in which "a person performs work in an industry". In Stevenson v Barham and anor (1977) 136 CLR 190 at 199, the High Court held: … the power conferred upon the Commission by s 88F of the Act is in the widest terms … and … is not limited to matters which are industrial in character … [T]he Commission's powers are not confined in point of jurisdiction to contracts or arrangements designed to avoid the industrial awards or agreements of the rates of remuneration fixed for the performance of work by employees … 40 The applicant rejected the suggestion that the summons for relief was in effect an under payment of wages claim pursuant to the terms of the award or that it was a "dressed up unfair dismissal claim". This was a case where the applicant says the contract or arrangement was unfair because: (a) the promise to pay the applicant $10 per hour for each hour worked was broken; (b) the monies actually received by the applicant were manifestly inadequate for the hours and the spread of hours that the applicant worked; (c) the conduct of the respondents under the contract arrangement was unfair and unconscionable in that the first respondent was permitted to: (i) induce the applicant to continue to work by misrepresenting that he was putting a large proportion of his wages into a trust or superannuation fund when no such arrangements had been made; (ii) stop the applicant from leaving the property once the applicant had made a complaint; (iii) induced the applicant to enter into a deed of release in respect of outstanding wages by offering $14,000 and then only paying $1,400, knowing that the applicant was semi-literate; (iv) withholding monies owing to the applicant once the contracts or arrangement came to an end. 41 It was submitted that in deciding whether a contract of employment was unfair either in its terms or in its operation, the Commission was entitled to have regard to all of the circumstances surrounding the contract including the circumstances that prevailed at the time it was entered into, the circumstances in which it operated and the circumstances of its termination, as well as the conduct of the employer in those circumstances (Incitec v Industrial Court of New South Wales (1992) 45 IR 155; Baker v National Distribution Services Ltd (1993) 50 IR 254; Westfield Limited and anor v Sidney Helprin (1996) 68 IR 25). In Baker v National Distribution Services Ltd the Commission looked at a range of issues and considered that in their entirety "… the litany of conduct by the respondent … demonstrates in a comprehensive way the quality of unfairness which we find occurred in this matter as to the way in which the appellant's contract and arrangements worked out in practice" (at 273). 42 A review of the unfairness of the contract and the conduct of the parties under the contract was not a matter covered by the Federal award. Further, the Commission, under s 106 of the Act, in exercising a discretion to review the contract, was not enforcing a right under an industrial award. The discretion exercised is broad and was to be applied to "provide a proper balance or division of advantage and disadvantage between the parties who have made the contract or arrangement" (Davies v General Transport Development Pty Ltd (1967) AR (NSW) 37). Not only may the Commission have regard to the conduct of the parties, but also shall have regard to their ability to appreciate the bargain entered into, the comparative bargaining strength of each of the parties in terms of the advantage and disadvantage and the surrounding circumstances of each particular case on a case by case basis (see Davies and Baker). The section had also been described as involving the application of plain standards of "morals not law" (Davies at 374). These matters had nothing to do with the matters covered by the Federal award. 43 The respondents' reliance on the recent decision in Burgess was entirely a different matter. In that case the employer had complied with the terms of the Federal award and the certified agreement. In the present matter the respondents' conduct is not said to be relevantly inconsistent with any right granted by the provisions of the Pastoral Industry Award. However, in a further act of unconscionable conduct, the respondents sought to hide behind their alleged respondency to a Federal award in order to defeat the claim of the applicant under s 106. 44 Further, an award made pursuant to the Federal Act and complying with s 89A of that Act did not evince an intention to cover the field nor was it directly inconsistent with the operation of s 106. In those circumstances s 109 of the Constitution did not apply. 45 In oral submissions for the applicant, senior counsel submitted that at this stage of the evidence the matter could not be struck out because ultimately the Court may find, as a matter of fact, that the duties performed by this applicant were not as described in the affidavit. The evidence does not say this was the statement of duties and were accurate. They were only a reference to the duties upon which reliance was then placed: ultimately, the Court may find that they were not the duties performed by the applicant. The importance of this fact was that the "jurisdictional hiatus" relied on by the respondents was dependent upon the final state of the facts as found by the Court. 46 Further, s 152 of the Workplace Relations Act referred to the "matter" dealt with in the Federal award: the respondent had not analysed what that "matter" was but had simply relied on the fact that there was a Federal award. Neither was there an analysis of how orders under s 106 became a State law. It was necessary before the Court came to any view on these matters that there be a determination of the precise factual background or circumstances on which the Federal award was based and on which this application by the respondents was based. 47 The difficulties for the respondents' case on the notice of motion were said to be demonstrated by the fact that part of the case in this Court concerned the circumstances surrounding the release signed by the applicant under duress. Under s 106 of the Act the release could be struck down because of unfairness and an order for compensation made. The release is not a matter governed by the Federal award in any respect. 48 There was no evidence of the manner in which the individual respondents in these proceedings were bound by the Federal award. It was merely asserted that the owners of the business name became members of an organisation which itself was bound by the Federal award. Similarly, it is simply asserted that the people who own the business name are in partnership. Evidence would be required to establish partnership bearing in mind the members are jointly responsible for the expenditure of the partnership and jointly in receipt of income of the partnership. This is one of the reasons why joint ventures were created rather than partnerships. 49 In relation to the Rules of the New South Wales Farmers' (Industrial) Association there was no evidence whether or not the various persons, partnerships or companies were usually employers in connection with the industry in relation to which the Association was registered. There was no suggestion that more than one membership subscription was paid under the Rules and if that were so, it could not be said that each person who owned the business name is a member. To simply permit, under these Rules, to allow the owners of a business name to become members by virtue of a partnership and not separately, meant that all the members of the partnership would have a vote in the organisation. It was well established that the Rules of registered organisations would be strictly applied: the operation of the rules, as presently contended for by the respondents, would not be permitted. 50 The respondents had submitted the applicant was "probably" a Grade 3 station hand under the award classifications and while that might be correct the respondents' assertion that it was "probably" so was not good enough to determine whether or not the award applies and that no order could be made under s 106 of the Act. The Federal award was a minimum rates award and by virtue of s 89A of the Workplace Relations Act was confined in its operation. The Federal award did not deal with those matters that are otherwise contracted (or arrangements made in relation to) under the contract of employment. The distinction between the award and the contract of employment was settled by the High Court judgment in Byrne's case. It is in this respect that the award and the operation of s 106 of the State Act deal with "wholly different matters". 51 The recent judgment in this Court in Burgess was of no assistance to the respondents. The factual circumstances in that case, dealing with a certified agreement, were fundamentally different to the situation in the present case which involved a minimum rates award. Section 106 did not apply to the award and had no effect on the award. DELIBERATION 52 In Thornthwaite v Australian National Credit Union Limited [2002] NSWIRComm 240, (a case argued two days before the present matter and where judgment was handed down at the same time as judgment in this case) I have set out what I consider to be the relevant case law when dealing with alleged inconsistency arising between an award (or certified agreement) and s 106 of the Act. I do not repeat in this judgment those matters to which I have referred in Thornthwaite. However, I rely on that discussion of the relevant principles and adopt it for the purpose of this judgment. Similarly, for the reasons set out in Thornthwaite, I adhere to the following conclusions: (a) to establish the operation of s 152 of the Workplace Relations Act, the matter dealt with by the Federal award must be established with precision; (b) even where there is a comprehensive Federal award a consideration of its terms may indicate that there are areas left for the operation of a State law; (c) it is usual for Federal awards to operate against the background of general statute law, both State and Federal, which are not intended to be displaced by the award provisions; (d) section 106 of the New South Wales Act is a general statutory provision whose field of operation may be described as dealing with contractual unconscionability, a field not usually addressed by Federal awards or agreements ; (e) that the contention cannot be sustained that a minimum rates award, standing alone and made in compliance with the provisions of s 89A of the Workplace Relations Act 1996 [Cth] evinces an intention to cover the field in relation to the matters with which it deals; (f) that such an award made under Commonwealth law does not, simply by its own operation, become part of the contract of employment - the Commonwealth law and awards made under it, without more, do not operate in the same field nor deal with the same matter as s 106 of the New South Wales Act. In my view the respondents have made a very limited attempt to establish the "matter" dealt with by the Federal award and, in any event, have wrongly categorised the field of operation of s 106 of the State Act. The respondents have not adequately addressed the minimum rates nature of the Federal award in the context of applying the covering of the field test. 53 Apart from these general principles and findings which appear to have application to the present matter, having regard to the current state of the evidence, there are other insurmountable difficulties placed in the path of the respondents in making out their case on the notice of motion, namely: (a) at the heart of the respondents' case is the operation of the Federal award yet there is no evidence or insufficient evidence as to what classification the applicant is said to come within under that award but merely an assertion by the respondents that he is "probably" a Class 3 station hand; (b) there is evidence of a variety of duties performed by the applicant which suggests a mixed function role and the possibility of other award (State or Federal) application. Those duties include care of exotic birds, driving the first respondent in relation to his business as a bookmaker and the maintenance rather than the operation of machinery; (d) the unsatisfactory position of the respondents relying upon the evidence in the applicant's affidavit as to his duties when that evidence was not directed to the question of award coverage. That issue had not arisen when the affidavit was sworn. There is a real prospect that the evidence is incomplete for the purposes of determining award coverage; (e) the respondents rely on being the registered owners of a business name, Picone Pastoral Company, and that the respondents carry on a partnership under that business name as proving the respondents' eligibility for and actual membership of the New South Wales Farmers' (Industrial) Association and thereby their respondency to the Federal award. The partnership arrangement is merely asserted and there is no evidence to support such a finding. The Partnership Act 1892 in s 2 sets out a number of rules for determining the existence of a partnership, none of which have been addressed by evidence on the hearing of the notice of motion. Other aspects of the Partnership Act such as the power of a partner to bind the firm and agreements as to the liability of a partner or the liability of the firm for certain wrongs has also not been addressed; (f) there is no evidence as to the nature of the business carried out by the four respondents except to a limited extent in relation to the first respondent. Similarly, there is no evidence or insufficient evidence that the four respondents are usually employers in or in connection with the industry (as defined by Rule 2) in relation to which the New South Wales Farmers' (Industrial) Association is registered. There is force in the applicant's submission that rules of registered organisations are treated by the courts as "mandatory" (to use a term now regarded as inappropriate). This combination of matters makes it quite impossible on the current state of the evidence to make a finding that the four separate respondents to the s 106 proceedings are firstly respondent to the Federal award, or that the Federal award covers the work performed by the applicant. Mere assertion and supposition is a totally inadequate basis upon which to establish s 109 inconsistency. 54 As I have said in Thornthwaite it is a mistake to treat the considerations which inform the determination of a money order which is "just in the circumstances of the case" as resulting in the Court ordering in some strict, legal sense, for example, damages in lieu of reasonable notice or as equating with an order for "redundancy" or for "severance pay". In this case the respondents point to some aspects of the relief sought in the summons as demonstrating the inconsistency with the Federal award. That approach ignores the fact that the section is not a vehicle for general changes to employment conditions, does not provide for re-instatement and does not provide compensation for the loss of an employment contract. While regard may be had to award provisions or general industrial standards in making money orders that will not alter the essential nature of the jurisdiction being exercised - its field of operation may be broadly described as being concerned with contractual unconscionability. 55 There are other aspects of the applicant's case which cannot be considered as coming within any provision of the Federal award even adopting the respondents' approach to the "matter" dealt with by the award. The claims relating to the conduct of the first respondent, the circumstances allegedly surrounding the deed of release and the arrangements said to be made in relation to superannuation are not matters dealt with by the award. Even if the respondents were to succeed in their primary submission as to inconsistency, these matters of apparent substance would remain to be dealt with by the Court. 56 I also concur with the approach adopted by Moore J in Mt Thorley Operations Pty Ltd v Burgess & ors (2001) 103 IR 184 and Marks J in Burgess v Mount Thorley Operations Pty Ltd (unreported, 24 May 1999) that it is inappropriate to consider the question of potential inconsistency until such time as orders are made in the s 106 proceedings. It is not surprising therefore that the judgment of Schmidt J in Burgess, so heavily relied upon by the respondent in these proceedings, dealt with the inconsistency argument only after the matter had been fully heard. 57 In follows that in my view the challenge based on inconsistency under s 109 of the Constitution has been prematurely brought and in any event has been brought in circumstances where there is insufficient evidence to establish the necessary basis for that challenge. ORDERS: 58 The order of the Court is that the respondents' notice of motion is dismissed. I will hear the parties on the issue of costs. oo00oo 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.