Industrial Relations Commission of New South Wales CITATION: Sheehan v. Manly Warringah Pittwater Community Aid Service Inc [2006] NSWIRComm 1154 APPLICANT Chris Sheehan PARTIES: RESPONDENT Manly Warringah Pittwater Community Aid Service Inc FILE NUMBER(S): IRC 2945 of 2006 CORAM: Connor C CATCHWORDS: termination of employment - claim of unfair dismissal - dual proceedings in the Federal and State industrial jurisdiction - possibility that the State application of unfair dismissal beyond jurisdiction - what constitutes a corporation for the purposes of Work Choices legislation - the obligation to give an undertaking not to proceed under other legislation prior to arbitration - matter settled by conciliation - leave for discontinuance granted Industrial Relations Act 1996 LEGISLATION CITED: Interpretation Act, 1987 Federal Workplace Relations Amendment (Work Choices) Act, 2005 Actors and Announcers Equity Association v. Fontana Films Pty Limited (1982) 150 CLR 169 Commissioner for Main Roads Case (1976) AR 370 Davy v. Hawkesbury District Healthy Service Limited - unreported CASES CITED: Nestoroski v. BlueScope Steel (AIS) Pty Limited [2006] NSWIRComm 1140 R v. Judges of the Federal Court of Australia; ex parte Western Australian National Football League (1979 - 1980) 143 CLR 190 Sheehan v. Manly Warringah Pittwater Community Aid Centre (2006) U2006/8082 State Superannuation Board v. Trade Practices Commission (1982) 150 CLR 282 HEARING DATES: 12/10/2006 DATE OF JUDGMENT: 10/12/2006 EXTEMPORE JUDGMENT DATE : 10/12/2006 APPLICANT Jake Boghossian Employment Help Lawyers LEGAL REPRESENTATIVES: Zena Maxwell Manly Warringah Pittwater Community Aid Services Inc DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Thursday, 12 October, 2006 Matter No IRC 2945 of 2006 Chris Sheehan and Manly Warringah Pittwater Community Aid Service Inc Application under S.84 of the Industrial Relations Act, 1996 DECISION [2006] NSWIRComm 1154 Introduction 1 On Tuesday, 15 August, 2006 Mr Chris Sheehan lodged an application under Part 6, Unfair Dismissals, of Chapter 2, Employment [Ss.83 to 90] of the 1996 Industrial Relations Act concerning the termination of his services as a project manager with Manly Warringah Pittwater Community Aid Service (the Warringah Community Centre). Mr Sheehan has claimed that the termination of his services was unfair and he has sought monetary compensation over it. The matter was allocated to me by Registry staff for a conciliation and directions hearing on Wednesday, 6 September, 2006. I adjourned the matter for mention on Thursday, 28 September, 2006, Friday, 6 October, 2006 and Thursday, 12 October, 2006. 2 In his Part 6 application Mr Sheehan asserted that his services were terminated on Wednesday, 25 January, 2006, ie substantially outside the 21 day time limit prescribed by S.85(1). He indicated that he was also pursuing a claim for unfair dismissal before the Australian Industrial Relations Commission and in terms of S.85(2) the clock does not run against a dismissed employee if he has pursued a claim in the Federal unfair dismissal regime provided he does so within time. But there is an issue of some substance concerning those Federal proceedings which I will address later in this decision. 3 In any event, I was informed in the proceedings on Wednesday, 6 September, 2006 through Mr Sheehan's representative, Mr Boghossian of Employment Help Lawyers, that there was an error in the Part 6 application in that respect and, in fact, Mr Sheehan's dismissal was actually on Monday, 10 July, 2006. The 2005 Federal Workplace Relations Amendment (Work Choices) Act came into effect on and from Monday, 27 March, 2006 and there are therefore certain limitations which flow from that changed industrial climate, viz: * Employers in the Federal industrial jurisdiction with less than 100 employees engaged - and that is the case for the MWPCAS - are now excluded from the Federal unfair dismissal jurisdiction. In the proceedings on Wednesday, 6 September, 2006 I was informed that Mr Sheehan and the MWPCAS were awaiting a decision by a member of the Australian Industrial Relations Commission (Lawler J - Vice President) on whether or not the Federal claim was competent but on that date, in fact, that Federal matter was determined in chambers and an order made dismissing the claim [ Sheehan v. Manly Warringah Pittwater Community Aid Service (Matter U2006/5082)]. * I was informed that Mr Sheehan had also lodged an application alleging unlawful dismissal in the Federal jurisdiction as well, eg a dismissal based on sex, marital status, race, age, physical or intellectual disability or religious or political beliefs. Claims of unlawful dismissal, as distinct from an unfair dismissal claim, in the Federal jurisdiction do not have a restriction which eliminates employers where less than 100 employees are engaged. MWPCAS had challenged that unlawful dismissal claim. But, in any event, in the proceedings on Thursday, 28 September, 2006 Mr Hussein of Employment Help Lawyers, who had replaced Mr Boghossian on that day, informed me that Mr Sheehan has now withdrawn that claim (although I understand that there was still an unresolved application for costs by the MWPCAS over that claim). * The fundamental question remains whether of not the MWPCAS is a trading corporation within the meaning of S.51(xx) because, if that is so, it would presumably be outside the State unfair dismissal regime as well and Mr Sheehan's Part 6 application would be beyond jurisdiction. 4 There was nothing to prevent me from conciliating over Mr Sheehan's dismissal and, if necessary, making appropriate recommendations over it [the Commissioner for Main Roads Case (1976) AR 370]. Indeed, I have a duty to do so [S.66]]. But as soon as facts emerge which show that there is an issue for arbitration I should proceed no further until my jurisdiction to arbitrate is established. And it is at that point difficulties arise for Mr Sheehan's Part 6 application. 5 In the proceedings an offer was made in settlement of the matter by the MWPCAS but on Friday, 6 October, 2006 Mr Hussein wrote to me to inform me that Mr Sheehan had rejected the offer and that he sought that the matter proceed to arbitration. There was no appearance by either party in the subsequent proceedings on Friday, 6 October, 2006, however, and I was not prepared to refer the file to Registry staff in accordance with Practice Direction No.17 until I was in a position to know what, in fact, was being referred for arbitration. Mr Hussein's letter did not make any reference to the jurisdictional issues that had been raised by MWPCAS from the outset. Any jurisdictional issue would need to be heard as a threshold issue. I reconvened the proceedings for mention on Thursday, 12 October, 2006. In those proceedings Mr Boghossian represented Mr Sheehan and Ms Maxwell represented the MWPCAS. Is the MWPCAS a Constitutional Corporation? 6 The MWPCAS asserted that there is no State jurisdiction to deal with this claim, raising in issue the operation of Work Choices. In particular, in its formal reply to Mr Sheehan's Part 6 application, the MWPCAS argues that it: "...is a trading corporation as defined under the Commonwealth Constitution [S.51(xx)]. It is an incorporated body under the Associations Incorporations Act of New South Wales and conducts trading activities to the extent of at least 33% of the revenue handled by the organisation..." 7 Essentially, the MWPCAS is a community based organisation but, as I see the situation, that does not automatically take it outside S.51(xx). There is certainly some current confusion on that question. Gibbs CJ of the High Court in Actors and Announcers Equity Association v. Fontana Films Pty Limited (1982) 150 CLR 169 at p.182, viz: "The words of para (xx) suggest that the nature of the corporation to which the laws relate must be significant as an element in the nature or character of the laws, if they are to be valid... In other words, in the case of a trading and financial corporation, laws which relate to their trading and financial activities will be within power..." And in R v. Judges of the Federal Court of Australia; ex parte Western Australian National Football League (1979 - 1980) 143 CLR 190 at p.223 the High Court identified the test as whether the scale of the corporation's trading activities form a sufficiently significant proportion of its overall activities as to merit its description as a trading corporation. It was held that if the trading activities of a corporation are a "...substantial and not a merely peripheral activity...", form a "...significant part of its overall activities..." or are "...not insubstantial..." then it will be characterised as a trading corporation. That decision was endorsed in State Superannuation Board v. Trade Practices Commission (1982) 150 CLR 282 at p.304. 8 Therefore the question would appear to be whether the purported 33% trading activities of the MWPCAS is significant or not insubstantial or peripheral. But words like "significant", "insubstantial" or "peripheral" are not particularly precise and leave much room for argument which, until the High Court resolves the questions before it, must remain unresolved. Is Mr Sheehan Barred from Proceeding under Part 6? 9 There is a second issue before me to which I raised for the consideration of the parties in the proceedings. I note that Mr Sheehan has not to date completed the undertaking required by S.90, viz: "The Commission must not determine an applicant's claim by making an order under S.89 if: (a) another Act or a statutory instrument provides for redress to the person in relation to the dismissal, and (b) the person has commenced proceedings under the other Act or instrument or has not lodged a written undertaking not to proceed under the other Act or instrument." 10 And since Mr Sheehan has already lodged claims in the Federal unfair dismissal regime, the question is whether he is now estopped from subsequently pursuing his Part 6 application. As I indicated in my unreported decision of Tuesday, 26 September, 2006 in Nestoroski v. BlueScope Steel (AIS) Pty Limited [Matter No.IRC 2929 of 2006 at pp.4 and 5], there remains some doubts as to whether or not S.90 extends to Federal proceedings. That is to say that when S.90 speaks of "...another Act or statutory instrument..." by virtue of Ss.65 and 66 of the 1987 Interpretation Act (and the overriding role of valid Federal laws over inconsistent State laws flowing from S.109 of the Constitution) it arguably is confined to only State legislation. 11 In any event, S.90 does not present any barrier if a claim is firstly made elsewhere but is ruled to be incompetent in that area - as was Mr Sheehan's Federal unfair dismissal claim. In my unreported decision of Wednesday, 14 November, 2001 in Davy v. Hawkesbury District Health Service Limited [Matter No.IRC 3143 of 2001] I dealt, among other things, with the a claim under Part 6 which had been preceded with a complaint made under the 1977 Anti Discrimination Act but which had been rejected by the Anti Discrimination Board on the basis that it was not a matter which they would be prepared to investigate. I commented (at p.12) that: "…by taking his claim before the ADB, acting under the Anti-Discrimination Act, is (the applicant's) subsequent Part 6 application defeated? In my opinion, the answer to that question is no for the simple reason that, as he was informed, he never had redress in the ADB in the first place. S.90 only comes into effect if '…another Act or statutory instrument provides for redress to the person in relation to the dismissal…' and that was not the case here. The Part 6 application is competent on that score…" 12 But S.90 may still present a barrier to Mr Sheehan with respect to his Federal unlawful dismissal claim, notwithstanding the fact that he has now withdrawn it. The restriction flowing from S.90(a) applies where an applicant has commenced proceedings. The lodgement of a claim under some other statutory instrument may be all that is required to exclude an employee from jurisdiction under Part 6, even where it is subsequently withdrawn. 13 In my opinion, it is not sensible, particularly in the current uncertain industrial climate, for an employee to respond to his dismissal by simply lodging claims willy-nilly before the Federal and State Commissions without exploring matters of jurisdiction which may effect such claims - operating on the basis that by throwing enough wheat at a barn door, some of will hit the mark. Those separate applications will simply get in one another's way: they have on this occasion and created unnecessary complications for both Mr Sheehan and the MWPCAS. Conclusion 14 In my opinion, any argument on jurisdiction flowing from Work Choices may not be properly advanced ahead of the decision in the current High Court proceedings concerning it. Further delay of this matter is not in anybody's interests, however. In those circumstances, to avoid the problems which have emerged in the impenetrable industrial jungle which Work Choices has created, the parties further explored conciliation in the proceedings on Thursday, 12 October, 2006. The matter has been resolved with an agreement being reached between the parties. I commend them for their constructive approach to this matter. 15 I propose to grant leave for the discontinuance of the matter in accordance with Rule 138 on that basis. P J CONNOR Commissioner 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.