Industrial Relations Commission of New South Wales CITATION: Recorded Media Industry Union of New South Wales v Summit Technology Australia Pty Ltd [2006] NSWIRComm 270 APPLICANT Recorded Media Industry Union of New South Wales PARTIES: RESPONDENT Summit Technology Australia Pty Ltd FILE NUMBER(S): 6308 of 2005 CORAM: Sams DP Notice of motion - industrial dispute - CD manufacturer - bargaining in good faith - failure of conciliation - dispute proceeds to arbitration - application for a new award - Special Case reference - matter referred to single member - challenge to jurisdiction - employer a constitutional corporation - former State award coverage - award covering employees now a Federal Notional Agreement Preserving State Awards - effect of WorkChoices legislation - whether Commission has jurisdiction to make an award - notice under the Judiciary Act 1903 - reasons for employer's failure to negotiate a new agreement - merger of two sites - financial difficulty - whether real reason the effect of WorkChoices - exclusions under s 16(1) of WorkChoices legislation - effect of Regulations under WorkChoices - whether dispute is a preserved matter under Regulations - concessions of Union - new award 'problematic' - obligation to bargain in good faith - effect of failure to bargain in good faith - arbitration powers under s 136 of the Act to direct or recommend. CATCHWORDS: Held; notice under Judiciary Act unnecessary - primacy given to conciliation and arbitration in settlement of industrial disputes - relationship between conciliation and arbitration - objects of the Act - party entitled to seek relief by arbitration after failed conciliation - whether recommendations and directions of the Commission binding and final - employer failed to bargain in good faith - admissions in evidence - real reason for unwillingness to negotiate was effect of WorkChoices - serious doubt as to employer's bona fides - Union's right to persue arbitration of dispute - dispute lodged before commencement of WorkChoices - act or ommission the failure of the employer to bargain in good faith - preserved right retained - exclusion by virtue of Regulations sustained - no lack of jurisdiction - matter to proceed to arbitration - further programming. Acts Interpretation Act 1901 (Cth), s 8 Industrial Relations Act 1988 (Cth) Industrial Relations Act 1996, s 130, 134, 135, 136, 146A Judiciary Act 1903 (Cth) s 78B LEGISLATION CITED: Workplace Relations Act 1996 (Cth) Workplace Relations Act 2006 ("WorkChoices") s 16 Workplace Relations Regulations 2006 AWARD Recorded Music and Visual Entertainment and Production (State) Award 349 IG 923 Asahi Diamond Industrial Australia Pty Ltd and Automotive, Food, Metals and Engineering Union (1995) 59 IR 358 Attorney General for the State of Queensland v Australian Industrial Relations Commission and others (2002) 213 CLR 485 Australian Meat Industry Employees' Union v G & K O'Connor Pty Ltd (1999) 91 IR 356 Australian Rail, Tram and Bus Industry Union, Hancock, SDP, Australian Industrial Relations Commission, Print L5622, 30 September 1994 Australian Workers' Union (Technical, Administrative Professional Staff Branch) v Bluescope Steel (AIS) Pty Limited [2006] NSWIRComm 1080 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union of Workers - Western Australian Branch v BHP Billiton Iron Ore (2006) WAIRC 04716 CFMEU v Newcrest Mining (2005) 139 IR 50 CASES CITED: Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466 Commissioner of Police v Police Association of New South Wales (2005) 141 IR 423 Ex parte: McLean (1930) 43 CLR 472 New South Wales Teachers' Federation and New South Wales Department of Education and Training (2000) 100 IR 441 State Wage Case 2005 (2005) 142 IR 337 State Wage Case 2006 (2006) 150 IR 393 Sydney Water Corporation v Australian Services Union (NSW and ACT) Branch (2005) 146 IR 388 Unions NSW v Carter Holt Harvey Wood Products Australia Pty Ltd (2006) 149 IR 361 Wenn v Attorney General (VICT) (1948) 77 CLR 84 HEARING DATES: 10/08/2006 DATE OF JUDGMENT: 08/24/2006 APPLICANT TO THE NOTICE OF MOTION Mr C Fisher, Solicitor Fisher Cartwright Berriman Lawyers and Consultants LEGAL REPRESENTATIVES: RESPONDENT TO THE NOTICE OF MOTION Mr N Rudd, Industrial Officer Recorded Media Industry Union of New South Wales JUDGMENT: - 18 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: SAMS DP 24 August, 2006 Matter No IRC05/6308 Notification under section 130 by the Recorded Media Industry Union of New South Wales of a dispute with Summit Technology Australia Pty Ltd re industrial action DECISION ON NOTICE OF MOTION [2006] NSWIRComm 270 1 This decision determines a notice of motion filed on 31 July, 2006 by Summit Technology Australia Pty Ltd (the applicant to the notice of motion) in dispute proceedings filed under s 130 of the Industrial Relations Act 1996 ('the Act'), which were originally lodged on 5 December, 2005 by the Recorded Media Industry Union of New South Wales (the Union and respondent to the notice of motion). 2 As will be seen from the outline of contentions filed by both parties, the determination of this matter was said to involve the question of whether an award could be made in settlement of the dispute, pursuant to s 136(1)(b) of the Act, in circumstances where the introduction on the 27th March, 2006 of amendments to the Workplace Relations Act (for convenience, I shall hereinafter refer to these amendments as "WorkChoices") prevented the Industrial Relations Commission of New South Wales from making such an award. Specifically, the notice of motion sought an order from the Commission which would prevent the Union from bringing proceedings for a new award in resolution of the original dispute by reason that the Commission has no jurisdiction to do so. 3 Shortly stated, the jurisdictional challenge relied on the grounds that the employer is a constitutional corporation as defined in s 6 of the Workplace Relations Act, and that on 27 March, 2006 the Award which had hitherto governed the employment of the applicant's employees - the Recorded Music and Visual Entertainment and Production State Award ("the Award") became a Notional Agreement Preserving State Award (NAPSA). It was said that the NAPSA contains a model dispute resolution clause under which all disputes must be dealt with. For the purposes of these proceedings, there was no argument that the applicant is a constitutional corporation and that the employee's employment is now governed by the NAPSA. 4 During the course of argument, Mr Rudd for the Union made a number of concessions as to the Union's position, including that it was "problematic" that the Commission could make an Award in settlement of the dispute. Mr Rudd's primary argument, to which I shall return later in more detail, was that Regulation 1.2(2) of WorkChoices preserved this Commission's jurisdiction to make recommendations or directions binding on the parties in circumstances where the applicant had not complied with a direction to negotiate in good faith prior to the commencement of WorkChoices. 5 It is to be observed from the outset, that the question to be determined in this matter raises, probably for the first time, novel and interesting issues relevant to the jurisdiction of this Commission under s 136 of the Act in light of the passage of the WorkChoices legislation; albeit in a relatively limited way. With this in mind, I gave serious consideration to referring this matter to His Honour the President for consideration of whether the issues so portrayed should be considered by the Full Bench, pursuant to s 193 of the Act. While I raised this prospect with the parties during the proceedings, neither Mr Fisher for the applicant nor Mr Rudd requested such a referral and I have decided to proceed to determining the matter. BACKGROUND 6 At this point, it is helpful to set out the background to the proceedings which led to the application by the Union for a new award. 7 The applicant, whose parent company is a listed organisation in Singapore, employs some 200 employees in CD manufacturing and replication at a site at Silverwater. The Silverwater site was originally owned by a company named Digital Audio Technologies, Australia which was taken over by the applicant in 2005. The applicant moved its existing operations at Waterloo to Silverwater. The Union sought an enterprise agreement to cover the amalgamated site and a log of claims was served on the applicant in October 2005. The Union claimed that the majority of employees had not received a wage increase since April 2004. Hence the log of claims centred on a wage claim of 6% and improved redundancy benefits. 8 The original dispute notification was couched in the following terms: "the failure to bargain in good faith and industrial action last week and today." The matter was listed for compulsory conference on 5 December 2005. On that occasion, the Union expressed concern that the employees might be disadvantaged by pending Federal legislation and sought directions from the Commission that the applicant meet with the Union to discuss a new agreement, the primary purpose of which was to secure a wage increase for all the employees. 9 At that time, Mr Fisher submitted that the applicant's Singapore parent had not given permission for its Australian management to enter into discussions with the Union in relation to an enterprise agreement. This was for two reasons: firstly, the considerable uncertainty as to the effect of pending Federal legislation and, that secondly, the applicant was entering its peak production period. The Union foreshadowed that if the applicant maintained its refusal to negotiate, it would seek the issuance by the Commission of a certificate of attempted conciliation under s 135(2) of the Act and the making of an award, appreciating that special case considerations might arise under the State Wage Case 2005 (2005) 142 IR 337. At the end of proceedings that day the Commission made the following directions: HIS HONOUR: Pursuant to the provisions of the good faith bargaining provisions of the Act and the general provisions relating to industrial disputes, bearing in mind there has been industrial action in respect of this matter, I direct that the parties are to confer about the subject matter of the dispute, and that those negotiations are to take place as soon as practicable. I grant liberty to apply at short notice should there be any difficulties arising either in the form of any further industrial action or the view of either of the parties that the matter is not progressing in any sensible way. 10 At the request of the Union the dispute was re-listed on 31 January, 2006. The Union again complained that the applicant continued to refuse to negotiate an agreement with the Union. Mr Rudd sought the issuance of a certificate of attempted conciliation. 11 Ms Chapple, now appearing for the applicant, said that the applicant intended to continue with negotiations in good faith, although she added that "we would be waiting necessarily for the new legislation to commence for that process to continue." She opposed the issuance of a certificate as premature as the applicant had agreed to meet with the Union in February. That meeting was held on 17 February and was attended by Mr Kong Chee Min, Finance Director, and the responsible decision maker for the applicant. He had indicated that the applicant had experienced a very difficult year financially and it would be irresponsible to approve any wage increases before the applicant could finalise its ongoing financial position. He suggested that the applicant could not properly respond to the Union for three months. 12 Ms Chapple confirmed the applicant's position at the meeting in a letter dated 23 February 2006 in which it was said: (a) Summit has been through a difficult year as a result of the site integration process; (b) Summit is grappling with low productivity levels and ongoing operational inefficiencies and this had a significant impact on Summit's ability to service customers through the peak period (c) Summit management is working hard to improve the operational inefficiencies and productivity levels; (d) Summit is still finalising its 2005 financial reporting and 2006 budget requirements; (e) Once Summit has completed its financial reporting and budgeting, it will need to study in detail the existing cost structures as well as cost the claims put forward by the union. It is imperative that the claims are costed. To do otherwise would be financially irresponsible given the current business climate; (f) due to economic pressures including the entry of new competitors into the market, Summit is unable to pass the cost of wage increases on to its clients without jeopardising Summit's existing business; and (g) it is unlikely that Summit will be in a position to reach agreement with the Union prior to the commencement of the Workchoices legislation . (my emphasis) 13 The dispute was re-listed on 2 March 2006 and after private conferences with the parties, I issued a certificate of attempted conciliation and referred the matter to His Honour the President for consideration as a Special Case. During these proceedings, I note the following exchange between the Commission and Ms Chapple: HIS HONOUR: It seems to be simple, the Union is frustrated. I don't understand why it takes three months to cost a claim. CHAPPLE: It is not just simply costing a claim your Honour. It is also understanding the financial position of the company and perhaps if we could go off the record-- HIS HONOUR: There are two people going to undertake certain processes and that is only going to take one month. CHAPPLE: I am aware of that. HIS HONOUR: I wonder why there is any mention of the word Work Choice. Is that what this is all about? CHAPPLE: No it is not, your Honour. HIS HONOUR: You mentioned it. Indeed it was so specific to say they are not in a position to deal with this matter. You say it is not in a position to deal with this matter prior to the commencement of the Work Choices legislation. That presupposes one thing - you know when it is to be proclaimed and you refer to it as a basis upon which you want the matter not to proceed. I find that very curious. CHAPPLE: I am sure that is not why it was brought. Work Choices has been brought up by the union on a number of occasions in relation to trying to pressure the company into an enterprise agreement. I am not aware of when that is going to commence but we understand that it will be some time in March. Perhaps if it is three months down the track we can. HIS HONOUR: What difference does it make, Ms Chapple? CHAPPLE: The difference it makes is the pressure being placed on the company by the union to reach an agreement prior to the implementation or commencement of Work Choices and essentially if we don't come to an agreement before that it will pursue an award position and the making of an award. We say we don't have a time limit. We have given a commitment to make an enterprise agreement. We stand by that agreement. HIS HONOUR: Your letter says specifically that you are not in a position to deal with the matter prior to the Work Choices legislation. That means something hinges on the Work Choices legislation, not the passage of time, but something hinges on the legislation itself. 14 On 6 March 2006, His Honour the President determined: Pursuant to s193 of the Industrial Relations Act 1996 and Principle 10 of the State Wage Case 2005 Principles, having considered the reference to the President of the Commission by His Honour Deputy President Sams of 2 March 2006, I determine that proceedings, including any Special Case aspect of them, are to be dealt with by His Honour. 15 The dispute was listed for further directions on 15 March 2006. The Union sought a new award to be made as a Special Case. The Commission then issued directions in preparation for the arbitration of the dispute. The Evidence on the Notice of Motion 16 The applicant relied on the evidence of Phillipa Jane Chapple, Senior Consultant employed by Fisher Cartwright Berriman (the applicant's solicitors). The subject matter covered in Ms Chapple's affidavit was not in contention as it dealt primarily with the history of the negotiations between the applicant and the Union. However, in cross examination the emphasis focussed on the applicant's reasons for not being willing to negotiate an enterprise agreement with the Union. 17 Ms Chapple said she had only become personally involved in the dispute in January 2006. Ms Chapple agreed it had taken three months since the Union's log of claims for a meeting to be convened. Ms Chapple denied the delay had anything to do with WorkChoices. She acknowledged that this explanation differed to what was said by Mr Fisher in the proceedings on 5 December 2005. 18 Ms Chapple explained that the Company had been experiencing low productivity. However, she agreed that this had been a general statement, and she could not be more specific Operational inefficiencies had also arisen when the two sites merged. There had been timeframes not met and the loss of at least one large customer. There had also been client complaints with faults and defects. 19 Ms Chapple was referred to another two disputes before Connor, C (Matters IRC05/6294 and IRC05/6296 - Notifications of disputes under s 130 between Recorded Media Industry Union of New South Wales and Summit Technology Pty Ltd) involving the applicant's use of a labour hire company. She understood that this dispute had been resolved when the applicant ceased using the particular company. She said her client did not condone a labour hire company not complying with the award. Ms Chapple was not aware of the labour hire company simply changing its name, and still being engaged by the applicant. 20 Ms Chapple deposed that it was the cost of the Union's claim and how it would effect the applicant's viability which would take some time to assess. This could be done by the end of May. However, Ms Chapple said she was not aware if the applicant had provided the relevant information to the Union. 21 Ms Chapple denied at several points in her oral evidence that the applicant had deliberately delayed entering into negotiations with the Union as it was wanting to take advantage of WorkChoices. 22 Ms Chapple agreed the applicant had refused the Union's more recent request to pay the $20 State Wage Case 2006 increase and had also refused to agree to a s 146A Referral Agreement under the State Act. Ms Chapple said that if no agreement could be reached with the Union then an approach could be made to the Australian Industrial Relations Commission. This in fact, had been done. However, when asked if it was the intention of the applicant not to have the matter determined, Ms Chapple answered "I agree they do not want the matter to be determined by the (sic) third party." 23 In re-examination, Ms Chapple said that the intention of the Federal legislation was to have a third party mediate disputes through the Australian Industrial Relations Commission. The Union had not responded to this approach. 24 Ms Chapple emphasised that the reasons for the delay in negotiating an enterprise agreement were twofold: firstly, operational dislocation with the merger and secondly, a substantial financial loss in 2005, after tax of $4 million. She added that in the first half of 2006, the applicant had not traded profitably. WorkChoices Legislation 25 In order to understand the submissions of the parties, I outline now those relevant sections of the WorkChoices legislation relied upon in support of their respective positions. Section 16 of the legislation is expressed as follows: [s 16] Act excludes some State and Territory laws (1) This Act is intended to apply to the exclusion of all the following laws of a State or Territory so far as they would otherwise apply in relation to an employee or employer: (a) a State or Territory industrial law; (b) a law that applies to employment generally and deals with leave other than long service leave; (c) a law providing for a court or tribunal constituted by a law of the State or Territory to make an order in relation to equal remuneration for work of equal value (as defined in section 623); (d) a law providing for the variation or setting aside of rights and obligations arising under a contract of employment, or another arrangement for employment, that a court or tribunal finds is unfair; (e) a law that entitles a representative of a trade union to enter premises. Note: Subsection 4(1) defines applies to employment generally. (2) State and Territory laws that are not excluded However, subsection (1) does not apply to a law of a State or Territory so far as: (a) the law deals with the prevention of discrimination, the promotion of EEO or both, and is neither a State or Territory industrial law nor contained in such a law; or (b) the law is prescribed by the regulations as a law to which subsection (1) does not apply; or (c) the law deals with any of the matters (the non-excluded matters ) described in subsection (3). (3) The non-excluded matters are as follows: (a) superannuation; (b) workers compensation; (c) occupational health and safety (including entry of a representative of a trade union to premises for a purpose connected with occupational health and safety); (d) matters relating to outworkers (including entry of a representative of a trade union to premises for a purpose connected with outworkers; (e) child labour; (f) long service leave; (g) the observance of a public holiday, except the rate of payment of an employee for the public holiday; (h) the method of payment of wages or salaries; (i) the frequency of payment of wages or salaries; (j) deductions from wages or salaries; (k) industrial action (within the ordinary meaning of the expression) affecting essential services; (l) attendance for service on a jury; (m) regulation of any of the following: (i) association of employees; (ii) associations of employers; (iii) members of associations of employees or of associations of employers. Note: Part 15 (Right of entry) sets prerequisites for a trade union representative to enter certain premises under a right given by a prescribed lase of a State or Territory. The prerequisites apply even though the law deals with such entry for a purpose connected with occupational health and safety and paragraph (2)(c) says this Act is not to apply to the exclusion of a law dealing with that. (4) This Act excludes prescribed State and Territory laws This Act is intended to apply to the exclusion of a law of a State or Territory that is prescribed by the regulations of the purposes of this subsection. (5) To avoid doubt, subsection (4) has effect even if the law is covered by subsection (2) (so that subsection (1) does not apply to the law). This subsection does not limit subsection (4). (6) Definition In this section: this Act includes the Registration and Accountability of Organisations Schedule and regulations made under it. 26 The exclusions to the operation of s 16(1) are found in Division 2, Chapter 2, Regulation 1.2 of the Workplace Relations Regulations 2006: 1.2 State and Territory laws that are not excluded by the Act - general (1) For paragraph 16(2)(b) of the Act, subsection 16(1) of the Act does not apply to a law of a State or Territory of a kind that is mentioned in this regulation. Note Under subsection 16(1) of the Act, the Act is intended to apply to the exclusion of specified laws of a State or Territory so far as they would otherwise apply in relation to an employee or employer. The subsection lists the kinds of laws that are excluded. However, subsection 16(1) does not apply to a law of a State or Territory so far as the law is prescribed by the regulations as a law to which the subsection does not apply. (2) Rights and obligations - general Subsection 16(1) does not apply to law of a State or Territory (including a law relating to appeals) to the extent to which it relates to compliance with an obligation: (a) under (i) that law; or (ii) another law of a State or Territory; which would otherwise be excluded by subsection 16(1) of the Act; and (b) in respect of an act or omission which occurred prior to the reform commencement. Subclauses 3, 4, 5, and 6 are not relevant here. 27 The effect and operation of what was described by Mr Fisher as "the exclusion to the exclusion" subregulation 1.2(2), is referred to in the Explanatory Statement to WorkChoices at paras 17 and 18: 17. Subregulation 1.2(2) will apply to compliance with obligations, and the enforcement of accrued rights, which exist at the reform commencement under, for example, State and Territory industrial laws and instruments made under such laws. For example, if an employer failed to pay an employee in accordance with a State award prior to the reform commencement, then the employee may bring proceedings under the relevant State or Territory law to enforce the employer's award obligation. This is consistent with the approach taken (for repeals of Commonwealth laws) in paragraph 8(c) of the Acts Interpretation Act 1901 in relation to rights, privileges, obligations or liabilities which were acquired, accrued or incurred under a repealed Act before the Act was repealed. 18. To the extent that a State or Territory law is within the scope of subsection 16(1), and is not prescribed under this regulation otherwise saved by subsections 16(2) and 16(3), the State or Territory law will be excluded in relation to an employee or employer within the meaning of subsection 5(1) or 6(1). The effect of this is that, for example, the State and Territory industrial laws will cease to apply in relation to an employee or employer within the meaning of subsection 5(1) or 6(1) for the following kinds of matters: · matters about state awards (other that compliance with award obligations before the reform commencement), including the making or variation of an award; · matters about wages (other than compliance with wage obligations before the reform commencement), including application to vary awards to amend wages provisions, State wage cases, and applications for general orders to apply to a State or industry in a State, relating to wages; · matters about agreements between employers and employees, and employers and unions (other that compliance with agreement obligations before the reform commencement), including certification, registration and variation; · matters involving workplace dispute resolutions; · matters about industrial action, including strike pay (other than compliance with award obligations before the reform commencement) - except for industrial action affecting essential services (which is a non-excluded matter under paragraph 16(3)(k)); · matters about terminations of employment that occur after the reform commencement; · matters where proceedings have not yet commenced at the reform commencement, where the applicant seeks the variation or setting aside of rights and obligations under a contract of employment, or another arrangement for employment, that a court or tribunal finds is unfair; and · matters about a transmission, succession or assignment of a business, or part of a business, that occurs after the reform commencement. 28 s 8(c) of the Acts Interpretation Act states: Where an Act repeals in the whole or in part a former Act, then unless the contrary intention appears the repeal shall not: ................ (c) affect any right privilege obligation or liability acquired accrued or incurred under any Act so repealed. SUBMISSIONS For the applicant 29 At the commencement of proceedings, Mr Fisher raised whether the applicant's notice of motion brings into play s 78B of the Judiciary Act 1903 such as to place an obligation on the court to be satisfied that the Commonwealth and State Attorneys-General have been notified of the proceedings and given an opportunity to intervene. Mr Fisher said that the applicant had no concluded view about the matter, but in the event the Commission believed it appropriate, the proceedings need not be delayed. However, the matter might not be determined until s 78B of the Judiciary Act has been satisfied. 30 Mr Fisher's submissions on the effect and operation of WorkChoices are summarised in his outline of contentions: 5. The Company argues that as a result of the commencement of the Workplace Relations Amendment (WorkChoices) Act 2005 (Cth) (" WorkChoices "), the Commission does not have the jurisdiction to resolve the dispute. 6. WorkChoices had the effect of amending the Workplace Relations Act 1996 (Cth) (" WR Act "). 7. We submit that as a result of WorkChoices, the WR Act overrides most of New South Wales' industrial laws to the extent to which such laws would otherwise apply to an employer who falls within the definition of employer under section 6 of the WR Act. 8. The definition of employer at section 6 of the WR Act relevantly states: "(1) In this Act, unless the contrary intention appears: employer means: (a) a constitutional corporation so far as it employs, or usually employs, an individual" 9. The Company is a constitutional corporation within the meaning of section 6 of the WR Act. 10. Section 16(1) of the WR Act commenced operation on 27 March 2006. Section 16(1) clearly states that the WR Act is intended to apply to the exclusion of certain laws of a State or Territory so far as they would otherwise apply in relation to an employee or employer. 11. State and Territory laws which are excluded by section 16(1) of the WR Act (" Excluded Laws ") include: (a) a State or Territory industrial law; and (b) a law that applies to employment generally and deals with leave other than long service leave 12. A State or Territory industrial law is relevantly defined at section 4(1) of the WR Act to include: (a) the Industrial Relations Act 1996 of New South Wales; and (b) an " instrument " made under the IR Act, " so far as the instrument is of a legislative character"; 13. Under section 16(2) of the WR Act, there are a number of State laws, to which 16(1) does not apply. In other words, section 16(2) prescribes certain State laws, which are exempt from being an Excluded Law (" Laws Exempt from being Excluded Law "). Laws Exempt from being Excluded Law include certain States laws so far as: (a) the State law deals with the prevention of discrimination, the promotion of EEO or both, and is neither a State or Territory industrial law nor contained in such a law; (b) the State law is prescribed by the Regulations; or (c) the State law deals with any of non-excluded matters described in subsection 16(3) of the Act. 14. We submit that the IR Act is an Excluded Law for the purposes of section 16(1) of the WR Act ( Wenn v A-G (Vic) 1948 77 CLR 84 ). 15. The Company argues that as a result of the commencement of WorkChoices, the Commission lacks the jurisdiction and any order or award purported to be made by the Commission will not be enforceable against the Company or the Employees to whom the dispute relates (" the Employees "). It is therefore an act of futility for the matter to proceed. 16. The company contends that the employment of the Employees is regulated by a Notional Agreement Preserving State Awards (" NAPSA ") which came into force on 27 March 2006. The Recorded Music and Visual Entertainment Reproduction (State) Award (" the former Award ") as of 27 March 2006 does not apply to the Employees. The Union acknowledges the operation of NAPSAs and the effect that a NAPSA has on the employment regulation of their members in their application for Transitional Registration of a State Registered Association under schedule 10, clause 2 of the WR Act. 17. The Company contends that any disputes must be dealt with in accordance with the model dispute resolution process in the WR Act. The Company supports this contention by reference to Schedule 8 Part 3 Division 1 subdivision C of the WR Act which at Clause 36 Dispute Resolution Process identifies that a NAPSA is taken to include a term requiring disputes about the application of the agreement to be resolved in accordance with the model dispute resolution process. Clause 36(2) provides that any term of the NAPSA that would otherwise deal with the resolution is void to that extent. Clause 35(1) states that if a NAPSA confers a function or power on a State industrial authority, that function must not be performed and that power must not be exercised by the State industrial authority on or after the reform commencement. 31 In oral submissions, Mr Fisher dealt extensively with the authorities which have dealt with the question of a Federal statute "covering the field" to the exclusion of a State Act: Wenn v Attorney General (VICT) (1948) 77 CLR 84; Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466; Ex parte: McLean (1930) 43 CLR 472. 32 Mr Fisher foreshadowed that the Union would be relying on the exclusion to s 16(1) of WorkChoices in Regulation 1.2(2). He said this Regulation applied to any accrued rights a party might have prior to the introduction of WorkChoices. An obvious example would be an under payment claim or claims for accrued annual leave or long service leave. He submitted that the Regulation could not possibly apply to the present circumstances. 33 Mr Fisher then dealt with the Explanatory Statement concerning the General Regulation to the Workplace Relations Act and in particular paragraph 18. 34 Mr Fisher referred to a decision of the Western Australian Industrial Relations Commission which had considered the interaction of the exclusions under WorkChoices and the reinstatement rights of an employee under a State award: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union of Workers - Western Australian Branch v BHP Billiton Iron Ore (2006) WAIRC 04716. Mr Fisher understood that this decision had been appealed and, in any event, he submitted that it had been wrongly decided. He said the Commission had wrongly interpreted what matters the Regulation preserved. 35 Mr Fisher submitted that there could only be two matters in this case which may be relevant to an assessment under the Regulation. Firstly, that the applicant had failed to bargain in good faith. This was strongly denied. But even if it was right, it would not give rise to an accrued right as comprehended by Regulation 1.2(2). 36 Mr Fisher developed these arguments by reference to a number of authorities which have dealt with good faith bargaining: Asahi Diamond Industrial Australia Pty Ltd and Automotive, Food, Metals and Engineering Union (1995) 59 IR 358; Australian Meat Industry Employees' Union v G & K O'Connor Pty Ltd (1999) 91 IR 356; New South Wales Teachers' Federation and New South Wales Department of Education and Training (2000) 100 IR 441. For the Union 37 Mr Rudd submitted that the Union had no argument with Mr Fisher's contentions in respect to the general operation of the WorkChoices legislation. However, the difference here concerns the effect of Regulation 1.2(2). He argued that any right or obligation accrued before the commencement of WorkChoices was not extinguished and this applied to the obligation on a party to negotiate in good faith. For a matter to be preserved it must relate to compliance with an obligation and must be in respect to any act or omission which occurred prior to the commencement of WorkChoices. The Union maintained that the applicant had failed to comply with the Commission's direction to bargain in good faith in accordance with s 134(4) of the Act where it had an obligation to do so. 38 Mr Rudd submitted that it was not strictly necessary to establish non compliance with an obligation; merely that the process which might establish an obligation had been initiated - in this case the notification of a dispute. 39 Mr Rudd conceded that the making of a new award in this dispute was "problematic" and, accordingly the application for a new award was not being pressed. However, there are other options available under s 136 in settlement of the dispute, such as a recommendation or direction. 40 Mr Rudd argued that a s 136 arbitration of a dispute, gives effect to a direction under s 134(4) by the issuance of a binding direction. Mr Rudd asserted that there was authority for the proposition that directions are binding on the parties and later cited Connor, C in Australian Workers' Union (Technical, Administrative Professional Staff Branch) v Bluescope Steel (AIS) Pty Limited [2006] NSWIRComm 1080. 41 The Union would be seeking a direction to the effect that the applicant give effect to the recent $20 State Wage Case increase State Wage Case 2006 (2006) 150 IR 393, from 11 November 2006, being the 12 month anniversary of the last award increase by the State Wage Case 2005. To do this the Commission should take further evidence in the arbitration of the dispute. In reply 42 Mr Fisher strongly resisted any suggestion that the applicant had failed to bargain in good faith or that it would not continue to do so. The financial accounts provided by the applicant makes clear the reason why the applicant has resisted the claim. In seeking to negotiate further, the applicant would be seeking to introduce a rewards based system and other productivity benefits in exchange for a cost neutral wage increase. 43 Mr Fisher submitted that it could not be correct that the mere notification of a dispute preserved the jurisdiction of the Commission to make an award. Mr Fisher accepted however, there could be a possibility that the Commission could make a direction or recommendation flowing from a failure to bargain in good faith. However, this was not the case here. Moreover, the applicant has initiated a process to continue the negotiations in the Australian Industrial Relations Commission (AIRC). CONSIDERATION Preliminary Matters 44 At the beginning of his submissions, Mr Fisher alerted the Commission to the possibility that this matter might require the Commission to issue a notice of a constitutional matter under s 78B of the Judiciary Act 1903 (Cth). Section 78B(1) of that Act provides: " Where a cause pending in a federal court including the High Court or in a court of a State or Territory involves a matter arising under the Constitution or involving its interpretation, it is the duty of the court not to proceed in the cause unless and until the court is satisfied that notice of the cause, specifying the nature of the matter has been given to the Attorneys-General of the Commonwealth and of the States, and a reasonable time has elapsed since the giving of the notice for consideration by the Attorneys-General, of the question of intervention in the proceedings or removal of the cause to the High Court." 45 Leaving aside the question of whether the Commission is a court for the purposes of s 78B of the Judiciary Act: See Unions NSW v Carter Holt Harvey Wood Products Australia Pty Ltd (2006) 149 IR 361 at par 9, (about which there must be some doubt), I have formed the view, in light of the issue which ultimately fell for determination, that this matter is not one involving the Constitution or its interpretation. The issue which subsequently emerged for determination was whether the WorkChoices Regulations preserved this s 130 dispute notification in light of the Union's request for the arbitration of the dispute. In these circumstances, no notice under the Judiciary Act is required to be issued. The New South Wales Statutory Framework 46 It is firstly necessary, when considering this notice of motion, to refer to the powers and functions of this Commission under Part 1 Ch 3 of the Act dealing with the conciliation and arbitration of industrial disputes. These provisions were usefully set out in CFMEU v Newcrest Mining (2005) 139 IR 50 at paras 13-20: 13 Section 130 of the Act provides as follows: 130 Notification of industrial dispute to Commission (1) Any of the following may notify the Commission of an industrial dispute for the purpose of resolving the dispute: (a) an industrial organisation of employees or employers, (b) an employer who is or is likely to be affected by the dispute, (c) a person who is or is likely to be the subject of a secondary boycott in connection with the dispute, (d) a State peak council. (2) The Commission may act on its own initiative to resolve an industrial dispute. 14 Section 130 does not provide for the notification of an industrial dispute by a natural person other than in s 130(1)(c). Section 131 of the Act provides that the Commission may refuse to deal with an industrial dispute until it is satisfied that any relevant dispute procedures in an industrial instrument have been followed as far as is practicable in the circumstances. 15 Sections 132 - 134 of the Act provide as follows: 132 Compulsory conference (1) For the purpose of resolving an industrial dispute, the Commission may convene a compulsory conference and require the attendance of any person whose presence the Commission considers would help in the resolution of the dispute. (2) A compulsory conference is to be presided over by a member of the Commission. (3) The Commission may confer with any person on any matter that may affect the resolution of an industrial dispute, without requiring the person to attend a compulsory conference. 133 Conciliation before arbitration The Commission must first attempt to resolve an industrial dispute by conciliation. 134 Conciliation of dispute (1) Commission to assist parties The Commission, when attempting the conciliation of an industrial dispute, is to do everything that seems to be proper to assist the parties to agree on terms for the resolution of the dispute. (2) Recommendations or directions During conciliation proceedings, the Commission may make a recommendation or give a direction to the parties to the industrial dispute. Failure to comply with any such recommendation or direction may not be penalised but may be taken into account by the Commission in exercising its functions under this Act. (3) Conferences The action that may be taken by the Commission to assist the parties includes making arrangements or giving directions for the convening and conduct of conferences of the parties or their representatives (whether or not compulsory conferences and whether or not presided over by a member of the Commission). (4) Good faith bargaining The Commission, when dealing with an industrial dispute, must consider whether the parties have bargained in good faith and, in particular, whether the parties have: (a) attended meetings they have agreed to attend, and (b) complied with agreed or reasonable negotiating procedures, and (c) disclosed relevant information for the purposes of negotiation. The Commission may make recommendations or give directions to the parties to bargain in good faith. 16 It may be seen that a person may be compelled to attend a conference for the purpose of conciliation of an industrial dispute. Conciliation is the primary mechanism for resolving disputes and that is where the emphasis lies, both in terms of the statutory scheme and in practice. The vast majority of disputes notified to the Commission are resolved by conciliation. 17 Sections 135 and 136 deal with the arbitration of an industrial dispute: 135 Arbitration after attempted conciliation (1) The Commission is to deal with an industrial dispute by arbitration only if it is not resolved by conciliation. (2) Arbitration by the Commission is not to proceed until the Commission has issued a certificate that reasonable attempts have been made to resolve the industrial dispute by conciliation (certificate of attempted conciliation). (3) A certificate of attempted conciliation is to be provided to the President of the Commission unless the Commission is constituted by the President. (4) When determining whether to issue a certificate of attempted conciliation, the Commission must consider the effect that any industrial action in connection with the industrial dispute is having on the parties and the public generally. In particular, the Commission must give urgent consideration to the effect of industrial action in connection with a demarcation dispute. (5) A certificate of attempted conciliation may be issued on the Commission's own initiative or on application by any person authorised to notify the Commission of the industrial dispute. (6) The Commission must, without delay, issue a certificate of attempted conciliation on the application of any such person if the person satisfies the Commission that there is no reasonable likelihood that the dispute will be resolved by conciliation. (7) The Commission must, without delay, issue a certificate of attempted conciliation if the Commission decides that industrial action or duress necessitates the exercise of its arbitral powers. (8) The parties to the proceedings are to be provided with a copy of any certificate of attempted conciliation. (9) Nothing in this Act prevents the exercise of conciliation powers merely because arbitration powers have been exercised under this Act. 136 Arbitration of dispute (1) The Commission may, in arbitration proceedings, do any one or more of the following: (a) make a recommendation or give a direction to the parties to the industrial dispute, (b) make or vary an award under Part 1 of Chapter 2, (c) make a dispute order under Part 2, (d) make any other kind of order it is authorised to make (including an order made on an interim basis). (2) Any such action may be taken by the Commission on its own initiative or on application by any person authorised to notify the Commission of the industrial dispute. 18 The scheme of the arbitration provisions is that if conciliation is unsuccessful the Member of the Commission dealing with the dispute may on his or her own initiative or on the application of any person authorised to notify the Commission of an industrial dispute, issue a certificate of attempted conciliation. Section 135(4) requires certain matters to be considered before the issuing of the certificate. The certificate may only be issued if the Commission is satisfied that there is no reasonable likelihood that the dispute will be resolved by conciliation. 19 The Commission will not lightly issue certificates of attempted conciliation because they signal a failure of the primary dispute settling mechanism under the Act. Such certificates may also be the gateway to sanctions under the Act if the industrial dispute is accompanied by industrial action and a dispute order is later made. Before a certificate is issued the relevant party must be given an opportunity to be heard as to whether a s 134(2) direction should be taken into account: New South Wales Teachers Federation v NSW Department of Education and Training (2000) 100 IR 441 at [15]. 20 Conciliation (or more aptly its failure) is, therefore, the jurisdictional prerequisite to the exercise of any powers by the Commission in arbitral proceedings (under s 136(1) of the IR Act). 47 In my opinion, the above passage conclusively demonstrates the connection between conciliation, and in the event of its failure, the arbitration of an industrial dispute. This connection is further illustrated by reference to the relevant object of the Act at s 3(g): "to provide for the resolution of industrial disputes by conciliation and, if necessary, by arbitration in a prompt and fair manner and with a minimum of legal technicality." 48 The fact that a failure to comply with a direction or recommendation may be taken into account by the Commission in exercising its other functions under the Act, (s 134(2)), makes obvious that these provisions are ancillary to the Commission's arbitration powers under s 136. The nexus between the two sections could not, therefore, be more abundantly clear. Of course, a failure to negotiate in good faith is not, of itself, a trigger for a s 135 certificate. The Commission must merely be satisfied that all reasonable steps, including good faith bargaining have been taken and the dispute cannot be resolved by conciliation. 49 At the risk of stating the obvious, the primacy given to the conciliation and arbitration of industrial disputes by industrial tribunals has been the fundamental cornerstone of industrial jurisprudence in Australia for over 100 years. The fact that the emphasis on this objective is seemingly no longer an imperative, or at all, under Federal legislation, does not diminish or undermine, in any fashion, the central focus conciliation and arbitration has, and continues to have, in the New South Wales jurisdiction. 50 Having said that, it seems obvious to me that the entire scheme and policy intent of Pt 1 Ch 3 of the Act is to provide an orderly and structured code for the conciliation and, if necessary, the arbitration of industrial disputes; arbitration being the final stage in the process. That must include the process which was originally envisaged in this case being commenced by way of a s 130 notification, progressed through conciliation and directions under s 134, the failure of the conciliation, the issuance of a s 135(2) certificate of attempted conciliation, and the arbitration of the dispute under s 136, in its various guises. 51 When viewed in this light, it seems to me that if all of the steps leading from the notification of a dispute to the signing of a certificate of attempted conciliation have been complied with, a party to an industrial dispute is entitled, as a right, to press for the finality of the proceedings, including by the making of an award under s 136(1)(b). This must be obviously so, if it is accepted that the s 135 certificate ends the conciliation phase of a dispute and commences the arbitration phase. See: Commissioner of Police v Police Association of New South Wales (2005) 141 IR 423 at 29; Sydney Water Corporation v Australian Services Union (NSW and ACT) Branch (2005) 146 IR 388 at 20. 52 It is to be noted also that dispute proceedings cannot be terminated except by the filing of a notice of discontinuance signed by all parties under Pt 19 of the Commission's Rules, or unless the Commission so orders. 53 As the hearing progressed Mr Rudd did not press for an award in settlement of these proceedings, describing such an outcome as "problematic". I well understand Mr Rudd's caution, but having regard for the particular facts and circumstances of this dispute, with particular attention to Regulation 1.2(2) of WorkChoices, I must, with respect, disagree. I will return to the effect of the Regulation shortly. 54 Even if I be wrong about the Commission's jurisdiction to make an award in settlement of this dispute, I do not think it could seriously be doubted that the Commission has the power to make a recommendation or direction in settlement of the dispute under s 136(1)(a). That being so, the question arises, of course, of the utility of such a direction or recommendation. Would a direction, for example, be enforceable in the same way as an Award? 55 Mr Rudd submitted that a direction of the Commission under s 136(1)(a) is final and binding on the parties. He alluded to, and later provided authority, for that proposition in Australian Workers' Union (Technical, Administrative Professional Staff Branch) v BlueScope Steel (AIS) Pty Limited .[2006] NSWIRComm 1080, where I presume the following comment of Connor, C at paras 34 and 35 was apposite: 34 In the unreported decision of the Full Bench of the Commission (Wright J - President, Walton J - Vice President and Connor C) in the Teacher's Case [Matter No. IRC 6326 of 1999] interlocutory directions were made at first instance under S.134(2), ie in the conciliation phase of an industrial dispute (and consequently ahead of the issuing of the S.135 certificate of attempted conciliation). Those directions nevertheless grounded an appeal, with respect to which leave was not granted. By contrast, in Construction, Forestry, Mining and Energy Union v. Newcrest Mining Limited (2005) 139 IR 50 at p.65 the Full Bench of the Commission (Walton J - Vice President, Boland and Staff JJ) observed that a recommendation (and by implication, a direction) made under S.134(2) was neither an award, part of an award, nor a binding instrument, ie it was no more than a part of the processes of conciliation. 35 But, in any event, this matter falls under S.136(1) and not S.134(2), ie in the arbitration phase of the dispute. The upshot of that position, to my mind, is that any decision taking the form of a direction that I make on a matter before me after I have issued a S.135 certificate of attempted conciliation and entered the arbitral phase of a dispute, is a final determination of the issue in dispute and, subject to a right of appeal, binding on the parties to the dispute. 56 Although directions of the Commission have been the subject of appeal in the past, I am unclear whether the question of their finality or binding effect has been determined at Full Bench level. Nevertheless, and notwithstanding the attraction of Connor, C's opinion, the fact remains that there is no power, either expressed or implied, to be found in the Act to enforce a direction under s 136(1)(a) - a position distinguishable from enforceability of an award or the possibility of penalty under s 139 for the contravention of a dispute order under s 137. 57 However, on the state of the material before me, I do not feel disposed to opin a concluded view on this question. Moreover, the case required to be met by Mr Fisher was not sufficiently developed at this stage, for him to put a considered submission on the point. 58 That being said, it must be observed that there is a fundamental and time honoured tradition in this Commission which requires parties to accept recommendations and directions of the Commission. I expect, and would accept no less, from any party appearing before me. A failure to do so has its consequences, including ultimately a test of whether a recalcitrant party should continue to enjoy the benefits of access to the Commission or registration under the Act; both of which confer certain obligations on parties, including a moral dimension to the obligation to accept the decision of the independent umpire. This must particularly apply after a proper evidentiary case has been made out, and the Commission decides to make a direction in accordance with s 136(1)(a) of the Act. Such a case however, is yet to be run. Does Regulation 1.2(2) apply to the facts and circumstances of this dispute? 59 The essential issue to be determined in this case is the meaning and effect of Regulation 1.2(2) of the WorkChoices legislation in the context of the particular facts and circumstances of this case. 60 Mr Rudd argued that as this dispute had been lodged prior to the commencement of WorkChoices (thereby otherwise complying with the second leg of the Regulation), the rights and liabilities of the parties are preserved until the final determination of the dispute by way of a direction under s 136(1)(a) of the Act. 61 Unsurprisingly, Mr Fisher strongly resisted this interpretation of the Regulation describing Mr Rudd's contention as "drawing a very long bow". Nevertheless, he conceded, that the only right which might arise would be if a party failed to comply with the Commission's directions to bargain in good faith under s 134(4). Nevertheless, he maintained that there had been no failure here by the applicant to negotiate in good faith. Notwithstanding Mr Fisher's vigorous defence of the applicant's position, I cannot agree. This is so because I regard the act or omission which preserves the ongoing jurisdiction of the Commission in this matter under the Regulation, to be the failure of the applicant to comply with my directions on 5 December, 2005 to negotiate in good faith with the Union. This was well before the commencement of WorkChoices on 27 March, 2006. I shall return to the substance of this failure shortly. 62 In my opinion, this failure entitles the Union to rely on the next step in the process contemplated by Pt 1 Ch 3; that is to seek a remedy in settlement of the dispute. This right is further enshrined, to my mind, by the fact that the trigger for the arbitration, a s 135 certificate of attempted conciliation was signed on 6 March 2006, prior to the commencement of WorkChoices. That trigger moved the dispute out of the conciliation phase and into the arbitral phase (see earlier par 51). Thus, the Union had a preserved right to proceed to invoke the Commission's arbitral powers under s 136. If it is accepted that the Union has a right accrued before the commencement of WorkChoices then the explanation of how the Regulation is to be applied, as outlined in par 17 of the Explanatory Memorandum, is helpful. 63 In so finding, I have not been unmindful of the High Court's judgment in Attorney General for the State of Queensland v Australian Industrial Relations Commission and others (2002) 213 CLR 485 and, in particular, the conclusion of the Court as to whether accrued rights (for the purposes of s 8 of the Acts Interpretation Act) apply in the conciliation and arbitration of disputes under the former Industrial Relations Act 1988 subsequently replaced by the Workplace Relations Act 1996. (See paras 39 - 50). 64 Lest it be thought that my findings are contrary to the determination of the High Court, I am comfortably satisfied that the differences in legislative regimes and the particular facts and circumstances in this case, are sufficiently different to distinguish this case from the judgment of Attorney General for the State of Queensland v Australian Industrial Relations Commission and others. I apprehend no conflict with my findings as to the Union's preserved right to proceed to have the Commission arbitrate this dispute and the High Court's determination. 65 While the applicant may have some valid basis for arguing financial difficulty and the dislocation caused by the merger of its two sites as reasons for its stance in not wanting to negotiate an agreement with the Union, I have absolutely no doubt that the real and effective reason for its attitude was to delay the negotiations and this Commission's determination of the dispute until the commencement of WorkChoices. This regrettable conclusion is amply demonstrated by the history of the dispute and the applicant's stated public position as expressed on many occasions. I intend to elaborate. 66 The Commission accepts unreservedly that negotiating in good faith does not mean that a party must accept any, or all of the claims of the other party; nor does it mean that offers and counter offers need to be demonstrated if a conclusion of good faith bargaining is to be sustained. A party is perfectly entitled to take a hardline to negotiations, including refusing to accept a claim in its entirety. In this regard, I concur with the comments of Hancock, SDP in Australian Rail, Tram and Bus Industry Union, Australian Industrial Relations Commission, Print L5622, 30 September 1994: "...bargaining in good faith does not require a willingness to make concessions. It is consistent with adopting "a hard line". Equally, it does not imply moderation of demands. It does imply a preparedness to consider seriously offers and proposals made by the other side and to take account of arguments: but if, having done these things, a bargaining party is unmoved, it may still be bargaining in good faith. The inability of parties to reach an agreement is not evidence that either is acting in bad faith. The adoption of a hard line or the making of extravagant demands may evince an underlying intention of obstructing agreement. This tactic would constitute bad faith, but in few cases, if any, could its existence be inferred from the bargaining stance alone." 67 However, in my opinion, the applicant's attitude in this matter was a long way short of the category of adopting "a hardline". Rather, it was designed to deliberately frustrate the negotiating process and avoid this Commission from taking steps to resolve the dispute. The evidence unashamedly leads to no other conclusion. For example: 1. The applicant took three months to first respond to the Union's log of claims of October 2005. Even if there was some justification to a submission of this being a busy period of the year which prevented it from responding sooner, such a delay was an inexcusable and unreasonable failure to, at least, demonstrate courtesy to the Union acting on behalf of the employees. Was it any wonder that the employees response was to take industrial action? 2. On 5 December, 2005 Mr Fisher stated only two reasons for not wanting to negotiate agreement with the Union: uncertainty as to the effect of pending Federal legislation and the busy peak production period. 3. On every occasion since that time when asked to explain through correspondence and during these proceedings, the reasons for not wanting to negotiate an agreement with the Union, one of the reasons always cited was the pending or actual effect of WorkChoices . 4. When meeting the Union on 17 February 2006, Mr Kong Chee Min said that it would take three months to cost and respond to the Union's claim. In my view, this excuse was patent nonsense, inexcusable and unacceptable. There was no sensible explanation why it would take three months to do so. The real reason was again spelt out by Ms Chapple when the proceedings were re-listed on 2 March, 2006 and 15 March, 2006. At these later proceedings, she said on record: CHAPPLE: Your Honour, I would like to make some comments in relation to the proposed commencement of the Federal Government WorkChoice legislation to amend the Workplace Relations Act 1996 that the parties will need to consider there is a great deal of uncertainty as to what the legislation will mean, especially in relation to proceedings at least until such time as the legislation is released. My client hasn't formally concluded its view about the effect of WorkChoice on the employees. I thought I might mention it here today. 5. Despite giving an undertaking to respond in May, the applicant has still not done so. This gives rise to genuine doubt as to the applicant's bona fides as to the undertakings it has given. 6. The applicant resisted the certificate of attempted conciliation being issued and refused to accept a s 146A Referral Agreement to have this Commission determine the matter. 7. The applicant's real intention of not wanting to negotiate an agreement or have this Commission determine the dispute was amply exposed by its later tactic of filing a notice of dispute in the AIRC. If this notice was designed to demonstrate its willingness to negotiate, bona fide, with the Union, then I am far from impressed. The applicant knows full well the AIRC has no powers to arbitrate the dispute. Ms Chappell's candid response in cross examination was most enlightening. This evidence revealed the applicant will not, under any circumstances, agree to any process which binds it to an outcome. She said " I agree they do not want the matter to be determined by the (sic) third party ." 68 In my opinion, the above recitation makes it abundantly clear that from October last year, the applicant has set about on a course of delay, obfuscation and misrepresentation which, on any view, amounts to a failure to bargain in good faith, contrary to my directions and the provisions of s 134 of the Act. This constitutes a failure to comply with an obligation as contemplated by the exclusion to s 16(1) of the WorkChoices Regulation. 69 That being so, I would conclude that Regulation 1.2(2) of WorkChoices applies in this matter such as to exclude the operation of s 16(1) of the WorkChoices legislation. Accordingly, the Commission has jurisdiction to continue these proceedings by means of arbitration, pursuant to s 136 of the Industrial Relations Act 1996. The notice of motion filed by the applicant must, therefore be dismissed. The matter will be listed for further programming and directions on Wednesday 4 October 2006 at 9:30am. Peter J Sams, AM 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.