Industrial Relations Commission New South Wales Medium Neutral Citation: New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union and Liverpool City Council [2014] NSWIRComm 17 Hearing dates: 20 March 2014 Decision date: 07 April 2014 Jurisdiction: Industrial Relations Commission Before: Walton J, President; Stanton C; Newall C Decision: The Full Bench makes the following orders: (1) Leave to appeal is granted to the extent required to address the interpretation of cl 28 of the Award on appeal. Leave to appeal is otherwise refused. (2) The appeal is upheld to the extent that the interpretation of cl 28 is corrected, as we set out above. The appeal is otherwise dismissed. Catchwords: APPEAL - application for leave to appeal and appeal - asserted errors in award interpretation - asserted errors of fact - law and practice concerning leave to appeal - principles of award interpretation - principles of interpretation correctly stated - error in one aspect of interpretation of Award - leave to appeal granted in part - appeal upheld in part - no consequential relief ordered - appropriateness of provision of declaratory relief when no consequential orders are made - orders made. Legislation Cited: Industrial Relations Act 1996 s 187, s 188 Cases Cited: A v Commissioner for Children and Young People (2001) 107 IR 211 Austin v NF Importers Pty Limited [2005] NSWIRComm 353 Box Valley Pty Ltd v Price (2000) 97 IR 484 Certain Lloyd's Underwriters and Underwriters Subscribing to Contract No IHOOAAQS v Cross (2012) 293 ALR 412; [2012] HCA 56 Commissioner of Police v Dobbie (2006) 157 IR 44 Croft v Roads and Maritime Services [2012] NSWIRComm 102 Director of Public Employment (by her agent the Commissioner of NSW Fire Brigades) and New South Wales Fire Brigades Employees' Union [2008] NSWIRComm 158; (2008) 180 IR 170 Health and Research Employees' Association of NSW v Baptist Community Services (2002) 122 IR 178 Hosemans v Commissioner of Police (No 4) (2005) 150 IR 263 Kucks v CSR Limited (1996) 66 IR 182 at 184 Marmara v Toyota Motor Corporation Australia Ltd [2013] FCA 1351 Zoological Parks Board v AWU (2004) 135 IR 56 at [17] Category: Principal judgment Parties: New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union (Appellant) Liverpool City Council (Respondent) Representation: B G Docking of counsel (Appellant) A T Britt of counsel (Respondent) New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union (Appellant) Local Government and Shires Association of New South Wales (Respondent) File Number(s): IRC 918 of 2013 DECISION Overview 1This is an application for leave to appeal and, if leave is granted, to appeal from a decision of Tabbaa C in United Services Union and Liverpool City Council [2013] NSWIRComm 1021 ('the decision'). 2The decision was handed down on 24 October 2013. The present application was made within the time prescribed by s 189 of the Industrial Relations Act 1996 ('the Act'). 3The decision was given in the context of the arbitration of an industrial dispute notified pursuant to s 130 of the Act by the appellant Union. 4The dispute was said by the notifier to concern alleged breaches of cls 28, 35 and 36 of the Local Government (State) Award 2010 ('the Award') by the respondent arising from the respondent's decision to contract out certain work, including litter removal and picking up animal carcasses. 5Specifically, the appellant identified the question raised by the appeal as being the correct interpretation and application of cls 28, 35 and 36 of the Award. 6Without setting it out at length here, the relief actually sought by the appellant at first instance was a range of findings of fact together with what was, in effect, a declaration (based on an application of those facts to the terms of the Award), that the respondent had contravened the Award. 7However, at the conclusion of the proceedings at first instance, the parties submitted, by consent, that the Commission should make findings of fact regarding the matters in dispute and make findings regarding the interpretation of cls 28, 35 and 36 of the Award. It was submitted that the appropriate form of relief, if any, could then be considered in further proceedings before the Commission. The Commissioner indicated that she would adopt that approach. 8We observe that the adoption of a piecemeal or partial approach to determining arbitrated matters, even at the urging of the parties by consent as was the case here, is a course which has a real potential to expose a decisionmaker to error, as it necessarily involves considering a part of a matter removed from its whole context. The decision 9The decision followed what appears to the Members of the Full Bench to be an entirely orthodox approach of interpreting each of the three clauses of the Award identified by the appellant as being contentious and applying the facts disclosed by the evidence to the Award provisions so construed. 10Having undertaken that process in relation to each of the three clauses of the Award, the Commissioner came to the following conclusions: (1)As to cl 36 of the Award, the Commissioner held, at [24]: Because of the poor drafting, the purpose of cl 36 is obscured. In my opinion, however, the purpose is to provide the opportunity for in-house providers of Council services, including employees, to compete with external providers where the Council decides to put out a service performed by employees to competitive tender. Prior to Council making a decision to put out a service to competitive tender, a Council is required to notify and consult with the relevant union that has members likely to be affected by the decision. Clause 36(iii) then requires further notification and consultation if the Council makes a definite decision to competitively tender a service. (2)Having analysed the evidence, the Commissioner then held, at [29]: There is no evidence in this case that an in-house service unit even existed within the Council, let alone that Council instructed its in-house service unit to put in a bid for litter/dead animal collection. There was no evidence of any in-house bid having been made that would give rise to a competitive tender within the meaning of cl 36. Accordingly, in the absence of competitive tendering as defined in cl 36 of the Award, there was no obligation on the Council to notify and consult with unions and/or employees. (3)Further addressing cl 36, the Commissioner went on to hold, at [34]: If I am wrong about the discretion lying with Council as to whether an in-house bid will be made, cl 36 requires that the competitive tender must be "service(s) that are currently being performed by council employees". (4)Having further analysed the evidence the Commissioner held as follows, at [48] to [50]: 48 The work performed by Council employees was not an all-embracing, systematic, regular service of litter/dead animal collection that was required to address every road, etc, in the Western Area so that the objective was that road, etc, was to be cleaned every two weeks. Granted, there were some areas that were addressed on a regular, programmed basis, but clearly that was limited and unsatisfactory. 49 The service to be contracted out required additional plant, and equipment and labour in order for it to be performed. The nature and quality of the service that the Council contracted out was materially different to the work performed by Council employees. 50 Accordingly, the pre-condition in cl 36 that the service of litter, etc., collection was one performed by Council employees was not satisfied. (5)The Commissioner then turned to cl 35 of the Award. She relevantly held, at [51] to [54]: 51 Clause 35 of the Award provides that where a Council has made a definite decision to introduce "major changes" in production, program, organisation structure or technology that are likely to have "significant effects" on employees, the Council shall notify the employees who may be affected by the proposed changes and the unions to which they belong. "Significant effects" is defined to include: [T]ermination of employment, major changes in the composition, operation or size of the council's workforce or in the skills required, the elimination or diminution of job opportunities, promotion opportunities or job tenure, the alteration of hours of work, the need for retraining or transfer of employees to other work or locations and the restructuring of jobs. Provided that where the Award makes provision for the alteration of any of the matters referred to herein an alteration shall be deemed not to have significant effect. 52 The issue is whether the contracting out of litter/dead animal collection in the Western Area was a major change in program and/or organisation that had significant effects on employees. 53 The contracting out certainly involved change to program and/or organisation. However, as the Respondent submitted, the contracting out only affected Mr Musso and Mr Papagna. Yet both employees remain employed by Council. Moreover, both employees continue to work on a litter crew albeit in a smaller region than previously was the case. They continue to drive the same vehicle and still perform some litter functions over the whole Western Area on an as required basis collecting dead animals and picking up larger rubbish. They both work out of the same depot with the same fellow employees and same coordinators. 54 One could not describe the contracting out as a major change having significant effects on employees. (6)The Commissioner then turned to cl 28 and held, as follows, at [56]: The Respondent is correct in its submission that there is no obligation on the Council to refer any matter to the Consultative Committee under cl 28 of the Award. Clause 28(C)(i) provides a list of matters that are referred to as the "functions" of the Consultative Committee. It is debatable whether cl 28(c)(i)(c) or (d) applies, although I think it would be putting it too highly to regard the contracting out of litter etc., collection as "organisation restructure" or "job redesign" given the very limited impact on employees of the changes. (7)Having made those findings the Commissioner, following the approach the parties consensually asked the Commission to adopt, indicated as follows, at [58]: It should be obvious from the terms of my decision that I would not grant the relief sought by the USU. Nevertheless, in accordance with the understanding I earlier set out, I will refrain for the time being from making orders. Principles on leave to appeal 11Against that background we turn to the question of leave to appeal. 12The jurisprudence of the Commission concerning leave to appeal is well settled. It is nowhere more clearly set out than in the decision of the Full Bench in Hosemans v Commissioner of Police (No 4) (2005) 150 IR 263 in which it was held, at [5]: The law and practice governing leave to appeal is well settled and does not require restatement: see Knowles v Anglican Church Property Trust (No. 2) (1999) 95 IR 380. However, two principles warrant particular mention: first, leave will not be lightly or automatically granted (see King v State Bank of New South Wales (No 2) (2002) 126 IR 407 at [52]-[55] and Knowles at 381 - 382) and, subject to the requirements of s188 (2) of the Act, will not, generally, be granted unless the appellant demonstrates that the appeal "raises substantial issues of principle or law or has wider implications for the jurisprudence of this Commission, including whether the decision has widespread practical application" (see Knowles at 382) or raises issues going to the proper administration of justice. Secondly, leave will rarely be granted where an appeal primarily seeks to challenge findings of fact which are otherwise reasonably open on the evidence: Box Valley Pty Ltd v Price (2000) 97 IR 484; Austin v NF Importers Pty Limited [2005] NSWIRComm 353 at [5]. Award interpretation 13As we have noted above, the appellant advances that the question raised by the appeal is one of interpretation of clauses of the Award. 14It is conceded by the appellant that the Commissioner identified the correct approach to questions of award interpretation. That concession is properly made, at [16] of the decision, where the Commissioner held as follows: There appeared to be no issue between the parties as to the relevant principles to be applied in approaching the task of award interpretation as the principles are well known and, in that respect, I refer to the decision of Boland J, President in the Household Staff Award at [42]-[43], Director of Public Employment (by her agent the Commissioner of NSW Fire Brigades) and New South Wales Fire Brigades Employees' Union [2008] NSWIRComm 158; (2008) 180 IR 170 at [37] to [46], Re State Rail Authority Firefighters Award 2001 [200] NSWIRComm 159 at [22]-[32] and Zoological Parks Board of New South Wales and The Australian Workers' Union, New South Wales [2004] NSWIRComm 85 at [43]-[47]. 15The High Court has recently and comprehensively restated the principles of statutory construction: Certain Lloyd's Underwriters and Underwriters Subscribing to Contract No IHOOAAQS v Cross [2012] HCA 56; (2012) 293 ALR 412. Nothing there said, however, modifies the principles set out by the Full Bench of this Commission in Director of Public Employment and New South Wales Fire Brigades Employees' Union supra to which the Commissioner refers. 16The Commissioner then went on to elaborate, at [17] to [18] of the decision, correctly in our view, the tests to be applied in interpreting award provisions. 17It is now said on appeal that the Commissioner, while correctly identifying the approach to award interpretation, did not correctly apply that same approach to the construction of the clauses in the Award. Bases advanced for leave to appeal and appeal 18The appellant submitted that there were discrete errors in the Commissioner's application of each of the three clauses of the Award set out above. Clause 28 19As to cl 28, the appellant submitted, first, that the Commissioner was obliged to find that the matters which are characterised as the 'functions' of the Consultative Committee are matters which the respondent was, in fact, bound, pursuant to the Award, to raise with that Committee. Although it is not wholly clear, the Commissioner's reasoning (set out above) suggests that she did not regard the term 'functions' as having that meaning. 20Secondly, the appellant submitted that, on the evidence, the decision to contract out work which had previously been carried out by the respondent's employees necessarily, contrary to the Commissioner's finding, fell within either or both of the terms 'organisation restructure' or 'job redesign' as those terms appear in cl 28(C)(i) of the Award. It followed, it was submitted, that the decision to contract out that work was a matter which properly fell to be canvassed before the Consultative Committee. 21On this point the appellant's submissions are, in our view, correct. On our reading of the Award, the list of matters which are characterised as the 'functions' of the Consultative Committee are matters which, if cl 28(C)(i) of the Award is to have any work to do, an employer is bound to canvass with the Consultative Committee. We point out that it is not entirely clear that the Commissioner decided otherwise. 22However, we are obliged to say that, on our view of the wording of the clause, the decision to contract out work previously performed by the respondent's employees, even if it was previously performed only on an 'as required' basis, was 'organisational change' or 'job redesign' or both. We cannot accept the respondent's submission to the effect that organisational change was only referable to major changes to the structure of the organisation qua organisation. It means, in our view, changes to the way that a respondent to the Award organises its functions. 23That means that this decision was a matter which properly fell within the purview of the Consultative Committee pursuant to cl 28 of the Award. Clause 35 24The appellant argued that the Commissioner was in error in finding that, on the evidence, the decision to contract out the work was not a "major change having significant effects on employees" within the meaning of cl 35 of the Award, and that the Commissioner was therefore wrong to find that the respondent had no obligation to notify employees of its decision pursuant to that clause. 25We do not agree. The Commissioner's interpretation of the clause - that is, that only major and significant matters gave rise to the obligation to notify - was, in our view, correct and her finding that, as a matter of fact, the change only affected one aspect of the work of two employees who continued to be fully employed, is clearly available on the evidence. No error is disclosed. 26Even if another view of those facts were available, so long as the findings of fact made by the Commissioner were available to her on the evidence which, as we say, they were, it is not a ground of successful appeal that the facts might otherwise have been found: Commissioner of Police v Dobbie (2006) 157 IR 44 at [17] and Zoological Parks Board v AWU (2004) 135 IR 56 at [17]. Clause 36 27With respect to cl 36 of the Award, the appellant submitted that the Commissioner fell into error in finding that, as there was no competitive tender process carried out as required under that clause, there was no obligation on the appellant to notify and consult with the appellant or its members. 28That assertion of error in the decision at first instance depended on a construction of cl 36 which involved both reading subcl (i) of cl 36 as a clause itself imposing obligations, and then reading it as a clause to be given effect, in a temporal sense, not at the beginning of any tendering process but near the end of that process. 29This does not reflect the meaning of the clause. 30On a proper reading of cl 36, subcl (i) establishes a number of preconditions to the existence of a 'competitive tender'. If these preconditions are not met, there is no 'competitive tender' within the definition in subcl (i). It is without question, on the evidence, that the preconditions were not met. The Commissioner was correct to hold that there was no competitive tender, and it necessarily followed from that finding that there was no obligation upon the respondent to consult. Accordingly, no error in the decision is disclosed. 31The appellant's objection to what is, in our view, the only properly available reading of the clause, was essentially that such a reading would permit a respondent employer to control whether there was or was not to be a competitive tender, the inference being that such a situation would be, in broad terms, unfair. 32Without expressing a view as to whether that contention is correct or not, the Commission is, in any event, not free in construing an award provision to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has actually been written in the industrial instrument: Kucks v CSR Limited (1996) 66 IR 182 at 184 and Marmara v Toyota Motor Corporation Australia Ltd [2013] FCA 1351 at [21] to [22]. Leave to appeal 33As the Commission has repeatedly held, challenges to findings of fact will face significant hurdles in obtaining leave to appeal: Hosemans v Commissioner for Police (No 4), and cases cited therein, particularly Box Valley Pty Ltd v Price and Austin v NF Importers Pty Ltd; see also Croft and Roads and Maritime Services [2012] NSWIRComm 102. 34As we have noted above, leave to appeal will generally not be granted unless the appellant demonstrates that the appeal raises substantial issues of principle or law or has wider implications for the jurisprudence of this Commission, including whether the decision has widespread practical application. 35It is certainly true, however, as the appellant submitted, that the interpretation of clauses in the Award have, as do the terms of any award of this Commission, an capacity to be of wider interest than simply to the parties. 36In this matter, we have expressed the view that the Commissioner fell into error in her interpretation of the meaning of cl 28 of the Award, as well as the application of the evidentiary facts to that meaning. 37Accordingly, we are disposed to grant leave to appeal in order to permit correction of those errors. We are also disposed to grant leave so as to stress that provisions such as cl 28 should be construed beneficially. Such provisions are an important adjunct to the proper functions of the award system and the achievement of the objections of the Act. They confer valuable rights upon the parties to awards. The grant of leave is, however, confined to the leave necessary to address cl 28. For the reasons which will be apparent from what we have stated above, leave is not granted in respect of the elements of the appeal which go to cls 35 and 36 of the Award. Conclusions on appeal 38Having granted leave to appeal in that aspect of the matter going to the interpretation and application of cl 28 of the Award, we uphold the appeal so far as that clause is concerned, and for the purpose of correcting error with respect to the interpretation and application of cl 28, but not otherwise. 39We now turn to the proper interpretation and application of cl 28 of the Award. 40Properly understood, in our view, the use of the term 'functions' as it appears in cl 28 means those matters which are properly within the purview of the Consultative Committee, and which therefore the respondent is bound to have raised with the Consultative Committee. 41Further, the kind of matters here in question, that is, the contracting out of work previously done or able to be done by employees of a respondent to the Award, would fall within the scope of cl 28, as one or both of 'organisation restructure' or 'job redesign' as those terms appear in cl 28(C)(i) of the Award. Remedy 42It remains to address the remedy to be provided on appeal. 43We have set out what we regard as the proper interpretation of cl 28 of the Award, so far as that was agitated in the appeal. We have done so for the same fundamental reason that leave to appeal was granted, that is, in order that there be a clear statement of the meaning of the Award so far as it may have application to this and other respondents. 44In doing so we have set out what we regard as the appropriate finding of fact to be made on the evidence, given that interpretation. 45However, having upheld the appeal to that extent, it is our view that the appeal is thereby spent. This is a consequence of the conduct of the proceedings below to which we have earlier referred. There is no scope for any further orders to be made by the Commission on appeal. Utility of relief on appeal 46Accordingly, what has emerged on appeal is effectively an order of interpretation, in circumstances where no further orders are to be made. 47So far as that raises any question of the utility of the orders being made, we make the orders essentially so that the Award may be correctly understood by parties bound by it. In any event, it is a proper exercise of the Commission's discretionary powers to make orders of the kind here made even when no other consequential relief could be claimed or is granted: A v Commissioner for Children and Young People (2001) 107 IR 211 at 213 and Health and Research Employees' Association of NSW v Baptist Community Services (2002) 122 IR 178 at 188. Orders 48The Full Bench makes the following orders: (1)Leave to appeal is granted to the extent required to address the interpretation of cl 28 of the Award on appeal. Leave to appeal is otherwise refused. (2)The appeal is upheld to the extent that the interpretation of cl 28 is corrected, as we set out above. The appeal is otherwise dismissed. ********** 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. Decision last updated: 07 April 2014