FEDERAL COURT OF AUSTRALIA

INDUSTRIAL LAW – appeal against decision of primary judge involving interpretation of an “award” – “award” was an order made under s 118A Industrial Relations Act 1988 (Cth) by a Presidential Member of the Australian Industrial Relations Commission – whether period of operation of the order had to be specified – whether the order had continuing legal effect after period specified in the order by operation of s 148 of the Industrial Relations Act 1988 (Cth) – whether that order was “an order affecting an award” for the purposes of s 143 of the Industrial Relations Act 1988 (Cth) – meaning of the term “award” – whether Presidential Member making order had power to limit its period of operation.

Industrial Relations Act 1988 (Cth) s 118A, 143, 144, 145, 146, 147, 148

Workplace Relations Act 1996 (Cth) s 413

Re Queensland Alumina Ltd (1991) 42 IR 304, cited

Waterside Workers Federation v Commonwealth Steamship Owners Association (1920) 28 CLR 209, cited

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION v COMALCO ALUMINIUM LIMITED and AUSTRALIAN WORKERS’ UNION

QG 55 of 1998

COMALCO ALUMINIUM LIMITED v AUSTRALIAN WORKERS’ UNION and CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

QG 56 of 1998

SPENDER, MOORE AND SUNDBERG JJ

15 DECEMBER 1998

BRISBANE

                        On appeal from a judge of the federal Court of Australia

                        On appeal from a judge of the federal Court of Australia

THE COURT ORDERS THAT:

1.                  The appeals be allowed.

2.                  The orders of the primary judge be set aside.

Note:                Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

                        On appeal from a judge of the federal Court of Australia

                        On appeal from a judge of the federal Court of Australia

REASONS FOR JUDGMENT

THE COURT

This is an appeal against a judgment of this Court of 21 May 1998 in an application made pursuant to s 413 of the Workplace Relations Act 1996 (“WR Act”) by Comalco Aluminium Ltd (“Comalco”).  The application arose from proceedings in the Australian Industrial Relations Commission (“the Commission”) heard by Justice Munro.  On 12 December 1990 Comalco notified the Commission of the existence of a demarcation dispute involving the Federated Engine Drivers’ and Firemen’s Association of Australasia (“FEDFA”) and the Australian Workers’ Union (“AWU”) concerning employees at a mine and related processing facilities at Weipa in northern Queensland.  On 19 April 1991 Comalco applied to the Commission for orders under s 118A of the Industrial Relations Act 1988 (“IR Act”).  While the IR Act was the name of the WR Act prior to a change of name effected by the Workplace Relations and Other Legislation (Amendment) Act 1996, it is convenient to refer to them as if they were different Acts.  The application for orders under s 118A concerned broadly the same issues raised in the notification given on 12 December 1990 though it appears no finding of the existence of an industrial dispute was made by the Commission based on that notification.  The absence of a finding is a procedural bar to the exercise of powers to settle the dispute capable of affecting substantive rights and liabilities: see Re Australian Bank Employees Union; Ex parte Citicorp Australia Ltd (1989) 167 CLR 513 at 517.  The subsequent proceedings before Justice Munro concerned, in substance, the application for orders under s 118A.

On 25 October 1991 Justice Munro made orders under s 118A and published his reasons for doing so: see Re Comalco Aluminium Ltd (1991) 42 IR 336.  In those reasons his Honour discussed, at length, the demarcation issues that had arisen in the aluminium and related mining and processing industries involving the FEDFA and AWU.  His Honour also discussed the principles that might guide the Commission in exercising the power conferred by s 118A and the application of those principles to the position arising at Weipa.  He referred to an earlier judgment he gave on 15 July 1991: Re Queensland Alumina Ltd (1991) 42 IR 304 in which he had discussed at greater length the applicable principles.  His Honour’s reasons for decision concerning Weipa concluded at 347 with the following:

I determine that an order will be made under s 118A(1)(c) of the Act to the effect that FEDFA does not have the right to represent the industrial interests of employees who are eligible for membership of the FEDFA and employed by the company in its operations at Weipa.  It will be a condition of the order that for the 1991/1992 financial year a paid up and financial member of the FEDFA as at 25 October 1991 shall as far as practicable be deemed to be a member of the AWU for a period corresponding to the unexpired period of financial membership with the FEDFA, not to extend beyond 29 June 1992.  The order made will take effect from 2 December 1991 and shall remain in force for a period of two years.  The order will be referred to a designated Presidential Member under s 118A(5) of the Act as I am of the view that the rules of the FEDFA may need to be altered to reflect the order.  The order is published in conjunction with a decision as Print KO160. 

            (Emphasis added)

It is clear from his Honour’s reasons read as a whole that the order he proposed to make was intended to endure.  That is, his Honour did not intend that the removal of the representational rights of FEDFA was to be temporary.  His Honour does not explain why he specified a period for which the order was to operate but, as will be apparent later in this judgment, his Honour may have proceeded on a mistaken understanding of a provision of the IR Act.  The orders his Honour made on 25 October 1991 were:

1.                  This order shall be known as the “Comalco Weipa Site Organisation Coverage order 1991”.

2.                  Pursuant to the decision recorded in Print K0153 dated 25 October 1991 the Commission orders:

(a)               That pursuant to section 118A(1)(c) of the Industrial Relations Act 1988 (the Act), The Federated Engine Drivers’ and Firemen’s Association of Australasia (the FEDFA) does not have the right to represent under the Act the industrial interests of persons otherwise eligible for membership of that organisation and employed by Comalco Aluminium Ltd (the Company) in its operations at Weipa in the State of Queensland.

(b)               That pursuant to section 118A(5) of the Act that the matter, and in particular this order, be referred to a designated Presidential Member for such further consideration under section 118A(6) of the Act as may be appropriate.

(c)                That it is a condition of this order binding upon Comalco Aluminium Ltd, The Australian Workers’ Union (the AWU) and the Federated Engine Drivers’ and Firemen’s Association of Australasia that a person who at 25 October 1991 is a financial member of the FEDFA shall be deemed by each party bound by this order to be a member of the AWU, and shall be treated by the Company as a paid up member of the AWU, for a period coextensive with the period of financial membership of the FEDFA paid up for at 25 October 1991, or with a period expiring on 29 June 1992, whichever first expires.

(d)               That this order shall be binding upon the Comalco Aluminium Ltd, The Australian Workers’ Union and The Federated Engine Drivers’ and Firemen’s Association of Australasia.

3.                  This order shall take effect on 2 December 1991 and shall remain in force for a period of 24 months.

Order 3 gives effect to his stated intention that the orders would operate for 24 months from 2 December 1991.

Consistent with order 2(b) the matter, in due course, came before a designated Presidential Member of the Commission, Deputy President Williams.  On 27 January 1993 Deputy President Williams made a determination under s 118A(6) altering the rules of the Construction, Forestry, Mining and Energy Union (“CFMEU”).  The CFMEU was an organization resulting from the amalgamation, after 25 October 1991, of other organizations including the FEDFA.  Deputy President Williams noted in his reasons for decision that the combined effect of s 253V and 253T of the IR Act was that the CFMEU was to be treated as bound by the orders made against FEDFA: see Australian Workers’ Union v Federated Engine Drivers’ and Firemen’s Association of Australasia (1993) 46 IR 66 at 67.  Deputy President Williams made the following observation at 71 about what Justice Munro had intended by his decision:

[Justice Munro’s decision] clearly demonstrates that his Honour was concerned with solving demarcation problems that had existed as between the two unions at this site for some time and with doing so by removing the presence of one of those unions from the site.  To achieve that in any “permanent” sense, ie. by a decision or order of the Commission that will continue to operate until amended or reversed, it is necessary for the eligibility rules of CFMEU to be altered.

Following this passage, Deputy President Williams set out the alteration to the eligibility rules of the CFMEU excluding from its coverage any person employed by Comalco in its operations at Weipa in the State of Queensland.  The alteration to the rules took effect on 27 January 1993.

It appears that the decision and orders of Justice Munro and the consequential alteration of the eligibility rules of the CFMEU remained uncontentious until an application was lodged by the CFMEU on 30 May 1997 seeking the consent of a designated Presidential Member under s 204 of the WR Act to an alteration it had made to its eligibility rules.  That alteration was to give the CFMEU coverage of employees of Comalco at Weipa other than clerical and administrative employees.  Until consent was given under s 204 the alteration made by the CFMEU had no legal effect: see s 204(1) of the WR Act.  It appears that this application raised questions about the continued legal efficacy of the orders made by Justice Munro on 25 October 1991. 

In order to establish their continuing efficacy Comalco made the application to this Court under s 413 of the WR Act which resulted in the judgment leading to this appeal.  In its application Comalco sought the following orders:

1.         An order that upon its true meaning and intent the order made by the Honourable Mr Justice Munro on 25 October 1991 and known as the Comalco Weipa Site Organisation Coverage Order 1991 is an award or an order affecting an award within the meaning of s.143 of the Industrial Relations Act 1988.

2.                  A declaration that the said order remains in full force and effect pursuant to s.148(1) of the Workplace Relations Act 1996.

When the application was heard in May 1998 the principal focus of the submissions of the parties was whether order 2(a) of the orders made by Justice Munro on 25 October 1991 was an order affecting an award.  This issue arose because of the language of s 143(1) of the IR Act which will be considered in detail shortly.  The award in question was the Aluminium Industry (Comalco Aluminium Ltd – Weipa) Award 1982 (“the Weipa Award”) which was the award applying to the relevant sections of the workforce of Comalco at Weipa on 25 October 1991.  At first instance the primary judge concluded that the order made under s 118A(1) had the requisite connection with the Weipa Award and it was an order affecting that award for the purposes of s 143.  Accordingly her Honour made an order substantially in terms of the first order sought by Comalco.  This conclusion was based on an analysis of various clauses of the Weipa award and how they might be affected by the s 118A(1) orders.  This conclusion meant that s 148 of the IR Act would have applied to order 2(a) at the time the two year period was specified in order 3 and order 2(a) would have continued in force by operation of the Act.  Whether this is so is the principal point in issue between the parties. The primary judge did not, however, make the second order declaring that the s 118A order continued in force apparently on the footing that the Weipa Award had been superseded by other awards.  The orders made by the primary judge were:

1.                  The order made by Munro J on 25 October 1991 and entitled the Comalco Weipa Site Organisation Coverage Order 1991 is an order affecting the Aluminium Industry (Comalco Aluminium Limited – Weipa) Award 1982.

2.                  Each party has liberty to apply in relation to any necessary variation of the terms of the order.

In order to understand the issues arising in this appeal it is necessary to set out certain provisions of the IR Act at the time Justice Munro made the orders on 25 October 1991.  It is by reference to the provisions of the IR Act at that time that the character and legal effect of the orders of Justice Munro are to be determined.  It is convenient to start with s 4 which defined various expressions of relevance.  Section 4 commenced with the prefatory words:

4(1)     In this Act, unless the contrary intention appears:

The word “award” was defined in the following terms:

“award” means an award or order that has been reduced to writing under subsection 143(1), and includes a certified agreement;

It can be seen that the definition contained, relevantly, two elements.  The first was that an award in the defined sense must be either an award or an order.  The second element was that the award or order must have been reduced to writing in the manner contemplated by s 143(1).

Section 4 also defined both a demarcation dispute and an industrial dispute.  A demarcation dispute was defined as:

(a)               a dispute arising between 2 or more organisations, or within an organisation, as to the rights, status or functions of members of the organisations or organisation in relation to the employment of those members; or

(b)               a dispute arising between employers and employees, or between members of different organisations, as to the demarcation of functions of employees or classes of employees; or

(c)               a dispute about the representation under this Act of the industrial interests of employees by an organisation of employees;

An industrial dispute was defined as:

(a)               an industrial dispute (including a threatened, impending or probable industrial dispute):

(i)                 extending beyond the limits of any one State; and

(ii)               that is about matters pertaining to the relationship between employers and employees; or

(b)               a situation that is likely to give rise to an industrial dispute of the kind referred to in paragraph (a);

and includes a demarcation dispute (whether or not, in the case of a demarcation dispute involving an organisation or the members of an organisation in that capacity, the dispute extends beyond the limits of any one State).

It can be seen that a demarcation dispute is an industrial dispute and the repeated references in the IR Act to an industrial dispute can be taken to include, subject to any contrary intention, a demarcation dispute.

The powers of the Commission to prevent or settle a demarcation dispute were the general powers of the Commission to prevent and settle an industrial dispute.  This would have included the power to make a demarcation award in settlement of such a dispute: see R v The Commonwealth Conciliation and Arbitration Commission; Ex parte The Transport Workers’ Union of Australia (1969) 119 CLR 529.  The definition did not repeat what at one stage was a defined feature of a demarcation dispute and possibly a perceived constitutional requirement to enliven jurisdiction, namely that it be an interstate demarcation dispute: see R v Turbet; Ex parte The Australian Building Construction Employees and Building Labourers’ Federation (1990) 144 CLR 335. 

Apart from the general powers of the Commission to prevent and settle demarcation disputes as a class of industrial dispute, special provision was made, at the time Justice Munro made his orders, for such a dispute in s 118 of the IR Act which provided:

118            In exercising its powers in relation to a demarcation dispute, the Commission:

(a)           must consider whether it should consult with appropriate peak councils that are representative of organisations representing employees or organisations representing employers; and

(b)           may consult with appropriate peak councils and, where it does so, must inform the parties to the dispute of any views expressed by those peak councils.

In addition to and separate from its general powers to prevent and settle industrial disputes including demarcation disputes, the Commission had power under s 118A to deal with demarcation issues.  That section provided:

118A(1)  Subject to this section and subsection 202(3), the Commission may, on the application of an organisation, an employer or the Minister, make the following orders:

(a)       an order that an organisation of employees is to have the right, to the exclusion of another organisation or other organisations, to represent under this Act the industrial interests of a particular class or group of employees who are eligible for membership of the organisation;

(b)       an order that an organisation of employees that does not have the right to represent under this Act the industrial interests of a particular class or group of employees is to have that right;

(c)       an order that an organisation of employees is not to have the right to represent under this Act the industrial interests of a particular class or group of employees who are eligible for membership of the organisation.

118A(2)  In considering whether to make an order under subsection (1), the Commission:

(a)           must consider whether it should consult with appropriate peak councils that are representative of organisations representing employees or organisations representing employers; and

(b)           may consult with appropriate peak councils and, where it does so, must inform the parties to the proceedings under this section relating to the order of any views expressed by those peak councils; and

(c)           must have regard to any agreement or understanding of which the Commission becomes aware that deals with the right of an organisation of employees to represent under this Act the industrial interests of a particular class or group of employees.

118A(3)  An order under subsection (1) may be subject to conditions or limitations.

118A(4)  The powers of the Commission under this section are exercisable only by a Full Bench or Presidential Member.

118A(5)  Where the Commission makes an order under subsection (1), the Commission must refer the matter to a designated Presidential Member unless the Commission is satisfied that the rules of the organisations concerned do not need to be altered.

118A(6)  Where a matter is referred to a designated Presidential Member under subsection (5), the Presidential Member must, after giving each organisation concerned an opportunity, as prescribed, to be heard, determine such alterations (if any) of the rules of any organisation concerned as are, in the Presidential Member’s opinion, necessary to reflect the Commission’s order.

118A(7)  An alteration of the rules of an organisation determined under subsection (6) takes effect on the day on which the determination is made.

The history of this section may be stated briefly.  The Conciliation and Arbitration (Organizations) Act 1974 amended the Conciliation and Arbitration Act 1904 (“C&A Act”) and introduced s 142A which, for the first time, conferred on the Australian Conciliation and Arbitration Commission (“C&A Commission”) a power similar to the power conferred by s 118A(1)(a), namely a power to grant an organization a right to represent the industrial interests of a group of employees to the exclusion of another or other organizations.  The exercise of that power did not depend on an existing, pending or threatened demarcation dispute.  The validity of that section depended on a source of constitutional power other than to provide directly for a mechanism to prevent and settle industrial disputes by conciliation and arbitration: see R v Sweeney; Ex parte Northwest Exports Pty Ltd (1980) 147 CLR 259 at 272-273 and R v Marks; Ex parte The Australian Building Construction Employees’ and Builders Labourers’ Federation (1981) 147 CLR 471 at 488.  Section 142A was amended by the Conciliation and Arbitration (Amendment) Act (No 3) 1977 though the substance of the power was not altered.  This amending legislation did, however, expressly provide for the C&A Commission to make an order directing an organization affected by the order to alter its rules to reflect the order.  When the IR Act was enacted in 1988, and repealed the C&A Act, s 118 of the IR Act conferred on the Commission a power to make an order of the type that could have been made under s 142A though, of some present significance, the power was expressed to be exercisable to prevent or settle a demarcation dispute.  That had not been a feature of s 142A. 

However in January 1991 the Industrial Relations Legislation (Amendment) Act 1990 introduced into the IR Act s 118A which conferred a power similar to that which had been s 142A though the nature of the orders that might be made and the scheme under which they were given effect to was expanded and modified.  However the exercise of the power under s 118A(1) was not conditioned on the existence of an actual or pending demarcation dispute nor was the order made to settle or prevent such a dispute.

Both at first instance and on appeal in these proceedings a central question was the true character of an order made under s 118A(1) in October 1991.  In particular, the issue was whether it was an order on which s 148 of the IR Act operated with the effect that it continued in force beyond the period nominated in a related order.  Section 148 is found in Division 6 of Part VI of the IR Act.  Division 6 contained several provisions concerning awards and orders of the Commission.  It is desirable to set out several of them:

143(1)  Where the Commission makes a decision or determination that, in the Commission’s opinion, is an award or an order affecting an award, the Commission shall promptly:

(a)           reduce the decision or determination to writing that:

(i)                 expresses it to be an award;

(ii)               is signed by at least one member of the Commission; and

(iii)             shows the day on which it is signed; and

(b)           give to a Registrar:

(i)                 a copy of the decision or determination; and

(ii)               a list specifying each party who appeared at the hearing of the proceeding concerned.

143(2)  Where the Commission makes a decision or determination:

(a)           that, in the Commission’s opinion, is not an award; but

(b)           in relation to which either of the following subparagraphs applies:

(i)                 the decision or determination is a decision or determination from which an appeal may be made to a Full Bench;

(ii)               the decision or determination is, in the Commission’s opinion, otherwise so significant that it should be made available in writing;

the Commission shall promptly:

(c)           reduce the decision or determination to writing that:

(i)                 is signed by at least one member of the Commission; and

(ii)               shows the day on which it is signed; and

(d)           give to a Registrar:

(i)                 a copy of the decision or determination; and

(ii)               a list specifying each party who appeared at the hearing of the proceeding concerned.

143(3)  A Registrar who receives a copy of a decision or determination under subsection (1) or (2) shall promptly:

(a)           provide a copy of:

(i)                 the decision or determination; and

(ii)               any written reasons received by the Registrar for the decision or determination;

            to each party shown on the list given to the Registrar under paragraph (1)(b) or (2)(d); and

(b)           ensure that copies of the decision or determination, and of any reasons referred to in paragraph (a), are available for inspection at each registry.

143(4)  The Industrial Registrar shall ensure that all decisions and determinations of the Commission referred to in subsections (1) and (2), and any reasons referred to in paragraph (3)(a), are published as soon as practicable.

143(5) ….

144       An award shall be framed so as best to express the decision of the Commission and to avoid unnecessary technicalities.

145       The date of an award shall be:

  (a)     if the award is a certified agreement – the day on which the agreement was certified under section 115; or

  (b)     in any other case – the day on which the award was signed under subsection 143(1).

146(1)An award shall be expressed to come into force on a specified day.

146(2)Unless the Commission is satisfied that there are exceptional circumstances, the day specified in an award for the purposes of subsection (1) shall not be earlier than the date of the award.

147(1)An award shall specify the period for which the award is to continue in force.

147(2)In determining the period to be specified under subsection (1), the Commission shall have regard to:

(a)           the wishes of the parties to the industrial dispute concerned as to the period for which the award should continue in force; and

(b)           the desirability of stability in industrial relations.

148(1)Subject to section 113 and any order of the Commission, an award dealing with particular matters continues in force until a new award is made dealing with the same matters.

148(2)  The inclusion in an award of a provision relating to:

(a)           long service leave with pay;

(b)           sick leave with pay; or

(c)           superannuation benefits;

is not prevented merely because the provision is so expressed as not to be capable of operating, or of operating fully, during the period specified in the award as the period for which the award is to continue in force.

148(3)  Where, under subsection (1), an award has continued in force after the end of the period specified in the award as the period for which the award is to continue in force, an award made by the Commission for the settlement of a further industrial dispute between the parties may be expressed to operate from a day not earlier than the day on which the industrial dispute arose.

            (Emphasis added)

It can be seen that s 143(1) required the Commission to take specified steps in relation to a decision or determination which, in its opinion, was an award or an order affecting an award.  It had to be reduced to writing in the way specified in s 143(1)(a) and a copy and related information given to the Registrar: see s 143(1)(b).  It had to be expressed to be an award: see s 143(a)(i).  Similar obligations were imposed by s 143(2) in relation to a decision or determination that, in the Commission’s opinion, was not an award though they did not include, for obvious reasons, that it be expressed to be an award.

When the C&A Act was enacted in 1904, it did not contain a definition of award.  The word was first defined by an amendment made in 1947 as meaning “an award made with this Act”.  By Act No 44 of 1956 the words “and includes an order” were added.  Those additional words comprehended an order varying an award: see Vehicle Builders’ Federation of Australia v General Motors Holdens Pty Ltd (1977) 32 FLR 100 at 106.  Between at least 1947 and 1988 the C&A Act contained objects which made reference to the making or enforcement of awards in settlement of industrial disputes.  The form of definition changed with the enactment of the IR Act.  No reason for the change was given in the explanatory memoranda or second reading speech but the answer may well lie in the extremely broad meaning given to the word “order” in the definition by the High Court in 1985 in R v Ludeke Ex parte Customs Officers Association of Australia, Fourth Division (1985) 155 CLR 513 at 519 and 526.  The definition adopted in the IR Act may have been an attempt to ensure that the notion of award and, for the purposes of Division 6 and the enforcement procedures, an order affecting an award, were confined to awards and related orders prescribing wages and conditions and otherwise preventing and settling industrial disputes.  Indeed s 3(e) identified the objects of the IR Act and spoke of one of them as involving the “observance and enforcement of … awards made for the prevention or settlement of industrial disputes”.

Against this statutory background it is necessary to consider whether an order made under s 118A(1) could have been “an order affecting an award” for the purposes of Division 6.  It may be accepted that the word “affect” (or derivatives of it) can be a word of wide meaning: see Shanks v Shanks (1942) 65 CLR 334 at 335, Hepples v Deputy Commissioner of Taxation (1990) 22 FCR 1 at 32 and (1991) 102 ALR 497 at 520 and Tana v Baxter (1986) 160 CLR 572 at 577.  However the expression “an order affecting an award” has to be construed in the statutory context in which it appears and the appropriate meaning given to the word “affecting”. 

It is readily apparent that s 143(1) and (2) created a dichotomy.  The Commission was required to take particular steps in relation to a decision or determination which was “an award or an order affecting an award” and other, though substantially the same, steps in relation to a decision or determination that was “not an award”.  It is comparatively clear that in the expression “not an award” in s 143(2)(a), the word “award” was a reference to a decision or determination not comprehended by s 143(1).  That is, a decision or determination that was not an award or an order affecting an award.  This dichotomy is of some significance as s 144, s 145, s 146, s 147 and s 148 were sections which operated on “an award”.  It is also comparatively clear that those sections operated on an award of the type referred to in s 143(1), namely an award or an order affecting an award.  That meaning of the word “award” in those sections is also in conformity with the definition of “award” in s 4.

However the requirement in s 147 that the award specify the period for which it was to operate was conditioned by a requirement that the Commission consult with the parties to the industrial dispute concerned.  This requirement suggests that an award, which for the purposes of s 147 would include an order affecting an award, was an instrument made in relation to the prevention or settlement of an industrial dispute.  This construction of the word “award” as comprehending “an award” or “an order affecting an award” made in prevention or settlement of an industrial dispute is reinforced by the provisions of s 148(3) where the supervening award, which brought to an end the statutory continuation of the period of the award (which would include any order affecting the award), was said to be made “(in) settlement of a further industrial dispute between the parties”.

The purpose of an early statutory predecessor of s 148 (s 28 of the C&A Act) was discussed in Waterside Workers Federation v Commonwealth Steamship Owners Association (1920) 28 CLR 209 by Isaacs and Rich JJ at 224-225:

Dealing, then, with the law, the first question is the proper construction of sec. 28(2).  In other words, what did Parliament mean when it said “After the expiration of the period so specified, the award shall, unless the Court otherwise orders, continue in force until a new award has been made”?  The expression “expiration of the period so specified” has reference to the first sub-section of sec. 28, and it is necessary to understand that sub-section before we get the full meaning of sub-sec. 2.  Putting that sub-section, so far as now material, into ordinary English, it says in effect to the arbitrator: “In making an award, you are to fix some specific period for which it is to last, and, in arriving at your decision as to wages, hours and other conditions, you are to settle them with reference to that fixed period, so as to give stability to the industry, assuring to the employers and employees alike a certainty as to those conditions, and (subject to variations within the range of the dispute) binding them all for that period, and, as a matter of necessary consequence, tying your own hands for the same period.”

One of the things the arbitrator has to bear in mind is that, for the period he selects, he ties his own hands except for the power of variation within the ambit of the dispute.

While their Honours dissented on the legal issue raised in the proceedings, these observations are unexceptionable.

The language and structure of Division 6 points to the word “award” in s 148(1) as meaning an award made in prevention or settlement of an industrial dispute or an order of the same character.  That is, an order which is varying the terms upon which a dispute has been prevented or settled by the making of an award.  On this construction of s 148(1) an order of the Commission which was not made in prevention or settlement of an industrial dispute would not be an “award” for the purposes of s 148(1) even if, as a matter of fact, it might be thought that the order in some way affected an award.  An order which was an order affecting an award and made in prevention and settlement of an industrial dispute would be an order varying an award.  This construction of Division 6 and its application to an order under s 118A(1) is consistent with its history.  Prior to the enactment of the IR Act there were found in the C&A Act provisions in similar terms to ss 144 to 148 inclusive (see ss 56 to 58 at the time of the repeal of the C&A Act in 1988).  However there was in the C&A Act no provision equivalent to s 143.  When s 143 was enacted with the enactment of the IR Act, there was no power conferred on the Commission to make an order of the type contemplated by s 118A other than in prevention or settlement of an industrial dispute.  This tends to suggest that Parliament did not then intend that the expression “award or an order affecting an award” concerned an order made under s 118A. 

A further indication that Parliament’s intention that an order under s 118A(1) was not comprehended by the expression “an order affecting an award” is that the contrary construction of s 143 would have the following result.  An order made under s 118A(1) that did, as a matter of fact and/or legal effect, affect an award would have to be dealt with in the way prescribed by s 143(1) with the consequence that ss 144, 145, 146, 147 and 148 would apply to such an order.  If, however, an order was made under s 118A(1) in circumstances where no award existed applying to employees that might be affected by the order under s 118A(1) then these sections would not apply to that order.  It is quite conceivable that an order under s 118A(1) would be of the latter type.  A large construction project, for example, may be planned and the employer, or a union seeking to represent employees on the project, might move for an order under s 118A(1) before the project commenced.  That action might be taken before any award or certified agreement had been made regulating the conditions of employees to be employed on the project.  It is unlikely that Parliament intended a different statutory regime would operate on an order made under s 118A(1) depending on whether an award or certified agreement existed, when the order was made, which applied to the workforce in question.  It is more likely that an order under s 118A(1) is an order comprehended by s 143(2).  That is, it is a determination or decision which is not an award (either an award or order affecting an award) but must nonetheless be reduced to writing and dealt with in the way provided for in that subsection.  However it is not an order on which the remaining provisions in Division 6 which have been discussed to this point would operate.

It follows that any order made under s 118A(1) was not an order for which, by operation of s 147(1), a period of operation needed to be specified.  Nor was it an order on which s 148(1) operated to continue it in force until a new order was made under s 118A(1) dealing with the same matters.  In our opinion an order made under s 118A(1) is not comprehended by the expression “an order affecting an award” and the order in the present case was not an order of that character.  Even accepting for present purposes that the order made by Justice Munro on 25 October 1991 affected the Weipa Award as a matter of fact and/or law, that is irrelevant in considering the operation of Division 6.  That is so because the order made by his Honour was not “an award or order affecting an award” as that expression appears in s 143(1) nor was it an award for the purposes of ss 147 and 148.  That is because it was not either an award or an order affecting an award which was made in settlement of an industrial dispute. 

For the preceding reasons we do not agree with the conclusion of the primary judge that the order made on 25 October 1991 was an order affecting an award though the approach to the proper construction of the IR Act that we have discussed was not raised with her Honour at the hearing at first instance.  Nonetheless, the order her Honour made should be set aside.

It appears Justice Munro may have believed that the order he made was an order for which a period had to be specified having regard to s 147 and that s 148 would continue its operation notwithstanding the specification of a finite period in the orders themselves.  That this was his Honour’s view is supported by the absence of any explanation for ostensibly limiting the period of operation of the order when it is clear from his reasons the order was intended to have an enduring effect.  Justice Munro’s concern that it might be necessary to specify a period for the operation of orders of the type made under s 118A was evident in observations his Honour made in a later decision concerning the form of orders to be made under s 127B, namely orders concerning unfair contracts with independent contractors.  In an unreported decision of 9 July 1993 (Print K8355) his Honour said:

In an attempt to ease some of the difficulties the parties might experience in relation to foreshadowed appeals and in positioning themselves in relation to the contracts as varied, I have set back the date of effect from the date of the orders.  I have also specified a term of the orders.  I do not think that a term for such an order is necessary under section 147 of the Act (4).  However I have some residual doubt on the point.  Out of abundant caution, I will specify a period for the order to continue in force.  It will be two years.  That period will carry it beyond the life of the Wagners’ current harvesting contract.

The case which was footnote (4) was a decision of Deputy President Williams in Australian Workers’ Union v Metals and Engineering Workers’ Union (1993) 46 IR 61.  In that decision Deputy President Williams had considered whether it was necessary to specify a period of operation under s 147 for an order under s 118A(1) and had concluded it was not.

Thus, it appears, Justice Munro may have been acting out of an abundance of caution in specifying a period of operation when making the orders on 25 October 1991 which are central to these proceedings.  If ss 147 and 148 had applied and no period had been specified then it could well have affected the validity of the orders: see R v Foster; Ex parte Crown Crystal Glass Pty Ltd (1945) 70 CLR 405.  However in our view it was unnecessary for his Honour to limit the period for which the orders would operate in the way he did in order 3. 

This leads to one other issue that has to be addressed.  If Justice Munro was not obliged by s 147 to limit the period of operation of the orders made under s 118A(1), was order 3 nonetheless an order he had power to make?  The language of s 118A(1) suggested that any order made under that subsection is to be an order that endures in perpetuity or at least until it is varied or revoked.  Power to vary or revoke it would arise through the combined operation of s 111(1)(f) and (2) of the WR Act.  However s 118A(3) enabled the Commission to make an order under subs (1) that was subject to conditions or limitations.  It is clear, in our opinion, that Justice Munro did not intend to limit the operation of the order made under s 118A(1) to a period of two years.  For reasons just explained, his Honour intended that the order would continue in force because of what he understood to be the effect of s 148(1).  In our opinion the only basis upon which we might make an order rectifying, in a sense, the orders of Justice Munro would be if we considered that order 3 was made beyond power.  There can be no question that his Honour intended by order 3 that the period of operation of order 2(a) was two years.  That clear intention was based on a mistaken belief that apart from the orders themselves, the IR Act would operate to continue order 2(a) in force.  However an order limiting the period in which the order made under s 118A(1) would operate is, in our opinion, an order limiting the operation of the orders and is an order that can be made in exercise of the power conferred by s 118A(3).  Thus the rectification of the orders of Justice Munro is a matter for his Honour or another member of the Commission.  His Honour may arguably be able to exercise the power to vary or revoke order 3 of the orders or to make some further order giving effect to what, in our opinion was plainly intended when he made his orders in October 1991.  The only orders we propose to make is an order allowing the appeal and an order setting aside the order of the primary judge.

Associate:

Dated:              15 December 1998