F100209384

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES AUSTRALIAN LIQUOR, HOSPITALITY AND MISCELLANEOUS WORKERS UNION, WESTERN AUSTRALIAN BRANCH

APPELLANT

 -v-

 BURSWOOD RESORT (MANAGEMENT) LIMITED

RESPONDENT

CORAM FULL BENCH

  HIS HONOUR THE PRESIDENT P J SHARKEY

  CHIEF COMMISSIONER W S COLEMAN

  SENIOR COMMISSIONER A R BEECH

DELIVERED FRIDAY, 26 APRIL 2002

FILE NO/S FBA 1 OF 2002

CITATION NO. 2002 WAIRC 05396

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Decision Appeal upheld, orders at first instance quashed, and matter remitted back to Industrial Magistrate

Appearances 

Appellant Mr J Rosales-Castaneda (of Counsel), by leave

Respondent Mr J Britts (of Counsel), by leave

_______________________________________________________________________________

Reasons for Decision

THE PRESIDENT:

INTRODUCTION

1          This is an appeal by the abovenamed organisation of employees (hereinafter called “the ALHMWU”) against the decision of the Industrial Magistrate on 12 December 2001 in matter number M175 of 2001 on the grounds set out in the Schedule to the notice of appeal (see page 2 of the appeal book (hereinafter referred to as “AB”)), which read as follows:-

 GROUNDS OF APPEAL

“1. The Magistrate erred in law in holding that if a Magistrate cannot make any orders to enforce an order by the Commission, then there are no grounds for a claim for a breach of the Commission’s order.

 2. The Learned Magistrate erred in law in making a finding that the claim was frivolous or vexatious.

 3. The learned Magistrate erred in law in finding that the original application did not have merit because:

a. there was no order or finding he could make; and

b. it would not be appropriate to impose a penalty in view of the proceedings that had taken place prior to this application.

 4. The Learned Magistrate erred in law in finding that the Union was not entitled to pursue matter M175 of 2001 for the benefit of the union and other delegates.

 5. The Learned Magistrate erred in law in finding that the Union was barred from pursuing the claim against the respondent, because a Union delegate had entered into a deed of settlement with the respondent (excluding the Union from any negotiations).

 6. Because of all of the above grounds, the Learned Magistrate erred in law in making an order for costs against the appellant Union.”

2          The decision appealed against was a decision of the Industrial Magistrate (see page 10 (AB)) whereby he dismissed the appellant organisation’s claim and ordered it to pay the respondent’s costs fixed at $800.00.

BACKGROUND

3          The appellant organisation, the ALHMWU, by claim M175 of 2001, alleged that the respondent employer, Burswood Resort (Management) Limited (hereinafter called “Burswood”) failed to comply with an order made by Commissioner Wood dated 14 February 2001.  The ALHMWU made application to enforce the order.  It also sought a declaration that the respondent had breached the Commissioner’s order by terminating the employment of an employee, Mr Derek Mitchell, and sought an order that a penalty of not more than $1,000.00 be imposed.

4          The short point, at first instance, as agreed by the parties, was whether the proceedings were incompetent in that the respondent had been released from liability and there was a bar to the proceedings brought about by a deed of release executed by Mr Derek Mitchell and by the respondent.  On the pleadings it was quite clear and admitted that the following was the case in fact:-

(a) That the complainant ALHMWU took a matter to the Commission, constituted by a single Commissioner, whereby the appellant organisation alleged that the respondent, who it also alleged was the manager of Burswood International Resort Casino, had advised the employee that his services would be terminated on 10 January 2001 unless he could find a suitable alternative position, either internally or otherwise, before 10 January 2001.  The matter came before the Commissioner pursuant to s.44 of the Industrial Relations Act 1979 (as amended) (hereinafter referred to as “the Act”)).

(b) That the matter was not settled by conciliation within the Commission and was referred by the Commission, in matter number CR 350 of 2000, for final hearing and determination.

(c) That the Commissioner, having heard the parties, made the following orders on 14 February 2001, namely that:-

(i) The respondent allocate forthwith duties to Mr Mitchell in the Environmental Services Area compatible with his duties and skills.

(ii) The respondent engage in a full exploration, in consultation with Mr Mitchell, of options for his employment with the respondent including any appropriate training relevant to available positions with the respondent, that are compatible with his capabilities and skills.

(iii) That in light of point 2 of the order, the respondent not terminate the employment of Mr Mitchell as an Environmental Services Attendant prior to three calendar months from the date of the order, for reasons to do with his inability, for medical reasons, to perform duties as an Environmental Services Attendant.

5          It was admitted that the respondent terminated Mr Mitchell’s employment on 23 March 2001, but it was denied by the respondent that this was in contravention of the Commission’s orders.

6          It was also common ground that Mr Mitchell and the respondent executed a document, duly stamped, and entitled a “Deed of Release and Settlement” on 10 May 2001 (see pages 53-58 (AB)).  By the deed it was acknowledged, inter alia, that Mr Mitchell, an employee of the respondent, was advised in December 2000 that his current position was no longer available, acknowledged that the Commission ordered that it not terminate Mr Mitchell’s employment, and recites the existence and content of the complaint herein.

7          It also recites the existence of the order of the Commission made on 30 April 2001, and referred to above, requiring that Mr Mitchell be reinstated.

8          The agreement also recites that Mr Mitchell has been made redundant and that he has been paid an amount, (blacked out in the copy deed) called “an ex gratia redundancy payment”.

9          Clauses 1(c), (d) and (e) purport to be releases from claims and bars to actions “in or in connection with Mr Mitchell’s employment without termination of employment from the respondent”.  The deed also contains a provision whereby Mr Mitchell undertakes not to seek any reinstatement, re-employment, or further employment with the respondent in the future.

10       Mr Mitchell agrees, too, to have the claims, including the claim the subject of this appeal “withdrawn, dismissed or otherwise proceeded with”; and the payment of compensation referred to above is expressed to be conditional upon that occurring.

11       What occurred, of course, was that there was a termination of Mr Mitchell’s employment during the currency of the order and read in the terms of the incontravention of it.  What is of course important is that the appellant whilst it was a party to the proceedings in the Commission was not a party to the deed of release and settlement.  Significantly, too, Mr Mitchell was not a party to the proceedings in the Commission but is a party, of course, to the deed of settlement. 

FINDINGS AT FIRST INSTANCE

12       The Industrial Magistrate found (see page 31 (AB)) that there was nothing in the order which can be enforced and therefore there was no merit in the application or that the application had any chance of being enforced under s.83 of the Act.  He did say also that there was some merit in Mr Hooker’s argument and that:-

“An employee must be able to make decisions in relation to these matters and unless you can show that the deed of settlement was reached under some duress or that the employee was not capable for some reason of making this agreement, then the – the terms of the deed are that this put an end to the relationship between the -- the employee and the employer respondent.  And I think that the union will have to look at some other way of trying to do what it wants to do in relation to punishment of the employer in all of these -- in this case, particularly when, as you’ve said, it’s so that in the future the delegates aren’t treated in a certain way.  Each case must be dealt with on its -- in this court anyway, on its -- each case has to be dealt with on the merits of the individual case and I can’t entertain any, I believe, applications which would have a general effect.”

ISSUES AND CONCLUSIONS

13       Mr Brits, who appeared for the respondent, argued ground 5 only and made no submissions in relation to any of the other grounds of appeal.

14       What is, of course, clear and significant is that Mr Mitchell was not a party to the proceedings in the Commission and he was not a party to the proceedings in the Industrial Magistrate’s Court.  The parties to the proceedings in the Industrial Magistrate’s Court were the parties to the proceedings to this appeal, and the parties to the proceedings in this Commission.

15       The appellant organisation was a party to the proceedings in the Commission as was the respondent. The appellant was not a party to the deed of release but Mr Mitchell and the respondent are and were.

16       The appellant has not at any time purported to release the respondent from the application to enforce the order made at first instance, nor is it contended that it has ever done so. 

17       Fundamental to the grounds of appeal was this complaint, the nature of it, and the ordinary natural meaning of the words of s.83 of the Act.  The learned Industrial Magistrate dealt with the matter without considering the nature of the application before him as it exists pursuant to s.83.

18       S.83 quite clearly and unequivocally prescribes that where a person (which includes, of course, a non-natural person within the definition of person in the Interpretation Act 1984 (as amended)), s.5, contravenes or fails to comply with an order of the Commission, inter alia, (with certain exceptions which do not apply in this case) then certain officers such as the Registrar or other persons, and, in this case, “an organisation” as defined in s.7 of the Act, which the appellant is, may apply in the prescribed manner to an Industrial Magistrate’s Court “for the enforcement of the order”.  The word “enforcement” is not defined.  What it means depends on the meaning of the section read as a whole.  In this case, the application at first instance was made by a person entitled to make it, namely an organisation as defined, in the manner prescribed to an Industrial Magistrate’s Court.

19       The complaint was that the respondent had failed to comply with or had committed a breach of an order of the Commission made under s.44 of the Act and to which both the appellant and respondent were parties ((ie) the order referred to above).

20       If one refers to the deed of settlement to which I have referred above it will also be quite clear that there was prima facia evidence of the breach or failure to comply alleged actually contained in the deed of settlement in that there was admitted the termination of Mr Mitchell’s employment contrary to the Commissions order.

21       If one looks at s.83(2) and (3) and to some extent (4), (5) and (6) of the Act it is quite clear what enforcement proceedings under s.83 are, what powers and jurisdiction can be exercised by the Industrial Magistrate’s Court and what remedies are available to an applicant pursuant to s.83 for enforcement of an award, order or other instruments. 

22       On the hearing of an application under s.83(1) the Industrial Magistrate is enabled to do certain things, in the event and only in the event that the contravention of or failure to comply with an order (in this case) is proven (see s.83(2)).  (If it is not proven then there is power to dismiss a complaint or application).

23       In this case, the application was dismissed by the Industrial Magistrate before the applicant could properly proceed with its case and notwithstanding prima facia evidence of a breach of or non-compliance with an order, which application the applicant, as an organisation, a party to the order made at first instance, was clearly competent to bring.  Once the application was made alleging the contravention or failure to comply, (which, of course, had occurred), then the Industrial Magistrate’s duty was to determine whether the contravention or failure to comply, in this case, was proved after hearing the appropriate evidence.  If what was alleged by the complaint, which was a clear allegation of a contravention of or non-compliance with an order of the Commission, and within the jurisdiction of the Industrial Magistrate, then he was required to determine whether any contravention or non-compliance was proven and whether he would issue a caution or impose a penalty with or without costs (see s.83(2)), and whether the complaint should be dismissed.

24       Since this was not an application to enforce an award the question of any order for the payment of monies underpaid pursuant to an award obligation was not, of course, relevant. 

25       However, as I have described it that is what enforcement proceedings under s.83 are.  There is no power or jurisdiction to make orders to compel or prohibit an action by a party in the manner of injunctive relief.  The jurisdiction and the power is simply as I have stated it above.

26       The Industrial Magistrate erred entirely in not in adverting to the clear terms of s.83 to determine his jurisdiction and power and in misapprehending therefore the nature of enforcement proceedings as prescribed by that section.

27       I would add further that there was and could be no application for reinstatement under s.83, and the fact that there was a deed of settlement entered into and a termination of employment of Mr Mitchell, accompanied by the payment of “compensation” to him, was totally irrelevant to whether there was a breach of or non-compliance with an order of the Commission made under s.44.  The applicant organisation as an organisation competently made the application to enforce an order to which it and the respondent were parties.  It was alleged that the respondent had contravened the order or had failed to comply with it and there was prima facia evidence that this occurred.  The finding that the claim was frivolous and vexatious within the meaning of the principle expressed in TWU v Tip Top Bakeries 75 WAIG 9 (IAC) was for those reasons entirely erroneous.  There was prima facia merit in the claim.  The finding that the original application had no merit because there was no order which could be made was both premature and erroneous also for those reasons.  The Industrial Magistrate simply did not set out to exercise his jurisdiction and powers.

28       The question of whether a penalty could be appropriately imposed was also irrelevant.  That is not a question which should exercise the Magistrate until such time as any application for enforcement has been proven.  If it has not been proven, of course, it is required to be dismissed.  Accordingly, also, there was no valid basis for any order for costs.

29       For all of those reasons, the Industrial Magistrate erred in terms of grounds 1, 2 and 3 of the grounds of appeal.

30       As to ground 4, the only requirement to be complied with before the appellant was enabled to make and pursue this application was that the order existed, that it was alleged to have been breached, and that the appellant is and was an organisation as defined and competent to make the application.  All of those ingredients existed.  The Learned Industrial Magistrate clearly erred in finding otherwise.

31       I would add that it has also been somewhat difficult to accurately discern the reasons for His Worship’s decision.

32       I now turn to ground 5, which was the only ground argued by both sides on appeal.  It is quite clear that the deed purports to act as a bar to any actions, claims and the like made by Mr Mitchell or to be made by Mr Mitchell.  The question is whether the Industrial Magistrate erred in law in finding that the appellant organisation was barred from pursuing this claim against this respondent by virtue of the fact that Mr Mitchell, a member of the organisation, had executed a deed to which it was not a party.  It was, of course, held by the Industrial Magistrate that as a union delegate Mr Mitchell had entered into a deed of settlement with the respondent excluding the union from any negotiations.  The ground of appeal complained that that was an erroneous finding.  The claim which is said to have been “barred” by the deed was one whereby an organisation of employees, the ALHMWU, took enforcement action in respect of an order made in proceedings at first instance relating to Mr Mitchell but brought by the ALHMWU under s.44 of the Act.

33       The order was made in proceedings, as I have said, in which the appellant and respondent were the parties and not Mr Mitchell.  In my opinion, the deed of release in its terms does not at all purport to be executed by a delegate of the appellant organisation in that capacity.  On a fair reading of the clear words it purports only to be executed by Mr Mitchell on his own behalf and for his own purposes.  It was not therefore open to find that it could in any way bind the appellant organisation because Mr Mitchell executed it.  There is no indication of any express authority from the appellant organisation to Mr Mitchell to execute the document, nor was it submitted that its execution was authorised by the ALHMWU rules.  There was no basis upon which to correctly find that the ALHMWU was involved in the deed of settlement indirectly.  Clearly it was not.  The respondent’s counsel submitted that there was privity of contract which bound the ALHMWU to Mr Mitchell’s’ actions.  In my opinion, the doctrine of privity of contract simply does not apply and the principle expressed in Trident General Insurance Co Ltd v McNiece Bros Pty Ltd [1987-1988] 165 CLR 107 (HC) has no application.  There was, for example, in this case no question of one party purporting to indemnify another as there was in Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (HC) (op cit).  In my opinion, there could be no privity of contract, and further the decision in AFMEPKIU v Direct Engineering Services (1999) 79 WAIG 1768 is not in point.  Firstly, no question of estoppel arose in these proceedings as it did in that case.  Secondly, this was not a personal or private matter but one in which the public have an interest ((ie) the interest conferred on certain persons to enforce orders of the Commission).  No release could therefore by validly given by Mr Mitchell which could purport to bind the organisation of which he was a member.

34       In any event, the matter was not one of contract but the clear matter of the enforcement of an order made by the Commission in proceedings in which Mr Mitchell was not a party.  The order was made as a result of an application pursuant to s.44 of the Act to the Commission to conciliate in and arbitrate upon, using its’ statutory powers, an industrial dispute which was in turn an industrial matter as defined in s.7 of the Act.  It will be exceedingly strange if a provision such as s.83 of the Act did not exist to enable interested parties to enforce orders of the Commission in the manner prescribed.

35       In any event, the question of privity of contract could not arise because s.114 of the Act would operate to prevent it.  S.114(1) reads as follows:-

“Subject to this Act, a person shall not be freed or discharged from any liability or penalty or from the obligation of any award, industrial agreement or order of the Commission by reason of any contract made or entered into by him or on his behalf, and every contract, in so far as it purports to annul or vary such award, industrial agreement or order of the Commission, shall, to that extent, be null and void without prejudice to the other provisions of the contract which shall be deemed to be severable from any provisions hereby annulled.”

36       The effect of the section is therefore in this case to prohibit the freeing or discharge of the respondent from the obligation of the order of the Commission by reason of the deed of settlement and discharge (a contract between Mr Mitchell and the respondent).  That is, of course, if Mr Mitchell had the ability to discharge the respondent from its obligation pursuant to the order of the Commission which for the reasons I have already stated he did not.  In any event, the contract by way of deed of settlement and discharge insofar as it purports to annul or vary the order of the Commission, which it set out to do, is, to that extent, null and void, and of no effect.  It can and could be no bar to this application being made at first instance and the Industrial Magistrate erred insofar as he held otherwise.

37       For all of those reasons, the appeal is made out, and for all of those reasons I would uphold it.  I would quash all of the orders made at first instance.  I would then remit the matter back pursuant to s.84 of the Act, to another Industrial Magistrate, to be heard and determined according to law.

CHIEF COMMISSIONER W S COLEMAN:

38              I have read the reasons for decision of His Honour the President.  I agree with those reasons and have nothing to add.

SENIOR COMMISSIONER A R BEECH

39       I agree with the Order proposed by the Honour President and with his Reasons.  I desire to add the following.

40       It is essential to appreciate that a registered union is a principal in its own right and not merely an agent of its members.  This was observed by Jackson SPJ in R v. Conciliation Commissioner and Another [1963] WAR 210 at 215.  His Honour was there referring to the effect of s.13 of the Industrial Arbitration Act 1912.  However, that section is for these purposes of no different effect than s.60(1) of the present Act.  In that matter, the unauthorised stoppage of work by two or more employees who were members of a union could not be held to constitute a breach of the award by the union (and see also re: Australian Insurance Employees’ Union: ex parte Workers Compensation Board of Queensland (1981) 56 ALJR 51; ADSTE v. Hamersley Iron Pty Ltd (1983) 63 WAIG 1918 at 1920).  Thus, the action taken by Mr Mitchell cannot be said to be the action of the union (and see:  Young v. Public Service Board [1982] 2 NSWLR 456 where it was held that members of an individual union have no legal privity of interest with the union so as to estop them in relation to proceedings in the New South Wales Industrial Commission).  Accordingly, the agreement entered into between Mr Mitchell and his former employer cannot in any sense be pleaded as a bar to the union in this matter seeking the enforcement of the Order to which it is a party. 

THE PRESIDENT:

41       For all of those reasons, the appeal is upheld.  The orders made at first instance will be quashed and the matter remitted back pursuant to s.84 of the Act, to another Industrial Magistrate, to be heard and determined according to law.

       Order accordingly