100421886

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES THE CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION OF WORKERS

APPLICANT

 -and-

 SANWELL PTY LTD AND THE CHamber of Commerce and Industry of Western Australia

RESPONDENTS

CORAM FULL BENCH

  HIS HONOUR THE PRESIDENT P J SHARKEY

  COMMISSIONER J F GREGOR

  COMMISSIONER J H SMITH

DELIVERED MONDAY, 22 MARCH 2004

FILE NO/S FBM 8 OF 2003

CITATION NO. 2004 WAIRC 10947

_______________________________________________________________________________

Catchwords  Industrial Law (WA) – Referral of questions of law to Full Bench, s27(1)(u) – Intervention pursuant to s30(2) – Issue of whether certain clauses of an industrial agreement registerable under s41A - Definition of bargaining agent – Bargaining agent’s clause – Industrial agreements, s41 – Definition of “industrial matter” – Bargaining agent and sub-contractor clause – Industrial matters – Issue of registration of agreements containing ‘non-industrial’ matters – Mere presence of one or more ‘non-industrial’ matters does not render the agreement one which is not with respect to any industrial matter – Industrial Relations Act 1979 (as amended), s6, s7, s27(1)(u), s30(2), s41, s41A, s96B, s96C, s97U(1), s97UA, s97UJ – Workplace Relations Act 1996, s170VA, s298A, s298B, s298C, S298G, s298K, s298L, s298U, s298Y - Minimum Conditions of Employment Act 1993, s19, s20A, s21

Decision  Determination of questions of law pursuant to s27(1)(u) of the Act

Appearances

Applicant  Mr T J Dixon (of Counsel), by leave, and with him Mr T R Kucera (of Counsel), by leave

Respondents Mr K Richardson, as agent, on behalf of Sanwell Pty Ltd, and Mr K J Dwyer on behalf of The Chamber of Commerce and Industry of Western Australia

Intervener  Mr D S Ellis (of Counsel), by leave, and with him Ms Z M Weir (of Counsel), by leave

_______________________________________________________________________________

Reasons for Determination of Questions of Law Pursuant to S27(1)(u) of the Act

INTRODUCTION

1         These are the joint reasons for decision of the President and Commissioner J F Gregor.

2         This is a referral of questions of law to the Full Bench pursuant to s27(1)(u) of the Industrial Relations Act 1979 (as amended) (hereinafter called “the Act”).

3         By s27(1)(u), the Commission may, in relation to any matter before it, with the consent of the President, refer to the Full Bench for hearing and determination by the Full Bench any question of law, including any question of interpretation of the rules of an organisation, arising in the matter.

S27(1)(u) MATTERS – THE FUNCTION OF THE FULL BENCH

4         S27(1)(u) prescribes a procedure which relates to questions of law.  The Full Bench in a s27(1)(u) referral has no power to make findings of fact.  The relevant facts must be ascertained by the Commissioner at first instance or agreed before the question or any part of it can be answered by the Commission.  This is in contradistinction to the broader powers of the Full Bench on appeal under s49 and s84 of the Act (see TWU v The Readymix Group (WA) and Others (1980) 60 WAIG 1483 (FB) and AWU v ABLF (1988) 69 WAIG 527 (FB)).

5         The questions referred by the Chief Commissioner arise from s32 conferences conducted between The Construction, Forestry, Mining and Energy Union of Workers (hereinafter called “the CFMEU”), an “organisation” as that term is defined in s7 of the Act, and Sanwell Pty Ltd (hereinafter called “Sanwell”), an employer, before the Chief Commissioner and pertain to an industrial agreement entered into by the above-named parties.

6         The questions of law which were referred are contained in a memorandum of 27 October 2003, from the Chief Commissioner to the President, and which the President consented to and referred to the Full Bench, and a copy of those questions was forwarded to the parties.  We will refer hereinafter to its terms.

APPEARANCE BY THE CHAMBER OF COMMERCE AND INDUSTRY OF WESTERN AUSTRALIA

7         The Chamber of Commerce and Industry of Western Australia appeared on this hearing in the Full Bench because it became a party to the proceedings at first instance by virtue of s29(1)(b) of the Act because it was served with a copy of the proceedings at first instance.

LEAVE TO INTERVENE – THE MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS (COMMONWEALTH)

8         The abovementioned Minister, The Honourable, the Minister for Employment and Workplace Relations (the Federal Minister), sought to intervene in these proceedings through counsel.  The Honourable, the Minister, sought to intervene pursuant to s30(2) of the Act, on a number of grounds.

9         S30(2) reads as follows:-

“(2) The Minister of the Commonwealth administering the Department of the Commonwealth that has the administration of the Commonwealth Act may by giving the Registrar notice in writing of his intention to do so, and by leave of the Commission, intervene on behalf of the Commonwealth in any proceedings before the Commission in which the Commonwealth has an interest.”

10      “Commonwealth Act” means the Workplace Relations Act 1996 (hereinafter called “the WR Act”) of the Commonwealth (see s7).  That is, of course, the Act under which and for which the Minister is responsible.

11      That means that the Minister may, by giving notice in writing of his intention to do so, which he did, intervene, but only by leave of the Commission, in any proceedings before the Commission in which the Commonwealth has an interest.

12      It was submitted that there was a divergence of opinion in industrial tribunals in Australia about these issues, which, to some extent, is correct.

13      Leave to intervene was sought in relation only to the two clauses applying to bargaining agent’s fees and sub-contractor employees, respectively.

14      The Minister plainly does not have an interest of the type referred to in R v Ludeke and Others; Ex parte Customs Officers’ Association of Australia, Fourth Division [1985] 155 CLR 513 at 522 (see also Gairns and Dempsey v RANF (1989) 69 WAIG 2343).

15      However, s30(1) and (2) of the Act confer a right to intervene with the leave of the Commission upon the relevant Minister of this State and the relevant Minister of the Commonwealth.

16      The right to intervene in constitutional matters in the High Court is exercised in constitutional cases and other matters by the states and others.  Such a right to intervene is akin to that conferred by s30(2).

17      Such a right plainly exists under the Act to enable the Commonwealth Minister to take part in proceedings as an intervener where the Commonwealth has a sufficient interest in the outcome and/or matters of law which affect or might affect the Commonwealth, or matters of industrial relations which affect or might affect the Commonwealth, or, to put it generally, where the Commonwealth has a legitimate and sufficient interest in the conduct and outcome of particular proceedings in this Commission.

18      S6(g) of the Act throws light on this right, and reads as follows:-

“The principal objects of this Act are —

…

(g) to encourage persons, organisations and authorities involved in, or performing functions with respect to, the conduct of industrial relations under the laws of the State to communicate, consult and co‑operate with persons, organisations and authorities involved in, or performing functions with respect to, the conduct or regulation of industrial relations under the laws of the Commonwealth.”

19      Of course, and obviously, s30(2) does not confer a right to intervene as a matter of course.

20      We accept, as was submitted, that the matters raised by these questions have significance in the context of industrial relations within Australia (see the Workplace Relations Amendment (Prohibition of Compulsory Union Fees) Act 2003).  Particularly, the WR Act is a Commonwealth Act.

21      The Minister also referred to s298SA and s298SC of the WR Act which prohibit the payment of bargaining fees and which the Minister is opposed to.  The Minister also has an interest in the building and construction industry in this country, and recently a Commonwealth Royal Commission inquired into the industry and reported to the Federal Government.

22      The Minister’s application was not objected to by Mr Dwyer, who appeared for the Chamber of Commerce and Industry of Western Australia, and, indeed, who supported the intervention.  The application to intervene was opposed by counsel for the CFMEU.  It was not opposed by Mr Richardson who appeared for Sanwell.

23      It was opposed by Mr Dixon (of Counsel) for the CFMEU.

24      However, the Full Bench gave leave to intervene since it was satisfied that there were matters of law with which the Minister could assist the Commission, and also matters of likely effect on industrial relations regulated by the Commonwealth legislation.  These matters were limited, however, to the first two questions raised by the Full Bench in this matter.  Nonetheless, there was sufficient interest for the Minister to intervene for the purposes of s30(2) of the Act, and the Full Bench so found.

QUESTIONS

25      The particular matter before the Commission in application No AG 70 of 2003, which is the number of the matter at first instance, is an application to register an industrial agreement between Sanwell and the CFMEU.  That predicates the fact that an agreement has been made.

26      The questions which arise are referred to in the memorandum of the Chief Commissioner of 27 October 2003.  The relevant findings of fact are also set out in the Chief Commissioner’s memorandum.  It is convenient to produce the memorandum as a whole, which we do hereunder:-

“1. Between December 2002 and May 2003 the Commission presided over a number of conferences pursuant to section 32 of the Act to address issues which had arisen in the course of parties progressing industrial agreements in the building and construction industry.

Among matters which were of concern and which remain in issue are the Commission’s power to register industrial agreements which make provision for a bargaining agent’s fee, an undertaking that an employer must not engage any sub-contractor who has not executed a certified agreement or an industrial agreement, and provision which enables employees to elect to convert all sick leave entitlements over 5 days to a cash payment.

2. The particular matter before the Commission is AG 70 of 2003, an application to register an industrial agreement between Sanwell Pty Ltd and the CFMEUW.

3. A proposed provision for a Bargaining Agents Fee to be included in the industrial agreement states:

“(1) The employer must advise all employees prior to commencing work for the employer that a “Bargaining Agents Fee of $500 per annum is payable to the Union on or prior to 1 March each year.

 (2) Each employee must pay the “Bargaining Agents Fee” to the Union in advance on a pro rata basis for any time which the employee is employed by the employer.  By arrangement with the Union, the “Bargaining Agents Fee” may be paid in 2 instalments throughout the year.

 (3) The employer must, at the request of an employee, provide a direct debit facility to pay the “Bargaining Agents Fee” to the Union in accordance with this clause.”

In general terms the competing viewpoints about the inclusion of the above provision in an industrial agreement are that:

• The “Bargaining Agents Fee” is a matter that is properly within the jurisdiction of the Commission.  It comes within the scope of an “industrial matter” as defined within section 7 of the Industrial Relations Act and where it is the subject of agreement for provision in an industrial agreement, the Commission shall, subject to the Act, register the industrial agreement; and conversely

• The “Bargaining Agents Fee” is not an “industrial matter” and therefore cannot be included in an industrial, agreement.

4. With respect to the inclusion of an undertaking that an employer not engage any sub-contractor that has not executed a certified agreement or industrial agreement, it is claimed that the proposed provision is directed at the problem of “phoenix” companies, pyramid sub-contracting and safety matters.  Accordingly, the public interest is served by the inclusion of the provision.

Conversely, it is stated that the provision may constitute a breach of the Trade Practices Act (Commonwealth) and inclusion in an industrial agreement may expose a party to prosecution.

5. The proposed provision on the conversion of sick leave states:

“The employee may elect to convert all sick leave entitlements over 5 days to a cash payment. If the employee elects to convert sick leave to a cash payment, payment must be made by the employer to the employee on the last pay period prior to any closedown for Christmas.”

The concern with respect to this proposed entitlement is that it may be contrary to the terms of the “leave for illness or injury” under the Minimum Conditions of Employment Act, 1993.  Therefore, it should not be included in an industrial agreement.

(THE QUESTIONS OF LAW - THE FIRST QUESTION (Our Notation))

6. The questions of law formulated for the reference for the Hon. President’s consideration are as follows:

With respect to the Bargaining Agents Fee:

(a)  (i)  Is the provision of a “Bargaining Agents Fee” in the terms set out hereunder an industrial matter?

(ii) Where the parties have agreed to the provision for a “Bargaining Agents Fee” in the terms set out hereunder, can the Commission register the Agreement under section 41A of the Act?

“Bargaining Agent’s Fee

(i) The Employer must advise all employees prior to commencing work for the Employer that a ‘Bargaining Agents Fee’ of $500 per annum is payable to the Union on or prior to 1 March each year.

(ii) Each employee must pay the ‘Bargaining Agents Fee’ to the Union in advance on a pro rata basis for any time which the employee is employed by the Employer.  By arrangement with the Union, the ‘Bargaining Agents Fee” may be paid in 2 instalments throughout the year.

(iii)       The Employer must, at the request of an employee, provide a direct debit facility to pay the ‘Bargaining Agents Fee’ to the Union in accordance with this clause.”

These parties agree that the only finding of fact with respect to the Bargaining Agents Fee that needs to be made is confirmation of the CFMEUW policy that amongst other things provides that the union “will waive its right to seek a Bargaining Agents Fee from its financial members” and this “fact should be made clear to any employees potentially affected”.

A finding is made that the terms of the CFMEUW policy with respect to the application of the proposed Bargaining Agents Fee is that set out in the copy of the pro-forma letter under the CFMEUW’s letterhead and included as an attachment hereto.

A copy of a pro forma CFMEUW letter setting out this policy is attached.

(THE SECOND QUESTION (Our Notation))

The next question regarding the sub-contractors:

(b) (i) Is the provision of a clause as set out hereunder which prevents the employer engaging any sub-contractor that has not executed a certified agreement or industrial agreement an industrial matter?

(ii)         Where the parties have agreed to the provision of a clause which is set out hereunder which prevents an employer from engaging any sub-contractor that has not executed a certified agreement or industrial agreement can the Commission register the agreement under section 41A of the Act?

“Engagement of Sub-Contractors

The Employer must not engage any sub-contractor that has not executed a certified agreement or industrial agreement.”

(THE THIRD QUESTION (Our Notation))

The last matter, the conversion of accrued sick leave:

(c) (i) Where the parties have agreed to the provision of a clause which is set out hereunder which enables conversion of accrued sick leave credits to be bought out, can the Commission register the agreement under section 41A of the Act?

“Conversion of Sick Leave

The employee may elect to convert all sick leave entitlements over 5 days to a cash payment. If the employee elects to convert sick leave to a cash payment, payment must be made by the employer to the employee on the last pay period prior to any closedown for Christmas.”

7. Before matters set out in this document could be submitted to the Hon. President the parties were required to confirm the following:

(a) That the questions of law posed above properly identify the issues to be addressed;

(b) Apart from the finding made with respect to the CFMEUW policy on the application of the Bargaining Agents Fee, (see Attachment) there are no other findings of fact to be made to enable the Full Bench to determine the questions posed; and –

(c) That this document contains the questions which have been framed after the parties have been given an opportunity to be heard.

8. The parties have confirmed in writing that, for their part, there are no further proceedings necessary for findings of fact, reframing the questions of law, nor for any other reasons before these matters, could be submitted for the Hon. President’s consideration for submission to the Full Bench.”

THE FIRST QUESTION

27      We turn to the first question and that raises two sub-questions.  The first is whether the bargaining agent’s clause is within the jurisdiction of the Commission, that is, is it an “industrial matter” as defined.  The second part of the question is whether under s41A of the Act the agreement is registerable pursuant to s41 of the Act containing the clause in that form.

28      The effect of the clause, on a fair reading, is as follows:-

(a)          The employer must advise all employees before they commence work for the employer that a “bargaining agent’s fee” of $500.00 premium is payable to the union on or before 1 March in each year.

(b)          The mode of payment is in advance by an employee to the CFMEU and the fee is mandatorily prescribed.

(c)          The employer must, at the request of an employee, pay the fee to the CFMEU in accordance with the clause.

29      The Chief Commissioner found, as a fact, that the policy of the CFMEU in relation to bargaining agent’s fees, contained in a copy memorandum attached to the Chief Commissioner’s memorandum to the President of 27 October 2003, is as follows:-

“For the avoidance of doubt, the CFMEUW will waive its right to seek a Bargaining Agents Fee from its financial members.  This fact should be made clear to any employees potentially affected.”

30      There is no finding of fact about the quantum of a member’s subscription to the CFMEU or any finding as to any comparison of quantum between the $500.00 fee proposed to be levied from non-members and the quantum of subscriptions payable by members of the CFMEU, and no finding of any advantage or disadvantage to members or non-members; nor were such findings sought at first instance.

31      We would first observe as follows.

The Act – The Definition of Bargaining Agent

32      A “bargaining agent” is defined in the context of Part VID “Employer-Employee Agreements”, s97U(1) of the Act, as meaning “a person appointed as a bargaining agent under section 97UJ”.  However, it would seem that that is not what is meant by “bargaining agent” for the purposes of the agreement.  There is not a proper description or definition of the term, for the purposes of the industrial agreement herein, available to the Full Bench, but it would seem to have a wider meaning than that ascribed to it in the Act.  We say that because, under the Act, a bargaining agent, as defined, is a person who may be appointed by an instrument in writing by an employer or employee to be his or her bargaining agent for the negotiation and making of an employer/employee agreement (hereinafter called “an EEA”) (see s97UJ of the Act).  A bargaining agent may be appointed in connection with the registration of an EEA, for the negotiation and making of an EEA and that includes an agreement to cancel an EEA, also.

33      Significantly, a bargaining agent may be appointed for the purpose of acting for an employer or an employee in connection with any question, dispute or difficulty that has arisen or may arise out of or in the course of the employment (see s97UJ(1)(d)) of the Act).  However, that, in our opinion, is limited to any employment, the subject of an EEA because bargaining agents are appointed only for purposes connected to EEA’s.  Further, any person may be appointed as a bargaining agent, including an organisation or association that is registered under Part II, Division 4 of the Act.  That is an “organisation” as defined in s7 of the Act (see s97UJ(1) and (2) of the Act).

34      Such an appointment may be terminated at any time by notice of termination to the agent in writing.  Thus, a “bargaining agent” is a role or function created for an agent by the Act purely for the purposes of acting in relation to EEA’s and for no other purpose.  The agent must be appointed in writing by an employer or an employee each of who can also terminate the appointment in writing.  No-one else can appoint a bargaining agent.  That is, any such appointment purported to be made merely by an agreement between an organisation or association and an employer or employer organisation or association, purporting to appoint a bargaining agent for that employee, would be entirely null and void.

35      Under the WR Act, s170VA, contained in Part VID, refers to Australian workplace agreements (hereinafter called “AWA’s”), and defines a “bargaining agent”.

36      Again, a bargaining agent, as defined by the WR Act is very limited.  A bargaining agent means a person or group of persons duly appointed as a bargaining agent under s170VK of the WR Act.  S170VK is in similar terms to s97UJ of the Act, with one or two significant but not relevant differences.  However, it is clear that a bargaining agent under the WR Act, just as under the Act, is a limited creature who is appointed to be bargaining agent of the employer or employee concerned “in relation to the making, approval, variation or termination of an AWA”.

37      By way of emphasis on what a bargaining agent’s role is, we should add that s97UA of the Act prescribes as follows:-

“A single employer and a single employee may make an agreement, called an employer‑employee agreement, that deals with any industrial matter.”

38      That, of course, is in contradistinction between the sort of agreement registerable under s41 of the Act, which is a collective and not an individual agreement.

39      Statutorily such a bargaining agent cannot be appointed for any other purpose than the purposes of the Act and the WR Act and by the means prescribed in them.

40      In our opinion, the appointment of a bargaining agent by that name, and not for the purposes of a bargaining agent under the Act and the WR Act in the agreement between the above-mentioned parties, may well be invalid.  Further, a bargaining agent might, in any event, have no place in a collective bargaining agreement because under the Act such an agent exists for a different and restricted category of agreement, namely an EEA.

41      However, that matter was not raised in argument before the Full Bench, and we do not decide it for that reason, and we further do not decide it also because it may require, for its determination, findings of fact to be made at first instance.

S41 of the Act

42      Next, we turn to s41 of the Act which applies to industrial agreements, their effect, scope, registration and duration (see also s41A).

43      An industrial agreement means “an agreement registered by the Commission under this Act as an industrial agreement” (see s7 of the Act).

44      S41 provides, as we have said, the mechanism for and power of registration of industrial agreements.  One noteworthy feature of it is the very limited role of the Commission.  The Commission, with one or two exceptions, exists solely to register the agreement reached by the prescribed parties.

45      S41(1) reads as follows:-

“(1) An agreement with respect to any industrial matter or for the prevention or resolution under this Act of disputes, disagreements, or questions relating thereto may be made between an organisation or association of employees and any employer or organisation or association of employers.”

46      That section is quite clear.  First, there must be an agreement made between the persons, bodies or entities named in s41(1).  Second, the agreement can only be made between an organisation or association of employees and any employer or organisation or association of employers.

47      Generally speaking, that is a manifestation of the object of the Act which refers to collective bargaining (see s6(ad) of the Act) and its promotion and the establishment of its primacy over individual agreements.

48      An “industrial agreement”, as defined, cannot be registered if made by any other persons or entities party to it, nor, indeed, can any such agreement be made.  Specifically, no individual employee can be a party to a s41 industrial agreement (see the marked contrast with EEA’s where the opposite is the case).

49      It is to be noted that “organisation” is defined in s.7 of the Act to mean “an organisation that is registered under Division 4 of Part II”.  “Association” is defined to mean “an association that is registered under Division 4 of Part II”.  A council or other body, however designated, formed by and for the purpose of representing two or more organisations to the extent that they have industrial interests in common may be registered under the Act (see s67).

50      Therefore, no agreement can be an industrial agreement as defined, and no industrial agreement can be validly made or validly registered unless it is made between an organisation, an organisation of employees or association of employees and an employer and registered under the Act.

51      It is to be noted that, subject only to s41(3), s41A and s49N of the Act, where the parties to a s41(1) agreement apply to the Commission for registration of the agreement as an industrial agreement, the Commission shall register the agreement (see s41(2)) (our emphasis).  That is, there is a mandatory requirement by the use of the word “shall” that the Commission register such agreement, and that is the Commission’s function primarily, under s41.

52      The agreement can only be made and registered (see s41(1)) if it is:-

(a)          With respect to any “industrial matter” as defined in s7 of the Act; or

(b)          For the prevention or resolution under the Act of disputes; or

(c)          For the prevent or resolution under the Act of disagreements; or

(d)          With respect to any question relating to all or any of the above.

53      Despite Mr Ellis’ submission for the Minister, on a fair reading, the phrase “relating thereto” refers to all of the classes of matter to which s41(1) refers and not merely “industrial matters”.

54      Therefore, notwithstanding Mr Ellis’ submissions to the contrary, too, an “industrial agreement” is not confined to an industrial matter, but may be made for the prevention of disputes or disagreements or questions relating to such disputes or disagreements.  Insofar as this agreement was made for the prevention or resolution under the Act of disputes, disagreements or questions relating thereto, it is therefore within the jurisdiction of the Commission to register it whether it relates to an industrial matter or not.

55      Substantially, the agreement and the subject clause do relate, on a fair reading, to an “industrial matter” as defined, as we will observe hereinafter.

56      The registration is, of course, subject to s41(3) of the Act, which empowers the Commission, by the use of the word “may”, to require the parties thereto to effect such variation as the Commission considers necessary or desirable for the purpose of giving clear expression to the true intention of the parties.  It is to be noted, of course, that that is a very limited power and is directed not to the alteration of the agreement, save and except to give it clear expression so that the true intention of the parties who make the agreement is reflected in it (see s56 of the Interpretation Act 1984 (as amended)).

Industrial Matter?

57      Since this clause is part of an agreement which is plainly for the prevention or resolution of a dispute or disputes or questions relating thereto, in its form and substance, the clause is within the definition of an industrial matter, within jurisdiction, and can form part of the agreement as registered, for those reasons.

58      If we are wrong in the view that the agreement does not necessarily have to be one made “with respect to an industrial matter”, then we consider the nature of the two clauses in question and what they say, and we do so, in fact, because that is the first question referred.

59      We have reproduced above the first clause which relates to the question of bargaining fees.  What it says, in effect, is that the employer is required to advise all employees prior to commencing work for the employer that a “Bargaining Agents Fee of $500 per annum is payable to the Union on or prior to 1 March each year”.

60      There are other requirements of the employee, namely that each employee must pay the “Bargaining Agents Fee” to the union in advance on a pro rata basis for any time which the employee is employed by the employer.

61      Next, the employer is required by the clause, at the request of an employee, to provide a direct debit facility to pay the “Bargaining Agents Fee” to the union in accordance with this clause.

62      Suffice it to say, as we have said above, too, that although it was not raised by the parties before us, we have doubts that such a clause can be valid because a “bargaining agent” exists under both the Act and the WR Act for the limited purposes expressed in those Acts.

63      We now turn to consider the question of whether the clause is an “industrial matter” as defined, and whether, in 2002, the definition of “industrial matter” was substantially amended (see the Labour Relations Reform Act 2002).

64      There is a great deal of authority in the High Court, the Federal Court, the Industrial Appeal Court, and in the courts and tribunals of other States about the definition of “industrial matter” and the federal definition of “industrial dispute”.  In our opinion, the first step to be taken is to deal with the construction of the definition of “industrial matter” in s7 of the Act.

65      It is to be noted that the definition of “industrial matter” in the Act is and has been enlarged or extended by the use of the well known extending word “includes” (see R v Holmes and Others; Ex parte Public Service Association of New South Wales and Another [1977] 140 CLR 63 at 72).

66      We also observe that the definition of “industrial matter” has, by the amendments of 2002 (the Labour Relations Reform Act 2002), been substantially enlarged, and the value of authorities decided in the Industrial Appeal Court before that date, insofar as they are limited to the more limited words of “industrial matter” as it was then defined, are not so apposite.

67      The definition should be interpreted in accordance with the approach taken by the High Court in R v Coldham and Others; Ex parte The Australian Social Welfare Union [1983] 153 CLR 297 at 312 where whilst interpreting the then definition of “industrial dispute” in the WR Act, Their Honours said, per curiam:-

“The words are not a technical or legal expression.  They have to be given their popular meaning -- what they convey to the man in the street.  And that is essentially a question of fact.”

68      A further indication of the approach to be taken is that contained in the dicta of King CJ (Mohr J agreeing) in R v Industrial Commission of South Australia; Ex parte Master Builders Association of South Australia Incorporated [1981] 26 SASR 535 at 537-538 (In Banco).  Referring to the definition of “industrial matter” in the South Australian Act, which was in similar terms to the first paragraph of the definition in the Act before the amendments of 2002, he said:-

“The natural meaning of these words is wide and I see no reason to restrict the natural meaning.  The Act manifests a clear intention to give the Industrial Commission wide powers to adjudicate upon and to resolve disputes concerning matters which might reasonably be regarded as affecting the employer and employee relationship or which might be the source of disharmony in that relationship.

Clearly, there may be causes of disharmony between employers and employees which are totally unrelated to the relationship and which could not be regarded as arising from or relating to industrial matters, but, to my mind, the legislature has indicted its will that the Industrial Commission should be a tribunal to which employers and employees can resort to have a decision upon all issues which can legitimately be regarded as industrial issues and which might otherwise result in industrial conflict.  If this is the true policy of the Act, as I think it is, it would be quite inconsistent with that policy to place a restrictive interpretation upon the naturally wide meaning of the words “affecting or relating to” in the definition.”

69      We respectfully adopt those dicta and apply them in construction of the definition of “industrial matter” in the Act.

70      The clause under consideration in that case was a clause which sought to prohibit a principal party from entering into a contract or arrangement with a contractor for the supply of labour unless the principal’s contract or arrangement with the contractor had in it clauses or agreements, in respect of such labour, binding the principal to the observation of conditions not less than those in the award.

71      Whilst we follow what Parker J (Kennedy J agreeing) said in RGC Mineral Sands Ltd and Another v CMETSWU (2000) 80 WAIG 2437 at 2443 about the inapplicability of reasoning directed to the nature of an industrial dispute, in interpreting the definition of “industrial matter” in the Act, assistance can clearly be derived, and we do derive it from the High Court authorities to which we refer hereinafter.  In so saying, we note that the term “industrial dispute” and the definitions generally in the Federal Acts are narrower than that which now appears in the Act.  The general part of the definition of “industrial matter” in s7 of the Act reads as follows:-

““industrial matter” means any matter affecting or relating or pertaining to the work, privileges, rights, or duties of employers or employees in any industry or of any employer or employee therein and, without limiting the generality of that meaning, includes any matter affecting or relating or pertaining to …” (our emphasis)

72      There follow the items of expanded definition of a particular kind, some of which we refer to hereinafter.

73      It should be noted that the word “includes” is a word which expands the definition.  It should also be noted that the particular items of definition, which appear after what we have just quoted above, are specifically expressed not to limit the generality of the first six lines of the definition in s7 of the Act.

74      (It is necessary also to look generally at the analysis of the definition as it was formerly, which the Full Bench undertook in Hamersley Iron Pty Ltd v AMWSU (1990) 70 WAIG 3001 at 3006-3008 (FB), and the authorities cited therein).

75      The words now are “any matter affecting or relating or pertaining to the work, privileges, rights or duties of employers or employees in any industry …”.  (The words “or pertaining to” were added in 2002).

76      The words “pertaining to” mean “belonging to” or “within the sphere of” (see Re Cram and Others; Ex parte New South Wales Colliery Proprietors’ Association Ltd and Others [1987] 163 CLR 117 at 134 per Mason CJ, Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ).

77      Such an approach is fortified by the naturally wide meaning of the words in the definition of “industrial matter” in s7 of the Act, which words are even wider than those referred to in the South Australian Act in R v Industrial Commission of South Australia; Ex parte Master Builders Association of South Australia Incorporated (In Banco) (op cit) or those words which defined “industrial matter” before the amendments of 2002.

78      The words “affecting or relating to” alone must be read widely and unrestrictedly, and, in our opinion, for the reasons expressed hereinafter, are sufficient to render the clause an “industrial matter”.  The definition has been widened so that any matter “affecting or relating or pertaining to” the relationship between employers and employees is an industrial matter, and, a fortiori, must be read widely and unrestrictedly (see R v Industrial Commission of South Australia; Ex parte Master Builders Association of South Australia Incorporated (In Banco) (op cit) per King CJ and see Hamersley Iron Pty Ltd v AMWSU (FB) (op cit)).

79      In particular is it made clear in that case that such a definition includes “the relations of employers and employees”.  Paragraph (ca) of the definition “industrial matter” in s7 of the Act, which has now been added, expressly uses the words “the relationship between employers and employees” and augments the definition.

80      Dixon CJ noted, too, in R v Findlay and Another; Ex parte The Commonwealth Steamship Owners’ Association and Others [1953] 90 CLR 621 at 629-630 that although the possibility of an indirect and consequential effect is not enough, the conception of what arises out of or is connected with industrial relations includes much that is outside the contract of service, its incidence and the work done under it.

81      Paragraph (ca) of the definition of “industrial matter” in s7 clearly reflects that view legislatively.

82      His Honour said at page 630:-

“Conditions affecting the employee as a man who is called upon to work in the industry and who depends on the industry for his livelihood are ordinarily taken into account.”

83      Dixon CJ went on to approve what Isaacs and Rich JJ said in The Australian Tramway Employes' Association v Prahran and Malvern Tramway Trust and Others [1913] 17 CLR 680.  Isaacs and Rich JJ said at pages 693-694:-

The ‘conditions’ of employment include all the elements that constitute the necessary requisites, attributes, qualifications, environment or other circumstances affecting the employment.

And the words ‘employers’ and ‘employes’ are used in the Act not with reference to any given contract between specific individuals, but as indicating two distinct classes of persons co-operating in industry, proceeding harmoniously in time of peace, and contending with each other in time of dispute.”

84      We respectfully apply those dicta.

85      We refer to the application of these dicta by the Full High Court in Re Cram and Others; Ex parte New South Wales Colliery Proprietors’ Association Ltd and Others (op cit) at page 134).  Their Honours in Re Cram and Others; Ex parte New South Wales Colliery Proprietors’ Association Ltd and Others (op cit) referred to the extended definition under their consideration by reference to a different but similar part of the definition of “employee” ((ie) similar) to the definition of “employee” in the Act in one respect.  The definition of “employee” in s7 of the Act includes “any person whose usual status is that of an employee”, and, since the definition of “industrial matter” depends on the definition of “employer” and “employee” in the Act it is an expanded definition because of that expanded definition of “employee”, just as the definition was expanded for a similar reason in Re Cram and Others; Ex parte New South Wales Colliery Proprietors’ Association Ltd and Others (op cit).

86      In paragraph (b) of the definition of “industrial matter” in s7 of the Act, “industrial matter” is defined to include any matter affecting or relating to the “conditions of employment”, so that dictum is plainly relevant, and we apply it in this case.

87      Some attention to similar clauses has been paid in other jurisdictions.

88      A Full Bench of the New South Wales Industrial Relations Commission in Re Review of the Principles for Approval of Enterprise Agreements 2002 [2002] NSWIR Comm 342 (NSWIRC FB) considered a clause which in that case was not materially different from the clause in this case for the purpose of deciding the questions of law raised (see pages 4 and 5 of that decision).

89      It must be observed that in that case, whether the clause was within the jurisdiction for the purpose of registering an agreement including the clause, depended on whether the agreement was made “setting conditions of employment for employees”, which is very much more narrow than the definition of “industrial matter” in the Act.  Nonetheless, having regard to the judgment in R v Booth; Ex parte Administrative and Clerical Officers Association [1978] 141 CLR 257 where the broad definitions of “conditions of employment” referred to by Isaacs and Rich JJ in The Australian Tramway Employes' Association v Prahran and Malvern Tramway Trust and Others (op cit) at page 693 were approved, the Full Bench of the New South Wales Industrial Relations Commission found that such a clause was within jurisdiction.  The Full Bench observed in New South Wales that such a clause might fall within the definition of “conditions of employment” in s29 of the New South Wales Act and therefore within the jurisdiction.

90      The Full Industrial Relations Commission of South Australia in Ian Gregory Morrison Pty Ltd (SA) Patrol and Security Officers’ Enterprise Agreement 2002-4 (Bargaining Agents Fee) [2003] SAIR Comm 36 also considered a bargaining agent’s fees clause, not materially different from the clause under consideration in this case, and also for the purposes of determining jurisdiction.

91      Enterprise agreements in the Industrial and Employees Relations Act 1994 (SA) are referred to as instruments for the regulation of “remuneration and other industrial matters” and being made “about remuneration and other industrial matters”.  The objects of the South Australian Act (s73) refer to the encouragement of agreements “governing remuneration, conditions of employment and other industrial matters”.  That is not so different from the objects in s6 of the Act which are to bring about fair conditions, inter alia.

92      The South Australian clause was held in Ian Gregory Morrison Pty Ltd (SA) Patrol and Security Officers’ Enterprise Agreement 2002-4 (Bargaining Agents Fee) (op cit) to be an “industrial matter” for the purposes of that Act (see paragraphs 63 and 64).

93      In Queensland, the case of Australian Workers’ Union of Employees; Queensland v Skills Training Mackay (2002) QCIG 172 was a case in which the Queensland Commission dealt with a clause relating to a bargaining agent’s fees.  However, the reasons for determining that such a clause in the agreement referred to in that case was not within jurisdiction placed too much emphasis on the definition of “industrial dispute” under various Federal Acts.  On a fair reading, therefore, the reasons are not helpful to the interpretation of the definition of “industrial matter” in this State.  In any event, the definition of “industrial matter” in that State is much narrower than the definition in the Act (see page 176).  We would not therefore apply that decision, for those reasons.

94      We turn first to the general part of the definition of “industrial matter” in s7 of the Act.  The imposition of a bargaining agent’s fee and the manner of its payment or collection is any matter affecting or relating to or pertaining to ((ie) belonging to or in the sphere of) the work of employees in the building industry.  It is also a matter affecting or relating or pertaining to the wages, salaries or other remuneration of employees.  In so finding, we adopt what was said by the Full Industrial Commission of South Australia in Ian Gregory Morrison Pty Ltd (SA) Patrol and Security Officers’ Enterprise Agreement 2002-4 (Bargaining Agents Fee) (op cit).

95      The clause before the Full Bench in this matter is an “industrial matter” as defined in the Act.  The relevant authorities and the words of the definition to which we have referred above require the Commission to adopt a wide meaning for the definition and all parts of the definition of “industrial matter” so as to include any matter that might be reasonably regarded as affecting the employer and employee relationship, or which might be the source of disharmony in that relationship.  Quite clearly, payments to a third party may be an industrial matter, depending on the character of the payee and the capacity in which that person makes the payment.

96      The subject clause adjusts the manner in which the employees are to be paid, and this means that the provision governs or affects remuneration payable under the agreement and is within jurisdiction.  The clause also pertains to remuneration payable.  This approach is clearly consistent with those authorities which conclude that the deduction of authorised union dues was an industrial matter.

97      In any event, as we later conclude, the clause relates to a condition of employment in the wide sense in which the authorities above characterise that term.

98      This is also a matter affecting or relating or pertaining to remuneration in the manner in which paragraph (a) of the definition refers to remuneration of employees.  Further, the clause is an industrial matter because the matter is one which affects or relates or pertains to conditions of employment, and, further, the mode and terms of employment.

99      Next, the clause relates clearly to the relationship between employers and employees since it refers to the relationship of employer and employee referred to in paragraph (ca) of the definition, particularly having regard to the dicta which we have quoted above.

100   The subject matter of the clause is a matter which affects or relates or pertains to work, work conditions, the environment and the use of agents to negotiate pay or conditions for employees in the working environment, because of the fact that they are employees of employers.  There is a direct imposition of obligations on the employer and on employees in an industry whether union members or not.

101   We would add that that definition (ca) was not relied on in this case, so that we do not make a final judgment on the matter, but it is, we think, for the reasons which we have expressed, a strongly arguable approach.

102   Further, the clause relates clearly to the relationship between employers and employees since the matter of the clause is directly related to the relationship of employer and employee as defined, particularly having regard to the dicta we have just quoted.  The clause expresses a matter which affects, relates or pertains to work, work conditions, environment and the use of agents to negotiate pay or conditions.  (We adopt the reasoning in Re Cram and Others; Ex parte New South Wales Colliery Proprietors’ Association Ltd and Others (op cit) and the cases cited above, particularly Ian Gregory Morrison Pty Ltd (SA) Patrol and Security Officers’ Enterprise Agreement 2002-4 (Bargaining Agents Fee) (op cit) and Re Review of the Principles for Approval of Enterprise Agreements 2002 (op cit)).

103   Paragraph (e) of the definition of “industrial matter” in s7 of the Act is another relevant definition.  That reads:-

“(e) the privileges, rights, or duties of any organisation or association or any officer or member thereof in or in respect of any industry;”

104   It is, it might be said, entirely clear that the right of the CFMEU, an “organisation” as defined in s7, or its privilege to levy and have collected a bargaining fee from “employees” in an industry as defined, is within the meaning of that provision, and that the clause is a matter affecting or relating or pertaining to such a right or privilege.  Again, we make no final finding on that question because it was not argued, but it is fair to say that it is very much arguable.

105   We should add that this matter is not one which falls within paragraph (g) of the definition of “industrial matter” in s7 of the Act, because it does not relate to the collection of “subscriptions to an organisation”, nor could it be so contended.

106   We now turn to paragraph (i) of the definition of “industrial matter” in s7.  It is a very wide definition which includes, inter alia, any matter falling within the preceding part of the definition of “industrial matter”.  It reads as follows:-

“(i) any matter, whether falling within the preceding part of this interpretation or not, where — 

1. an organisation of employees and an employer agree that it is desirable for the matter to be dealt with as if it were an industrial matter; and
2.       the Commission is of the opinion that the objects of this Act would be furthered if the matter were dealt with as an industrial matter;

and also includes any matter of an industrial nature the subject of an industrial dispute or the subject of a situation that may give rise to an industrial dispute but does not include …”

(There follows reference to matters excluded from the definition in paragraph (i) which relate, it would seem, to matters of freedom of association).

107   It is fair to say, on a fair reading, that a matter is an “industrial matter” if it is any matter which affects, relates or pertains to any matter where an organisation of employees and an employer agree that it is desirable for the matter to be dealt with as if it were an “industrial matter”, that is as if it were an “industrial matter” as otherwise defined.

108   The second precondition to this occurring is that the Commission must be of opinion that the objects of the Act would be furthered if the matter were dealt with as an industrial matter.

109   In this case, the parties in reaching an agreement and placing it before the Commission by way of an application under s41 of the Act for registration, have complied with the first condition.  It is not necessary for them to say so in those precise words when it is quite clear that by the terms of the agreement that the parties are seeking to register an agreement relating to an industrial matter.

110   In addition, it is plainly open to find that objects 6(aa), (ad) and (ag) of the Act would be furthered, and that the Commission could so find if the matter were treated by the Commission as an “industrial matter”.  Those objects of the Act would be clearly advanced because the agreement and the clause under consideration are directed to promoting collective bargaining and to establishing the primacy of collective agreements over individual agreements.  The agreement and clause are also directed to promoting goodwill within industry and enterprises within industry, as well as enabling employers, employees and organisations to reach agreement appropriate to the needs of the enterprise within it, balanced with fairness to the employees in the industry and enterprises.

111   Paragraph (i) of the definition of “industrial matter” in s7 of the Act also includes any matter, whether the parties desire it or not, the subject of an industrial dispute or the subject of a situation that may give rise to an industrial dispute, within the definition of “industrial matter”.  The breadth of that part of the definition is, paradoxically enough, exemplified by its express exclusion of what we might call only freedom of association related matters.  Otherwise, there seems to be no limitation.  In our opinion, “any matter of an industrial nature” within paragraph (i) of the definition, means a matter not essentially between employers or employees qua employers and employees as defined, but a matter which has the quality of an industrial matter (see the definition of “in the nature of” in The Macquarie Dictionary, (3rd Edition)).  That is, it is a matter which affects or relates or pertains to a matter of an industrial nature.  In itself, a matter of an industrial nature, as long as it is the subject of an industrial dispute or the subject of a situation that might give rise to an industrial dispute, is an industrial matter.  A matter which is “in the nature of an industrial matter” is plainly not an “industrial matter”, in any narrow sense, otherwise there would be no need to extend the definition of “industrial matter” to include a matter in the nature of an industrial matter.

112   A matter, to come within that part of paragraph (i) of the definition, must be a matter in the nature of an industrial matter, and, secondly, must be the subject of an industrial dispute, which is not defined, or the subject of a situation that might give rise to an industrial dispute.  Therefore, a matter which has an industrial flavour, industrial features, relates to industry, is affected by or affects industry and/or employers, employees or persons who are not employers or employees engaged in or connected to industry, and organisations or associations engaged in or connected to industry or affected by questions arising directly or indirectly in relation to an industry is a matter of an industrial nature.  Paragraph (i), therefore, extends the definition of “industrial matter” substantially.

113   This clause indubitably would fit within paragraph (i) of the definition, because it may give rise to an industrial dispute, particularly if the agreement is not registered, and because if it is not an “industrial matter” as directly defined, which it clearly is, it is without doubt a matter of an industrial nature.  Further, it is a matter which would, within paragraph (i), if an agreement is not registered be that sort of matter which is the subject of a situation that may give rise to an industrial dispute.  It could clearly be so found.

114   The clause, as King CJ said in R v Industrial Commission of South Australia; Ex parte Master Builders Association of South Australia Incorporated (In Banco) (op cit), affects, relates (or pertains) to the employer and employee relationship “in a close and obvious way”.

115   For all of those reasons, it is quite clear that the clause is an “industrial matter”.

116   We refer to Mr Richardson’s submission that the matter was not an industrial matter if the rules of the union forbade or did not empower such a course.  That is arguable, but that was not one of the facts before the Full Bench.  We do not therefore consider it, nor do we consider any argument that the CFMEU cannot bind itself or purport to do something under its rules which is ultra vires the rules.  That, however, is a matter which the Commissioner at first instance ought to entertain if it is raised.  Obviously, an organisation cannot act ultra vires its rules.

117   However, nothing was submitted to the Full Bench which would have us accept that it was not an “industrial matter” as defined.  The Commission has jurisdiction to deal with that clause and with the agreement under s41 of the Act.

THE SUB-CONTRACTOR’S CLAUSE

118   We turn now to the second clause which relates to sub-contractors.

119   This, so it was submitted, was a clause which bound an employer to not enter into a contract for doing work in circumstances where “the interest which an organisation of employees possesses in the establishment or maintenance of industrial conditions for its members gives a foundation for an attempt on its part to prevent employers employing anyone else on less favourable terms” (see R v The Commonwealth Court of Conciliation and Arbitration and Others; Ex parte Kirsch and Another [1938] 60 CLR 507).

120   The effect of the clause, it was accepted by counsel and the agents who appeared, was that Sanwell was prohibited from engaging sub-contractors who themselves engaged employees whose terms of employment were not governed by an industrial agreement under the Act or a certified agreement under the WR Act.

121   We adopt and repeat what we said above about the general approach to the interpretation of the term “industrial matter”.

122   The Full Court of the Supreme Court of South Australia in R v Industrial Commission of South Australia; Ex parte Master Builders Association of South Australia Incorporated (In Banco) (op cit) held that the South Australian Industrial Relations Commission had jurisdiction to include in an award a provision prescribing conditions upon which employers bound by an award may engage independent contractors to do work covered by the award.  That matter was decided on a definition akin to the first part of the old definition of “industrial matter” in the Act which used the words “affecting or relating to”, only before the words “or pertaining to” were added in 2002.

123   The narrower definition of “industrial dispute” was still wide enough to support the finding that a dispute about whether employees of contractors, if engaged by an employer, should be entitled to the benefit of an award binding the employer, was within jurisdiction so as to enable the South Australian Industrial Relations Commission to settle the question as incidental to a dispute about conditions of employment.  The High Court so held in R v Moore and Others; Ex parte FMWU [1978] 140 CLR 470 at 472-473 and 478.  In that case, the High Court also distinguished R v Judges of the Commonwealth Industrial Court and Others; Ex parte Cocks and Others [1968] 121 CLR 313, and we follow Their Honours reasoning in that case.

124   In AFMEPKIU v Unilever Australia Ltd (PR 940027) (31 October 2003) (FB) a Full Bench of the Australian Industrial Relations Commission held that “a contractors clause” was properly about a matter “pertaining” to the relationship of employer/employee in the more narrowly defined federal jurisdiction (see the definition of “industrial dispute” in s4(1) of the WR Act and paragraphs (a) and (b) in particular).

125   King CJ applied R v Moore and Others; Ex parte FMWU (op cit) in R v Industrial Commission of South Australia; Ex parte Master Builders Association of South Australia Incorporated (In Banco) (op cit) at page 539, and we refer hereinafter to what His Honour said:-

“The significance of the case, to my mind, is that all members of the Bench recognized implicitly the connection which may exist between the employer and employee relationship and the terms and conditions upon which an employer or potential employer can have the work done by persons other than his employees.”

126   Their Honours held that, depending on factual findings, such a cause could be within jurisdiction of the Australian Industrial Relations Commission.  However, at page 538, King CJ said this:-

“The three clauses which the union seeks to insert in the award are designed to prevent an employer or potential employer from procuring work, which would otherwise be performed by employees under the award, to be done by subcontractors for contract prices and under contract conditions less favourable to those performing the work than those prescribed by the award.  Such an application seems to me to affect or relate to the employer and employee relationship in a close and obvious way.  If employers or potential employers can have work which is covered by the award done by subcontractors at cheaper rates than those prescribed by the award, employees are less likely to be able to obtain and retain employment in the industry.  In some cases employees may be rendered vulnerable to pressure to accept less than award conditions thereby creating problems for the policeing and enforcement of the award.  In other cases, they may be vulnerable to pressure to abandon their status as employees and to accept work under contract on less favourable terms.  Considerations such as these must have been present to the minds of the judges of the High Court in In re Moore; Ex parte Federated Miscellaneous Workers’ Union of Australia.”

127   Zelling J also said in the same case at page 543:-

“This is a typical contracting out clause which seeks to avoid undercutting in an industry with the consequent likelihood either of an application to reduce the rates payable under the award or of making employees redundant and therefore causing them to lose their jobs or reduce the amount of employment available to them.  Employers and employees have been disputing about such things for very many years.  It is the sort of thing that an employee could legitimately negotiate when considering whether to enter into a particular contract of employment and it is within the words of Bray C.J. in The Queen v. The Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Co-operative Limited.” ((1977) 16 SASR 6 at 8)

128   We would also observe that those findings relied on the words “affected or related to” in the Industrial Conciliation and Arbitration Act 1972-1979 (SA), which, in our opinion, were quite wide enough.  However, we observe that those words are narrower than the words in the Act which are “affecting or relating or pertaining to”.

129   R v Moore and Others; Ex parte FMWU (op cit) was a case where the draft award put forward by the union in its log of claims contained a clause to the effect that no employer should permit work covered by the award to be done under contract, except in accordance with the terms and conditions of the award.

130   The sub-contractor’s clause is closely akin to the clauses considered in R v Industrial Commission of South Australia; Ex parte Master Builders Association of South Australia Incorporated (In Banco) (op cit) and in R v Moore and Others; Ex parte FMWU (op cit).  It is a clause which has been agreed between the parties and which will ensure that all employees on site will be employed pursuant to collective bargaining agreements to which an organisation of employees will be a party.  S41 agreements, of course, will more likely than not involve the CFMEU as a party.  Thus, there is a greater likelihood that all employees on site will be engaged on the same or similar conditions.  There is therefore less likelihood of the sort of problems arising which King CJ and Zelling J adverted to in R v Industrial Commission of South Australia; Ex parte Master Builders Association of South Australia Incorporated (In Banco) (op cit), incidentally another building industry case (see, too, Hanssen Pty Ltd v CFMEU (unreported) (2004 WAIRC 10828), delivered 8 March 2004, (FB) where a sub-contractor’s clause was considered in detail and held to be an “industrial matter”).

131   The sub-contractor’s clause, for those reasons, affects, relates or pertains to the employer and employee relationship, as King CJ said above at page 538, “in a close and obvious way”.

132   We would add, too, that that sort of situation where employees on the sites are subject to the same or similar conditions is certainly conducive to goodwill in the industry (see s6(a) of the Act), because, it is fair to observe, difficulties will not arise over different or markedly different prevailing conditions of employment.  However, that observation, of course, does not relate to the question of jurisdiction.

133   There is a direct connection manifested in the sub-contractor’s clause between the employer and employee relationship and the terms and conditions upon which an employer or potential employer can have the work done other than by her/his/its employees.

134   For all of those reasons, we would find that the subject of the sub-contractor’s clause is an industrial matter and is within jurisdiction.

135   Further, such a matter plainly fits within the general part of the definition of “industrial matter” and paragraph (b) “conditions of employment”, and paragraph (i).  We have already observed that it is strongly arguable that the subject matter of the clause fits within paragraphs (ca) and (e) of the definition of “industrial matter” in s7 of the Act, and therefore the sub-contractor’s clause is a matter affecting or relating or pertaining to an industrial matter in the agreement and an “industrial matter” as defined.

136   In particular, since the parties have agreed, pursuant to s41, that the matter is an industrial matter by making the application to register the agreement, then it is one, provided that the Commission, as it is open to do, pursuant to paragraph (i) of the definition of “industrial matter” in s7, finds that the sub-contractor’s clause helps to promote the objects of the Act, which it clearly does.  It does so because it helps to establish the primacy of collective agreements.  It provides for a means of settling industrial disputes.  It also deals with a multiplicity of uncontestedly industrial matters.  The sub-contractor’s clause is clearly within jurisdiction as an industrial matter.  It was correctly not contended, except for the sub-contractor’s clause that any other clause was not within the definition of “industrial matter”.

JURISDICTION TO REGISTER

137   We find, for those reasons, and are satisfied, that there is jurisdiction to register the agreement, including the sub-contractor’s clause.

CAN THE COMMISSION REGISTER AGREEMENTS AND MAKE ORDERS CONTAINING NON-INDUSTRIAL MATTERS?

138   If we are wrong in those views which we have just expounded, then we would hold that the agreement is one with respect to an industrial matter, including the clauses the subject of these proceedings, and can still be registered in this jurisdiction.

139   We have already said that the agreement “for the prevention or resolution under this Act of disputes, disagreements, or questions relating thereto” may be made between an organisation or association of employees and may be made between an organisation or association of employees and any employer or organisation or association of employers.  This quite correctly accords with the extended definition of “industrial matter” and the objects of the Act, giving primacy to collective agreements.

140   Further, it is a construction which enables an agreement which the parties have reached to be registered, thereby preventing or resolving a dispute.  That is a mechanism which reflects the objects prescribed in s6(a), (ae), (af) and (ag) of the Act.

141   Next, the CFMEU relied on the proposition that an industrial agreement can be registered under s41 of the Act, even if it contains matters which are not “industrial matters” as defined.

142   There was reliance for that proposition upon the judgment of the Full Court in AFMEP&KIU v Electrolux Home Products Pty Ltd (2002) 115 IR 102.  Their Honours held at page 120:-

“We do not see why the presence of one or more provisions that do not pertain to the relationship necessarily takes an agreement outside the description embodied in s 170LI(1).  As counsel for the Unions pointed out, s 170LI(1) does not refer to the terms of an agreement.  It talks about ‘‘an agreement . . . about matters pertaining to the relationship’’.  So it is necessary to characterise the agreement itself, considering it as a whole.  An agreement for the sale of a house is an agreement pertaining to real estate, notwithstanding it includes a provision regarding furniture.

Nothing in the statutory scheme suggests that a certified agreement that, considered as a whole, answers the description of s 170LI(1) may not include a particular term that does not.”

(And see AFMEPKIU v Unilever Australia Ltd (op cit) (FB)).

143   In the same manner, s41 of the Act talks about “an agreement with respect to any industrial matter”, as we have said.

144   The Act allows the parties, not the Commission, to judge the content of the agreement.  It furthers the objects of the Act if they do.  They judge the conditions, rights, objects and subject matter.  However, the agreement must be an agreement in the terms prescribed by s41 of the Act.

145   The agreement, inter alia, must be an agreement “with respect to any industrial matter”.  It is not restricted by those words to industrial matters only.  The object is to resolve disputes in accordance with the objects of the Act, to create goodwill in industry, and to promote the primacy of collective bargaining.  S41 is a manifestation of that.

146   We agree, with respect, with the dicta of the Federal Court referred to above and apply it.  Clearly, if the matters in the agreement so preponderantly relate to and/or create an agreement which is not with respect to any industrial matter, then it cannot be registered because the agreement is not one with respect to an industrial matter.  However, the mere presence of one or more provisions in the agreement which the parties agree are necessary to solve their differences and/or regulate their relationship and/or prevent a dispute, even though they do not affect, relate or pertain to an industrial matter as defined, does not render the agreement one which is not with respect to any “industrial matter”.  Such a clause is the sub-contractor’s clause.  It is the only clause in the agreement made by the parties so characterised.  The agreement is clearly one with respect to any “industrial matter”, because, on a fair reading, it is an agreement with respect to a whole lot of industrial matters.  The agreement is therefore registerable for that reason also.

ARE THERE OTHER BARS TO REGISTRATION – THE WR ACT?

147   It was submitted that the bargaining agent’s clause could not be registered because it was uncertain.  We do not think that that was a matter raised in the questions posed by the Chief Commissioner to the Full Bench.  In our opinion, therefore, the Full Bench cannot and ought not to deal with that submission.

148   It is not correct to submit that the parties did not reach agreement about the matters in the agreement.  They did whether the clause or any clause needs more clarity of expression or not.  In any event, it is a matter for the Commissioner at first instance to deal with questions of clarity of expression pursuant to s41(3) of the Act which exists to enable the true intention of the parties to be expressed.  If that is a matter which the Chief Commissioner is of opinion should be raised, then no doubt he will raise it with the parties, but that is a matter for him, and not for this Full Bench in the questions referred to it.

THE BARGAINING AGENT’S CLAUSE – IS IT REGISTERABLE?

149   The Chief Commissioner referred a question to the Full Bench in somewhat general terms, namely whether the bargaining agent’s clause can be registered under s41A of the Act.  S41A reads as follows:-

“(1) The Commission shall not under section 41 register an agreement as an industrial agreement unless the agreement —

(a) specifies a nominal expiry date that is no later than 3 years after the date on which the agreement will come into operation;

(b) includes any provision specified in relation to that agreement by an order referred to in section 42G; and

(c) includes an estimate of the number of employees who will be bound by the agreement upon registration.

 (2) The Commission shall not under section 41 register an agreement as an industrial agreement to which an organisation or association of employees is a party, unless the employees who will be bound by the agreement upon registration are members of, or eligible to be members of, that organisation or association.”

150   S96B(1), (2) and (3) of the Act reads as follows:-

“(1) An award, industrial agreement or order under this Act, or any arrangement between persons relating to employment must not — 

(a) require a person — 

(i) to become or remain a member of an organisation;

(ii) to cease to be a member of an organisation;

(iii)       not to become a member of an organisation; or

(iv) to treat another person less favourably or more favourably according to whether or not that other person is, or will become or cease to be, a member of an organisation;

or

(b) confer on any person by reason of that person’s membership or non­-membership of an organisation any right to preferential employment or to be given preference in any aspect of employment.

(2) The prohibition in subsection (1) extends to awards, industrial agreements, orders and arrangements that are in force at the commencement of section 28 of the Industrial Relations Amendment Act 1993.

(3) A requirement that is contrary to this section is of no effect.”

151   It was submitted on behalf of the intervener that the bargaining clause in the agreement, at least, cannot be registered because it is unlawful.  It is unlawful, so the submission went, because it is in breach of s96B of the Act, and therefore, of no effect.

152   There is no indication what element of s41A is the subject of the referral, or what the question of law which is referred to is, in relation to s41A.

153   S96B of the Act has been raised by the intervener.

154   At pages 94-96 of the transcript on appeal, Mr Dixon, who appeared for the CFMEU, made a number of submissions, in the course of responding to Mr Ellis’ submissions for the Minister, in the course of an exchange with the Full Bench in which the question of Mr Ellis’ submissions for the Minister were dealt with.  In short, Mr Ellis’ submission was that the bargaining agent’s clause was not registerable and was of no effect because of s96B of the Act.

155   Mr Dixon’s submissions can be summarised as follows:-

(a)          The bargaining agent’s clause is not unlawful because if there is evidence that the intent is to apply the clause differently according to union membership then he would accept that s96B would be offended.  However, he submitted that that is a question of fact.

(b)          He then went on to say this:-

“…difficulty of the finding put forward by the Chief Commissioner because it puts the Full Bench in a difficult position because I would have to accept that if that's true, there are real problems with section 96B.”

(c)          He then submitted that, on a fair reading of the clause, that was not so.

(d)          He also developed that further by saying that, on a fair reading of the proposed clause, it is not contrary to s96B because the clause applies to “employees”, and not therefore to union members or non-union members as such.  Thus, if the bargaining agent’s fee is set below the level of union fees everyone would pay a bargaining agent’s fee, so the submission went.  Thus, further, union members would pay over and above that amount “to a quantum equivalent to their union membership fees, but everyone would be paying a bargaining agent’s fee”.  Thus, as he submitted, there would be no “discrimination” in that case.

(e)          Mr Dixon also agreed, when it was put to him by the Full Bench, that there was no finding as to what the union’s fees are.

(f)           He turned his attention to the precise words of the finding made by the Chief Commissioner that “the terms of the CFMEUW policy with respect to the application of the proposed Bargaining Agents Fee is that set out in the copy of the pro-forma letter” to which we have referred above.

(g)          He submitted that the finding, in summary, was uncertain, but suggested that:-

“… the CFMEUW will waive its right to seek a bargaining agent’s fee from its financial members.  That’s what it suggests and that would give rise to a difficulty because in every other registration that goes before a Commissioner that of course wouldn’t be the case.”

156   The policy referred to requires, inter alia, that the employer must advise all employees, not merely union members, that a bargaining agent’s fee is payable to the union, and, inter alia, that the terms and conditions of the industrial agreement (if registered, of course) are to be explained by the employer to all new employees before the commencement of their employment, as being a condition of employment.

157   In the pro forma letter referred to above, the CFMEU then says quite clearly:-

“For the avoidance of doubt, the CFMEUW will waive its right to seek a Bargaining Agents Fee from its financial members.  This fact should be made clear to any employees potentially affected.”

158   Of course, by s96B(1) of the Act, an industrial agreement must not, inter alia (see 96B(1)(a)(iv)), require a person to treat another person less favourably or more favourably according to whether or not that other person is, or will become or cease to be a member of an organisation.  A requirement that is contrary to s96B(1) is of no effect (see s96B(3)).

159   However, on a fair reading, the clause itself, which refers to “employees” and makes no distinction between union members and other employees, is not at all exceptionable.  It does not require any person to treat any person less favourably or more favourably according to whether or not that other person is or will become or cease to be a member of an organisation.  That, therefore, is not part of the industrial agreement sought to be registered.

160   It is the policy of the union by which financial union members’ bargaining agent’s fees are waived and which is not part of the agreement which alone might, on a fair reading of the policy, and on the finding of any relevant facts required to be made, be characterised as offending s96B.  That, however, is not a part of “an award, order or industrial agreement” within the meaning of s96B(1).

161   An “industrial agreement”, as defined in s7 of the Act, means “an agreement registered by the Commission under this Act as an industrial agreement”.  The agreement sought to be registered contains the clause to which we have referred.

162   The policy of the CFMEU is not expressed to be part of the industrial agreement sought to be registered, and nothing like it appears in the industrial agreement sought to be registered.  Further, it is not part of an award or order as defined.  Whether it is “an arrangement between persons relating to employment” within the meaning of s96B(1) is entirely another matter, and irrelevant to these proceedings.

163   Further, it is arguable, even if we were wrong in those conclusions, which we are not, that the policy is not one which treats non-union employees less favourably and union employees more favourably merely because a bargaining fee is levied on non-union members and not on union members.  In determining that question, which is not a question which is before the Full Bench, much would depend on the quantum of the comparative union fees and bargaining agent’s fees.  We do not see that the charging of a fee for a service which is performed for an employee, itself, offends the section.  Again, however, it is unnecessary for us to find that, and there are no facts on which we can find it, even if it were relevant.

164   There were, in any event, no findings of fact made at first instance in relation to these matters, as we have observed.  Some difficulty arises obviously because the interveners’ submissions, supported on this point by other parties, were not ventilated at first instance for the relevant facts to be found by the Chief Commissioner.

165   Moreover, even on a fair reading of s41, questions about whether there can be registration of an agreement under s41A do not give any consideration to the operation of s96B of the Act.

166   Any argument that s96C is an obstacle to negotiation of the agreement fails also because of the lack of fact finding, by agreement of the parties in relation to any question of favourable or less favourable treatment of any person and for the same reasons in that context, as we have expressed in relation to s96B above.  We emphasise that the answers which we provide to the questions asked are confined to the direct questions of law posed to the Full Bench.

167   We would answer the question posed, “Yes”, on the submissions and material before the Full Bench.

IS THE PROPOSED SUB-CONTRACTOR’S CLAUSE REGISTERABLE?

168   It was submitted for the intervener that if the intention of the parties was to confine permitted industrial agreements to agreements certified under the WR Act or registered under s41 of the Act, then the clause has the potential to lead to contraventions of Part XA of the WR Act.  This, it was submitted, was because Sanwell would be prevented from entering into a sub-contract agreement with a contractor if that sub-contractor had engaged employees under an award or under industrial employment instruments such as a federal AWA or an EEA under the Act.

169   The question of registerability is confined to the operation of s41A.  Again, it is not clear to us which part of s41A applies.  No or no sufficient findings of fact have been made, in any event, to enable us to answer that question of law.  It is certainly not clear to us either what the submissions of the intervener about the effect of the federal legislation have to do with s41A.  In fact, they would seem not to have any relevance.  These again are matters which should have been raised at first instance by the intervener, and they have not been.  Were they raised at first instance, they might well have been included in the questions referred by the Chief Commissioner.  Further, again, no findings of fact, not surprisingly, were made which might relate to any of these matters.

170   Accordingly, this question cannot and should not be dealt with by the Full Bench.

171   We should say that, fatally for the submission, there is not even a finding of fact at first instance that Sanwell is a constitutional corporation, a major fact on which the intervener bases its submissions.  Accordingly, without findings of fact on precise matters pertaining to s41A, there is nothing which can persuade us that the agreement is not registerable under s41A of the Act, and we would answer that question “Yes”.

172   We were referred to s298K(2) of the WR Act which reads as follows, in its relevant part:-

“(2) A person must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following:

(a) …

(b) injure the independent contractor in relation to the terms and conditions of the contract for services;

(c) alter the position of the independent contractor to the independent contractor's prejudice;

(d) refuse to engage another person as an independent contractor;

(e) discriminate against another person in the terms or conditions on which the person offers to engage the other person as an independent contractor.”

173   S298L(1) of the WR Act deals with prohibited reasons.  Conduct referred to in s298K(1) or (2) is for a prohibited reason if it is carried out because the employee, independent contractor or other person concerned, in the case of an independent contractor, has one or more employees who are not or do not propose to become members of an industrial association or has not paid or does not propose to pay a fee however described to an industrial association.

174   It is not the fact that Sanwell is a constitutional corporation to which Part XA of the WR Act applies by virtue of s298G and it was not so found at first instance, so that matter is not to be taken into account.  However, the proposed provision, it was submitted, would require Sanwell to refuse to enter into an agreement with a sub-contractor if that sub-contractor had engaged employees on an award but not a certified agreement or industrial agreement, or if the sub-contractor had engaged employees on individual employer/employee instruments, that is AWA’s or EEA’s.

175   It was submitted that, having regard to s298U of the WR Act, and consistent with s6(g) of the Act, the Commission ought not to permit registration of an agreement under s41 of the Act which can lead to breaches of industrial laws of the Commonwealth.

176   S298J of the WR Act reads as follows:-

“Subject to section 298W, to the extent that this Part applies by virtue of the operation of section 298G or 298H, it is not intended to exclude or limit the concurrent operation of any law of a State or Territory.”

177   An “industrial instrument” is defined in s298B of the WR Act as follows:-

“industrial instrument means an award or agreement, however designated, that:

(a) is made under or recognised by an industrial law; and

(b) concerns the relationship between an employer and the employer's employees, or provides for the prevention or settlement of a dispute between an employer and the employer's employees.”

178   “Industrial law” is defined under the same section and means:-

“industrial law means this Act, the Registration and Accountability of Organisations Schedule or a law, however designated, of the Commonwealth or of a State or Territory that regulates the relationships between employers and employees or provides for the prevention or settlement of disputes between employers and employees.”

179   We are not of opinion that the WR Act purports to bind this State in its legislation.  There is no bar established to the registration of the agreement, save and except the question of whether the agreement can enable a person to act as a bargaining agent under the Act or the WR Act for any purpose other than the narrow purposes and requirements of those Acts, as we have already observed.

180   It was submitted, and we agree, that s298K(2)(d) of the WR Act does not apply.

181   The sub-contactor’s clause does not in any way concern itself with what the entitlements of the employees of the sub-contractors are at that time.  If they are entitled to the benefit of, for example, an award then the clause says nothing of that.  It simply seeks to provide for terms and conditions above that award.  In our opinion, too, s298L(1)(h) is directed to a situation where an employee may be entitled to the benefit of a certified agreement, for example, paying above award conditions.  If a person refused to engage that person because they were too expensive then that might fall foul of the provision.  However, the fact that a person is entitled under an industrial instrument is not any reason for refusing to engage them.  In fact, all that it requires is that the sub-contractor enter into a certified agreement or an industrial agreement.  If the sub-contractor happens to employ people that are under AWA’s or EEA’s, then there is no prohibition upon that.  People can go ahead and sign individual agreements.  All the clause is directed to is that the sub-contractor enter into an industrial agreement or certified agreement.  In fact, all of the employees may be so bound by individual agreements, and the sub-contractor could still enter into an industrial agreement which may apply to future employees.

182   That, it was said, and we agree, is manifested in s6(ae) of the Act, which requires that a principal object of the Act is to ensure that all agreements registered under the Act provide for fair terms and conditions of employment.

183   Next, it was submitted for the Minister that the provision may be unfair because there is no element of consent in relation to a bargaining agent’s fee.  It was submitted for the CFMEU that that was not unfair because the Act provides that once an agreement was made between an employer and a union, then it binds employees.  That is not a matter for determination in these proceedings.  It is not a question of law but of discretion.

184   In our opinion, therefore, it has not been established that those matters are a bar to the registration of the agreement.

185   In any event, and fatally, the submission by the Minister is entirely irrelevant to the effect of s41A of the Act, and should not be considered for that reason.

THE IMPUGNED SICK LEAVE PROVISION

186   Clause 10(1)(e) relevantly provides, the Full Bench was informed, as follows:-

“The employee may elect to convert all sick leave entitlements over five days to a cash payment.  If the employee elects to convert sick leave to a cash payment, payment must be made by the employer to the employee in the last pay period prior to any close down for Christmas.”

187   The effect of the provision is to allow employees who have not used accrued sick leave to entitlements over five days to receive a cash benefit for the Christmas period.  The provision has been included in agreements in an attempt to reduce absenteeism through the provision of a monetary incentive.

188   The relevant provision is s19 of the Minimum Conditions of Employment Act 1993 (hereinafter called “the MCE Act”) which reads as follows:-

“19. Paid sick leave, entitlement to

(1) Subject to sections 20 and 22, an employee, other than a casual employee, who is unable to work as a result of the employee’s illness or injury, is entitled to paid leave each year for periods of absence from work resulting from the illness or injury for the number of hours the employee is required ordinarily to work in a 2 week period during that year, up to 76 hours.

 (2) An entitlement under subsection (1) accrues pro rata on a weekly basis.

 (3) In subsection (1), “year” does not include any period of unpaid leave.”

189   S20A and s21 of the MCE Act are also relevant, and read as follows:-

“20A. Sick leave, employee may use portion of to care for sick relative etc.

(1) An employee is entitled to use, each year, up to 5 days of the employee’s entitlement under section 19(1) for that year to be the primary care giver of a member of the employee’s family or household who is ill or injured and in need of immediate care and attention.

(2) In subsection (1) —

“member of the employee’s family” means any of the following persons —

(a) the employee’s spouse or de facto partner;

(b) a child for whom the employee has parental responsibility as defined by the Family Court Act 1997;

(c) an adult child of the employee;

(d) a parent, sibling or grandparent of the employee.

21. Certain matters as to sick leave not minimum conditions

Nothing in this Division requires —

(a) an employee’s untaken entitlement under section 19(1) or 20A(1) to be carried over from the year in which the entitlement arose to the next year;

(b) an entitlement under section 19(1) or 20A(1) to be taken as a whole working day; or

(c) an employer to pay an employee in lieu of the employee’s untaken entitlement under section 19(1), on the termination of the employee’s employment.”

190   The sick leave provisions provided for under the agreement comply with the minimum statutory requirements prescribed by s19 and s20A of the MCE Act.

191   Additionally, the sick leave benefits provided for under the agreement and the award have been enhanced by the provision of sickness, accident and income protection insurance provided for under clause 32 of the agreement.  We agree with that submission, on a fair reading of the section.  It was not argued otherwise.

192   The payout of accrued sick leave under clause 10(1)(e) does not offend the provisions of the MCE Act because minimum entitlements provided for under the MCE Act do not by virtue of s21 carry over from year to year.  Alternatively, we are not satisfied on the facts and a fair reading that it does.

193   However, again, we are not certain what part of s41A is material, nor are there any relevant findings of fact.  However, in its terms, and in the absence of facts or arguments which would lead to another conclusion, there is no obstacle to the registration of the agreement, including that clause.  We would find accordingly.

ANSWERS TO THE QUESTIONS POSED

194   We would therefore answer the questions posed to the Full Bench as follows:-

(a)          Question (a) –

(i) Yes

(ii) Yes

(b)          Question (b) -

(i)                   Yes

(ii)                   Yes

(c)          Question (c) - Yes

COMMISSIONER J H SMITH:

195   The questions of law formulated for the reference to the Full Bench are set out in the President's reasons for decision.

196   The Minister for Employment and Workplace Relations was granted leave to intervene in this matter.  The reasons given by the President set out the reasons why I was satisfied leave should be granted.

Does the Bargaining Agent's Fee Raise an Industrial Matter

197   The CFMEU argues that recent amendments to the definition of "industrial matter" in s 7 of the Industrial Relations Act 1979, by the enactment of the Labour Relations Reform Act 2002, has expanded and broadened the jurisdiction of the Commission.  Relevantly, s 7 of the Act  was amended as follows to define an "industrial matter" to mean among other things:-

"any matter affecting or relating or pertaining to the work, privileges, rights, or duties of employers or employees in any industry or of any employer or employee therein and, without limiting the generality of that meaning, includes any matter relating matter affecting or relating or pertaining to — 

(a) the wages, salaries, allowances, or other remuneration of employees or the prices to be paid in respect of their employment;

(b) the hours of employment, leave of absence, sex, age, qualification, or status of employees and the mode, terms, and conditions of employment including conditions which are to take effect after the termination of employment;

(c) the employment of children or young persons, or of any person or class of persons, in any industry, or the dismissal of or refusal to employ any person or class of persons therein;

(ca) the relationship between employers and employees;

(d) any established custom or usage of any industry, either generally or in the particular locality affected;

(e) the privileges, rights, or duties of any organisation or association or any officer or member thereof in or in respect of any industry;

(f) in respect of apprentices or industrial trainees trainees — 

(i)their wage rates; and

(ii)subject to the Industrial Training Act 1975 — 

(I)their other conditions of employment; and

(II) the rights, duties, and liabilities of the parties to any agreement of apprenticeship or industrial training agreement training agreement;

(g)  any matter relating to the collection of subscriptions to an organisation of employees with the agreement of the employee from whom the subscriptions are collected including —

(i) the restoration of a practice of collecting subscriptions to an organisation of employees where that practice has been stopped by an employer; or

(ii) the implementation of an agreement between an organisation of employees and an employer under which the employer agrees to collect subscriptions to the organisation;

[(h) deleted]

(i) any matter, whether falling within the preceding part of this interpretation or not, where — 

(i) an organisation of employees and an employer agree that it is desirable for the matter to be dealt with as if it were an industrial matter; and

(ii) the Commission is of the opinion that the objects of this Act would be furthered if the matter were dealt with as an industrial matter;

and also includes any matter of an industrial nature the subject of an industrial dispute or the subject of a situation that may give rise to an industrial dispute but does not include — 

(j) compulsion to join an organisation of employees to obtain or hold employment;

(k) preference of employment at the time of, or during, employment by reason of being or not being a member of an organisation of employees;

(l) non-employment by reason of being or not being a member of an organisation of employees; or

(m) any matter relating to the matters described in paragraph (j), (k) or (l);"

198   Not all conflicts and causes of action between master and servant are industrial matters.  For a matter to constitute an industrial matter, the matter must be of an industrial nature (Hotcopper Australia Ltd v Saab ("Saab's case") [2002] WASCA 190 at [26]-[27]; (2002) 82 WAIG 2020 at 2023.  See also Robe River Iron Associates v The Metal & Engineering Workers' Union Western Australian Branch (1995) 75 WAIG 2478 and Robe River Iron Associates v Association of Draughting, Supervisory and Technical Employees of Western Australia (Pepler's case) (1987) 68 WAIG 11). 

199   The enactment of the Labour Relations Reform Act added the words "or pertaining" in line two and added "matter affecting or relating or pertaining" in lines 5 and 6 of the opening words.  Further, subsections (ca) and (g) were added and the words "and also includes any industrial matter of an industrial nature the subject of an industrial dispute or the subject of an industrial dispute of the subject of a situation that may give rise to an industrial dispute" were added to the concluding paragraph of the definition.

200   As to the addition of the words "or pertaining" and subsection (ca) the observations made by the Industrial Appeal Court in The Minister of Police and The Commissioner of Police v Western Australian Police Union of Workers (1995) 75 WAIG 1504 are in my respectful view relevant in construing these amendments.  In that case, the Industrial Appeal Court had regard to s 4 of the Commonwealth Conciliation and Arbitration Act 1909, which defined "industrial matters" as meaning "all matters pertaining to the relations of employers and employees" and without limiting the generality of these words included certain matters.  Franklyn J, with whom Kennedy and Rowland JJ agreed, compared scope of the definition of "industrial matters" in the Commonwealth Act to the definition of "industrial matter" in the Industrial Relations Act.  At page 1508 Franklyn J said:

"In my opinion, the general words of the definition "industrial matter" in s 7 of the Act provide a definition considerably wider in its coverage than that of "industrial matters" in the Commonwealth Act.  Unlike the Commonwealth definition, its terms are not directed initially to the question whether the matter in issue "pertains" (ie belongs to or is within the sphere of) the relations of employers and employees as such.  Rather, it is directed to the question whether the matter in issue affects or relates to the work, privileges, rights or duties of employers or employees or an employer or employee in any industry.  It seems to me that this requires initial identification of what it is, within the description of "work, privilege, rights or duties" of the employer or employee or employers or employees (as the case may require), that is said to be affected by or related to the claimed industrial matter.  If that cannot be identified, then the issue does not concern an industrial matter.  If, however, it can be identified, then the inquiry is next directed to establishing whether the matter in issue does, as a matter of fact, affect or relate to the identified "work, privilege, right or duty".  Only if it can be found so to do can it be an "industrial matter" within the meaning of the Act.  In my opinion, to approach the question in reliance on authorities based on the definition in the Commonwealth Act is to distract from the true question.  Whilst it is implicit in the wording of the definition in s 7 that the "matter" must be connected with the relationship between the employer and employee in their respective capacities as such, to determine the issue on the further requirement expressed in the Manufacturing Grocers Employees case that the matter must not only be so connected, but must also be "direct and not merely consequential", diverts from the necessity of determining whether the matter in fact affects or relates to the identified work, privilege, right or duty.  The test in the Manufacturing Grocers Employees case concentrates on the nature and degree of the "connection" between the "matter" and the employer and employee relationship rather than the test provided for by the definition in s 7."

201   In oral submissions the CFMEU's counsel informed the Full Bench that the CFMEU relies upon subsections (a), (b), (e) and (i).

202   With respect I am of the view the addition of the words "or pertaining" by Parliament has added an alternative test of determining whether an "industrial matter" is raised by a matter in issue.  As his Honour Franklyn J points out, this test is different than the test already provided for in the opening paragraph of "industrial matter".  When the test enunciated by Franklyn J is applied to a matter in issue, the Commission is required to identify the relevant part of the definition of industrial matter and determine whether the matter in dispute is affected or related to that part.  However, Parliament has also added the words "affecting or relating to or pertaining to" in line 6 of the opening paragraph of definition of industrial matter to qualify the matters set out in paragraphs (a) to (e).  These words replaced the words "matter relating".  As words "affecting or pertaining to" in line 6 have been added, the Commission when considering these words is required to consider whether the matters in dispute between the parties are directly connected with the matters set out in the opening paragraph and subclauses (a) to (i) of the definition of "industrial matter".  This in my view is a different and separate test to the test enunciated by Franklyn J.

203   Having considered the terms of the proposed Bargaining Agent's Fee clause, I am of the view that the clause raises a matter that is of an industrial nature.  Paragraph (iii) of the Bargaining Agent's Fee clause on its face raises a matter affecting or relating to the wages, salaries, allowances, or other remuneration of employees within the meaning of subparagraph (a) of s 7, as the deduction of the Bargaining Agent's Fee is a deduction from an employee's wage, salary allowances or other remuneration.  Further, the whole of the clause in my view constitutes a condition of employment within the meaning of subsection (b) of s 7.  That is not, however the end of the inquiry, as the Saab's case illustrates not all conditions of employment have an industrial relations complexion.  In Saab's case, Mr Saab sought an order from the Commission for the issue and transfer of shares pursuant to the terms of his contract of employment.  The Industrial Appeal Court held Mr Saab's claim was a private claim of a commercial nature which lacked any ingredient or complexion of industrial relations.  In this matter the clause and the agreed facts disclose the employees of Sanwell Pty Ltd (except members of the CFMEU) are required to pay the union a bargaining agent's fee.  Whilst it is not clear what the fee is for, the title of the clause suggests it may be for work undertaken by the union in negotiating an industrial agreement.  Under the Act an organisation of employees is not confined to representing its members.  It can act on behalf of persons eligible to be members by negotiating an agreement on behalf of members or those eligible to be members (See s 41A(2)).  Further, the process of collective bargaining engaged in by an organisation on behalf of an entire group of employees is embraced by the principal objects of the Act set out in s 6(ad).  For these reasons I am of the view that the Bargaining Agent's Fee clause raises an "industrial matter" within the meaning of s 7 of the Act.  If I am wrong, whilst the CFMEU and Sanwell Pty Ltd could rely upon subsection (i) of the definition of "industrial matter" to do so they would have to agree that it is desirable that the Bargaining Agent's Fee clause be dealt with as an "industrial matter".  I do not agree that by entering into an agreement which is intended by the parties to be registered as an industrial agreement that the parties can be said to have given their agreement that it is desirable that each matter in the agreement be dealt with as if they were an "industrial matter". However it is open to parties to reach such an agreement and once agreement is reached the Commission is then required to determine whether the objects of the Act would be furthered if the matter were dealt with as an "industrial matter". 

204   If the Bargaining Agent's Fee clause does not raise an "industrial matter", the CFMEU argues that the Commission can register an agreement that contains provisions which are not "industrial matters".  In particular, CFMEU says under s 41(1) the Commission may register an agreement for the prevention or resolution of under the Act of disputes, disagreements, or questions relating thereto.  They also contend the Commission should examine the agreement as a whole in making a determination whether the agreement is "with respect to any industrial matter" (see Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union v Electrolux Home Products Pty Limited [2002] FCAFC 199 at [102]; (2002) 118 FCR 177 at 196).  For the reasons set out above I do not need to deal with this argument in relation to the Bargaining Agent's Fee as I have reached the conclusion the Bargaining Agent's Fee clause does raise an "industrial matter".

Can the Commission Register the Agreement with the Bargaining Agent's Fee Clause under s 41 of the Act

205   The Minister for Employment and Workplace Relations, whose submissions were adopted by Sanwell Pty Ltd and the Chamber of Commerce and Industry, say that the Bargaining Agent's Fee clause and policy of CFMEU to waive its right to seek the fee from its financial members is a prohibited arrangement within the meaning of s 96B(1)(b) of the Act.  I agree with His Honour the President for the reasons he gives that the Bargaining Agent's Fee is not a prohibited arrangement within the meaning s 96B(1)(b). 

206   Sanwell Pty Ltd also argues that the Bargaining Agent's Fee clause and policy of CFMEU breaches s 96C of the Act.  However, on the facts before the Full Bench there is nothing before it on which it could be affirmatively be said that the policy of the CFMEU is in breach of s 96C.  Section 96C provides:

"(1) A person must not, in relation to any contract of employment or contract for services, treat another person less favourably or more favourably according to whether or not the person is, or will become or cease to be, a member or officer of an organisation.

(2) A person must not conspire with another person to commit an offence against subsection (1).

(3) It is not an offence against subsection (1) for a person to treat another person more favourably as part of a scheme whereby the cost of services provided to members of an organisation is less than the cost ordinarily charged by the person for those services."

207   Section 96C(3) expressly contemplates that an employee organisation may provide services to members at a discounted rate.  This does not mean that the application of the policy could not in some circumstances breach s 96C.  That is not however a matter on which this Full bench can speculate. 

208   As the policy does not form part of terms of the agreement, I agree the Commission can register the agreement containing the Bargaining Agent's Fee Clause.

Does the Engagement of Sub-contractor's Clause Raise an Industrial Matter

209   The proposed clause prohibits the CFMEU from engaging any sub-contractor who has not executed a certified agreement or industrial agreement.  The CFMEU contends that the clause is born out of a dispute as to the terms and conditions upon which sub-contractors employ their labour and is intended to provide for above award terms and conditions of employment for employees of sub-contractors. 

210   Whilst the Minister says that the use of sub-contractors may fall within the definition of "industrial matter" as the use of sub-contractors may deleteriously affect the amount of work available for employees to perform, this clause does not directly prohibit the engagement of a sub-contractor.  The Minister says that the terms and conditions of the employer's relationship with sub-contractors engaged by it are an aspect of the commercial relationship between Sanwell Pty Ltd and the sub-contractor and do not affect, relate or pertain to the employment relationship between the Sanwell Pty Ltd and its employees. 

211   In R v Commonwealth Industrial Court Judges; Ex parte Cocks ("Cocks' case") (1968) 121 CLR 313, the Commonwealth Industrial Court made an award containing a clause prohibiting an employer bound by the award to cause any work to be done for him by any person outside his workshop or factory unless the person is the holder of a current outdoor worker's permit.  The High Court held a dispute as to whether outworkers (contractors) should be engaged is not "industrial".  In R v Moore; Ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 9 ("Moore's case"), the union served a letter of demand on a number of uranium mining companies and project engineers.  Clause 5 of the letter demanded that no employer shall permit a contractor to pay their employees except in accordance with the terms of the proposed award.  The clause also demanded the employer to enter into binding agreements with contractors to pay the rates and observe the conditions prescribed in the proposed award.  Jacobs J, with whom Stephen J agreed, at page 478 distinguished Cocks' case and held:-

"… the presence of a claim in a log of claims, even if it be one which does not involve an industrial matter, does not provide a reason for the grant of prohibition or certiorari.  That is sufficient to dispose of the argument based on cl. 5.  But it cannot be assumed that under no circumstances could the insertion of such a clause in an award settle a dispute as to an industrial matter.  Here the evidence shows that the construction works will be large and extensive.  It cannot be assumed that the respondent companies - both the mining and the project companies - will not be exercising continued supervision and co-ordination.  It may well be that if the Commission considered it proper in order to achieve a settlement of existing or threatened disputes between the companies and their employees that the same award conditions should apply throughout the work of constructing the mines and their associated installations, it would be open to it to achieve that result by the insertion in the award of a clause along the lines of cl .5."

212   Gibbs J agreed with Jacobs J and observed that this question should not be finally determined until the facts were fully explored.  Gibbs J also distinguished Cocks' case and observed that the present dispute is not whether contractors should be engaged but whether, if they are engaged, their employees should be entitled to the benefits of the proposed award, assuming one is made.

213   In R v Industrial Commission of South Australia; Ex parte Master Builders Association of South Australia Incorporated [1981] 26 SASR 535 ("Master Builders' case"), the South Australian Supreme Court accepted that the South Australian Commission has jurisdiction to include in an award made by it provisions prescribing conditions upon which employers bound by the award may engage independent contractors to do work covered by the award.  But it determined that the power was not at large.  The Court held that provisions which are designed to prevent an employer from procuring work which would otherwise be performed by employees under the award, to be done by sub-contractors for contract prices and under contract conditions less favourable to those performing the work than those prescribed by the award, affect or relate to the employer and employee relationship in a close and obvious way (per King CJ at 538).  The Court then went on to consider three clauses sought by the union.  One was found to be within jurisdiction.  The other two were found not to raise an "industrial matter".  These clauses were as follows:-

"Clause 42  A person (hereinafter referred to as the 'principal') shall not enter into a contract or arrangement with any other person (hereinafter referred to as the 'contractor') for the supply of labour of a kind mentioned in clause 4 of this award unless such principal's contract or arrangement with such contractor contains clauses or agreements in respect of such labour binding the principal to observe not less than the rates of pay, industrial conditions and requirements as set out in this award.

Clause 43 An employer bound by this award (hereinafter referred to as the 'principal') shall not enter into a contract with any other person (hereinafter referred to as the 'contractor') for the contractor to undertake work of a kind mentioned in clause 4 of this award unless such principal's contract with such contractor contains clauses or agreements in respect of such work binding the principal to observe not less than the rates of pay, industrial conditions and requirements as set out in this award.

Clause 44  No person (hereinafter referred to as 'the principal') shall enter into any contract for the carrying on of any work of a kind mentioned in clause 4 of this award with any other person (hereafter referred to as 'the contractor') unless such principal's contract with such contractor contains clauses:

(i) binding the contractor to pay his employees not less than the rates and to observe the conditions set out in this award in respect of such work;

(ii) entitling the principal to terminate the contract in the event of failure by the contractor to pay not less than such rates or observe such conditions; and

binding the principal to assume responsibility to the extent of any moneys due by him to the contractor for the payment of all wages due by the contractor to employees for such work."

214   At 539, King CJ, with whom Mohr J agreed, held that proposed Clauses 42 and 44 were beyond power.  His Honour determined that:-

"Clause 42, like Clause 43, deals with a contract whereby the contractor performs the work personally, but, unlike Clause 43, it places the obligation on the principal whether he is or is not an employer bound by the award.  I do not think that the insertion of a clause in the award in terms of such width would be within jurisdiction.  It would cover situations quite remote from any actual or potential employer and employee relationship.  The principal might be a householder who contracts for a lump sum for plastering work to be done on his home with materials supplied by the householder.   Such a situation cannot be said, in my opinion, to be sufficiently connected with the relationship of employer and employee to be regarded as related to an industrial matter.   If, however, the principal is in business in the industry and would, but for such contracts, be likely to employ labour in accordance with the award, there would, in my opinion, be sufficient connection, and a determination inserting in the award a proper clause covering that situation would be within jurisdiction.  There may be other situations which would lawfully be covered by such a clause. 

The proposed Clause 44 deals with the situation in which the principal contracts with a contractor who will himself employ labour.  The comments which I made as to the width of the expression "the principal" in relation to Clause 42 and the limits within which there may be jurisdiction, apply with equal force to this clause."

215   In this matter, similar observations can be made about the sub-contractor's clause.  Firstly, it binds Sanwell Pty Ltd even when it seeks to engage a sub-contractor who is not an employer.  Such an all encompassing obligation cannot, in my opinion, be a matter affecting or relating to or pertaining to the work privileges, rights or duties of Sanwell Pty Ltd or its employees or any matter set out in subsections (a) to (g) of the definition of "industrial matter".  If Sanwell Pty Ltd engages a sub-contractor to provide secretarial services on site, the proposed clause would apply despite the fact the CFMEU has no constitutional coverage of secretaries.  If this work is contracted out, Sanwell Pty Ltd would be bound to comply with the clause unless there is a provision in the agreement that confines the operation of the sub-contractor clause to particular sites and or groups of employees in relation to which the CFMEU has constitutional coverage.

216   In my opinion, the terms of proposed sub-contractor's clause are so wide so as to not constitute an "industrial matter" under s 7.  Having reached that conclusion the clause could be capable of being dealt as if it were an industrial matter by agreement between the CFMEU and Sanwell Pty Ltd or being dealt with as a "matter of an industrial nature the subject of an industrial dispute" or "the subject of a situation that may give rise to an industrial dispute" within the meaning of s 7.  However, there are no facts before the Full Bench upon which either conclusion could be drawn, so as to invoke subsection (i) or the concluding paragraph to the definition of "industrial matter".  Leaving that aside, it is plainly apparent from the terms of the clause, that the provision is not a demand to pay the same terms and conditions paid to employees of Sanwell Pty Ltd.  The clause regulates the contract between Sanwell Pty Ltd and the contractor and not employees of Sanwell Pty Ltd.  Further, on its face, the clause is not site specific, nor is it confined to apply to persons who are members or eligible to be members of the CFMEU.  If however the clause was amended to restrict the operation of the clause in such a way then the provision could, depending upon the terms of the amendment, be capable of raising an "industrial matter".  Further if any facts are raised before the Commission at first instance which provide a basis to form an opinion that this clause arose out of a "matter of an industrial nature the subject of a situation that may give rise to an industrial dispute" it would be open to conclude that the sub-contractor's clause raises an industrial matter within s 7. 

217   I do not agree that the observations made by the Full Bench in Hanssen Pty Ltd v CFMEU (unreported) [2004] WAIG 10828 ("the Hanssen case") in respect an identical sub-contractor's clause.  This matter was argued before the Hanssen case was decided and these reasons were written in draft form prior to the delivery of the Hanssen decision.

218   The Full Bench should not lightly depart from its earlier decisions and that is particularly so when the earlier decision has been applied.  It should do so only in circumstances in which it is convinced that the earlier decision is wrong (see Re Calder; Ex parte Cable Sands (WA) Pty Ltd (1998) 20 WAR 343 per Steyler at 354).  In Hanssen the Full Bench upheld the appeal by Hanssen and quashed the order at first instance making an enterprise order on grounds that are not relevant to the matters raised in this matter.  In that case the Full Bench dismissed a ground of appeal raised by Hanssen that a sub-contractor's clause in the same terms as the clause in this matter was not an "industrial matter".  As that ground failed but the appeal was successful on other grounds this issue may not be tested on appeal.  At [253], [259], [263] and [264] of the Hanssen case the Full Bench applied the reasons of King CJ in the Master Builders' case (op cit) and observed in particular at [263] and [264] that the sub-contractors clause is similar to and very little removed in type to the clause considered in Moore's case (op cit) and Master Builders' case (op cit).  This observation in my respectful opinion is not right.  The provision considered in Moore's case was a clause in a letter of demand and not a clause in an award or registered agreement.  The majority of the High Court in Moore’s case held the clause in the letter of demand may be capable of raising an industrial matter, not that it raised an industrial matter.  Further the area and scope of the demand in that case was defined by the terms of the proposed award.  The clause was different from the clause in this matter in that the clause in Moore’ case sought to bind a contractor to the conditions contained in the proposed award.  Similarly the sub-contractor's clause in this matter is not of the kind found within jurisdiction in the Master Builders' case.  Clause 43 was the only clause found to be with within power in the Master Builders’ case.  Clause 43 bound the principal when contracting with a sub-contractor to provide work of a kind set out in the award to observe rates and conditions not less than the rates of pay, industrial conditions and requirements as set out in the award.  By restricting the application of cl 43 to work covered by the award the scope of the clause was restricted not only to the constitutional coverage of the union and in doing so could be said to affect or relate to the work of the employees who were covered by the award.

219   I do not agree that the Commission should examine the agreement as a whole to determine whether the agreement is "with respect to an industrial matter" in this case.  Section 41(1) of the Act provides that an "agreement with respect to any industrial matter or for the prevention or resolution of disputes, disagreements, or questions relating thereto may be made".  All words " with respect to" require is a relevance or connection to the industrial matter or the prevention of resolution of disputes, disagreement or questions relating thereto (see by analogy Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55 at 77 in relation to the Commonwealth's law making powers).  Notwithstanding these words allow the registration of an industrial agreement which contains matters which are peripherally connected with an "industrial matter", the Commission's jurisdiction is not at large.  In each case the question must be is whether the circumstances of a dispute is really and truly a dispute of an industrial nature, susceptible of resolution under the Act (see Saab's case (op cit) Anderson J at [27]).  Disputes capable of resolution between an organisation and an employer must be confined to the constitutional coverage of the organisation in question.  Insofar as the sub-contractor's clause extends beyond the CFMEU's constitutional coverage there is not a sufficient connection with an industrial matter or to the prevention or resolution of disputes disagreement or questions within the meaning of s 41(1).

Can the Commission Register the Agreement containing the Engagement of Sub-contractor's Clause

220   Where the parties reach an agreement within the meaning of subsection (i) of the definition of "industrial matter" the Commission is then required to consider whether the objects of the Act would be furthered if the matter is dealt with as an "industrial matter".

221   No party made any submissions about the objects of the Act, however the Minister contends that if the agreement is registered the proposed sub-contractor's clause would breach s 298K(2) of the Workplace Relations Act 1996.  These provisions apply to Sanwell Pty Ltd as they are a constitutional corporation (see s 298G of the Workplace Relations Act).  Section 298K(2)(d) provides:-

"A person must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following:

(d)     refuse to engage another person as an independent contractor;"

222   The "prohibited reason" relied upon is defined in s 298L(1)( h) as:-

"Conduct referred to in subsection 298K(1) or (2) is for a prohibited reason if it is carried out because the employee, independent contractor or other person concerned:

(h) is entitled to the benefit of an industrial instrument or order of an industrial body;"

223   An "industrial instrument" defined in s 298B to include instruments made under the Workplace Relations Act and the Act.

"Industrial instrument means an award or agreement, however designated, that:

(a) is made under or recognised by an industrial law; and

(b) concerns the relationship between an employer and the employer's employees, or provides for the prevention or settlement of a dispute between an employer and the employer's employees."

224   In my respectful opinion, s 298K(2) is not raised by the proposed sub-contractor's clause.  The clause does not require Sanwell Pty Ltd to refuse to engage a sub-contractor if they are entitled to the benefit of a Federal or State award or a certified agreement on industrial agreement.  The clause creates an obverse obligation.  However, for the reasons set out above under the heading "Does the Engagement of Sub-contractor's Clause Raise an "Industrial Matter", I am of the view the Commission cannot register the agreement containing this clause.

Conversion of Sick Leave

225   Sanwell Pty Ltd questions whether the provisions of the Minimum Conditions of Employment Act 1993, prohibit the payout of sick leave.

226   Pursuant to s 19(1) of the Minimum Conditions of Employment Act all full-time employees are entitled to 10 days paid sick leave per year.  Whilst s 19(1) contemplates the taking of leave, Division 2 of Part 4 of the Minimum Conditions of Employment Act does not deal with accrual of sick leave from year to year.  If a full-time employee takes only one day of sick leave shortly before the end of that year, they would have an entitlement to nine days sick leave.  Under the Minimum Conditions of Employment Act, those nine days do not accrue to the next year.  However, the Minimum Conditions of Employment Act only creates minimum conditions.  If it is intended that the nine days entitlement, standing as accrued within that year, should be paid out rather than lapse at the end of the year, then in my view the operation of s 19(1) would not be affected.  Having made these observations the clause does not clearly evince that intention.  If that is the intention all full-time employees would have commenced employment on 1 January in any year.  If it is intended that election and payment can only be made to take effect on or after the last pay period of a year's service the clause is capable of amendment pursuant to s 41(3) of the Act.

Answers to the Questions Posed

227   I would therefore answer the questions posed to the Full Bench as follows:-

(a) Question (a)

(i) Yes

(ii) Yes

(b)  Question (b)

(i) No

(ii) No

(c) Question (c)

Yes

THE PRESIDENT:

228   For those reasons, the answers to the questions of law referred to the Full Bench pursuant to s27(1)(u) of the Act are as set out in paragraph 194 above.