WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES Klara Margarette Stylianou

APPLICANT

-v-

Country Realty Pty Ltd As Trustee for the Marcelli Family Trust

RESPONDENT

CORAM Commissioner S J Kenner

HEARD Friday, 20 August 2010

DELIVERED FRIDAY, 29 OCTOBER 2010

FILE NO. B 40 OF 2010

CITATION NO. 2010 WAIRC 01074

CatchWords Industrial Law (WA) – Jurisdiction to hear contractual benefits claims where the employer is a constitutional corporation – Claim is enforcement of contract of employment – Claim not extinguished by Federal legislation – Inconsistency between Commonwealth and State law – State law revived – Claim within Commission’s jurisdiction –Commonwealth Constitution ss 51(xx), 109; Fair Work Act 2009 (Cth) ss 26, 27; Industrial Relations Act 1979 s 29(1)(b)(ii); Limitation Act 1935 s 38(1)(c); Workplace Relations Act 1996 (Cth) s 16.

Result Declaration issued

Representation 

Applicant Mr G Sturman as agent

Respondent Mr L Marcelli

                                                Reasons for Decision

Background

1         The substantive application in this matter is a claim by the applicant for a contractual benefit by way of salary and superannuation contributions in the total sum of $43,126.42.

2         The respondent objects to and opposes the applicant’s claim and moreover, asserts that the Commission has no jurisdiction to entertain the applicant’s claim, as it arose whilst the terms of the Workplace Relations Act 1996 (Cth) (“the WR Act”) were in force.

3         The Commission listed the application for a hearing in relation to this preliminary point as to the Commission’s jurisdiction to deal with the applicant’s claim.

4         The notice of application was filed on 17 March 2010, after the Fair Work Act 2009 (Cth) (“the FW Act”) came into effect.

Jurisdiction Prior to FW Act

5         There is no doubt that as at the time of the vesting of the applicant’s claimed entitlement, presumably on or about 13 December 2007 when her employment was terminated, the Commission did not have jurisdiction to hear such a claim if brought at that time, against a trading or financial corporation for the purposes of s 51(xx) of the Commonwealth Constitution: Saldanha v Fujitsu Australia Pty Ltd (2008) 89 WAIG 76. 

6         In Saldanha, it was held by the Full Bench that the former s 16(1) of the WR Act ousted the Commission’s jurisdiction to deal with a contractual benefits claim under s 29(1)(b)(ii) of the Industrial Relations Act 1979 (“the Act”), as the WR Act evinced an intention to cover the field to the exclusion of State industrial laws, for the purposes of s 109 of the Commonwealth Constitution. Section 109 provides that:

“When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail and the former shall, to the extent of the inconsistency, be invalid.”

7         Importantly for present purposes, it is well settled that the phrase “invalid” means “inoperative”. Thus, where the relevant Commonwealth law is repealed or struck down as unconstitutional, the State law will revive: Butler v Attorney-General for Victoria (1961) 106 CLR 268.  The significance of this proposition is a matter that I will consider further below.

Enforcement of Contracts of Employment

8         The FW Act came into effect on various dates in 2009.  For present purposes, ss 26 and 27 dealing with the operation of State and Territory industrial laws came into effect on 26 May 2009. Whilst s 26 of the FW Act maintains the general exclusion of the State and Territory industrial laws as did the former s 16 of the WR Act, s 27 of the FW Act is somewhat different. Section 27(2)(o), dealing with “non-excluded matters”, that is matters which are not excluded by s 26 of the FW Act, includes “claims for enforcement of contracts of employment, except so far as the law in question provides for a matter to which s 26(2)(e) applies”.  Section 26(2)(e) has no application in the present case.

9         There is no argument in the present matter that the application is a claim for the “enforcement of a contract of employment” and for present purposes I consider this to be so. There is no definition of “enforcement” for the purposes of s 27(2)(o) set out in the FW Act and therefore I apply its ordinary and natural meaning.

10      According to the Shorter Oxford English Dictionary, “enforcement” relevantly means “3. The forcible extraction of a payment; an action, etc.; the compelling the fulfilment of (a law, obligation, etc.)”.  In my view, an application to recover a denied contractual benefit pursuant to s 29(1)(b)(ii) of the Act is plainly an action to compel the fulfilment of an obligation by an employer to an employee under a contract of employment, which action is maintainable under a law of the State. An order of the Commission arising from such an application legally compels the employer to fulfil the obligation that arose under the contract of employment at the material time. 

11      Furthermore, there is also no argument that the respondent is a constitutional corporation for the purposes of s 51(xx) of the Commonwealth Constitution and I assume this for present purposes.

Retrospectivity of Legislation

12      It is trite to observe that as a matter of common law all legislation is presumed to not operate retrospectively.  In this regard, in Maxwell v Murphy (1957) 96 CLR 261 Dixon CJ said at 267:

“The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonably certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events.”

13      Furthermore, a distinction has been drawn between legislation that operates by way of a prior effect on past events and legislation that basis future activity on past events.  In Coleman v Shell Co of Australia Ltd (1943) 45 SR (NSW) 27 Jordan CJ said at 31:

“Upon a consideration of the authorities, I think that, as regards any matter or transaction, if events have occurred prior to the passing of the Act which have brought into existence particular rights or liabilities in respect of that matter or transaction, it would be giving a retrospective operation to the Act to treat it as intended to alter those rights or liabilities, but it would not be giving it a retrospective operation to treat it as governing the future operation of the matter or transaction as regards the creation of further particular rights or liabilities.”

14      It is also the case, that the common law presumption against retrospectivity can be rebutted by express reference in the relevant statute or by necessary implication: Worrall v Commercial Banking Co of Sydney Ltd (1917) 24 CLR 28 per Barton J at 32; Zainal bin Hashim v Government of Malaysia (1980) AC 134.

15      There is a further accepted distinction dealing with the presumption against retrospectivity, between statutes which are procedural in nature and those that confer substantive rights and obligations: Maxwell.

16      Some difficulties arise however, in determining whether a statutory provision is truly procedural or not, in that some matters of procedure may affect a vested right or interest adversely and therefore are substantive in effect.  It would seem from the cases, that legislation which at first appearance is procedural, but which in effect destroys the ability to bring a proceeding or immunity from such a proceeding, will tend to be characterised as affecting substantive rights and the presumption against retrospectivity upheld: Coleman; Maxwell. It has been recognised however that this is a difficult area and the distinction is one not always easy to draw: Rodway v R (1990) 169 CLR 515.

Consideration

17      Whilst the respondent argued that for the applicant’s claim to now be able to proceed would involve the retrospective application of the relevant provisions of the FW Act, I do not consider that it does. The resolution of the present question of jurisdiction does not involve the retrospective application of the FW Act and thus there is no need to consider whether the relevant provisions of the FW Act are substantive or procedural in nature. 

18      A claim under s 29(1)(b)(ii) of the Act is a common law claim for a remedy in the nature of damages: Matthews v Cool or Cosy Pty Ltd (2004) 84 WAIG 2125.

19      By s 38(1)(c) of the Limitation Act 1935 such a claim, as an ‘action’, may be commenced in a court of competent jurisdiction within six years. On the assumption that the applicant’s claimed entitlement in this matter vested on the termination of her employment on 13 December 2007, this means that she has six years up to 12 December 2013 to bring her claim in a court of competent jurisdiction.

20      Importantly, there was at the material time and is no time limit on a claim under s 29(1)(b)(ii) of the Act. This is in contrast to a claim of harsh, oppressive or unfair dismissal under s 29(1)(b)(i) of the Act, which must be brought within 28 days of the date of termination of employment, unless accepted out of time by the Commission under s 29(3) of the Act. 

21      Does the fact that the application was not able to be pursued before the Commission from the commencement of the WR Act on 16 March 2006, continue with the repeal of the WR Act by the FW Act in 2009? For the following reasons I do not consider that it does.

22      Section 27(2)(o) of the FW Act does not operate retrospectively in the context of contractual benefits claims.  Given that such claims in Western Australia may be brought within six years of the time of the accrual of such a claim, s 27(2)(o) of the FW Act operates prospectively to confer jurisdiction on the Commission in respect of claims for denied contractual benefits vested, but not precluded by the limitation period as prescribed in s 38(1)(c) of the Limitation Act 1935.

23      The prior s 16 of the WR Act did not and could not extinguish the applicant’s common law contractual claim. Its effect simply meant that the Commission could not exercise jurisdiction to deal with it by reason of the operation of s 109 of the Commonwealth Constitution. This was to the effect that at the material times, s 29(1)(b)(ii) of the Act was invalid, as being inconsistent with the intention of the WR Act to cover the field to the exclusion of State and Territory industrial laws, in relation to constitutional corporations. There would have been nothing precluding the applicant proceeding with her claim in another court of competent jurisdiction during that time.

24      The repeal of the WR Act and the enactment of the FW Act did not “revive” the applicant’s common law claim for damages as it was never extinguished by the WR Act in the first place. The repeal of the WR Act merely enables the Commission, once again, to hear such claims, as it could prior to March 2006, as long as the limitation period prescribed by s 38(1)(c) of the Limitation Act 1935 has not expired. The applicant’s claim was filed on 17 March 2010, within the relevant limitation period. 

25      By s 109 of the Commonwealth Constitution, where there is an inconsistency between a State law and a Commonwealth law, as noted above, the State law is only invalid to the extent of the inconsistency and can be revived. By the operation of s 27(2)(o) of the FW Act, the relevant State law, that is s 29(1)(b)(ii) of the Act, is no longer inconsistent with the Commonwealth law and therefore ceases to be invalid in relation to a constitutional corporation. 

Conclusion

26      For the foregoing reasons the applicant’s claim is within the Commission’s jurisdiction and a declaration will be made accordingly. The substantive claim will be listed for hearing in due course.