WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

FULL BENCH

CITATION : 2011 WAIRC 00192

DELIVERED : FRIDAY, 11 MARCH 2011

FILE NO. : FBA 22 OF 2010

Appellant

AND

The Minister for Health

Respondent

ON APPEAL FROM:

Jurisdiction : Industrial Magistrate’s Court

Coram : Industrial Magistrate G Cicchini

Citation : [2010] WAIRC 01210; (2010) 90 WAIG 1868

File No : M 117 of 2010

CatchWords : Industrial Law (WA) - Application for interim order preventing the contravention of or a failure to comply with an industrial agreement - Alleged failure to comply with WA Health - LHMU - Support Workers Industrial Agreement 2007 - Power to make orders in the form of injunctive relief - Principles considered - Industrial Relations Act 1979 (WA) s 26(1)(a), s 26(1)(b), s 37, s 41, s 41(4), s 41(5), s 41(6), s 83, s 83(1), s 83(4), s 83(5), s 83(7), s 84(2); Public Sector Management Act 1994 (WA) s 3(5), s 5(1)(c)(iii), s 45, s 53; Hospitals and Health Services Act 1927 (WA) s 2, s 3, s 3(2), s 5, s 5A, s 5A(1), s 7, s 7(1), s 7(2), s 7A, s 7A(1), s 7A(2), s 15, s 15(2), s 15(3), s 16, s 18, s 18(1)(a)(i), s 19, s 19(1); Industrial Magistrates Courts (General Jurisdiction) Regulations 2005 (WA) reg 5, reg 35(4), reg 72.

Result : Appeal dismissed

Representation:

Appellant : Mr R L Hooker (of counsel)

Respondent : Mr G T W Tannin SC and Mr R Bathurst (of counsel)

Case(s) referred to in reasons:

Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241

Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57

Bailey v Matthews [2004] WAIRC 11593; (2004) 84 WAIG 1392

Brown v President, State School Teachers’ Union (1989) 69 WAIG 1390

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Ltd [2010] FCA 591

Council of Civil Service Unions v Minister for the Civil Service [1984] 3 All ER 935 (HL)

Dunn v R [1896] 1 QB 116

Federated Clerks’ Union of Australia, Industrial Union of Workers, WA Branch v George Moss Ltd (1990) 70 WAIG 3040

George A Bond & Co Ltd (in liquidation) v McKenzie [1929] AR (NSW) 498

Kucks v CSR Ltd (1996) 66 IR 182

Merredin Customer Service Pty Ltd as trustee for Hatch Family Trust t/a Donovan Ford/Merredin Nissan and Donovan Tyres v Green [2007] WAIRC 01150; (2007) 87 WAIG 2789

Minister for Youth and Community Services v Health and Research Employees’ Association of Australia, NSW Branch (1987) 10 NSWLR 543

Palermo v Rosenthal [2011] WAIRC 00069

QR Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2010] FCAFC 150

Robe River Iron Associates v Amalgamated Metal Workers and Shipwrights Union (1987) 67 WAIG 1097

Ryder v Foley [1906] HCA 61; (1906) 4 CLR 422

Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110

Underdown v Dowford Investments Pty Ltd [2005] WAIRC 01243; (2005) 85 WAIG 1437

Case(s) also cited:

Construction, Forestry, Mining and Energy Union v Kavanagh [2008] WASC 146

Civil Service Association of Western Australia Incorporated v Director General, Department of Consumer and Employment Protection (2002) 82 WAIG 458

Health Services Union of Western Australia (Union of Workers) v Director General of Health (2008) 88 WAIG 543

United Group Resources Pty Ltd v Calabro (No 2) [2010] FCA 71 and (No 3) [2010] FCA 115

Reasons for Decision

SMITH AP:

The Appeal

1          This is an appeal instituted under s 84(2) of the Industrial Relations Act 1979 (WA) (the Act).  The appeal is against an order of the Industrial Magistrate’s Court made on 7 December 2010 in M 117 of 2010.  The order appealed against is that the appellant’s application for an interim order restraining the respondent pursuant to s 83(7) of the Act be dismissed. 

The Application before the Industrial Magistrate’s Court

2          In an application filed on 19 November 2010, the union in the statement of claim sought pursuant to s 83(5) and s 83(7) of the Act that pending the outcome of the substantive claim, the respondent be restrained from entering into any contract with Serco Australia Pty Ltd (Serco) in relation to Fiona Stanley Hospital as it alleged that the respondent in negotiations with Serco had breached cl 11.13 of the WA Health – LHMU – Support Workers Industrial Agreement 2007 (the Industrial Agreement). 

3          It is common ground that the respondent intends to soon execute a contract with Serco for Serco to employ employees at Fiona Stanley Hospital whose functions and/or duties are identical to or substantially similar to, functions and/or duties carried out by employees covered by the Industrial Agreement. 

4          Pursuant to s 83(5) of the Act, the union sought the following substantive relief:

(a) an order restraining the respondent from further contravention of cl 11.13 of the Industrial Agreement; and

(b) a penalty be imposed on the respondent for contravention of the Industrial Agreement and the penalty be paid to the union pursuant to s 83(4) of the Act. 

5          Clause 11.13(a) and cl 11.13(b) of the Industrial Agreement relevantly provides:

(a) The parties recognise the importance of promoting long term job security and career development for employees subject to this Agreement.

(b) With the exception of those contracts for services currently in existence, there will be no contracting out or privatisation of functions or duties performed by directly employed workers during the life of this Agreement.

6          The statement of claim filed by the applicant states as follows:

(a) The respondent is constructing and proposes to operate a hospital named the Fiona Stanley Hospital as a tertiary hospital on Murdoch Drive, Murdoch.

(b) The respondent proposes to employ at Fiona Stanley Hospital employees with functions and/or duties identical to, or in the alternative substantially similar to, functions and/or duties performed by classifications of employees listed at cl 19.2 - Classifications of the Industrial Agreement.

(c) The meaning of cl 11.13 of the Industrial Agreement is that the respondent has been at all material times, and continues to be, precluded from the contracting out or privatisation of the functions and/or duties of its employees covered by the Industrial Agreement intended to be, or who may be, employed at Fiona Stanley Hospital.

(d) In, or prior to November 2009, the respondent decided to contract out or privatise the functions and/or duties of employees covered by the Industrial Agreement intended to be employed at Fiona Stanley Hospital.

(e) In, or about November 2009, the respondent issued invitations to tender for the contracting out or in the alternative privatising the functions and/or duties of employees covered by the Industrial Agreement intended to be employed at Fiona Stanley Hospital.

(f) After November 2009, but prior to 19 October 2010, the respondent considered tenders from companies wishing to enter into negotiations for the contracting out or in the alternative privatising the functions and/or duties of employees covered by the Industrial Agreement intended to be employed at Fiona Stanley Hospital.

(g) On 19 October 2010, the respondent announced that Serco had been chosen as the preferred tenderer for the provision of non-clinical facilities management and support services at Fiona Stanley Hospital.

(h) The conduct of the respondent constituted engaging in contracting out or in the alternative privatising the functions and/or duties of employees covered by the Industrial Agreement intended to be employed at Fiona Stanley Hospital.

Industrial Magistrate’s Reasons for Decision

7          In making the decision to dismiss the application, the learned Industrial Magistrate found the following facts:

(a) The State of Western Australia (the State) is building a new hospital at Murdoch known as the Fiona Stanley Hospital.  Brookfield Multiplex won contracts to build the Hospital and commenced construction in 2009.  Practical completion of the Hospital is due to occur in December 2013.  Between December 2013 and May 2014, equipment that is not already installed by the builder will be moved into the hospital and a program of testing facilities and staff training will occur with a view to commencing services in May 2014.

(b) The State has decided to introduce a system whereby most of the facilities management services will be provided by an independent organisation.  Serco has been appointed as the preferred proponent in the process, and contract negotiations between the State and Serco are currently occurring.  It is envisaged that the contract will be for an initial term of 10 years with options for the State to extend the contract.

(c) If Serco is awarded the contract, it will have an immediate and significant role in the design and construction of the hospital.  It will be required to provide advice in a number of areas relating to facilities management that will influence the final construction outcome.  By way of example, kitchens and the sterilising service areas are being constructed as bare shells.  Serco will be required to provide advice to the builder concerning where to locate facilities such as power points, taps and steam supplies.  As part of its role Serco will design and implement various new technologies.  This process will involve liaising with the builder, as the implementation of new technologies will affect the building design.

(d) The State is concerned that if there is a delay in signing of a contract with Serco the commencement of works will be impeded which will adversely impact the practical completion and opening dates for the Hospital.  The monetary cost of a delay in the opening of the Hospital has been estimated to be between $250,000 and $400,000 per day.

(e) The union is very concerned that a significant number of its members will be seriously disadvantaged if the contract with Serco is signed.  The union fears that if its members’ functions and duties are contracted out its members will lose coverage under the Western Australian industrial relations system resulting in a reduction of their industrial rights.  As private sector employees they will not have access to the public sector service systems of appointment, discipline and support.  They will also be vulnerable to their employer going out of business.  The union believes that industrial disharmony will likely result.  It foreshadows difficulty in retaining staff which will result in a diminution in both the quality and numbers of staff.  It also considers that the likely result will be the ‘immoral and downward pressure on wages’.

(f) The union believes that by entering into a contract with Serco the respondent and the State will be doing something which was agreed would not be done.  It points out that it was agreed in the Industrial Agreement that the contracting out or privatisation of functions and duties of those workers falling within classifications specified in the Industrial Agreement would not occur.  It says that the Industrial Agreement was not restricted to a certain set of hospitals.  It applies to all staff present and future within the life of the Industrial Agreement, which is still current.

(g) The union is of the view that by negotiating with Serco, the State and therefore the Minister, is contracting out or privatising the functions or duties of staff within the scope of the Industrial Agreement and therefore is in breach of the Industrial Agreement.  It believes that a further breach of the Industrial Agreement will be committed if the State signs the contract with Serco.  Therefore, it is attempting to prevent the State and Serco from entering into the contract on the basis that it contravenes the Industrial Agreement.

8          When considering the application for interim relief, the learned Industrial Magistrate had regard to the matters stated in the union’s statement of claim and s 83(1) of the Act which provides for the enforcement of an industrial agreement.  The learned Industrial Magistrate also had regard to the fact that there was no dispute about the fact that the union and the respondent are covered and bound by the Industrial Agreement which is an instrument to which s 83(1) of the Act applies. 

9          The learned Industrial Magistrate observed that cl 11.13(a) and cl 11.13(b) of the Industrial Agreement was of particular relevance in this claim.  He then considered:

(a) The union’s argument that the meaning to be given to cl 11.13 of the Industrial Agreement is that the respondent is precluded from contracting out or privatising the functions and/or duties of its employees covered by the Industrial Agreement, intended to be, or who may be employed, at Fiona Stanley Hospital;

(b) The contention by the union that by entering into negotiations with Serco the respondent has contravened, or has failed to comply with, the Industrial Agreement;

(c) The assertion by the union that the respondent is contracting out or privatising the same or substantially similar functions and/or duties of employees within the classifications of employees listed in the Industrial Agreement.  In particular the assertion that issuing invitations to tender and by the announcement that Serco had been chosen as the preferred tenderer for the provision of non-clinical facilities management and support services at the Hospital, the respondent was contracting out or privatisation in contravention of the Industrial Agreement; and

(d) The argument by the union that the execution of a contract with Serco which is anticipated to take place will amount to a further breach of the Industrial Agreement and thus it sought to restrain the respondent by an order made under s 83(7) of the Act.

10       The Industrial Magistrate then had regard to s 83(5) to s 83(7) of the Act. 

11       Section 83 provides:

(1) Subject to this Act, where a person contravenes or fails to comply with a provision of an instrument to which this section applies any of the following may apply in the prescribed manner to an industrial magistrate’s court for the enforcement of the provision —

(a) the Registrar or a deputy registrar;

(b) an industrial inspector;

(c) in the case of an award or industrial agreement, any organisation or association named as a party to it;

(d) in the case of an award, industrial agreement or order, an employer bound by it;

(e) any person on his or her own behalf who is a party to the instrument or to whom it applies;

(f) if an employee under an employer‑employee agreement is a represented person, a representative acting on his or her behalf.

(2) In this section —

instrument to which this section applies means —

(a) an award;

(b) an industrial agreement;

(c) an employer‑employee agreement; and

(d) an order made by the Commission, other than an order made under section 23A, 32, 44(6) or 66.

(3) An application for the enforcement of an instrument to which this section applies shall not be made otherwise than under subsection (1).

(4) On the hearing of an application under subsection (1) the industrial magistrate’s court may, by order —

(a) if the contravention or failure to comply is proved —

(i) issue a caution; or

(ii) impose such penalty as the industrial magistrate’s court thinks just but not exceeding $2 000 in the case of an employer, organisation or association and $500 in any other case;

or

(b) dismiss the application.

(5) If a contravention or failure to comply with a provision of an instrument to which this section applies is proved against a person as mentioned in subsection (4) the industrial magistrate’s court may, in addition to imposing a penalty under that subsection, make an order against the person for the purpose of preventing any further contravention or failure to comply with the provision.

(6) An order under subsection (5) —

(a) may be made subject to any terms and conditions the court thinks appropriate; and

(b) may be revoked at any time.

(7) An interim order may be made under subsection (5) pending final determination of an application under subsection (1).

(8) A person shall comply with an order made against him or her under subsection (5).

Penalty: $5 000 and a daily penalty of $500.

12       The Industrial Magistrate also had regard to the modified order sought by the union which was as follows:

The Respondent be restrained from taking any step to negotiate or facilitate any contracting out or privatisation of any function and/or duties of directly employed workers during the life of the Agreement whether by facilitating or negotiating the contract with Serco or others.

13       The Industrial Magistrate then considered the affidavits sworn by Ms Carolyn Smith, the Assistant Secretary of the union. 

14       After having regard to the evidence and the contentions put forward by the union, the learned Industrial Magistrate found:

(a) An enforcement of an industrial instrument pursuant to s 83(1) of the Act requires an actual contravention or failure to comply.  The proper institution of proceedings under that sub-section is predicated on a contravention or failure to comply having occurred. 

(b) Leaving aside the fact that it is the State and not the respondent which is negotiating with Serco, the act of negotiation to enter into a contract, of itself cannot constitute contracting out or privatisation.  A legally binding contract has not thus far been concluded.  It may never eventuate.  Consequently when regard was had to the evidentiary material, there did not appear to be a breach of the Industrial Agreement. 

(c) If and when a contract is signed that might give rise to an allegation of a contravention or failure to comply. 

(d) On a proper analysis of the union’s case, the evidentiary material established that the real complaint of the union was that the respondent intends to execute the contract with Serco.  Properly characterised the union’s concern was with respect to a prospective breach of the Industrial Agreement.  A prospective breach is not actionable under s 83 of the Act:  Bailey v Matthews [2004] WAIRC 11593; (2004) 84 WAIG 1392. 

(e) The Industrial Magistrate’s Court does not have jurisdiction to deal with an alleged prospective breach of an industrial agreement, and without further evidence there did not appear to be a serious question to be tried. 

(f) It was doubtful whether the union could establish that the conduct of the respondent complained of is that of a party to the Industrial Agreement as the definition of ‘employer’ in cl 3 of the Industrial Agreement is defined to mean any of the employers referred to in cl 5.2(b) and cl 5.3(c) of the Industrial Agreement which have the effect that the respondent is only an employer party to the Industrial Agreement in his incorporated capacity as the Boards of the hospitals formerly comprised in the Metropolitan Health Service Board, Peel Health Services Board and the WA Country Health Service. 

(g) It is the State and not the Minister for Health who will, if negotiations are successful, be entering into a contract with Serco.  When making this finding the learned Industrial Magistrate had regard to an affidavit sworn by Bradley Charles Sebbes on 29 November 2010 who said that if negotiations with Serco are successful the State of Western Australia will be a party to the contract. 

(h) The union’s contention that the State and the Minister are interchangeable as if they are one and the same person was wrong; that clearly they are not one and are distinct legal entities. 

(i) The Industrial Magistrate’s Court does not have power to bind parties that are not before it, and the proposed order sought could not bind the State of Western Australia and/or Serco. 

15       The learned Industrial Magistrate also had regard to an argument put forward by the respondent that the Industrial Magistrate’s Court may not issue an interim order under s 83(5) and s 83(7) of the Act unless a contravention or failure to comply is proved.  The Industrial Magistrate rejected that argument and found that to construe that provision in that way would make it ineffectual.  He found that the provision was to be construed as giving the Industrial Magistrate’s Court the power to make interim orders where the evidence supports the allegation of an alleged contravention or failure in order to prevent further contravention or failure, and it follows that in an appropriate case the Industrial Magistrate’s Court may exercise its power by making interim orders pursuant to s 83(7).

The Notice of Appeal

16       The notice of appeal was filed on 14 December 2010.  The grounds of the appeal are as follows:

1. The learned Industrial Magistrate erred in law in misconstruing s 83 of the Industrial Relations Act 1979 (WA) (the Act) and thereby failing properly to exercise his jurisdiction to determine whether to grant orders under s83(5) and (7) of the Act in failing to find that:

(a) the power conferred by s83(7) of the Act to make an interim order pending final determination of an application under s83(1) does not require the finding of an actual contravention of, or failure to comply with, an instrument to which s 83 applies;

(b) the substantive application brought by the Appellant and the evidence led in support of the application for interim orders did make identifiable allegations of actual breaches of clause 11.13 of the WA Health – LHMU – Support Workers Industrial Agreement 2007 (the Agreement); and

(c) if there were a serious question to be tried concerning those allegations of actual breaches of clause 11.13 of the Agreement, then, subject to the balance of convenience favouring the making of the interim order sought by the Appellant, the court had jurisdiction to make the interim order accordingly.

2. The learned Industrial Magistrate erred in law and in fact in failing to conclude that there was, on the evidence led on the application for interim orders, a serious question to be tried that the Respondent has breached clause 11.13 of the Agreement when:

(a) it is strongly arguable that the conduct of the Respondent disclosed in the evidence constitutes a "contracting out" and/or a "privatisation" of the functions or duties performed by directly employed workers during the life of the Agreement contrary to clause 11.13(b) of the Agreement, notwithstanding the evidence of the Respondent that any formal execution of a contract to impose legally binding obligations in respect of that "contracting out" or "privatisation" of those functions or duties is likely to be entered into by the State of Western Australia.

(b) it is, further, strongly arguable that the conduct by or on behalf of the Respondent disclosed by the evidence occurred in the Respondent’s capacity as a party to the Agreement and not in some other, unidentified capacity.

3. The learned Industrial Magistrate erred in law and in fact in concluding:

(a) expressly, that as the evidence stands the Appellant cannot demonstrate any contravention or failure to comply with the Agreement; and

(b) by implication, that there is no serious question to be tried justifying the preservation of the status quo pending trial by making an interim order restraining the Respondent from taking any step to negotiate or facilitate any contracting out or privatisation of any functions and/or duties of directly employed workers during the life of the Agreement whether by facilitating or negotiating the contract with Serco, or otherwise,

when:

(c) the meaning of clause 11.13(b) of the Agreement is to prohibit, among other things, conduct by or on behalf of the Respondent of the kind disclosed in the evidence, which conduct includes:

(i) inviting private interests to tender for a contract for facility management and support services at Fiona Stanley Hospital;

(ii) selecting a preferred bidder from the private sector to provide those services;

(iii) contract negotiations which are presently occurring between representatives of the Respondent and that preferred bidder;

(iv) expressly stating that most of the non-clinical tasks that are performed by staff employed by WA Health will be undertaken by privately employed staff at Fiona Stanley Hospital;

(v) expressly stating that the Shenton Park campus of Royal Perth Hospital will be closed, that there will be job losses at Royal Perth Hospital Wellington Street campus, and that those services are being transferred to Fiona Stanley Hospital; and

(vi) expressly stating that Swan Districts Hospital is to be closed and a private operator will be operating the Midland Health Campus.

17       The appellant seeks orders on appeal that:

A. The appeal be allowed.

B. The decision of the learned Industrial Magistrate dismissing the Appellant’s application be varied and an interim order be made of the kind sought by the Appellant in the terms sought, as varied, at first instance.

C. In the alternative to B above, the decision of the learned Industrial Magistrate dismissing the Appellant’s application be quashed and the matter be remitted to the Industrial Magistrate’s Court for further hearing and determination according to law.

The Appellant’s Submissions

18       The appellant’s counsel made a strong submission that the interpretation of industrial instruments must have regard to the principle that for the scheme of regulation and its enforcement of industrial relations enacted under the Act to work and maintain credibility, there is a critical role of the Commission in holding negotiating parties to the bargains they strike and which are subsequently registered as industrial agreements.  In addition, the body of now orthodox authority concerning construction and application of industrial agreements recognises the importance of substance, and giving effect to the apparent intent of negotiating parties and does not find distinctions which attempt to avoid or evade that common intent.  Thus industrial reality is to be recognised in interpreting documents and narrow or pedantic approaches to interpretation should not be taken.  Inherent in that line of authority is a striving to avoid outcomes of inconvenience or injustice.  It is through these principles that the appellant says the relevant clauses of the Industrial Agreement should be interpreted. 

19       The fundamental basis of the appellant’s argument is a contention that the learned Industrial Magistrate misapprehended the extent and import of the appellant’s evidence and too narrowly assessed the substance of the role of the Minister for Health as a respondent to the Industrial Agreement.  Behind this argument, is an argument that at all material times the Minister for Health in making the statements and carrying out the acts complained of made those statements and carried out those acts not only as a representative of executive government but also in the capacity of the incorporated entity of the hospitals that formerly comprised in the Metropolitan Health Service Board.  They say this inference can be drawn from the relevant provisions of the Hospitals and Health Services Act 1927 (WA) and from the documents which were tendered into evidence, in particular the Expression of Interest (AB 14 – 59). 

20       The second important part of the appellant’s argument is that the evidence given by Ms Smith provided evidence of actual breaches of the Industrial Agreement and it was not open or necessary for the learned Industrial Magistrate to consider whether he had the power to deal with a prospective breach of an industrial agreement. 

21       The appellant contends that there was the substantial volume of evidence before the learned Industrial Magistrate about what the respondent (either directly, or on his behalf) had done to implement his intention to contract out and privatise functions or duties performed by union members.  That evidence included:

(a) Ms Smith deposed in her affidavit made on 19 November 2010 (the first affidavit) that the respondent had issued a document from the South Metropolitan Area Service titled ‘Fiona Stanley Hospital Facilities Management and Support Services – Preferred Bidder Stage, October 2010’ (AB 85 – 89).  The document set out a number of questions and answers.  One of the questions asked was ‘How are facilities management and support services going to be delivered at Fiona Stanley Hospital?’  The answer given was as follows (AB 86): 

The staff who work at Fiona Stanley Hospital when it opens in 2014 will not perform support service and facilities management tasks in the same way staff currently do at existing hospitals.  One major change is that most of the non-clinical tasks that are performed by staff employed by WA Health in other public hospitals will be undertaken by privately employed staff.

(b) Ms Smith said in her first affidavit that the Industrial Agreement was not restricted to a certain set of hospitals.  Rather it was conceived and drafted to apply to all staff present and future within the life of the Industrial Agreement whose functions and duties came under the classifications in the Industrial Agreement. 

(c) The Expression of Interest issued on 17 December 2009 was issued by the respondent as the ‘Principal’ in contract negotiations, to organisations capable of providing facilities management services for the new Fiona Stanley Hospital.  It is common ground that those services encompass duties and functions performed by members of the appellant under the Industrial Agreement.  The covering page describes the ‘Principal’ as the Minister for Health (AB 16).  The ‘Facilities Manager’ is defined in the glossary to be ‘the person engaged by the Principal on behalf of the State of Western Australia under the facilities management contract to provide the services’ (AB 36).  The term ‘State’ is defined in the glossary as ‘the Crown in right of the State of Western Australia, any Department, agency or instrumentality of the State of Western Australia, any Minister (including, without limitation, the Principal) whether body corporate or otherwise and their respective employees, agents, contractors and consultants’ (AB 37).  Under cl 2.2 it is stated ‘the Principal will engage the facilities manager as a head contractor’ (AB 22). 

(d) The respondent announced on 19 October 2010 on behalf of the Government of Western Australia, that Serco had been selected from the private sector to provide non-clinical facilities management and support services at Fiona Stanley Hospital.  The announcement observed that ‘the Government’ would then begin contract negotiations with Serco with a view to finalising and agreeing on a range of contractual details (AB 83).

(e) Whilst the affidavit of Mr Sebbes stated that the parties to the contract, if negotiations are successful, will be the State of Western Australia (AB 125), the appellant contends that the respondent represents the State of Western Australia and whilst he signs the contract on behalf of the State of Western Australia, at common law and pursuant to the express terms of the tender he is ‘part and parcel’ of the State which is the executive government of Western Australia. 

22       The appellant says in light of the evidence set out in the preceding paragraph, there was a serious question to be tried that the respondent had breached cl 11.13 of the Industrial Agreement.  In particular, when the Minister for Health says the government will begin contract negotiations with Serco with a view to finalising and reaching an agreement he does so as not the State in some narrow technical sense as a body politic, but as the State in a meaningful practical sense, by way of all those who undertake the function of executive government through agencies, the Minister for Health, whether body corporate or not, departments and senior public service officers who implement those decisions.  The appellant also says that what the Minister for Health is doing is part of the implementation of metropolitan health services.  Inherent in this argument is a contention that there is no separation at law of the functions and acts of the Minister for Health and those who act under his direction from the powers and duties of the Minister for Health as an incorporated Board of the former Metropolitan Health Service and the powers and duties as a government Minister for Health whose duty it is to provide health services in Western Australia. 

23       The appellant also says there was evidence before the learned Industrial Magistrate that representations have been made (by representatives of the State who are responsible to the Minister for Health), that functions and duties currently undertaken by employees who are presently employed covered by the Industrial Agreement will be undertaken by a private contractor.  In an affidavit sworn by Ms Smith on 1 December 2010 (the second affidavit) she deposed that she had a number of discussions with Marshall Warner from the Department of Health in negotiations for a Support Workers Agreement in 2010.  During negotiating meetings the issue of privatisation arose in connection with the use of fixed term contracts in the Department of Health whereby Mr Warner said on a number of occasions that employees on fixed term contracts as opposed to permanent staff would be engaged at places where the intent was to privatise the services.  When asked to identify which services were to be privatised, she was informed by Mr Warner:

(a) The Shenton Park Campus of Royal Perth Hospital would be closed.

(b) There would be job losses at Royal Perth Hospital Wellington Street Campus because those services were being transferred to Fiona Stanley Hospital; and

(c) Swan Districts Hospital would be closed and a private operator would be operating the Midland Health Campus (AB 119).

24       In support of the argument that the capacities of the Minister for Health cannot be seen in some way as mutually exclusive, the appellant referred to the following provisions of the Hospitals and Health Services Act:

(a) Section 5 provides that the general administration of the Hospitals and Health Services Act shall be under the control of the Minister.

(b) Pursuant to s 5A(1), it is the duty of the Minister to provide, to such extent as he considers necessary to meet all reasonable requirements:

(i) hospital accommodation;

(ii) hospital service, whether at a public hospital or, if necessary on medical grounds, elsewhere; and

(iii) health services.

(c) ‘Hospital service’ is defined in s 2 to include accommodation, maintenance, care, and all other services rendered, goods supplied or work done at, by or on behalf of a public hospital. 

(d) Section 7(1) provides where a hospital board is abolished the management and control of the hospital is vested in the Minister, and under s 7(2) whilst the Minister is deemed to be the board he has all the duties, powers and functions of a board, and all property which would vest in a board of a hospital vests in the Minister.  (It is common ground in this matter that no board has yet been established for Fiona Stanley Hospital).

(e) Under s 7A(1) the Minister has the general power to establish depots and supply equipment, stores, drugs and other hospital requisites to public hospitals and for the purposes of any public health service provided under any Act administered by the Minister. 

(f) Section 18 sets out the functions of hospital boards and provides a number of powers to a hospital board, and s 19 provides the power of a board to appoint officers and servants.  Under s 18(1)(a)(i) the Minister as a board is responsible for the control, management, and maintenance of the public hospital or hospitals for which it is or has been appointed. 

25       The appellant says that whether s 7 operates or not, the Minister for Health has a duty to provide health services and a hospital service is a subset of that.  The appellant argues the Minister for Health when exercising power under s 7(2) of the Hospitals and Health Services Act as the board of the former Metropolitan Health Service one of his functions is to provide health services as he sees fit as a board.  So they say that at all material times in relation to the acts complained of, the Minister was and is implementing the duties, powers and functions of what was previously the Metropolitan Health Service Board.  Importantly they say pursuant to s 7A(2) of the Hospitals and Health Services Act the Minister may:

(a) enter into contracts and make arrangements on such terms and conditions, which may include the payment of charges, as the Minister thinks fit; or

(b) make arrangements for the provision of services by an agency or agencies.

26       The appellant contends s 5A, s 7(2), s 18 and s 19 of the Hospitals and Health Services Act contemplate that the Minister for Health provides health services as a general duty whether he is acting in the place of a board or not.  If he is standing in the shoes of the board he is a body corporate and as part of that function he can enter into contracts and make arrangements under s 7A(2) and s 19(1) of the Hospitals and Health Services Act. 

27       It is submitted that this construction is compatible with the manner of functions of executive government that ministers or employing authorities undertake from time to time in relation to other agencies outside of those in health.  For example, the appellant’s counsel referred in argument to the effect of s 3(5) of the Public Sector Management Act 1994 (WA) (PSM Act) which provides that a reference in the PSM Act:

(a) to a person being employed by an employing authority; or

(b) in relation to a person, to an employing authority as being his or her employing authority,

shall, if the person was appointed under this Act for and on behalf of the State, be construed as a reference to the person being so employed for and on behalf of the State or as a reference, in relation to the person, to the employing authority as being his or her employing authority for and on behalf of the State, as the case requires.

28       Chief executive officers are employed for and on behalf of the State:  s 45 of the PSM Act.  So too are persons appointed by an employing authority to the senior executive service:  s 53 of the PSM Act.  Consequently it is argued that the idea of mutual exclusivity between Ministers of the Crown and senior executives undertaking important government functions, whether those functions are employing people, granting licences or approvals or implementing health services is misconceived. 

29       The appellant contends there are several important factors in interpreting the text of cl 11.13(b) of the Industrial Agreement and these are as follows:

(a) The proscription against contracting out is expressed in absolute terms.

(b) The heading to cl 11.13 itself – ‘Contracting out and Privatisation’ – reinforces the textual meaning of the clause as being concerned with the substance of what, on a fair and sensible reading, constitutes either or both a ‘contracting out’ or a ‘privatisation’.

(c) The proscription on contracting out or privatisation comes directly after a declaration, in cl 11.13(a) that the parties recognise the importance of promoting long term job security and career development for employees subject to the Industrial Agreement.  Thus they say any attempt to construe cl 11.13(b) narrowly will undermine the joint recognition expressed in cl 11.13(a).

(d) The burden of the prohibition is one operating on the type of work undertaken by directly employed workers, namely their ‘functions or duties’.  The burden does not operate on any specific personality of the employees’ employing authority. 

30       Whilst the prohibition needs to be read in light of the scope of the Industrial Agreement itself, the appellant says cl 11.13(b) remains the starting point for its construction.  Industrial context and purpose are also relevant in construing the language chosen by the parties who have struck an agreement to regulate their employment.  Moreover, narrow or pedantic approaches to interpretation of an industrial instrument are misplaced.  Meanings which avoid inconvenience or injustice may reasonably be strained for, as recognised in the now frequently cited observations of Madgwick J in Kucks v CSR Ltd (1996) 66 IR 182 (184); applied in Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241.  See also Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Ltd [2010] FCA 591 [39], sustained on appeal as to liability: QR Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2010] FCAFC 150. 

31       The appellant also says that the context and consequences are important in considering the interpretation advanced on behalf of the respondent, namely that, unless and until a formal contract is executed for the provision of facilities management services at Fiona Stanley Hospital, there cannot be any conduct that constitutes a ‘contracting out or privatisation’.  The appellant contends that not only is such an interpretation ‘narrow’ which is disavowed in the statement of principle by Madgwick J in Kucks it also marginalises cl 11.13(b) and robs it of considerable sensible operation.  This is because:

(a) Such a meaning is formalistic and legalistic and could not have been intended by the framers of cl 11.13 given the express recognition of the importance of promoting long term job security.

(b) The respondent’s interpretation means that all steps taken which are directed to privatisation of services unless and until a legally binding contract is executed are not covered by cl 11.13(b).

(c) If no action can be taken by the appellant or other party affected by cl 11.13(b) until a legally binding contract is entered into this would result in the capacity of a participant in industrial relations being severely affected and that could not be the intention behind the enforcement regime enacted in the Act. 

32       In relation to ground 1 of the appeal, the appellant says that there was a misconstruction of s 83 of the Act and a failure to properly exercise jurisdiction under s 83(7) and s 83(5) of the Act.  Whilst the appellant concedes that the learned Industrial Magistrate properly found that there is power to make an interim order pending final determination of an application which does not require the finding on actual contravention or failure to comply with an instrument to which s 83 applies, the learned Industrial Magistrate erred by finding that the evidentiary material did not appear to disclose a breach of the Industrial Agreement as the act of negotiation to enter into a contract of itself cannot constitute contracting out or privatisation.  They also say that the learned Industrial Magistrate also erred in finding that what was alleged by the appellant constituted a prospective breach when the evidence led in support of the application for an interim order made identifiable allegations of actual breaches of cl 11.13 of the Industrial Agreement.  The third part of ground 1 is that the appellant says there was a serious question to be tried concerning the allegations of actual breaches of cl 11.13.  They say the learned Industrial Magistrate should have considered the balance of convenience which the appellant says favoured the making of an interim order as sought by the appellant. 

33       Ground 2 asserts that the Magistrate erred in law and in fact in failing to conclude that there was a serious question to be tried that the respondent had breached cl 11.13 of the Industrial Agreement.  The appellant’s counsel made a submission that conduct of the respondent constitutes a ‘contracting out’ or ‘a privatisation’ and part of what the Minister has done is to implement health services within the State of Western Australia both pursuant to his general power to do so and ‘wearing his deemed incorporated hat standing in the shoes of’ the former Metropolitan Health Service Board.  The appellant also argues in this ground, that to say that the actual privatisation or contracting out has not occurred because the final formal step of executing the written contract and assuming a range of legal obligations has not crystallised, is a very narrow construction of cl 11.13(b).

34       Ground 3 deals with similar issues to those raised in ground 2.  The appellant says that the learned Industrial Magistrate erred in failing to have regard to the modified relief sought for interim orders because he failed to have any proper regard to the terms of that relief that was ultimately sought.  The appellant says it was not their ‘real complaint’ that the respondent intends to execute a contract with Serco, but the grievance of the appellant goes beyond that, to the culmination of the respondent’s policy of privatisation. 

35       The appellant contends that the balance of convenience clearly favours the granting of relief.  Central to the consideration of this element is the maintenance of the status quo.  Whatever argument may be ultimately advanced on all of the evidence at trial, the appellant says it is clearly apparent for the purposes of interim relief that:

(a) It is the express intention of the parties that, in the event of a grievance, complaint or dispute arising under the Industrial Agreement, the status quo will remain until the issue is resolved:  cl 51.1 and cl 51.9 of the Industrial Agreement. 

(b) Claims for interim relief in the sphere of industrial relations recognise that a prudent exercise of jurisdiction warrants maintaining of the status quo pending a substantive hearing and determination. 

(c) The Commission has a legitimate function to ensure that parties to an industrial agreement are held to the terms of the agreement they have struck. 

(d) Merely to restrain the respondent in the manner sought in the form of relief put to the learned Industrial Magistrate would give rise to no apparent detriment to the respondent on the evidence led to date.  All the respondent’s plans for the delivery of health services at Fiona Stanley Hospital can still continue, save for those that do not prima facie contravene cl 11.13(b).  The respondent seemingly relies on the estimation made by Mr Sebbes in late November 2010, that a delay in the opening of Fiona Stanley Hospital would cost between $250,000 and $400,000 per day (AB 126 – 127).  Yet the appellant says it is not seeking to delay the opening of the hospital.  Its interest is to restrain the taking of steps to negotiate or facilitate the contracting out or privatisation of the function or duties of its members.  

(e) If the respondent is permitted to continue to take all steps within its power to facilitate the finalisation of a contract and its formal execution such a substantial step will be considerably more difficult to undo than it would be to prevent on an interim basis. 

(f) The trial of the substantive application can, for the appellant’s part, be efficiently case managed and programmed to occur, subject to the availability of the Industrial Magistrate’s Court, within a matter of weeks, rather than months.  The interim restraint need not subsist for any longer than is necessary to maintain the status quo pending an expedited trial. 

36       Moreover the appellant says that this is a clear case where it cannot be said that damages would be an adequate remedy to vindicate the appellant’s interest in ensuring that an industrial agreement of this Commission is observed should its substantive claim be established in due course.  Consequently, they say in all of the circumstances, an interim restraint until trial ordered by the Full Bench will satisfy the criteria identified by the common law of Western Australia and Australia and would be a just and expeditious outcome, compatible with s 26(1)(a) of the Act. 

The Respondent’s Submissions

37       The respondent points out that the appellant’s statement of claim alleges only two breaches by the respondent of cl 11.13 of the Industrial Agreement, namely:

(a) Announcing that Serco had been chosen as the preferred tenderer for the provision of non-clinical facilities management and support services at Fiona Stanley Hospital; and

(b) Intending, or proposing, to execute a contract with Serco for Serco to employ employees at Fiona Stanley Hospital whose functions and/or duties are identical to, or substantially similar to, functions and/or duties carried out by employees covered by the Industrial Agreement.

38       The appellant sought interim orders under the statutory regime of s 83 of the Act, and Industrial Magistrates Court Practice Direction No 1 of 2005.  Practice Directions are made pursuant to reg 72 of the Industrial Magistrates Courts (General Jurisdiction) Regulations 2005 (WA).  The appellant is required by paragraph 1 of Practice Direction No 1 of 2005 to outline their case/further and better particulars, in a schedule, in the form of Form 8.2.  The outline is required to specify, among other matters, the identity and nature of the provisions of the statutory instrument alleged to have not been complied with.  Paragraph 10 of Practice Direction No 1 of 2005 also requires a party seeking an interim order to:

(a) Lodge an originating claim specifying the alleged contravention or failure and the final orders sought. 

(b) Lodge an application in Form 6 with a supporting affidavit (Form 7) setting out the interim relief sought and the reasons for seeking such relief. 

39       The principal argument advanced on behalf of the respondent are that the breaches alleged by the appellant are not conduct by a party to the Industrial Agreement and are incapable in law of constituting a breach of cl 11.13 of the Industrial Agreement.  Relevantly, it is argued that the Minister for Health may act in an incorporated capacity (a corporate sole) as a hospital board and also as a representative of the Western Australian Government.  The respondent says recognition of the Minister’s different legal capacities is not mere sophistry. 

40       The respondent says the learned Industrial Magistrate was not in error to examine whether the evidence led by the appellant supported the breaches of the Industrial Agreement that had been alleged and to decide the matter on that basis.  The respondent also says:

(a) It is now not open to the appellant on appeal, through the guise of discussing the relief sought, to seek to introduce new alleged (prospective) breaches of the Industrial Agreement as interim orders under s 83 of the Act can only be granted in respect of the breaches of the relevant instrument which are alleged;

(b) It is apparent that the varied order sought by the appellant arose from material in the second affidavit of Ms Smith.  That document was provided to the respondent on the day the application for the interim order was heard by the Industrial Magistrate on 1 December 2010; and

(c) There was no application to amend the statement of claim by the appellant. 

41       In these circumstances the respondent says that whilst the Industrial Magistrate’s Court is not a court of pleadings the appellant is bound by the statement of claim. 

42       Pursuant to s 41(4) of the Act, an industrial agreement relevantly extends to and binds employers who are a party to an industrial agreement.  The term ‘employer’ is defined in cl 3 of the Industrial Agreement to mean ‘any of the employers party to the agreement referred to in sub-clauses 5.2(b) and 5.2(c) of this agreement’.  The respondent points out that employers referred to in cl 5.2(b) and cl 5(2)(c) of the Industrial Agreement are:

(a) The Minister for Health in his incorporated capacity under s 7 of the Hospitals and Health Services Act as:

(i) the hospitals formerly comprised in the Metropolitan Health Service Board,

(ii) the Peel Health Services Board, and

(iii) the WA Country Health Service;

(b) the Western Australian Drug and Alcohol Authority.

43       The respondent says it is only in his incorporated capacity as the hospitals formerly comprised in the Metropolitan Health Service Board, the Peel Health Services Board and the WA Country Health Service, the respondent is an employer party to the Industrial Agreement.  The Industrial Agreement does not apply to the respondent acting in any other capacity.  Nor does the Industrial Agreement bind the Western Australian State Government generally.

44       Clause 11.13(a) of the Industrial Agreement provides that the ‘parties recognise the importance of promoting long-term job satisfaction and career development for employees subject to this Agreement’.  The respondent points out that this principle is specifically limited to the parties to the Industrial Agreement and to the employees subject to the Industrial Agreement.  Importantly the respondent says that in his incorporated capacity as the hospitals formerly comprised in the Metropolitan Health Service Board, the Peel Health Services Board and the WA Country Health Service, the respondent does not control or manage Fiona Stanley Hospital. 

45       The respondent also says that cl 11.13(b) of the Industrial Agreement only relevantly prohibits the Minister in his incorporated capacity as the hospitals formerly comprising the Metropolitan Health Service Board, the Peel Health Services Board and the WA Country Health Service from contracting out or privatising functions or duties.  In publishing the Expression of Interest and in announcing that Serco had been selected as the preferred bidder, the Minister for Health was acting on behalf of the State Government and was not acting in his incorporated capacity as the hospitals formerly comprising the Metropolitan Health Service Board, the Peel Health Services Board or the WA Country Health Service.  If negotiations are completed successfully with Serco, a contract between Serco and the Crown in the right of the State of Western Australia for the provision of facilities management services will be entered into.  The Minister for Health in his incorporated capacity as the respondent to the Industrial Agreement will not be a party to the Contract. 

46       The respondent says that even if the appellant’s artificially expansive interpretation of cl 11.13(b) proposed is accepted (that is, the Industrial Agreement applies to employees who may be employed at Fiona Stanley Hospital), there is no serious question to be tried as the contract will not be entered into by any party to the Industrial Agreement.  Consequently, the respondent says, the learned Industrial Magistrate was correct to take into account the fact that the appellant could not show that the actions of the Minister for Health complained of were the actions of a party to the Industrial Agreement and was correct in determining there was no serious question to be tried.  The amendment of the relief sought by the appellant did not alter its inability to show the breaches alleged were conduct of a party to the Industrial Agreement. 

47       The respondent also says by merely announcing that Serco was the preferred tenderer with whom further negotiations will take place and are taking place cannot amount to privatisation and cannot amount to contracting out and the conduct complained of is ‘a prospective breach’ or ‘prospective breaches’ over which the Industrial Magistrate’s Court has no jurisdiction:  Bailey.

48       The respondent says that ground 1(a) cannot be made out as the learned Industrial Magistrate did not find that the power conferred by s 83(7) of the Act to make an interim order pending final determination of an application under s 83(1) of the Act required a contravention or failure to comply with an instrument to which s 83 applies to be proved before an interim order can be made (AB 116).  The respondent says, however, in order to obtain an interim order the claim must relate to matters which are capable of constituting a contravention or failure to comply with the provision of a relevant instrument and the breach or breaches alleged by the appellant do not meet this requirement.

49       As to the balance of convenience raised in ground 1(c), where there is an accepted power to issue interim orders, the respondent contends the usual principles applicable to the granting of interim injunctions have been held to be relevant:  Brown v President, State School Teachers’ Union (1989) 69 WAIG 1390, 1393. 

50       The principles that apply when a party is seeking an interim order must:

(a) Make out a prima facie case, in the sense that the applicant must show a sufficient likelihood of success to justify the preservation of the status quo; and

(b) Show that the inconvenience or injury which the applicant will be likely to suffer if an injunction were refused but the applicant were later successful at hearing outweighs the injury which the respondent would suffer if an injunction were granted but the respondent was later successful at hearing:  Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 [65]. 

51       The respondent points out that having found that the appellant had not made out a prima facie case, the learned Industrial Magistrate was not required to go on and consider the issue of balance of convenience. 

52       However, in the event that the Full Bench may be asked to consider the issue of balance of convenience the following matters are relevant:

(a) As the apparent strength of the appellant’s case diminishes, the balance of convenience moves against the making of an order:  Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110 [11]. 

(b) The appellant’s action does not demonstrate an arguable case. 

(c) The interim order sought is calculated to delay the practical completion and opening of Fiona Stanley Hospital.  Any order that has that effect will have both a human cost, as needed hospital facilities will be delayed, and a financial cost of between $250,000 and $400,000 per day of delay:  Affidavit of Mr Sebbes (AB 125 – 127).

(d) The Commission (like the Industrial Magistrate’s Court) does not have the power to bind parties that are not before it.  Neither party to the proposed contract (that is, the State and Serco) is before the Commission.

(e) The appellant is seeking injunctive relief of a character that belongs in a superior commercial court.  It seeks relief against parties who are not present.  It also seeks to prevent legitimate economic and social activities of persons who are not parties to the Industrial Agreement.

(f) If an injunction were being sought in the Supreme Court in Western Australia, it would ordinarily be necessary to serve the parties sought to be enjoined and to give an undertaking for damages:  Rules of the Supreme Court, O 52, r 1, r 9 and r 10; Supreme Court Practice Direction 4.3.4.  Despite the significant and irreparable harm which will be caused by any order which has the effect of delaying the opening of Fiona Stanley Hospital, there is no requirement to give an undertaking for damages in this Commission, and the Commission is not empowered to receive or enforce such an undertaking.

(g) There is no requirement to grant an interim order to protect the employment of any employees covered by the Industrial Agreement.  No employees will have their employment terminated due to the opening of Fiona Stanley Hospital in 2014.  Nor will any employee be forced to accept employment with Serco in 2014:  Affidavit of Mr Warner (AB 138).

(h) The status quo in relation to the employees subject to the Industrial Agreement is fully protected.  The fact that due to a properly constituted law of the Commonwealth of Australia (the Fair Work Act 2009), employees employed by Serco in 2014 are likely to come within the federal industrial relations system, rather than the Western Australian Industrial Relations Commission system in which the appellant operates, is not a factor relevant to whether an interim order should issue.

Application to Adduce Fresh Evidence

53       After submissions were heard on 27 January 2011, in a letter to the Full Bench dated 10 February 2011, the appellant made an application to adduce fresh or new evidence.  The fresh or new evidence consists of the following statements in a letter to the secretary of the appellant, Mr David Kelly, from Mr Warner dated 10 February 2011 that:

• The decision on the preferred scope of private sector involvement in the provision of facilities management and support services at the Fiona Stanley Hospital will be taken in due course by State Cabinet.  It is unlikely that a decision will be sought from Cabinet before April 2011.

• For the purposes of Clause 46.1(a) of WA Health - LHMU - Support Workers Industrial Agreement 2007 the execution of a contract with the preferred proponent will constitute the definite decision to introduce major change.

• In terms of the execution of a contract the Minister for Health would act to give effect to a decision by State Cabinet.

54       The appellant says that Mr Warner’s letter deals with an important issue of fact insofar as the letter makes clear that the Minister for Health will be a party to the proposed contract with Serco for services to be provided at Fiona Stanley Hospital.  They say this evidence, is clearly fresh evidence that should be admitted in this appeal, as the evidence was not available at the time of the initial hearing before the learned Industrial Magistrate, nor at the hearing of the appeal before the Full Bench on 27 January 2011.  Further, they say the statements provide a critical context to certain evidence upon which the respondent has placed substantial reliance, namely the assertion of Mr Sebbes at para 8 of his affidavit sworn on 29 November 2010 that:

The parties to the Contract, if negotiations are successful, will be the State of Western Australia (State) and Serco (AB 125).

55       The appellant contends this fresh evidence reinforces the case for the appellant generally and supports the appellant’s position that the Minster for Health is in breach of the Industrial Agreement. 

56       The respondent opposes the application by the appellant to adduce fresh evidence.  The respondent in a letter from his solicitors dated 16 February 2011 says that the suggestion by the appellant that the Minister for Health will be a party to the contract is incorrect.  They also refer to para 8 of the affidavit of Mr Sebbes at AB 125 and say the uncontested evidence before the Commission is that the parties to the contract, if negotiations are successful, will be the State of Western Australia and Serco.  They contend that the statements made in Mr Warner’s letter merely indicate that the Minister for Health is likely to be the person who signs the contract on behalf of the State and at law the fact that the Minister for Health in signing the contract will do so on behalf of the State, will not make the Minister a party to the contract:  see, for example, Minister for Youth and Community Services v Health and Research Employees’ Association of Australia, NSW Branch (1987) 10 NSWLR 543, 556 – 558. 

57       The respondent says that the statements contained in the letter from Mr Warner should not be admitted as the appellant could have, with reasonable diligence, obtained evidence as to who was likely to sign the contract for and on behalf of the State.  For example, in the proceedings before the learned Industrial Magistrate, Mr Sebbes could have been cross-examined on his affidavit.  In any event, they say that the evidence that the Minister for Health is likely to be the person that signs the contract on behalf of the State will make no difference to the outcome of this matter as the Minister will not, by so signing, become a party to the contract in any capacity. 

58       In the alternative, the respondent says that if the letter is received into evidence, the incorrect assertion that the letter indicates that the Minister for Health will be a party to the contract with Serco should be rejected. 

59       The test to be applied by the Commission for admission of fresh evidence on an appeal was for many years set out in the decision of the Full Bench in Federated Clerks’ Union of Australia, Industrial Union of Workers, WA Branch v George Moss Ltd (1990) 70 WAIG 3040, 3041 in which the Full Bench held that fresh evidence is only admissible if:

(a) The evidence was not available to the parties seeking to tender it at the time of the trial and the evidence would not have been available to that party with reasonable diligence in the preparation of their case; and

(b) The evidence must be such that it would have had an important influence on the result of the trial and must be credible, but not necessarily beyond controversy.

60       The Full Bench modified this criteria in Underdown v Dowford Investments Pty Ltd [2005] WAIRC 01243; (2005) 85 WAIG 1437, when Sharkey P and Kenner C with whom Scott C agreed, said at [8] and [9] that fresh evidence can only be admitted if it is almost certain that, if the evidence had been available and adduced, an opposite result would have been reached.  They also observed that they had put this last condition too low in George Moss Ltd and they wished to retract what they said in that case and substitute the stricter criteria.  The modified principle was applied by the Full Bench in Merredin Customer Service Pty Ltd as trustee for Hatch Family Trust t/a Donovan Ford/Merredin Nissan and Donovan Tyres v Green [2007] WAIRC 01150; (2007) 87 WAIG 2789 [10]. 

61       Whilst I am satisfied that the evidence contained in the letter dated 10 February 2011 was not available to the parties seeking to tender it at the time of the hearing before the learned Industrial Magistrate, I am not satisfied it would have resulted in the making of an interim order.  Mr Warner does not expressly state that the Minister for Health will be a party to a contract with Serco.  As the respondent asserts, if the Minister for Health signs a contract for and on behalf of the Crown, then the Minister when so signing only does so as an agent of the Crown and not as a party to the contract:  Minister for Youth and Community Services [72] – [73], (McHugh JA).  In any event, it is not clear from Mr Warner’s letter in what capacity the Minister would sign.  Further and of more importance, the learned Industrial Magistrate found that it was doubtful whether the appellant could establish that the conduct of the respondent complained of was that of a party to the Industrial Agreement, as the definition ‘employer’ in cl 3 of the Industrial Agreement, has the effect the respondent is an employer party to the Industrial Agreement only in his incorporated capacity of the hospitals formerly comprising the Metropolitan Health Service Board, Peel Health Services Board and the WA Country Health Service.  For the reasons that follow, I am of the opinion that the learned Industrial Magistrate did not err in making this finding.  For this reason, I am also of the opinion that it is not necessary in this appeal to determine who will be the party to any contract with Serco in respect of Fiona Stanley Hospital if indeed such a contract is to be entered into in the future. 

Conclusion

(a) Negotiations with Serco

62       The first issue of importance in this appeal is whether the acts complained of in relation to the negotiations with Serco with a view to entering into a contract for the provision of facilities management and support services for Fiona Stanley Hospital were carried out by or on behalf of the respondent in his capacity as a respondent to the Industrial Agreement. 

63       The powers of the State as the Crown are derived from Acts of Parliament and the common law.  At common law the Crown is empowered to employ by the Royal prerogative:  Council of Civil Service Unions v Minister for the Civil Service [1984] 3 All ER 935 (HL).  It also has a prerogative power to enter into contracts to provide services.  A prerogative power can be displaced, abolished or limited by statute, and once a statute has occupied the ground formerly occupied by the prerogative, the Crown must comply with the terms of the statute:  Hogg PW and Monahan PJ, Liability of the Crown (3rd ed) and cases cited therein (17).  A statute will only displace a prerogative power with respect to powers or matters that the statute deals with expressly or by necessary implication:  Hogg (17); Dunn v R [1896] 1 QB 116 (120) (Kay LJ); Ryder v Foley [1906] HCA 61; (1906) 4 CLR 422 (435) (Griffith CJ) and (444 – 445) (Barton J). 

64       The power to engage employees to work in a public hospital who are not members of the Senior Executive Service is regulated not only by the provisions of the Hospitals and Health Services Act but also the PSM Act. 

65       Pursuant to s 15(2) of the Hospitals and Health Services Act the management and control of a public hospital (or more than one public hospital where a re-organisation of hospital boards has taken place under s 16), is vested in the board constituted in relation to it and under s 15(3) every board is a body corporate.  At common law, as a corporate entity, each board of a public hospital is a legal separate entity.  Even where a company has only one member it is a separate legal entity and its rights, privileges, duties and liabilities are separate from those of its sole member:  Austin RP and Ramsay IM, Ford’s Principles of Corporations Law (13th ed) (2007) [4.150]. 

66       Each board has an express power to employ under s 19(1) of the Hospitals and Health Services Act and each board is the employer of employees who carry out functions at or for the public hospital or hospitals that each board is appointed to manage and control.  The fact that each board is a separate employer is recognised by the statutory scheme of the rights and obligations of public sector employers and management of public sector employment in the PSM Act.  Section 5(1)(c)(iii) of the PSM Act relevantly provides among other matters that an ‘employing authority’ is a board in relation to an employee if a written law confers on the board the power to appoint staff. 

67       Employees whose terms and conditions of employment are covered by the Industrial Agreement are not appointed under the PSM Act or for and on behalf of the Crown within the meaning of s 3(5) of the PSM Act.  Persons appointed under the PSM Act are those appointed as chief executive officers and chief employees under Division 4 of Part 2 of the PSM Act, public service officers including those appointed to senior executive posts under Division 1 of Part 3 of the PSM Act, and ministerial officers appointed under Division 1 of Part 4 of the PSM Act.  Employees whose employment is covered by the Industrial Agreement are not appointed as officers or employees in any of those categories. 

68       Where the management and control of a hospital is vested in the Minister for Health pursuant to s 7(1) of the Hospitals and Health Services Act, s 7(2) of the Hospitals and Health Services Act relevantly provides:

Whilst the Minister is so controlling any hospital he shall be deemed to be the board thereof and to be incorporated under the name of such board, and shall have all the duties, powers and functions of a board, and all property which would vest in a board of such hospital shall vest in the Minister.

69       Importantly s 7(2) of the Hospitals and Health Services Act does not simply provide for the Minister for Health to have all the duties, powers and functions of a board, the provision goes further than that.  In deeming the Minister for Health when controlling a public hospital that is vested in him, to be the board and an incorporated body, the Minister for Health as an incorporated board is a separate legal entity to the entity of the Minister for Health as a Minister of the Crown.  Consequently the powers, duties and functions that otherwise attach to the office of Minister for Health under the provisions of the Hospitals and Health Services Act that do not expressly apply to a board are separate powers and duties.  This is one of the consequences of the well recognised common law principle of the separate entity doctrine in the law of corporations. 

70       If pursuant to provisions of the Hospitals and Health Services Act, the Minister for Health only had the powers and functions of a hospital board if no board was appointed and in these circumstances was not deemed to be the board of a public hospital or hospitals and to be incorporated, then the arguments put forward on behalf of the appellant would have some force.  However, the Minister for Health when acting in an incorporated capacity as a board, part of his functions and duties cannot be the duties and functions arising under s 5A and s 7A of the Hospitals and Health Services Act, as these provisions do not vest powers and duties in a board. 

71       The incorporated capacity of the Minister for Health as a board is the employer of employees in the hospitals of which he is constituted as a board and an incorporated body.  It is in this capacity, and only in this capacity, that he is properly named as one of the employers bound by the Industrial Agreement. 

72       The terms of the Industrial Agreement must be construed in accordance with the express provisions of the Hospitals and Health Services Act.  It follows therefore that there is no scope for giving the meaning of ‘employer’ in cl 3, cl 5.2(a) and cl 5.2(b) any construction beyond that what is authorised by the provisions of the Hospitals and Health Services Act. 

73       For these reasons, the terms of the Industrial Agreement, in particular cl 11.13(b), cannot apply to the Minister for Health other than in his incorporated capacity as:

(a) the hospitals formerly comprised in the Metropolitan Health Service Board;

(b) the Peel Health Services Board; and

(c) the WA Country Health Service. 

74       Prior to the abolition of the Metropolitan Health Service Board on 9 March 2001, the Metropolitan Health Service Board was comprised of the following hospitals (affidavit of Mr Warner sworn on 29 November 2010 (AB 131)):

(a) Armadale Kelmscott Memorial Hospital

(b) Bentley Hospital

(c) Fremantle Hospital

(d) Graylands Selby-Lemnos & Special Care Hospital

(e) Kalamunda District Community Hospital

(f) King Edward Memorial Hospital for Women

(g) Osborne Park Hospital

(h) Perth Dental Hospital

(i) Princess Margaret Hospital for Children

(j) Rockingham/Kwinana District Hospital

(k) Rottnest Island Nursing Post

(l) Royal Perth Hospital

(m) Sir Charles Gairdner Hospital

(n) Swan District Hospital

(o) Woodside Maternity Hospital

(p) Wooroloo Hospital

75       The building of Fiona Stanley Hospital is yet to be completed.  No board has been constituted to manage and control the proposed public hospital.  There is no scope to construe Fiona Stanley Hospital as part of the hospitals ‘formerly comprised in the Metropolitan Health Service Board’ as such an expression refers to a board that has been abolished, not to one that is yet to be created. 

76       Consequently, insofar as the appellant argues there is a prima facie case for an interim order restraining the respondent from taking any steps to negotiate or facilitate any contracting out or privatisation of any function and/or duties of directly employed workers during the life of the Industrial Agreement by facilitating or negotiating a contract with Serco for services at Fiona Stanley Hospital, this part of the appeal must fail. 

77       As a consequence of this finding it becomes unnecessary to consider whether the State of Western Australia or the Minister for Health will be a party to any contract with Serco. 

(b) Is or should the Appellant be Bound by the Case Stated in the Statement of Claim

78       When the application for an interim order was made by the appellant, the appellant put forward a modified order which sought to extend the scope of acts to be prohibited to facilitating or negotiating contracts for the privatisation of services with contractors other than Serco.  The basis for the modified order is said to arise out of statements made by Mr Warner to Ms Smith during 2010 to the effect that there is an intention to privatise particular services that are currently provided at hospitals that formerly comprise the Metropolitan Health Service Board. 

79       The appellant’s statement of claim sets out the particulars of the breaches of the Industrial Agreement alleged by the appellant.  Those particulars only relate to the proposal by the respondent to enter into an agreement with Serco to provide services and carry out functions at Fiona Stanley Hospital.  The particulars do not specify any particulars which relate to an intention to privatise services at Royal Perth or Swan Districts Hospitals which are hospitals, among others, that formerly comprised the Metropolitan Health Service Board. 

80       The Industrial Magistrate’s Court when exercising its general jurisdiction is like the Commission not a court of pleadings.  Pursuant to reg 35(4) of the Industrial Magistrates Courts (General Jurisdiction) Regulations the Industrial Magistrate’s Court is not bound by the rules of evidence and may inform itself on any matter and in any manner as it thinks fit.  Under reg 5 of the Industrial Magistrates Courts (General Jurisdiction) Regulations the Industrial Magistrate’s Court is required to ensure that cases are dealt with justly.  Similarly, the Commission itself is not bound by the rules of evidence and is bound to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms:  s 26(1)(b) and s 26(1)(a) of the Act. 

81       Whilst the Industrial Magistrate’s Court is not a court of pleadings that does not mean that a party to proceedings in the general jurisdiction of the Industrial Magistrate’s Court should not be bound by their particulars.  I and Beech CC recently observed in Palermo v Rosenthal [2011] WAIRC 00069 [73] and [80]:

73 … The Commission is not a court of pleadings.  It is required by s 26 of the Act to act according to equity, good conscience and the substantial merits of the case and without regard to technicalities and legal form.  However, the nature of an enquiry under s 23(1) of the Act is not inquisitorial in the sense that the Commission can undertake an enquiry outside the bounds of particulars.  Particulars of a claim and corresponding particulars of defence to a claim are necessary to avoid a trial by ambush.  Such particulars need not be drafted with any finesse or to the same extent as required in a court of pleadings but must leave the opposing party in no doubt as to what is alleged so as to enable the opposing party to know what case he or she is required to meet.  Proceedings brought by an employee under s 29(1)(b) of the Act are adversial in nature and as such, once particulars are given each party is entitled to run their case on the basis that the particulars set the boundaries of relevant issues in dispute.  Unless an application to amend particulars is granted, a party should be bound by the particulars they have provided.

80 These provisions together with the requirements of procedural fairness and the provision of a fair hearing establish the following statutory case management regime that:

(a) Matters should be dealt with in a way that eliminates delay with a minimum of legal form and technicality but allows for a proper and just consideration of matters;

(b) When managing a matter the Commission should have regard not only to the interests of each party but to interests of the public in the efficient use of resources of the Commission;

(c) There should be a fair and reasonable opportunity to both parties to each present their case.  A determination of what is fair and reasonable in the circumstances of a matter should have regard to the matters raised in (a) and (b) above and:

(i) The parameters of relevant matters set by the particulars given by each party in the application, notice of answer and any other particulars.

(ii) What is reasonably required for the efficient presentation by each party of their case.

(iii) The principle that each party should not be left in any doubt about what is alleged against them and the opposing case they are required to meet.

82       If the appellant’s concerns about privatisation of services extended beyond negotiations with Serco to other alleged breaches of the Industrial Agreement, the appellant should have sought to amend the particulars set out in the statement of claim as the matters alluded to in the second affidavit of Ms Smith potentially raised new and different alleged breaches of the Industrial Agreement. 

83       The widening the scope of the order sought by the appellant to ‘or others’, was in light of the matters stated in Ms Smith’s second affidavit, a substantial addition to the particulars of the alleged breach of the Industrial Agreement.  This evidence was outside the bounds of the particulars in the union’s statement of claim.  This was not merely a matter of form or an inconsequential change to the particulars.  If it were an inconsequential change it would perhaps not be necessary to amend the statement of claim as the strict rules of pleading that apply to superior courts of record have no application to the Industrial Magistrate’s Court.  In matters however where potentially more than one breach of an industrial instrument is alleged such breaches should be particularised.  As alleged breaches in respect of Royal Perth Hospital and Swan Districts Hospital were not particularised in the statement of claim, I am of the opinion that the learned Industrial Magistrate did not err in not having regard to the evidence in the second affidavit of Ms Smith about the anticipated job losses and transfer of services at Royal Perth Hospital and Swan Districts Hospital. 

(c) Is there Prima Facie Evidence in Relation to the Privatisation of Services at Royal Perth Hospital and Swan Districts Hospital

84       If I am wrong about the requirement to amend the particulars in the statement of claim, it is my view that the evidence of Ms Smith about what is planned to occur at Royal Perth Hospital and Swan Districts Hospital is not sufficient to establish a prima facie case of any alleged breach or breaches of the Industrial Agreement to found an interim order pursuant to s 83(5) of the Act. 

85       The evidence about the statements Mr Warner is said to have made about what is planned to occur at Royal Perth Hospital is vague and does not without further information, disclose a privatisation or contracting out of the functions or duties of persons whose employment is covered by the Industrial Agreement.  Statements that the Shenton Park Campus will be closed and there will be job losses at the Wellington Street site of Royal Perth Hospital because those services will be transferred to Fiona Stanley Hospital does not establish a contracting out or privatisation of functions and duties of employees at Royal Perth Hospital as the services will in the future be transferred to a separate legal entity, that is to the future board of Fiona Stanley Hospital. 

86       Whilst the evidence establishes that Swan Districts Hospital is to be closed and replaced by a new facility to be built at Midland Health Campus which will be operated by a private contractor, there was no evidence before the Industrial Magistrate’s Court as to whether the Midland Health Campus:

(a) Is to be a new public hospital and thus not part of the hospitals formerly comprised in the Metropolitan Health Service Board; or

(b) Is simply the new name and new building and as such the new facility at Midland Health Campus could be said to still be the ‘Swan Districts Hospital’ and thus part of hospitals formerly comprised in the Metropolitan Health Service Board.

87       Even if the new facility can be regarded at law as part of the hospitals formerly comprised in the Metropolitan Health Service Board there is no evidence about whether any actual steps have been taken to contract out or privatise functions at the Swan Districts Hospital.  The evidence at its highest, simply establishes an intention to do so.  Whether that intention has been acted on by the taking of any steps such as the issuing of an expression of interest or any other similar process or when such steps are likely is not known.  Such steps in my view would be steps that could be characterised as ‘contracting out or privatisation of functions or duties’ within the meaning of cl 11.13(b) of the Industrial Agreement.  I do not agree that the prohibition created by cl 11.13(b) is restricted to the entering into a contract with a private provider of services.  If the framers of the clause had intended such a meaning words of narrow import would have been used.  The concept of ‘contracting out’ and ‘privatisation’ are words of wide import.  The words ‘contracting out’ connote and encompass the entire process of entering into a contract, which would include the contractual processes such as issuing of expressions of interest, the calling of tenders and selecting a preferred tenderer.  By including the word ‘privatisation’ is to extend the meaning of the prohibition to include the process and incidents of privatisation which would also include issuing an expression of interest, selection of a preferred tenderer or other pre-contractual processes.  The prohibition in cl 11.13(b) is not simply on the entering into a contract but is something more than an intention to commence a process of privatisation or contracting out. 

88       However, as set out above, the evidence adduced by the appellant does not establish in relation to Swan Districts Hospital that:

(a) Services at the hospital are to be contracted out (rather than services are to cease resulting in job losses in relation to which may trigger the application of the Western Australian Government/Liquor, Hospitality and Miscellaneous Union Redeployment, Retraining and Redundancy Certified Agreement 2004); or

(b) Pre-contractual steps have been taken with any potential private provider of services.

89       For these reasons, I would make an order that the appeal be dismissed. 

SCOTT ASC:

90      I have had the benefit of reading a draft of the reasons for decision of the Acting President.  I agree and have nothing to add.

KENNER C:

91       The background to this appeal, the reasons of the learned Industrial Magistrate, and the submissions of the parties in relation to the grounds of appeal, have been set out in the reasons of Smith AP, which I need not repeat.

Issues

92       The issues arising on this appeal to my mind are twofold:

(a) Did the terms of the WA Health – LHMU – Support Workers Industrial Agreement 2007 (‘the Agreement’) apply to the circumstances before the learned Industrial Magistrate; and

(b) If so, did the learned Industrial Magistrate err in not granting an interim order under s 83(7) of the Industrial Relations Act 1979 (‘the Act’)?

93      It was common ground both at first instance and on this appeal, that the applicant and the respondent are parties to the Agreement.

94      Cl 5 – Area, Incidence and Parties Bound the Agreement provides as follows:

5.1 This agreement applies throughout the State of Western Australia and is binding on the parties and on employees to which the Health and Disability Services - Support Workers - Western Australian Government - Award 2001 applies.

5.2 The parties to the agreement are:

(a) The Liquor, Hospitality and Miscellaneous Union, WA Branch.

(b) The Minister for Health in his incorporated capacity under s.7 of the Hospitals and Health Services Act 1927 (WA) as:

(i) the Hospitals formerly comprised in the Metropolitan Health Service Board,

(ii) the Peel Health Services Board, and

(iii) the WA Country Health Service.

(c) The Western Australian Drug and Alcohol Authority

(d) The Director General of Health is the delegate of the Minister for Health in his incorporated capacity under s.7 of the Hospitals and Health Services Act 1927 (WA).  In this capacity the Director General acts as the “Employer” for the purposes of this Agreement.

95      The provision of the Agreement in issue for the purposes of the appeal is cl 11.13 which is in the following terms:

11.13 Contracting Out and Privatisation

(a) The parties recognise the importance of promoting long term job security and career development for employees subject to this Agreement.

(b) With the exception of those contracts for services currently in existence, there will be no contracting out or privatisation of functions or duties performed by directly employed workers during the life of this Agreement.

(c) Subject to successfully negotiating an efficiency and quality agreement between the parties to this Agreement, the Employer will not re-tender contracts for service currently in place which can be carried out by directly employed workers.

(d) Negotiations to successfully return in house those functions or duties currently out-sourced will include the following factors;

(i) Whether the product delivered under the contract for services meets the expected outcomes in terms of efficiency, quality and safety;

(ii) Public interest considerations such as quality of services and the safety of patients;

(iii) Cost, in particular the wages differential (if any) between the rates of pay for employees current contracts and directly employed employees; and

(iv) The impact the contract has on the job security and career development for employees subject to this agreement.

(e) Any agreement reached between the parties as a result of this process will be written up into a document and signed by both parties.  The parties agree to be bound by the agreement as recorded in this document.  The document will then be binding and enforceable between the parities (sic).

96      That part of cl 11.13 which is most relevant is cl 11.13(b).

97      Whilst by cl 6 of the Agreement the nominal expiry date of the Agreement was 31 July 2010, by s 41(6) of the Act, as no party has retired from its terms, the Agreement continues in force.

98      Industrial agreements obtain legal effect by registration by the Commission under s 41 of the Act.  Upon registration, an industrial agreement has application by s 41(4) and (5) of the Act which are in the following terms:

(4) An industrial agreement extends to and binds — 

(a) all employees who are employed — 

(i) in any calling mentioned in the industrial agreement in the industry or industries to which the industrial agreement applies; and

(ii) by an employer who is — 

(I) a party to the industrial agreement; or

(II) a member of an organisation of employers that is a party to the industrial agreement or that is a member of an association of employers that is a party to the industrial agreement;

and

(b) all employers referred to in paragraph (a)(ii),

and no other employee or employer, and its scope shall be expressly so limited in the industrial agreement.

(5) An industrial agreement shall operate — 

(a) in the area specified therein; and

(b) for the term specified therein.

99      As opposed to awards of the Commission, which by s 37 of the Act apply as a ‘common rule’ to all employees and employers in the industry or industries to which they apply (subject to any term to the contrary), an industrial agreement, by s 41(4) of the Act, only extends to employees employed by an employer who is a party to the industrial agreement.

100   Therefore the resolution of the first issue turns on whether any employer, party to the industrial agreement, has engaged, or proposes to engage, in conduct said by the appellant to constitute a contravention of, or failure to comply with, cl 11.13(b) of the Agreement.

Principles of Interpretation

101   The Agreement, as a legal instrument, is subject to the usual principles of interpretation.  There has been over many years, judicial acceptance that in the case of industrial instruments, such as awards or industrial agreements, a ‘generous’ approach to interpretation should be applied.  In George A Bond & Co Ltd (in liquidation) v McKenzie [1929] AR (NSW) 498 Street J said at 503 – 504:

… speaking generally, awards are to be interpreted as any other enactment is interpreted.  They lay down the law affecting employers and employees in their relations as such, and they have to be obeyed to the same extent as any other statutory enactment.  But at the same time, it must be remembered that awards are made for the various industries in the light of the customs and working conditions of each industry, and they frequently result, as this award in fact did, from an agreement between the parties, couched in terms intelligible to themselves but often framed without careful attention to form and draughtsmanship which one expects to find in an Act of Parliament.  I think, therefore, in construing an award, one must always be careful to avoid a too literal adherence to the strict technical meaning of words, and must view the matter broadly, and after giving consideration and weight to every part of the award, endeavour to give it a meaning consistent with the general intention of the parties to be gathered from the whole award.

102   As to the interpretation of industrial agreements in this jurisdiction, in Robe River Iron Associates v Amalgamated Metal Workers and Shipwrights Union (1987) 67 WAIG 1097 Brinsden J observed at 1098:

The meaning of a provision in the Agreement is to be obtained by considering the terms of the Agreement as a whole.  If the terms are clear and unambiguous it is not permissible to look to extrinsic material to qualify the meaning of the particular provision being considered.  Therefore, when the issue is which of two or more possible meanings is to be given a contractual provision it is not permissible to look at actual intentions, aspirations, or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract but to look at only the objective framework of facts within which the contract came into existence, and to the parties presumed intentions in that setting.  Should a consideration of the whole terms of this Agreement expose an ambiguity in the construction of Clause 6(9) then resort may be made to extrinsic material and in certain circumstances any trade custom or usage.

103   In the same case, Kennedy J said that in the interpretation of agreements, a broad approach to the meaning of the agreement should be adopted, and too literal adherence to the technical meaning of words should be avoided.

104   More recent expressions of the generous approach to the interpretation of industrial instruments were adopted by Madgwick J in Kucks v CSR Limited (1996) 66 IR 182, considered and approved by Kirby and Callinan JJ in Amcor Limited v CFMEU (2005) 222 CLR 241 at 270-271; 282-283. 

Employer Party to the Agreement-Fiona Stanley Hospital

105   Given the terms of s 41(4) of the Act, the scope and application of the Agreement is to be determined by ascertaining who are the employers bound by it and whether one or more of them is an ‘employer’ for the purposes of the application for interim orders before the learned Industrial Magistrate.

106   By cl 5.2 of the Agreement the employers, as defined in cl 3 of the Agreement, are set out.

107   Under this clause the Minister for Health is an employer but in a particular capacity, that is as an incorporated entity under s 7 of the Hospitals and Health Services Act 1927 (“the Hospitals Act”).

108   The Hospitals Act by its long title provides that it is ‘An Act to provide for the establishment, maintenance, and management of public hospitals and for the control and regulation of private hospitals and private psychiatric hostels, for the provision of other health services and for incidental and other purposes’.

109   Under the Hospitals Act, the responsible Minister may declare an institution to be a public hospital: s 3.  By s 15, there may be the appointment by the Governor of a hospital board, as a body corporate, in which the management and control of a hospital is vested.  By s 19, a board, for the purposes of performing its functions under s 18 of the Hospitals Act, can engage employees or other persons, and will be the employer.

110   By s 7 of the Hospitals Act, in a case where a hospital board is abolished, the management and control of the hospital board is vested in the Minister; the Minister is incorporated under the name of the board and performs all of the duties, functions and powers of the former board.  In this capacity the Minister is deemed to be the relevant hospital board. 

111   The relevant history of the organisation and reorganisation of the various hospital boards in Western Australia is set out in the affidavit of Mr Warner at AB 128-151.  These are referred to in cl 5.2(b) of the Agreement. In short, all of the former hospital boards have now been abolished, and the powers of the former boards are vested in the Minister under s 7 of the Hospitals Act.

112   Thus, the Minister in his incorporated capacity, stands in the shoes of the former hospital boards and is the employer of employees in the hospitals as specified in cl 5.2(b)(i)-(iii) of the Agreement.  It is also plain that by the operation of s 7 of the Hospitals Act, the Minister in his incorporated capacity has a separate legal personality to the Minister as an individual.  As a corporate entity, the Minister’s status, functions and powers are quite different to that applying to the Minister’s general duties under the Hospitals Act, as for example, in ss 5A and7A.  In my view, these are not, contrary to the submissions of counsel for the appellant, matters of ‘mere sophistry’.  It is also trite to observe that the Crown in right of the State has a separate legal personality.

113   Additionally, the Director-General of Health is also an employer for the purposes of the Agreement, but only as the delegate of the Minister in his capacity under s 7 of the Hospitals Act.  Therefore, this does not enlarge the scope of the employers bound by the Agreement as specified in cl 5.2(b).

114   On the facts as found before the learned Industrial Magistrate, the Fiona Stanley Hospital is yet to be built.  Thus, no declaration has been made by the Minister under s 3(2) of the Hospitals Act.  Further, no hospital board in relation to the proposed Fiona Stanley Hospital has been appointed under s 15 of the Hospitals Act (See affidavit of Mr Warner AB 137).

115   In my view therefore, on its proper construction, and having regard to the terms of s 41(4) of the Act, the Agreement is limited in its scope and application to employees of the employers named as parties in cl 5.2(b). This in effect means that it cannot extend to any employee, present or future, who is not employed by an employer, as a hospital board in the form of the Minister in his incorporated capacity, coming within the scope of cl 5.2(b)(i)-(iii).

116   As the Fiona Stanley Hospital is yet to be established as an employer, it is not, through the Minister in his incorporated capacity, a party to the Agreement and therefore no issues concerning the Fiona Stanley Hospital are covered by, or can be the subject of, proceedings regarding the enforcement of the Agreement.  On this analysis, there was no capacity for the appellant, under Part III of the Act dealing with enforcement, to seek interim relief against the respondent in his capacity as a legal entity not party to or bound by the Agreement as the board of a relevant hospital.

117   Nor, in my opinion, can the appellant take any comfort from cl 5.2(d) of the Agreement, as the Director-General of Health is only named as an employer in his capacity as a delegate of the Minister who in turn, is a party to the Agreement in his incorporated capacity under s 7 of the Hospitals Act.

118   In view of my conclusion as to the scope of the Agreement it is unnecessary to deal with the second issue as to whether the preconditions existed for the making of an interim order in relation to the Fiona Stanley Hospital.  In my opinion, the learned Industrial Magistrate could not consider the exercise of the interim order power under s 83(7) of the Act, unless he was satisfied that the Agreement had application to the circumstances before him. 

119   It is also unnecessary to consider whether the act of the Government in announcing Serco as the preferred tenderer for the provision of non-clinical facilities management and support services at Fiona Stanley Hospital, and the proposed contract with Serco, invoked cl 11.13(b) of the Agreement.  However, it is arguable that the language of cl 11.13(b) is not limited to the act of the execution of a formal contract, as was contended by counsel for the respondent.  There may be steps preparatory to such a stage that may be regarded as falling within the scope of this provision of the Agreement in my view.

120   I also expressly leave open the issue raised by counsel for the appellant that the decision in Bailey v Matthews (2004) 84 WAIG 1392 should be overturned.  It is unnecessary to consider that issue further, in view of my conclusions as to the non applicability of the Agreement to these circumstances.

Royal Perth and Swan Districts Hospitals

121   The next issue in relation to this question relates more specifically to grounds 3(c)(v) and (vi).  These grounds, part of the larger issue raised by ground 3 as a whole, assert that there was evidence of contracting out or privatisation in relation to employees party to the Agreement, namely the Minister in his s 7 incorporated capacity as the hospital board of the Royal Perth Hospital and Swan Districts Hospital.  There is no doubt that the Minister, in his s 7 incorporated capacities under the Hospitals Act, is an employer bound by the Agreement in relation to these two hospitals.

122   The issues identified in this ground of appeal concern the evidence of Ms Smith in her second affidavit of 1 December 2010, appearing at AB 118-122.  In this affidavit, Ms Smith deposed that in discussions with Mr Warner, in relation to a new industrial agreement, Mr Warner made statements to the effect that the Royal Perth Hospital, Shenton Park Campus would be closed; that the Wellington Street Campus of the Royal Perth Hospital would be affected by job losses as the services would be transferred to the new Fiona Stanley Hospital; and that at the Midland Health Campus a private operator would provide the services and the Swan Districts Hospital would be closed.

123   It was contended by the appellant that this evidence, not adverted to nor considered by the learned Industrial Magistrate, demonstrated that the respondent was taking steps to contract out or privatise functions and/or duties of employees covered by the Agreement, which evidence properly founded an order for interim relief.  This submission was made in connection with the modification of the interim order sought at first instance before the learned Industrial Magistrate, which was in the following terms:

The Respondent be restrained from taking any step to negotiate or facilitate any contracting out or privatisation of any function and/or duties of directly employed workers during the life of the Agreement whether by facilitating or negotiating the contract with Serco or others.

124   For the reasons expressed by Smith AP I agree that the appellant was bound by the case stated in its statement of claim at first instance.  Further, in the alternative, the evidence of Ms Smith of itself was insufficient to establish a basis for the grant of interim relief. 

Application to Lead Fresh Evidence

125   I also agree for the reasons expressed by Smith AP that the appellant’s application to introduce fresh evidence by way of the letter from Mr Warner of 10 February 2011 to Mr Kelly of the appellant, should be refused.

Conclusion

126   For the foregoing reasons, in my view, the appeal must be dismissed.