2015 WAIRC 00862
APPEAL AGAINST A DECISION OF THE INDUSTRIAL MAGISTRATE IN MATTER NO. M 47 OF 2013 GIVEN ON 21 JANUARY 2015 AND APPEAL AGAINST A DECISION OF THE INDUSTRIAL MAGISTRATE IN MATTER NO. M 48 OF 2013 GIVEN ON 21 JANUARY 2015

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

FULL BENCH

CITATION : 2015 WAIRC 00862

CORAM
: THE HONOURABLE J H SMITH, ACTING PRESIDENT
ACTING SENIOR COMMISSIONER P E SCOTT
COMMISSIONER J L HARRISON

HEARD
:
WEDNESDAY, 10 JUNE 2015; MONDAY 17 AUGUST 2015

DELIVERED : FRIDAY, 4 SEPTEMBER 2015

FILE NO. : FBA 1 OF 2015

BETWEEN
:
HUGH SUTHERLAND ROGERS
Appellant

AND

J-CORP PTY LTD
Respondent

- AND –

FILE NO. : FBA 2 OF 2015

BETWEEN
:
ANDJELKO BUDIMLISH
Appellant

AND

J-CORP PTY LTD
Respondent

ON APPEAL FROM:

JURISDICTION : INDUSTRIAL MAGISTRATE'S COURT
CORAM : INDUSTRIAL MAGISTRATE G CICCHINI
CITATION : [2015] WAIRC 00018; (2015) 95 WAIG 267
FILE NOS : M 47 OF 2013 AND M 48 OF 2013

CatchWords : Industrial Law (WA) - Applications to strike out appeals - Claims for accrued annual leave accrued under Minimum Conditions of Employment Act 1993 (WA) terms of which became a NAPSA pursuant to Workplace Relations Act 1996 (Cth) and later a transitional instrument pursuant to Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) - Commission is a court for the purposes of s 78B of the Judiciary Act 1903 (Cth) - s 79 of the Judiciary Act considered - The right to appeal a decision of the Industrial Magistrate in s 84 of the Industrial Relations Act 1979 (WA) by operation of s 109 Commonwealth Constitution inconsistent with s 565 of the Fair Work Act 2009 (Cth) - Section 565 creates an exclusive right of appeal from the Industrial Magistrate's Court exercising its civil jurisdiction under the Fair Work Act - Appeals dismissed for want of jurisdiction
Legislation : Industrial Relations Act 1979 (WA) pt II, s 11(1), s 12, s 12(1), s 13, s 14, s 14B, s 22, pt II div 2, s 23(1), s 26(1)(b), s 26(3), s 72(1)(b) s 27(1)(o), s 27(1a), s 29(1)(a), s 29(1)(b)(i), s 29(1)(b)(ii), s 31, s 34, s 34(3), s 34(4), s 35, pt II div 2A - div 2D, s 41, s 46, pt II div 2E, s 49, s 49(11), pt II div 3, s 81, s 81CA, s 82A, s 83, s 84, s 84(1), s 84(2), s 84A, s 84A(8), s 90(1), s 92(4)
Minimum Conditions of Employment Act 1993 (WA) s 3(1), s 7(c), s 23, s 24
Minimum Conditions of Employment Regulations 1993 (WA) reg 3, item 1 of sch 1
Workplace Relations Act 1996 (Cth) s 4, s 5, s 6, s 16(1)(a), s 16(1)(b), sch 8, cl 31 of sch 8, sl 34 of sch 8, sl 34(2) of sch 8, sl 34(3)of sch 8, sl 38(3) of sch 8, sl 43(1) of sch 8, s 717, s 718, s 719
Fair Work Act 2009 (Cth) s 12, s 26, s 26(1), s 26(2)(c), s 44(1), s 90, s 90(2), ch 4, ch 4 pt 4, s 539(2), s 540, s 549, s 562, s 565, s 565(1), s 565(1A)
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) sch 3, item 2(1) of sch 3, item 2(2) of sch 3, item 2(5) of sch 3, item 5A of sch 3, item 7 of sch 3, item 6 of sch 4, item 2(1) of sch 16, item 16(1) of sch 16, item 38 of the table to item 16
Judiciary Act 1903 (Cth) s 78B, s 78B(1), s 79, s 79(1)
Commonwealth of Australia Constitution (Cth) s 77(iii) s 109
Corporations Law (Cth) s 471B
Industrial Relations Commission Regulations 2005 (WA) reg 33, reg 40 - reg 44
Acts Interpretation Act 1901 (Cth) s 8 [sic]
Interpretation Act 1984 (WA) s 7
Liquor Act 1912 (Qld)
Commonwealth Electoral (War-time) Act 1917 (Cth)
Forty-four Hours Week Act 1925 (NSW)
Conciliation and Arbitration Act 1904 (Cth)
Result : Appeals dismissed for want of jurisdiction
REPRESENTATION:
APPELLANTS : MR P MULLALLY, AS AGENT
RESPONDENT : MR R LHOOKER (OF COUNSEL)
Solicitors:
APPELLANTS : NOT APPLICABLE
RESPONDENT : SQUIRE PATTON BOGGS

Case(s) referred to in reasons:
Ansett Transport Industries (Operations) Pty Ltd v Wardley [1980] HCA 8; (1980) 142 CLR 237
Assistant Commissioner Condon v Pompano Pty Ltd [2013] HCA 7; (2013) 87 ALJR 458
Australian Liquor Hospitality and Miscellaneous Workers Union WA Branch v Silver Chain Nursing Association (1995) 75 WAIG 1511
Australian Securities and Investments Commission v Edensor Nominees Pty Ltd [2001] HCA 1; (2001) 204 CLR 559
Clyde Engineering Co Ltd v Cowburn [1926] HCA 6; (1926) 37 CLR 466
Forge v Australian Securities and Investments Commission [2006] HCA 44; (2006) 228 CLR 45
Helm v Hansley Holdings Pty Ltd (In Liq) [1999] WASCA 71; (1999) 118 IR 126
Kable v Director of Public Prosecutions (NSW) [1996] HCA 24; (1996) 189 CLR 51
K-Generation Pty Ltd v Liquor Licensing Court [2009] HCA 4; (2009) 237 CLR 501
Kirk v Industrial Court (NSW) [2010] HCA 1; (2010) 239 CLR 531
Liquor, Hospitality and Miscellaneous Union, Western Australian Branch v The Director General, Department of Education and Training [2010] WAIRC 00089; (2010) 90 WAIG 127
Matthews v Cool or Cosy Pty Ltd [2004] WASCA 114; (2004) 136 IR 56; (2004) 84 WAIG 2152
Momcilovic v The Queen [2011] HCA 34; (2011) 245 CLR 1
Myers v Myers [1969] WAR 19
Network Ten Pty Ltd v TCN Channel Nine [2004] HCA 14; (2004) 218 CLR 273
Northern Territory of Australia v GPAO [1999] HCA 8; (1999) 196 CLR 553
Owen v Menzies [2012] QCA 170; (2012) 265 FLR 392
Public Service Association and Professional Officers' Association Amalgamated Union of NSW v Director of Public Employment [2012] HCA 58; (2012) 250 CLR 343
R v The Licensing Court of Brisbane; Ex parte Daniell [1920] HCA 24; (1920) 28 CLR 23
Rainbow Coast Neighbourhood Centre Inc v Wood [2011] WAIRC 00821; (2011) 91 WAIG 1831
Shacam Transport Pty Ltd v Damien Cole Pty Ltd [2013] WAIRC 00872; (2013) 93 WAIG 1628
Sue v Hill [1999] HCA 30; (1999) 199 CLR 462
Case(s) also cited:
Certain Lloyds Underwriters v Cross (2012) 248 CLR 378
Compass Group (Australia) Pty Ltd t/as ESS World Wide Services v Bartram [2006] FCA 1337
Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355
Reasons for Decision
SMITH AP:
Introduction
1 These appeals are sought to be instituted under s 84(2) of the Industrial Relations Act 1979 (WA) (the IR Act). Mr Rogers seeks to appeal the decision in M 47 of 2013 and Mr Budimlich seeks to appeal the decision in M 48 of 2013. In each matter the Industrial Magistrate dismissed a claim by each appellant seeking an entitlement to paid annual leave pursuant to s 23 of the Minimum Conditions of Employment Act 1993 (WA) (MCE Act) during a period of employment with the respondent. The central issue before the Industrial Magistrate in both matters was whether each of the appellants were paid wholly by commission and as such were not employees for the purposes of the MCE Act, the Workplace Relations Act 1996 (Cth) (WR Act) and the Fair Work Act 2009 (Cth) (FW Act).
The notices of appeal
2 Each notice of appeal in these matters is the same. The notices of appeal were filed one day out of time on 10 February 2015.
3 At the hearing of this matter, the Full Bench granted leave to each of the appellants to amend their grounds of appeal by substituting ground 1 of the appeal and abandoning ground 2 of the appeal as follows:
GROUND 1
The learned magistrate erred in fact and in law in determining that the appellants were not employees of the respondent as defined in the Minimum Conditions of Employment Act 1993
PARTICULARS
1.1 It was an error of fact and law in determining that the appellants were paid wholly by commission;
1.2 It was an error of fact and law in determining that the appellants' receipt of payments, such as incentives, bonuses and rewards paid to them by the respondent other than commissions did not alter the character of their remuneration by the respondent as being wholly by commission.
1.3 It was an error of fact and law in determining the clause in the appellant Rogers' (Budimlich's) written contract for the payment of a holiday allowance did not mean that he was paid otherwise than wholly by commission.
1.4 It was an error of fact and law in determining that the provision of a discount on the construction of the appellant Budimlich' s home by the respondent did not alter the character of his remuneration by the respondent as being wholly by commission.
4 The orders sought on appeal are as follows:
1. That the appeal be upheld;
2. That the matter be remitted to the Industrial Magistrate's Court for annual leave entitlements to be determined in accordance with the decision of the Full bench
Background
5 It is not in dispute in the proceedings before the Industrial Magistrate that at all material times each appellant was employed by the respondent as a full-time sales consultant pursuant to the terms of a common law contract of employment. The respondent employed Mr Rogers continuously for 19 years from 24 December 1993 to 18 December 2012. Mr Budimlich was employed for 14 years from 19 May 1997 to 2 November 2011.
6 The claims to paid annual leave during the period of employment of Mr Rogers and Mr Budimlich can be divided into three periods of time. These are as follows:
(a) Period 1 - from the commencement of employment of Mr Rogers on 24 December 1993 and Mr Budimlich on 19 May 1997 until 26 March 2006 the claims are made pursuant to the provisions of the MCE Act.
(b) Period 2 - any entitlement to accrued and accruing annual leave from 27 March 2006 to 30 June 2009 arose under the WR Act.
(c) Period 3 - from 1 July 2009 and on the cessation of the employment of Mr Rogers and Mr Budimlich the claims to accrued and accruing annual leave and a right to be paid annual leave for annual leave not taken is made under the provisions of the FW Act.
7 An important point in this matter is the principle that any accrued entitlements to annual leave that the appellants had were preserved, carried forward and only became payable in lieu of taking leave at the point in time when each of the appellants ceased employment.
The respondent's grounds of objection
8 On 2 April 2015, the respondent filed notices of grounds of objection to each of the appellants' notices of appeal. The jurisdictional objection raised in both matters is as follows:
(a) The claim by each appellant concerned an application for accrued annual leave which, each appellant contended, should have been paid out on termination of employment with the respondent pursuant to s 90(2) of the FW Act.
(b) In each case, on commencement of employment, the terms and conditions of each appellant were regulated by the MCE Act.
(c) On 26 March 2006, amendments were made to the WR Act by virtue of which the MCE Act became a notional agreement preserving a state award (NAPSA) and any accrued entitlements under the MCE Act were thereby preserved.
(d) As a consequence, any entitlements the appellants had to annual leave under the MCE Act became enforceable under the WR Act and were no longer enforceable under any legislation of the Western Australian Parliament.
(e) Following the enactment of the FW Act, the NAPSA became a transitional instrument and all accrued entitlements to paid annual leave were preserved under the then operative Commonwealth legislation.
(f) Accordingly, in each case the claim for paid annual leave on termination was enforceable under, and only under, the FW Act.
(g) Section 26 of the FW Act relevantly provides that the FW Act is intended to apply to the exclusion of all state industrial laws (which at all material times included the MCE Act) in circumstances such as each of the appellants' employment with the respondent.
(h) The Industrial Magistrate's Court had jurisdiction to determine each of the claims for accrued annual leave, because it is an 'eligible State or Territory court' within the meaning of s 12 of the FW Act for the purposes of ch 4 of the FW Act.
(i) Section 565 of the FW Act materially provides that appeals from decisions of the Industrial Magistrate's Court (in its capacity as an 'eligible State or Territory court') lie, and lie exclusively, to the Federal Court.
(j) It necessarily follows that each purported appeal is not competent and the Commission is, relevantly, without jurisdiction.
Section 78B of the Judiciary Act 1903 (Cth)
9 The applications to dismiss the appeals were first listed to be heard on 10 June 2015. Prior to the hearing, enquiries were made of the respondent's solicitors on behalf of the Full Bench whether notices pursuant to s 78B of the Judiciary Act 1903 (Cth) had been given to the Attorneys-General of the Commonwealth and of the States. Section 78B provides:
(1) Where a cause pending in a federal court including the High Court or in a court of a State or Territory involves a matter arising under the Constitution or involving its interpretation, it is the duty of the court not to proceed in the cause unless and until the court is satisfied that notice of the cause, specifying the nature of the matter has been given to the Attorneys-General of the Commonwealth and of the States, and a reasonable time has elapsed since the giving of the notice for consideration by the Attorneys-General, of the question of intervention in the proceedings or removal of the cause to the High Court.
(2) For the purposes of subsection (1), a court in which a cause referred to in that subsection is pending:
(a) may adjourn the proceedings in the cause for such time as it thinks necessary and may make such order as to costs in relation to such an adjournment as it thinks fit;
(b) may direct a party to give notice in accordance with that subsection; and
(c) may continue to hear evidence and argument concerning matters severable from any matter arising under the Constitution or involving its interpretation.
(3) For the purposes of subsection (1), a notice in respect of a cause:
(a) shall be taken to have been given to an Attorney-General if steps have been taken that, in the opinion of the court, could reasonably be expected to cause the matters to be notified to be brought to the attention of that Attorney-General; and
(b) is not required to be given to the Attorney-General of the Commonwealth if he or she or the Commonwealth is a party to the cause and is not required to be given to the Attorney-General of a State if he or she or the State is a party to the cause.
(4) The Attorney-General may authorize the payment by the Commonwealth to a party of an amount in respect of costs arising out of the adjournment of a cause by reason of this section.
(5) Nothing in subsection (1) prevents a court from proceeding without delay to hear and determine proceedings, so far as they relate to the grant of urgent relief of an interlocutory nature, where the court thinks it necessary in the interests of justice to do so.
10 In response to the enquiry, the respondent's solicitors advised that there was a view that the procedure in s 78B was not invoked as:
(a) the proceedings do not involve any 'matter arising under the Commonwealth Constitution or its interpretation' in any substance; further or alternatively;
(b) notwithstanding the text of s 12(1) of the IR Act, the Commission is not necessarily a 'court' within the meaning of the Judiciary Act.
11 After hearing submissions about this issue on 10 June 2015, the Full Bench advised the parties that the members were of the opinion that the matters raised by the respondent in its notice of objection required the service of the notices and that we were of the opinion that the Commission is a 'court' within the meaning of s 78B of the Judiciary Act.
12 When regard was had to the submissions made by the parties, in particular the submissions made on behalf of the respondent, it was clear that the proceedings do involve a matter arising under the Commonwealth of Australia Constitution (the Constitution), in particular the application of s 109 of the Constitution.
13 Section 78B notices subsequently issued on 15 June 2015 to each Attorney-General of the States and the Commonwealth. Prior to the hearing, all Attorneys-General with the exception of the Attorney-General for New South Wales advised that they did not intend to intervene in the appeals. Upon resumption of the appeals on 17 August 2015, the members of the Full Bench were of the opinion that the appeals could proceed as it had discharged its duty under s 78B(1) of the Judiciary Act not to proceed with the hearing of the appeals until reasonable time had elapsed since the giving of notice.
The Commission is a 'court' within the meaning of s 78B of the Judiciary Act 1903 (Cth)
14 Pursuant to s 12(1) of the IR Act, the Commission is a court of record and has a judicial seal. It exercises judicial power in some matters. For example it exercises judicial power in industrial matters that are contractual benefit claims pursuant to s 29(1)(b)(ii) of the IR Act, arbitral power in other matters which cannot be classified as 'judicial' such as the making of awards and it exercises some administrative functions such as the registration of agreements under s 41 of the IR Act.
15 Authorities of the High Court have made it clear that the test for determining whether a state court or tribunal is a court of a state does not turn on whether it carries out administrative functions, nor is any distinction made about a concept of a court of a state being a 'court of law'.
16 In Public Service Association and Professional Officers' Association Amalgamated Union of NSW v Director of Public Employment [2012] HCA 58; (2012) 250 CLR 343 [14] (French CJ) and [57] (Hayne, Crennan, Kiefel and Bell JJ) observed that it is established that state legislatures are not constrained constitutionally by the separation of powers doctrine. State legislatures can create a body that combines judicial and non-judicial functions. Thus, the institutional integrity of a state court is not affected by its members applying the law when performing non-judicial functions: see Kable v Director of Public Prosecutions (NSW) [1996] HCA 24; (1996) 189 CLR 51, 78 - 80, 92 - 94, 109, 118; Kirk v Industrial Court (NSW) [2010] HCA 1; (2010) 239 CLR 531 [69].
17 The test when considering whether a tribunal such as the Commission can be characterised as a court of a state, is whether it exercises its powers and functions in a judicial manner.
18 In Assistant Commissioner Condon v Pompano Pty Ltd [2013] HCA 7; (2013) 87 ALJR 458 French CJ set out the defining characteristics of a court. His Honour's observations were made in the context of whether federal jurisdiction can be conferred on a court of a state. His Honour said federal jurisdiction cannot be conferred where the state court is said to be distorted if it no longer exhibits in some relevant aspect the defining characteristics which mark a court apart from other decision-making bodies [67]. He then went on to say the defining characteristics of a court include:
• the reality and appearance of decisional independence and impartiality (Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at 343 [3] per Gleeson CJ, McHugh, Gummow and Hayne JJ, 373 [116] per Kirby J; [2000] HCA 63; North Australian Aboriginal Legal Aid Service Inc v Bradley [2004] HCA 31; (2004) 218 CLR 146 at 152 [3] per Gleeson CJ, 163 [29] per McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ; [2004] HCA 31; Forge v Australian Securities and Investments Commission [2006] HCA 44; (2006) 228 CLR 45 at 77 [66] per Gummow, Hayne and Crennan JJ; Gypsy Jokers Motorcycle Club Inc v Commissioner of Police [2008] HCA 4; (2008) 234 CLR 532 at 553 [10] per Gummow, Hayne, Heydon and Kiefel JJ; [2008] HCA 4);
• the application of procedural fairness;
• adherence as a general rule to the open court principle (Dickason v Dickason (1913) 17 CLR 50; [1913] HCA 77; Russell v Russell (1976) 134 CLR 495 at 520 per Gibbs J; [1976] HCA 23; Scott v Scott [1913] AC 417);
• the provision of reasons for the courts' decisions (Wainohu v New South Wales [2011] HCA 24; (2011) 243 CLR 181 at 213 - 215 [54] - [56] per French CJ and Kiefel J and authorities there cited).
Those characteristics are not exhaustive. As Gummow, Hayne and Crennan JJ said in Forge v Australian Securities and Investments Commission ([2006] HCA 44; (2006) 228 CLR 45 at 76 [64]:
'It is neither possible nor profitable to attempt to make some single all-embracing statement of the defining characteristics of a court. The cases concerning identification of judicial power reveal why that is so.'
19 Chief Justice French then said [68]:
[T]he defining characteristics of courts are not and cannot be absolutes. Decisional independence operates within the framework of the rule of law and not outside it (Public Service Association and Professional Officers' Association Amalgamated (NSW) v Director of Public Employment [2012] HCA 58; (2012) 87 ALJR 162; 293 ALR 450). Procedural fairness, manifested in the requirements that the court be and appear to be impartial and that parties be heard by the court, is defined by practical judgments about its content and application which may vary according to the circumstances. Both the open court principle and the hearing rule may be qualified by public interest considerations such as the protection of sensitive information and the identities of vulnerable witnesses, including informants in criminal matters.
20 Justice Gageler in Assistant Commissioner Condon v Pompano Pty Ltd also made a similar point. He said [182]:
That structural expedient can function only if State and Territory courts are able to act 'judicially'. To be able to act judicially, a court must have institutional integrity: it must 'be and appear to be an independent and impartial tribunal' (Forge v Australian Securities and Investments Commission [2006] HCA 44; (2006) 228 CLR 45 at 81 [78]; [2006] HCA 44; North Australian Aboriginal Legal Aid Service Inc v Bradley [2004] HCA 31; (2004) 218 CLR 146 at 163 [29]; [2004] HCA 31).
21 Thus, it appears the clear characteristics of a court and thus performing judicial functions are:
(a) impartiality and independence in decision-making;
(b) a requirement to provide procedural fairness;
(c) general principles of open hearings;
(d) the provision of reasons for decision.
22 In Helm v Hansley Holdings Pty Ltd (In Liq) [1999] WASCA 71; (1999) 118 IR 126 Kennedy J (with whom Anderson and Parker JJ agreed) found that the Commission was a court within the meaning of s 471B of the Corporations Law (Cth). In his reasons for judgment Kennedy J pointed out that by s 12 of the IR Act, it is expressly provided that the Commission is a 'court of record'. He then went on to observe that it acts judicially. In particular, he said [9]:
Furthermore, in determining whether an employee has been unfairly dismissed from his employment, and in considering whether, pursuant to s 23A(1)(ba), it should order the employer to pay any, and what, amount of compensation to the claimant for loss or injury caused by the dismissal, the Commission is acting judicially.
23 In K-Generation Pty Ltd v Liquor Licensing Court [2009] HCA 4; (2009) 237 CLR 501, French CJ at [85] found after considering the powers and functions of the Licensing Court of South Australia, and gave particular weight to its designation as a court of record by the state legislature, and found that it could be regarded as a 'court of a State' for the purposes of receiving federal jurisdiction under s 77(iii) of the Constitution. Justice Kirby made a similar point and found that such a statement in a statutory provision warranted the High Court taking the state Parliament's description at face value: [219].
24 It is clear that each member of the Commission, including the President, must act impartially and act with independence in their decision-making. This is reflected in the oath that each member of the Commission is required to take. Pursuant to s 11(1) of the IR Act, each member of the Commission is required to make an oath before a judge of the Supreme Court that he or she will faithfully and impartially perform the duties of his office and that he or she will not, except in the discharge of those duties, disclose to any person any evidence or other matter brought before the Commission. Further, under s 13 of the IR Act, each person who is a member of the Commission has, in the performance of his or her functions and duties as such a member, the same protection and immunity as a Supreme Court judge. Pursuant to s 14 of the IR Act, the President and each of the Commissioners have the jurisdiction expressly conferred on each in accordance with the IR Act. In these circumstances, the President and each of the Commissioners are required to exercise those powers in accordance with the provisions of the IR Act. The only directions that can be given by a Minister of the Crown are under s 14B of the IR Act which arises where there is an arrangement made between the Chief Commissioner and the President of Fair Work Australia to perform powers and functions in respect of dual appointments to carry out duties of a secondary office as a member of the Fair Work Australia.
25 Members of the Commission, including the President, have security of tenure and cannot be required to retire until the age of 65 years pursuant to s 10 of the IR Act. Members of the Commission, including the President, are appointed by the Governor and pursuant to s 22 of the IR Act each member of the Commission shall hold their office during good behaviour, subject to a power of removal by the Governor upon the address of both Houses of Parliament. Thus, it is quite clear that each member of the Commission must act independently and is not subject to the direction and control by any entity, including any Minister, which are central features of a judicial process.
26 Whilst only the President of the Commission, including the Acting President, is required to hold legal qualifications and other members of the Commission are not, in Forge v Australian Securities and Investments Commission [2006] HCA 44; (2006) 228 CLR 45 it was observed that such a factor was not significant: see also Owen v Menzies [2012] QCA 170; (2012) 265 FLR 392 in which de Jersey CJ [15(6)] (with whom Muir JA agreed [101]).
27 The principal jurisdiction of the Commission is provided for in s 23(1) of the IR Act which provides that subject to this Act, the Commission has cognizance of and authority to enquire into and deal with any industrial matter. The principal industrial matters the Commission deals with are:
(a) industrial matters referred by employers and industrial organisations under s 29(1)(a) of the IR Act which range in matters in dispute between employers and employees including disputes referred to the Commission to make awards which requires a determination of future rights of employees;
(b) industrial matters referred under s 29(1)(b)(i) of the IR Act, by an employee that he or she has been harshly, oppressively or unfairly dismissed from his or her employment;
(c) industrial matters which constitute a claim by an employee under s 29(1)(b)(ii) of the IR Act that he or she has not been allowed by his employer a benefit, not being a benefit under an award or order, to which he or she is entitled under his or her contract of employment;
(d) applications for a declaration made under s 46 of the IR Act of the true interpretation of an award (including a general order and an industrial agreement).
28 Under s 29(1)(b)(i) of the IR Act each member of the Commission called upon to hear and determine claims is required to exercise discretion as to whether they are of the opinion (having regard to the principles of law that apply to unfair dismissals), whether the employee has been unfairly dismissed. However, in determining a claim under s 29(1)(b)(ii) of the IR Act, the Commission does not have a discretion to determine whether a contractual provision is fair or not. The Commission must apply common law contractual principles and consider the remedies in the law of contract: Matthews v Cool or Cosy Pty Ltd [2004] WASCA 114; (2004) 136 IR 56; (2004) 84 WAIG 2152 [24] (Steytler J). If a claim is made out the Commission may award compensation in the nature of damages for the failure to provide the contractual benefit. Many of these matters involve the determination and consideration of principles that apply to commercial contracts (for example Shacam Transport Pty Ltd v Damien Cole Pty Ltd [2013] WAIRC 00872; (2013) 93 WAIG 1628).
29 Whilst the Commission, pursuant to s 26(1)(b) of the IR Act, is not bound by any rules of evidence, but may inform itself on any matter in such a way as it thinks just, such a provision is not 'inimical to the exercise of judicial power' as the provision does not exonerate the Commission from the application of substantive rules of law and is consistent with, and requires the application of, the rules of procedural fairness: Sue v Hill [1999] HCA 30; (1999) 199 CLR 462 [42]; applied in K-Generation Pty Ltd by Gummow, Hayne, Heydon, Crennan and Kiefel JJ [125].
30 In any event, through its statutory powers and duties under the IR Act, the Commission adopts the practices and procedures of a conventional court. This is reflected in s 27(1)(b) and reg 40 - reg 44 of the Industrial Relations Commission Regulations 2005 (WA) whereby in proceedings before the Commission, the Commission takes evidence on oath. It also has power to make interlocutory orders for costs of witness expenses, delivery of particulars, discovery and inspection of documents (see s 27(1)(o)) of the IR Act).
31 Parties to proceedings are entitled to be represented pursuant to s 31 of the IR Act. The procedure in a hearing before the Commission is provided for in reg 33 of the Industrial Relations Commission Regulations. This procedure applies to the Commission, except before the President, on an appeal to be heard by the Full Bench or before a Commission in Court Session. It is notable that the procedure is the same as the procedure which usually applies to courts such as the District Court and Supreme Court in civil matters. The procedure provides for parties to make opening statements, call witnesses, cross-examine, re-examine and provision is made for closing submissions and rights of reply.
32 The rules of evidence are often applied by Commissioners because of the nature of the matter before them. In many cases a failure to do so may mean that the Commissioner falls into error and if so their decision could be set aside if appealed: see for example the observations of the Full Bench in Australian Liquor Hospitality and Miscellaneous Workers Union WA Branch v Silver Chain Nursing Association (1995) 75 WAIG 1511, 1516.
33 The Commission is bound by the doctrine of precedent: see the observations of Ritter AP in Liquor, Hospitality and Miscellaneous Union, Western Australian Branch v The Director General, Department of Education and Training [2010] WAIRC 00089; (2010) 90 WAIG 127 [10] - [20].
34 In some matters, the Commission is bound to strictly apply the rules of evidence. This is when the President and two members of the Commission sit to hear an appeal against a decision made by the Industrial Magistrate under s 84 of the IR Act. As the Industrial Magistrate is bound by the rules of evidence, on an appeal each member of the Full Bench must determine the appeal by strictly applying all relevant rules of evidence.
35 The Full Bench itself also has powers to enforce contraventions of the IR Act and enforcement of certain orders made by the Commission pursuant to s 84A of the IR Act. If contravention or failure to comply is proved the Full Bench is empowered to issue a number of orders, including the imposition of a fine. Also, when hearing such a matter pursuant to s 84A(8) of the IR Act the standard to be applied by the Full Bench is to be the standard observed in civil proceedings.
36 Except for appeals from a constituent authority of a Public Service Appeal Board, all decisions made by the Commission and its constituent authorities can be appealed to the Full Bench by operation of s 49 of the IR Act. The President also has the power under s 49(11) of the IR Act to hear and determine applications for a stay of a decision pending the hearing and determination of an appeal.
37 It is only the President either presiding on the Full Bench or sitting alone who has the power to punish for contempt. Pursuant to s 92(4) of the IR Act, the President has the same power to punish for contempt of its power and authority as has the Supreme Court in respect of contempts of court.
38 The Commission is obliged to comply with the rules of procedural fairness.
39 The Commission's duty to provide procedural fairness is also expressly reflected in s 26(3) of the IR Act which provides as follows:
Where the Commission, in deciding any matter before it proposes or intends to take into account any matter or information that was not raised before it on the hearing of the matter, the Commission shall, before deciding the matter, notify the parties concerned and afford them the opportunity of being heard in relation to that matter or information.
40 When hearing applications for adjournments it is required to consider the same principles which apply to other courts in Western Australia. Those are the principles set out in the decision of the Supreme Court in Myers v Myers [1969] WAR 19, 21 which require the Commission to consider the principle that where a refusal of an adjournment would result in serious injustice to one party, an adjournment should be granted unless in turn this would mean serious injustice to the other party: Rainbow Coast Neighbourhood Centre Inc v Wood [2011] WAIRC 00821; (2011) 91 WAIG 1831.
41 The Commission conducts its hearings in public. It is required to do so expressly pursuant to s 27(1a) of the IR Act which provides as follows:
Except as otherwise provided in this Act, the Commission shall, in relation to any matter before it, conduct its proceedings in public unless the Commission, at any stage of the proceedings, is of the opinion that the objects of the Act will be better served by conducting the proceedings in private.
42 Pursuant to s 34 of the IR Act, all decisions of the Commission have to be signed and delivered by the Commissioner constituting the Commission. As required by s 35 of the IR Act, each decision is to be drawn up in the form of minutes and reasons for decision must be published at the same time. This provision has been interpreted to the effect that written reasons for decision must be delivered in all matters.
43 There are rights of appeal to the Industrial Appeal Court from any decision of the President, the Full Bench or the Commission in Court Session pursuant to s 90(1) of the IR Act on certain grounds.
44 Decisions of the Commission cannot be removed to any court by certiorari or otherwise on any ground relating to jurisdiction or any other ground pursuant to s 34(3) of the IR Act. Also, pursuant to s 34(4) of the IR Act, no award, order, declaration, finding or proceeding before the President, the Full Bench or the Commission can be challenged, appealed against, reviewed, quashed, or called into question by any court on any ground relating to jurisdiction or any other ground.
45 When all of these matters are considered it is clear that the Commission is a court of a state, as it has institutional integrity, it is an independent and impartial tribunal, conducts its hearing in public and has all of the defining characteristics of a court.
Legislative framework
(a) Minimum Conditions of Employment Act 1993 (WA)
46 Under s 23 of the MCE Act an employee, other than a casual employee, is entitled for each year of service, to paid annual leave for the number of hours the employee is required to ordinarily work in a four week period during that year, up to 152 hours. The entitlement under s 23 accrues pro rata on a weekly basis and is cumulative.
47 The meaning of 'employee' found in s 3(1) of the MCE Act excludes a person who belongs to a class of persons prescribed by the Minimum Conditions of Employment Regulations 1993 (WA) (MCE Regulations) as persons not to be treated as employees for the purposes of the MCE Act. Regulation 3 and item 1 of schedule 1 of the MCE Regulations prescribe persons whose services are remunerated wholly by commission or percentage reward are persons who are not employees for the purposes of the MCE Act.
48 Pursuant to s 24 of the MCE Act an employee is paid for a period of annual leave at the time payment is made in the normal course of the employment. If, however, an employee lawfully leaves his or her employment before the employee has taken annual leave to which he or she is entitled, the employee is to be paid for all of that annual leave. The only exception is where the employee is dismissed for misconduct, the employee is not entitled to be paid for any untaken leave that relates to a year of service that was completed after the misconduct occurred.
(b) Workplace Relations Act 1996 (Cth)
49 It is not in dispute that when the WR Act commenced on 27 March 2006, the terms of the MCE Act became, under sch 8 of the WR Act, a NAPSA. It is not in dispute the finding made by the Industrial Magistrate that Mr Rogers' and Mr Budimlich's conditions of employment had been governed by the MCE Act and when the NAPSA came into operation, Mr Rogers, Mr Budimlich and the respondent became bound by the NAPSA: [5], AB 28. It is also not in dispute that the Industrial Magistrate properly found that it was a term of the NAPSA that accrued leave under the MCE Act was preserved under the WR Act: [5], AB 28.
50 Pursuant to s 16(1)(a) of the WR Act, the WR Act applied to the exclusion of a state or territory industrial law so far as they would otherwise apply in relation to an employee or employer. Under s 4, a state or territory industrial law was defined to mean the IR Act and an Act of a state providing for the determination of terms and conditions of employment. Clearly the MCE Act is an Act of a state that provides for the determination of terms and conditions of employment, and thus when the WR Act came into effect the MCE Act ceased to have effect insofar as it extended to employees and employers covered by the provisions of the WR Act, which, pursuant to s 5 and s 6 of the WR Act, were employees employed by constitutional corporations. It is not in dispute in these proceedings that the respondent can be characterised as a constitutional corporation.
51 The entitlement to paid annual leave which Mr Rogers and Mr Budimlich claim they are entitled to became a NAPSA pursuant to cl 31 of sch 8 of the WR Act. Clause 31 provided that if, immediately before the reform commencement, (which was 26 March 2006), the terms and conditions of employment of one or more employees in a single business were determined in whole or in part under a state law, a NAPSA was taken to come into operation on the reform commencement in respect of the business or that part of the business. Pursuant to cl 34 of sch 8, it became a term of the NAPSA that accrued leave under the MCE Act was preserved. Clause 34(2) of sch 8 provided that if, immediately before the reform commencement, a provision of a state industrial law would have determined, in whole or in part, a preserved entitlement of a person employed in the business who was not bound by or not a party to a state employment agreement, or whose employment was not subject to such an agreement, then to that extent, that provision, as in force at that time, was taken to be a term of the notional agreement. A preserved entitlement was defined under cl 34(3) of sch 8 to mean an entitlement to annual leave.
52 Under cl 38(3) of sch 8 of the WR Act, none of the terms and conditions of employment included in the NAPSA was enforceable under the law of a state or territory. The WR Act did, however, provide for enforcement of the NAPSA. Pursuant to cl 43(1) of sch 8, a NAPSA could be enforced as if it were a collective agreement.
53 Pursuant to s 718 of the WR Act, a term of a collective agreement could be enforced by an employee who was bound by the agreement and pursuant to s 719 of the WR Act an eligible court could impose a penalty if the person was bound by an applicable provision and the person breached the provision. Under s 717, 'applicable provision' was defined to mean a collective agreement and an 'eligible court' was defined to mean:
(a) the Court; or
(b) the Federal Magistrates Court; or
(c) a District, County or Local Court; or
(d) a magistrate's court; or
(e) the Industrial Relations Court of South Australia; or
(f) any other State or Territory court that is prescribed by the regulations.
(c) Fair Work Act 2009 (Cth)
54 On the coming into operation of the FW Act on 1 July 2009, pursuant to item 2(2) of sch 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (FWTP Act) a NAPSA became a WR Act instrument. Pursuant to item 2(1) of sch 3 of the FWTP Act each WR Act instrument became a transitional instrument and continues in existence in accordance with sch 3 from when it becomes a transitional instrument, despite the WR Act repeal. Pursuant to item 5A of sch 3 of the FWTP Act, the same state and territory interaction rules, that applied in relation to the WR Act immediately before the WR Act was repealed, continue to apply in relation to instruments of that kind that become transitional instruments.
55 Pursuant to item 7 of sch 3 of the FWTP Act, there is no loss of accrued rights or liabilities when a transitional instrument terminates or ceases to apply to a person. Although the Industrial Magistrate in his reasons for decision relied upon s 8 [sic] of the Acts Interpretation Act 1901 (Cth) for the principle that when the FW Act came into operation any accrued rights were not affected by the repeal of the WR Act, it is not necessary to rely upon the Acts Interpretation Act as the provisions referred to in sch 3 of the FWTP Act expressly preserved any accrued rights that had accrued under the WR Act.
56 Under item 6 of sch 4 of the FWTP Act, the provisions of the National Employment Standards relating to the taking of annual leave (including rates of pay while taking leave) or cashing-out that kind of leave, apply, as a minimum standard, to the accrued leave as if it had accrued under the National Employment Standards. This provision applies to leave accrued under the WR Act and a transitional instrument.
57 Contravention of the National Employment Standards is prohibited under s 44(1) of the FW Act. Further, under this provision contravention of the National Employment Standards is a civil remedy provision. Under s 540 of the FW Act, an employee can make an application in relation to a contravention of a civil remedy provision.
58 Pursuant to item 2(5) of sch 3 of the FWTP Act, transitional instruments are classified in a number of ways. In particular, NAPSAs are classified as award-based transitional instruments. Under item 2(1) of sch 16 of the FWTP Act, a person is prohibited from contravening a term of an award-based transitional instrument that applies to a person and that this sub-item is a civil remedy provision. By operation of item 16(1) of sch 16 of the FWTP Act and item 38 of the table to item 16, the Federal Court, the Federal Magistrates Court and an eligible state or territory court has jurisdiction under s 539(2) of the FW Act to determine any proceedings in relation to a contravention of a term of an award-based transitional instrument. An eligible state or territory court is defined in s 12 of the FW Act to mean one of the following courts:
(a) a District, County or Local Court;
(b) a magistrates court;
(c) the Industrial Relations Court of South Australia;
(ca) the Industrial Court of New South Wales;
(d) any other State or Territory court that is prescribed by the regulations.
59 Thus, the Industrial Magistrate as a magistrate's court had jurisdiction to hear and determine the claims for accrued annual leave made by Mr Rogers and Mr Budimlich. In particular, the Industrial Magistrate had the jurisdiction to deal with and determine the claims made for annual leave which was said to have accrued pursuant to the provisions of the MCE Act.
The appellants' submissions
60 Each of the appellants concede that the provisions of s 565 and s 12 of the FW Act render any appeal from the findings made by the Industrial Magistrate with respect to any claim for an entitlement to accrued annual leave or accruing annual leave under the WR Act and the FW Act are beyond the jurisdiction of the Full Bench.
61 Each of the appellants point out that the respondent submits that s 26 of the FW Act is intended to exclude the MCE Act from operation. Yet the appellants say that that argument only can be upheld for each period of employment of each of the appellants subsequent to 26 March 2006.
62 The appellants say when considering the effect of s 26 of the FW Act the Full Bench should have regard to the purposive approach to statutory interpretation which insists that the context be considered in the first instance and not merely at some later stage when ambiguity may be thought to arise and 'context' is to be construed in its widest sense to include such things as the existing state of the law and the mischief which by legitimate means the Parliament intended to change the law: Network Ten Pty Ltd v TCN Channel Nine [2004] HCA 14; (2004) 218 CLR 273.
63 In particular, the appellants say when the objects and their context of the FW Act are considered it follows that the appellants' rights under the MCE Act are preserved. This they say was so when the WR Act provided for the MCE Act to be a NAPSA and through the operation of the protected transitional instruments as defined in the FW Act.
64 The appellants contend that the 'decisions' made by the Industrial Magistrate in these matters are reviewable under s 84(1) of the IR Act as s 84 confers jurisdiction on the Full Bench to hear and determine an appeal in the manner prescribed from a 'decision' of the Industrial Magistrate's Court and a 'decision' is defined in s 84(1) to include an 'order, order of dismissal, and any other determination of an industrial magistrate's court'. Thus, it is said the claims for unpaid annual leave that arise under the MCE Act can be characterised as 'any other determination of an industrial magistrate's court' or 'other' determination under s 84(1) of the IR Act.
65 The appellants' claims in these appeals are now confined to a consideration only of the entitlements that arise in the first period that the appellants were employed by the respondent. The first period is the period of time that Mr Rogers and Mr Budimlich were employed prior to the WR Act coming into force on 27 March 2006 and thus Mr Rogers' claim for accrued annual leave is from 24 December 1993 until 26 March 2006 and Mr Budimlich's claim is from 19 May 1997 until 26 March 2006. The appellants claim that the Full Bench has jurisdiction to consider this part of the claim unrestricted by the provisions of the WR Act and the FW Act because a consideration of the Industrial Magistrate's findings reveals that the Industrial Magistrate dealt with the MCE Act in that period as a separate portion of the claims.
66 The Industrial Magistrate had regard to previous decisions of the Full Bench in construing the provisions of the MCE Act and found at [95] of his reasons for decision (AB 40) that Mr Rogers and Mr Budimlich were not 'employees' for the purposes of the MCE Act and thus they say it follows that they had failed to establish an entitlement to annual leave for period 1. Thus, they had no entitlement to accrued annual leave that could be carried forward and preserved as a NAPSA under the WR Act and as a transitional instrument under the FW Act. The appellants point out that the FW Act and the WR Act do not act retrospectively and contend as a matter of jurisprudence the MCE Act provisions remain unfettered with respect to the period prior to 27 March 2006. For these reasons, they say it is entirely competent for the Full Bench to entertain these appeals as the definition of a 'decision' in s 84(1) of the IR Act is broad enough to encompass these appeals.
67 The appellants in effect seek declaratory relief which encompasses an assessment whether the Industrial Magistrate's interpretation of the provisions of the MCE Act are in error.
68 The appellants say that the decision in Australian Securities and Investments Commission v Edensor Nominees Pty Ltd [2001] HCA 1; (2001) 204 CLR 559, which is relied upon by the respondent, in fact supports the appellants' arguments. In that matter a distinction between the jurisdiction of a court to hear and determine a matter and the power to do so was made. Whilst the appellants concede that the power to enforce accrued entitlements of annual leave under the MCE Act is a matter that can be raised in an application under s 90 of the FW Act only, the appellants say that when the jurisdiction of the Full Bench to review the matter of state law (the provisions of the MCE Act) is divided from the power of enforcement that arises under s 90 of the FW Act, the state law can be left intact enabling a review by the Full Bench of the jurisdiction created by the state law.
69 The appellants say that s 90 of the FW Act can be regarded separately as a power to recover from the matter of jurisdiction of the Full Bench to decide the matter arising under the MCE Act. In putting this argument the appellants also rely upon s 79(1) of the Judiciary Act. Section 79 states:
(1) The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.
(2) A provision of this Act does not prevent a law of a State or Territory covered by subsection (3) from binding a court under this section in connection with a suit relating to the recovery of an amount paid in connection with a tax that a law of a State or Territory invalidly purported to impose.
(3) This subsection covers a law of a State or Territory that would be applicable to the suit if it did not involve federal jurisdiction, including, for example, a law doing any of the following:
(a) limiting the period for bringing the suit to recover the amount;
(b) requiring prior notice to be given to the person against whom the suit is brought;
(c) barring the suit on the grounds that the person bringing the suit has charged someone else for the amount.
(4) For the purposes of subsection (2), some examples of an amount paid in connection with a tax are as follows:
(a) an amount paid as the tax;
(b) an amount of penalty for failure to pay the tax on time;
(c) an amount of penalty for failure to pay enough of the tax;
(d) an amount that is paid to a taxpayer by a customer of the taxpayer and is directly referable to the taxpayer's liability to the tax in connection with the taxpayer's dealings with the customer.
70 The appellants argue that s 79 has application because it preserves the application of the state law; namely the MCE Act and s 84 of the IR Act. In particular, they rely upon the observations of McHugh J at [141] in Australian Securities and Investments Commission v Edensor Nominees Pty Ltd in which his Honour stated:
[C]ourts exercising federal jurisdiction should operate on the hypothesis that s 79 will apply the substance of any relevant State law in so far as it can be applied. The efficacy of federal jurisdiction would be seriously impaired if State statutes were held to be inapplicable in federal jurisdiction by reason of their literal terms or verbal distinctions and without reference to their substance. In Railway Co v Whitton's Administrator ((1871) 13 Wallace 270 at 286 [80 US 270 at 286]), decided thirty years before our Constitution was enacted, the Supreme Court of the United States declared:
'Whenever a general rule as to property or personal rights, or injuries to either, is established by State legislation, its enforcement by a Federal court in a case between proper parties is a matter of course, and the jurisdiction of the court, in such case, is not subject to State limitation.'
Subject to the proviso that the nature of some State and Territory statutes may make them inapplicable to proceedings in federal jurisdiction, that statement of the Supreme Court is a sound guide as to the effect of s 79 of the Judiciary Act.
71 For these reasons, the appellants put an argument that s 26 of the FW Act does not oust the operation of the jurisdiction of the Full Bench to determine whether the Industrial Magistrate erred in his construction of the provisions of the MCE Act. In particular, they say that whilst it is true that the claims for payment for unpaid annual leave are only enforceable under s 90 of the FW Act, the decision of the learned Industrial Magistrate in determining that the appellants were not 'employees' for the purposes of the MCE Act meant that for period 1 no entitlement to paid annual leave arose. Thus, they say it follows that there was no entitlement to enforce anything under s 90 of the FW Act in respect of period 1 and it is this entitlement to which ground 1 of the appeals properly particularised goes.
72 In essence, the appellants say that the subject matter of their appeals is the proper interpretation of the provisions of the MCE Act which is not a matter arising under s 90 of the FW Act.
The respondent's submissions
73 The respondent points out that s 26 of the FW Act expresses the intention that the provisions of the FW Act are to apply to the exclusion of all state industrial laws which at all material times include the MCE Act. It says that the Industrial Magistrate's Court had jurisdiction to determine the claims made by the appellants because it is an 'eligible State or Territory court' within the meaning of s 12 of the FW Act for the purposes of ch 4, pt 4 of the FW Act. The FW Act as an enactment of the Commonwealth Parliament confers federal jurisdiction on a state court, which is the sole source of that jurisdiction.
74 The respondent points out that although the IR Act enacts the Industrial Magistrate's Court in s 81 and confers upon it with a variety of different kinds of jurisdiction, it is necessarily state jurisdiction not federal jurisdiction that the IR Act is capable of conferring and on its own terms does confer.
75 The respondent makes a submission that once a 'matter' within the meaning of ch III of the Constitution can be said to 'arise under' a Commonwealth statute, the entirety of the matter is then derived from federal legislation. In other words, the whole controversy can be said to be 'federal': Australian Securities and Investments Commission v Edensor Nominees Pty Ltd [7] (Gleeson CJ, Gaudron and Gummow JJ).
76 The respondent also says from when federal jurisdiction has been attracted to a court (as was the case here in the hearing and determination of the claims at first instance), then from that point:
(a) the jurisdiction so attracted throughout the case will remain federal (unless there happens to be a completely disparate claim constituting in substance a separate matter, which plainly is not the case here); and
(b) equally a court determining such a matter in federal jurisdiction is not capable of also, or instead, exercising state jurisdiction; there can be no legitimate concept of a 'concurrent' exercise of both federal and state jurisdiction: Justice James Allsop, Federal Jurisdiction and the Jurisdiction of the Federal Court of Australia in 2002 (2003) 22 Australian Bar Review 29, particularly at 41 - 42.
77 Further, the respondent says that when the provisions of the IR Act and, in particular, its scheme and forms of original jurisdiction of the Commission are considered, s 84 of the IR Act cannot be construed in any way to provide an alternative source of appellate jurisdiction from a matter that arises under the FW Act. In particular, the respondent says:
(a) Part II of the IR Act confers various forms of original jurisdiction on the Commission, generally in div 2, and for more specific purposes in each of div 2A to div 2D. Division 3 confers particular original jurisdiction on the Commission to make general orders. Section 84A confers a particular kind of original jurisdiction upon a Full Bench of the Commission to enforce certain provisions of the IR Act and orders, directions and the like of the Commission.
(b) Division 2E of the IR Act, which is confined to s 49, confers appellate jurisdiction on the Commission, empowering a Full Bench to hear and determine appeals from decisions of the Commission made under the IR Act by a Commissioner. This provision is inapplicable to the present matter beyond comprising one part of the overall statutory context in which the material provisions of the FW Act conferring appellate jurisdiction on the Federal Court are to be construed and applied.
(c) Section 84 of the IR Act confers appellate jurisdiction upon a Full Bench of the Commission concerning 'decisions' (as defined, in terms, by s 84(1) of the IR Act) of an Industrial Magistrate's Court. This provision does not provide support for a contention that the present appeals are competently brought under this provision. The flaws in the appellants' arguments are:
(i) the relevant appellate jurisdiction is that conferred by s 565 of the FW Act, which is unambiguously conferred in terms which provide for it to be exclusive of any other court;
(ii) neither the IR Act nor any other legislation of the Western Australian Parliament purports to confer any relevant jurisdiction to determine the claims in question which are confined to legislation of the Commonwealth Parliament (namely either or both of the WR Act and the FW Act);
(iii) the expression 'any decision' in s 84(2) of the IR Act, read with s 84(1), must be read so as to arrive at the correct legal meaning, which is not a technical literal meaning, but reflects that the decisions which are under challenge in these appeals did not derive from any conferral of original jurisdiction by the IR Act;
(iv) the unambiguous meaning of s 26 of the FW Act (applied, to the extent necessary, against the background of s 109 of the Constitution) puts the matter beyond any shadow of doubt. To construe s 84 of the IR Act as in any way providing an alternative source of appellate jurisdiction in the circumstances of this case would conflict with the operation of s 26 of the FW Act and thus the expressly manifested intent of the Commonwealth Parliament.
78 The respondent says that the appellants' arguments (even as restricted as it is proposed now in these appeals) are artificially unworkable and is impermissible in light of the clear manifestation of the intent of the federal laws of the Commonwealth. It says whether one analyses the appellants' arguments along the pathway of the statutory text of the relevant provisions of the state and federal law and the operation of s 109 of the Constitution, or construes the provisions of the federal jurisdiction and the state laws, the result is the same, the Full Bench has no jurisdiction to hear and determine these appeals.
79 The respondent says that when regard is had to s 7 of the Interpretation Act 1984 (WA) which provides that every written law is to be construed subject to the limits of the state and not to exceed that power, the language of s 84 of the IR Act, which confers jurisdiction on the Full Bench to hear appeals against decisions of the Industrial Magistrate's Court, must be read down so it operates in a way that is compatible with the limits imposed on the state power by the relevant legislative provisions of the Commonwealth.
80 The argument put on behalf of the appellants that there is a dichotomy between jurisdiction and power does not assist the appellants in these matters as such a dichotomy has no consequence in this case.
81 In essence, the respondent says that the jurisdiction conferred upon the Industrial Magistrate's Court to hear and determine whether the appellants had an accrued right to annual leave is conferred solely by the provisions of the FW Act and previously by the WR Act and that the power for enforcement of any right to accrued annual leave relies solely upon a federal law, namely s 90 of the FW Act. Thus, the respondent says that the matters are 'federalised' and the Industrial Magistrate's Court at all material times exercised only federal jurisdiction.
82 The respondent points out that the appellants importantly concede that the power to enforce any accrued rights to annual leave arises solely in s 90 of the FW Act and thus there is nothing left for the state law to operate.
83 In relation to the 'declaratory relief' the appellants seek against the findings of fact and law made by the Industrial Magistrate, as set out in their grounds of appeal, cannot be granted by the Full Bench, as it is not possible to split any findings of declarations of the law from the relief that can only be granted by and within the exclusive jurisdiction of the Federal Court.
84 The respondent also argues that s 79 of the Judiciary Act does not assist the appellants. The effect of s 79 is to pick up and apply state law with respect to procedure, evidence and ancillary matters with respect to rights and obligations. In these particular matters the work that s 79 of the Judiciary Act has is that the procedures for hearing and determining the applications by the Industrial Magistrate's Court is to be found in the IR Act and the Evidence Act 1906 (WA). In any event, it says the construction put on behalf of the appellants of s 79 is inaccurate. Section 79 of the Judiciary Act can only have effect where the subject matter of the state law has not been otherwise provided for by Commonwealth legislation.
85 For these reasons, the respondent says each of the appeals should be struck out as incompetent.
Does the Full Bench have jurisdiction to determine the appeals?
86 Section 7(c) of the MCE Act provides:
A minimum condition of employment may be enforced —
(c) where the condition is implied in a contract of employment, under section 83 of the IR Act as if it were a provision of an award, industrial agreement or order other than an order made under section 32 or 66 of that Act.
87 It is notable that if the appellants made a claim for accrued annual leave solely pursuant to the provisions of s 7(c) the MCE Act and under s 83 of the IR Act and not s 90 of the FW Act and that the entitlements claimed are only in respect of leave that accrued prior to the coming into operation of the WR Act on 26 March 2006, the claims would be out of time as such claims must be instituted within six years of the date when the cause of action arose: s 7(c) of the MCE Act and s 82A of the IR Act. Section 82A of the IR Act provides:
An application under section 77, 83, 83B, 83E or 84A shall be made within 6 years from the time of the alleged contravention or failure to comply.
88 The provisions of the FW Act and the FWTP Act confer jurisdiction on the Industrial Magistrate's Court to determine the claims made by Mr Rogers and Mr Budimlich. Turning to the scheme provided for in the FW Act for appeals from a decision of an eligible state or territory court, in respect of the claims for accrued annual leave that are said to be payable on termination of employment of the appellants, the right to claim payment (if so established) can only arise under a transitional instrument. In these circumstances, it is clearly apparent that the Full Bench of this Commission has no jurisdiction to hear and determine the appeals as the entirety of the claims, including period 1, only arise under and pursuant to the provisions of the FW Act.
89 The provisions of the state law and the federal law that create the right to appeal from a decision of the Industrial Magistrate's Court are s 84 of the IR Act and s 565 of the FW Act.
90 Section 84 of the IR Act provides:
(1) In this section decision includes a penalty, order, order of dismissal, and any other determination of an industrial magistrate’s court, but does not include a decision made by such a court in the exercise of the jurisdiction conferred on it by section 96J.
(2) Subject to this section, an appeal lies to the Full Bench in the manner prescribed from any decision of an industrial magistrate’s court.
(3) An appeal under this section shall be instituted within 21 days from the date of the decision against which the appeal is brought and may be instituted by any party to the proceedings wherein the decision was made.
(4) On the hearing of the appeal the Full Bench —
(a) may confirm, reverse, vary, amend, rescind, set aside, or quash the decision the subject of the appeal; and
(b) may remit the matter to the industrial magistrate’s court or to another industrial magistrate’s court for further hearing and determination according to law; and
(c) subject to subsection (5), may make such order as to costs as the Full Bench considers appropriate.
(5) In proceedings under this section costs shall not be given to any party to the proceedings for the services of any legal practitioner, or agent of that party unless, in the opinion of the Full Bench, the proceedings have been frivolously or vexatiously instituted or defended, as the case requires, by the other party.
91 Section 565 of the FW Act provides:
Appeals from original decisions of eligible State or Territory courts
(1) An appeal lies to the Federal Court from a decision of an eligible State or Territory court exercising jurisdiction under this Act.
(1A) No appeal lies from a decision of an eligible State or Territory court exercising jurisdiction under this Act, except:
(a) if the court was exercising summary jurisdiction—an appeal, to that court or another eligible State or Territory court of the same State or Territory, as provided for by a law of that State or Territory; or
(b) in any case—an appeal as provided for by subsection (1).
Appeals from appellate decisions of eligible State or Territory courts
(1B) An appeal lies to the Federal Court from a decision of an eligible State or Territory court made on appeal from a decision that:
(a) was a decision of that court or another eligible State or Territory court of the same State or Territory; and
(b) was made in the exercise of jurisdiction under this Act.
(1C) No appeal lies from a decision to which subsection (1B) applies, except an appeal as provided for by that subsection.
Leave to appeal not required
(2) It is not necessary to obtain the leave of the Federal Court, or the court appealed from, in relation to an appeal under subsection (1) or (1B).
92 Examination of the legislative scheme of the FW Act reveals the following:
(a) A contravention of a civil remedy provision is not an offence: s 549 of the FW Act.
(b) Jurisdiction is conferred on the Federal Court in relation to any matter (whether civil or criminal) arising under the FW Act: s 562.
(c) An appeal lies to the Federal Court from a decision of an eligible state or territory court exercising jurisdiction under the FW Act: s 565(1).
(d) No appeal lies from a decision of an eligible state or territory court exercising jurisdiction under the FW Act, except if the court was exercising summary jurisdiction an appeal may be made to that court or another eligible state or territory court of the same state or territory as provided for by a law of that state or territory: s 565(1A).
93 The Industrial Magistrate's Court in these matters was not exercising summary jurisdiction. Summary jurisdictions are criminal proceedings. The Industrial Magistrate was exercising civil jurisdiction. In particular, the Industrial Magistrate's Court was exercising the procedure provided for in its general jurisdiction rather than prosecution jurisdiction within the meaning of s 81CA of the IR Act, in determining the claims.
94 The Full Bench of the Commission, whilst it is a court, it is not an eligible state or territory court within the meaning of the FW Act as it is not a court that is prescribed by the regulations made under the FW Act.
95 Whilst the originating claims before the Industrial Magistrate's Court were made on grounds that the entitlement to accrued annual leave arose under the MCE Act, the WR Act and the FW Act, the claim for payment was based on an argument and facts accepted by the learned Industrial Magistrate that the entitlement to payment to each appellant crystallised on the termination of their employment, as an accrued entitlement preserved under the FW Act as a transitional instrument. Consequently, the right to claim payment arose solely under the provisions of the FW Act and not under the MCE Act. The effect of the provisions of the MCE Act being preserved as a transitional instrument is that the entitlement in the MCE Act to payment for accrued annual leave arises not in the MCE Act as a state law but as a federal law.
96 The text of s 79 of the Judiciary Act does not assist the appellants. Leaving aside the breadth of operation of s 79, it is expressly stated in s 79 that a law of the state only applies to a court exercising Federal jurisdiction 'except as otherwise provided by the Constitution or the laws of the Commonwealth'. The effect of s 79 in relation to a law of the state was explained in Northern Territory of Australia v GPAO [1999] HCA 8; (1999) 196 CLR 553 by Gleeson CJ and Gummow J at [78] - [80] (with whom Gaudron J [135] and Hayne J [254] agreed) as follows:
The text of s 79 is set out earlier in these reasons. It was derived from s 34 of the Judiciary Act 1789 (1 Stat 73, 92 (1789), now codified as amended at 28 USC §1652 (1994)), enacted by the First Congress of the United States and more often referred to as the Rules of Decision Act. Section 34 stated:
'That the laws of the several states, except where the constitution, treaties or statutes of the United States shall otherwise require or provide, shall be regarded as rules of decision in trials at common law in the courts of the United States in cases where they apply.'
It has been said of s 34 that, if the federal courts are directed to apply federal law, it governs by 'displacing' state law, even on matters of substance (Freer, 'Some Thoughts on the State of Erie After Gasperini', Texas Law Review, vol 76 (1998) 1637, at p 1637; Wright, Miller and Cooper, Federal Practice and Procedure: Jurisdiction, 2nd ed, (1996), vol 19, §4501), and that this operation of s 34 is dictated by the Supremacy Clause of the United States Constitution (Art VI, cl 2) (See Sola Electric Co v Jefferson Electric Co (1942) 317 US 173 at 176. The Supremacy Clause provides: 'This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.').
In applying the phrase 'otherwise provided' in s 79, Latham CJ (De Vos v Daly (1947) 73 CLR 509 at 515) and Starke J (De Vos v Daly (1947) 73 CLR 509 at 518) asked whether the particular law of the Commonwealth was to be regarded in any way as 'inconsistent' with the application of the State Act which was said to be 'picked up' by s 79. Later, Menzies J asked whether the law relied upon as a law of the Commonwealth was one 'displacing' the law of the State (Anderson v Eric Anderson Radio & TV Pty Ltd (1965) 114 CLR 20 at 39). In Australian National Airlines Commission v The Commonwealth ((1975) 132 CLR 582 at 587. See also Arnotts Ltd v Trade Practices Commission (1990) 24 FCR 313 at 368-369 where it was concluded that the relevant law of the Commonwealth left 'no room' for the application of the State law), Mason J said:
'Section 26A of the High Court Procedure Act [1903 (Cth)], which provides that judgments of the Court shall carry interest, should be regarded as a comprehensive expression of the entitlement in this Court of a litigant to interest on damages to the exclusion of any provision in State law which would otherwise be made applicable by virtue of s 79.'
The objective of s 79 is to facilitate the particular exercise of federal jurisdiction by the application of a coherent body of law, elements in which may comprise the laws of the State or Territory in which the jurisdiction is being exercised, together with the laws of the Commonwealth, but subject always to the overriding effect of the Constitution itself. Seen in that light, the notion of 'inconsistency' involved in the phrase 'otherwise provided' in s 79 is akin to that first identified by Mason J in the passage from the judgment in University of Wollongong v Metwally ((1984) 158 CLR 447 at 463) set out earlier in these reasons. This is the need to resolve the problem that arises by conflict between conflicting statutes having the same source. The law of a State or Territory which is to operate as a surrogate law of the Commonwealth is to be measured beside other laws of the Commonwealth.
97 Thus, any applicable law of a state that is capable of applying to a federal matter is displaced by an inconsistent federal law. The source of the effect of s 79 is to be found in s 109 of the Constitution.
98 Pursuant to s 109 of the Constitution an inconsistency between a law of the Commonwealth and a law of the state is to be resolved by applying the law of the Commonwealth and not the state. Section 109 of the Constitution provides:
When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid.
99 The first step in determining whether an inconsistency arises is to identify the law of the Commonwealth and the law of the state to which it is said to apply: Momcilovic v The Queen [2011] HCA 34; (2011) 245 CLR 1 [102] (French CJ).
100 In these appeals, the law of the Commonwealth is s 565 and the definition of 'eligible State or Territory court' in s 12 of the FW Act. The law of the state is s 84 of the IR Act and not the provisions of the MCE Act, as the provisions of the MCE Act as a law of a state are inoperative. It is a state law that was 'displaced' on 27 March 2006 by the operation of s 16(1)(b) of the WR Act which was in the same terms as s 26(1) and s 26(2)(c) of the FW Act. Section 26(1) and s 26(2)(c) of the FW Act provide as follows:
(1) This Act is intended to apply to the exclusion of all State or Territory industrial laws so far as they would otherwise apply in relation to a national system employee or a national system employer.
(2) A State or Territory industrial law is:
(c) a law of a State or Territory that applies to employment generally and deals with leave (other than long service leave or leave for victims of crime); or
101 As the MCE Act is a state industrial law dealing with leave other than long service leave, it cannot apply to the respondent as the respondent is a national system employer. This is a matter that is in effect properly conceded by the appellants.
102 Section 565 of the FW Act provides that an appeal lies to the Federal Court from a decision of an eligible state court. The Industrial Magistrate's Court is an eligible state court: s 12 of the FW Act.
103 Both s 84 of the IR Act and s 565 of the FW Act create a right of appeal from a 'decision' of the Industrial Magistrate's Court. Section 565 only applies to appeals in respect of actions that arise under the FW Act. Section 84 of the IR Act is not so circumscribed; this provision creates an all-encompassing right of appeal in respect of 'any other determination of an industrial magistrate's court' which the appellants contend could be construed to create a right of an appeal against a 'decision' of the Industrial Magistrate's Court that arises under or pursuant to a law of the Commonwealth.
104 Inconsistency arises in three ways.
105 The first form of inconsistency arises where the two laws make contradictory provisions upon the same subject matter, making it impossible to obey both laws. This form of inconsistency was considered by the High Court in R v The Licensing Court of Brisbane; Ex parte Daniell [1920] HCA 24; (1920) 28 CLR 23. In that matter the Liquor Act 1912 (Qld) required that a local election be held on the date of the next Senate election. The Commonwealth Electoral (War-time) Act 1917 (Cth) prohibited the conduct of state elections on a day appointed. The High Court found the law of the state was invalid and thus inoperative as it could only be obeyed by disobeying the Commonwealth Act.
106 The second form of inconsistency arises where Commonwealth law confers a right, privilege or immunity upon a person which the state law alters, impairs or detracts from the operation of a law of the Commonwealth. In Clyde Engineering Co Ltd v Cowburn [1926] HCA 6; (1926) 37 CLR 466, the High Court found the Forty-four Hours Week Act 1925 (NSW) to be inconsistent with the Conciliation and Arbitration Act 1904 (Cth). The state law obliged employers to pay employees a full-time wage for 44 hours a week and the Commonwealth law granted employers a right to demand a 48 hour work week for full-time work. In a joint judgment, Knox CJ and Gavan Duffy JJ rejected an argument that no inconsistency arose between the state law and the Commonwealth law as an employer could obey both laws by paying a full-time wage for a shorter week. Their Honours said (478):
Two enactments may be inconsistent although obedience to each of them may be possible without disobeying the other. Statutes may do more than impose duties: they may, for instance, confer rights; and one statute is inconsistent with another when it takes away a right conferred by that other even though the right be one which might be waived or abandoned without disobeying the statute which conferred it.
107 In Momcilovic Gummow J observed that this form of inconsistency, which he described as class (2), might have been supplemented to include cases where it is the state law which confers a right or privilege and it is the federal law that modifies or restricts it [240].
108 The first two forms of inconsistency have been described as 'direct' inconsistency and arise where there is direct conflict or direct textual collision between state and Commonwealth laws: Ansett Transport Industries (Operations) Pty Ltd v Wardley [1980] HCA 8; (1980) 142 CLR 237 (260 - 261) (Mason J) and (253) (Stephen J).
109 The third form of inconsistency is indirect; it arises where the Commonwealth and state laws deal with the same subject or field whereby the intention of the Commonwealth Parliament to 'cover the field' is revealed in Commonwealth law. In these circumstances, the Commonwealth law is construed as not supplementary to, or cumulative on the state law: see the discussion in Momcilovic (324 - 326) (Hayne J).
110 In Momcilovic at [244] Gummow J, with whom Bell J agreed at [660], explained:
This situation is addressed by class (3), which has come to be known as 'indirect inconsistency'. Here, the essential notion is that, upon its true construction, the federal law contains an implicit negative proposition that nothing other than what the federal law provides upon a particular subject matter is to be the subject of legislation; a State law which impairs or detracts from that negative proposition will enliven s 109.
111 However, Gummow J in Momcilovic was critical of the use of the metaphor 'to cover the field'. He said that the use of this metaphor to identify the consequence of an imputed legislative intention has served to confuse what is a matter of statutory interpretation [263]. His Honour's approach is that the task is to ascertain whether the proper construction of the Commonwealth law evinces an intention to deal exclusively and exhaustively with the subject matter in question: [265] - [268], [272] (Gummow J); see also [341] - [342] (Hayne J).
112 The effect of s 84 of the IR Act and s 565 of the FW Act can be characterised as raising a direct inconsistency in the sense of a class 2 inconsistency considered by Gummow J in Momcilovic as s 84 of the IR Act creates a right of appeal against a 'decision', including among other decisions, an order of dismissal and any other determination of an Industrial Magistrate's Court and s 565 of the FW Act restricts the right of appeal against a decision of an Industrial Magistrate's Court to the Federal Court where the Industrial Magistrate's Court exercises federal civil jurisdiction under the FW Act. The operation of s 84 and s 565 could also be characterised as an indirect inconsistency as both laws deal with the same subject matter whereby the plain text of the federal law, s 565 of the FW Act, manifests a clear intention to operate in the field to the exclusion of any law of a state that confers a right of appeal from an eligible state court. In these matters, that is the Industrial Magistrate's Court.
113 For the reasons set out above, the Industrial Magistrate exercised federal civil jurisdiction in the determination of the claims in both of these matters. No issue of state jurisdiction arose. Thus, any dichotomy or distinction between the exercise of jurisdiction and power does not arise.
114 For these reasons, I am of the opinion that the appeals should be dismissed for want of jurisdiction as the Full Bench has no jurisdiction to hear and determine an appeal against a decision of the Industrial Magistrate's Court where the claim made in the Industrial Magistrate's Court is a claim to enforce entitlements under s 90 of the FW Act, for alleged rights that are said to have accrued under a transitional instrument.
SCOTT ASC
115 I have had the benefit of reading the draft reasons for decision of Her Honour, the Acting President. I agree with those reasons and have nothing to add.
HARRISON C
116 I have had the benefit of reading the reasons for decision of her Honour, the Acting President. I agree with those reasons and have nothing to add.