APPEAL AGAINST A DECISION OF THE COMMISSION IN MATTER NUMBER CR 29/2023 GIVEN ON 12 FEBRUARY 2025

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

FULL BENCH

CITATION : 2025 WAIRC 00797

DELIVERED : FRIDAY, 19 SePTEMBER 2025

FILE NO. : FBA 1 OF 2025

Appellant

AND

Western Australian Municipal, Administrative, Clerical and Services Union of Employees

Respondent

ON APPEAL FROM:

Jurisdiction : WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Coram : COMMISSIONER T B WALKINGTON

Citation : [2024] WAIRC 00803

File No : CR 29 OF 2023

Catchwords : Industrial Law (WA) – Appeal against decision of the Commission – Dispute referral for arbitration under s 44(9) – City of Stirling Inside Workforce Agreement 2019 – New State instrument under s 80BB – Principles of interpretation of industrial agreements considered – Meaning of  suitable alternative employment for the purposes of cl 10.4 – Matters to be taken into account – Jurisdiction of the Commission – Exercise of judicial or arbitral power – Appeal upheld in part – Commission’s decision suspended – Matter remitted back to Commission for further hearing and determination

Legislation : Industrial Relations Act 1979 (WA) s 7, s 44, s 44(9), s 49(2), s 49(5), s 49(5)(b), s 49(6)(a), s 80BB, s 83(3)

Fair Work Act 2009 (Cth) s 119  

Result : Appeal upheld in part

Representation:

Counsel:

Appellant : Mr R Knox

Respondent : Ms H Millar of counsel

Solicitors:

Respondent : Shoreline Chambers

Case(s) referred to in reasons:

Ammon v Colonial Leisure Group Pty Ltd [2019] WASCA 158; (2019) 55 WAR 366

The Australian Chamber of Manufacturers and Derole Nominees Pty Ltd (Clothing Trades Award 1982(1)) [1990] AIRC 980; (1990) 140 IR 123

Australian Liquor, Hospitality and Miscellaneous Workers’ Union, Western Australian Branch v Eurest (Australia) Pty Ltd [2003] WAIRC 09979; (2003) 83 WAIG 4157

Broadlex Services Pty Ltd v United Workers’ Union [2020] FCA 867; (2020) 296 IR 425

Clothing and Allied Trades Union of Australia v Hot Tuna Pty Ltd (1988) 27 IR 226

Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194

Cranswick v Burswood Resort (Management) Limited [2003] WAIRC 10340; (2003) 84 WAIG 887

Crewe and Sons Pty Ltd v Amalgamated Metal Workers and Shipwrights Union of Western Australia (1989) 69 WAIG 2623

Director General, Department of Justice v The Civil Service Association of WA (Inc.) [2025] WAIRC 00146; (2025) 105 WAIG 428

House v The King (1936) 55 CLR 599

Minister for Corrective Services v Western Australian Prison Officers’ Union of Workers [2024] WAIRC 00758; (2024) 104 WAIG 1843

The Australian Rail, Tram and Bus Industry Union of Employees, West Australian Branch v Public Transport Authority of Western Australia [2014] WAIRC 00534; (2024) 94 WAIG 800

United Voice WA v The Minister for Health [2012] WAIRC 01090; (2012) 93 WAIG 261

United Voice WA v The Director General, Department of Education [2014] WAIRC 01361; (2015) 95 WAIG 13

Reasons for Decision

THE FULL BENCH:

1         The parties to this appeal were at the material times, bound by an industrial agreement, the City of Stirling Inside Workforce Agreement 2019 which had application as a new State instrument under s 80BB of the Industrial Relations Act 1979 (WA).  A dispute arose between the parties following the appellant’s decision in early 2023 to restructure its Community Safety Business Unit.  A consequence of that decision was that the Parking Services team, comprising the position of Parking and Information Officer, would cease and that position would be abolished. Ms Cerinich, a member of the respondent, was a Parking Information Officer and as a consequence of the appellant’s decision, which also affected three other employees, triggered the terms of cl 10 – Employment Security and Redundancy of the Agreement.  Specifically, cl’s 10.4, 10.5, 10.6 and 10.7 dealt with suitable alternative employment, re-deployment, transfer to lower paid duties and redundancy payment respectively.  These provisions of the Agreement provided as follows:

10.4 Suitable Alternative Employment

10.4.1 When a position is no longer required due to operational reasons, the City shall make every effort to establish whether there is suitable alternative employment available for the substantive incumbent and offer such employment to the individual(s) concerned.

10.4.2 Suitable alternative employment refers to a position of similar classification, salary and status to the employee’s former role.  The employee’s skills, qualifications, abilities and experience may also be considered with regard to the requirements of the position and the practicality and cost of any retraining requirements.

10.4.3 If suitable alternative employment is not available, the employee may be considered for redeployment or apply for a transfer to lower paid duties, otherwise redundancy terms may apply in accordance with clause 10.7.

10.5 Redeployment

10.5.1 Where no suitable alternative employment has been identified, the City may consider the affected employee(s) for redeployment.

10.5.2 The employee(s) may not be required to meet all the criteria for the position and shall be assessed on their ability to acquire all the competencies of the position within a reasonable period of time.

10.5.3 Salary Maintenance

In the event that an employee agrees to be redeployed to a position within the City that is of a lower level of salary than the salary paid to the employee, then the employee shall have their salary maintained for a period of two (2) years after which the employee’s salary shall be adjusted to that of the new position.

10.5.4 Retraining

The City, where appropriate, shall provide a redeployed employee with competency based training to enable the employee to acquire the necessary skills and competencies to carry out the functions of their position.

10.6 Transfer to Lower Paid Duties

Where a role is no longer required and no suitable alternative employment or redeployment opportunities have been identified, the City may consider an application from an employee affected by this change for a transfer to lower paid duties.

Where the City accepts this application, the employee shall be offered the salary applicable to those lower paid duties and may no longer be eligible for redundancy payment, in accordance with clause 10.7.5.  However, the City will pay the difference between the ordinary time rate applicable to the new position and the employee’s former ordinary rate of pay for a period equivalent to the same period of notice the employee would have been entitled to if the employment had been terminated.

10.7 Redundancy Payment

10.7.1 An employee whose employment is terminated by reason of redundancy is entitled to the following amount of redundancy pay in respect of a period of continuous service:

10.7.2 An employee who is 50 years of age or more at the time of redundancy shall be entitled to an additional eight (8) weeks’ pay provided that the total amount payable under 10.7.1 and 10.7.2 is capped at 52 weeks’ pay.

10.7.3 The above package shall be additional to all other entitlements owing to the employee.

10.7.4 For the purposes of this clause, continuity of service shall be the same as defined in Regulation 5 of the Local Government (Long Service Leave) Regulations regarding service to the City, as amended from time to time.

10.7.5 Application may be made to the FWC for variation of the applicable redundancy package where the City has obtained other acceptable employment for the employees or cannot pay the relevant amount stipulated in clause 10.7.1.

2         The issue in the present case was whether Ms Cerinich was offered suitable alternative employment for the purposes of cl 10.4 and whether, ultimately, she should be provided with a redundancy payment.  Ms Cerinich was initially offered an alternative position of Ranger, and later several other alternative positions, including the position of Community Patrol Officer.

3         An application was made by the respondent under s 44 of the Act for a compulsory conference.  Whilst some issues referred in the application are not relevant for present purposes, the material issue was the ‘Redundancy Dispute’, dealing with the offers of various positions made by the appellant to Ms Cerinich as suitable alternative employment.  The respondent contended that none of the offered positions were suitable alternative employment and accordingly, that Ms Cerinich should be paid a redundancy payment under cl 10.7 of the Agreement.

4         As a result of the compulsory conference proceedings, the dispute between the parties could not be resolved. The dispute was referred for hearing and determination under s 44(9) of the Act.  A number of questions were posed for determination by the Commission.  Relevantly for present purposes, that part of the s 44(9) referral dealing with the redundancy payment issue was in the following terms:

SCHEDULE

Entitlement to redundancy payment

1. Is the role of Community Patrol Officer, suitable alternative employment under cl 10.4 of the City of Stirling Inside Workforce Agreement 2019?

2. If the answer to question 1 is ‘yes’, is Ms Cerinich entitled to:

a) reject an offer of suitable alternative employment made under cl 10.4 of the City of Stirling Inside Workforce Agreement 2019; and

b) be paid a redundancy payment under cl 10.7 of the City of Stirling Inside Workforce Agreement 2019?

3. If the answers to question 2 is ‘yes’, does section 80BE(2) of the Industrial Relations Act 1979 (WA) apply so as to give the Western Australian Industrial Relations Commission the power under cl 10.7.5 of the City of Stirling Inside Workforce Agreement 2019 to vary the applicable redundancy package the Respondent is required to pay to Ms Cerinich under clause 10.7.1?

4. If the answer to question 1 is ‘no’, is Ms Cerinich entitled to a redundancy payment under clause 10.7 of the City of Stirling Inside Workforce Agreement 2019?

5         In short, the respondent at first instance contended that the Community Patrol Officer was not suitable alternative employment for the purposes of cl 10.4 of the Agreement, and accordingly, Ms Cerinich was entitled to a redundancy payment under cl 10.7 of the Agreement.  On behalf of the appellant, it was contended that having regard to the proper interpretation of cl 10.4, that the position of Community Patrol Officer was suitable alternative employment for the purposes of the Agreement.  Accordingly, the entitlement to a redundancy payment under cl 10.7 of the Agreement did not arise.

The Commission’s decision

6         As to Question 1, that being whether the position of Community Patrol Officer was suitable alternative employment under cl 10.4 of the Agreement, the learned Commissioner answered that question in the negative. In reaching that conclusion, she found and concluded that:

(a)              As was common ground between the parties, the test to apply to whether employment is ‘suitable alternative employment’ is an objective and not a subjective test: United Voice WA v The Minister for Health (2012) 93 WAIG 261 at 264 per Kenner C (as he then was); Australian Liquor, Hospitality and Miscellaneous Workers’ Union, Western Australian Branch v Eurest (Australia) Pty Ltd (2003) 83 WAIG 4157 at 4160 per Harrison C; Cranswick v Burswood Resort (Management) Limited (2003) 84 WAIG 887 per Harrison C at 896;

(b)             Adopting the objective test, an employee is not able to reject an alternative employment offer on an unreasonable basis: Australian Chamber of Manufacturers and Derole Nominees Pty Ltd – Clothing Trades Award 1982(1) (1990) 140 IR 123;

(c)              In the matter before her, there was no evidence of a classification assessment of the relevant positions that were offered to Ms Cerenich.  The question of classification is based on an assessment of work value including duties, qualifications required, skills, abilities and experience of an employee to undertake a position.  A conclusion on classification involved an assessment of work value, and differences in work value between various positions;

(d)             After undertaking such an assessment, the positions of Parking and Information Officer and Community Patrol Officer were not similar and accordingly the classifications of the two positions were not similar;

(e)              That the salary of the Parking and Information Officer position was less than the Community Patrol Officer position, reflecting the differences in their classifications, and work value and accordingly, the positions were not similar in these respects;

(f)               That the status of the positions, given the reporting lines in the appellant’s organisational structure were similar and this supported a conclusion that the positions were similar in this respect; and

(g)             In relation to training, the Community Patrol Officer required possession of a Certificate 2 in Security Operations which Ms Cerinich did not possess and she would be required to undertake training to obtain it, which would not suit her personal circumstances.

7         Accordingly, for the foregoing reasons the learned Commissioner concluded that the position of Community Patrol Officer was not suitable alternative employment for the purposes of cl 10.4 of the Agreement and the answer to Question 1 was ‘no’.  The learned Commissioner did not find it necessary to deal with a related issue raised by the respondent at first instance, that being whether the reference to ‘refers’ in cl 10.4.2 enables factors other than those set out in the sub-clause to be taken into account.

8         Given her conclusions in relation to Question 1, it was unnecessary for the learned Commissioner to answer Questions 2 and 3 in the s 44(9) referral.

9         As to Question 4, that being if the answer to Question 1 was no, whether Ms Cerinich was entitled to a redundancy payment under cl 10.4 of the Agreement, the learned Commissioner found and concluded as follows:

(a)              That analogously with the decision in Broadlex Services Pty Ltd v United Workers’ Union [2020] FCA 867; (2020) 296 IR 425 in relation to s 119 of the Fair Work Act 2009 (Cth) the appellant’s decision to no longer require a position to be performed constituted a repudiation of a contract of employment and led to termination of employment.  This was because an affected employee’s refusal to continue in employment constituted an acceptance of a repudiation by the employer on the grounds of redundancy and the employment would be terminated;

(b)             That on 3 June 2023, Ms Cerinich accepted the appellant’s repudiation of her contract of employment because of the abolition of her position; and

(c)              That in applying Crewe and Sons Pty Ltd v AMWSU (1989) 69 WAIG 2623 and United Voice WA v The Director General, Department of Education (2015) 95 WAIG 13, that the matter arising in Question 4, involved the declaration of an existing entitlement based on past events, thus constituting the exercise of judicial and not arbitral power, which was beyond the Commission’s jurisdiction.

10      The learned Commissioner made orders in accordance with her answers to Questions 1 to 4 above.

The Appeal

11      The appellant now appeals against the learned Commissioner’s decision as to her answers to Question 1 and Question 4.  The grounds of appeal are as follows:

1. The Commissioner erred in law in making the Question 1 Decision as she applied a subjective test notwithstanding she recognised she was required to apply an objective test.

Particulars

(a) The Commissioner finds at paragraph [41] of the Reasons for Decision that the test to be applied in assessing whether an alternative position is ‘suitable alternative employment’ under the 2019 Agreement is an objective one.

(b) The Commissioner, at paragraph [41] of the Reasons for Decision cites the Full Bench of the Australian Industrial Relations Commission decision of Australian Chamber of Manufacturers and Derole Nominees Pty Ltd – Clothing Trades Award 1982(1) [1990] 140 IR 123 (Derole Nominees Decision). However, the Commissioner wrongly applied the Derole Nominees Decision by stating the objective test set out in that decision is ‘an employee is not able to reject an alternative employment opportunity on an unreasonable basis’ (see paragraph [41] of the Decision).

(c) The Commissioner, having held an objective test is to be applied, erroneously applied a subjective test by taking into account and placing weight on factors such as that Ms Cerinich ‘would struggle’ to complete relevant training ‘in the circumstances of caring for two young (paragraph [70]) and because she lacked the motivation to undertake required training (paragraph [71]).

2. The Commissioner erred in law by exceeding her jurisdiction in making the Question 1 Decision and, instead, ought to have limited her determination to what was agreed by the parties in the schedule to the Memorandum.

Particulars

(a) Section 44(9) of the IR Act permits the Commission to hear and determine a question, dispute or disagreement as agreed to by the parties.

(b) Section 46 of the IR Act permits the Commission to interpret a clause in an industrial agreement.

(c) The parties to the Application agreed the questions to be determined by the Commission under section 44(9) of the IR Act and these were set out in the schedule to the Memorandum.

(d) Question 1 did not ask the Commissioner to interpret the text of clause 10.4.2 of the 2019 Agreement.

(e) The Commissioner, at paragraphs [51] and [52] of the Reasons for Decision, finds Question 1 of the Memorandum requires ‘the Commission to decide if the [CPO] role is suitable alternative employment under cl 10.4.2 of the [2019] Agreement’ in accordance with the ‘text of the clause and the factors listed within the clause’.

(f) The text of clause 10.4.2 of the 2019 Agreement sets out the factors to be applied in determining whether a role is suitable alternative employment. Those factors are whether the position being considered is a ‘similar classification, salary and status’ to the redundant position.

(g) The Commissioner erroneously ignored the text of clause 10.4.2 by considering factors not listed in clause 10.4.2 of the 2019 Agreement such as work value, role scope, responsibilities, reporting lines, visibility, focus, compliance activities and stakeholder engagement requirements between the two roles being considered (at paragraphs [57] – [66]).

(h) By considering factors outside of clause 10.4.2 of the 2019 Agreement in deciding whether the CPO Role was suitable alternative employment, the Commissioner answered a different question to Question 1.

(i) The Commissioner interpreted the term ‘refer’ in clause 10.4.2 of the 2019 Agreement in paragraphs [73] - [78] of the Reasons for Decision.

(j) The Commissioner erred in exercising her jurisdiction under section 44(9) of the IR Act by determining a question which was not the question she has been asked to decide and by interpreting a clause in an industrial agreement.

3. The Commissioner erred in law by making the Question 1 Decision which is an exercise of a judicial power and, instead, ought not to have interpreted clause 10.4.2 of the 2019 Agreement in making her Decision.

Particulars

(a) The Commissioner’s powers under section 44 of the IR Act are arbitral, not judicial.

(b) The Commissioner recognises ‘a claim for the interpretation of an Agreement is an exercise of judicial power’ at paragraph [99] of the Decision.

(c) The Commissioner, at paragraph [100] of the Reasons for Decision, cites the Full Bench decision of Full Bench in Crewe and Sons Pty Ltd v AMWSU (1989) 69 WAIG 2623 (Crewe and Sons) and in so doing recognises that ‘in the course of a section 44 matter, the Commission is entitled to interpret a document before it’ but ‘the recourse of interpretation removed from the arbitral process is not authorised by section 44’.

(d) The Commissioner interprets the terms ‘refer’ and ‘classification, salary and status’ in clause 10.4.2 of the 2019 Agreement in reaching the Question 1 Decision.

(e) The Commissioner erroneously ignores the limits of her jurisdiction and the Crewe and Sons decision in respect of the exercise of arbitral power by making the Question 1 Decision in circumstances where it was not necessary or open to her to interpret the terms for the purpose of answering Question 1.

4. The Commissioner erred in law by making the Question 4 Findings which are an exercise of a judicial power and, instead, ought not to have made the Question 4 Findings.

Particulars

(a) The Commissioner’s powers under section 44 of the IR Act are arbitral, not judicial.

(b) The Commissioner, in outlining the task required to answer Question 4 recognises the ‘giving of decisions in the nature of adjudication upon disputes as to the rights or obligations arising from the operation of laws upon past events or conduct’ is a judicial determination at paragraph [102] of the Decision, citing the Full Bench in United Voice WA v The Director General, Department of Education (2015) 95 WAIG 13 (United Voice WA).

(c) In the same paragraph, the Commissioner refers to the finding in the United Voice WA decision that a tribunal (such as the Commission) exercising arbitral powers may only form a view or opinion on a matter as a stop to ‘arriving at the ultimate conclusion’ but this view or opinion ‘does not bind the parties and cannot operate as a binding declaration of rights’.

(d) The Commissioner’s ultimate finding in relation to Question 4 is that she is unable to answer Question 4 because it is ‘beyond the power of this Commission’.

(e) Nonetheless, between paragraphs [91] to [95] of the Reasons for Decision the Commissioner purports to make a number of judicial determinations regarding legal entitlements arising out of past events. Namely, the Commissioner purported to find:

(i) the City’s decision to no longer require a position to be performed led to the termination of [Ms Cerinich’s] employment because it was a repudiation of the employment contract ([91]);

(ii) Ms Cerinich ‘accepted the repudiation of her employment contract’ ([95]);

(iii) there had been a ‘redundancy repudiation’ ([92]);

(iv) Ms Cerinich was entitled to the redundancy payment under the 2019 Agreement on the basis the City has not applied to the Commission to reduce the redundancy payment ([94]);

(together the Question 4 Findings).

(f) The Commissioner erroneously ignored the limits of her jurisdiction by making the Question 4 Findings.

5. The Commissioner erred in law and fact by finding (as part of the Question 4 Findings) that a declaration by an employer that an employee’s role is redundant amounts to a repudiation of that employee’s employment contract by the employer, notwithstanding there is no law or fact to support this view.

Particulars

(a) The Commissioner ‘adopts similar reasoning to that in the case of Broadlex Services Pty Ltd v United Worker’s Union [2020] FCA 869 (Broadlex Decision) in finding that ‘the City’s decision to no longer require a position to be performed leads to termination of employment because it is a repudiation of the employment contract’ at paragraph [91] of the Reasons for Decision.

(b) The Commissioner erred by accepting a submission from the WASU, at paragraph [82] of the Reasons for Decision, that Katzmann J in the Broadlex Decision held ‘an employer’s declaration of redundancy under section 119 of the [Fair Work Act 2009 (Cth)(FW Act)] is a repudiation of the employment contract’.

(c) Section 119 of the FW Act creates an entitlement to redundancy pay on the happening of two causally connected events. One is the termination of the employee’s employment at the employer’s initiative. The other is the termination of the employee’s employment because the employer no longer requires the job done by the employee to be done by anyone.

(d) The Commissioner failed to distinguish the entitlement to redundancy pay created by section 119 of the FW Act to the entitlement to redundancy pay created by clause 10.4 of the 2019 Agreement. The entitlement to redundancy pay under clause 10.4 only arises if the City has complied with all of its obligations that precede termination on redundancy grounds and which are designed to maintain the employment of employees whose role has been made redundant.

(e) The Commissioner failed to identify the Broadlex Decision concerns the question of whether the employee in that case was entitled to redundancy pay under section 119 of the FW Act given her employment continued on a part-time basis after termination of her full-time contract and so the first event required by section 119 of the FW Act did not occur.

(f) The Commissioner failed to distinguish the facts in the Broadlex Decision from the facts in the Application which included:

(i) Ms Cerinich’s full time employment contract dated 22 January 2014 remained on foot;

(ii) Ms Cerinich employment remained on foot given she was on approved leave and was not due to return from leave until January 2024; and

(iii) the City was making every effort to find a role for Ms Cerinich in accordance with its obligations under clause 10.4.1 of the 2019 Agreement to ensure the continuation of her employment.

(g) Contrary to the Commissioner’s findings at paragraph [82] of the Reasons for Decision, the Broadlex Decision does not state or imply that an employer’s declaration of redundancy under section 119 of the FW Act alone is a repudiation of an employee’s employment contract.

12      The appellant seeks orders that:

(a)              The appeal be upheld;

(b)             That the decision in relation to Question 1 be quashed and be replaced with the answer ‘yes’;

(c)              That the decision in relation to Question 2 be quashed and be replaced with the answer ‘no’; and

(d)             The Question 4 findings (contained at [91]-[95] of the learned Commissioner’s reasons for decision are beyond the power of the Commission to make.

Approach to the determination of the appeal

13      The appellant submitted that the learned Commissioner’s decision was a discretionary decision and thus the well-established approach in House v The King (1936) 55 CLR 599 at 504-505 and Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 at [72] has application. On the other hand, the respondent submitted that the answers to Question 1 and Question 4 involve the correctness standard of appellant review.

14      The distinction between the deferential standard, applicable to an appeal from a decision involving a discretionary decision, or the correctness standard, was discussed in Ammon v Colonial Leisure Group Pty Ltd [2019] WASCA 158.  In Minister for Corrective Services v Western Australian Prison Officers Union of Workers [2024] WAIRC 00758; (2024) 104 WAIG 1843, the Full Bench referred to these issues and observed at [16]-[19] as follows:

16 In Ammon, the matter at first instance was a claim based on private nuisance, with the need to establish that the use or enjoyment of the plaintiff’s land or rights conferred under it, were interfered with substantially and unreasonably: at [119]. On the appeal, an issue arose as to whether the approach in House v The King should apply. The Court of Appeal referred to the decision of Gageler J (as his Honour then was) in Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 92 ALJR 713 at [35]-[50], in particular at [48]-[49] where his Honour observed:

48. The course of High Court authority since Warren v Coombes has accordingly proceeded on a consistent understanding of how the line of demarcation is to be drawn between those of a primary judge’s conclusions which attract the correctness standard of appellate review reaffirmed in that case and those which attract the deferential standard applicable to appellate review of an exercise of judicial discretion.  Without excluding the potential for other considerations to affect the standard of appellate review in a particular category of case, the understanding provides a principled basis for making at least the principal distinction.

49. The line is not drawn by reference to whether the primary judge’s process of reasoning to reach a conclusion can be characterised as evaluative or is on a topic on which judicial minds might reasonably differ.  The line is drawn by reference to whether the legal criterion applied or purportedly applied by the primary judge to reach the conclusion demands a unique outcome, in which case the correctness standard applies, or tolerates a range of outcomes, in which case the House v The King standard applies.  The resultant line is not bright; but it is tolerably clear and workable.

17 Returning to the issue at hand, the Court of Appeal went on to conclude on this point as follows at [128]-[129]:

128. Colonial’s submissions that the deferential standard is applicable in the present appeal should be rejected.  As Gageler J made clear in SZVFW, and as the High Court has recently emphasised, the deferential standard does not apply whenever minds may reasonably differ on a question or the question may be characterised as evaluative.  Although the question of whether there has been a substantial and unreasonable interference with the beneficial use of Mr Ammon’s land is evaluative in nature, it involves the application of a legal standard, in respect of which there is only one uniquely correct outcome.  The character of the finding is more like a finding of negligence, or an Anshun estoppel (the touchstone of which is the question of unreasonableness), rather than the exercise of a judicial discretion.

129. Adopting Gageler J’s nomenclature, the correctness standard rather than the deferential standard is to be applied to an appellate review of whether, on primary facts agreed or found by the trial court, there is a substantial and unreasonable interference with the beneficial use of premises so as to constitute an actionable nuisance.  That is consistent with the approach taken by this court in Marsh and Southern Properties.

18 The appellant submitted that analogously with Ammon, in this case, the decision of his Honour as to whether there was a contravention of cl 71.1 of the Agreement, involved, on the proper interpretation of the Agreement, only one correct answer. His Honour’s discretion was not exercised at large, such that there were a range of possible outcomes.

19 We prefer the appellant’s approach to this issue.  The decision of the learned Industrial Magistrate, whilst involving an element of discretion in his assessment of the reasonableness of Mr Paterson’s claim for sick leave, made in the context of a legal standard, that being the correct construction of the relevant provisions of the Agreement, leads to only one correct answer.  Accordingly, the correctness standard applies to the determination of the appeal.  Insofar as the decision of the learned Industrial Magistrate turned on his interpretation of the Agreement, it is for the Full Bench to decide for itself, the correct interpretation.

15      In our view, the correctness standard and not the deferential standard of appellate review applies to the present appeal.  This is because in relation to Question 1, the essential issue for determination was whether, having regard to cl 10.4 of the Agreement, properly construed, the position of Community Patrol Officer was suitable alternative employment.  This involved the application of the criterion set out in the Agreement which would lead to a ‘unique outcome’, or put differently, only one legally permissible answer, rather than a range of possible answers, applying the discretionary standard.  The same approach would apply to the answer to Question 4, in the event that it was held by the Commission that it had jurisdiction to determine the matter.  Insofar as the decision of the learned Commissioner turned on her interpretation of the Agreement, it is for the Full Bench to decide for itself, the correct interpretation.

Grounds 1 and 2

Contentions

16      It is convenient to deal with these two grounds together. The thrust of the appellant’s submissions in relation to these grounds fell into three broad themes.  First, the appellant contended that the learned Commissioner failed to have regard to relevant considerations and took into account irrelevant considerations.  As to the former, the appellant submitted that the learned Commissioner correctly identified at [51] and [52] of her reasons (see AB338) the relevant factors specified in cl 10.4.2 of the Agreement included factors relevant to the position, being the need for a similar classification, salary and status. The learned Commissioner also referred to factors relevant to the person of skills, qualifications, abilities and experience.

17      However, the appellant contended that the learned Commissioner then proceeded, from [55] of her reasons and onwards, to consider a range of factors extraneous to those set out in cl 10.4.2.  These included the work value of the two positions, and a detailed consideration of the position descriptions for each position.  It was submitted that nothing in the language of cl 10.4.2 supported this approach.  Factors analysed incorrectly on the appellant’s argument included matters such as the content and scope of the tasks of the position; the responsibilities and expectations on employees occupying the position; the purpose of the position; qualifications required and the skills and abilities needed for each position.

18      The appellant also submitted, although somewhat speculatively, that the reason for this erroneous approach on its case, may have been the learned Commissioner’s observation at [56] of her reasons (see AB338), that there was no evidence of a classification assessment for each of the positions.  As to this, the appellant submitted that if this was so, this observation overlooked the content of the Agreement at Annexure 1.1, to the effect that the classifications in the Agreement had been subject to a process of classification evaluation, adopting the Mercer Job Evaluation System (see AB594). On this basis, the appellant contended that regardless of the reason for it, the learned Commissioner’s consideration of the additional work value and other factors was in error.  This error led to an incorrect conclusion that the classification levels of 4 and 5 respectively for the Parking and Information Officer position and the Community Patrol Officer position, were not similar.

19      As to the issue of salary similarity, the appellant submitted that the learned Commissioner did not, as required by cl 10.4.2, refer to the salaries for the respective positions, which uncontroversially were $68,612.55 for the Parking and Information Officer and $71,495.88 for the Community Patrol Officer.  The appellant submitted that the only reference to salary was the learned Commissioner’s conclusion at [65] of her reasons (see AB340), that the salary of the Parking and Information Officer position was less than that of the Community Patrol Officer position, which reflected the difference in work value of the two positions, and on that basis, the positions were not similar.

20      Considering this, the appellant contended that the learned Commissioner did not undertake the task required by cl 10.4.2 to consider if the actual salaries themselves, irrespective of other factors, were similar.  It was submitted that the conclusion of the learned Commissioner that the ‘positions are not similar’ did not discharge the obligation on the Commission to compare the salaries themselves.

21      The third theme advanced by the appellant as to these grounds was that despite acknowledging at [41] of her reasons (see AB336), that the test to apply in determining suitable alternative employment was an objective test, she then, in determining the matter, applied subjective factors in her assessment of the suitable alternative employment issue.  This involved Ms Cerinich’s subjective views as to her capacity to undertake training given her personal circumstances, referred to at [70]-[71] of the learned Commissioner’s reasons (see AB340).  In this respect, the appellant contended that the learned Commissioner erred.

22      The respondent on the other hand, contended that the learned Commissioner did not err in the manner contended by the appellant.  As to the terms of cl 10.4.2 of the Agreement, it was submitted by the respondent that the learned Commissioner did consider the relevant factors that she was obliged to take into account.  The respondent contended in short that the process of comparing classifications for the purposes of determining whether they are similar, must be one of substance, rather than to just compare the classification levels themselves.  To do the latter on the respondent’s submissions, would be a barren exercise and not one of assistance to the Commission in determining Question 1 in the s 44(9) referral.  The respondent contended that the learned Commissioner, with the positions classified at levels 4 and 5 respectively, sought to determine if the differences in the classifications meant that the positions were similar. According to the respondent’s argument, this necessarily required the Commission to consider the substance of the classifications, in terms of work value, duties and the requirements of the respective positions.

23      The respondent further contended that in the absence of evidence of a process of classification of both positions, then it was appropriate for the learned Commissioner to embark on the examination of the positions that she did.

24      As to the issue of salary, the respondent submitted that the learned Commissioner found that the differences in salary reflected the classification differences for the two positions. This was said to be a ‘substantive consideration’ of salary.  However, we must say, it is not entirely clear as to why this is so.

25      Finally, as to the issue of whether the learned Commissioner did not consider the issue of suitable alternative employment objectively, the respondent contended that her reasons at [71], dealing with the issue of the practicality of retraining of Ms Cerinich, did consider the matter objectively.  It was common ground that for Ms Cerinich to undertake the Community Patrol Officer position, she would need to obtain a Certificate II in Security Operations.  The respondent contended that the learned Commissioner considered the evidence on this issue and whether it would be, viewed objectively, fair given Ms Cerinich’s circumstances, for her to be required to undertake this training. The respondent contended that this approach was consistent with the decision in Derole Nominees.  In any event, even if this were not so, and the learned Commissioner erred in this respect, the respondent submitted that the error would not be of sufficient moment to undermine the learned Commissioner’s conclusions overall as to the suitable alternative issue.

Consideration

26      The construction of cl 10.4 of the Agreement was important in the determination of the issues arising on these grounds of appeal.  We will turn to this now.

27      The meaning of the terms of an industrial instrument is a question of law.  The Commission may, in the exercise of its powers under s 44 of the Act in arbitration proceedings, interpret an industrial agreement, award or other instrument for the purposes of determining the matter in dispute.  Such a course does not involve the exercise of judicial power: Crewe; United Voice. This is so, as long as the Commission does not engage in bare interpretation, or purport to make binding declarations of right, or purport to enforce the instrument.

28      We have set out the relevant provisions of the Agreement above.  The clause set out rights and entitlements of the parties to the Agreement in the circumstances of organisational change at the appellant, that may have led to positions being no longer required.  It is trite that in matters of the interpretation of an industrial instrument such as the Agreement, its provisions should be construed as a whole and in context.  In Minister for Corrective Services in relation to the approach to the interpretation of industrial instruments, the Full Bench said at [20] as follows:

20 To the extent that the appellant contended that the learned Industrial Magistrate erred in his interpretation of the Agreement, the approach to be adopted is well settled.  Recently in Western Australian Prison Officers’ Union of Workers v Minister for Corrective Services [2024] WAIRC 00139; (2024) 104 WAIG 322, the Full Bench observed at [34]:

34. There was no contest as to the relevant principles to apply in the interpretation of industrial instruments.  In Fedec v The Minister for Corrective Services [2017] WAIRC 00828; (2017) 97 WAIG 1595 Smith AP (as her Honour then was) and Scott CC observed at [21] to [23]:

Interpreting an industrial agreement - general principles of interpretation

21 The approach that is to be applied when interpreting an industrial agreement is well established.  This is:

(a) Industrial agreements are usually not drafted with careful attention to form by persons who are experienced in drafting documents that have legal effect.

(b) The task of construction of an industrial agreement is to be approached in a way that allows for a generous construction: City of Wanneroo v Holmes [1989] FCA 369; (1989) 30 IR 362.

(c) Industrial agreements are made for industries in light of the customs and working conditions of each industry and must not be interpreted in a vacuum divorced from industrial realities: George A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498; City of Wanneroo v Holmes (378 - 379) (French J).

22 The general principles that apply to the construction of contracts and other instruments also apply to the construction of an industrial agreement. In Re Harrison; Ex parte Hames [2015] WASC 247, Beech J said [50] - [51]:

The general principles relevant to the proper construction of instruments are well-known. In summary:

(1) the primary duty of the court in construing an instrument is to endeavour to discover the intention of the parties as embodied in the words they have used in the instrument;

(2) it is the objectively ascertained intention of the parties, as it is expressed in the instrument, that matters; not the parties’ subjective intentions. The meaning of the terms of an instrument is to be determined by what a reasonable person would have understood the terms to mean;

(3) the objectively ascertained purpose and objective of the transaction that is the subject of a commercial instrument may be taken into account in construing that instrument. This may invite attention to the genesis of the transaction, its background and context;

(4) the apparent purpose or object of the relevant transaction can be inferred from the express and implied terms of the instrument, and from any admissible evidence of surrounding circumstances;

(5) an instrument should be construed so as to avoid it making commercial nonsense or giving rise to commercial inconvenience. However, it must be borne in mind that business common sense may be a topic on which minds may differ; and

(6) an instrument should be construed as a whole.  A construction that makes the various parts of an instrument harmonious is preferable. If possible, each part of an instrument should be construed so as to have some operation (Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 [35] (French CJ, Hayne, Crennan & Kiefel JJ); Kidd v The State of Western Australia [2014] WASC 99 [122]; Red Hill Iron Ltd v API Management Pty Ltd [2012] WASC 323 [106] - [112]; Primewest (Mandurah) Pty Ltd v Ryom Pty Ltd [2014] WASCA 28 [55] (Martin CJ, Pullin & Murphy JJA agreeing)).

These general principles apply in the construction of an industrial agreement (Director General, Department of Education v United Voice WA [2013] WASCA 287 [18] - [20] (Pullin J, Le Miere J agreeing), [83] (Buss J)). The industrial character and purpose of an industrial agreement is part of the context in which it is to be construed (Amcor Ltd v Construction, Forestry, Mining & Energy Union [2005] HCA 10; (2005) 222 CLR 241 [2] (Gleeson CJ and McHugh J); Director General v United Voice [81]; see also Amcor v CFMEU 66 (Kirby J), 129 - 130 (Callinan J)).

23 To these principles, the following observations made by Pullin J in Director General, Department of Education v United Voice WA [2013] WASCA 287; (2013) 94 WAIG 1 [18] - [19] should be added:

The Agreement has to be construed to determine what the intention of the parties was at the time the Agreement was entered into. This has to be determined by ascertaining what a reasonable person would have understood the words of the Agreement to mean taking into account the text, the surrounding circumstances known to the parties and the purpose and object of the transaction: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 [40]; Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 [22].

Surrounding circumstances may only be taken into account if the ordinary meaning of the words used by the parties is ambiguous or susceptible of more than one meaning: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337, 352; McCourt v Cranston [2012] WASCA 60 [23].

29      It is apparent from cl 10.1, and the terms of cl 10 of the Agreement read as a whole, that the focus of the clause was primarily on the preservation of employment as far as is practicable.  On a fair reading of the clause, redundancy was the last option to consider, with the initial focus on the finding of a suitable alternative position, redeployment and a transfer, before the option of redundancy arose.  The key provision for present purposes was cl 10.4 – Suitable Alternative Employment.

30      It was not in dispute at first instance that as a result of the appellant’s decision to restructure its Community Safety Business Unit, the position of Parking and Information Officer, then occupied by Ms Cerinich, was no longer required, due to operational reasons.  Accordingly, cl 10.4.1 of the Agreement was engaged.  This obliged the appellant to establish whether suitable alternative employment was available and if so, to offer it to Ms Cerinich.  The Agreement informed the reader as to what was suitable alternative employment, by the terms of cl 10.4.2.  This required the appellant to be satisfied of the factors relevant to the position, being a similar classification, with a similar salary and of a similar status to the employee’s position determined to no longer be required.  In addition to these matters, the appellant could but did not have to, also take into account factors specific to the individual person. These included the person’s skills, their qualifications, their abilities and their experience.  These characteristics of the employee were to be considered consistent with what the alternative position required. The practicality and costs of additional training was a relevant consideration.

31      In United Voice WA v Minister for Health [2012] WAIRC 01090; (2012) 93 WAIG 261 Kenner C (as he then was) observed that the approach to determining whether an offer of employment is ‘suitable alternative employment’ is to be assessed objectively (at [32] citing and applying Clothing and Allied Trades Union of Australia v Hot Tuna Pty Ltd (1988) 27 IR 226).  If this was not so, and the approach was subjective, in terms of a position only being suitable from the perspective of the employee, then, as was observed by the Full Bench of the Australian Industrial Relations Commission in Derole Nominees ‘this would give an employee an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay: the exemption provision would be without practical effect’.

32      As we have noted above, there seemed to have been no dispute at first instance that the meaning of ‘suitable alternative employment’ under cl 10.4.2 of the Agreement was to be considered objectively. Also, as Kenner C (as he was then) observed in Minister for Health, what will be suitable alternative employment in each case, is a matter for the content of the parties’ agreement.  It is for the parties to delineate what the scope of the issues to be determined are when assessing whether a position is or is not, suitable alternative employment. Accordingly, each case will turn on its own circumstances, having regard to the particular terms of the industrial instrument concerned.

33      In this case, it is the content of cl 10.4.2 that was relevant.  Notably, even if suitable alternative employment was not available, then cl 10.4.3 of the Agreement  made it clear that the further options of re-deployment or transfer, were to be considered prior to the final option of redundancy.

34      There was a qualification to the various attributes of a position as specified in cl 10.4.2.  That was that they had to be ‘similar’.  As  a matter of ordinary meaning this means ‘2. Having a marked resemblance or likeness; of a like nature or kind…’(Shorter Oxford English Dictionary). Clause 10.4.2 required that the positions had similar specified characteristics, rather than requiring that there be ‘similar positions’. This was an important matter of emphasis in the interpretation of cl 10.4.2.  As to ‘classification’, this must be taken to have meant the assigned class of work to be performed by the employee under the Agreement.  This is the key issue. The meaning of ‘classification’ in this sense, is well settled in industrial parlance.  It means ‘the category into which an employee fits for the purpose of determining that employees’ wages and conditions under his or her contract of employment, as well as influencing other matters such as union eligibility’: Australian Labour Law Reporter, (CCH Australia Ltd, 1977) Vol 2 at 31-770.

35      In this case, it appeared to not be in dispute that the Parking and Information Officer position was classified at Level 4 in accordance with Annexure 1.1 – Minimum Rates of Pay for Employees of the Agreement.  The corresponding classification of the Community Patrol Officer position was Level 5, carrying a higher rate of pay. That the levels of classification in Annexure 1.1 were intended to be the relevant ‘classification levels’ for the purposes of the Agreement, was made clear by Annexure 1 – Minimum Rates of Pay of the Agreement.  This provided at 1 that:

1. Subject to clause 11, all employees will be paid the minimum wage for their classification set out in Annexures 1.1 to 1.5.

36      This was confirmed by cl 11.1 of the Agreement which provided that ‘Employees will be paid in accordance with Annexure 1’.  Additionally, and relevantly for present purposes, in Annexure 1.1 under the classification tables, appeared the following:

• The classification level of each employee is determined using the Mercer Job Evaluation system for evaluating and classifying positions.

• Employees may wish to refer to the descriptors contained in the Local Government Industry Award 2010 as a point of reference.

• In the event of a dispute about the appropriateness of an employee’s classification level the dispute resolution process in Clause 7 of this Agreement will be utilised.

• In dealing with any dispute the employer will, where requested, provide the relevant employee, union and tribunal with the relevant material provided by Mercer and utilised by the Human Resources Business Unit to evaluate the affected position or positions.

• In dealing with any dispute, regard will be had to the principle that positions should not be classified at a level lower than that which would apply under the Local Government Industry Award 2010.

37      This supports the conclusion that for the purposes of the Agreement, a process of classification of positions covered by it was based on an established job evaluation methodology. For the purposes of Annexure 1.1 of the Agreement, there appeared to be no dispute at first instance as to the classification of the two relevant positions for comparison purposes, at Level 4 and Level 5 respectively.  In our view, absent any evidence to the contrary, there was no basis upon which consideration needed to be given to matters extraneous to the content of the Agreement, when considering what were the ‘classifications’ of two or more positions, contained in the Agreement.  The parties to the Agreement had turned their minds to the classification of positions and this meaning was to be adopted for the purposes of cl 10.4.2. If there was any dispute about matters of classification, the Agreement in Annexure 1.1 as above, provided a mechanism for it to be resolved.

38      Consistent with the above, the ‘salary’ was plainly to be construed as the salary payable for the respective positions as classified and as set out in the Agreement.  In Annexure 1.1, for each classification level, there were, apart from Level 1, three increments from 1 to 3, with the lowest at 1 and highest at 3.  The fact that the salary comparison for the positions was also to be based on what was specified in the Agreement, was also consistent as a matter of construction, with confining the question of classification to that also specified in Annexure 1.1.

39      As to the meaning of ‘status’ for the purposes of cl 10.4.2, we see no reason to give it other than its ordinary and natural meaning.  This means the ‘2 … position of a person as determined by his membership of some class of persons legally enjoying certain rights or subject to certain limitations … 3.  Position or standing in society, a profession or the like’ (Shorter Oxford English Dictionary). The meaning of the other matters specified in cl 10.4.2 relating to the person, were self-evident as a matter of construction in our  view.  It was only once cl 10.4.3 of the Agreement was enlivened, and that both cl 10.5 and cl 10.6 had been complied with, and an employee’s employment was terminated, would the entitlement to redundancy have arisen under cl 10.7.

40      There also seemed to be some dispute at first instance as to the meaning of ‘refers’ in cl 10.4.2.  Again, we see no reason to give this word other than its ordinary meaning. It means ‘1. To trace (back), assign, attribute, impute (something) to a person or thing as the ultimate cause, origin, author or source.  2. To assign to a thing, or class of things, as being properly included or comprehended in this; to regard as naturally belonging, pertaining, or having relation to; to attach or attribute to… (Shorter Oxford English Dictionary).  For the purposes of cl 10.4.2, a position was to be considered ‘suitable alternative employment’ if it had the attributes set out in the sub-clause. Notably, the draftsperson of the sub-clause did not use the word ‘includes’, suggesting that a range of other factors relevant to a position, may be considered.  Accordingly, we consider there was no scope to go beyond the matters specified in cl 10.4.2, when construed consistent with reading the terms of the Agreement as a whole. 

41      Given the approach to the interpretation of cl 10.4.2 that we consider should be preferred, the learned Commissioner was, respectfully, in error in engaging in the examination that she did of a range of factors not specified in cl 10.4.2 for comparative purposes.  As to the two attributes of classification and salary, the terms of the Agreement that we have referred to above, contained the information necessary for the parties and for the Commission to determine whether both the classification (as Levels 4 and 5 respectively) and the salaries (at $68,612.55 and $71,495.88 respectively) were similar.

42      As to the issue of salary, the learned Commissioner did not undertake any comparison of these salaries payable for the two positions, under cl 10.4.2.  The learned Commissioner did not approach this task as was required by cl 10.4.2.  What it required was a consideration of the actual salaries payable for both positions, and a view formed as to whether they were similar or not.  As referred to above, the learned Commissioner found the salary for the Parking and Information Officer position was less than the salary for the Community Patrol Officer position.  But no comparison was made of the actual salaries for each position. A finding that a salary is ‘less’ than another does not answer the question posed by cl 10.4.2 of the Agreement.  A lesser salary may be similar or it may not be. A salary that is far less is unlikely to be similar. The learned Commissioner then moved to the conclusion that the classifications of the two positions were not similar, without specifically addressing the similarity or otherwise, of the salaries for the two positions.

43      As to whether the approach the learned Commissioner took to determining the issue of suitable alternative employment for the purposes of cl 10.4.2 involved subjective considerations, we tend to the view that considering matters such as Ms Cerinich’s motivation for undertaking training for the position of Community Patrol Officer, involved matters personal to Ms Cerinich.  The focus of cl 10.4.2 in this respect, was on the ‘practicality and cost of any retraining requirements.’  Viewed objectively, this would involve the time and expense to undertake training.  A relevant consideration would be whether the training would be made available during ordinary working hours and was able to be accommodated by the employer, on this basis, without loss of income for an employee.  If retraining would be required over an overly lengthy period of time and at great cost to the employer, then the view may be reached that objectively, such a requirement would not be reasonable.

44      In a circumstance such as the present matter, where it appears that the required training, as referred to by the learned Commissioner in her reasons at [70]-[71] (see AB340) involved Ms Cerinich’s assessment of practicality, having regard to her personal circumstances, then we think the conclusion is open that subjective considerations played a part in the learned Commissioner’s determination.  Where it appears that the required training was to be provided by the employer at its cost and during working hours, (see [69] AB340), is difficult to see what other factors may impact on this consideration, which do not involve subjective factors particular to the employee, including whether the employee wanted to undertake the training or not.  A circumstance such as this would ‘give an employee an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay’:  Derole Nominees.

45      Accordingly, we would uphold these grounds of appeal.

Ground 3

46      As to this ground, the appellant contended that the learned Commissioner embarked upon the bare interpretation of cl 10 of the Agreement, and as a result, engaged in the exercise of judicial as opposed to arbitral power.  The distinction between arbitral and judicial power was recently considered by the Full Bench in Director-General Department of Justice v Civil Service Association (WA Inc) [2025] WAIRC 00146; (2025) 105 WAIG 428.  In this case, the Full Bench said at [75]-[77] as follows:

75 It is trite to observe that the Act distinguishes between the exercise of judicial power, by way of enforcement, and the exercise of arbitral power. Section 46, enabling the Commission to make bare declarations as to the meaning of the terms of awards or industrial agreements, s 83 regarding the enforcement of entitlement provisions by the Court and the power of the Full Bench under s 84A to enforce the Act and certain kinds of orders of the Commission, are examples of the former. Section 44, read with s 23 of the Act, enabling the Commission to conciliate and arbitrate disputes in relation to industrial matters, is an example of the latter.

76 Whilst the dividing line between the exercise of judicial power by way of enforcement and the exercise of arbitral power is sometimes a fine one, it has been repeatedly held by the Full Bench that the terms of s 44 of the Act should not be read down. This was first considered in Crewe and Sons Pty Ltd v Amalgamated Metal Workers and Shipwrights Union of Western Australia (1989) 69 WAIG 2623 at 2626. The determination of whether judicial or arbitral power is sought to be invoked will often turn on what is the ‘essence’ of the dispute before the Commission: Crewe at 2626.

77 The distinction between judicial and arbitral power was also considered by the Full Bench in United Voice WA. In this matter, Smith AP (Beech CC and Kenner C agreeing) observed at [95]-[100] as follows:

[95] The difference between an exercise of judicial power and arbitral power was explained by Isaacs and Rich JJ in The Waterside Workers’ Federation of Australia v J W Alexander Ltd (1918) 25 CLR 434, 463 as:

[T]he judicial power is concerned with the ascertainment, declaration and enforcement of the rights and liabilities of the parties as they exist, or are deemed to exist, at the moment the proceedings are instituted; whereas the function of the arbitral power in relation to industrial disputes is to ascertain and declare, but not enforce, what in the opinion of the arbitrator ought to be the respective rights and liabilities of the parties in relation to each other.

[96] In Re Ranger Uranium Mines Pty Ltd; Ex parte Federated Miscellaneous Workers’ Union of Australia (1987) 163 CLR 656, 666 the High Court put the distinction more simply:

The purpose of the Commission’s inquiry is to determine whether rights and obligations should be created. The purpose of a court’s inquiry and determination is to decide whether a pre-existing legal obligation has been breached, and if so, what penalty should attach to the breach.

[97] Accordingly a judicial function arises when the resolution sought is ascertainment of legal rights and obligations as opposed to the creation of new rights and obligations. In reclassification proceedings the Commission usually is called upon to exercise arbitral power; that is to create a bundle of new rights and obligations. The Industrial Magistrate’s Court acting under s 83(1) and s 83(4) of the Act is conferred with judicial power to determine whether an award, industrial agreement or order has been complied with.

[98] In Crewe and Sons the Full Bench quashed an order by the Commission that an employer pay three of its employees annual leave loading prescribed by the Metal Trades (General) Award No 13 of 1965. The order was made under s 44 of the Act. In a unanimous decision of the Full Bench they observed that:

(a) it was established in Mt Newman Mining Co Pty Ltd v Transport Workers Union of Australia, Industrial Union of Workers, Western Australian Branch (1984) 64 WAIG 1075 that the Commission does not have any jurisdiction to hear and determine matters that are essentially seeking enforcement or recovery of wages under an award;

(b) the power and duty to enforce orders and awards is conferred separately in the Act by separate express provisions upon the Full Bench (s 84A) and the Industrial Magistrate (s 83) (2626).

[99] The Full Bench in Crewe and Sons referred to the decision of the High Court in Re Cram; Ex parte The Newcastle Wallsend Coal Co Pty Ltd [1987] HCA 29; (1987) 163 CLR 140 in which the High Court held that the making of a binding declaration or right is the exercise of judicial power. The Full Bench then summarised the principles enunciated by Mason CJ, Brennan, Deane, Dawson and Toohey JJ in Re Cram as follows (2627):

(1) A claim for payment of wages due and payable by an employer to an employee is a claim for the enforcement of an existing legal right.

(2) A claim for the enforcement of a provision in an award for the payment of wages to an employee is also a claim for the enforcement of an existing legal right.

(3) Claims for the enforcement of existing legal rights necessarily invoke the exercise of judicial power.

(4) The Court held that there was no jurisdiction in the Board to determine or enforce a legal right to payment of wages on the part of employees in respect of a past period during which they had been stood down or refused work or to enforce the provisions of an award regulating the right to payment of wages for such a period.

(5) Thus, the authority was denied the power of judicial determination which included, to use the words of Kitto J. in Aberdare Collieries Case (op. cit.) ‘the giving of decisions in the nature of adjudications upon disputes as to rights or obligations arising from the operation of the law upon past events or conduct’.

(6) The making of a binding declaration of right is an instance of the exercise of judicial power.

It stands outside the arbitral function.

But there is no substance in the suggestion that an industrial tribunal cannot interpret laws, awards and other legal instruments. A tribunal could not discharge its arbitral functions if it were unable to form an opinion on a matter of interpretation. The formation of views and opinions on matters of interpretation in arbitral proceedings does not of itself amount to a usurpation of judicial power (see Cessnock Collieries Case (op. cit.) and Australian Coal and Shale Employees’ Federation Case (op. cit.) at page 174 and R. v. Gough; ex parte Key Meats Pty Ltd (1982) 148 CLR 582 at 596-597) (our underlining).

[Put in the context of the Industrial Relations Act (W.A.) it would not necessarily amount to an intrusion on the section 46 power].

(7) Indeed, a tribunal may find it necessary to form an opinion as to the existing legal rights of the parties as a step in arriving at the ultimate conclusions on which the tribunal bases the making of an award intended to regulate the future rights of the parties [see Aberdare Collieries Case (op. cit.)]. Of course, the formation of such an opinion does not bind the parties and cannot operate as a binding declaration of rights.

(8) Despite the reference by Kitto J. in Aberdare Collieries Case (op. cit.) to ‘the distinction between a power of arbitral decision in respect of the future and a power of judicial determination of existing rights and obligations’, the arbitral function includes the determination of a dispute relating to past transactions, events and conduct. Commercial arbitration often involves the determination of such a dispute and so does industrial arbitration.

[100] Thus, it is clear that the Commission when exercising an arbitral function is not prohibited from interpreting industrial instruments. It necessarily follows that whilst a Commissioner may not make a binding declaration of the rights and obligations of parties under an industrial instrument, it is open to the Commission to make a binding determination of future rights and obligations.

47      In answering Question 1 in the s 44(9) referral, as to whether the position offered to Ms Cerinich was suitable alternative employment for the purposes of cl 10.4.2, the learned Commissioner necessarily had to interpret the terms of cl 10.4.2, as a step along the way in forming a view as to how Question 1 should be answered, in light of the facts of the case. This did not involve a bare declaration as to the meaning of cl 10.4.2, and was consistent with the decision of the Full Bench in Crewe.  This ground of appeal is not made out.

Grounds 4 and 5

48      It is convenient to deal with these two grounds together.

49      As noted above, the learned Commissioner answered Question 4 to the effect that it involved the exercise of judicial power and was beyond the Commission’s jurisdiction (see [104] reasons AB347).  The question posed in the s 44(9) referral was not one involving the determination of future rights by arbitration, but involved the seeking of a declaration of existing rights and entitlements, based on then existing or prior events, applying the terms of cl 10 of the Agreement. Accordingly, the learned Commissioner’s conclusion that she reached at [104] of her reasons was ultimately correct.  The question posed did not involve matters of industrial fairness or policy, or whether as an exercise of discretion, in accordance with equity, good conscience or the substantial merits of the case, a remedy should be granted.  It was not a question as to whether Ms Cerinich was treated unfairly.  The question posed did not involve the process of arbitral interpretation, in order to achieve an outcome that was industrially fair or industrially just.

50      The question to be asked in cases such as the present, as was the case in Department of Justice, is what was the essential nature of the dispute raised by Question 4?  Put another way, in terms of the summary by the Full Bench of the relevant legal principles set out above in United Voice at [99] of that decision, what was the essential nature of the claim before the Commission?  The question posed involved a bare declaration as to whether or not Ms Cerinich was entitled, as a matter of legal right, to a redundancy payment in accordance with cl 10.7, of the Agreement.

51      It is beyond doubt that an entitlement to a redundancy payment under cl 10.7 of the Agreement involves an ‘entitlement provision’ as defined in s 7 of the Act.  An application to enforce an entitlement provision is within the exclusive jurisdiction of the court under s 83(3) of the Act.

52      On the basis that the claim in Question 4 was in essence, a claim for a bare declaration as to an entitlement under the Agreement, the Commission had no jurisdiction to embark on a consideration of the question. Consideration of whether a circumstance is a ‘Redundancy’ for the purposes of the definitions in cl 10.2(b) of the Agreement, involves the question, as a matter of fact or a matter of mixed fact and law, whether an employee’s employment is terminated in the circumstances set out in cl 10.2(b). A finding as to the termination of an employee’s employment for these purposes, is a necessary finding to be made in order to trigger the entitlement to a redundancy payment under cl 10.7 of the Agreement.  No further step is needed.

53      In the present circumstances, whilst the learned Commissioner purported to embark upon a consideration of these matters in connection with a bare claim for a declaration as to an entitlement provision under the Agreement, she had no jurisdiction to do so.  Any such findings and conclusions reached were beyond the Commission’s jurisdiction to make. However, given that the learned Commissioner answered Question 4 in the order by determining that the answer to it was beyond the Commission’s jurisdiction, that conclusion was correct.  In terms of the order, as opposed to the learned Commissioner’s reasons for decision, ultimately, as set out below, there is nothing for the Full Bench to correct.  This ground is not made out.

Orders to issue

54      The parties were in dispute as to orders that should be made by the Full Bench in the event that the appeal is upheld.  The appellant contended that if the Full Bench upholds the appeal in relation to the learned Commissioner’s findings in relation to Question 1, and the answer should be ‘yes’, then the Full Bench should go on to consider for itself the two issues raised in Question 2, which has been set out earlier in these reasons. The appellant contended that whilst expressed separately as (a) and (b) in the s 44(9) referral, Question 2 should ultimately be read as a single one as ‘is an employee entitled to reject an offer of suitable alternative employment made under clause 10.4 and be paid a redundancy payment under cl 10.7 of the City of Stirling Inside Workforce Agreement 2019?  The appellant submitted that the answer to this question should be ‘no’.

55      On the other hand the respondent submitted that it would be more appropriate in the event that the appeal against the Question 1 finding is upheld, that the decision be suspended and the questions remitted to another Commissioner to answer, in light of the conclusions of the Full Bench.  It was also contended by the respondent that given the Commission at first instance did not consider it necessary to answer Question 2, and therefore no appeal from the answer to such a question is before the Full Bench, then the appellant’s approach ought be refused.  As to Question 4, the respondent submitted that the orders sought by the appellant should not be made because ultimately, the learned Commissioner concluded that Question 4 was beyond the Commission’s power to answer.

56      It is not open for the Full Bench under s 49(5) of the Act, to both uphold an appeal and quash a part of a decision, and otherwise vary another part of it as was the appellant’s contentions on relief: The Australian Rail, Tram and Bus Industry Union of Employees, Western Australian Branch v Public Transport Authority of Western Australia [2014] WAIRC 00534; (2024) 94 WAIG 800. 

57      As to the Question 1 issue, the Full Bench has concluded that the learned Commissioner erred in her approach to cl 10.4.2 of the Agreement in relation to ‘suitable alternative employment’.  Given the extent of the evidence and issues arising at first instance, this is not a case where it would be appropriate for the Full Bench to exercise its powers under s 49(5)(b) to uphold the appeal and to decide for itself whether the alternative employment offered to Ms Cerinich was suitable alternative employment, by varying the decision, having regard to s 49(6)(a) of the Act.  It would be appropriate to suspend the operation of the Commission’s decision and remit the case to the Commission otherwise constituted for further hearing and determination on this issue, in accordance with these reasons for decision.   

58      As to Question 2, given that the learned Commissioner did not find it necessary to consider that question, it would not be appropriate for the Full Bench to answer it.  The answer to Question 2 will ultimately depend on the answer to Question 1 on remittal.  There was also, necessarily, no challenge to Question 2 on the appeal as it was not answered.  Similarly, as to Question 4, that question was not ultimately answered and formed no part of the order.  It is the order of the Commission that is the ‘decision’ for the purposes of an appeal under s 49(2) of the Act, when read with the meaning of ‘decision’ in s 7 of the Act.  The reasons for decision are not the Commission’s decision for these purposes.  

59      Order accordingly.