Australian Industrial Relations Commission C Simmonds PR942517 (C2003/278) October 20. 2003., 12 January 2004 Headnotes Application — for order restraining State industrial authority — termination of employment due to redundancy — severance pay — allegation of agreement for severance pay additional to that provided for in federal award — claim before State industrial authority in relation to contractual entitlements — claim that State industrial authority should be restrained — Commission not likely to be hindered or embarrassed by State proceedings — application rejected — Workplace Relations Act 1996, s 128 — Industrial Relations Act 1979 (Western Australia) ss 29(1)(b)(ii) and 44(1) and (9). (CTH) Workplace Relations Act 1996 s 128 application for order restraining a State industrial authority C Simmonds . DECISION [1] This is an application by Spotless Services Australia Ltd (the applicant) for an order pursuant to s 128 of the Workplace Relations Act 1996 (the Act) restraining the Western Australian Industrial Relations Commission (the State Commission). An order is sought in the following terms: 1. The Western Australian Industrial Relations Commission shall not deal with application no C242 of 2003 insofar as it relates to the quantum of redundancy payments to be paid to employees covered by the Argyle Catering (Australian Workers Union/Spotless Services Australia Ltd) Agreement 1996 and the Argyle Catering — Australian Workers Union/Spotless Services Australia Ltd Award 2002 2. This order shall operate until further order of this Commission. 3. Leave is hereby reserved to all parties hereto to make application to this Commission to continue or discharge this order upon the matter having been dealt with by this Commission.” [2] At the conclusion of the hearing on 20 October 2003 we announced that we had decided not to grant the application. We gave short reasons for our decision and indicated that we would publish full reasons in due course. These are those reasons. [3] In October 2002 the applicant terminated the employment of 46 employees engaged at the Argyle Diamond Mine in the Pilbara region of Western Australia. The employees had been engaged in the provision of catering services pursuant to a contract between the applicant and the operator of the mine. It may be assumed that at all relevant times the applicant was respondent to the Argyle Catering — Australian Workers’ Union/Spotless Services Australia Ltd Award 2002 1. (the federal award) and a party to the Argyle Catering (Australian Workers’ Union/Spotless Services Australia Ltd) Agreement 1996 2. (the federal agreement). [4] A dispute arose between the Australian Workers’ Union (AWU) and the applicant as to the termination entitlements of the employees made redundant. The federal award contains provision for severance pay on termination of employment for redundancy to a maximum of eight weeks pay after four years of service. The AWU alleges, however, that in or about June 2002 the applicant agreed to severance pay on termination of employment for redundancy to a maximum of 20 weeks pay after 13 weeks of service. The alleged agreement is set out in a letter from the AWU to the applicant dated 17 June 2002. [5] On 27 August 2002 the AWU lodged an application for an order for severance pay pursuant to s 170FB of the Act. That section permits the Commission to make an order to give effect to Arts 12 and 13 of the Termination of Employment Convention 1982 (the Convention). The application sought an order requiring the applicant (in this case) to make severance payments in accordance with the alleged agreement of June 2002. [6] The applicant opposed the AWU’s s 170FB application on the basis that s 170FC applied. While it is not necessary to set it out in full, s 170FC provides that the Commission must refrain from considering an application or from determining it if the Commission is satisfied that there is an alternative mechanism by which effect will be given to Arts 12 and 13 of the Convention in relation to the employees concerned. [7] On 25 September 2002 Deputy President McCarthy published a decision in relation to the s 170FB application. 3. In that decision he indicated, among other things, that if, having heard further submissions, he decided that the redundancy clause in the federal award provided an entitlement to a severance allowance, he intended to cease considering the application because of s 170FC of the Act. On 2 October 2002 the applicant wrote to the AWU and admitted that the employees concerned were entitled to severance payments pursuant to the redundancy clause in the federal award. [8] On 14 November 2002 the Australian Workers’ Union Industrial Union of Workers Western Australian Branch (the State AWU) made an application to the State Commission. For present purposes it is sufficient to note that the application is presently being pursued pursuant to s 44 of the Industrial Relations Act 1979 (Western Australia) and seeks an order requiring the applicant to make payments to relevant employees in accordance with the alleged severance pay agreement of June 2002. Section 44 is relevantly in these terms: 44. Compulsory conference (1) Subject to this section, the Commission constituted by a Commissioner may summon any person to attend, at a time and place specified in the summons, at a conference before the Commission. … (9) Where at the conclusion of a conference held in accordance with this section any question, dispute, or disagreement in relation to an industrial matter has not been settled by agreement between all of the parties, the Commission may hear and determine that question, dispute, or disagreement and may make an order binding only the parties in relation to whom the matter has not been so settled. [9] The State AWU’s application came on for hearing in the State Commission on 31 July 2003. The applicant in this matter, the respondent in the proceedings in the State Commission, contested the State Commission’s jurisdiction. On 14 October 2003 the State Commission issued a decision in which it held that it does have jurisdiction to proceed and listed the matter for further hearing. 4. [10] On 6 August 2003 Deputy President McCarthy re-listed the federal application. After hearing submissions he issued a further decision on 26 September 2003. 5. In that decision he refused to determine the AWU’s application. The applicant has lodged an appeal against that decision. [11] The applicant submitted that in the circumstances an order should issue pursuant to s 128 of the Act restraining the State Commission from dealing further with the State AWU’s application. Section 128 is as follows: (1) If it appears to a Full Bench that a State industrial authority is dealing or is about to deal with: (a) an industrial dispute; (b) a matter provided for in an award, an order of the Commission or a certified agreement; or (c) a matter that is the subject of a proceeding before the Commission; other than by: (d) facilitating the entering into of a State employment agreement; or (e) approving a State employment agreement; the Commission may make an order restraining the State industrial authority from dealing with the industrial dispute or matter. (2) The State industrial authority shall, in accordance with the order, cease dealing or not deal, as the case may be, with the industrial dispute or matter. (3) An order, award, decision or determination of the State industrial authority made in contravention of the order of the Full Bench is, to the extent of the contravention, void. [12] The grounds for the application are: (1) severance pay is comprehensively dealt with in the federal award and the federal agreement, which incorporates the terms of the award; (2) both the federal award and the federal agreement contain settlement of disputes and grievance provisions; (3) the question of severance pay is before this Commission in the form of a s 170FB application which has not been finally determined; (4) the matter is the subject of an industrial dispute; and (5) the State Commission has no jurisdiction to deal with the State AWU’s application. [13] As to the first ground, the applicant submitted that because the redundancy clause in the federal award prescribes a maximum of eight weeks severance pay and also provides that the amount is subject to further order, any order by the State Commission purporting to increase the amount of severance pay would be inconsistent with the terms of the federal award and would deal with a matter in the federal award. It was further submitted that because the federal agreement incorporates the terms of the federal award, if the State Commission made an order purporting to increase the amount of severance pay such order would also be inconsistent with the federal agreement. The applicant also contended that because the redundancy clause in the federal award provides for the manner in which the severance pay is to be varied, any attempt by the State Commission to vary the level of severance pay would be inconsistent with that and therefore invalid. The applicant further contended that because the level of severance pay in the federal award has been approved by a Full Bench in test case proceedings, the State Commission should be restrained from increasing that level. [14] In relation to the second ground it was submitted that because of the dispute and grievance procedures in the federal award and the federal agreement, the State Commission has no jurisdiction to deal with the present dispute about the level of severance pay. Any order the State Commission made would be inconsistent with the grievance procedure in the federal instruments and would be invalid. [15] In amplification of the third ground it was submitted that because the s 170FB application has not been properly disposed of, or disposed of at all, there is therefore an extant application before the Commission. [16] In relation to the fourth ground it was submitted that it is clear that the matter before the State Commission is the subject of an industrial dispute because the federal award is based on an industrial dispute and the federal agreement is one made pursuant to Div 3 of Part VIB of the Act. [17] For all of these reasons, it was submitted, the State Commission has no jurisdiction to hear the State AWU’s application or, if it does, it should nevertheless be restrained by an order of the kind sought. [18] We were referred to a number of authorities which might provide guidance as to the manner and circumstances in which the discretion to restrain a state industrial authority is to be exercised. There is no need to refer to those authorities in this decision. [19] We are prepared to assume that the jurisdictional prerequisites for the exercise of the discretion in s 128 are fulfilled. In the circumstances should we make the order sought? In order to answer that question it is necessary to properly identify the matter before the State Commission. [20] We have earlier set out the terms of s 44(9) of the Industrial Relations Act 1979 (Western Australia). It provides that the State Commission may hear and determine a dispute which is outstanding at the conclusion of a compulsory conference. It appears from the terms of s 29(1)(b)(ii) of the Industrial Relations Act 1979 (Western Australia) that the State Commission may deal with a claim by an employee that the employee has not been allowed a benefit, not being a benefit under an award or order, to which the employee is entitled under his contract of employment. In her decision of 14 October 2003, Commissioner Harrison characterised the dispute before her as “whether or not the [relevant] employees are due benefits owing to them under their contracts of employment with the respondent.” 6. We take the Commissioner’s characterisation to be referable to s 29(1)(b)(ii). So characterised, the dispute concerns whether the employees have an existing contractual entitlement which remains unsatisfied. It involves questions of law requiring the exercise of judicial power for their final resolution. The Commission, not being a court, cannot exercise judicial power. The Commission could not resolve such a dispute. [21] In the circumstances a decision by the State Commission relating to the contractual entitlements of the employees is unlikely to hinder or embarrass this Commission in the performance of any of its statutory functions. Obviously there may be cases in which a State Commission is about to deal with an issue which this Commission has decided or is in the course of deciding and there is a strong case for an order restraining the State Commission. If, for example, the State Commission were about to decide whether the amount of severance pay prescribed under the federal award was adequate, there would be a clear potential for conflict between that Commission and this. But such is not the case. [22] It follows that we do not see a sufficient basis upon which to exercise the power of restraint reposed in the Commission by s 128. [23] We noted earlier that the State Commission had decided that it has jurisdiction to determine the question. It is neither necessary nor appropriate that we make any comment on the correctness of that conclusion. It is sufficient to indicate that we have decided not to restrain the State Commission from dealing with the issue identified in Commissioner Harrison’s decision of 14 October 2003. Since that is the only issue before her, it follows that we should reject the application. We do so. Order Orders accordingly. A.D. Lucev, of counsel, and J. Brits, of the Chamber of Commerce and Industry, Western Australia, for Spotless Services Australia Ltd J. Boots, of counsel, for the Australian Workers’ Union.