BHP Billiton Iron Ore Pty Ltd v The Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union of Workers [2006] FCA 1181 (31 August 2006) Last Updated: 1 September 2006 FEDERAL COURT OF AUSTRALIA BHP Billiton Iron Ore Pty Ltd v The Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union of Workers [2006] FCA 1181 WORKPLACE RELATIONS – interlocutory application – whether Commissioner of State Industrial Commission should be injuncted from conducting a Conference – whether right of appeal from Commissioner to Federal Court – whether right of appeal from Industrial Appeal Court – agreed serious issues – other considerations on balance of convenience Industrial Relations Act 1979 (WA) s 12(1) , 34 (4), 44 , 44 (12a), 44 (12c), 49 , 49 (2a), 85 , 90 Judiciary Act 1903 (Cth) ss 78B , 78B (1), 78B (5) Workplace Relations Amendment (Work Choices) Act 2005 (Cth) ss 16(1), 16(2), 16(3), 170MT, 422, 642(3), 853, 853(1) Workplace Regulations 2006 reg 1.2(2), reg 1.2(4), reg 1.2(5), reg 4.55 Transport Workers’ Union v Lee (1998) 84 FCR 60 BHP BILLITON IRON ORE PTY LTD v THE AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING & KINDRED INDUSTRIES UNION OF WORKERS - WESTERN AUSTRALIAN BRANCH and THE WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION WAD 201 of 2006 NICHOLSON J 31 AUGUST 2006 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 201 OF 2006 BETWEEN: BHP BILLITON IRON ORE PTY LTD Applicant AND: THE AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING & KINDRED INDUSTRIES UNION OF WORKERS - WESTERN AUSTRALIAN BRANCH First Respondent THE WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION Second Respondent JUDGE: NICHOLSON J DATE OF ORDER: 31 AUGUST 2006 WHERE MADE: PERTH THE COURT ORDERS THAT: The applicant’s application for interlocutory relief in terms of paragraph B1 of its application be refused. Costs reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 201 OF 2006 BETWEEN: BHP BILLITON IRON ORE PTY LTD Applicant AND: THE AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING & KINDRED INDUSTRIES UNION OF WORKERS - WESTERN AUSTRALIAN BRANCH First Respondent THE WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION Second Respondent JUDGE: NICHOLSON J DATE: 31 AUGUST 2006 PLACE: PERTH REASONS FOR JUDGMENT Mr Joe Furulyas is a member of the first respondent (the Union). He is employed by the applicant (BHP Billiton) at Newman. On 1 July 2005, following a disciplinary inquiry, BHP Billiton issued Mr Furulyas with a final written warning and changed his working arrangements in the light vehicle workshop from shift work to day work. The consequence for Mr Furulyas was that he suffered a loss of income of approximately $28 000 per annum. On 5 October 2005, the Union applied in the second respondent (the Commission) pursuant to s 44 of the Industrial Relations Act 1979 (WA) ( Industrial Relations Act ) for a Conference and other orders. The Union thereby sought the assistance of the Commission to resolve a dispute between it and BHP Billiton in relation to the change of Mr Furulyas’ employment status. It asserted that his permanent removal from shift work was unfair and unreasonable in the circumstances. The Union sought an order of the Commission that Mr Furulyas’ employment status be reinstated to that of shift worker and member of the emergency response team on no less favourable terms than those he enjoyed prior to 1 July 2005. Mr Furulyas’ contract is covered wholly by the Iron Ore Production and Processing (BHP Billiton Iron Ore Pty Ltd) Award 2002 (the Award). The Award includes in cl 23 provisions for an issue resolution process. The clause provides that any question, dispute or difficulty not settled may be referred to the Commission for conciliation and, if not resolved, for arbitration, provided reasonable attempts have been made to resolve the question. On 14 December 2005, the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) ( Work Choices Act ) received assent. Portions of it commenced on that date and further portions on 27 March 2006. On that latter date, the Workplace Relations Amendment (Work Choices) (Consequential Amendments) Regulations 2006 (No 1) took effect amending the Workplace Relations Regulations. The Conference was listed for hearing on 26 – 28 April 2006 at Newman. However, by correspondence dated 11 April 2006, BHP Billiton contended that, as result of the amendments to the Workplace Relations Act 1996 (Cth) ( Workplace Relations Act ) created by the Work Choices Act , the Commission did not have jurisdiction to hear and determine the application and sought its discontinuance. The hearing in relation to that application took place on 15 June 2006. The case of BHP Billiton was that none of the exemptions to the application of s 16(1) of the Workplace Relations Act as prescribed by s 16(2) and s 16(3) of that Act and the Workplace Relations Regulations were capable of applying to the proceedings. It was submitted to the Commissioner that the effect of s 16(1) was that the Workplace Relations Act was intended to apply to the exclusion of all State or Territory industrial laws and therefore to the exclusion of the Industrial Relations Act . The exceptions (relevantly) provided by s 16(2) were that s 16(1) does not apply to a law of the State or Territory so far as: law is prescribed by the regulations as the law to which subsection (1) does not apply.’ The Regulations relied upon were 1.2(2), 1.2(4) and 1.2(5). These (relevantly) read: ‘1.2 (1) For paragraph 16(2)(b) of the Act, subsection 16(1) of the Act does not apply to a law of a State or Territory of a kind that is mentioned in this regulation. (2) Subsection 16(1) does not apply to a law of a State or Territory (including a law relating to appeals) to the extent to which it relates to compliance with an obligation: (a) under: (i) that law; or (ii) another law of a State or Territory; would otherwise be excluded by subsection 16(1) of the Act; and (b) in respect of an act or omission which occurred prior to the reform commencement. ... (4) Subsection 16(1) does not apply to a law of a State or Territory (including a law relating to appeals) to the extent to which it relates to a termination of employment that occurred before the reform commencement. (5) Subsection 16(1) does not apply to a law of a State or Territory (including a law relating to appeals) to the extent to which it: (a) relates to proceedings that commenced before the reform commencement; and (b) provides for the variation or setting aside of rights and obligations arising under: (i) a contact of employment; or (ii) another arrangement for employment; a court or tribunal finds is unfair. ...’ Commissioner’s reasons On 6 July 2006, Commissioner Wood delivered his reasons finding that the Commission had jurisdiction. In relation to reg 1.2(5), the Commissioner concluded that it had no application as the matter was not one concerning ‘unfair contracts’. In relation to reg 1.2(4), the Commissioner considered it was necessary for him to have regard to s 642(3) of the Workplace Relations Act which stated that for the purposes of Div 4 (dealing with termination of employment): termination or termination of employment does not include demotion in employment if: (a) the demotion does not involve a significant reduction in the remuneration or duties of the demoted employee: and (b) the demoted employee remains employed with the employer who effected the demotion.’ The Commissioner concluded that a reduction in salary in the amount experienced by Mr Furulyas was ‘significant’ and consequently he considered that reg 1.2(4) applied. However, he then went on to consider the terms of the Award and did not consider that Mr Furulyas’ demotion could be construed to be a dismissal or termination of employment so that he did not consider reg 1.2(4) applied to the application or was enlivened. Nevertheless, in his conclusion to his reasons, Commissioner Wood found that the Commission had jurisdiction within the provisions of reg 1.2(4) along with reg 1.2(2). In relation to reg 1.2(2), the Commissioner considered that the real contest was whether the words ‘compliance with an obligation’ referred only to enforcement rather than arbitral proceedings. He said that by subjecting themselves to conciliation and/or arbitration, the parties were complying with an obligation under the contract because there was a binding agreement that either party, in a dispute, may exercise the right, subject to certain conditions he did not consider relevant. Therefore, the compliance was not simply the attendance at a conference. He therefore considered that the application could be characterised as an obligation under the Award so that it fell within the provisions of reg 1.2(2). Interlocutory relief BHP Billiton now seeks interlocutory relief in the following circumstances. The interlocutory relief sought is an interim order that until the hearing and determination of the application or until further order, the first and second respondents be restrained from listing the proceedings for hearing in the Commission. The application itself seeks a declaration that by virtue of the Workplace Relations Act and the Workplace Relations Regulations, the Commission is without jurisdiction to hear the application before it (application CR 172 of 2005). The circumstances of the application for interlocutory relief are that, apparently at the request of the Union, the Commission has listed the application before it for further hearing on Friday, 2 September 2006. On 21 August 2006, BHP Billiton gave notice pursuant to s 78B of the Judiciary Act 1903 (Cth) that the proceeding involves a matter arising under the Constitution or involving its interpretation. This is because it would be argued that the Workplace Relations Act and Workplace Relations Regulations remove the jurisdiction from the Commission as a consequence of the application of s 109 of the Constitution. Section 78B(1) of the Judiciary Act 1903 (Cth) provides that where it is applicable it is the duty of the Court not to proceed in the cause. However, s 78B(5) provides that nothing in subs (1) prevents a court from proceeding without delay so far as the proceedings relate to the grant of urgent relief of an interlocutory nature where the Court thinks it is necessary in the interests of justice to do so. Given the proximity of the hearing in the Commission, I accept the submission for BHP Billiton that this exception is applicable and that it is in the interests of justice for the matter of interlocutory relief to be heard and determined. Serious question There is no dispute between the parties that the general principles governing the grant of interlocutory injunctions are that the Court must decide whether there is a serious question to be tried and whether the balance of convenience favours the grant of an injunction. Further, those two issues need not be considered in isolation from each other. Additionally, the submissions for the Union rely on the test considered by the Full Court in Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65 where the Court (at 66) adopted dicta from the judgment of Mahoney JA who with the concurrence of the other members of the Court in Re Middle Harbour Investments Ltd (in liquidation) (unreported, New South Wales Court of Appeal, 15 December 1976), said: an application is made for a stay of proceedings, it is necessary that the applicant demonstrate an appropriate case. Prima facie, a successful party is entitled to the benefit of the judgment obtained by him and is entitled to commence with the presumption that the judgment is correct. These are not matters of rigid principle and a court asked to grant a stay will consider each case upon its merits, but where an applicant for a stay has not demonstrated an appropriate case but has left the situation in the state of speculation or of mere argument, weight must be given to the fact that the judgment below has been in favour of the other party.’ The Union accepts that it and BHP Billiton are at one in accepting that there is a serious question to be tried. The question is whether the Workplace Relations Act and the Workplace Relations Regulations have the effect of leaving the Commission without jurisdiction to hear the application or whether, as the Commissioner determined, certain of the exceptions are applicable. On his reasoning, it may be that the principal issue to be determined in that respect is whether he was correct in his conclusion in relation to reg 1.2(2). Balance of convenience Whether right of appeal Turning to the balance of convenience, it is necessary to give attention to the decision of the Full Court in Transport Workers’ Union v Lee (1998) 84 FCR 60 ( Lee’s case). In that appeal the circumstances were that applicants, who were a union and employees of that union against whom complaints had been laid under s 61 of the Workplace Relations Act 1997 (QLD), commenced proceedings in the Federal Court. The application sought a declaration that pursuant to s 170MT(2) of the Workplace Relations Act an action commenced in the Industrial Magistrates Court at Kingaroy against them did not lie. The primary judge granted an interlocutory injunction restraining proceedings before the Queensland Industrial Magistrate. On appeal the injunction was set aside. The relevant reasoning of the Full Court was as follows. The primary judge had placed weight on two factors in deciding that an injunction should be granted. The first was a doubt about the rights of appeal available under State law and in particular pursuant to s 422 of the Workplace Relations Act against a decision of the magistrate in the circumstances. The second was that he concluded it was in the interests of justice that the Federal Court resolve the matter dealing with rights under federal law. However, the Full Court found that he was in error in concluding that s 422 did not provide a right of appeal. Leave to appeal was therefore granted. The Full Court declined to remit the proceeding to the primary judge. The Court considered it relevant that the respondent sought to enforce a State law in a State court. It accepted that a matter arising under s 170MT of the Workplace Relations Act could potentially raise important questions of federal law but that was no reason why the proceeding should be restrained particularly when it was seen that that Act provided for a right of appeal to the Federal Court. Further, it was the applicants themselves who commenced the proceeding in the Federal Court when proceedings had already been brought against them in the Industrial Magistrates Court. Therefore, the Full Court concluded that the injunction should have been dismissed and so allowed the appeal. In the light of that reasoning, it is material to consider what the rights of appeal in the present proceeding are. That examination will not alone determine the exercise of the discretion arising on the balance of convenience in this proceeding but it will direct attention to a matter which may be of particular relevance. BHP Billiton submits that the effect of reg 1.2(2) when it refers to ‘including a law relating to appeals’ is to preserve the right of appeal only to the extent to which it ‘relates to compliance with an obligation’. BHP Billiton is disputing that the application in the present circumstances does relate to compliance with an obligation. Consequently, it disputes that any provision for a right of appeal in the State industrial law is not preserved. Section 34(4) of the Industrial Relations Act provides that except as provided in the Act, no award shall be liable to be appealed against. The rights of appeal appear in ss 49 and 90 of that Act. Section 49 provides that, subject to the section, an appeal lies to the Full Bench from any decision of the Commission. In respect of a finding made by the Commission such right of appeal is subject to the Full Bench being of the opinion that it is in the public interest for the appeal to lie: s 49(2a). It is not in present circumstances precluded by s 44(12c) as there has not been any agreement here for s 44(12a) to apply. Section 90 provides for an appeal to lie to the Western Australian Industrial Appeal Court from any decision of the President, the Full Bench of the Commission or the Commissioner in Court Session on certain grounds. The effectiveness of these provisions requires consideration in the context of the Workplace Relations Act as amended by the Work Choices Act . Section 853 of the Workplace Relations Act is the equivalent of s 422 at issue in Lee’s case. It provides that an appeal lies to the Court from a judgment of a court of a State or Territory in a matter arising under the Workplace Relations Act or the Building and Construction Industry Improvement Act . In accordance with the ratio in Lee’s case , s 853 must be understood as providing a right of appeal from a judgment of a ‘court of a State or Territory’. The position, therefore, is that there is a right of appeal to this Court in respect of a judgment of a State court. Is a decision of the Commissioner within this description? Section 12(1) of the Industrial Relations Act provides that ‘the Commission is a Court of Record and shall have an official seal’. Whether or not that makes the Commission a court for the purposes of s 853 of the Workplace Relations Act is open to argument: cf Commonwealth v Hospital Contribution Fund of Australia [1982] HCA 13 ; (1982) 150 CLR 49 at 58; Newman v “A” (A child) (1992) 9 WAR 14 at 16. It is not necessary to decide that issue here. This is because when the Commission acts under s 44 it is acting to conciliate, not to judge. The outcome of a s 44 Conference is not a ‘judgment’ as that description is commonly understood. Therefore, I do not consider that s 853 of the Workplace Relations Act provides any direct right of appeal from a decision of a Commissioner acting pursuant to s 44 of the Industrial Relations Act . However, that the Commissioner’s decision is open to appeal to the Full Bench and then to the Industrial Appeal Court. The latter is constituted as a court by s 85 of the Industrial Relations Act . The former would appear to be also acting as a Court and delivering a judgment. I therefore accept that s 853 of the Workplace Relations Act , if of continuing effect, could have application to and provide a right of appeal from the decision of the Industrial Appeal Court and arguably the Full Bench resulting from an appeal originating from the decision of the Commissioner. There are other provisions of the Workplace Relations Act which go to the question whether the right of appeal provided for in s 853 is of continuing effect. Section 16(1), as has been seen, excludes a State or Territory industrial law, subject to s 16(2) which excepts law prescribed by regulations. Regulation 1.2(2), previously set out above, provides s 16(1) does not apply to a law of a State or Territory ‘(including a law relating to appeals)’ to the extent provided for in the regulation. This must be considered further in the context of reg 4.55 which relevantly reads: Subject to subregulation (2), for paragraph 16(2)(b) of the Act, subsection 16(1) of the Act does not apply to a law of a State or Territory that allows or otherwise relates to an appeal to a State industrial authority against a decision to make or vary a State award, including a decision under which an employer, employee or industrial association becomes bound or ceases to be bound by the State award. Subregulation (1) ceases to apply 6 months after the reform commencement.’ The Union submits reg 4.55 does not limit the preservation of the right of appeal appearing in reg 1.2(2) but is limited to preserving the right of appeal in respect of decisions made pre-reform. BHP Billiton submits the effect of reg 4.55 is that all rights of appeal lapse on 27 September 2006. From the text of reg 4.55 it is apparent that it is not all appeals which are encompassed by the exception in reg 4.55(1) and the limitations in reg 4.55(2). The exception in reg 4.55(1) applies only to an appeal to a State industrial authority against a decision to make or vary a State award, including a decision under which an employer, employee or industrial association becomes bound or ceases to be bound by the State award. The application to the Commissioner under s 44 which might in future manifest as an appeal in the Industrial Appeal Court is not in respect of a decision to make or vary a State award. Nor would the decision of the Court be one by which BHP Billiton becomes bound to an award or ceasing to be bound by it, because it is already so bound, the Award being in place. Consequently, the cessation of the exception in reg 4.55(1) by application of reg 4.55(2) in six months time would not extinguish the right of appeal under s 853 of the Workplace Relations Act which BHP Billiton has and may bring in respect of any decision of the Commissioner under s 44 of the Workplace Relations Act which appealed to the Industrial Appeal Court. BHP Billiton nevertheless argues that the reference to rights of appeal in reg 1.2(2) must be construed to be understood as such rights only so far as they relate to ‘compliance with an obligation’ and that no such obligation is present in the circumstances of the application to the Commissioner. That is the central issue to be determined in this proceeding. The application by the Union is directed to reinstatement of Mr Furulyas’ employment status. For the purpose of this interlocutory application that must be understood as directed to consideration of the obligation of BHP Billiton pursuant to the Award to take that step in respect of an alleged ‘act or omission which occurred prior to the reform commencement’: reg 1.2(2)(b). That is, the Union is alleging the existence of a relevant obligation. It follows that from what is presently before the Court there is no reason to understand the reference to rights of appeal in reg 1.2(2) to be read in a way excluding the right of appeal to this Court which BHP Billiton has ultimately from a decision of the Commissioner as a consequence of appeal from it to the Industrial Appeal Court and arguably the Full Bench. The conclusion which I reach on the issue of the rights of appeal is therefore that BHP Billiton has a right to appeal through to the Industrial Appeal Court and the Full Bench in respect of which s 853 of the Workplace Relations Act provides a right of appeal to the Federal Court. In that regard BHP Billiton is in a similar position to the applicants in Lee’s case. It follows that, because of the possibility of such an appeal being brought, any important issues of statutory construction of the Workplace Relations Act are not precluded from consideration by this Court as the Court having the primary function of determining controversies arising under that Act. Other considerations There are other considerations going to the balance of convenience. BHP Billiton contends that the Union did not commence the application under s 44 of the Industrial Relations Act until three months after Mr Furulyas ceased to be a shift worker. Further, his status has remained unchanged for over a year. The matter was not set down for a hearing until 8 March 2006. His application was not therefore one which was progressed with any degree of urgency. Further, BHP Billiton contends that the order which will be sought in the Commission by the Union is that Mr Furulyas be returned to shift work and this is the result that it ultimately seeks in the proceedings in this Court. Importantly, in relation to any financial affect, BHP Billiton undertakes to the Union and repeats that undertaking as part of this application that if the proceedings in CR 172 of 2005 are stayed pending this proceeding, it will pay Mr Furulyas as a continuous shift worker from the date of his application (18 July 2006) in the event that this Court determines that the Commission has jurisdiction and that the Commission orders that Mr Furulyas be returned to shift work. The Union raises other considerations. It submits that there are four possible ways the proceeding may develop if an interlocutory injunction is not issued, namely: the Commission might dismiss the Union’s claim – in which case the dispute is at an end and these proceedings are unnecessary; or the Commission might uphold the Union’s claim and the High Court might hold that s 16 of the Workplace Relations Act is unconstitutional – in which case the dispute is at an end; or the Commission might uphold the Union’s claim and the Court might hold that the Commission does have power to arbitrate the dispute (assuming the High Court has upheld s 16) – in which case the dispute is at an end; or the Commission might uphold the Union’s claim and the Court might hold that the Commission does not have power to arbitrate the dispute (assuming the High Court has upheld s 16). The Union submits that if an interlocutory injunction does not issue, BHP Billiton will only suffer loss in the event of the fourth scenario, in which case BHP Billiton’s only loss would be legal costs incurred in the arbitration. It would not suffer any loss, it is submitted, as a result of Mr Furulyas’ restoration to shift work because the wages it paid for the period of shift work would be offset by the benefit received from that work. The Union maintains that if an interlocutory injunction does issue both it and Mr Furulyas would be deprived of their presently existing entitlement to arbitration in the Commission on the issue of fairness of the action by BHP Billiton in assigning Mr Furulyas to day work. The submission of the Union therefore is that the balance is evenly poised and favours neither party. It refers also to the fact that the dispute is of a small and limited nature; there has already been long delay since the inception of the matter in the Commission; there is a prima facie entitlement to the Union to proceed in accordance with the decision of the Commission (that again assumes the continuation of entitlement); and that there is an element of speculation involved in consideration of what will be decided by the High Court, whether the Court will uphold the BHP Billiton’s argument as to jurisdiction and whether the Commission will uphold or dismiss the Union’s claim. In all these circumstances, the Union submits an interlocutory injunction should not issue. I have also taken into account issues of comity. Reasoning The balance of convenience is not clear cut either way. In that context, it is particularly significant that BHP Billiton has rights of appeal which could arguably result in it appealing on the issue before the Commissioner to this Court. In those circumstances I consider the applicant has not discharged the burden of establishing its entitlement to interlocutory relief, which therefore will be refused. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson. Associate: Dated: 31 August 2006 Counsel for the Applicant: PD Quinlan Solicitor for the Applicant: Mallesons Stephen Jacques Counsel for the First Respondent: DN Schapper Date of Hearing: 28 August 2006 Date of Judgment: 31 August 2006