1 Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 Sch. 6A, Item 6 - Modernisation of State reference public sector transitional awards Greyhound Racing Victoria Employees Award 2004 [Transitional] (AM2014/20) State and Territory government administration VICE PRESIDENT WATSON MELBOURNE, 22 AUGUST 2014 DEPUTY PRESIDENT SMITH COMMISSIONER LEE State reference public sector transitional award modernisation- Greyhound Racing Victoria Employees Award 2004 [Transitional] - Whether Award a State reference public sector award - national system employer - trading corporation - Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 - Sch. 6A Items 2, 6, Sch. 3 Item 2A, Sch. 5 Item 3 - Fair Work Act 2009 - ss.14,30D. [1] This decision arises out of proceedings commenced on the Commission’s own motion under Item 6 of Schedule 6A to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) with respect to the Greyhound Racing Victoria Employees Award 2004 (the Award). [2] Item 6 provides: “6 Further obligation of the FWC to make or vary State reference public sector modern awards at end of application period If, at the end of the period referred to in subitem 4(2), there are one or more State reference public sector transitional awards that still cover some employers and employees, the FWC must make, or (in accordance with section 168L of the FW Act) vary the coverage of, one or more State reference public sector modern awards so that all those employers and employees are covered by State reference public sector modern awards. Note: The employers and employees will cease to be covered by the State reference public sector transitional awards when they start to be covered by a State reference public sector modern award that is in operation: see item 29 of Schedule 3.” [2014] FWCFB 5633 DECISION f_p_n_1_ [2014] FWCFB 5633 2 [3] The initial question is whether the Award is a State reference public sector transitional award. The relevant terms are defined in Item 2 of Schedule 6A as follows: “2 State reference public sector transitional awards (1) A State reference public sector transitional award is a State reference transitional award or common rule in relation to which the following conditions are satisfied: (a) the only employers that are expressed to be covered by the award or common rule are one or more specified State reference public sector employers; (b) the only employees who are expressed to be covered by the award or common rule are specified State reference public sector employees of those employers. Note: State reference transitional awards and common rules are continued in existence as transitional instruments by Schedule 3. (2) A State reference public sector employee is a State reference employee who is a State public sector employee as defined in section 30A or 30K of the FW Act. (3) A State reference public sector employer is a State reference employer that is a State public sector employer as defined in section 30A or 30K of the FW Act.” [4] Sub-item 2A(4) of Schedule 3 to the Transitional Act provides: “(4) A State reference employer is an employer that is a national system employer only because of section 30D or 30N of the FW Act.” [5] Section 30D of the Fair Work Act 2009 (the FW Act) provides: “30D Extended meaning of national system employer (1) A national system employer includes: (a) any person in a State that is a referring State because of this Division so far as the person employs, or usually employs, an individual; and (b) a holder of an office to whom subsection 30E(2) applies. f_p_n_2_ [2014] FWCFB 5633 3 (2) This section does not limit the operation of section 14 (which defines a national system employer). Note: Section 30H may limit the extent to which this section extends the meaning of national system employer.” [6] These are not easy provisions from which to distil meaning, but the effect appears to be:  If an employer is a national system employer independently of s.30D of the FW Act, then it does not meet the definition of a State reference employer,  If an award applies to an employer that is not a State reference employer, then the award is not a State reference public sector award, and  An award that is not a State reference public sector award cannot be modernised under Item 6 of Schedule 6A. [7] Section 14(1) of the FW Act relevantly defines a national system employer as a constitutional corporation. That term arises from s.51(xx) of the Constitution. Various authorities have considered the meaning of the terms in that paragraph such as “trading corporation.”1 [8] Those principles have been summarised as follows: 2 “The last few years have seen several decisions, particularly by the High Court, in which the notion of a trading corporation has been examined. It is not my intention to refer to those decisions in great detail but rather to state the principles that appear to emerge from them and then to apply those principles to the facts of the present case. 1. The mere fact that a corporation trades does not mean that it is a trading corporation: R v Trade Practices Tribunal; Ex parte St George County Council (1974) 130 CLR 533 at 543 (St George County Council); R v Federal Court of Australia; Ex parte Western Australian National Football League (1979 143 CLR 190 at 219, 234 (Adamson). 2. The purpose of incorporation, propounded in St George County Council, is no longer a valid test. The test is one of the current activities of the corporation: Adamson; State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 at 304; (1982) ATPR 40-326 at 43,976-43,977 (State Superannuation Board). 3. But the current activities test is not the sole criterion for determining whether a corporation is a trading corporation. Thus where a corporation has not begun to trade, its character may be found in its constitution. Even when there are current activities, the corporation's constitution is not completely irrelevant: Fencott v Muller (1983) 152 CLR 570 at 602; (1983) ATPR 40-350 at 44,218. f_p_n_3_ [2014] FWCFB 5633 4 4. Views as to the necessary extent of trading activity have varied. It must be a substantial corporate activity (Barwick CJ in Adamson at 208); the trading activities must form a sufficiently significant proportion of the corporation's overall activities (Mason J in Adamson at 233, with Jacobs J concurring at 237); the trading activities should not be insubstantial (Murphy J in Adamson at 239); the corporation must carry on trading activities on a significant scale: (Mason, Murphy and Deane JJ in State Superannuation Board at 304; 43,976- 43,977; Deane J in Commonwealth v Tasmania (1983) 57 ALJR 450 at 559- 560. 5. An incorporated sporting body can be a trading corporation if its activities meet the required test: Adamson. 6. In particular, incorporation under a statute such as the Associations Incorporation Act does not prevent a corporate body from being a trading corporation if its activities warrant that description: Adamson at 232. 7.Trading denotes the activity of providing, for reward, goods or services: Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR 134 at 139; St George County Council at 569-570; Bevanere Pty Ltd v Lubidineuse (1985) 7 FCR 325 at 330-331; (1985) ATPR 40-565 at 46,568. 8. The Trade Practices Act itself draws a distinction between trading corporations and financial corporations; nevertheless the two classes are not mutually exclusive: State Superannuation Board at 303. [9] It is necessary to apply these authorities to Greyhound Racing Victoria, the only employer respondent to the Award. The trading activities of Greyhound Racing Victoria are set out in the witness statement of Stephen Wicks, filed in these proceedings. He provides the following information from the most recent Annual Report: “2012-2013 Annual Report Tabcorp income $54.94m Racefields income $13.69m Other income $2.35m Total income from transactions $70.99m” [10] It is clear on the basis of this evidence that Greyhound Racing Victoria undertakes substantial trading activities and is a trading corporation within the test established by the above authorities. Both the State of Victoria and the Community and Public Sector Union agree with that characterisation. It follows that the Award cannot be modernised under Item 6 of Schedule 6A as Greyhound Racing Victoria is not a State reference public sector employer. Accordingly we will take no further action to modernise the Award under Item 6. Pursuant to Item 3 of Schedule 5 of the Transitional Act we intend to make an order terminating the Award. Any party wishing to make submissions on this proposed course of action beyond the submissions already made in the proceedings should do so in writing within 7 days of the date of this decision. f_p_n_4_ [2014] FWCFB 5633 5 VICE PRESIDENT Final written submissions: State of Victoria on 13 May 2014. Community and Public Sector Union on 27 May 2014. Printed by authority of the Commonwealth Government Printer <Price code C, AT831656 PR554392 > 1 E.g. R v Federal Court of Australia; Ex parte Western Australian National Football League (1979) 143 CLR 190 (Adamson); State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282; Commonwealth v Tasmania (1983) 158 CLR 1. 2 Hughes v Western Australian Cricket Association (Inc) (1986) 19 FCR 10, per Toohey J. f_p_n_5_