PR956130 PR956130 Download Word Document [Note: a correction has been issued to this document - see PR956218 signed 3 March 2005 AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION Workplace Relations Act 1996 s.45 appeal against an order issued by Deputy President McCarthy at Perth on 23 December 2004 [ PR954671 ] Australian Nursing Federation -Western Australian Branch (C2004/6515) S.170MW (8A) POWER OF THE COMMISSION TO SUSPEND OR TERMINATE A BARGAINING PERIOD Australian Nursing Federation - Western Australian Branch AND Minister for Health in his capacity as the South West Health Board and Others (BP2004/5136, BP2004/5137, BP2004/5138 and BP2004/5140) JUSTICE GIUDICE, PRESIDENT SENIOR DEPUTY PRESIDENT KAUFMAN COMMISSIONER BLAIR MELBOURNE, 2 MARCH 2005 Appeal - termination of bargaining periods - reliance by Commission on things said or done in conciliation - whether denial of procedural fairness - Workplace relations Act 1996 ss.45 and 170MW(2)(a)and (b) DECISION [1] This is an appeal by the Australian Nursing Federation (the ANF) against an order made by Deputy President McCarthy on 23 December 2004 terminating a number of bargaining periods in relation to nurses and others eligible to be members of the ANF who are employed in the public sector in Western Australia. Leave is required to appeal. [2] The background to the Deputy President's decision may be summarised fairly briefly for present purposes. Nurses in the public sector in Western Australia are employed subject to the Nurses' (WA Government Health Services) Agreement 2001 1 . The nominal expiry date of the agreement is 1 May 2004. Since the agreement was made there has been a significant restructuring of public hospital boards. They have reduced in numbers from 75 to 4. Since February 2004 the ANF has been in discussion with the 4 hospital boards and the Alcohol and Drug Authority, represented by the Minister for Health, pursuant to s.7 of the Hospital and Health Services Act 1927 (WA) , ostensibly for the purpose of negotiating a new agreement. Both the ANF and the Minister for Health served Notices of Initiation of Bargaining Periods pursuant to s.170MI of the Workplace Relations Act 1996 (the Act) and lodged the notices in the Commission. The ANF has taken protected industrial action against two of the hospital boards, although arguably in pursuit of an agreement across the public sector. [3] On 10 September 2004 Deputy President McCarthy commenced conciliation. On 21 October 2004 the Minister made an application to the Commission pursuant to s.170MW of the Act to terminate the relevant bargaining periods applying to the public sector employing authorities. On 28 October 2004 the Commission concluded conciliation and issued a formal statement. The statement where relevant is as follows: "[11] I have formed the view that agreement is not likely to be reached within a reasonable timeframe. The reasons for forming that view include: 1. The Minister is resolute in the terms of his offer being final. 2. The ANF is resolute in its view that the Minister will improve upon the offer. 3. The ANF has been unable to state with any precision when it will make any counter offer. 4. The experience of the conciliation I was involved in has been that responses from the ANF to concessions or proposals by the Minister have not involved any concessions or counterproposals by the ANF. At this point the full 102 items of the ANF's claim appear to still be the ANF's claims except where the Minister has agreed with a particular item. 5 The only exception has been the ANF has modified its wages claim from 10% per year for three years to 5% per year for three years. The compounded effect on wages of the ANF's amended wages claim is 15.76%. The compounded effect of the Minister's offer is 13.78%. 6. The Minister's wages offer is on the basis of the increase taking effect from when agreement is reached (i.e. an additional 1.8% to the 3.4% already being paid will only apply from the date agreement is reached). 7. The ANF is concerned with the full content of the agreement and less concerned about when it takes effect from. 8. There is a large number of items remaining unresolved and there has been an absence of any indications of a drastic reduction in the number of those items by the ANF (many of which are specific to small numbers of employees or more appropriate for other forms of resolution e.g. by administrative action). 9. The time taken for the ANF to formulate any firm counterproposals or concessions during the negotiations. [12] The above observations are not to be taken as any indication or view that either party has not tried or is not trying to reach agreement. However for the reasons above I have decided to conclude the conciliation. I conferred with both parties before taking this course of action and neither party objected to my proposal to end the conciliation." [4] On 23 December 2004 the Deputy President issued an order which, among other things, terminated the relevant bargaining periods on the grounds specified in s.170MW (2)(a) and (b). Section 170MW(2)(a) and (b) read: "(2) A circumstance for the purposes of subsection (1) is that a negotiating party that, before or during the bargaining period, has organised or taken, or is organising or taking, industrial action to support or advance claims in respect of the proposed agreement: (a) did not genuinely try to reach an agreement with the other negotiating parties before organising or taking the industrial action; or (b) is not genuinely trying to reach an agreement with the other negotiating parties; or ..." [5] The second ground of the ANF's appeal is that the Deputy President should not have referred to and relied upon observations he had made of the conduct of the ANF's representatives in conciliation conferences conducted in the Commission, over which the Deputy President had himself presided. The ANF submitted that this involved three distinct problems, each of which constitutes appellable error. The first error was said to be that it was wrong to refer to and rely upon what had occurred in conciliation in the course of arbitrating or finding facts pursuant to the adversarial model. Secondly, it was submitted that in so doing the Deputy President had denied the ANF natural justice in that the ANF was not told and did not know what material might be used against it and therefore was given no reasonable opportunity to meet that material. Thirdly, it was submitted that in relying upon his own informal, subjective perceptions of what had occurred in conciliation rather than evidence the Deputy President made the exercise of the Commission's appellate jurisdiction impossible. [6] The terms of s.170MW (2)(a) and (b) indicate that in considering an application for termination of a bargaining period under that section the Commission is to have regard to, among other things, whether a party genuinely tried or is genuinely trying to reach an agreement with the other parties. This must necessarily involve an examination of the parties' positions and changes in positions, if any, during the negotiations. While as a matter of general policy what occurs in conciliation should be without prejudice and confidential, conduct during conciliation might have a critical bearing on the Commission's decision under the section. Conduct during the bargaining period, but not formally part of conciliation, might take on a different significance when all of the facts are known. [7] Sections 104(3) and (4) indicate that a member reporting to a Presidential member in relation to unresolved matters in an industrial dispute is not to disclose what has occurred in conciliation in relation to those unresolved matters. It is relevant that the terms of ss.104(3) and (4) do not have any equivalent in s.170MW . Furthermore, the right conferred on parties to an industrial dispute by s.105(1) to object to a member arbitrating when the member has previously exercised conciliation powers in the same dispute has no application to s.170MW (1). [8] We consider that there may be circumstances in which the Commission might take into account what had occurred in conciliation in deciding an application based on the grounds in s.170MW (2)(a) and (b). There may be cases where an injustice would be done otherwise and reference to conciliation would therefore be essential. [9] Whether reference was permissible in this case depends upon the relevant facts and circumstances. The Commissioner indicated relatively early in his decision of 8 December 2004 2 that he intended to take into account his observations of conduct during conciliation 3 . He subsequently made numerous references to the conduct of the ANF, principally through its Secretary, during the conferences the Deputy President had chaired. These references occur principally in paragraphs 65, 75, 77, 80, 88 and following and 111 and following. We shall set out some only of the relevant passages. "[75] During the conciliation I conducted there was also no real effort I perceived by the ANF to conclude an agreement. Rather the ANF's approach was to receive responses to its claims but not respond to those responses, and to make demands about who the ANF considered should be involved in the Government's negotiation team. ... [77] The response to any offers the Minister has made has been one of tacit rejection, although not formal rejection in writing. It appeared to me during the conciliations that the Minister's offers and positions did not receive serious consideration. Whilst the ANF made every endeavour to give an appearance of serious consideration I formed a view that there was no desire to give serious consideration to the Minister's position. ... [88] I questioned the ANF Secretary about his capacity to make such an agreement at the outset of my involvement in conciliation proceedings, as I wanted to ensure that the ANF Secretary had the power to make agreements. I was assured that the ANF Secretary did have such power and authority. I emphasised with the ANF Secretary that is it is a s.170LJ agreement being proposed then it is the ANF that makes the agreement which only then requires employee approval. The purpose of my raising this issue at the outset of the conciliation was to try to ensure that decision making process for the making of an agreement was clearly understood and applied. This I had hoped would avoid the use of consultation and direction from members of the ANF as a device by the ANF Secretary to delay making an agreement. [89] However I saw no evidence of the ANF Secretary applying in any practical way the responsibility he claimed to have for the making of an agreement. Rather the ANF Secretary continually retreated to expressing a need to consult his members before offering any position at all on any aspect of a potential agreement. This suggested that there was little progress being made towards the reaching of an agreement. In my view the ANF Secretary was insincere in his approach in this regard and was involved in attempting to undermine the decision making process in order to delay the reaching of an agreement." [10] It should be appreciated that although the Minister's counsel had urged the Deputy President to take into account the conclusions expressed in the Deputy President's statement of 28 October 2004 4 no reference was made by the Minister's counsel or anyone else to what had actually occurred in conciliation. It was common ground on the hearing of the appeal that during the hearing of the application neither party referred to what had occurred during conciliation. The Deputy President's conclusions arising out of what had occurred in conciliation were therefore formed without the benefit of submissions by either party. It follows that the ANF had no opportunity to challenge those conclusions yet they turned out to be very influential in the decision to terminate the bargaining periods. [11] The Deputy President should have alerted the ANF to the conclusions he had reached concerning the conduct of the ANF, and in particular its secretary, during conciliation. Failure to do so deprived the ANF of the opportunity to make submissions or to call evidence concerning those conclusions, or indeed to make any application available to it. Because the Commission is obliged to act judicially the rules of natural justice apply. In the circumstances the ANF was denied a fair hearing. For that reason the Deputy President failed to exercise the jurisdiction under s.170MW . [12] There were a number of other grounds of appeal. It is not necessary to deal with them. We think it appropriate to observe that while on the evidence and submissions before him the Deputy President would have been entitled to make the relevant findings pursuant to s.170MW (2)(a) and (b), in light of the jurisdictional error the order cannot stand. [13] We were told by the ANF at the hearing of the appeal that there had been significant alterations in its position since the Deputy President's orders were made and that there have been further discussions between the parties. We are unaware of developments, if any, since the date of hearing. In the circumstances we shall make an order quashing the Deputy President's order. We reserve for further consideration what additional order or orders should be made to determine the appeal. The matter will be listed for mention on the application of either party within 30 days of this decision. BY THE COMMISSION: PRESIDENT Appearances: R. Hooker, of counsel, for the Australian Nursing Federation. R. Andretich and R. Hartley of counsel, for the Minister for Health. Hearing details: 2005. Perth: January 12 1 AG809781 PR907700, 9 August 2001. 2 PR954110. 3 Ibid., at para [56]. 4 PR952781. Printed by authority of the Commonwealth Government Printer <Price code C>