AIRC JURISDICTION—DISPUTE RESOLUTION UNDER A CERTIFIED AGREEMENT

Cases

AIRC JURISDICTION—DISPUTE RESOLUTION UNDER A CERTIFIED AGREEMENT

The High Court of Australia has unanimously upheld the jurisdiction of the Australian Industrial Relations Commission (the AIRC) to arbitrate a broad range of issues when facilitating the dispute resolution procedures of a certified agreement.

WantToReadMore

Get unlimited access to all of our content.

The High Court of Australia has unanimously upheld the jurisdiction of the Australian Industrial Relations Commission (the AIRC) to arbitrate a broad range of issues when facilitating the dispute resolution procedures of a certified agreement. In Construction, Forestry, Mining and Energy Union v The Australian Industrial Relations [2001] HCA 16 (15 March 2001), the seven members of the High Court found that:

  • the AIRC was not exercising judicial powers when it facilitated the dispute settlement procedures provided by certified agreements; and

  • s89Aof the Workplace Relations Act 1996did not operate to limit the powers exercisable by the AIRC in discharging the dispute resolution procedures of agreements.

In late 1996, the AIRC certified an agreement between the Construction, Forestry, Mining and Energy Union (the union) and Gordonstone Coal Management Pty Ltd (GCM), it was certified pursuant to s170MC of the then Industrial Relations Act 1988. Replacing the Gordonstone Coal Mine Consent Award 1993, the agreement specified the terms and conditions for production and engineering workers at the Gordonstone mine.

Clauses 21 and 22 of the agreement related to the appropriate dispute resolution procedures of safety and industrial issues. Clause 22 of the agreement provided that in the event of a dispute where resolution cannot be achieved then the parties could agree to abide by a decision or recommendation of the Commission.

Legislative background

In 1996 when the agreement was certified, the then Industrial Relations Act 1988provided for the certification of industrial agreements by parties to an industrial dispute or situation. Under s170MC(1)(c) of the Industrial Relations Act 1988the AIRC had to be satisfied that the agreement included procedures for preventing and settling disputes before the agreement could be certified. In this regard s170MH of the former Actformer Act facilitated the use of the AIRC to settle disputes over the application of the agreement.

Therefore, one of the points at issue before the High Court was the question of whether s89Aof the Workplace Relations Act 1996limited the powers of the Commission when discharging functions derived from s170MH of the former Industrial Relations Act 1988. This issue was raised by virtue of the fact that s89Aof the Workplace Relations Act 1996restricts, to twenty allowable award matters, the range of matters that the AIRC can address in dealing with an industrial dispute by arbitration.

History of this matter

On 27 February 1997 the union notified the AIRC of a dispute with GCM. When the matter came before Hodder C of the AIRC, GCM contended that the Commission did not have the power to deal with some matters in dispute because of the operation of s89A. Pursuant to s107of the Workplace Relations Act 1996the matter was considered to be of public importance and was accordingly referred to a Full Bench of the AIRC.

In proceedings before the Full Bench, three issues emerged. They were:

  1. the validity of the certified agreement;

  2. the validity and scope of clauses 21 and 22; and

  3. the operation of s89Aof the Workplace Relations Act 1996.

The Full Bench of the AIRC determined that the agreement was validly certified; that clauses 21 and 22 validly operated and that s89Adid not operate to limit the powers exercisable by the AIRC in the discharge of functions derived from the Agreement.

Shortly after the Full Bench decision, GCM applied to the High Court for certiorari to quash the Full Bench decision. The application was remitted by the High Court to the Full Court of the Federal Court. The Full Court examined the same three issues that were before the Full Bench of the AIRC and held that s89Adid in fact operate to limit the AIRC's powers when discharging functions derived from the agreement.

The union was thereafter granted special leave to the High Court to appeal the Full Court's decision. In consideration of this matter the High Court adopted the same approach of the lower courts and separately examined the three issues in contention.

Certification of the agreement

As in the previous proceedings Kestrel Coal Pty Limited (which some time after the Federal Court decision took over management of the Gordonstone mine) argued before the High Court that the agreement was not validly certified. The argument was that the certification of the agreement under the former Actwas not sustained by an industrial dispute or situation that extended beyond the limits of any one State.

The High Court rejected Kestrel's argument and reasoned that the certified agreement resulted from the parties negotiating terms and conditions to replace those contained in the previous Award. The failure to negotiate an agreement could have as such led to a situation that resulted in an interstate industrial dispute. Thus the High Court concluded that there was an industrial situation as defined by s4 of both Acts (that being a situation that if preventative action was not taken may have given rise to an industrial dispute), and as such the agreement was validly certified.

Validity of clauses 21 and 22

Generally Kestrel argued that the scope of the two clauses extended to any dispute and were not confined to disputes or situations within the confines of the original industrial dispute or situation which led to making of the original award or agreement. In this regard the company argued that the two clauses were invalid.

The High Court focused upon the application of s170MH of the former Act, which facilitated the use of the AIRC to settle disputes over the application of the agreement. In this regard a distinction was drawn between arbitral power and the AIRC's award-making power. On the one hand the Commission may participate in agreed dispute resolution procedures, whereas in the making of an award the outcome is a judgement or order that is binding on its own force. It was noted that where parties agree to submit to the decision of a third party, that third party does not exercise judicial power. It was determined that the application of s170MH merely authorised the AIRC to exercise private arbitration for the resolution of disputes over the application of the agreement. In this regard the provisions of clauses 21 and 22 were valid.

Section 89A

The Full Court had determined that in fullfilling the dispute resolution functions envisaged by the agreement the AIRC could only deal with issues that fell within the twenty allowable award matters outlined in s89A(2). The High Court determined that the Full Court erred in this regard. Returning to the wording of s89A(1), the High Court noted that s89Aidentifies the scope of allowable matters for the purposes of the AIRC:

  1. dealing with an industrial dispute by arbitration;

  2. preventing or settling an industrial dispute by making an award or order; and

  3. maintaining the settlement of an industrial dispute by varying an award or order.

In this matter, the High Court noted that the AIRC was not required to deal with, prevent or settle an industrial dispute [ie (a) and (b) above], by virtue of the fact that an industrial dispute as defined by the Act requires an interstate element; nor was the AIRC required to maintain the settlement of a dispute through the variation of an award or order because the AIRC was not required to vary an award or order.

The High Court thus allowed the union's appeal with costs, and set aside the orders of the Full Court of the Federal Court.

 
Post details