NSW litigation commenced before WorkChoices can continue

Cases

NSW litigation commenced before WorkChoices can continue

The NSW Court of Appeal has ruled that an unfair contracts case based on NSW legislation was not stopped from continuing by the commencement of WorkChoices legislation on 27 March 2006.

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The NSW Court of Appeal has ruled that an unfair contracts case based on NSW legislation was not stopped from continuing by the commencement of WorkChoices legislation on 27 March 2006.
 
The effect of this decision is that any s106 cases lodged before 27 March 2006 will be able to proceed.
 
This case was concerned with an application by the Construction, Forestry, Mining and Energy Union (NSW Branch) claiming unfair contract legislation protected certain members’ superannuation entitlements.
 
Background
 
The CFMEU sought orders under s106 of the Industrial Relations Act 1996 to vary the terms of superannuation arrangements between Port Kembla Coal Terminal, the employer, and 78 of its employees on the basis of an alleged misrepresentation or promise that they would receive the benefit of a higher rate of employer contributions between the period 1990–26 March 2006, during which period state law was operative. Following the introduction of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) the arrangements were converted into a federal instrument.
 
The issue before the Court was whether the Industrial Court of New South Wales could exercise jurisdiction under s106 of the Industrial Relations Act in light of alleged constitutional inconsistency with the Workplace Relations Act.
 
The applicant submitted that the Workplace Relations Act covered the field and, alternatively, that there was a direct inconsistency with the provisions of the Commonwealth law that would prevail in accordance with s109 of the Commonwealth Constitution.
 
State legislation valid
 
The Court of Appeal found in favour of the union — noting:
‘The purpose of s 16(1) of the WR Act is to identify, at least in part, the relevant field which the Commonwealth Act intends to occupy; and by reason of which inconsistency with State law could arise under s109 of the Commonwealth Constitution …
 
Section 16(2) of the WR Act, which renders s 16(1) inapplicable in certain respects, should not be given a narrow technical construction in light of the broader context of the Act, including its scope, nature and purpose. It is intended to provide flexibility to the legislative scheme …
 
Regulation 1.2(5) of the Workplace Relations Regulations 2006 (Cth) is a valid regulation which invokes the exception in s 16(2)(b) of the WR Act. Accordingly, s 16(1) is inapplicable and no indirect inconsistency arises …’
Inconsistency issue
 
The Court of Appeal went on to rule on the argument that the Commonwealth legislation covered the field:
‘The WR Act does not cover the field in respect of, or make provision for, enforcement of rights under a State instrument which had accrued prior to the coming into force of the federal instrument, on 27 March 2006. As such, the enforcement of pre-existing rights and obligations continues to depend upon State law …
 
There is no direct inconsistency between orders varying the superannuation payment obligations contained in the federal instrument for the period prior to 27 March 2006 and the continued operation of the unamended federal instrument for the period subsequent to that date …’
 
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