Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Secretary of the Treasury v Public Service Association & Professional Officers' Association Amalgamated Union of New South Wales [2014] NSWCA 14
• Hearing dates: 10 February 2014
• Decision date: 11 February 2014
• Before: Basten JA

Decision

(1) The orders made by Boland J on 20 December 2013 in the Industrial Relations Commission in the matter of Re Crown Employees Wages Staff (Rates of Pay) Award 2011 (No 3) [2013] NSWIRComm 109 be stayed pending determination of the proceedings in this Court.

(2) The costs of the motion be the respondents' costs in the proceedings.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: ADMINISTRATIVE LAW - judicial review - stay - review of decision of industrial tribunal - whether decision should be stayed pending review for alleged jurisdictional error; PRACTICE AND PROCEDURE - interlocutory application for stay - relevant considerations - nature of dispute in industrial matter - potential prejudice to parties and employees entitled to benefits of award - difficulty in recovering payments once made - conduct of applicant in delaying making review application
• Legislation Cited: Industrial Relations Act 1996 (NSW), ss 118, 146C, 179; Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 (NSW), cll 6, 7; Superannuation Guarantee (Administration) Amendment Act 2012 (Cth); Supreme Court Act 1970 (NSW), s 23; Uniform Civil Procedure Rules 2005 (NSW), rr 51.1, 51.44, 59.10
• Cases Cited: Kirk v Industrial Court of New South Wales [2010] HCA 1; 239 CLR 531; Newcrest Mining v Industrial Relations Commission (NSW) [2005] NSWCA 85; 139 IR 72; The Queen v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Company Pty Ltd [1953] HCA 22; 88 CLR 100; Re Australian Nursing Federation; Ex parte State of Victoria [1993] HCA 8; 112 ALR 177; Re Crown Employees Wages Staff (Rates of Pay) Award 2011 (No 2) [2013] NSWIRComm 53; Re Griffin; Ex parte Professional Radio & Electronics Institute of Australasia [1988] HCA 72; 167 CLR 37; Re Moore; Ex parte Pillar (1991) 103 ALR 11
• Category: Interlocutory applications
• Parties: Secretary of the Treasury (First Applicant); Director General Ministry of Health (Second Applicant); Landcom (Third Applicant); Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales (First Respondent) and 15 Ors
• Representation: Counsel: S B Benson (Applicants); S Crawshaw SC/M Gibian (Respondents); Solicitors: Crown Solicitor's Office (Applicants); W G McNally Jones Staff (Respondents)
• File Number(s): CA 2013/385141

Decision under appeal

• Jurisdiction: 9105
• Citation: Re Crown Employees Wages Staff (Rates of Pay) Award 2011 (No 3) [2013] NSWIRComm 109
• Date of Decision: 2013-12-20 00:00:00
• Before: Boland J

Judgment

1 BASTEN JA: The applicants seek a stay of orders made by Boland J in the Industrial Relations Commission on 20 December 2013. Those orders provide for an increase in wages, salaries and allowances with respect to a large number of public sector awards (said to be in excess of 60). The increases allowed were 2.5%, payable from the beginning of the first pay period commencing on or after 1 July 2013.

2 That order constituted a variation of an earlier order, which had allowed an increase of 2.27% for employees subject to the same awards and for the same period. (Although the orders left open the possibility that some awards had not been increased by 2.27%, it is likely that all the awards covered had been so increased.) Accordingly the increases resulting from the orders of 20 December 2013 were limited to 0.23%. On a salary of $50,000, that would amount to a payment of $115, before tax, for a full year. (The amount of the total payments was said to be $62 million in a full year and the number of workers affected 190,000, making the average payment $326, which seems implausible.) So far some 7.5 months have elapsed since the date from which the payments were to commence.

3 The matter is in the Court because the applicants, being emanations of the State Government, have commenced proceedings for judicial review of the award made by Boland J, on the basis that he lacked jurisdiction to make it. An appeal was lodged with the Full Bench, but that has been stayed pending determination of the proceedings in the Court. The application in this Court is listed for hearing on 14 March 2014.

4 On 30 January 2014 the applicants sought a stay of the orders of Boland J before the Full Bench: the application was refused. No reasons were given for that decision, although reasons were offered should a party request them. The solicitor for the Secretary requested such reasons on 31 January 2014. So far, no reasons have been provided. The present application does not involve a review of the decision of the Full Bench, but an exercise of original jurisdiction by this Court as ancillary to the relief sought in this Court.

5 In order to understand the submissions of the parties it is necessary to identify some aspects of the procedural history, the nature of the dispute, and the principles to be applied.

Procedural history and nature of dispute

6 In April and May 2013 various applications were filed by public sector unions, including the Public Service Association and other respondents, seeking a 2.5% increase in salaries and allowances. Such an increase was, the Unions asserted, available under and consistent with the public sector polices declared for the purposes of s 146C of the Industrial Relations Act 1996 (NSW) and contained in the Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 (NSW), cl 6(1)(a).

7 The State submitted to the Commission that any award must be limited to 2.27% because of an increase in the superannuation guarantee levy payable by employers, from 9% to 9.25% in the 2013-2014 financial year: Superannuation Guarantee (Administration) Amendment Act 2012 (Cth). The State contended that the increase in the levy was an "employee-related cost" and that the jurisdiction of the Commission was limited to increasing employee-related costs by not more than 2.5% per annum.

8 The Unions submitted that the policy set out in cl 6(1)(a) of the Regulation was stated to be "subject to compliance with the declared paramount policies" which included an obligation of the employer to pay the minimum amount prescribed under the relevant Commonwealth law to employee superannuation schemes or funds: cl 7(1)(c).

9 That issue, described as the "threshold issue", was addressed by a Full Bench of the Commission in Re Crown Employees Wages Staff (Rates of Pay) Award 2011 (No 2) [2013] NSWIRComm 53, handed down on 25 June 2013. The Full Bench rejected the Secretary's position and referred the matter back to Boland J to make an award in accordance with its ruling.

10 The State was not content with the Commission's determination and, on 28 June 2013, published an amended regulation which sought to give effect to the Government's position, rejected by the Full Bench.

11 On 26 July 2013, by consent, the Commission awarded increases of 2.27% backdated to the first full pay period on or after 1 July 2013, leaving open to the Unions an opportunity to seek an additional 0.23% increase.

12 The matter came back before Boland J in November 2013, judgment being delivered on 17 December 2013. The orders the subject of the present judicial review application were made on 20 December 2013.

Relevant principles

13 The parties to the present proceedings have agreed on relatively little by way of common ground: their disagreements extended to the source of the power of the Court to order a stay in these proceedings. The respondents submitted that the Court's power to stay the orders of the Industrial Commission depended upon it having "all jurisdiction which may be necessary for the administration of justice in New South Wales", pursuant to the Supreme Court Act 1970 (NSW), s 23. That jurisdiction, in so far as it operated in judicial review proceedings, was said to be available only in limited circumstances.

14 The Secretary submitted that the power to order a stay was to be found in the Uniform Civil Procedure Rules 2005 (NSW), r 51.44(1), which provides that "[s]ubject to the filing of a relevant originating process, the Court may order that the decision below or the proceedings under the decision be stayed." Otherwise, the rule makes clear that merely filing an originating process does not itself operate as a stay: r 51.44(2). That provision is not, in its terms, limited to appeals and, consistently with r 51.1(1), applies to any proceedings in the Court, whether or not appeal proceedings. There is no doubt that r 51.44, being framed in language which is applicable to both appellate or review proceedings, provides an express source of power for the order now sought.

15 Accepting the availability of the power conferred in unconfined terms by r 51.44, is not to say that the Court should not take into account the kind of considerations which operate generally with respect to stays of orders subject to claims of invalidity for jurisdictional error. Further, there is a traditional reluctance to intervene where the matters are before an industrial tribunal, recognising that such bodies have particular expertise in resolving industrial disputes and that uncertainty should be limited as far as possible. The respondents invited attention to the reasoning in Re Griffin; Ex parte Professional Radio & Electronics Institute of Australasia [1988] HCA 72; 167 CLR 37 (Brennan J): Re Moore; Ex parte Pillar (1991) 103 ALR 11 (Dawson J); Re Australian Nursing Federation; Ex parte State of Victoria [1993] HCA 8; 112 ALR 177 (McHugh J); Newcrest Mining v Industrial Relations Commission (NSW) [2005] NSWCA 85; 139 IR 72 (Bryson JA). As Brennan J noted in Re Griffin, the effect of a stay, based upon an allegation of invalidity, is to interfere with a presumptively valid exercise of power where the merits of the decision are not in issue: at 42. There is a greater reluctance to interfere by way of a stay in such circumstances, as compared with a stay pending an appeal, where the merit of the decision itself is challenged.

16 Whilst accepting the unfettered discretion conferred by r 51.44, it is appropriate to take into account the factors underpinning the traditional reluctance to grant stays in proceedings involving judicial review of industrial awards. The three broad areas for consideration in this case are, first, whether the applicants have reasonable prospects of success on the review; secondly, the consequences of having to undo steps taken to enforce the judgment which may later be found to be invalid, and, thirdly, any potentially disentitling conduct of the applicants.

Application of principles

(a) prospects of success on review application

17 The arguments before the Full Bench of the Commission reflected different emphases placed by the contesting parties on the effect of the policy that public sector employees "may be awarded increases in remuneration or other conditions of employment that do not increase employee-related costs by more than 2.5% per annum". The Unions contended that the focus is on the increase "awarded" by variation of "remuneration or other conditions of employment". That is, one must look to the terms of the award to identify the effective increase in cost to the employer. The alternative approach, supported by the Secretary, was to focus on the effect of the increases in remuneration or other conditions of employment on the "employee-related costs": it is the latter which must not be increased by more than 2.5%. Thus, the Secretary contended, the Commission was required to look at the effect of the proposed increase resulting from external factors, such as an increased superannuation guarantee levy. In response, the Unions submitted that the levy resulted from the separate agreement of the State to make such payments as would be required under Commonwealth law, as part of the declared paramount policies, to which the restriction in cl 6 was subject. The Full Bench did not reach the argument based on the paramount policies.

18 It is not necessary to pursue the legal issues further in order to be satisfied that the Secretary's approach was clearly arguable and, in the common phrase, the applicants have reasonable prospects of success in their application for judicial review. (By use of the phrase "reasonable prospects of success", I do not intend to indicate that they are more likely to succeed than to fail.)

(b) potential consequences

19 The second question concerns the consequences for the parties (including the public sector employees for whom the respondents appear) of granting and not granting a stay. If a stay is not granted, approximately 190,000 public sector employees will be entitled to receive a benefit which, before tax, is likely to be of the order of $200.

20 The actual figure will depend upon the salary and allowances available to the particular employee; it will also depend upon the period for which the amount is payable which, in the present case is presently a little less than eight months. More precisely, the amount in issue for each person is 0.154% of their salary as at 30 June 2013. If the amount is to be treated as relatively small in the hands of an employee, so it is a relatively small proportion of the State's overall budget for wages and salaries.

21 Further, if the amount is to be paid, there is at least a possibility that within two months the State will be entitled to recover the payments. The proceedings in this Court have already been listed for hearing on 14 March 2014. Although it is likely that the Court will reserve its decision, it is also likely that a judgment will be delivered expeditiously, given the nature of the proceedings, in the ensuring weeks, rather than months. This is a significant consideration to be weighed in determining the outcome of the present proceedings, because it limits the prejudice involved in granting a stay.

22 The relatively small amount of the payments is significant in another respect, namely as a point of comparison for the likely cost of recovery, should that be necessary. In an affidavit filed in support of the stay by the solicitor acting for the Secretary, the following statement appeared:

"I am instructed by the applicants that, in the event that orders of Boland J are not stayed and the salary increases are paid, but that the applicants are in due course successful in their application for judicial review in this Court, then the result would entail an onerous, disproportionately expensive, and in some cases impossible administrative exercise in securing the recovery of the excess moneys paid."

23 The respondents objected to this passage on the basis that it failed to identify the source of the information, the order of the expenses involved and the steps likely to be required. As counsel for the Secretary accepted, the statement set out above took the matter little further than a statement of matters of which judicial notice could be taken.

24 The question of recovery also needs to take account of the fact that, by the time recovery is sought, some of the recipients may no longer be public sector employees. The affidavit referred to the "changing employee pool", but failed to identify even in the broadest terms the expected numbers of resignations and retirements on an annual or monthly basis. Thus, whilst it may be impracticable to recover small amounts from persons who are no longer employees, the actual numbers involved are unknown.

25 More troubling, however, is the question of recovery from continuing employees. The amounts involved probably render it impractical to contemplate legal proceedings for recovery. However, absent entitlement under an industrial instrument, it appears that the State may not be able to recover payments by way of deduction from future entitlements: Industrial Relations Act, s 118. Although neither party came to grips with this issue, either in evidence or in submissions, counsel for the applicants raised the problem potentially created by s 118, to which there was no proffered answer. In this somewhat unsatisfactory state of affairs, the Court may infer that recovery may be difficult and the administrative costs not insignificant.

26 Subject to the objections raised by the respondents as to the way in which the applicants have conducted the proceedings so far, the factors set out above would constitute sufficiently exceptional circumstances to warrant a stay for the following reasons:

(a) the amounts involved for each employee are relatively small;

(b) a stay would result in those amounts being withheld for a period which will probably not exceed six-eight weeks;

(c) there is no risk of the employers not making such payments in due course if the judicial review proceedings are unsuccessful;

(d) some proportion of the amounts, if paid, will almost certainly be unrecoverable, although the numbers cannot be estimated; and

(e) the costs and administrative burdens of recovering the bulk of the payments will be significant and disproportionately high, having regard to the limited benefits in making the payments at this stage.

(c) conduct of proceedings

27 The final issue to be considered is the conduct of the proceedings. The respondents placed some emphasis on the fact that the challenge was, in substance, to the ruling of the Full Bench delivered on 25 June 2013. They submitted that the applicants had every opportunity to challenge that ruling before a final award was delivered, thus avoiding the present impasse. Indeed, the respondents submitted that the application for judicial review should have been made within three months of the decision, that is by 25 September 2013: UCPR, r 59.10(1). Further, even if they were reluctant to take that step until the fate of the amended regulation was known, that regulation was disallowed in September 2013. Again, the applicants chose not to bring these proceedings, but allowed the hearing to proceed before Boland J, resulting in the award made on 20 December 2013. Even then, the respondents noted, the applicants had not immediately pursued a stay application in this Court, but had commenced proceedings before a Full Bench of the Commission, on the same grounds as the judicial review grounds and then sought a stay there.

28 The first response of the applicants was that, until the final determination by Boland J on 20 December 2013, there was nothing which they could seek to review. That submission cannot be accepted. In The Queen v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Company Pty Ltd [1953] HCA 22; 88 CLR 100 at 118 the joint reasons of Dixon CJ, Williams, Webb and Fullagar JJ stated:

"Now it might be said that until an order for cancellation or suspension of the registration of an employer has been actually made the Court ought not to consider whether the basis for making such an order is so wanting that the power has not arisen ... and that accordingly the Court should withhold the writ until the result of the inquiry is known. There are two observations to make upon such a view of the matter. The first is that it must be borne in mind that, subject to certain limitations not here material, while prohibition is not a writ of course, it is a writ which goes as of right when the prosecutor is directly affected by the course pursued by a tribunal to which the writ lies and the prosecutor shows satisfactorily that the tribunal is about to act to his detriment in excess of its authority."

29 The second response of the applicants was that they wished to take such other steps as were available to them, short of initiating proceedings in this Court. Had they not done so, relief might have been refused for discretionary reasons. Given that there was (and is) uncertainty as to the meaning of the statutory language, there was merit in the view that, if Parliament were prepared to resolve the uncertainty, that course might be preferable. However, once that step had proved unavailing, there was less to be said for proceeding before the Commission, although admittedly over two hearing dates only, and requiring the Commission to prepare a decision involving a significant volume of evidence, and resulting in a judgment of 96 pages.

30 That stage being reached, however, there may have been something to be said for the view that the applicants acted appropriately in appealing to the Full Bench. The effect of s 179 of the Industrial Relations Act is, in its terms, to prevent judicial review proceedings being brought except against a decision or purported decision of the Full Bench of the Commission in Court Session or in circumstances where the Full Bench refuses to give leave to appeal. (Whether the appeal was to the Commission in Court Session is not clear.) Whether the decision of the High Court in Kirk v Industrial Court of New South Wales [2010] HCA 1; 239 CLR 531 denies the State legislature the power to limit review from a decision at trial by requiring an appeal is arguably an open question.

31 Whatever criticisms may be levelled at the applicants for the course they took, it cannot be said that they sat on their hands after 25 June 2013. The best that the respondents can say is that there was an opportunity to resolve this jurisdictional issue expeditiously, before now. So much should be accepted; however, if review proceedings had been brought in the second half of 2013, and the respondents had been successful, it is likely that the merits of the application would have been delayed and it is unclear that a final outcome would have been achieved in a markedly shorter period than is now expected. Accordingly, it is not appropriate to decline an otherwise appropriate stay for these reasons.

Orders

32 The Court makes the following orders:

(1) The orders made by Boland J on 20 December 2013 in the Industrial Relations Commission in the matter of Re Crown Employees Wages Staff (Rates of Pay) Award 2011 (No 3) [2013] NSWIRComm 109 be stayed pending determination of the proceedings in this Court.

(2) The costs of the motion be the respondents' costs in the proceedings.

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Decision last updated: 11 February 2014