Dec 1014/98 M Print Q4738

AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Workplace Relations Act 1996

s.45 appeal against decision [Print P5280]

issued by Commissioner Holmes on 22 September 1997

Pacific Access Pty Limited

(C No. 36830 of 1997)

s.45 appeal against direction order [Print P7372]

issued by Commissioner Blair on 12 December 1997

Pacific Access Pty Limited

(C No. 38861 of 1997)

s.99 notification of industrial dispute

Community and Public Sector Union

and

Pacific Access Pty Ltd

(C No. 34024 of 1997)

Various employees

Telecommunications services

   

JUSTICE GIUDICE, PRESIDENT

  

SENIOR DEPUTY PRESIDENT MACBEAN

  

COMMISSIONER LEWIN

MELBOURNE, 11 AUGUST 1998

Disputing finding - union rules re eligibility - powers under s.111(1)(t)

DECISION

These are two appeals before the Commission. For convenience they were heard together. Before addressing the issues it is appropriate to summarise the circumstances which gave rise to the Commission proceedings.

Since 1991 Pacific Access Pty Ltd (Pacific Access) has produced the Yellow Pages directories under a contract with Telstra Corporation Limited (Telstra). On 19 June 1997 the Board of Telstra decided to contract out the production of its White Page directories to Pacific Access. This involved movement of some 650 staff employed in the National Directory Services Department of Telstra to Pacific Access. On 16 June 1997 CPSU, the Community and Public Sector Union (CPSU) served a letter of demand and log of claims on Telstra. When notified as an alleged industrial dispute this log became C No. 33870 of 1997. On 23 June the CPSU served a letter of demand and log of claims on Pacific Access. When notified as an industrial dispute this log became C No. 34024 of 1997. Of the 650 persons at that time employed by Telstra in National Directory Services, over 400 were CPSU members. At the time of these events, Pacific Access was in ongoing discussions with the Australian Municipal, Administrative, Clerical and Services Union (ASU) in relation to an award and/or agreement to apply to any Telstra employees who might become employees of Pacific Access as a result of that company taking over the production of the White Pages.

Both dispute notifications were dealt with in conciliation on a number of occasions by Commissioner Holmes without resolution being achieved. The CPSU then sought a finding of dispute against Pacific Access in C No. 34024 of 1997. Pacific Access, supported by the ASU, opposed a finding. In a decision of 22 September 1997 [Print P5280] Commissioner Holmes made a finding of dispute between the CPSU and Pacific Access. The finding was based not on the CPSU log of claims but on the Commissioner's assessment of the situation which had arisen between the parties with respect to the conditions of employment to be enjoyed by Pacific Access employees. Pacific Access appealed from that decision. That is the first appeal with which this decision is concerned.

The matter next came before the Commission on a formal basis on 10 December 1997 when the CPSU sought directions from the Commission to require Pacific Access to include the CPSU in negotiations for an agreement to cover the employees of Pacific Access engaged on the production of the White Pages. Most of those employees had been previously employed by Telstra. It was alleged by the CPSU that Pacific Access was refusing to negotiate with it, which was not denied, and negotiating with the ASU. Commissioner Blair made directions on 12 December 1997 [Print P7372]. The second appeal with which this decision deals is an appeal by Pacific Access against those directions.

THE APPEAL AGAINST THE DISPUTE FINDING

There were three principal grounds relied upon by Mr I E Douglas QC who appeared for Pacific Access, namely:

· the log of claims served on Pacific Access by the CPSU was not served in accordance with the rules of the organisation;

· the CPSU is not permitted by its rules to enrol persons employed by Pacific Access; and

· the terms of the finding were too wide.

We deal first with the issue of compliance with the CPSU's rules in the service of the log of claims. As we have noted above, Commissioner Holmes did not find a dispute based upon the log of claims. On the appeal Pacific Access submitted that the service of the log had not been properly authorised by the CPSU and that Commissioner Holmes had erred in holding to the contrary. To understand the argument advanced by Pacific Access it must be appreciated that the CPSU is an amalgamation of two organisations retaining some of their pre-amalgamation identity within the rules as the CPSU Group and the SPSF Group. The rules of the union as a whole are found in the General Rules (Chapter A), whilst the rules of the CPSU Group are found in the CPSU Group Rules (Chapter B). The rules provide for three organs of management:

· the National Officers Committee of the union as a whole;

· the National Management Committee of the CPSU Group; and

· the National Management Committee of the SPSF Group.

The nub of the argument was that pursuant to the relevant rules, because the log related to the whole of the CPSU and not just the CPSU Group, it could only be authorised by the National Officers Committee of the union as a whole pursuant to rule 6(b) of the General Rules. The log had in fact been authorised by the National Management Committee of the CPSU Group pursuant to rule 1.12 of the CPSU Group rules. The resolution, which was passed on 3 June 1997, is as follows [Appeal Book, Tab 19]:

It was argued that the log was authorised by the wrong organ of the union and was not effective. Mr Douglas submitted that the lack of authority was fatal to the dispute finding, even though the finding did not rely as such on the log of claims. (To avoid confusion we should point out that the Commissioner declined to make a finding based on the log of claims because of his inability to discern whether the log had been narrowed in its scope by later conduct of CPSU officers and not because of any lack of authority.)

In response Mr K Bell QC, who appeared for the CPSU, tendered the minutes of the National Officers Committee meeting of 1 July 1994 and drew our attention to the following items [Exhibit B5 at 8]:

The CPSU principally relied upon the powers of the National Secretary of the CPSU Group and the National Management Committee of the CPSU Group, found in the rules of the CPSU Group. More particularly rules 1.12(a) and (b) [Exhibit C3 before Commissioner Holmes]:

Mr Bell submitted that rule 1.12(a) empowers the Secretary of the CPSU Group to submit a dispute relating only to that Group to the Commission, and that rule 1.12(b) provides the basis for the National Management Committee of the Group to authorise the service of a log of claims, again, relating only to that Group.

Mr Bell submitted that no authority was required from the union as a whole because the matter affected the CPSU Group only and he relied on rule 15(_) of Chapter A of the General Rules in that regard. Rule 15(_) reads [Exhibit D1 at 98]:

It was submitted that it is a necessary implication of the terms of the rule that matters relating to disputes affecting members of the CPSU Group only do not require the consideration of the National Officers Committee of the union as a whole. He also submitted that the powers of the Federal Council of the CPSU Group to resolve industrial disputes, contained in rule 26(viii) of the CPSU Group rules, were exercisable by the Federal Executive of the Group between Council meetings: rule 31A of the CPSU Group rules.

Mr Bell submitted in the alternative that if the CPSU Group did not have the power to authorise service, the resolution of the National Officers Committee of the union as a whole, passed on 1 July 1994, was sufficient for the purpose.

We have concluded that the service of the log affected members of the CPSU Group only and was sufficiently authorised by the resolution of the National Management Committee of the CPSU Group on 3 June 1997. We agree with Mr Bell's contention that in matters affecting CPSU Group members only, the Federal Executive of the Group is able to authorise the service of logs of claims between Federal Council meetings. It was not disputed before us that the National Management Committee of the Group is the Federal Executive for the purposes of the relevant Group rules.

In light of our conclusion that the service of the log was validly authorised by the National Management Committee it is not necessary to deal with the CPSU's alternative contention concerning the National Officers Committee resolution of 1 July 1994.

The second matter principally relied upon by Pacific Access in the first appeal is the proposition that employees of Pacific Access are not eligible for membership of the CPSU. If that is correct then the CPSU is unable to be a party to a dispute with Pacific Access. The relevant parts of the CPSU industry rule are paragraphs (a) and (b) of sub-rule E of Part 1 of rule 3. They read [Exhibit D1 at 59]:

Both of the relevant paragraphs incorporate by reference the definition of telecommunications in s.5 of the Telecommunications Act 1991. That definition is:

The term "communication" is in turn defined as follows:

Commissioner Holmes decided this question in favour of the CPSU. He relied upon the decisions of Senior Deputy President Williams in which approval was given for the insertion of, inter alia, paragraphs (a) and (b) of sub-rule 3E. The decisions were given on 1 June 1993 [(1993) 6 CAR 5] and 24 June 1993 [(1993) 6 CAR 360]. In addition, Commissioner Holmes relied upon the fact that the production and publication of White Pages is mandatory under the Telecommunications Act 1991. This fact, he concluded, demonstrated that the White Pages directory was integral to the operation of the telecommunications system.

Mr Douglas criticised the Commissioner's conclusion, submitting that the dominant function of Pacific Access was the production of Yellow Pages. That activity, he submitted, was related to advertising rather than telecommunications. Under rule 2E(b) of the CPSU's eligibility rule, the function that is incidental, ancillary or complementary to the supply, etc. of telecommunications services must be the principal function of the relevant business. A number of the factual matters said to be relevant to the ascertainment of the principal function of Pacific Access are set out in an exhibit before us [Exhibit D2]. We do not understand the substance of the document to be in dispute. The more important matters drawn to our attention and relied upon by Mr Douglas are contained in the following paragraphs of the exhibit:

Mr Bell agreed with Mr Douglas that it was necessary to identify the principal function of Pacific Access in order to decide whether its employees are eligible for membership of the CPSU. He submitted that the employees were eligible for membership primarily under paragraph (b) of sub-rule 3E but also under paragraph (a), in particular the first part of that paragraph. We were taken in detail to the manner in which White Pages and Yellow Pages are produced and to some of the regulatory provisions including those requiring Telstra, as a condition of its telecommunications licence, to produce a White Pages directory annually.

We agree with Mr Bell that Pacific Access' main function or business is the production of directories. Of that business it is likely that the largest part involves the production of Yellow Pages, whether that part is measured by employee numbers, the size of the task or contribution to overall revenue. In light of those findings, we turn to the terms of paragraph (b) of sub-rule 3E. It is convenient to note that while sub-rule E describes in part the industry in connection with which the CPSU is registered, by paragraph A1(IV) of Part 1 of rule 2 all persons employed in the telecommunications industry as defined in sub-rule 3E are eligible for membership of the organisation.

It was not disputed that the provision of telephone services including equipment and line by Telstra or any other licensed carrier is the provision of a telecommunications service or services within the meaning of paragraph (b). Even if it were not conceded the matter appears to us to be beyond argument. The question then becomes, is Pacific Access' principal function "incidental, ancillary or complementary" to the supply and/or installation and/or maintenance of those services. We have concluded that Pacific Access' principal function is incidental to the supply of telecommunications services. This is so whether the principal function is described as the production of directories or the production of Yellow Pages. The nature of the directories produced, no less the Yellow Pages than the White Pages, is directly related to the telecommunications service. Indeed, although Yellow Pages is undoubtedly an advertising medium as well as a directory of telephone numbers, its existence and use is based upon the telephone system. It follows that employees of Pacific Access are eligible for membership pursuant to paragraph (b) of sub-rule 3E. We doubt whether they are also eligible for membership pursuant to paragraph (a) of the sub-rule, but it is not necessary that we decide that issue.

Although Commissioner Holmes decided that employees of Pacific Access were eligible for membership, we are not entirely sure which part of the rule he relied upon. In addition, we have some reservation about the relevance of the two decisions of Senior Deputy President Williams upon which the Commissioner may have relied. Statements of purpose and intention found in an application to alter conditions of eligibility for membership may not be a sure guide to the construction of the altered rule. Nor do we think it appropriate that anything said by Senior Deputy President Williams should be taken into account in construing the rule he approved, other than in the most general sense. This is because he was not called upon to deal with the issue of whether the altered rule would apply to employees of Pacific Access. For these reasons, we have expressed our own view on the issue.

It follows from our conclusion that we do not intend to disturb the Commissioner's finding that employees of Pacific Access are eligible for membership of the CPSU.

We now turn to the third issue, the nature of the Commissioner's finding.

In order to fully understand the nature of Pacific Access' challenge to the dispute finding it is necessary to set out the manner in which the Commissioner reached his decision. He found that the log of claims was served in accordance with the CPSU's rules and that Pacific Access' employees were eligible for membership. He declined to make a finding based on the rejection of the log, however, because of a statement made by the CPSU representative to the Commissioner during proceedings on 7 July 1997. The statement purported to narrow the scope of the CPSU's demand to former White Pages employees of Telstra. Notwithstanding a purported written withdrawal of the statement by the same representative some 7 days later, Commissioner Holmes decided not to make a finding based on the log. He concluded that on the evidence the CPSU's position as to the scope of the demand was unclear. He nevertheless found that the material before him as a whole constituted an industrial dispute between the CPSU and Pacific Access in relation to the terms and conditions to be afforded by Pacific Access to its employees who were eligible for membership of the CPSU.

Pacific Access submitted that any dispute finding should have been confined to the circumstances arising from the out-sourcing of White Pages. We were taken to parts of the submissions and evidence before the Commissioner, set out or referred to in his decision, tending to show that the log was served by the CPSU because of its desire to preserve the conditions of employment of its members engaged on the production of the White Pages who left Telstra's employ and joined Pacific Access. Reliance was also placed on a statutory declaration of Ms Bissett, the Secretary of the CPSU, PSU Group, Telecommunications Section, who authenticated minutes of the resolution of a CPSU, PSU Group National Management Committee Meeting on 3 June 1997 said to authorise the service of the log of claims. The relevant minutes are set out above.

It was also pointed out that the CPSU submitted to the Commissioner in support of a finding, that if no dispute had arisen from the service of the log, then a dispute had arisen from the circumstances of the transfer of the White Pages contract. The relevant paragraph from the CPSU's submission to Commissioner Holmes reads [Print P5280 at 29-30]:

In light of these matters, Mr Douglas submitted that the dispute must be limited to the area of interest which the CPSU had itself identified in the resolution passed by the Committee of Management of the CPSU Group on 3 June 1997, namely the conditions to be afforded to employees of Pacific Access formerly employed by Telstra on the production of the White Pages directory. It was submitted that the Commissioner was justified in making a finding based on the facts before him. Pacific Access' only criticism was that the finding itself was too broad because it was not confined to the conditions to be enjoyed by the employees affected by the transfer of the White Pages contract from Telstra to Pacific Access.

Whether a dispute exists is a question of fact to be decided on all of the evidence. Whilst the service and rejection of a log of claims is cogent evidence, it can be displaced by other evidence which tends to show that the demands contained in the log are not genuinely pursued or that they mistake the true scope of the real dispute. It was open to Commissioner Holmes to conclude as he did that in all of the circumstances the true scope of the CPSU's demands was in doubt and that he could not find that a dispute had arisen from the service and rejection of the log in relation to employees of Pacific Access engaged on White Pages directory production or any other employees. We see no basis for disturbing that conclusion.

Having reached that conclusion, however, it was incumbent on the Commissioner to weigh all of the relevant evidence (apart from the log itself) in order to see whether a dispute existed. Once the log was put to one side, all of the evidence pointed to a dispute which was limited to the area of the terms and conditions of employment to be afforded by Pacific Access to employees engaged on the production of the White Pages. At most that area extended to all employees engaged on White Pages production, including those who had formerly been employed by Telstra, although clearly that latter group was the focus of the most of the CPSU's energies.

The evidence supporting a finding in these limited terms includes:

· the fact that it was the letting of the White Pages contract to Pacific Access which gave rise to the dispute;

· the terms of the resolution of the CPSU Group National Management Committee meeting on 3 June 1997;

· paragraph 8 of the CPSU's written submissions to Commissioner Holmes, set out above; and

· the fact that Pacific Access' other employees had for some years been represented industrially by the ASU and covered by a certified agreement with that organisation.

In light of this evidence it was not reasonably open to the Commissioner to conclude that the dispute extended in scope to all employees of Pacific Access eligible for membership of the CPSU.

We grant leave to appeal and uphold the appeal in relation to the breadth of the dispute finding. The dispute finding will be varied so that it is limited to the employees of Pacific Access engaged on the production of the White Pages directory. The variation to the dispute finding is attached to this decision.

THE APPEAL AGAINST THE DIRECTIONS OF 12 DECEMBER 1997

Employees of Telstra engaged on the production of White Pages had traditionally been represented industrially by the CPSU. Employees of Pacific Access engaged on the production of Yellow Pages had for some years been represented industrially by the ASU and were covered by an agreement made with a pre-amalgamation constituent of the ASU, the Federated Clerks Union of Australia. Although we were not told precisely when, in about the middle of 1997 the majority of the White Pages employees left Telstra and took up employment with Pacific Access when the latter commenced production of White Pages under contract. The CPSU sought to continue its representational role in relation to the White Pages employees. There was some evidence before Commissioner Blair that the CPSU also sought to recruit other employees of Pacific Access.

Pacific Access took the position that it did not wish to deal with the CPSU, preferring to negotiate a new, comprehensive agreement with the ASU which would replace the existing (expired) agreement and extend its coverage to the White Pages employees. The substance of the CPSU's case before Commissioner Blair was that it had been unfairly excluded by Pacific Access from agreement negotiations, that the exclusion was contrary to the Workplace Relations Act 1996 (the Act) and that the Commission should direct Pacific Access to include the CPSU in any agreement negotiations with the ASU.

In the proceedings before Commissioner Blair the CPSU outlined the directions sought and told the Commissioner that it had 120 members employed by Pacific Access of whom 47 had authorised it to bargain on their behalf. It alleged that it had initiated a bargaining period with Pacific Access but that the company was refusing to meet or negotiate thereby depriving the CPSU members of the representation of their choice. (It was subsequently revealed that the CPSU bargaining notice had been served on 10 December 1997 and would have had effect on 17 December pursuant to s.170MK.)

Before the CPSU called any evidence, counsel for Pacific Access submitted that the Commissioner should dismiss the application for directions because there was no power under the Act to make directions during a bargaining period. Counsel relied in this regard on the decision of a Full Bench of the Commission in CSR Humes Pty Ltd v Construction, Forestry, Mining and Energy Union of Australia [(1971) 76 IR 121]. In that case the Full Bench was required to consider the validity of an order purporting to require an employer to meet and confer with a registered organisation in relation to an agreement under Division 2 of Part VIB of the Act and do other things [76 IR at 121]. The Commission quashed the order under appeal because in its view the power in s.111(1)(t) to issue directions is an arbitration power. The Full Bench concluded that because the Commissioner was not arbitrating when he made the relevant orders, s.111(1)(t) was not available to him [76 IR at 126].

The CPSU submitted to Commissioner Blair that this authority did not constitute an impediment to him issuing the directions it sought. Nevertheless the Commissioner seems to have accepted that the Full Bench decision dealt with the issue which he was required by Pacific Access' submission to decide. He said [Transcript at 28, lines 22-36 on 10 December 1997]:

It appears from this passage that the Commissioner accepted the submission made by counsel for Pacific Access that the effect of the Full Bench decision in CSR Humes v CFMEU was that the Commissioner had no power to grant the directions sought. The Commissioner decided not to follow the decision, to issue the directions sought by the CPSU, but to provide a prospective date of operation to enable Pacific Access to seek a stay of the directions should it wish to do so.

While it is possible that Commissioner Blair may have had other reasons for his decision, we think it would be wrong to speculate. We must accept the reasons which he has given as being his reasons [see Re Australian Insurance Employees Union; Ex parte Academy Insurance Pty Ltd (1988) 28 IR 214 at 215].

The CPSU sought to argue on appeal that the decision in CSR Humes v CFMEU was wrong and ought not be followed. Whilst elements of the arguments developed by counsel for the CPSU in this regard are not without cogency, we do not think that this is an appropriate case to re-examine that decision. The Commissioner decided not to follow a Full Bench authority which he regarded as binding. That was a fundamental error which deprived Pacific Access of the success which it was entitled to in accordance with binding authority. Whilst the Commissioner made it clear he thought the decision was wrong, he was nevertheless under a clear duty to follow it. His failure to follow an authoritative Full Bench decision was a serious error of principle which attracts the public interest. This alone is reason to grant leave to appeal and to quash the directions.

Because of the view we have reached on this issue, it is not necessary for us to pass judgment on a range of arguments advanced by Pacific Access, the Minister for Workplace Relations and Small Business, the Australian Council of Trade Unions and the CPSU as to the manner in which the discretion under s.111(1)(t) should be exercised. Whilst those arguments raise a number of questions which would be important if, contrary to the decision in CSR Humes v CFMEU, the power conferred by s.111(1)(t) was exercisable in conciliation, it is not appropriate that we consider them further in this case.

We grant leave to appeal and quash the directions made by Commissioner Blair.

BY THE COMMISSION:

SENIOR DEPUTY PRESIDENT MACBEAN

Appearances:

I E Douglas QC for Pacific Access Pty Ltd.

K Bell QC with S Ramsey and S Jones for the CPSU, the Community and Public Sector Union.

A Duffy with R Beales for the Australian Municipal, Administrarive, Clerical and Services Union.

T Pallas for the Australian Council of Trade Unions.

R Crow for the Minister for Workplace Relations and Small Business.

S Barklamb for the Australian Chamber of Commerce and Industry

Hearing details:

1998.

Melbourne:

January 19-21;

March 10.

Printed by authority of the Commonwealth Government Printer

<Price code F>

AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Workplace Relations Act 1996

s.99 notification of industrial dispute

CPSU, the Community and Public Sector Union

and

Pacific Access Pty Ltd

(C No. 34024 of 1997)

Various employees

Telecommunications services

   

JUSTICE GIUDICE, PRESIDENT

SENIOR DEPUTY PRESIDENT MACBEAN

SENIOR DEPUTY PRESIDENT POLITES

MELBOURNE, 11 AUGUST 1998

Wages and conditions - log of claims.

VARIATION TO DISPUTE FINDING

A. Further to the decision of the Commission [Print Q4738] dated 11 August 1998, the Commission, pursuant to s.101(1) of the Workplace Relations Act 1996, varies the dispute finding made by Commissioner Holmes on 22 September 1997 in Print P5280 at pages 33 and 34:

1. By deleting the first paragraph appearing under the heading "Finding" and inserting the following:

2. This variation shall take effect from 22 September 1997.

B. This formally records the variation to the dispute finding made on 11 August 1998 in Melbourne.

BY THE COMMISSION:

SENIOR DEPUTY PRESIDENT MACBEAN

Decision Summary

   

Industrial dispute - finding of dispute - authority to serve log - binding authority - appeal - full bench - since 1991 appellant has produced Yellow Pages for Telstra - in 1997 Telstra contracted out production of White Pages to appellant - 650 staff formerly employed by Telstra moved to employment with appellant - CPSU served log on Telstra and another on appellant - dispute found with appellant - finding based not on log but on Commissioner's assessment of situation between parties with respect to conditions of employment - matter next came before Commission when CPSU sought and was granted direction from Commission requiring appellant to include CPSU in negotiations in relation to an agreement - appellant claimed service of log not properly authorised - respondent contended that as log affected CPSU Group members only authorisation by National Management Committee of CPSU adequate and that under rules Federal Executive (National Management Committee) could exercise power of Federal Council between meetings of that body - Bench agreed with respondent's contentions and found log sufficiently authorised - second ground relied on by appellant was that its employees not eligible for membership of CPSU and therefore CPSU unable to create dispute - Bench concluded appellant's principal function is incidental to supply of telecommunication services - nature of directories produced directly related to telecommunications services - employees of appellant are eligible under rule which provides for eligibility of employees in any business whose principal function is incidental to telecommunication services - appellant's third ground claimed that Commissioner erred in making finding broader than that identified in resolution by CPSU itself - Bench considered Commission entitled to consider all evidence as to existence of dispute - not prepared to disturb finding as to existence of dispute but evidence supporting a finding in limited terms such that it was not open to Commissioner to conclude that dispute extended in scope to all employees of appellant eligible for membership of CPSU - leave to appeal granted and appeal upheld in relation to breadth of dispute finding - appeal against directions - CPSU claimed appellant unfairly excluded them from agreement negotiations - CPSU had members, and alleged it had initiated bargaining period - appellant referred Commissioner to CSR Hume Pty Limited v Construction Forestry Mining Energy Union of Australia and suggested that Commission had no power to grant direction sought - Bench found Commission did not follow binding authority - Commissioner decided not to follow a Full Bench authority which he regarded as binding - while Commissioner made it clear he thought decision was wrong nevertheless under a clear duty to follow it - failure to follow binding authority serious error of principle which attracts public interest - this alone enough to grant leave and quash decision - not deemed appropriate to review findings in CSR case in relation to exercise of power conferred by s111(1)(t) exercisable in conciliation - dispute finding varied - direction quashed.

Pacfic Access Pty Limited and CPSU, Community and Public Sector Union

C Nos 36830 and 38861 of 1997

Print Q4738

Giudice J

Macbean SDP

Lewin C

Melbourne

11 August 1998

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