Industrial Disputes, the Employment Relationshipand the FIMEE Case

Esther Stern*

For most of this century Australian industrial relations have been domi­nated by statutory tribunals whose jurisdiction to make awards and certifyagreements has been circumscribed by the limitations inherent in the ex­pressions "industrial disputes" and "industrial matters". Foremost amongthese has been the federal industrial tribunal: the Australian IndustrialRelations Commission and its predecessors, the Commonwealth Courtof Conciliation and Arbitration (1904) and the Conciliation and Arbitra­tion Commission (1956).

Since its establishment in 1904 the jurisdiction of the federal indus­trial tribunal has been subject to the limitations arising from the term"industrial disputes" as it has appeared in s 51(xxxv) of the Constitutionand the Conciliation and Arbitration Act (1904) (including its successors,the Industrial Relations Act (1988) and the Workplace Relations Act (1996)).When the Industrial Relations Act replaced the Conciliation and ArbitrationAct in 1988, the definition of "industrial dispute" was significantly altered.Before 1988, that definition was defined as a dispute "as to industrialmatters" and "industrial matters" was further defined to mean "all mat­ters pertaining to the relations of employers and employees", with thelatter further defined to include a long list of enumerated items. In 1988the definition was significantly simplified by the removal of the words"industrial matters" together with the enumerated items. All thatremained of the definition of "industrial matters" was the expression"about matters pertaining to the relationship between employers andemployees". By the removal of the enumerated items, the legislature ineffect recognised what had been the High Court's practice since 1904:that the subject matter of"industrial dispute" is essentially about matters

• Lecturer in Legal Studies, Flinders University of South Australia.

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pertaining to the employment relationship. This point was made by aformer Deputy President of the Federal Tribunal, Isaacs, in a paper pre­sented at the International Conference on Industrial Democracy in thelate 1970s.1

: In considering the contribution of conciliation and arbitration toI· industrial democracy, Isaacs noted the constraints operating on the juris­

diction of the federal industrial tribunal, which he attributed to the HighCourt's approach to the interpretation of industrial disputes. He noted inthe first instance that the High Court's current interpretation of industrialdisputes, as summed up by the Chief Justice, Sir Garfield Barwick, in R vCommonwealth Conciliation and Arbitration Commission; Ex parte Melbourne& Metropolitan Tramways Board/ amounted to a tautology in that virtuallyany matter which is industrial is not managerial and vice versa.3 A furtherdifficulty arose from the court's conception of the employment relation­ship itself. Isaacs summed this up in the following passage:

"... A further important consideration is that in dealing with whether a matterpertains to the relations of employers and employees the character of thisrelationship appears to be relevant. This relationship can be viewed simply interms of that between the employer and the individual employee, or alterna­tively, and more broadly, between the employer and employees collectivelyas represented by their union. The former approach may be said to be inher­ent in the master and servant individual bargaining concept, whereas the lat­ter may be said to take a collective bargaining context as the proper basis fordetermining what is a proper subject matter pertaining to the 'relations ofemployers and employees'. The second approach would result in a much widerrange of subject matter being encompassed under 'privileges, rights and du­ties of employers and employees' of sec 4(1)(a) of the Act ..."4

I,I

Isaacs was further of the view that the restrictive approach under­pinned recent High Court cases, marking "... a significant shift in theapproach of earlier years ..:'.5 He compared the earlier cases, namely Aus­tralian Tramway Employees Association v Prahran and Malvern Tramway Trust

1 JE Isaacs "Industrial Democracy in the Context of Conciliation and Arbitration", in RDLandsbury (ed) Democracy in the Workplace, Longman and Cheshire, 1980.

2 (1966) 115 CLR 443.3 Above n 2, at 451.4 Above n 1, at 38. This view is based on DB Moore, Value Judgments and the High Court: A

Study of Judicial Attitudes Towards Management Prerogatives (Unpublished) LLB (Hons)Thesis, Monash University, 1975. See also E Stem, "Industrial Disputes and the Jurisdic­tion of the Federal Industrial Tribunal: An Analysis of Recent Developments", (1990) 3AJLL 130; RC McCallum and MJ Pittard, Australian Labour Law Cases and Materials, 3rded, Sydney: Butterworths, 1995 at 279-325; WB Creighton, W] Ford and RJ Mitchell, La­bour Law: Materials and Commentary, 2nd ed, Sydney: Law Book Co, 1993, Chapter 18; WBCreighton and AJ Stewart, Labour Law An Introduction, 2nd ed, Sydney: Federation Press,1994 at 66-71. Compare L Bennett, "Ideology in Australian Judicial Practice: A Non­Reductionist Account of a Jurisdictional Issue in Labour Law", (1989) 17 InternationalJournal of the Sociology ofLaw 207.

5 Above n 1, at 38.

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(Union Badge)6, Federated Clothing Trades of the Commonwealth v Archer(ArcherY and Metal Trades Employers Association v Amalgamated Engineer­ing Union (Metal Trades)8 with the outcome in recent cases. He argued theoutcome would have been different in these earlier cases had the HighCourt taken the narrow"master and servant" view in its interpretation ofthe kind of employment relationship with which the definition of"industrial dispute" was concerned. Notably, he contrasted Archer's caseof 1919 with its counterpart R v Commonwealth Industrial Court; Ex parteCocks (Ex parte Cocks? Both involved the question whether an award pro­vision requiring employers not to engage outworkers was concerned withan industrial matter construed as a matter arising out of an employer­employee relationship. In each case, however, the court arrived at a dif­ferent result, an outcome which Isaacs attributed to the court havingadopted competing models of the employment relationship.

In this paper it is argued that a parallel development can be discernedin the most recent High Court decision in Re Alcan Australia Ltd: Ex parteFederation ofIndustrial Manufacturing and Engineering EmployeeslO (FIMEE).Just as Isaacs discerned a more restrictive approach being adopted by theHigh Court in the late 1960s and 1970s, compared with the earlier period,so too it is argued that a more restrictive approach can be discerned inrecent years, by comparison with the broader approach that had beenhitherto taken since R v Coldham; Ex parte Social Welfare Union (Social Wel­fare Union)l1 was decided in 1983. The paper is divided into two substan­tive sections. Section one provides an historical overview of the HighCourt's approach to the definition of "industrial dispute". In this sectionit is argued that the High Court has employed two analytically distinctapproaches to the interpretation of that expression, based on two com­peting models of the employment relationship. Also included in thissection are the cases reviewed extensively by the High Court in FIMEE.Section two examines the more recent High Court decisions leading upto FIMEE. The purpose of this section is to identify recent developmentsin the High Court's interpretation of "industrial disputes" and the asso­ciated expression"all matters pertaining to the employment relationship".The paper concludes with a brief assessment of FIMEE in the context ofrecent federal industrial relations legislation.

6 (1913) 17 CLR 680.7 (1919) 27 CLR 207.8 (1935) 54 CLR 387.9 (1968) 121 CLR 313.10 (1994) 181 CLR 96.11 (1983) 153 CLR 297.

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Industrial Disputes: An Historical Perspective

In identifying the subject matter of "industrial disputes", the High Courthas consistently employed two competing approaches.12 In its mostrestrictive form the narrow approach has been associated with the HighCourt judge and founding President of the Commonwealth Court of Con­ciliation and Arbitration, O'Connor J, particularly with his formulationof what is commonly referred to as the"direct-indirect" test in Clancy vButchers Shop Employees Union (Clancy),13 In that case O'Connor J ruled,concurring with Griffith CJ and Barton J, that an agreement regulatingthe trading hours of butchers' shops was not concerned with "the relationsbetween employers and employees" within the meaning of "industrialmatters" (in the Industrial Arbitration Act 1901 (N5W» because of its indi­rect association with work in the industry.14 However, as O'Connor Jequated the notion of indirectness with management matters, therebytotally excluding such issues from the employment relationship, hisapproach is also referred to as the managerial prerogative theory.IS

A corollary of the "direct/indirect" test was a restrictive view of theemployment relationship, as arising between employer and individualemployee.16 0'Connor Jmade this clear in his capacity as President of theCommonwealth Court of Conciliation and ArbitrationP In AustralianWorkers Union v Pastoralists'Federal Council ofAustralia18 0'ConnorJappliedClancy to determine whether union officials could be given the right underthe award to enter shearers' huts for the purposes of recruiting membersand collecting union dues. At that time the term "industrial dispute" wasdefined in s4 of the Conciliation and Arbitration Act as including a disputein relation to "industrial matters" arising between an employer (or aregistered union of employers) and a registered union of employees. Itincluded an extensive list of items, amongst them:

" ... all matters relating to work, pay, wages, reward, hours, privileges, rights,or duties of employers or employees or the mode, terms, and conditions ofemployment or non-employment [and] ... all matters pertaining to the rela-tions of employers and employees "

Yet O'Connor Jconcluded that in the absence of a mutual agreementto insert a right of entry clause, the claim was not an "industrial matter"

12 Above n 1; DB Moore, above n 4; E Stern, above n 4.13 (1904) 1 CLR 18I.14 Above n 13, at 207.15 RC McCallum and MJ Pittard, above n 4, at 280.16 Above n 13, at 20I.17 See Clancy" ... [the words] privileges, rights or duties of employers or employees in any

industry ... [in the definition of industrial matters] ... refer to matters of mutual obliga­tion. They imply ex vi termini that there are two parties, one of whom owes a duty orpossesses a right as against the other ...", per CJ Griffith at 20I.

18 (1907) 1 CAR 62.

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as he understood the term. According to Clancy, the Act was to applyonly to such matters which affected the "mutual duties and obligations"of employers and employees; it did not, moreover, extend to compellingan employer to admit onto his premises:

"... some third person whose business has not necessarily any relation to thecarrying out of the contract between employer and employee ..."19

The broader approach has been closely associated with the collectivistconcept of the employment relationship. It is not without significancethat this approach emerged following a change in the composition on theHigh Court in the wake of O'Connor J's death in 1912. In Union BadgeIsaacs Jjoined with the new appointee, Rich J, to uphold the claim for aright to wear a union badge, relying, inter alia, on the view that the words"employer" and "employee" in the definition of industrial dispute wereused in the Act:

"... not with reference to any given contract between specific individuals, butas indicating two distinct classes of persons co-operating in industry ..."20

Following on from this in Archer's case the court upheld the claim thatgarments bear the name of the manufacturer (to distinguish them fromgarments made by a sub-contractor) and the claim that the use ofoutworkers be prohibited, with Isaacs and Rich JJ again delivering a jointjudgment in favour of both claims. In Burwood Cinema Ltd v AustralianTheatrical & Amusement Employees Association (Burwood Cinema)21 the courtdeclared that the union could create a dispute with an employer whoemployed none of its members because an industrial rather than a con­tractual relationship was a requirement of an industrial dispute within themeaning of the Act and the Constitution. In Metal Trades the court took thisargument one step further, declaring that an award could require anemployer to pay the same wages to non-union employees as to union mem­bers because, as Dixon Jsubsequently put it in R v Commonwealth Court ofConciliation and Arbitration; Ex parte Kirsch (Kirsch),22 the union had an inter­est in establishing and maintaining industrial conditions for its members.23

It is now acknowledged that the High Court reverted to the morerestrictive approach after World War II and the election of a conservativegovernment.24 In R v Kelly; Ex parte State of Victoria (Kelly),25 the court

19 Above n 18, at 95.20 Above n 6, at 693-4.21 (1925) 35 CLR 528.22 (1938) 60 CLR 507.23 Above n 22, at 537.24 LW Maher and MG Sexton, "The High Court and Industrial Relations", (1972) 46 Aus­

tralian Law Journal 109; WE Creighton, WJ Ford and RJ Mitchell, above n 4, at 504-18; RCMcCallum and MJ Pittard, above n 4, at 286-88; E Stem, above n 4.

25 (1950) 81 CLR 64.

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endorsed both the decision and the reasoning in Clancy to hold that adispute over trading hours was not an industrial matter because the issueof trading hours was only indirectly related to the relations of employersand employees. Among Kelly's descendants are R v Hamilton Knight; Exparte Commonwealth Steamship Owners' Association, 26 raising doubts aboutthe validity of a claim for superannuation benefits, Melbourne & Metro­politan Tramway Board where Barwick CJ made his memorable remarksupholding management prerogative, Ex parte Cocks and R v Portus; Exparte ANZ Banking Group Ltd (Portus).27 In the latter case the High Courtrelied on Ex parte Cocks for the view that a claim for the deduction ofunion dues from the salaries of employees did not pertain to the employ­ment relationship, but (as explained by WalshJ) "... is a matter pertainingto the relationship between the employees and their union ..." .28 MenziesJ, who delivered the leading judgment, commented that:

"... lilt is the principle in R v Kelly that must be applied here, not the moregeneral statements to be found in ... Union Badge ... and ... Archer ..."29

The 1980s was the decade which gave rise to speculation that the statu­tory term "industrial dispute" would be more liberally interpreted.3D Thatspeculation began in 1983, the year that federal Labor was re-elected,fuelled by the High Court's landmark decision in Social Welfare Union. Inthat case the court swept away more than half a century of precedent inholding that the words "industrial disputes" in the Constitution shouldbe given their popular meaning - what they convey to the "man in thestreet". This is essentially a question of fact. 31 The ensuing speculation,that the statutory concept of "industrial dispute" would be more liber­ally interpreted, was given credence in subsequent cases.

Federated Clerks Union of Australia v Victorian Employers Federation32 isthe decision where the court upheld, as an industrial matter within themeaning of the Victorian Relations Act 1979, the right of employees andtheir union to be consulted about the introduction of new technology.33The case is equally noteworthy for Mason 1's rejection of Barwick CJ'sformulation of "management prerogative", (in Melbourne & MetropolitanTramway Board), as a criterion of jurisdiction. Subsequently, in Re Cram &

26 (1952) 86 CLR 283.27 (1972) 127 CLR 353.28 Above n 27, at 364.29 Above n 27, at 360.30 See A Stewart, "The Federated Clerks Case: Managerial Prerogative in Retreat?", (1985)

59 Australian Law Journal 717; J T Ludeke, "Whatever Happened to the Prerogative ofManagement?", (1992) 66 Australian Law Journal 11; RC McCallum, "Jones and LaughlinSteel Downunder: New Directions in Australian Federal Labour Law", (1984) 6 Com­parative Labour Law 94.

31 Above n 11, at 312.32 (1984) 154 CLR 472.33 Above n 32, at 490-491.

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Ors; Ex parte NSW Colliery Proprietors Association Ltd & Ors34 the Full Courtof the High Court endorsed Mason J's comments, ruling that manningand mode of recruitment were matters directly pertaining to the employ­ment relationship within the meaning of the more restrictively wordeddefinition of "industrial matter" in the respective Commonwealth andNew South Wales Coal Industries Acts (1946) (comparable to the federalAct). In doing so, moreover, the court supported its finding by referenceto the passage in Isaacs and Rich JJ's judgment in Union Badge to the effectthat the words "employer" and "employee'" in the definition of "indus­trial dispute" denoted "... the general conception of relations betweenemployers and employees ...".35 The leading decision during this period,on the interpretation of an industrial matter in the federal Act is that ofthe Full Court in Re Manufacturing Grocers Employees Federation of Aus­tralia; Ex parte the Australian Chamber ofManufacturers (Manufacturing Gro­cers).36 In that case the court affirmed the requirement that the subjectmatter of an industrial matter must directly pertain to the relationshipbetween employer and employee, while at the same time removing anylingering doubt that a claim for superannuation benefits was not an in­dustrial matter.

This more liberal interpretation of the definition of "industrial dis­pute" survived its amendment in 1988. Indeed, the amendment to thatdefinition by the Industrial Relations Act 1988 was not even mentioned inRe Boyne Smelters Ltd; Ex parte Federation of Industrial Manufacturing andEngineering Employees ofAustralia.37 In that case the court upheld an awardrequiring the employer, Boynes Smelters, to reinstate employees maderedundant en masse following a dispute over productivity. The court reliedon its decision in Re Cram and Manufacturing Grocers (among others) inrejecting an argument of counsel for Boyne Smelters that the relevant dis­pute which was to provide the ambit for the award (providing for thereinstatement of the employees) did not pertain to the employment rela­tionship as required by the definition of "industrial dispute" in the Actbut to a past employment relationship. To quote Brennan, Deane, Tooheyand Gaudron JJ:

"... [i]t is clear that the relationship required by the definition of industrialdispute in s4(1) of the Act is not that of individual employer and individualemployee or former employee but a more general relationship inhering in thesubject-matter of the dispute such that it can be identified as involving thecollective relationship between employers and employees as such ..."38

34 (1987) 163 CLR 117.35 Above n 34, at 134. See also Slonim v Fellows (1984) 154 CLR 505; Re Ranger Uranium Pty

Ltd; Ex parte Federated Miscellaneous Workers Union ofAustralia (1987) 163 CLR 656.36 (1986) 160 CLR 341.37 (1993) 177 CLR 446 .38 Above n 37, at 454-5.

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However, in FIMEE, just 16 months after its decision in Boyne Smelters,the court declared that a claim which was clearly related to the collectiverelationship between employers and unions, namely for the deduction ofunion dues, was not a matter pertaining to the employment relationshipwithin the meaning of "industrial dispute" in the Industrial Relations Act.The Full Court of the High Court observed that to the extent that the newdefinition of "industrial dispute" still required the subject matter of adispute to pertain to the employment relationship, it was different fromthe previous definition " ... only in the manner ofits expression ...".39 Thisraises the not unreasonable question whether FIMEE signals a return tothe more restrictive approach.

Industrial Disputes: Recent Developments

A key question raised in this article is whether FIMEE signals a retreat bythe High Court to the more restrictive interpretation of the requirementthat the subject matter of an industrial dispute must pertain to the indi­vidual employment relationship. In examining this question, it is pro­posed to examine two High Court cases decided just prior to FIMEE, bothof which were concerned with the extent of the Commission's powers todeal with superannuation. The first, Re Amalgamated Metal Workers Union;Ex parte Shell Co of Australia Ltd (Shell),40 involved a dispute over whatshould be done with superannuation surpluses. The second of these, ReFinance Sector Union of Australia; ex parte Financial Clinic (Vic) Pty Ltd(Finance Sector Union),41 involved a dispute as to the choice of funds and,in particular, with respect to the claim by the union that superannuationcontributions be paid to a particular fund on behalf of all employees,whether members of the union or not. The purpose of this exercise is todetermine whether in hindsight the cases foreshadowed the more restric­tive approach in FIMEE. In answering this question it is helpful to beginby revisiting an earlier case on the question of superannuation -Manufac­turing Grocers.

Manufacturing Grocers

Among the achievements of the 1980s was the recognition by the HighCourt in Manufacturing Grocers that a claim for retirement benefits, in theform of employer contributions to a superannuation fund, could give rise

39 Above n 10, at 104-5.40 (1992) 174 CLR 345.41 (1993) 178 CLR 352.

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to a dispute about an industrial matter pertaining to the relationshipbetween employers and employees. 42 At a more general level this deci­sion is important because in affirming the jurisdiction of the federal tri­bunal to deal with a claim for superannuation benefits, the High Courtfacilitated the historic transition by the Commission away from the exist­ing practice of granting automatic wage increases towards productivitybargaining.43

This case involved an appeal against the decision of a Full Bench inthe 1986 National Wage case44 which held that it had jurisdiction to grantthat a wage increase be paid as a productivity component into a superan­nuation fund. The case involved two claims for variations of existingawards, one by the Manufacturing Grocers Employees Federation ofAustralia, the other by the Association of Professional Engineers, Aus­tralia. While the claim by the former was for a superannuation schemeconfined to its own members,45 the court made some general observa­tions, indicating that it would not have been opposed to a claim thatcontributions be made to a single superannuation fund on behalf of allemployees, regardless of their union status. Significantly, the court foundit:

"... convenient to treat both claims as containing a demand for payments byemployers to a superannuation fund for the benefit of their employees and todisregard the different way in which each claim is framed ..."46

42 Compare In re Club Managers and Secretaries(State)Conciliation Committee [1976] AR 196,where the New South Wales Industrial Commission applied the "direct/ indirect" testto determine whether the claim concemed an industrial matter, having regard to StephenJ in Portus that to constitute reward for work performed a matter must be "inherently"associated with the relationship of employer and employee and not with some othertype of relationship. In applying that test the Commission concluded that the claim forcontributions to a superannuation fund was not directly related to the employment rela­tionship, notably because of the perception that the purposes of the fund were unrelatedto the employment relationship. Just prior to Manufactures Grocers a similar claim wasrejected by the Commission in Federated Storemen and Packers Union ofAustralia v AlbanyWool Stores Pty Ltd (1985) 297 CAR 566. Compare In re Sydney County Council (SalariedDivision) Conciliation Committee (1977) lAS Current Review 455, where the New SouthWales Industrial Commission held that a claim for a lump-sum superannuation benefiton termination was as an industrial matter. The same view was taken a decade earlier bythe federal tribunal in Australian Federation ofAir Pilots v MacRobertson Miller Airlines Ltd(1968) 122 CAR 1033.

43 See G Warburton, "The Jurisdiction of the Australian Industrial Relations Commissionover Disputes Concerning Superannuation Surpluses: One Step Beyond the Manufactur­ing Grocer case", (1991) 4 AJLL 251.

44 (1986) 14 IR 187; 301 CAR 611.45 Above n 36, at 347. The claim sought by the ACTU also referred to employees in a ge­

neric sense, that the employer make contributions eqUivalent to a 3% wage increase: at347-8. The ACTU made submissions on behalf of the Manufacturing Grocers EmployeesFederation, while the Australian Council of Professional Engineers represented APEA.The federal Minister for Employment and Industrial Relations proposed that paymentsbe made by"... employers to an approved superannuation fund ... in respect of eachemployee of an amount equivalent to 3 per cent of an employee's ordinary time rate ofpay ...": at 352.

46 Above n 36, at 352.

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Elsewhere the court observed that superannuation benefits were nowregarded in the community as terms and conditions of employment, giventhe frequency with which they were offered as part of the remunerationpackage and the proportion of workforce that were entitled to them.47

Where the court canvassed the jurisdictional merits of the claims was inregard to the possibility that the Commission may become involved inthe administration of a superannuation scheme. The court was reassuredthat the claim went no further than a payment (in lieu of wages) by em­ployers of contributions to a superannuationfund:

"... The way in which the claims are put does not reveal that the Commissionis to have any direct function in the supervision or control of the superannua­tion schemes to which contributions are to be made'.48 This interpretation ofManufacturing Grocers is supported by subsequent federal tribunal decisions

"

The issue left unresolved in Manufacturing Grocers was whether ademand that contributions should be made to a specified superannua­tion scheme relates to a matter pertaining to the relationship betweenemployers and employees. In Re Child Care Industry (ACT) Award 1985(Child Care Industry)49 the Full Bench (Boulton J, MacBean DP and BairdC) examined this question in the course of giving effect to the March 1987National Wage case decision,50 which provided for the Commission toarbitrate on superannuation claims where the parties failed to reach agree­ment.51 The case involved an appeal against the order made by Turbet Cgranting the claim by the Federated Miscellaneous Workers Union(FMWU) that superannuation contributions be paid to HESTA, a nationalsuperannuation scheme for the health care industry, and that the contri­butions be paid on behalf of fl ••• all employees [covered by the Child CareIndustry (ACT) Award 1985] including casual employees ...fI. 52 The FullBench concluded that:

fl ••• differences regarding the choice of funds are 'matters pertaining to therelationship between employers and employees' and as such fall within themeaning of industrial dispute in the Act..."53

In reaching this conclusion it took into account a number of matters.In the first instance, the Full Bench had regard to Social Welfare Union thata dispute as to the choice of funds could lead to industrial disruption inthe supply of goods and service to the community. Secondly, it had regard

47 Above n 36, at, 352, 355.48 Above n 36, at 354.49 (1989) 31 IR 17.50 (1987) 17 IR 65, 87; 304 CAR 378.51 Above n 49, at 20.52 Above n 49, at 28.53 Above n 49, at 23.

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to remarks made by the High Court in Manufacturing Grocers that theright to participate in a superannuation fund, along with the means bywhich the scheme is funded, are matters pertaining to "the relations ofemployers and employees". Thirdly, the Full Bench did not consider thatthe claims, if granted, would result in the Commission having "... anydirect function in the supervision or control of the superannuation schemesto which the contributions are to be made ..." as referred to by the HighCourt in Manufacturing Grocers.54 The Full Bench's conclusion was fur­thermore reinforced by recent decisions of State industrial tribunals,55 thatif payments to a superannuation fund in a non-specific sense can form anincident of the employment relationship then so too maya directive topay such contributions to a specified fund.56

While employers in the Child Care Industry challenged (on merits) theinclusion of casual employees they did not object to the inclusion of non­union employees. Such an objection to an award on jurisdictional groundswas, however, raised in Ashman Insurance and Investment Pty Ltd v Aus­tralian Insurance Employees' Union (Ashman).57 In that case, the Full Benchheard an appeal by the Confederation of ACT Industry against an awardvariation by Nolan C in November 1990, imposing on employers theobligation to make superannuation contributions into the InsuranceIndustry Superannuation Fund in respect of all employees who wereeligible to be members of the Australian Insurance Employees Union(AIEU). The basis of the federation's argument was that the variation wascontrary to existing authority. Counsel argued that, according to BurwoodCinema and Metal Trades, the Commission had no jurisdiction to make anorder compelling non-unionist employees to participate in a superannua­tion fund against their will, and that this view "was not inconsistent"with Manufacturing Grocers.

In rejecting this argument, the Full Bench (Riordan Dp, Peterson JandSmith C) made it clear that jurisdiction to make an award compelling anemployer to contribute to a nominated fund extended to all employeescovered by the relevant award, regardless of whether or not they belonged

54 Above n 49, at 23.55 See Application for orders exempting various retailers from the effect ofa decision of the Com­

mission, DecisionD 89/0195, the Victorian Industrial Relations Commission in full session,15 May 1989; 1989 AlLR 219 and Shop Assistants (Country) Award and Shop Concilia­tion Committee Award (Referral of Question of Law) (1989) 56 SAIR 197.

56 Compare Robe River Iron Associates v Amalgamated Metal Workers and Shipwrights Union ofWestern Australia (1989) 69 WAIG 2629, 2641-2 (Superannuation case). In that case, theFull Bench of the Western Australian Industrial Commission held it had jurisdiction togive effect to State wage fixing principles requiring Robe River Iron Associates to in­crease its superannuation contributions to 3 per cent by ordering it to execute docu­ments amending, varying or changing the terms of the trust deed and the rules of theRobe River Provident Fund. See also Confederation of Western Australian Industry (Inc)Westfarmers Ltd v Shop Distributive and Allied Employee's Association ofAustralia (1990) 70WAlG 3544, 3548 where the Full Bench held, endorsing the Superannuation case, that anaward specifying the fund to which superannuation is payable was directly related tothe employer / employee relationship.

57 (1991) 39 lR 155.

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to the claimant union. In reaching this conclusion, the Full Bench consid­ered that its decision was "not inconsistent" with what was decided inManufacturing Grocers. In support of this view the Full Bench quoted heav­ily from certain passages in Manufacturers Grocers to the effect that whatwas demanded went no further than the payment in lieu of wages andthat the award did not require the Commission to become directlyinvolved in supervising or controlling any superannuation schemes.58

Employers challenged the validity of the 1990 variation in the HighCourt. In Finance Sector Union the High Court ruled, contrary to the FullBench of the Commission in Ashman, that the 1990 variation was defec­tive in requiring employers to make contribution to a superannuation onbehalf of non~unionemployees. Before examining this case in greater detailit is proposed to examine Shell. It is against the background of Manufac­turing Grocers, and subsequent federal tribunal decisions, that a compari­son between Shell and Finance Sector Union will bring out in stark reliefthe position of the majority of the High Court on the eve of FIMEE's case.For if one were to hazard a prediction and ask how the High Court inManufacturing Grocers would have ruled on the question of the jurisdic­tion of the Commission to deal with the dispute in Shell and Finance Sec­tor Union, it is arguable that the minority view in each case should haveprevailed.59

Shell

In this case the High Court considered, for the first time, the scope of theexpression "all matters pertaining to the relationship of employers andemployees" as it appeared in the amended definition of "industrial dis­pute" under the Industrial Relations Act. The case involved an appealagainst the decision of the Full Bench of the Commission60 which ruledthat a dispute over superannuation surpluses came within that definition.The dispute was precipitated by the removal by the Shell Companies ofsurpluses from a defunct superannuation fund following the transfer ofits members to another fund. The claims served by the union on the ShellCompanies were directed at returning the surpluses to its members. Therewere three claims, each framed in the alternative. The first provided thatactuaries should be appointed by the union and the companies to ascertainwhat surplus (if any) existed. The substance of the second claim was thatthe Companies must return and account for any surplus funds. The thirdclaim was that the Companies should exercise their "best endeavours" to

58 Above n 57, at 160.59 For a comprehensive comparison of the two cases see KJ Wood and R McCallum, "Craft­

ing the Law: The High Court and Superannuation as an Industrial Matter", (1995) 8AJLL 12l.

60 Amalgamated Metal Workers Union v Shell Australia Ltd (1991) 4 CAR 6.

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ensure that no further transfers of assets occurred and that no amend­ment to the old trust deed occurred except with members' permission.

The Full Bench held by a majority decision (Ludeke and Peterson H,Johnson C dissenting) that all three claims were valid inasmuch as theintervention sought from the Commission was limited to the issue of pro­tecting the surplus and did not direct it to administer the fund in anygeneral sense. The majority conceded that their decision went beyondthat of the High Court in Manufacturing Grocers and left open the ques­tion of whether its jurisdiction could extend to controlling, directly, themanagement and operation of a fund, if only in a specific sense.61

An appeal to the High Court was dismissed by a four to three major­ity. In a joint judgment Mason CJ, Toohey, Gaudron and Deane H ruledthat the "... general question of superannuation entitlements is a matterwhich may form the subject of an industrial dispute ...".62 In particular,the majority held that the Commission had power to entertain the firstclaim and parts of the third claim. This view was based on what the ma­jority perceived to be a broader concept of the employment relationshipfound in the post 1988 definition of "industrial dispute". To the extentthat the definition of "industrial dispute" now provided for disputes"about matters pertaining to the relationship between employers andemployees" as distinct from "as to industrial matters" (which appearedin the previous definition of "industrial dispute" in the Conciliation andArbitration Act 1904) the majority considered that it could be significantlywider.63

Against this there is the view of the minority. None of the threedissenting justices was able to draw any meaningful distinction betweena dispute "about matters" as distinct from "as to industrial matters". Inparticular, Dawson J observed that while the previous definition of anindustrial dispute referred to "as to industrial matters", the latter expres­sion was itself very widely defined as meaning 1/all matters pertaining tothe relations of employer"'.64 Thus, if a valid comparison was to be drawnbetween the two Acts, the true counterpart of the expression"about mat­ters pertaining to the relationship between employers and employees" inthe 1988 Act were the opening words of the definition of industrial mat­ters "all matters pertaining to the relations of employers and employees"in the 1904 Act. Which then is wider?

Putting this issue to one side, the decision is in fact an authority forthe proposition that a dispute as to superannuation entitlements thatextends to the administration of a superannuation fund can give rise toan industrial dispute about matters pertaining to the employment rela­tionship. As explained by Dawson J, Manufacturing Grocers required that

61 Above n 60, at 14.62 Above n 40, at 346.63 Above n 40, at 357.64 Above n 40, at 369; see also at 373, per McHugh J.

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I

"

a clear distinction be maintained between the right of employees to haveemployers make contributions and the right of employees to receive ben­efits.65 Notably, his Honour contended that jurisdiction could not extendto providing for the administration, by the Commission, of a fund for thepurpose of securing tangible benefits for employees.66 However, it wasthe majority decision that prevailed and as a consequence the power ofthe Commission to administer a superannuation fund was affirmed.

Less than a year later in Finance Sector Union the same four judgesformed the majority but this time to deny the Commission jurisdictionover a superannuation claim which sought to cover all employees whethermembers of the union or not. And the same three judges were in theminority, upholding the particular claim for superannuation benefits.67

Finance Sector Union

In Finance Sector Union the High Court considered, separately, twoobjections raised by employers concerning a variation to the IndustrySuperannuation (Third) Award (1988) which provided for a single industrysuperannuation fund, jointly controlled by the union and employers, andinto which participating employers were required to make contributionsin respect of their employees whether members of the union or not.Employers objected to the variation on two grounds. First, they contendedthat to specify a particular superannuation scheme into which employersmust contribute was not a matter pertaining to a relationship betweenemployers and employees as required by the definition of "industrialdispute" in the Act. Second, counsel objected to the requirement that pay­ments be made on behalf of employees who did not belong to the claim­ant union.

The Court unanimously dismissed the first objection, in respect of thejurisdiction of the Commission to deal with a claim that specified thefund into which superannuation contributions should be made. In a jointjudgment Mason CJ, Deane, Toohey and Gaudron JJ held that there maybe an "industrial dispute" concerning " ...the identity of a particularsuperannuation scheme to which employers should contribute on behalfof their employees ...".68 In a separate joint judgment Brennan, Dawsonand McHugh JJ added that a claim which identified the recipient of thedemand as a particular trustee to which the employer was to make pay­ments was simply a more elaborate version of the claim upheld by theHigh Court in Manufacturing Grocers. 69 Nor did they find merit in the

65 Above n 40, at 363.66 Above n 40, at 370.67 KJ Wood and R McCallum, above n 59.68 Above n 41, at 359.69 Above n 41, at 373.

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argument that Manufacturing Grocers should be confined to instancesinvolving a general demand for payment by an employer to a superan­nuation fund as distinct from a dispute about the identity of the fund towhich payments are to be made.70

The court upheld the second objection by a four to three majority.Mason CJ, Deane, Toohey and Gaudron H, being the same judges whoformed the majority in Shell, disallowed that part of the award whichrequired employers to make payments to a superannuation fund on be­half of all employees whether or not they were members of the claimantunion. In doing so, the majority accepted the union's submission that MetalTrades was the leading authority on this issue, and further referred to DixonJ in Kirsch as having spelt out the principle on which Metal Trades rests?!

The majority acknowledged that the subject matter of an industrialdispute had tended in recent times to take on a "broader aspect" (asreflected in Manufacturing Grocers and Shell). At the same, it rejected thenotion that the Metal Trades principle would automatically extend " ...beyond wages and conditions as they affect individual employees ...". 72

In the case where the claim did so extend " ... different considerationsarise ..." and it was necessary to inquire whether the claim pertained tothe relationship between employers and employees as required by thestatutory concept of industrial dispute in s4 of the Act.

The critical consideration for the majority, in the first instance, waswhether the claim that contributions be made in respect of non-unionmembers pertained to the employment relationship within the meaningof the statutory concept of industrial dispute ?3 Mason CJ, Deane, Tooheyand Gaudron H referred to the remarks of Latham CJ in Metal Trades asmaking it clear that the dispute must relate to the employment relationshipeven though it might also relate to some other relationship. Their Honoursconsidered that much the same principle was identified in ManufacturingGrocers. Indeed, their Honours considered that the two principles,combined, would reveal the true nature of the claims:

"... The necessity for the subject matter of an industrial dispute to pertain tothe employer-employee relationship of the employers and employees whoare parties to the dispute or, in the case of a dispute involving a trade union oran organization of employers, of the employers and employees who are treatedas parties to the dispute, when taken in conjunction with the statement ofprinciple that underlies the Metal Trades case, reveals the nature of those claimsby a trade union with respect to non-members that give rise to an industrialdispute ..."74

70 Above n 41, at 374-5.71 Above n 41, at 360.72 Above n 41, at 361.73 Above n 41, at 363.74 Above n 41, at 363.

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The majority went on to assert that it followed from the requirementthat a matter pertain to the employment relationship that a trade unioncould not make a claim on behalfofnon-members but may only claim inrespect of them: " ... more precisely it may only claim in respect of theiremployment or non-employment ...".75 The majority further asserted thatMetal Trades also made it clear that such claims "are not completely atlarge". If a union wanted to claim in respect of the employment of non­members, it could only do so "... with respect to their position as employ­ees relative to the position of those employees who are members of theunion ...".76 For example, a trade union would have an industrial interestin securing for non-members (as well as for members) the same level ofsuperannuation benefits or the establishment or maintenance of a super­annuation fund. However, the majority took the view that, despite thefact that the legitimate interests of a trade union in regard to superannua­tion were "wide- ranging", these did not:

"... extend to specifying the identity of the fund to which superannuationcontributions are to be made on behalf of employees who are not and neverbecome its members ..."77

The desire on the part of a union for a single industry superannuationscheme would not suffice. Rather it had to be shown that the matter hada bearing on the employment of non-members " ... relative to that of unionmembers ...".78 Underpinning the reasoning of the majority is the imageof employees as principals in their own right, able to negotiate on equalterms with their employers:

"... [s]pecial circumstances aside where an employer and non-member areagreed upon the identity of the superannuation fund to which the superan­nuation contributions in respect of non-members should be paid, a trade un­ion will have no relevant industrial interest in preventing effect being givento their agreement ..." 79

This somewhat restrictive interpretation of Metal Trades, construed inthe context of the requirement that a matter pertain to the employer­employee relationship as stated in the Manufacturing Grocers, stands insharp contrast to the more traditional reasoning evident in the minorityjudgment. For Brennan, Dawson and McHugh H, the issue of whether aparticular claim applied to non-union members was to be determined inaccordance with the Metal Trades principle, that is, whether the absence ofstandard terms and conditions may prejudice union members. There wasonly one possible answer to that question. They reasoned that the union

75 Above n 41, at 363 (emphasis mine).76 Above n 41, at 364.77 Above n 41, at 364.78 Above n 41, at 364.79 Above n 41, at 365.

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- ._------------ - -

(1999)

had a legitimate interest in the establishment of a superannuation fundthat extended to non-unionists, as long as there was a risk that unionmembers could be prejudiced in the absence of such a prescription. Forexample, an employer may have a commercial or some other incentive tohave contributions paid into a particular fund. They viewed the exist­ence of such an incentive as bringing with it the possibility of prejudice tounion members which would be obviated as a source of discriminationwere all employees required to belong to a single fund. 8o

It is submitted that in Shell, as in Finance Sector Union, the reasoning ofthe minority (Brennan, Dawson and McHugh JJ) rather than that of themajority, (Mason CJ, Deane, Toohey and Gaudron JJ) was more consist­ent with existing authority. Whereas in Shell the majority took a broaderapproach to the interpretation of an industrial dispute than was consist­ent with existing authority, in Finance Sector Union the court took anarrower approach than was consistent with existing authority, notablyMetal Trades. 81 In effect, the majority departed from existing principles inits interpretation of the term "industrial dispute" and this raises the fur­ther question: did the decision in Finance Sector Union signal a more am­bivalent approach towards unions in the context of a changing industrialrelations climate?

That Finance Sector Union did not signal an "across the board" returnto a more restrictive approach is supported by the High Court's decisionin Re Media Entertainment and Arts Alliance; Ex parte the Hoyts Corporation(HoytS).82 Handed down a month after Finance Sector Union, this case wasconcerned with the validity of an interim award that prohibited Hoytsfrom altering the conditions of employment of its employees or transfer­ring them to any of its subsidiaries without leave of the Commission.This was a temporary measure designed to pre-empt Hoyt's strategy ofaward evasion. The High Court upheld the award by a six to one major­ity (Mason CJ, Brennan, Dawson, Toohey, Gaudron and McHugh JJ; DeaneJdissenting). The court held that a dispute about a matter pertaining tothe employment relationship did not cease to be so just because (as in thiscase) there was a subsidiary claim, of concern to the powers of the Com­mission, which was not about a matter pertaining to the employmentrelationship. More importantly, the majority reaffirmed the principle inRe Cram, maintaining that:

" ... it is now established that a matter may pertain to the relationship betweenemployers and employees notwithstanding that it involves some curtailmentof what is known by the somewhat dated expression as 'managerial preroga­tive' ..."83

80 Above n 41, 376.81 Compare KJ Wood and R McCallum, above n 59.82 Above n 41, at 379.83 Above n 41, at 391.

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On the other hand there is the later decision in FIMEE that appears toconfirm the view that the court had adopted a more restrictive interpre­tation of industrial dispute in respect of union issues.

FIMEE

Almost two years elapsed between the decision of the Full Bench of theCommission (November 1992) and the High Court decision (August 1994)in FIMEE. In the interim, the Labor government was re-elected and theIndustrial Relations Act was amended by the Industrial Relations ReformAct (1993), the amendments becoming operational on March 301994. TheReform Act introduced for the first time a "non-union" (enterprise flex­ibility) agreement, raising serious questions concerning the role of unionsunder the new enterprise bargaining regime. It is against this backgroundof a rapidly changing industrial relations climate that FIMEE ought to bereviewed.

In FIMEE, the Full Bench of the Commission84 applied the High Court'sdecision in Portus to hold that a claim for union dues deductions was notconcerned with a matter pertaining to the employment relationship asrequired by the definition of industrial dispute. It proceeded on the basisthat there was no appreciable difference between the definition of indus­trial dispute under the previous Conciliation and Arbitration Act and thecurrent Industrial Relations Act. In doing so the Full Bench rejected FIMEE'sargument that the 1988 amendment to the definition of "industrial dis­pute", as interpreted in Shell, had made sufficient difference to justify theruling that the Commission now had power to deal with a claim for thededuction of union dues.8s

The Full Bench acknowledged that the definition of an "industrialdispute" had expanded considerably since Social Welfare Union was de­cided, bearing in mind the 1988 amendment (which according to Shellnow allows for a less direct relationship between the subject matter of thedispute and the relationship of employer and employee than was the casewhen Portus was decided). However, it took the view that the definitionstill required a connection between the two, according to the principlelaid down in Manufacturing Grocers and Portus. The Full Bench had regardto Menzies Jin Portus that there was no connection whatsoever betweenthe deduction of union dues and the employment relationship and con­cluded that "... in the absence of further clarification by the High Court..." it had no option but to follow the High Court's decision in Portus.86

All that notwithstandin& it is worth noting that in Australian Education

84 Federation ofIndustrial, Manufacturing and Engineering Employees v Alcan Australia Ltd (1993)46IR37.

85 Above n 84, at 42-44.86 Above n 84, at 44.

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Union v Minister for Education ofVictoria,87 a few months prior to the HighCourt decision in FIMEE, Riordan DP expressed the view that a demandfor the deduction of union dues should be regarded within the scope ofthe new definition of industrial dispute in view of what was said in Shell,and in the light of the growing emphasis on workplace negotiation. Per­haps what he did not recognise is that, while there may be a growingemphasis on workplace negotiation, this need not translate into negotia­tions between unions and employers as traditionally understood underarbitration. This may explain, to some extent, the High Court's decisioninFIMEE.

On August 25 1994 the Full Court of the High Court (Mason CJ,Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ) handed downits decision in FIMEE, dismissing the appeal from the decision of the FullBench.88 The court held that the Commission did not have the power todeal with a claim for the deduction of union dues. In doing so, it appliedPortus after a detailed examination of the judgment together with theauthorities discussed in that case. It is important to note initially that thecourt accepted that Menzies J (who delivered the leading judgment)proceeded on the basis that the effect of Kelly was to require somethingmore than what was stated by Isaacs and Rich JJ in Union Badge (that an"industrial dispute" arises whenever employers and employees disputeover something that is within the power of employers to concede). Con­versely, the court rejected the submission put to it by counsel for FIMEEthat Portus should not be followed or alternatively, that it should bereconsidered, in the light of the new definition of "industrial dispute"and of the broader approach to the constitutional term "industrial dis­putes" adopted by it in Social Welfare Union. Finally, the court appears tohave rejected the further submission of counsel for FIMEE that it shoulddecide the issue by reference to Union Badge and Archer, rather than themore restrictive approach inherent in Kelly and Portus. In other words, thecourt was specifically invited to choose between two opposing interpreta­tive approaches to the definition of "industrial dispute". Arguably it decidedin favour of Portus and hence rejected the Union Badge approach, to the extentthat the latter stood for the proposition that a claim gave rise to an industrialdispute whenever it was in the interests of the union and its members.

In reviewing Union Badge and Archer, the court did not think eithersupported the proposition that:

N ••• a claim directed to strengthening the position of a union or union mem­bers is, without more a matter pertaining to the employment relationship in­volving employers as such with employees as such ..."89

87 IRe Decision No.31325 of 1993, Print L3875, 17 June 1994, Senior Deputy PresidentRiordan.

88 For a review of FIMEE see K Wood, "Federal Jurisdiction over Industrial Disputes: R vPortus; Ex parte NZ Banking Group Revisited" (1995) 8 AJLL 71.

89 Above n 10, at 106.

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However, the court held that the claim was within s51(xxxv), basingits decision on the role of unions in furthering the interests of theirmembers, representing them in negotiations with employers and inproceedings before tribunals:

"... [i]n an industrial relations system involving the active participation of tradeunions as the recognised representatives of their members, a claim thatemployers should deduct union dues, is in our view, inherently industrial incharacter ..."90

What is less clear is why that was not good enough to give rise to anindustrial dispute under the Act. In this regard it is worth noting the court'ssuggestion that according to the popular meaning of industrial disputesthe claim would probably not be within s 51 (xxxv) unless authorised byemployees:

"... lilt is arguable however that the popular meaning of industrial disputesdoes not extend to a claim for the deduction of union dues unless the deduc­tions are in some way authorized by employees. That is because, prima facie,a union is acting in its own interest, not that of its members as employees,when it pursues a claim for the deduction of dues and it may well be, thateven in popular understanding, it is necessary for the employees' interests tobe seen as coinciding with the union's if the matter is to be regarded as indus­trial ..."91

In introducing this qualification, the court appears to be turning theclock back, for, according to Social Welfare Union, the popular meaning ofthe expression industrial disputes was to be determined by reference tothe meaning assigned to it by the "man in the street". Would the "man inthe street", upon being asked whether a dispute over union dues deduc­tions gave rise to an industrial dispute, reply: but is it authorised? It ishardly arguable that a union would need to demonstrate that its mem­bers sought the deduction of union dues in order to demonstrate that theclaim had an industrial flavour within s 51(xxxv). Rather, the answerwould depend on whether such an issue would lead to industrial dispu­tation.

The argument that a claim for union dues deduction must be author­ised is reminiscent of the approach of the High Court prior to itsdecisionin Burwood Cinema.92 Prior to that case the High Court treated unions astheir members' agents rather than as principals in their own right. Thiswas based on the conception of an "industrial dispute", as arising out ofan individual contract of employment rather than an industrial relation­ship between unions and employers. Colliery Employees Federation of the

90 Above n 10, at 104.91 Above n 10, 104.92 Above n 21.

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Northern District, New South Wales (Industrial Union ofEmployees) v Brown93

illustrates the extent to which the contractual requirement diminished atribunal's capacity to deal realistically with industrial disputation. Thecase involved an appeal to the High Court against a ruling of the NewSouth Wales Supreme Court94 that the New South Wales Court of Arbi­tration had no jurisdiction to entertain a dispute between mine-ownersand their striking workers because the action of striking brought the con­tract of employment to an end.95 The appeal was dismissed. Griffith CJ(with whom Barton and O'Connor JJ concurred) explained why in thefollowing terms:

"... Industrial matters are matters relating to the terms and conditions ofemployment between employer and employee in an industry. So that, untilemployer and employees differ as to the terms and conditions of employ­ment, there is no industrial dispute. Otherwise there is nothing to settle ..."96

R v Commonwealth Court of Conciliation and Arbitration and MerchantService Guild of A/asia; Ex parte William Holyman & Sons Ltd (Holyman)97was a decision on the federal Act, in which the High Court prohibited themaking of an award binding on employers whose employees has signeda statement to the effect that they had no dispute with their employerand were satisfied with their conditions of employment. In Burwood Cinemathe High Court rejected that line of reasoning. Starke Jdeclared that"...an industrial relationship, and not a contractual relationship is all that isnecessary to constitute an 'industrial dispute' ..." .98 He referred to Holyman'scase, among others, as based on "... doctrine of agency and not the princi­ple of representation ...99 His honour regarded Holyman's case, in particu­lar, as having been wrongly decided on the ground that"... an organisa­tion registered under the Arbitration Act is not a mere agent of its mem­bers ..." .100

Can it be argued that this restrictive interpretation of an industrialdispute also underpins the court's declaration that the claim is outsidethe statutory definition of an industrial dispute? In FIMEE the courtconcluded its judgment by providing three reasons why Portus shouldnot be reconsidered. First the court said"... there was no reason to thinkthat the case was affected by error ..." because the general principle inKelly had not been brought into question in subsequent cases - that for amatter to pertain to the employment relationship it must affect employers

93 (1905) 3 CLR 255.94 Ex parte Brown [1905] AR 294.95 Above n 94, at 298.96 Above n 93, at 267.97 (1914) 18 CLR 273.98 Above n 21, at 549.99 Above n 21, at 550.100 Above n 21, at 551.

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and employees in their respective capacities.101 The second reason the courtgave was that parliament had no intention of overturning Portus becauseit had " ... re-enacted in s 4(1) words which are almost identical with thoseconsidered in Portus .. ,". Presumably what the court regarded as "almostidentical" was the retention of the requirement that a matter pertain tothe employment relationship - thereby indicating that it viewed theremoval of the bulk of the old definition of "industrial matters" in 1988 asof little consequence. The third reason the court gave for not reconsider­ing Portus is perhaps the most puzzling of the three. The court stated that"... academic criticism notwithstanding, there is no reason to think that it[Portus] is in any way affected by error ..".1°2 In explaining why this wasso the court made the cryptic comment that the conclusion that the claimwas within s51(xxxv) (if the check-off was authorised by union mem­bers) tended to lead to the opposing conclusion, that the claim did notpertain to the relationship of employers and employees in their respec­tive capacities. The court did not elaborate as to the nature of these con­siderations beyond making the following comment:

"... These considerations, which depend on the nature and role of trade unionsin Australia, show that although the subject matter pertains to the relation­ship between employers and employees, it is a relationship involvingemployees as union members and not at all as employees. That appears evenmore clearly if, as earlier suggested, the industrial character of the claim forthe purposes of s51(xxxv) comes about only in the case of a claim for em­ployee-authorised deductions ..."103

In short, the court is saying that Portus should continue to stand as anauthority for the interpretation of the statutory (if not the constitutional)concept of an "industrial dispute". While its reasons for doing so seemperfectly plausible, flowing as they do directly from the court's accept­ance of its authority, the reasoning is not entirely satisfactory in dispos­ing of the fact that High Court had been in the habit, since Social WelfareUnion, of taking a collective bargaining context as the basis for determin­ing what is a subject matter pertaining to the employment relationship.Rather, it appears from the above comment that an important considera­tion in the court's decision to rule against the claim for union duesdeductions related to the changing role of unions in Australia. In puttingthat explanation forward as a plausible reason why the claim was out­side the definition of industrial dispute, it is suggested that the court pro­posed a somewhat novel distinction between a claim pertaining to theemployment relationship involving employees as union members and aclaim pertaining to the employment relationship involving employees as

101 Above n 10, at 106.102 Above n 10, at 107.103 Above n 10, at 107.

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employees. In effect, the court envisages two sorts of employment rela­tionships, one centred on unions and another centred on employees, withonly the latter being regarded within the statutory concept of industrialdispute. This may explain the "double standard" proposed by the courtthat a claim for union dues deductions may be within the Constitutionalterm "industrial disputes" because of its industrial character, namely theactive involvement of unions as the recognised representatives ofemployees, but by the same token not qualify as within the statutory con­cept of" industrial dispute" .104

It is interesting to note that a recent decision of the federal tribunalraised this very issue. In Special Broadcasting Service Corporation v Commu­nity Public Sector Union105 the Full Bench considered whether a claim byan individual worker against Special Broadcasting Service Corporation(SBS) for back pay was a matter pertaining to the relations of employersand employees capable of being the subject of an industrial dispute. Inreaching its decision the Full Bench noted:

"... The High Court has consistently policed the statutory dividing line betweenindustrial issues capable of arbitration and issues about collective or indi­vidual rights that are considered to fall outside the scope of the statutory defi­nition of industrial disputes. The crucial test for being on the jurisdictionalside of that dividing line is that the subject matter in dispute, or the issue to bearbitrated on, pertains to the relationship between employers and employees

"106

The Full Bench referred to a number of cases, including FIMEE, whichrevolved around the theme as to the degree of connection between thesubject matter of an "industrial dispute" and the industrial relationshipbetween employer and employee. In focussing on this discussion the FullBench drew upon what is regarded were the two leading decisions,namely, Manufacturing Grocers and Finance Sector Union. These predisposedthe Full Bench to think that the expression "industrial disputes":

" ... allowed an individual employment relationship to be taken into accountas part of the concept of the collective employment relationship of employersand employees ..."107

The Full Bench accepted the argument advanced by SBS that thedispute over back pay was concerned with the:

"... rights of an individual under an award of the Commission, and was not amatter pertaining to the relations of employers and employees ..."108

104 Above n 10, at 104.105 (1997) 77 IR 191.106 Above n 105, at 199.107 Above n 105, at 201.108 Above n 105, at 192-3.

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Conclusion

Industrial Disputes

The decision in FIMEE, that a claim for union dues deduction (whereauthorised by employees) is within the Constitution but not the (former)

~ Industrial Relations Act, makes no sense except in the context of recentamendments to that Act. The most important of these for present purposesrelate to the introduction of non-union agreements by the Industrial Rela­tions Reform Act 1993 (a development that has since been consolidated bythe Workplace Relations Act 1996). These developments raise the spectrethat trade unions are less essential to the industrial relations system as ithas evolved in recent years. This may be a major overstatement of thecourt's position, based as it is on what may be described as an overlyimaginative reading of certain passages in the High Court's judgment.But the proposition that a claim pertaining to the employment relation­ship involving employees as union members is not within the statutoryconcept of "industrial dispute" only makes sense in an industrial rela­tions system where the emphasis is, increasingly, on bargaining betweenemployers and employees as individuals. Conversely legislation w4ichplaces employees as individuals at the centre of the industrial relationssystem fits in with the court's view that a claim pertaining to the employ­ment relationship involving employees as employees is within the statu­tory concept of industrial dispute.

In this regard FIMEE appears to be consistent with Finance Sector Union,which, in hindsight, may be seen as the thin edge of the wedge, signal­ling a more restrictive approach to claims which seek to consolidate therole of unions under the new bargaining regime. Again, that may be anoverstatement that must await confirmation by the High Court. If true,however, this development would not necessarily mean a correspondingrevival to the doctrine of management prerogatives of earlier times. TheHigh Court decision in Hoyt's case rules this possibility out. What cannotbe ruled out is that the more restrictive approach may dominate the HighCourt's interpretation of the expression "all matters pertaining to therelationship of employers and employees" as long as that expression con­tinues to be a requirement of industrial relations legislation.

Leaving to one side State industrial relations legislation, which continueto incorporate the expression "industrial dispute"', "industrial matters"and the associated expression"all matters pertaining to the employmentrelationship" (or words of similar import), this is still an important ques­tion even under the radically amended federal legislation which hasintroduced the most draconian restrictions on the commission's awardmaking power since 1904. The Workplace Relations Act, with its emphasison 20 "allowable matters"109as the basis of the Commission's arbitrationjurisdiction, makes much of this discussion irrelevant. However there are

109 Workplace Relations Act, ss89A and 120A.

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a number of exceptions where the requirement of an industrial disputecontinues to apply. To name just a few: the Commission's powers are notlimited to an "allowable matter" if the issue is regarded as "incidental toan allowable matter",n° an "exceptional matter"lll or following the termi­nation of a bargaining period in given circumstances (eg damage to theeconomy etc).112 A Division 3 agreement is entered into between partiesto an "industrial dispute".113 Finally, the ubiquitous expression, the coreof the definition of "industrial dispute" - all matters pertaining to therelations between employers and employees (or words of similar import)- which has been the High Court's interpretative focus since Clancy in1904, has resurfaced as a requirement of Division 2 agreements and Aus­tralian Workplace Agreements.114 Again, it is too soon to say what theHigh Court will make of this requirement, inserted as it is in agreementsbased on the corporations power. It suffices to note that the Commissionitself has not hesitated in applying the same principles to its predecessor,the enterprise flexibility agreement, which was also based on thecorporations power.llS

110 Above n 109, s89A(6).111 Above n 109, s89A(7).112 Above n 109, ss170MY and 170MW(3).113 Above n 109, s170LO.114 Above n 109, ss170LI and 170VF.115 See Comalco Aluminium (Bell Bay) Ltd Enterprise Flexibility Agreement, IRC Decision No

32110 of 1995, Print M3302, 4 July 1995. There the ACIU objected, unsuccessfully, to anEFA arguing that the requirement that employees on staff contracts join Comalco's Em­ployees' Benefits Organisation and that payments be deducted from their salaries wasnot a matter pertaining to the employment relationship. In Allvend Wholesalers Pty LtdEnterprise Flexibility Agreement, IRC Decision No 31305 of 1994, Print L4727, 12 August1994, Vice President Ross, the AFMEU (as "eligible union" under s170LB) argued, un­successfully that casual and part-time employment was not a matter pertaining to theemployment relationship. Compare ACT Basketball Enterprise Flexibility Agreement, IRCDecision No 90023 of 1995, Print M1148, 28 April 1995 where the Commission (WhelanC) refused to approve an agreement because it induded matters relating to paid volun­teers

90