Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd; Gribbles Radiology Pty Ltd v Health Services Union of Australia

• Jurisdiction: Australia Federal only
• Judge: Gleeson CJ,Hayne,Callinan,Heydon JJ,Kirby J
• Judgment Date: 09 March 2005
• Neutral Citation: 2005-0309 HCA B,[2005] HCA 9
• Court: High Court
• Docket Number: M299/2003 and M302/2003 Matter No M302/2003
• Date: 09 March 2005

[2005] HCA 9

HIGH COURT OF AUSTRALIA

Gleeson CJ, Kirby, Hayne, Callinan and Heydon JJ

M299/2003 and M302/2003

Matter No M299/2003

Matter No M302/2003

Minister for Employment and Workplace Relations

Appellant

and

Gribbles Radiology Pty Ltd & Anor

Respondents

Gribbles Radiology Pty Ltd

Appellant

and

Health Services Union of Australia & Anor

Respondents

Representation:

R R S Tracey QC with M P McDonald for the Minister for Employment and Workplace Relations (instructed by Australian Government Solicitor)

J L Bourke for Gribbles Radiology Pty Ltd (instructed by Clayton Utz)

M Bromberg SC with D C Langmead for Health Services Union of Australia (instructed by Health Services Union of Australia)

Intervener:

K H Bell QC with R M Doyle intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor)

Workplace Relations Act 1996 (Cth), s 149(1)(d).

Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd

Gribbles Radiology Pty Ltd v Health Services Union of Australia

Industrial law (Cth) — Award — Transmission provisions — Binding to award new employer who is successor to or of the business or part of the business of employer party to dispute determined by the award — New employer granted a licence to run a radiology practice at a suburban clinic — New employer stopped providing radiographic services at the clinic and terminated the employment of the radiographers who worked there — Previous licensee of the radiology practice was an employer bound by an industrial award — Whether new employer was bound by the award — Whether new employer a successor to or of the business or part of the business of previous employer.

Constitutional law (Cth) — Powers of Commonwealth Parliament — Conciliation and arbitration — Whether s 51(xxxv) of the Constitution supports a law providing for the declaration of a common rule for an industry.

Words and phrases — ‘successor’, ‘business’.

Gleeson CJ, Hayne, Callinan and Heydon JJ.

The issue

1 The issue in these appeals is whether an employer (Gribbles Radiology Pty Ltd — ‘Gribbles’) was a ‘successor, assignee or transmittee (whether immediate or not) to or of the business or part of the business of an employer who was a party to the industrial dispute’ determined by the Health Services Union of Australia (Private Radiology — Victoria) Award 1993 (‘the Award’). If Gribbles met that description, s 149(1)(d) of the Workplace Relations Act 1996 (Cth) (‘the Act’) provided that, subject to any order of the Industrial Relations Commission, the Award bound Gribbles.

2 The determination of this issue turns on whether Gribbles was a ‘successor’ to or of the business, or part of the business, of Melbourne Diagnostic Imaging Group (‘MDIG’) which employed radiographers (sometimes called ‘medical imaging technologists’) to take medical images at the Moorabbin Heritage Clinic in suburban Melbourne. It was not contended that Gribbles was an assignee or transmittee of any part of MDIG's business.

3 Region Dell Pty Ltd (‘Region Dell’) conducted a number of medical clinics under the name ‘Heritage Clinic’. At several of those clinics (including the clinic at Moorabbin), Region Dell licensed the use of part of the clinic's premises by what was called a ‘radiology practice’. Region Dell supplied specified radiology equipment; the radiology practice supplied radiographers, consumables and spares. Most, but not all, of the patients who had X-rays taken at the premises were referred by doctors working in the Heritage Clinic.

4 Until 31 August 1997, Region Dell granted such a licence to Southern Radiology at the Moorabbin Heritage Clinic. Between 1 September 1997 and 31 August 1999 it licensed MDIG. From 1 September 1999 it licensed Gribbles.

5 In 2000, Gribbles stopped providing radiographic services at the Moorabbin Heritage Clinic. It terminated the employment of radiographers who had worked at Moorabbin.

6 Both Southern Radiology and MDIG were respondents to, and parties bound by, the Award. Presumably, each had been a party to the industrial dispute which the Award determined. Argument proceeded on that assumption. Gribbles was not a party to the Award.

7 If bound by the Award, Gribbles was bound to pay severance pay to the radiographers whose employment at Moorabbin it had terminated. That severance pay was to be calculated by reference to the length of continuous service of the radiographers with employers of which Gribbles was the ‘transmittee’. The Award definition of ‘transmittee’ did not follow the language of s 149(1)(d). Nothing in the courts below was seen as turning on those differences and they need not be noticed here. The issue argued in these appeals focused upon the construction of s 149(1)(d) and it is only the questions about the valid operation of that provision which must be decided.

8 The reasons that follow demonstrate that Gribbles was not a successor to or of any part of the business of MDIG and that Gribbles, therefore, was not bound by the Award. At no time did Gribbles enjoy any asset of MDIG, tangible or intangible, which MDIG had used in the pursuit of its business activities, whether at the Moorabbin Heritage Clinic or elsewhere.

The proceedings below and the appeals to this Court

9 The Health Services Union of Australia (‘the HSU’) brought proceedings in the Federal Court of Australia against Gribbles claiming the imposition (pursuant to s 178 of the Act) of penalties on Gribbles for breaches of the Award, the payment (pursuant to ss 178 and 179 of the Act) of sums which it alleged were owing to certain employees of Gribbles whose employment had been terminated when Gribbles stopped using Region Dell's premises at the Moorabbin Heritage Clinic, and orders (pursuant to s 356 of the Act) that the penalties be paid to the HSU. On 5 July 2002, Gray J ordered1 that Gribbles pay a penalty of $50 to the HSU for breach of the Award in failing to pay four named employees severance pay calculated in accordance with cl 37 of the Award. It was further ordered that Gribbles pay those employees amounts specified in the order together with interest.

10 Gribbles appealed to the Full Court of the Federal Court. That Court (Moore, Marshall and Merkel JJ) dismissed2 the appeal. By special leave, Gribbles, and the Minister for Employment and Workplace Relations (‘the Minister’) who had intervened in the proceedings below, each appeal to this Court.

11 Gribbles contended in this Court that the construction of s 149(1)(d) of the Act adopted by the Full Court ‘traverses beyond the permitted scope of the Commonwealth's constitutional powers relating to industrial relations’. Accordingly, Gribbles gave notice to the Attorneys-General of the Commonwealth, the States and the Territories, pursuant to s 78B of the Judiciary Act 1903 (Cth), that both Gribbles' appeal and the Minister's appeal involved a matter arising under the Constitution or involving its interpretation. The Attorney-General for Victoria intervened in the proceedings in support of the contention by the Minister that, properly construed, s 149(1)(d) of the Act is a valid law of the Commonwealth.

The Act

12 The outcome of these appeals depends upon the proper construction of s 149(1)(d) of the Act. That paragraph takes its place in a provision which identifies those persons who are bound by awards. Subject to any order of the Commission, an award determining an industrial dispute binds the parties to the industrial dispute who appeared or were represented before the Commission (s 149(1)(a)), those who were summoned or notified to appear as parties to the industrial dispute, whether or not they appeared (s 149(1)(b)), and those who, having been notified of the industrial dispute and of the fact that they were alleged to be parties to the industrial dispute, did not, within the time prescribed, satisfy the Commission that they were not parties to that dispute (s 149(1)(c)). In addition, an award determining an industrial dispute (subject to any order of the Commission) is binding on all organisations and persons on whom the award is binding as a common rule (s 149(1)(e)), and all members of organisations bound by the award (s 149(1)(f)).

13 The provisions of s 149(1)(d), dealing with successors, assignees and transmittees, derive from s 29(ba) of the Conciliation and Arbitration Act 1904 (Cth), a provision introduced into the 1904 Act by the Commonwealth Conciliation and Arbitration Act (No 2) 1914 (Cth). Although renumbered by a number of subsequent amendments to the 1904 Act, and amended in some respects, the provision remained in the legislation until the repeal of the 1904 Act in 1988 and the enactment of a similar provision by s 149(d) of the Industrial Relations Act 1988 (Cth), the immediate predecessor of the provision now under consideration.

14 The provision introduced in 1914, for awards to bind successors, assignees and transmittees of a business of a party bound by an award, was enacted against a background in which the Court's decisions in R v Commonwealth Court of Conciliation and Arbitration; Ex parte Whybrow & Co3 and Australian Boot Trade Employes' Federation v Whybrow & Co4 loomed very large. The Court decided in the first Whybrow case that the only arbitral power which could validly be conferred on the Commonwealth Court of Conciliation and Arbitration, by a law made under s 51(xxxv) of the Constitution, was a power of judicial determination between the parties to an industrial dispute, and that accordingly those provisions of the 1904 Act which dealt with the regulation of industries generally were invalid. In the second Whybrow case, the Court decided5 that a federal award could not validly prescribe a common rule in any particular industry. (The references now made in s 149(1)(e) of the Act to awards binding as a...