The New South Government has introduced and had quickly passed two Bills which are a further attempt to cocoon a sizeable part of the New South Wales workforce from the reach of the WorkChoices legislation passed by the Federal Government. That part of the workforce that would otherwise have been covered by the WorkChoices legislation relates to public sector employees engaged by various statutory corporations although not (yet) employees of State Owned Corporations. The WorkChoices legislation does not apply to the public servants of State Governments. The New South Wales Government’s counter is to transfer public sector workers to direct Government employment, thus ensuring the continued application of the State industrial relations system for such persons. The legislation was jointly put together in two Bills, being one an amendment to the Industrial Relations Act and the other entitled The Public Sector Employment Legislation Amendment Bill.

The first part of that legislation which relates to the amendment to the Industrial Relations Act proposes to provide a continued role for the New South Wales Industrial Relations Commission. It does this by permitting parties to conclude a “Common Law Deed of Arrangement” thereby agreeing to give the New South Wales Industrial Relations Commission a role in resolving disputes about the application of the Deed and Industrial Relations Commission will be empowered to assist.

It further goes to the point of making enterprise consent awards under the New South Wales system to cease to operate and be replaced to enterprise agreements in the same terms as the previous awards. This is in order to comply with aspects of the Federal legislation which would permit such agreements to be transferred to the Federal industrial relations system in a form that protects the agreed conditions to the maximum extent possible. The Industrial Relations Amendment Bill further proposes some minor administrative arrangements in relation to the composition of Full Benches and the power of the President to determine the way in which a matter, or class of matters, is listed before the Commission.

Whether or not all of these amendments to the industrial relations legislation and the public sector employees’ working arrangements are effective, will be determined when and if any employer or other party seeks to argue that the proposals are contrary to the WorkChoices legislation and, as a result of which because of the inconsistency with the Federal enactment, are null and void. However, the legislation is consistent with the State Government’s opposition to the WorkChoices legislation and is another weapon in its armoury of such opposition allied to its challenge in the High Court to the constitutionality of the Federal provisions.

The legislation is yet to be given an operative date. That should be soon keeping in mind the imminence of the WorkChoices regulations being handed down and its legislation becoming operative, as promised, by the Federal Minister for Workplace Relations, this month.

Since Michael Tooma and I co-authored, in 2003, Thomson’s publication Law of Unfair Contracts in NSW, the unfair contracts jurisdiction found within the New South Wales Industrial Relations Act has come under sustained and critical examination both within the Commission itself but, more importantly, within the Court of Appeal of New South Wales. At the time of the publication of the book, the Mitchforce decision had just been handed down by the Court of Appeal. Currently a number of cases have had decisions reserved by the High Court dealing with the scope of this jurisprudence. Of the three decisions outstanding in the High Court, the most important is the Court of Appeal’s decision in Solution 6 Holdings & Ors v Industrial Relations Commission & Ors [2004] NSWCA 200.

The Mitchforce and the Solution 6 cases held that any contract sought to be varied or avoided by use of section 106 must be a contract which directly, rather than incidentally, led to the performance of work. The Solution 6 case also went further to hold that any collateral arrangement, even though linked to a work contract, of itself must be an arrangement which directly led to the performance of work. Such arrangements which were ancillary or collateral to a work contract had previously been held to be within jurisdiction. Examples, of such arrangements were finance contracts which assisted an applicant to acquire the work contract, share sale agreements, or superannuation deeds. When looked at singly, such contracts or arrangements may not have directly led to work.

Another issue identified in these various cases before the Court of Appeal has been the privative clause found within section 179 of the Industrial Relations Act. That privative clause protected judgments of the Industrial Relations Commission and even purported judgments, even ones which were either wanting or in excess of jurisdiction. It had been described by Justice Handley as one of the widest privative clauses he had ever seen.

The New South Wales Parliament, however, in response to the critical analysis made of the unfair contracts jurisdiction, has responded by its 2005 amendment to the Act. Importantly, the amendment allows for appeals on questions of jurisdiction of the Industrial Relations Commission to go to the Court of Appeal, thus breaking down the current rigour of section 179. Further, it clarifies (and extends) the jurisdiction to avoid a contract that is a related condition or collateral arrangement to a work contract. So long as that contract is related or collateral to one whereby a person performs work in an industry and where the performance of work is a significant purpose of the contractual arrangements made by the person, it is amenable to section 106 orders.

There are some other consequential amendments such as the re-naming of the Industrial Relations Commission of New South Wales when it is sitting as the Commission in Court Session to once again be called the Industrial Court of New South Wales and also that the cut off point of 12 months from the bringing of an application for an unfair contract after its termination has now been softened so that during an additional three months after that time an Applicant may satisfy the Commission that there are exceptional circumstances justifying the making of a late application.

These amendments to the Act are, perhaps like an old Star Wars movie title, a case of “The Empire Strikes Back”. I say that on the basis that the Work Choices legislation passed by the Federal Government has attempted, with respect to employees, to negate the unfair contracts jurisdiction in New South Wales. These amendments will be of assistance to those applicants not excluded by the Work Choices legislation when it becomes operative some time early in 2006.

The amendments to the Industrial Relations Act in New South Wales were made operative on 9 December 2005.