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.