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House: Senate

Portfolio: Industrial Relations

Commencement: Royal Assent

Purpose

To make provision for the appointment of a judge of a court created by the Parliament as President of the Australian Industrial Relations Commission on a fixed term basis.

Background

This Bill is the result of the decision to nominate Justice Deirdre O'Connor for appointment as President of the Australian Industrial Relations Commission (AIRC) for a five year term. (The President is appointed by the Governor- General.) The nomination for appointment was announced by the Minister on 28 February 1994. Justice O'Connor is currently a judge of the Federal Court and President of the Administrative Appeals Tribunal, and was the chair of the Australian Broadcasting Tribunal from 1986 to 1990.

The nomination for appointment of Justice O'Connor contained three departures from previous practice.

First, she will retain her position as a judge of the Federal Court while she is President of the IRC. Section 15 of the Industrial Relations Act 1988 (the Principal Act) provides that while a person may hold an appointment under the Principal Act and at the same time hold an office on a Federal Tribunal, they may not hold an appointment under the Principal Act and be a member of a court created by the Parliament, which includes the Federal Court.

Secondly, her appointment will be for a fixed period of five years. Currently, section 16 of the Principal Act provides that members of the AIRC hold office until they resign or reach the age of 65. Her appointment will be the first for a fixed term. In a Press Release dated 28 February 1994 the Minister stated `The five- year term will apply only to Justice O'Connor. The government's policy remains that members of the Commission should normally be appointed up to the statutory retirement age of 65 years, but we are prepared to make a one- off provision for Justice O'Connor in light of her outstanding qualities. Future Presidents will be appointed under the usual provisions.'

Justice O'Connor insisted on these two conditions for her to be nominated for appointment as President and will return to her duties in the Federal Court at the end of her appointment as President.

The third significant feature of her appointment is that she will be the first woman to head the AIRC.

The President of the AIRC is remunerated at the same level as the Chief Justice of the Industrial Relations Court (section 21 of the Principal Act), while the occupant of the latter position receives remuneration equal to that received by the Chief Justice of the Federal Court (section 365 of the Principal Act). The remuneration of members of the Federal Court is determined by the Remuneration Tribunal, which decided in its Determination No. 15 of 1993 that the salary of the Chief Justice of the Federal Court would be $164 769 per year and that for a Judge would be $150 955 per year. As Justice O'Connor will maintain her position as a Judge of the Federal Court and section 72 of the Constitution provides that the remuneration payable to a judge of a court created by the Parliament is not to be diminished during their continuance in office, she will continue to be eligible to receive her salary as a judge of the Federal Court. Consequently, the Bill contains provisions relating to her remuneration so that she does not receive remuneration as a judge of the Federal Court and as President of the IRC.

The Principal Act provides for co- operation between the AIRC and State industrial bodies and allows members of the AIRC to also be appointed to State industrial authority and for members of State industrial authorities to also be appointed to the AIRC. The AIRC is also given power to hear disputes that come under the jurisdiction of State authorities where a State law authorises this. The Principal Act also provides that the President is to invite the heads of State industrial authorities to regular meetings to encourage co- operation between the AIRC and State industrial authorities. The announcement of the appointment of Justice O'Connor was made without consultation with the States and it may be argued that if the aim is to encourage greater co- operation between Commonwealth and State industrial authorities the States should be consulted before an announcement of nomination for appointment as President of the AIRC is made.

The nomination of Justice O'Connor for appointment as President of the AIRC has been criticised by the Federal opposition, industry groups and some areas of the media. The first area of criticism has related to alleged connections between Justice O'Connor and the A.L.P., and particular with the Minister for Industrial Relations and the `right' faction in N.S.W. Such criticism has been made in the Parliament and a number of newspapers. 1

A further criticism of the appointment has concerned Justice O'Connor's experience in the field of industrial relations. Section 10 of the Principal Act provides that the Governor- General may only appoint a person to be President if they satisfy certain criteria, including that:

`in the opinion of the Governor- General, the person is, because of skills and experience in the field of industrial relations, a suitable person to be appointed as President.'

The Minister, in a Media Release dated 28 February 1994, cited Justice O'Connor's experience in worker's compensation when practicing as a barrister. The Minister continued `Her background, skills and experience will be invaluable in managing the re- organisation of the Commission and the implementation of our industrial reforms which come into force at the end of March.'(For further information on the changes referred to by the Minister, refer to the Digest for the Industrial Relations Reform Bill 1993.) The executive director of the Australian Chamber of Commerce and Industry, Mr Noakes, is reported as saying `I'm not saying that Justice O'Connor won't be able to do it [the job of President of the AIRC], nor (am I) making any criticism of her personally. But one would have thought that it would have been far better if the person appointed had the experience as required by the act.' 2 Mr Noakes has also criticised the lack of consultation with employers prior to the announcement. 3

Another issue created by the nomination for appointment of Justice O'Connor as President of the AIRC is the possibility of the arrangement being seen as a mixing of judicial and `quasi- legislative' powers. In the Boilermakers' case 4, the High Court ruled that it was unconstitutional for a body to exercise both powers and it may be argued that Justice O'Connor would be exercising both powers due to holding the positions of a judge and President of the AIRC. However, this argument may be countered by the fact that she will not be exercising both powers at the same time, as she will not be acting as a judge of the Federal Court during her appointment as President of the AIRC.

Main Provisions

Clause 3 will amend section 10 of the Principal Act to simplify the wording of the legal qualifications necessary to be appointed as President of the AIRC. The amendment does not change the nature of the qualifications needed.

A new section 15A will provide that the appointment of a judge of a court created by the Parliament will not affect the judge's tenure of office or their salary and privileges. It also provides that a judge's service as President is to be taken as service as a judge. The proposed section will ensure that Justice O'Connor's appointment as President will not effect her entitlements, including those based on length of service (clause 4).

Proposed sub- section 16(1A) deals with the appointment of Justice O'Connor on a fixed term basis. It provides that the first President of the AIRC appointed after the commencement of the proposed provision may be appointed on a fixed term basis and will remain in office until the end of the fixed term or until they die, resign or are removed from office (clause 5).

The remuneration of a person who is President and a judge is dealt with in clause 6 which will amend section 21 of the Principal Act. The amendment provides that if the salary payable to such a person as a judge is less than that payable to the President they are to be paid an allowance equal to the difference and no other remuneration is payable to the person due to their being President of the AIRC.

References

1. See, for example, House of Representatives Hansard, 28 February 1994, p. 1374; Sydney Morning Herald, News Review, 5 March 1994; The Age, 1, 4 and 5 March 1994.

2. The Age, 1 March 1994.

3. The Australian, 1 March 1994.

4. (1956) 94 C.L.R. 254.

Chris Field (06 2772439)

Bills Digest Service 15 March 1994

Parliamentary Research Service

This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Commonwealth of Australia 1994

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Published by the Department of the Parliamentary Library, 1994.