Despite changes of name during the twentieth century the principal industrial tribunal in New South Wales (NSW) is the oldest continuing standing industrial tribunal in the world. Since its creation the parliament has sought to protect its decisions from interference by civil courts by inserting a ‘privative’ or ouster clause in the NSW industrial statute. The current legislation still contains such a clause. However, there is still an ongoing debate about the merits of such clauses.¹ The privative clause in the Industrial Relations Act 1996 was justified on the basis that ‘The Government is of the view that where a specialist court or tribunal is established to deal with a particular area of the law, then that is the forum where the particular body of law ordinarily should be determined’.² But on the other hand privative clauses are questioned because the lack of ‘appellate review’ can result in ‘fundamentally different approaches to the construction of statutes or industrial determinations’. Nevertheless, the NSW industrial tribunal (the ‘Industrial Commission’) has a history of limiting appellate review of decisions of the Commission. In 1959, for example, legislative amendments made the decisions of a single judge final, and appeals to a ‘full bench’ of the Commission could only relate to issues of jurisdiction.⁴ The effect of privative clauses is an ongoing conflict between the Supreme Court of NSW and NSW industrial tribunals.⁵

The issue of the status of the decisions of NSW industrial tribunals was a key feature of the industrial arbitration in the retail industry during the mid-1980s. This paper examines the events surrounding the introduction of extended retail trading between 1983 and 1988. Despite opposition form employers and unions, the government was able to reach an agreement with the parties over the employment conditions for retail workers that permitted Saturday afternoon trading to proceed. However, a dispute arose over the appropriate penalty rate applicable for staff. Notwithstanding the establishment of a specialist tribunal to deal with industrial relations in the retail industry the dispute continued for over two years. The analysis of these events suggests the reason for the continuation of the dispute was due to the conduct of the retail employers, particularly their propensity to engage in ‘forum shopping’ in order to find a tribunal decision which matched their specific commercial and industrial interests. Forum shopping between the NSW and federal arbitration systems in order for a party to achieve a more favourable result has been a common feature of the Australian industrial relations system.⁶ In this case, the forum shopping was concerned with efforts by employers to sidestep the specialist tribunal and seek a remedy from either the Commission or the Supreme Court. In response, the government made repeated efforts to curtail the forum shopping by the employers with direct statutory intervention. Background information was obtained from interviews with key personnel associated with the principal union in industry, the principal employer association, and the NSW industrial arbitration system. A condition attached to these interviews was that the views expressed would not be attributed to their original source. In this way the interview participants were more forthcoming with their reflections and perceptions then would have been the case if their comments were subject to attribution and identification. The interview data is supplemented by contemporaneous remarks and assessments found in newspaper reports, tribunal decisions and court judgments, and parliamentary debates. Primary documents are also used.

According to Marshall retail trading hours is a contentious issue as it entails ‘irresolvable conflicting interests – between big retail chains, small retailers, unions representing shop workers, consumers and so on – always mak[ing] this a difficult issue for governments to resolve’.⁷ For instance, Saturday afternoon trading was introduced in Tasmania largely due to lobbying from the large retailers.⁸ Baker argues that extended retail trading hours favours large retail chains, shopping centre operators and consumers with high disposable incomes, and disadvantages small retailers, low income consumers, and women employed in the industry.⁹ The issue of extended retail shop trading hours has attracted opposition from trade unions and the small business sector because it is often seen as ‘a threat to their continued viability’.¹⁰ While the gender composition of the retail workforce is a convenient explanation for the relative weakness of retail staff trade unions, Roberts suggests that an equally compelling explanation is the very nature of the retail industry.¹¹ Despite the industry’s high concentration of female and part-time employment,¹² Earle contends that retail employers are some of the least ‘friendly’ to their workforce in Australia.¹³ In this context, trading hours and conditions of employment are interrelated.¹⁴ For example, during an attempt by the South Australian government in 1990s to introduce extended trading by a scheme of ministerial exemptions from the legislative limitations, the High Court of Australia noted in a judgment ‘…any alteration in those hours necessarily affects the terms and conditions of [retail workers’] employment. Legislation regulating shop trading hours in South Australia arose from the need to protect employees from being required to work for
excessively long periods’.15

Retail trading in NSW

Justice Street’s royal commission recommendations of 1909 were that Saturday and evening retail trading should be retained for ‘the public’s convenience and comfort’. However, the NSW government amended the Early Closing Act to provide a ‘half-holiday’ for staff by introducing a compulsory closing time of 1.00pm for stores on Saturday in Sydney.16 Stores were required to close at 12.30pm on Saturday due to a further legislative amendment in 1956.¹⁷ However, a distinction was made between ‘general’ and ‘small’ shops, with the latter been able to be exempt from the trading hours restrictions.¹⁸ In the early 1970s general shops were allowed to trade till 9.00pm one night a week, and retail employees were awarded a 40 hour week. Importantly, the peak employer association – the Retail Traders’ Association (RTA) – and the major industry trade union – the Shop, Distributive and Allied Employees’Association (SDA) – agreed that the penalty rate payable to staff working evenings and Saturday’s hours should be time-and-a-quarter.

In December 1982 Justice Macken of the NSW Industrial Commission commenced an inquiry, pursuant to section 35 (1) (o) of the Industrial Arbitration Act 1940, on the desirability of extending retail trading hours. The NSW government was under considerable public and industry pressure to relax the trading hours regulations as some ‘large’ retailers were seeking to circumvent the regulations by claiming to be a conglomeration of ‘small’ shops.¹⁹ The terms of reference of the inquiry paid considerable attention to conditions of employment in the industry, and any adverse impact extended trading would have on staff and small shop operators. Most employer submissions to the inquiry argued for no change to the trading hours regime, and the RTA argued against Sunday trading and ‘De-regulation’. Some employers argued extended trading was only viable if staff penalty rates were abolished. The only submissions to fully embrace extended trading came from the major grocery supermarket chains. Unions, predominately the SDA, submitted that extended trading would result in more casual staff and a decline in full-time and permanent employment.²⁰ Indeed the NSW secretary of the SDA stated publicly the union did not favour Saturday afternoon trading.²¹

Justice Macken’s report of October 1983 recommended that general shops be allowed an additional evening’s trading and to open till 4.00pm on Saturdays.²² The report also called for an inquiry into staff employment conditions and hours of work.²³ The report was seen by the SDA as ‘a great victory for retail workers’ because of Macken’s proposal to favour permanent jobs over casual employment, and for a 35 hour week for retail staff.24 Not surprisingly, the former proposal was opposed by the general manager of McDonald’s Systems, who suggested the ‘logic of it defeats me’.25 Despite this, the government accepted the recommendations.²⁶ Legislation giving effect to the Macken recommendations was introduced into parliament in November 1983,²⁷ together with legislation establishing a ‘specialist tribunal’ to determine disputes in the retail industry.²⁸

Retail Trade Industrial Tribunal

The specialist tribunal established was the Retail Trade Industrial Tribunal (‘the Tribunal’), the membership of which consisted of a chair and a deputy chair (both members of the Industrial Commission), and two ‘assessors’ to advise the chair or deputy. The Labor Council and the RTA were to each nominate one assessor, while Justice Macken and Commissioner Mawbey were appointed as the chair and deputy, respectively. The 1983 amending legislation instructed the Tribunal to review all retail industry industrial awards to ‘guarantee the rights of current full-time weekly employees’.²⁹

In early 1984 the Tribunal commenced its review of the retail awards. The main issue of dispute between employer and union submissions concerned the penalty rate for Saturday work. The unions argued it should increase to time-and-a-half consistent with the State wide standard established by the Shiftworkers case of 1972,³⁰ and the Tribunal concurred stating: ‘The general rule is that a standard, once set, should not lightly be departed from, and I [Justice Macken] do not propose to depart from it’.³¹ The new penalty rate was to apply to all staff, otherwise a strict application of section 38v (2) (b) would favour casual over full-time employment because of their cheaper wage costs.³²

With their strong desire to have extended trading the major retailers come to an accord with the government and the retail unions to vary the conditions of employment, and this was formalised with the certification of industrial agreements.³³ The main agreement, Shop Employees’ (Major Retailers) Agreement,³⁴ made significant changes to retail employment, including: a 38 hour week for full-time staff; a minimum of 16 hours and a maximum of 30 hours for part-time staff per week; a pegging of casual employment to 15 per cent of total hours worked; a penalty rate of time-and-a-half for Saturdays for both permanent and casual staff; and proportions clauses limiting the number of junior and part-time staff. Myer Stores Limited had a separate industrial agreement with similar terms.³⁵ In the process of certifying the two agreement, the ‘full bench’ of the Commission (Industrial Commission in Court Session) commented ‘no one has appeared before us to oppose the certification of the agreements’.³⁶ The lack of objectors to the certification of the agreements reflects the understanding between the government, major retailers, and RTA that the terms of the agreements would eventually apply to all employees in the industry as the quid pro quo for the unions’ acceptance of extended trading hours.³⁷

In August 1984 the Tribunal created a new award to apply to all employees in stores of 15 or more staff, except for those retailers party to the industrial agreements.³⁸ In essence, the new award was very similar to the terms contained in the agreements. The RTA – at the urging of McDonald’s it seems – appealed to the Commission over the penalty rate, the proportions clause, and also sought a 20 per cent reduction in junior staff pay. The Commission decision of August 1985 created a single award for retail shops, reduced the penalty rate to time-and-a-quarter, and abolished penalty rates for casuals working on Saturday afternoons. The Commission asserted that any dangers of increased casualisation of the retail industry workforce could be dealt with in a flexible ‘self-regulatory way’ as an ‘experiment’.³⁹ The Commission noted that there was a public interest in having Saturday afternoon trading, yet concluded – based on employer submissions – that Saturday morning trading was now ‘less busy’ and thus was not willing to ‘impose a further cost burden’ on employers.

The Commission’s decision was applauded by the RTA’s executive director as ‘a step towards the eventual removal of all penalty rates’. The unions, on the other hand, claimed it was ‘one of the worst [decisions] inflicted upon the union movement in this State’, as it was contrary the understanding that the terms of the industrial agreements would also be the award standard.⁴⁰ A meeting of the Labor Council resolved the decision treated retail workers as ‘second class citizens’, was an attack on penalty rates, and was a breach of the terms by which extended trading was to be introduced.⁴¹ The Labor party premier, N.K. Wran, criticised the decision for reducing the pay for ‘150,000 shop assistants’, and the SDA called on the government as a ‘last hope’ to reverse the decision.⁴² The government’s response was swift: the minister for industrial relations, P. Hills, announced in late August it would overturn the penalty rate decision by legislation in order to ‘reintroduce uniformity into the rates of pay’. According to the Sydney Morning Herald, this was the first occasion that a judgment of the Commission was to be overturned by statute. While the RTA was ‘disgusted’ by the announcement, the unions welcomed the action because there had ‘never been a Full Bench decision as bad as this’.⁴³

The legislation was introduced in November 1985, and it allowed the minister to make regulations fixing a penalty rate for Saturday afternoon work by permanent and casual employees at time-and-a-half.⁴⁴ The minister justified the amendment on the basis it would ‘ensure that shop employees receive the benefits agreed to prior to the introduction of Saturday afternoon trading’, and by the fact that retail staff covered by the award had been paid time-and-a-half for the pervious 12 months.45 The regulation of December 1985 reinstated the penalty rates of the Tribunal’s mid-1984 award.⁴⁶

The opposition parties criticised the government’s action because it was ‘throwing out the umpire’s decision’.⁴⁷ However, the same could be said of the retail employers’ proclivity to by-pass the Tribunal and seek relief from the Commission. Indeed, Justice Macken noted ‘whichever way a decision goes before the Retail Trade Industrial Tribunal, an appeal will be brought to the Commission in Court Session’.⁴⁸ To overcome this practice, the government inserted a ‘privative’ clause into the Industrial Arbitration Act 1940 giving the determinations of the Tribunal the same status as the full bench of the Commission and proscribing appeals to the Commission over any ‘order, award, ruling or decision of the Tribunal’.⁴⁹ The clause was justified on the basis to ‘maintain industrial harmony and confidence in the decisions of the tribunal [sic]’, and to ensure it remains ‘the final arbiter’ on industrial issues for the industry.⁵⁰

Despite the privative clause the retail employers continued the practice of ‘forum shopping’ by appealing to the Commission on interpretative and jurisdictional grounds.51 In November 1986 the Tribunal made a new award to cover the larger retailers, the Shop Employees (Major General Shops) (State) Award. With appeals to the Commission limited, the employers appealed to the NSW Court of Appeal on the grounds that the new award was void because at the time the award was established the Tribunal was not properly constituted because one of its ‘assessors’ was not present during the Tribunal’s hearings and determinations.52 Amazingly, the absent assessor was the nominee of the RTA, and the RTA’s advocate before the Tribunal’s hearings made no objection at the time to his absence as this had been a common practice with the Tribunal’s proceedings since 1984. In granting the appeal the Supreme Court quashed the new award, and also called into question the status of all the Tribunal’s determinations since its formation. To overcome the possibility of retail employees in NSW being ‘award free’ the Tribunal – duly constituted – created an interim award in December largely reflecting the terms of the industrial agreements because they ‘reflected the consensus views of both parties’ and thus would not be an ‘injustice to either the union or the employers’.⁵³ The uncertainty created by the Court of Appeal’s judgment over the status of the Tribunal’s determinations resulted in the government enacting further legislation in mid-1987 to validate all its rulings made in the absence of the assessors.⁵⁴

The Tribunal remained the principal arbitral forum for the retail industry until its abolition in late 1988.⁵⁵ In 1987 the two retail awards were merged into a single award, and the terms of the industrial agreements were converted into a new award in April 1988 when the life of the agreements came to an end.⁵⁶ The Tribunal was formally abolished by the newly elected Coalition government on the grounds that industrial matters within the retail industry should return to ‘the accepted conciliation and arbitration system’.⁵⁷ The Labor party opposition concurred with the government, with its spokesperson noting that both employers and unions found strong weakness with the workings of the Tribunal.⁵⁸

Discussion and conclusion

The dispute over penalty rates associated with the extension of retail trading hours in NSW can be analysed in a variety of ways, and a rage of – potentially contradictory – conclusions can be drawn from the events. Carmody, for instance, suggests that the dispute demonstrates a ‘pecking order’ then operating in the NSW industrial relations system, with employers (small and large) having a lesser status than either the Commission or the State government.⁵⁹ He further implies that the Wran government’s action of reinstating the penalty rate of the Tribunal’s mid-1984 award with legislation in November 1985 demonstrated that the Commission had a ‘subservient’ position in the pecking order, and that it challenged the Commission’s ‘impartiality and credibility’.⁶⁰ He also suggests that the introduction of the privative clause to protect the impartiality and credibility of the Tribunal was part of a process ‘to ensure enshrinement in awards of a particular view (or, more accurately, the asserted undesirability) of casual employment in the retail industry’.⁶¹ However, with the benefit of hindsight, it is argued here that these events, if they demonstrate anything, show an unattractive characteristic of employers, and employer associations such as the RTA.

Retail Traders Association

As the submissions to the Macken inquiry of 1983 show, at the time most employers in NSW did not favour an extension to trading hours. The main – if not only – industry supporters of extended trade were the major stores and supermarket chains. About 90 per cent of the RTA’s then membership consisted of small retailers – employing less than 20 staff – who were already exempt from the trading hours restrictions.⁶² Yet membership of its council was dominated by representatives of the larger retailers. Moreover, a survey of RTA members conducted in October 1984 – about the same time extended trading commenced – found only 17 per cent indicating rates of pay to be an impediment to longer trading hours. Almost as many RTA members (12 per cent) considered lack of ‘efficient’ staff to be an obstacle to extending their trading.⁶³ Therefore, pay and penalty rates in particular were not the issues for the membership that the RTA latter claimed them to be.

The RTA’s crystallising opposition to the issue of penalty rates might be explained by the changes to its governing body – the council – during this period. In 1983-84 the president was the State director of G.J. Coles, G. Tate, a supermarket chain and variety store chain operator, and a party to the 1984 industrial agreement with the SDA. Thus, the supporting stance of the RTA to the accord reached between the government, unions and other retailers over employment conditions – largely those contained in the Macken report – can be explained by the leadership and direction given to the RTA by its then president. Yet, this changed when the managing director of the ‘up market’ department store chain operator David Jones, B.L. Walsh, became RTA president, as Walsh had publicly expressed his objections to the employment terms contained in the industrial agreements.⁶⁴ It should also be noted that executives from McDonald’s were also becoming prominent in the RTA.

Forum shopping

Forum shopping occurs when a party ‘shops around’ for a court or tribunal which will best serve their commercial or legal interests.⁶⁵ An obvious assessment of the parties’ conduct during the period of the Tribunal’s operation is that they – and the employers specifically – were engaged in forum shopping. The problem with forum shopping for the most desirable tribunal is, according to Whincop, legal rights and obligations become less certain.⁶⁶ This was clearly the case here as neither employers nor employees could state with any degree of certainty what the award employment conditions were likely to be in the short and medium terms, and the penalty rate regime in particular. The employers appealed to the Commission against the Tribunal’s 1984 award because its terms did not suit their commercial interests. The unions then appealed to the State government to reverse the Commission’s penalty rate decision. At the time the executive director of the RTA queried if Commission judgments are to be overturned, then ‘why have an arbitration system all?’⁶⁷ However, the RTA was more than willing to appeal many decisions of the Tribunal and in many instances seek to by-pass it altogether. Moreover, it is not uncommon – particularly in more recent times – for employer associations to request, if not demand, Coalition governments to overturn industrial tribunal decisions when they disagreed with the outcome.⁶⁸ The privative clause of 1987 sought to overcome the problem of forum shopping, particularly from retail employers. Due to the unique circumstances of industrial relations tribunals in Australia, privative clauses are justifiable, both in terms of the special nature of the employment relationship and the need to develop a body of jurisprudence reflecting employment’s distinctive characteristics.⁶⁹ Indeed, the NSW Coalition government elected in early 1988 retained a private clause in its industrial relations legislation.⁷⁰ With the avenue of appeal to the Commission restricted, the employers turned to the Court of Appeal. It was suggested in those proceeding that the principal reason for the appeal was that the award made by the Tribunal was against the employer plaintiffs’ interests, as their representative – particularly their solicitor advocate – was a party to the workings of the Tribunal called into question.Given the choice of conceding the ‘appeal’ was due to forum shopping or some other reason, in a surprising move for a legal practitioner specifically one claiming expertise in industrial law and the retail industry, the RTA advocate admitted he did not fully understand the NSW industrial statute that created the Tribunal.⁷¹

The Tribunal

A possible conclusion about the events surrounding the introduction of extended trading in NSW in the mid-1980 is that the experiment of a specialist industrial tribunal for the retail industry was a relative failure. Specialist tribunals are a not uncommon feature of the history of Australian industrial law and employment regulation. However, most of these forums are created to deal only with individual matters and not collective employment relations issues. In other words, most function to administer ‘industrial justice’ (administrative appeals, anti-discrimination and the like) but only a few of these specialist tribunals deal with matters concerned with ‘industrial peace’ and collective disputes.⁷² There is still considerable debate about the desirability of specialist forums in contrast to tribunals which deal with all matters and issues within the relevant jurisdiction. One concern is of duplication and ‘overlapping’ roles, functions and processes between the specialist and generalist tribunals resulting in jurisdictional conflict and uncertainty.⁷³

Personal interests, relationships and different perspectives about the role of employment regulation were also a factor in the events. Justice Macken had been appointed to the Commission in 1975. When in 1981 a new president of the Commission was to be appointed there was strong support for Macken to be elevated to the position from the minister for industrial relations. However, Premier Wran appointed Justice Fisher of the Supreme Court. In 1983 President Fisher noted that a major characteristic of the NSW industrial relations system is its ‘pronounced devolution of power’. Yet in practice his administration of the Commission was highly centralised with appeal benches being restricted to a ‘Holy Trinity’ of three judges (one being Fisher himself) on order to maintain ‘consistency’. This centralised control of the Commission’s decisions had a number of adverse consequences, including a corrosion of relations between Justice Fisher and Minister Hills, and a policy rift with Justice Macken. Moreover, it was a strongly held view by some participants in the NSW industrial relations during the mid-1980s that Justice Fisher had an uncritical position towards employer applications for workplace change.⁷⁴

While during the debate over the privative clause the opposition described the bill as ‘fascist legislation’,⁷⁵ the minister defended the measure on the basis that the Tribunal could remain ‘the most expert body’ for retail industry industrial relations and so that in future ‘the word or the tribunal [sic]’ could not be ‘broken by a decision in another place’. Moreover at the time NSW was the only State with Saturday afternoon trading and dealing with the industrial issues this generated justified a specialist arbiter for the industry.⁷⁶ Yet the reasons for the abolition of the Tribunal in 1988 were mostly administrative and not due to some failed experiment in industrial specialisation, as the new minister conceded: ‘…given the substantial number of matters before the tribunal [sic], its limited resources and the urgency and complexity of some of the issues involved, many of the matters before the tribunal have had to be formally referred to the Industrial Commission in Court Session for ultimate processing’.⁷⁷