The constitutional and other legal implications and limitations affecting the Fair Work Act and Fair Work Commission’s jurisdiction over State government employees is at the centre of these passages from a recent Commission decision.
“Consideration
[6] Part 3-5 of the FW Act deals with stand downs. Division 1 sets out how Part 3-5 applies to stand down disputes of the kind Mr Freeman sought to lodge by his application.
[7] Section 523 of the FW Act provides that for the purposes of Part 3-5, the term “employee” means a national system employee, and “employer” means a national system employer. These terms take their meaning from ss 13 and 14. Relevantly, ss 30M and 30N extend the meaning of national system employee and national system employer respectively.
[8] The central issue requiring determination by the Deputy President in the decision was whether Mr Freeman and the respondent met the definitions of a national system employee, and a national system employer in the FW Act. At [42] of the decision, the Deputy President concluded that:
“The Applicant is not a National System Employee and is not employed by a National System Employer. The Applicant is accordingly precluded from making the Application.”
[9] We consider the Deputy President’s conclusion to be plainly correct.
[10] In the assessment of Mr Freeman’s capacity to make the application in the Commission, we have considered Mr Freeman’s contract of employment, the Transport Administration Act 1998 (NSW) (TA Act), the Government Sector Employment Act 2013 (NSW) (GSE Act), and the Industrial Relations (Commonwealth Powers) Act 2009 (NSW) (Referral Act).
[11] The terms of Mr Freeman’s contract of employment provide, inter alia, as follows: 5
“A. The Employee is to be employed in the Transport Service and is designated by the Employer as a Transport Service Senior Manager, in accordance with Part 7A of the TA Act.”
[12] The reference in Mr Freeman’s contract to Part 7A of the TA Act concerns “The Transport Service.” The Transport Service is defined by s 68B(1) of the TA Act as consisting of “those persons who are employed under this Part by the Government of New South Wales in the service of the Crown.”
[13] By s 68C(2) of the TA Act, the Government of New South Wales may employ persons in the Transport Service to enable several entities, including Sydney Trains, to exercise its functions. Persons employed in the Transport Service and designated by the Transport Secretary as senior managers are “Transport Service Senior Managers” under s 68D(2) of the TA Act.
[14] Mr Freeman’s contract of employment also provides, inter alia, as follows:
“E. The terms and conditions in this agreement are subject to any provisions of the TA Act, GSE Act and any applicable Rules and Regulations that apply to the Employee’s employment and the roles and duties which the Employee undertakes.”
[15] The GSE Act provides the statutory framework for New South Wales government sector employment including the Transport Service and any other service of the Crown. 6 As an employee in the Transport Service, Mr Freeman is employed in the “government sector”7 and “in the service of the Crown.”8
[16] It was not in dispute in the proceedings below, or before us, that Mr Freeman is employed in the Transport Service of New South Wales on behalf of the Government of New South Wales. Mr Freeman performs work within Sydney Trains as a Transport Service Senior Manager.
[17] From 1 January 2010, pursuant to the Referral Act, the State of New South Wales referred specified industrial relations matters to the Commonwealth parliament. It excluded from the referred matters several matters including matters relating to State public sector employees. 9 Relevantly, the term “State public sector employee” is defined in s 3 of the Referral Act as “a member of the Government Service of New South Wales, the NSW Health Service, the Teaching Service of New South Wales or any other service of the Crown in right of the State (including an employee of any New South Wales government agency)” [emphasis added]. There can be no doubt that Mr Freeman, in his employment with the respondent, meets this definition. He is employed under Part 7A of the TA Act “in the service of the Crown” (s 68B(1) TA Act). By s 6 of the Referral Act, matters relating to State public sector employees such as Mr Freeman are excluded from the referral of matters to the Commonwealth under s 5 of the Referral Act. Accordingly, Mr Freeman’s employment, being the subject of an express exclusion under s 6 of the Referral Act, is not for present purposes, regulated by the FW Act.
[18] There is no dispute that Mr Freeman is not a national system employee and that his employer is not a national system employer within the meaning of ss 13 and 14 of the FW Act. As we earlier noted, s 30M extends the meaning of national system employee to relevantly include “any individual in a State that is a referring State because of this Division so far as he or she is employed, or usually employed, as described in paragraph 30N(1)(a), except on a vocational placement“. Section 30N extends the meaning of national system employer to include, relevantly, “any person in a State that is a referring State because of this Division so far as the person employs, or usually employs, an individual.” There is no dispute that the State of New South Wales is a referring State within the meaning of s 30L. But these provisions do not operate at large and are confined in their operation “to the extent that the State’s referral law refers to the Parliament of the Commonwealth the matters mentioned in subsection 30L(1) that result in the Parliament of the Commonwealth having sufficient legislative power for the provision so to have effect,” as s 30S makes clear.
[19] As we earlier noted, the Referral Act excluded from the referral, matters relating to State public sector employees. Mr Freeman is a State public sector employee within the meaning of the Referral Act and so neither he nor his employer are caught by the extended definitions in ss 30M and 30N respectively, of the FW Act.
[20] The Deputy President correctly concluded that Mr Freeman and the respondent do not meet the definitions of a national system employee and a national system employer in the FW Act. By appeal ground one, Mr Freeman contends that the Deputy President erred in so concluding. For the reasons stated, we reject this contention.
[21] Further, Mr Freeman’s first ground of appeal refers to s 68O of the TA Act, which relevantly specifies that:
(1) The employment of a Transport Service senior executive or senior manager, or any matter, question or dispute relating to any such employment, is not an industrial matter for the purposes of the Industrial Relations Act 1996.
[22] By his submissions, Mr Freeman indicates a concern that if the decision is upheld, Mr Freeman and his colleagues in a similar position to whom s 68O of the TA Act applies, may be without a remedy in respect of contract or employment disputes. 10 However, as the respondent in its written submissions correctly points out,11 this is not accurate. The grievance raised by Mr Freeman concerns an alleged breach of contract. While no remedy arises under the FW Act for the reasons found by the Deputy President, it remains open to Mr Freeman to pursue such matters in a state court of competent jurisdiction. Moreover, the effect of s 68O of the TA Act does not operate to make Mr Freeman a national system employee by default.12 Contrary to Mr Freeman’s contention, s 30L of the FW Act13 does not provide otherwise. The whole of Division 2B of Part 1-3 including s 30L are limited to the subject matters referred by a referring State as s 30S makes clear.
[23] To the extent that Mr Freeman contends by appeal ground one that the Deputy President erred by omitting reference to s 68B(2) of the TA Act from his decision, this is of no moment and does not disclose error in the Deputy President’s decision. Section 68B(2) simply confirms that persons such as Mr Freeman who are employed pursuant to Part 7A of the TA Act and who are employed by the Government of New South Wales in the service of the Crown, are not employed in the public service of New South Wales. The Deputy President did not determine otherwise. In any event, the answer to the question whether Mr Freeman is a national system employee is not concerned with any exercise of discretion, the exercise of which may be impugned by error in the reasoning process. The answer given by the Deputy President was either correct or it was not. Appeals from such decisions are determined by the correctness standard, and as we have already noted, the Deputy President’s conclusion was plainly correct.
[24] It follows that no appealable error arises in relation to Mr Freeman’s first ground of appeal. This is the only appeal ground relating to the finding that Mr Freeman is not a national system employee employed by a national system employer under the FW Act. 14
[25] The balance of Mr Freeman’s grounds of appeal relate to Mr Freeman’s ongoing concerns with the manner in which he says the respondent stood him down from his employment. 15 To the extent that these grounds allege error in the decision, such allegation of error is limited to the Deputy President’s conclusion that Mr Freeman has not been subject to a stand down within the meaning of the FW Act.16 Having regard to the above matters, and the conclusion reached, we consider it unnecessary to address this contention of error. As Mr Freeman is not a national system employee, Division 2 of Part 3-5 of the FW Act does not apply to him or to the circumstances about which he complains.
Conclusion
[26] For the reasons given, we are not satisfied for the purpose of s 604(2) of the FW Act that it is in the public interest to grant permission to appeal, as no arguable case of appealable error has been disclosed and no novel issues related to the construction of the operative provisions of the various statutes we have discussed arise. Nor are we persuaded that there is any other basis upon which permission should be granted as a matter of discretion. In the absence of error, the appeal cannot succeed.
[27] Permission to appeal will be refused.”
Freeman v Secretary of the Department of Transport as the Head of the Transport Service (2022) FWCFB 224 delivered 2 December 2022 per Gostencnik DP, Masson DP and Millhouse DP