1869
Western Australian
Industrial Gazette
Vol. 92—Part 2
PUBLISHED BY AUTHORITY
- Sub-Part 7
- WEDNESDAY 28 NOVEMBER, 2012
THE mode of citation of this volume of the Western Australian Industrial Gazette will be as follows:—
92 W.A.I.G.
CUMULATIVE CONTENTS AND DIGEST APPEAR AT THE END OF THIS PUBLICATION
FULL BENCH—Appeals against decision of Commission—
2012 WAIRC 00988
WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION TREVOR DAVID HOFFMAN
PARTIES CORAM
APPELLANT
-and-
PERTH MOBILE GP SERVICES LTD ACN 129 336 803
RESPONDENT
FULL BENCH
THE HONOURABLE J H SMITH, ACTING PRESIDENT CHIEF COMMISSIONER A R BEECH COMMISSIONER S J KENNER
WEDNESDAY, 7 NOVEMBER 2012 FBA 6 OF 2012
DATE FILE NO/S CITATION NO.
2012 WAIRC 00988
Result
Discontinued by leave
Order
WHEREAS on 27 September 2012, the appellant filed a notice of appeal to the Full Bench; and WHEREAS on 31 October 2012, the appellant by email advised that he wished to discontinue the appeal; and WHEREAS on 2 November 2012, the respondent’s agent informed the Full Bench by email that the respondent consented to the appeal being discontinued;
NOW THEREFORE, the Full Bench pursuant to the powers conferred on it under the Industrial Relations Act 1979 and the
Industrial Relations Commission Regulations 2005 reg 103A, hereby orders —
THAT the appeal be and is hereby discontinued by leave.
By the Full Bench
(Sgd.) J H SMITH,
- [L.S.]
- Acting President.
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2012 WAIRC 00966
APPEAL AGAINST A DECISION OF THE COMMISION GIVEN ON 30 MARCH 2012 IN MATTER NO B 195 OF 2010
WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
FULL BENCH
CITATION CORAM
::
2012 WAIRC 00966 THE HONOURABLE J H SMITH, ACTING PRESIDENT ACTING SENIOR COMMISSIONER P E SCOTT COMMISSIONER S M MAYMAN WEDNESDAY, 29 AUGUST 2012
- HEARD
- :
- :
- DELIVERED
THURSDAY, 1 NOVEMBER 2012
FILE NO. BETWEEN
::
FBA 2 OF 2012 THE STATE SCHOOL TEACHERS' UNION OF W.A. (INCORPORATED)
Appellant AND KEN DAVIS Respondent
ON APPEAL FROM: Jurisdiction Coram
::::
Western Australian Industrial Relations Commission Commissioner S J Kenner
- Citation
- [2012] WAIRC 00189; (2012) 92 WAIG 462
- B 195 of 2010
- File No
CatchWords
:
Industrial Law (WA) - contractual benefits claim - fixed term contract - implication of terms - 'business efficacy test' - custom and practice - principles to be applied when interpreting contracts considered - contract to vary found - appellant demonstrated error but no error found in the construction of the effect of terms of the varied contract of employment of the respondent
Legislation Result
::
Industrial Relations Act 1979 (WA) s 29(1)(b)(ii).
Appeal dismissed
Representation:
Counsel: Appellant Respondent Solicitors: Appellant Respondent
::
Mr R Hooker and Mr S Millman Mr M Cox and Mr J Hulmes
::
Slater & Gordon MDC Legal
Case(s) referred to in reasons:
Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1981-1982) 149 CLR 337 Commissioner of Taxation of the Commonwealth of Australia v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA
35; (2000) 201 CLR 520
Commonwealth of Australia v Crothall Hospital Services (Aust) Ltd (1981) 36 ALR 567 Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1985-1986) 160 CLR 226 Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2011] FCA 1294 Currie v Misa (1875) LR 10 Ex 153 Heimann v The Commonwealth (1938) 38 SR (NSW) 691 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41
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Hughes v St Barbara Ltd [2011] WASCA 234 Kucks v CSR Ltd (1996) 66 IR 182 Lee v GEC Plessey Telecommunications [1993] IRLR 383 Meek v Port of London Authority [1918] 2 Ch 96 Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 Ryan v Textile Clothing & Footwear Union Australia (1996) 130 FLR 313 Stirnemann v Kaza Investments Pty Ltd [2011] SASCFC 77 The Metropolitan Gas Co v The Federated Gas Employees' Industrial Union (1925) 35 CLR 449 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; (2011) 282 ALR 604
Case(s) also cited:
Casella v Hewitt [2008] WASCA 13 (12 February 2008) CFMEU v John Holland Pty Ltd [2010] FCAFC 90 Finance Facilities Pty Ltd v Federal Commissioner of Taxation [1971] HCA 12; (1971) 127 CLR 106 Gallotti v Argyle Diamond Mines Pty Ltd [2003] WASCA 166 Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1 Matthews v Cool or Cosy Pty Ltd [2004] WASCA 114 McCourt v Cranston [2012] WASCA 60 Perth Finishing College Pty Ltd v Watts (1989) 69 WAIG 2307 Royal Botanic Gardens Trust v South Sydney City Council (2002) 240 CLR 45
Reasons for Decision
SMITH AP: Background
- 1
- Until October 2005, Mr Davis, the respondent to the appeal, was a permanent teacher employed by the Department of
Education of Western Australia. In October 2005, he took leave to take up a short-term position with the appellant, The State School Teachers' Union of WA (Incorporated) (SSTU). In January 2007, Mr Davis was appointed by the SSTU as a field officer for a four year fixed term. The central issue in this appeal is whether at the expiration of the fixed term the SSTU was obliged, at law, to offer Mr Davis a further contract for a four year fixed term.
- 2
- When Mr Davis was appointed as a field officer, the terms of his contract of employment were set out in a short letter dated
25 January 2007, signed on behalf of the SSTU by Mr David Kelly, who was at that time the general secretary of the SSTU. Mr Davis also signed the letter. The express terms of contract set out in the letter were:
(a) (b)
The period of the contract was to commence on 15 January 2007 to 15 January 2011. The salary was $73,862 Year 2, of the current Conditions of Employment Agreement – for Officers of the SSTU dated 16 September 2005 (the Conditions of Employment Agreement).
(c) (d)
The normal hours of employment were 37½ hours per week. All other conditions of employment were in the Conditions of Employment Agreement.
- 3
- The Conditions of Employment Agreement was enclosed with the letter dated 25 January 2007. The Conditions of
Employment Agreement was executed on 16 September 2005 on behalf of the officers of the SSTU by Mr Kelly and on behalf of the representatives of the officers of the SSTU by Mr C C Sharpe. It is a comprehensive document containing 40 clauses and three appendices. The document follows the form and contains the types of conditions which are usually found in industrial agreements registered by the Commission that apply to employees in the public sector. The terms of the Conditions of Employment Agreement are expressed to 'apply and be binding upon the SSTU and the officers employed by it'. 'Officers' are defined in cl 5.3 to include a number of categories of officers employed by the SSTU, including field officers who are industrial officers. However, the Conditions of Employment Agreement is not a registered agreement, so it has no statutory force. Consequently, it only had force and effect in the law of contract as it was incorporated as an express term into Mr Davis' contract of employment.
4
5
It is common ground that the terms of the Conditions of Employment Agreement were express terms of the contract of employment of Mr Davis and that his position as a field officer was an industrial staff position. Although Mr Davis' contract of employment was for a maximum term of four years, the Conditions of Employment Agreement contained a provision which contemplated one offer of a further four year term could be made. This provision was contained in appendix 2 of the Conditions of Employment Agreement which provided as follows:
Contract appointments to the Union for Industrial Staff are on a four (4) year basis which Executive may renew for one (1) further 4 years contract without the requirement of declaring the position vacant and going to advertisement.
Prior to the appointment of Mr Davis in 2007, a dispute arose towards the end of 2006 between the SSTU and industrial officers employed by the SSTU about the renewal of fixed term contracts. At that time, the contracts of three industrial
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officers were about to expire. As a result of the dispute, negotiations took place between representatives of the industrial staff and the SSTU. After some months an agreed process for the renewal of contracts under appendix 2 was reached.
6
7
Mr Davis' contract as a field officer was to expire in January 2011. In early October 2010, Mr Davis was informed that his appointment would not be renewed and his contract came to an end in January 2011.
Mr Davis brought an application before the Commission under s 29(1)(b)(ii) of the Industrial Relations Act 1979 (WA) (the Act) claiming that he had been denied a contractual entitlement. His claim is that he should have been re-appointed for a further four year term pursuant to the terms of the agreed process and by not doing so, the SSTU breached the terms of his employment contract. The effect of the terms of agreed process and whether it applied to Mr Davis' contract of employment was a critical issue in the proceedings at first instance before the Commission.
8
9
After hearing the matter, the learned Commissioner found that by proceeding to advertise Mr Davis' position without compliance with the agreed process, the SSTU was in breach of Mr Davis' contract of employment and an order was made on 30 March 2012 to award Mr Davis compensation for denied contractual benefits in the sum of $136,622.
There is no appeal against the quantum of the sum awarded. This appeal is against the decision of the Commission that Mr Davis had been denied a contractual benefit. The SSTU says that there was no breach of any term of Mr Davis' contract of employment so that no award of compensation should have been made.
Relevant findings made by the Commission at first instance
10 The issues the learned Commissioner found required his consideration were as follows [4]:
Firstly, what were the terms of the agreed process for the renewal of Mr Davis' contract? Secondly, did any such agreed process became [sic] a term of Mr Davis' contract? Thirdly, if the agreed process was a term of Mr Davis' contract, on its proper interpretation, did it mean that the Union had to offer Mr Davis a renewal of his contract?
11 At the hearing at first instance, a dispute arose as to what was the document that had been agreed to by the executive of the
SSTU in 2007 which set out the terms of the agreed process. After considering all of the evidence, the learned Commissioner found that the document agreed to was set out in a document titled 'Agreed Process for the Implementation of Appendix 2 – Appointment' (2007 Agreed Process). This document states as follows (exhibit A4):
Appendix 2 states:
'Contract appointments to the Union for Industrial Staff are on a four (4) year basis which Executive may renew for one (1) further 4 years contract without the requirement of declaring the position vacant and going to advertisement.'
Agreed Renewal Process:
- 1.
- Executive is advised that the first 4 year term of the contract appointment of the incumbent Industrial Officer is
due to end. (Note: a minimum of 12 weeks is required prior to end of the appointment for Executive to receive this advice).
- 2.
- Executive determines that either:
2.1 2.2
The position proceeds through the 'offer of renewal process,' or The position is not renewed. This determination would be on the basis that: 2.2.1 2.2.2
The position has been made redundant, or The Officer's contract has been extended as he/she is currently subject to a substandard performance process which has not yet been completed; or
- 2.2.3
- The position is to be advertised and filled through normal appointment procedures as the Officer
has been found to be performing in a substandard manner and has unsuccessfully completed a substandard performance process.
3.
4.
Where Executive determines that the Industrial Officer be offered a renewal for one (1) further 4 year contract (as per Appendix 2 Officers of the SSTUWA Conditions of Employment Agreement and point 2 above), the following process will occur.
The President of SSTUWA writes to incumbent Industrial Officer inviting him/her to renew contract appointment for one further 4 year term.
5. 6.
The Industrial Officer responds in writing indicating whether he/she wishes to have appointment renewed or not. If the Industrial Officer accepts the renewal offer the Industrial Officer meets with the relevant Senior Officer for a Formal Appreciation and Formal Acceptance process which reviews the positive contributions and highlights from the Industrial Officer over the last four years and considers possible directions in the next four years and the support the organization can provide to the Industrial Officer to enhance his/her role within the organization and in the context of the SSTUWA Strategic Plan and their job satisfaction.
- 7.
- A Renewal Document process is formally completed, comprising the following steps:
Step 1 The Industrial Officer is provided with the documentation listed below and develops the Pro Forma Renewal Document with his/her work team, individually or as the Officer determines. Where the Officer develops the Pro Forma Renewal Document in collaboration with the team including the relevant Senior Officer, the process moves directly to step 3.
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Documentation provided to the Industrial Officer:
- A.
- Renewal Document Process (Steps 1-5)
- B.
- Pro Forma Renewal Document, based on the SSTUWA Strategic Plan
Samples of completed Pro Forma Renewal Documents Relevant JDF for the Industrial Officer's position.
C. D. Step 2 Where the relevant Senior Officer has not been party to the development of the Pro Forma Renewal Document the Industrial Officer presents the Document to the relevant Senior Officer for discussion.
Step 3 The relevant Senior Officer signs off the final Document Step 4 The General Secretary and Industrial Officer sign off the final Document. Step 5 The signed formal Document is forwarded to the President for consideration by the Appointments Committee.
8.
9.
The Appointments Committee recommends to Executive that the incumbent Industrial officer's contract appointment be renewed for one further 4 year term.
Executive endorses the Appointments Committee's recommendation re renewal of incumbent Industrial Officer's contract appointment. The SSTUWA President advises the Industrial Officer in writing of Executive's decision to renew contract appointment for one further four year term.
- 10.
- In the event that the incumbent Industrial Officer declines the offer to renew a contract appointment for one
further four year term or if the Executive determines not to renew a contract under the provisions of 2.2 above, the Officer is entitled to the conditions set out in Clause 35 Retraining.
12 Whilst the SSTU denies the correctness of the finding that the 2007 Agreed Process sets out the terms of the agreed process, it elected not to pursue this point on appeal.
13 The second issue considered by the learned Commissioner was whether the 2007 Agreed Process had contractual effect, either by express or implied incorporation into the contract of employment of Mr Davis.
14 The learned Commissioner found that there were two terms that formed part of Mr Davis' contract. The first was that it was an implied term that the contract of employment could be varied from time to time by a process of collective negotiation between representatives of the officers (the employees) and representatives of the SSTU. The learned Commissioner then went on to find that the approach of negotiating collectively through representatives had been followed in 2007 when the executive met on 22 February 2007 and 30 March 2007 and agreed to vary the Conditions of Employment Agreement. These acts, the learned Commissioner found, had the effect of incorporating the agreed process as an express term of Mr Davis' contract of employment by variation to the Conditions of Employment Agreement.
15 During the submissions in this appeal, the SSTU's counsel spent a considerable amount of time analysing the reasoning of the learned Commissioner in the following passages [36] – [39]:
[36] Of particular relevance to this issue is the evidence of Mr Kelly. His uncontradicted evidence was that changes to employment conditions for officers of the Union were negotiated collectively by representatives of the officers and the Union. This was consistent with the principles that the Union supported. This is reflected in the 2005 Agreement itself. The process, as outlined by Mr Kelly, is that representatives of the officers and of the Union, which generally included himself, would negotiate changes. They would then be endorsed by the Executive of the Union. All affected staff would then be notified of the changes, usually by a memorandum or such. This was confirmed in the evidence of Ms Mitussis. This was a method employed over many years. It was not the practice for individual officers to receive letters advising of the agreed changes.
[37] On the strength of that evidence, I have no hesitation in concluding that it was an implied term of Mr Davis' contract that it could be varied from time to time in this manner. To imply such a term is consistent with the evidence as to how the Union and its officers dealt with employment matters over a long period of time. The implication of such a term also satisfies the 'business efficacy' test, as set out in BP Refinery (Westernport) Pty Ltd
v Shire of Hastings (1977) 16 ALR 363 cited in Codelfa Construction Pty Ltd v State Rail Authority of New South
Wales (1982) 149 CLR 337.
[38] This approach was confirmed in exhibit A8, which is a record of a Special Executive Committee meeting on
22 February 2007. At this meeting it was resolved, as minuted at resolution 6 'that the current Agreement be amended to include the new clause for renewal process and performance management'. The reference to 'the current Agreement' can only sensibly be read as the 2005 Agreement. This evidence is very important. It reflects the decision of the Executive which, between meetings of the State Council, is the ultimate decision making organ of the Union under its Constitution, to amend the 2005 Agreement that was contractually binding on the Union and Mr Davis, to incorporate the 'agreed process' then in contemplation. This was a clear and unambiguous expression of intention by the Union to be bound by the outcome of the ensuing process. This is also to be read with resolution 4 of the same meeting where the Executive directed the senior officers, who were Messrs Kelly
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and Keely, 'as a matter of urgency to finalise a renewal process and that Senior Officers present the agreed process to the Executive for endorsement'. That is precisely what Messrs Kelly and Keely then did.
[39] The resolution adopted by the Executive on 30 March 2007 to 'endorse' the 21 March 2007 agreed process; the prior resolution of the Executive on 22 February 2007 to vary the contractually binding 2005 Agreement to incorporate it; and the evidence of Mr Kelly as to how the terms and conditions for officers of the Union were negotiated and varied, which evidence was consistent the evidence of Ms Mitussis and Mr Davis, leads to the conclusion that the 2007 agreed process was incorporated as an express term of Mr Davis' contract of employment by a variation to the 2005 Agreement. This is entirely consistent with Mr Kelly's evidence as to how all prior changes to officers' conditions were made. It is also consistent with the evidence as to the subsequent conduct of the Union and industrial officers who participated in the agreed process after it came into effect. If, as contended by the Union, the process did not bind it, then it is difficult to see why, at least until the end of 2010, the Union complied with it. This is evidence confirmatory of contractual effect: Howard Smith & Co Ltd v Varawa (1907) 5