Macken's law of employment [8th edition.] 9780455237824, 0455237824

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Macken’s Law of Employment

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Macken’s Law of Employment CAROLYN SAPPIDEEN LLB (Melb), LLM (Syd) Barrister and Solicitor Professor of Law, Western Sydney University

PAUL M O’GRADY QC LLB, BComm (Melb) Barrister – Victorian Bar Honorary Senior Fellow, Melbourne Law School The University of Melbourne

JOELLEN RILEY BA (Hons), MA (Syd), LLB (Hons 1) (Syd), BCL (Hons 1) (Oxon), PhD (Syd) Professor of Labour Law, Sydney Law School, The University of Sydney

with BELINDA SMITH BEcon (Soc Sci) (Hons), LLB (Hons) (Syd), JSD (Col) Associate Professor, Sydney Law School, The University of Sydney

EIGHTH EDITION

LAWBOOK CO. 2016

Published in Sydney by Thomson Reuters (Professional) Australia Limited ABN 64 058 914 668 19 Harris Street, Pyrmont, NSW First edition 1978 Third edition 1990 Fifth edition 2002 Seventh edition 2011

Second edition 1984 Fourth edition 1997 Sixth edition 2008

Creator: Sappideen, C. (Carolyn), author. Title: Macken’s law of employment / Carolyn Sappideen, Paul O’Grady, Joellen Riley, Belinda Smith. Edition: 8th edition. ISBN: 9780455237824 (paperback) Notes: Previous edition: 2011. Includes index. Subjects: Labor laws and legislation--Australia. Other Creators/Contributors: Macken, J. J. (James Joseph), 1927- Law of employment. O’Grady, Paul, (Paul M.), author. Riley, Joellen, author. Smith, Belinda, contributor. Dewey Number: 344.94011 © 2016 Thomson Reuters (Professional) Australia Limited This publication is copyright. Other than for the purposes of and subject to the conditions prescribed under the Copyright Act, no part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Inquiries should be addressed to the publishers. All legislative material herein is reproduced by permission but does not purport to be the official or authorised version. It is subject to Commonwealth of Australia copyright. The Copyright Act 1968 permits certain reproduction and publication of Commonwealth legislation. In particular, s 182A of the Act enables a complete copy to be made by or on behalf of a particular person. For reproduction or publication beyond that permitted by the Act, permission should be sought in writing. Requests should be submitted online at http://www.ag.gov.au/cca, faxed to (02) 6250 5989 or mailed to Commonwealth Copyright Administration, Attorney-General’s Department, Robert Garran Offices, National Circuit, Barton ACT 2600. Editor: Lara Weeks Product Developer: Vickie Ma Publisher: Robert Wilson Printed by Ligare Pty Ltd, Riverwood, NSW This book has been printed on paper certified by the Programme for the Endorsement of Forest Certification (PEFC). PEFC is committed to sustainable forest management through third party forest certification of responsibly managed forests. For more info: http://www.pefc.org

Preface In the decades since the first publication of this work (as The Common Law of Employment, in 1978) the law relating to the employment relationship in Australia has evolved considerably. In 1978, it made a great deal of sense to dedicate a scholarly work to the interrogation of the common law of employment, given that most other books on labour law at the time focused on the system of conciliation and arbitration governing collective industrial relations. Over the years, however, it has become much more difficult to segregate matters concerning the individual employment relationship (governed largely by employment contract law) from the statutory regulation of the labour market. Different federal regimes have come and gone in that time – the Industrial Relations Act 1988 (Cth) was supplanted by the Workplace Relations Act 1996 (Cth), which was substantially amended in 2006 by Work Choices, and ultimately replaced by the Fair Work Act 2009 (Cth). Each successive edition of this work has accommodated the elements of those statutory regimes (and indeed the elements of state-based legislation) that speak to the regulation of the individual employment relationship, while maintaining a comprehensive commentary and analysis of common law principles. For the first time, this 8th edition makes the growing influence of federal statutory law more explicit, by dividing our chapters into two essential parts, the first dealing (largely) with common law, and the second with statutory influences. Our publishers have been diligent in communicating with readers of earlier editions (and especially with those universities who rely upon our book in teaching employment law), and we have responded to their suggestions that we should include a dedicated chapter on work, health and safety (a field now dominated by statutory obligations), and more detailed analysis of elements of the Fair Work Act, including the provisions dealing with modern awards and enterprise agreements, unfair dismissal and general protections. This edition also includes material on the relatively recently enacted workplace bullying jurisdiction of the Fair Work Commission. We are confident that this edition continues to provide thoughtful and reliable commentary on common law developments. The High Court of Australia decision in Commonwealth Bank of Australia v Barker, for example, necessitated considerable revision of our views on the application in Australia of the English duty not to destroy mutual trust and confidence in the employment relationship. The law in this edition is stated to May 2016. Our special thanks, as always, to the Lawbook editors and especially to Lara Weeks and Lucas Frederick, without whose help this edition would not have been possible. CAROLYN SAPPIDEEN PAUL O’GRADY JOELLEN RILEY Sydney, May 2016

Table of Contents Preface ....................................................................................................................... v Table of Cases ........................................................................................................ ix Table of Statutes ............................................................................................... lxxxix 1 Employment Law in an Age of Statutes ............................................................... 1 2 The Relationship of Employer and Employee .................................................... 13 3 Labour Hire .......................................................................................................... 67 4 Formation of a Contract of Employment ............................................................ 97 5 Contractual Duties During the Employment .................................................... 161 6 Safety at Work ................................................................................................... 251 7 Suspension and Stand Down ............................................................................. 319 8 Terminating the Contract of Employment for Breach ...................................... 329 9 Other Modes of Termination of the Contract of Employment ........................ 367 10 Remedies – Actions for Wages or Damages .................................................. 415 11 Injunction and Declaration .............................................................................. 453 12 Conditions of Employment .............................................................................. 479 13 Statutory Protection for Job Security .............................................................. 513 14 Industrial Action .............................................................................................. 567 15 Anti-discrimination Law .................................................................................. 617 Index ...................................................................................................................... 651

Table of Cases A A v Hayden [No 2] (1984) 156 CLR 532 ................................................. 4.310, 4.330, 5.710 A,DC v Prince Alfred College Incorporated [2015] SASCFC 161 ............................... 6.60 A R Griffith v Richards (1996) QCA 417; [2000] 1 Qd R 116 ........................ 5.440, 5.460 AB, Re [2014] FWC 6723 ................................................................................................ 13.380 AB Oxford Cold Storage v Arnott [2003] VSC 452 ..................................................... 5.390 ABC v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 ................................ 5.400, 5.680 ABC Developmental Learning Centres Pty Ltd v Wallace [2007] VSCA 138 .................................................................................................................................... 6.350 ABCC v Mitchell & Ors [2011] FMCA 622 ................................................................... 6.610 ABK Ltd v Foxwell [2002] EWHC 9 .............................................................................. 5.800 ABN AMRO Bank NV v Bathurst Regional Council (2014) 224 FCR 1; [2014] FCAFC 65 .............................................................................................. 5.540, 5.550 ACCC v 4WD Systems Pty Ltd (2003) 200 ALR 49 ..................................................... 4.300 ACCC v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36 .............................. 13.310 ACCC v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2004] FCA 517 .............................................................................. 14.50 ACCC v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51 ...................................... 4.290 ACCC v CG Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 .......................... 4.290 ACCC v Samton (2002) 117 FCR 301 ............................................................................. 4.290 ACCC v Simply No-Knead (Franchising) Pty Ltd (2000) 104 FCR 253 ................... 4.300 ACE Insurance Ltd v Trifunovski (2013) 209 FCR 146; [2013] FCAFC 3 .............. 2.250, 2.280, 2.290, 2.350, 2.360, 2.370 ACN 050 541 047 Ltd, Re [2002] NSWSC 586 .......................... 4.130, 4.510, 4.520, 4.530 ACTEW Corporation Ltd v Pangallo (2002) 127 FCR 1; [2002] FCAFC 325 ...................................................................................................................... 9.190, 12.340 ADC v White [2001] NSWCA 9 ........................................................................................ 6.60 AED Oil Ltd v Back [2009] VSC 158 ............................................................... 14.80, 14.330 AEU v Victoria [2015] FCA 1196 .................................................................................. 12.160 AFMEPKIU v Australian Dried Fruit Sales (1997) 74 IR 386 ................................... 5.150 AFMEPKIU v DMG Industries Pty Ltd (2000) 102 IR 175 .................................... 13.310 AFMEPKIU v Eaton Electrical Systems Pty Ltd (2005) 139 IR 260 ........................ 11.90 AFMEPKIU v Maintenance Resource Engineering Pty Ltd [2003] FCA 570 ................................................................................................................................. 13.320 AFMEPKIU v Mechanical Engineering Services Pty Ltd [2007] FCA 1736 .................................................................................................................................... 9.50 AFMEPKIU v Southcorp Holdings (unreported, AIRC, Munro J, 7 March 2001) .................................................................................................................... 4.200 AFMEPKIU v United Milk Tasmania (2000) 140 IR 51 ............................................. 9.190 AG Australia Holdings Ltd v Burton [2002] NSWSC 170 ................... 5.670, 5.710, 5.720 AJ Mills & Sons Pty Ltd v Transport Workers’ Union of NSW [2009] NSWIRComm135; (2009) 187 IR 56 ............................................................... 2.90, 2.180 ALAEA v Qantas Airways Ltd [2011] FMCA 58 ....................................................... 13.240 ALDI Foods Pty Ltd v Transport Workers’ Union of Australia (2012) 227 IR 120 .................................................................................................................... 12.170 ix

Macken’s Law of Employment

ALHMWU v Coca-Cola Amatil [2000] FCA 782 ................................................... 13.250 ALHMWU v Commonwealth (1994) 55 IR 18 ......................................................... 9.220 ALHMWU v Liquorland (Aust) Pty Ltd (2002) 114 IR 165 ................................. 13.240 ALHMWU v Terranora Lakes Country Club Pty Ltd (1996) 19 ACSR 689 ............................................................................................................................... 9.320 ALHMWU v Woonona Bulli RSL Memorial Club Ltd (2007) 166 IR 314 ........ 13.340 ALZ v Workcover NSW [2015] NSWCATAP 138 ................................................... 5.400 AMACSU v McIntyre (1996) 73 IR 170 ..................................................................... 13.10 AMEV-UDC Finance Ltd v Austin (1986) 60 ALJR 741 ...................................... 10.110 AMIEU v Aziz [1998] FCA 925 .................................................................................. 9.320 AMIEU v Belandra Pty Ltd (2003) 126 IR 165 ....................................................... 13.250 AMIEU v Central Queensland Meat Export Co (Aust) Pty Ltd (1999) 90 IR 364 ................................................................................................................ 5.320, 9.40 AMIEU v G & K O’Connor Pty Ltd (2000) 100 IR 383 .... 11.10, 11.60, 11.70, 11.80, 11.90, 13.300, 13.320 AMP Services Ltd v Mann [2006] FCA 256 ........................... 5.530, 5.540, 5.600, 5.640 AMWU v Toyota Motor Corporation Australia [2013] FWA 8237 ........................ 4.520 AMWU v Visy Board Pty Ltd [2013] FWC 323 ........................................................ 4.530 ANF v Alcheringa Hostel Incorporated (2004) 136 FCR 530 .............................. 13.280 ANF v Croft Health Care (Vic) Pty Ltd [2000] FCA 93 ........................................ 13.320 ANZ v Bartlett [2016] NSWCA 30 ............................................................................. 5.240 APESMA v Skilled Engineering Pty Ltd (1994) 122 ALR 471; 54 IR 236 ............ 7.20, 8.50, 9.60, 13.100 APT Technology Pty Ltd v Aladesaye [2014] FCA 966 ................... 5.530, 5.570, 5.600 ASIC v Citigroup Global Markets Pty Ltd (No 4) (2007) 241 ALR 705 .............. 5.830, 8.350 ASIC v National Exchange Pty Ltd [2005] FCAFC 226 .......................................... 4.300 ASU v Ansett Australia Ltd (2000) 175 ALR 173 ......... 13.170, 13.250, 13.280, 13.300 ASU v Greater Dandenong City Council (2000) 101 IR 143 ..... 11.10, 13.240, 13.300, 13.320 ASU v Greater Dandenong City Council (No 2) [2001] FCA 1076 .................... 13.320 ATS (Asia Pacific) Pty Ld v Dun Oir Investments Pty Ltd [2012] FCA 1460 ............................................................................................................................. 4.300 AWU v BHP Iron Ore Pty Ltd (2001) 106 FCR 482 ..... 13.30, 13.230, 13.240, 13.270, 13.300 AWU v John Holland Pty Ltd (2000) 102 IR 172 ................................................... 13.320 AWU v Johnson Matthey (Aust) Ltd (2000) 171 ALR 410 .................................... 13.240 AWU v Johnson Matthey (Aust) Ltd [2000] FCA 728 ........................................... 13.310 AWU v Mackay Harbour Board; Re Keane (1939) 33 QJP 124 .............................. 8.360 AWU v Stegbar Australia Pty Ltd [2001] FCA 367 ..................................................... 7.30 AWU-FIME Amalgamated Union v Queensland Alumina Ltd (1995) 62 IR 385 ............................................................................................................ 8.320, 13.160 AWU (NSW Branch) v Grain Handling Authority of NSW (1988) 22 IR 447 ............................................................................................................................... 8.210 AZ v The Age [No 1] [2013] VSC 335 ............................................................ 6.230, 6.240 Abbott-Etherington v Houghton Motors Pty Ltd (1995) 63 IR 394 ................... 13.210 Abdalla v Viewdaze Pty Ltd (2003) 122 IR 215; [2003] AIRC 504 ............ 2.240, 2.250, 2.290, 2.320 Able Tours Pty Ltd v Mann [2009] WASC 192 .......................................................... 5.550 Ablett v Gemco Rail Pty Ltd [2010] FWA 8124 ........................................................ 12.40 Abood v Heartland Motors Pty Ltd [2010] NSWIRComm 52 ............................... 5.510 Abrahams v Performing Rights Society Ltd [1995] ICR 1028 ...... 9.150, 9.190, 10.220, 10.350 x

Table of Cases

Access for All Alliance (Hervey Bay) Inc v Hervey Bay City Council [2004] FMCA 915 ................................................................................................... 15.140 Accident Compensation Commission v Odco Pty Ltd (1990) 64 ALJR 606 .................................................................................................................... 2.320, 3.100 Achal v Electrolux Pty Ltd (1993) 50 IR 236 .......................................... 8.90, 9.50, 9.100 Acrow (Automation) Ltd v Rex Chainbelt Inc [1971] 1 WLR 1676 ..... 14.350, 14.390, 14.410 Actew Corporation Ltd v Pangallo [2002] FCAC 325 .............................................. 4.520 Actrol Parts Pty Ltd v Coppi (No 2) [2015] VSC 694 .................................. 9.140, 9.400 Adami v Maison De Luxe Ltd (1924) 35 CLR 143 ............................ 8.190, 8.220, 8.230 Adams v Union Cinemas [1939] 3 All ER 136 ............................................................ 9.40 Adamson v Jarvis (1827) 4 Bing 66; 130 ER 693 .......................................... 5.350, 5.370 Adamson v NSW Rugby League Ltd (1990) 27 FCR 535 ....................................... 4.360 Adamson v West Perth Football Club (1979) 39 FLR 199 ...................................... 4.360 Addis v Gramophone Co Ltd [1909] AC 488 ................................ 10.90, 10.260, 10.270 Adelaide Hebrew Congregation Inc v Engel [2007] SADC 23 ..................... 2.400, 4.50 Adidem Pty Ltd v Suckling [2014] FWCFB 3611 ..................................................... 5.800 Administrative and Clerical Officers Association v Commonwealth (1979) 53 ALJR 588 ................................................................................................ 12.370 Adrema Ltd v Jenkinson [1945] 1 KB 446 ................................................................. 9.370 Advance Resource Services Pty Ltd v Charlton [2006] SAIRC 79; (2006) 157 IR 341 ...................................................................................................... 2.250, 2.290 Advanced Australian Workplace Solutions Pty Ltd v Kangan Batman TAFE (unreported, AIRC, Giudice (President), McIntyre (VP) and Commissioner Redmond, 25 October 1999) ...................................................... 13.100 Adventure World Travel Pty Ltd v Newsom (2014) 86 NSWLR 515 ............ 9.50, 9.60 Advertiser Newspapers Pty Ltd v Industrial Relations Commission (SA) (1999) 74 SASR 240; 90 IR 211 .............................................................. 13.100, 13.120 Affinity Risk Partners (Brokers) Pty Ltd, Re [2011] FWA 295 ................................ 9.180 Affleck v Newcastle Mind [1999] ICR 852 ................................................................. 4.140 Aged Care Services Australia Group Pty Ltd v Ziday (2008) 172 IR 385 ............. 13.70 Agnew v Nationwide News Ltd PR 927597 ............................................................ 13.160 Aitken v Construction, Mining, Energy, Timberyards, Sawmills & Woodworkers Union of Australia (WA Branch) (1995) 63 IR 1 ......... 9.170, 10.330 Ajax Cooke Pty Ltd v Wong (1996) 40 AILR 7-059 ................................................. 9.180 Ajax Cooke Pty Ltd (t/as Ajax Spurway Fasteners) v Nugent (1993) 5 VIR 551 ................................................................................... 4.70, 4.130, 9.180, 12.390 Ajax Insurance Co Ltd v Smith (1962) 79 WN (NSW) 83 .................................... 10.110 Akmeemana v Murray (2009) 190 IR 66; [2009] NSWSC 979 .................. 4.480, 10.250 Alam v Ecological Development & Construction Pty Ltd [2010] FMCA 411 ............................................................................................................................... 4.230 Alcan Australia Ltd, Re; Ex parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 54 IR 475 .......................... 12.90 Alcoa of Australia Ltd v Barrett (2007) 170 IR 254 ................................................. 13.10 Aldersea v Public Transport Corporation (2001) 183 ALR 545 ..... 4.520, 5.280, 8.100, 10.320, 10.330, 10.370 Aldridge v Booth (1988) 80 ALR 1; EOC 92-222 .................................................. 15.200 Alexander v Home Office [1988] 2 All ER 118 ...................................................... 15.230 Alexander v Standard Telephones and Cables plc [1990] ICR 291 ........................ 11.60 Alexander v Webber [1922] 1 KB 642 ......................................................................... 8.310 Ali v Christian Salvesen Food Services Ltd [1997] ICR 25 ...................................... 4.520 Ali v London Borough of Southwark [1988] IRLR 100 .......................................... 11.60 Alidair Ltd v Taylor [1977] ICR 446 ............................................................................ 8.240 Allcard v Skinner (1887) 36 Ch D 145 ........................................................................ 4.270 xi

Macken’s Law of Employment

Allen v Flood [1898] AC 1 ................................................. 14.110, 14.230, 14.310, 14.400 Allen v Hounga [2014] UKSC 47; [2014] ICR 847; [2012] EWCA Civ 609; [2014] 1 WLR 2889 ............................................................................... 4.310, 4.320 Allen v Hounga [2012] EWCA Civ 609 .......................................................... 4.310, 4.320 Alliance Strata Management Pty Ltd v Caputo (unreported, ICt(NSW), Hungerford J, 27 February 1996) ........................................................................... 10.50 Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410 ......................... 13.160 Allied Express Transport Pty Ltd v Mears [2010] NSWSC 1112 ........................... 5.750 Allied Mills v Trade Practices Commission (1981) 34 ALR 105 ............................. 5.710 Allison v BDO (NSW-Vic) Pty Ltd [2010] VSC 35 ....................................... 5.750, 5.760 Allison v Bega Valley Council (1995) 63 IR 68 ............................................................ 8.90 Allman v Teletech International Pty Ltd (2008) 178 IR 415 ................................... 9.190 Allstate Life Insurance Company v Australia and New Zealand Banking Group Ltd (1995) 58 FCR 26 .................................................................. 14.120, 14.130 Amalgamated Collieries (WA) Ltd v True (1937) 59 CLR 417 .................... 5.20, 12.330 Ambulance Victoria v LHMU (2009) 187 IR 119 [2009] FWA 44 ......................... 14.40 Amcor Ltd v CFMEU (2005) 222 CLR 241 ....................................... 9.170, 9.190, 9.410 Amery v Department of Education & Training (NSW) [2004] NSWCA 404 ............................................................................................................... 15.140, 15.190 Ami Holdings Pty Ltd v Fairfax Media Publications [2009] NSWSC 1484 .......... 5.720 Amie Mac v Bank of Queensland Ltd [2015] FWC 774 ........................................ 13.390 Amoco v Rocca (1973) 133 CLR 310 .......................................................................... 4.420 Amy Linetta Ferguson v TNT Australia Pty Ltd [2014] WAIRCmm 20 .............. 4.130, 4.480 Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424 .................. 2.380, 6.110 Anderson v BNP Paribas Securities Services [2015] FCCA 2231 .......................... 5.730 Anderson v Crown Ltd [2008] FMCA 152 .............................................................. 13.340 Anderson v Edith Cowan University [1999] FCA 1802 ......................................... 13.240 Anderson v Groote Eylandt Mining Co Pty Ltd (2000) 102 IR 5 ........................ 13.190 Anderson v STA Travel Pty Ltd (unreported, AIRC, Watson SDP, Duncan SDP and Whelan C, 19 May 2005) .......................................................... 13.80 Anderson v Umbakumba Community Council (1994) 1 IRCR 457; 56 IR 102 ............................................................................................................................. 13.120 Andonovski v Park-Tec Engineering Pty Ltd (No 6) [2015] NSWSC 341 .......... 3.170, 3.210 Andrews v VWA [2013] VCC 1615 ...................................................... 6.270, 6.500, 6.580 Andrews Advertising Pty Ltd v David Andrews [2014] NSWSC 318 ........ 5.350, 5.580 Annetta v Ansett Australia Ltd (2000) 98 IR 233 ........................ 13.150, 13.160, 13.180 Annetts v McCann (1990) 170 CLR 596 ..................................................................... 2.410 Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37 .......................................................................................................... 5.610, 5.660, 5.680 Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 ............. 14.80, 14.110, 14.140, 14.150, 14.160, 14.170, 14.200, 14.250, 14.260, 14.330, 14.350, 14.360, 14.380, 14.400, 14.410 Ansett Transport Industries (Operations) Pty Ltd v Wardley (1984) EOC 92-002 ............................................................................................................ 15.60, 15.270 Ansett Transport Industries Operations Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 ............................................................................ 14.20 Anthony Smith & Associates Pty Ltd v Sinclair (1996) 67 IR 240 ......... 13.210, 13.340 Anwar v Mondello Farms Pty Ltd [2015] SASCFC 109 ................... 6.210, 6.220, 6.230 Aon Ltd v JLT Reinsurance Brokers Ltd [2009] EWHC 3448 ............................... 5.680 Appellant v Respondent (1998) 89 IR 407 ............................................................... 13.160 Appleby v Johnson (1874) LR 9 CP 158 ..................................................................... 4.100 Appleby v Myers (1867) LR 2 CP 651 ......................................................................... 10.40 xii

Table of Cases

Applicant v Australian Federal Police [2012] FWA 1352 ....................................... 13.160 Applicant v Respondent [2014] FWC 9184 .............................................................. 13.390 Applicant v Respondent (unreported, FWC, Drake SDP, 21 March 2014, PR 548852) ............................................................................................................... 13.410 Applicant, The v General Manager and Company C [2014] FWC 3940 ............. 13.390 Application by AIG to vary the Liquor and Accommodation Industry – Liquor Industries – Maltsters Award 1998, Re (unreported, AIRC, Whelan C, 8 October 1998, Print Q7368) ............................................................. 7.120 Application by MTIA to vary the Rubber, Plastic and Cable Making Industry – General – Award 1996, Re (unreported, AIRC, Lewin C, 17 June 1998, Print Q2003) ..................................................................................... 7.100 Application for Redundancy Awards, Re (1994) 53 IR 419 ..................................... 9.190 Ardelle v Spastic Society of Victoria Ltd [2000] FCA 1429 ...................................... 8.80 Argo Pty Ltd v Attorney-General [2006] TASSC 22 .............................................. 14.350 Arlesheim Ltd v Werner [1958] SASR 136 ................................................. 10.110, 10.120 Arthurson v State of Victoria [2001] VSC 244 .......................................................... 4.530 Ashbury Railway Carriage & Iron Co v Riche (1875) LR 7 HL 653 ...................... 4.150 Ashley v Statewide Autistic Services Inc [2005] AIRC 607 ..................................... 5.830 Askey v Golden Wine Co (1948) 64 TLR 379 ........................................................... 5.360 Aspin v Metric Group Ltd [2004] EWHC 1265 ............................................ 4.520, 5.290 Associated Dominions Assurance Society Pty Ltd and the Life Insurance Act, Re (1962) 109 CLR 516 .................................................................................... 9.310 Associated Dominions Assurance Society Pty Ltd v Andrew (1949) 49 SR (NSW) 351 ............................................................................................................ 5.850 Associated Newspapers v Insert Media [1988] 1 WLR 509 .................................. 14.400 Associated Newspapers Group Ltd v Wade [1979] ICR 664 ................................ 14.390 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 ................................................................. 5.220, 8.120, 10.150, 10.170 Association of Professional Engineers, Scientists and Managers Australia (on behalf of Cross) v Deniliquin Council (No 2) (1995) 134 ALR 267 .................................................................................................................. 9.170, 13.140 Atfield v Jupiters Ltd (2003) 124 IR 217 .................................................................. 13.160 Athens-Macdonald Travel Services Pty Ltd v Kazis [1970] SASR 264 ............... 10.260 Atkin v Acton (1830) 4 Car & P 208; 172 ER 673 .................................................... 8.320 Atlas Steels Australia Pty Ltd v Atlas Steels Ltd (1948) 49 SR (NSW) 157 .......... 11.20, 11.30, 11.40 Atlas Tiles Ltd v Briers (1978) 144 CLR 202 ........................................................... 10.340 Attorney-General v Blake [1998] 2 WLR 805 ......................... 5.540, 5.550, 5.570, 5.680 Attorney-General v Blake [2001] 1 AC 268 ........................................ 5.540, 5.550, 5.570 Attorney-General v Gray [1977] 1 NSWLR 406 ....................................................... 4.310 Attorney-General v Western Australian Prison Officers’ Union of Workers (1995) 62 IR 225 .............................................................................. 8.90, 9.100 Attorney-General v Whiteman (1912) 11 AR (NSW) 137 ....................................... 8.260 Attorney-General of New South Wales v World Best Holdings Ltd (2005) 63 NSWLR 557 ............................................................................................. 4.300 Attorney-General of the Commonwealth of Australia v R [1957] AC 288 .................................................................................................................................. 1.40 Attorney General (NSW) v Perpetual Trustee (1955) 92 CLR 113 ........................ 2.410 Attorney General of Belize v Belize Telecom Ltd [2009] UKPC 11; [2009] 1 WLR 1988 ....................................................................................... 4.520, 5.190 Attwood v Barley Marketing Board (NSW) [1982] WCR 94 ................................... 2.380 Attwood v Lamont [1920] 3 KB 571 ........................................................................... 4.430 Aufgang v Kominsky Nominees Pty Ltd [2008] VSC 27 ............................. 2.280, 2.420 Aurizon Operations Ltd, Re [2015] FWCFB 540 ...................................................... 12.80 xiii

Macken’s Law of Employment

Ausdale Enterprises Pty Ltd v Sandford [2006] WASCA 191 ................................. 4.350 Aussie Home Loans v X Inc Services [2005] NSWSC 285 .............. 4.420, 5.750, 5.760 Austin v Honeywell Ltd [2013] FCCA 662 ................................................................ 5.400 Australasian Meat Industry Employees’ Union v Fair Work Australia [2012] FCAFC 85 ...................................................................................................... 6.610 Australasian Meat Industry Employees Union v Mudginberri Station (1986) 161 CLR 98 .................................................................................................. 14.100 Australasian Meat Industry Employees’ Union v Peerless Holdings Pty Ltd [2000] FCA 1047 ................................................................................................ 4.250 Australasian Meat Industry Employees’ Union, Newcastle & Northern Branch v Australian Independent Contractors Agency [2004] NSWIRComm 238 ........................................................................................ 2.220, 3.100 Australasian Transport Officers Association v Department of Motor Transport (1988) 25 IR 235 ......................................................................... 8.100, 8.370 Australia Meat Holdings Pty Ltd v Kazi [2004] QCA 147 ....................................... 4.320 Australian & New Zealand Banking Group Ltd v Karam (2005) 64 NSWLR 149 ............................................................................................................... 4.250 Australian Agricultural Co v Federated Engine-drivers and Firemen’s Association of Australia (1913) 17 CLR 261 .......................................... 4.330, 12.370 Australian Air Express Pty Ltd v Langford (2005) 147 IR 240; [2005] NSWCA 96 ........................................................ 2.50, 2.100, 2.250, 2.260, 2.270, 2.340 Australian Airline Flight Engineers Association v Ansett Australia Ltd (2000) 102 IR 162 .................................................................................................... 10.170 Australian and International Pilots Association v Qantas Airways Ltd [2011] FWAFB 3706 ................................................................................................. 12.30 Australian and International Pilots Association v Fair Work Australia (2012) 202 FCR 200 ................................................................................................ 12.110 Australian and International Pilots Association v Qantas Airways Ltd [2013] FWCFB 317 ................................................................................................. 12.110 Australian and International Pilots Association v Qantas Airways Ltd [2014] FCA 32 ............................................................................................................ 4.510 Australian and New Zealand Banking Group v Karam (2005) 64 NSWLR 149 ............................................................................................................... 4.290 Australian Bank Employees’ Union v Australia & New Zealand Banking Group Ltd (1990) 34 IR 1 .......................................................................................... 9.30 Australian Bank Employees Union v National Australia Bank Ltd (1989) 31 IR 436 .................................................................................................................... 5.110 Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 .......................................................................... 5.680, 5.690, 11.10 Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 ..................... 11.10 Australian Building & Construction Commissioner v Inner Strength Steel Fixing Pty Ltd [2012] FCA 499 ..................................................................... 2.100 Australian Chamber of Manufacturers v Derole Nominees Pty Ltd (unreported, AIRC,Peterson J, Marsh DP and Commissioner Oldmeadow, 12 September 1990) ........................................................................... 9.190 Australian Collieries’ Staff Association v BHP Coal Pty Ltd (2000) 99 FCR 137 .................................................................................................................... 13.280 Australian Competition and Consumer Commission v Roberson [2008] FCA 1735 .................................................................................................................... 4.240 Australian Education Union v Victoria [2015] FCA 1196 ....................................... 4.530 Australian Education Union, Re; Ex parte Victoria (1995) 184 CLR 188 ............. 2.410 Australian Film Commission v Mabey (1985) 59 ALR 25 ................ 9.90, 9.100, 12.310 Australian Football League v The Age Company Ltd (2006) 15 VR 419; [2006] VSC 308 .................................................................................. 5.680, 5.710, 5.720 xiv

Table of Cases

Australian Hardwoods Pty Ltd v Commissioner for Railways [1961] 1 WLR 425 ........................................................................................................... 5.50, 11.80 Australian Institute of Marine and Power Engineers v Australian Coastal Shipping Commission (1972) 146 CAR 468 ........................................................... 9.50 Australian Iron & Steel Pty Ltd v Banovic (1989) 168 CLR 165 ........... 15.100, 15.130, 15.150 Australian Licenced Aircraft Engineers Association, The v Qantas Airways Ltd [2009] AIRC 268 ................................................................................. 4.520 Australian Licensed Aircraft Engineers Association v Qantas Airways Ltd [2011] FMCA 58 .............................................................................................. 13.250 Australian Licensed Aircraft Engineers Association v Qantas Airways Ltd (2012) 218 IR 165; [2012] FWAFB 236 ............................................ 12.110, 14.40 Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1 .......... 13.160, 13.210 Australian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1985) 9 FCR 425 ..................................................................................... 8.30, 14.50 Australian Mutual Provident Society v Allan (1978) 52 ALJR 407 ............. 2.350, 2.420 Australian Mutual Provident Society v Chaplin (1978) 52 ALJR 407; 18 ALR 385 ................................................................................................ 2.50, 2.260, 2.340 Australian National Airlines Commission v Robinson [1977] VR 87 ............ 5.50, 7.30, 8.260, 10.70, 11.80 Australian National Hotels Pty Ltd v Jager (2000) 9 Tas R 153 ...................... 9.30, 9.40 Australian National University v Burns (1982) 43 ALR 25 ........................................ 9.90 Australian Nursing Federation; re Suratman and Gell, Appeals (1989) 4 VIR 193 ....................................................................................................................... 9.170 Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 ........................................................................................................ 10.50, 13.310 Australian Paper Ltd v CEPU (1998) 81 IR 15 .......................................................... 14.90 Australian Postal Corporation v Rushiti (2012) 224 IR 382; [2012] FWAFB 7423 .................................................................................... 5.400, 5.410, 13.160 Australian Public Service Determinations as to Stand Downs, Re (1984) 10 IR 457 .................................................................................................................... 7.100 Australian Rail, Tram and Bus Industry Union v KDR Victoria Pty Ltd [2013] FCA 330 .............................................................................................. 4.480, 4.530 Australian Rail, Tram and Bus Industry Union v Rail Infrastructure Corp [2007] AIRC 15 .............................................................................................. 4.470, 4.530 Australian Rail, Tram and Bus Industry Union of Employees West Australian Branch v Public Transport Authority [2005] WAIRComm 1276 .................................................................................................................. 4.480, 4.520 Australian Rail Tram and Bus Industry Union (WA Branch) and Kirkpatrick v Metropolitan (Perth) Passenger Transport Trust (unreported, AIRC, Linkenbagh JR, 11 October 1994) ...................................... 8.300 Australian Railways Union of Workers (WA Branch) v Western Australian Government Railways Commission [1997] WAIRComm 168 ............................................................................................................................... 4.530 Australian Salaried Medical Officers Federation v ACT Visiting Medical Officers Association (2005) 142 IR 362; [2005] AIRC 525 ....... 2.100, 2.150, 2.260, 2.270, 2.320 Australian Salaried Medical Officers’ Federation (NSW) v Sydney South West Area Health Service (No 2) [2007] NSWIRComm 243 ....... 4.50, 4.110, 4.200 Australian Salaried Medical Officers’ Federation (NSW) (on behalf of Bruce Hall) v South Western Sydney Area Health Service [2006] NSWIRComm 101 .................................................................................................... 2.350 Australian Telecommunications Commission v Hart (1982) 65 FLR 41 ............... 8.210 xv

Macken’s Law of Employment

Australian Tramways Employees’ Association v Brisbane Tramways Co Ltd (1912) 6 CAR 35 ..................................................................................... 5.420, 8.210 Australian Wool Innovation v Newkirk No 2 [2005] FCA 1307 .......................... 14.400 Australian Wool Innovation Ltd v Newkirk [2005] FCA 290 ................... 14.80, 14.330 Australian Wool Selling Brokers Employers’ Federation v Federated Storemen and Packers Union of Australia (1976) 176 CAR 884 ........................ 9.90 Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424 ................ 4.70 Australian Workers Union v Barminco Pty Ltd [2015] FWC 99 ............................ 5.800 Australian Workers Union v BlueScope Steel Ltd [2007] NSWIRComm 1022 ........................................................................................................ 5.40, 5.120, 14.70 Australian Workers’ Union v BlueScope Steel Ltd t/as BlueScope Lysaght [2011] FWA 7525 ........................................................................................ 12.80 Australian Workers’ Union v Mason and Cox Foundries (1996) 66 IR 27 .............. 8.70 Australian Workers’ Union, New South Wales Branch v Roads & Traffic Authority (NSW) (1989) 29 IR 202 ...................................................................... 11.130 Australian Workers Union, WA Branch, Industrial Union of Workers v BHP Billiton Iron Ore [2005] WAIRComm 706 ................................................. 2.400 Australian Workers Union (WA Branch) v Goldsworthy Mining Ltd (1978) 20 AILR 259 .................................................................................................. 8.340 Austress-Freyssinet Pty Ltd v Kowalski [2007] NSWSC 399 .................................. 4.340 Autoclenz Ltd v Belcher [2009] EWCA Civ 1046 ......................................... 2.100, 4.570 Autoclenz Ltd v Belcher [2011] UKSC 41; [2011] ICR 1157 ......... 2.100, 2.260, 4.470, 4.570 Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 ...... 5.30, 5.40, 5.310, 8.30, 8.40, 8.50, 9.50, 9.60, 9.80, 10.40, 10.190, 11.150 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) v Veolia Water Operations Pty Ltd [2015] FWC 2561 ...................... 12.80 Automotive, Food, Metals Engineering, Printing and Kindred Industries Union v Toyota [2013] FWC 8237 ......................................................................... 4.530 Automotive Food Metals Engineering Printing and Kindred Industries Union and Zwart v Visy Packaging Pty Ltd [2011] FCA 953 .......................... 13.250 Avirone Pty Ltd v Kenneth Pirrie Pty Ltd (unreported, NSWCA, Meagher, Handley and Cole JJA, 5 February 1996) ............................................. 9.360 Award Simplification Decision, Re (1997) 75 IR 272 ............................................... 7.100 Ayub v Vauxhall Motors Ltd [1978] IRLR 428 ................................................................... Aztec Steel Pty Ltd v Gaden [2011] FWA 42 ............................................................. 9.180

B B v McM (1987) 8 SR (WA) 36 ..................................................................................... 4.330 B G Gale Ltd v Gilbert [1978] ICR 1149 ..................................................................... 9.50 BBC v Beckett [1983] IRLR 43 ...................................................................................... 8.90 BD Investments Pty Ltd v Workers Rehabilitation and Compensation Corporation [1994] SASC 4673 .............................................................................. 2.290 BDO Group Holdings (Qld) Ltd v Sully [2015] QSC 166 ........................... 4.420, 4.430 BDO Group Investments (NSW-Vic) Pty Ltd v Ngo [2010] VSC 206 .... 4.340, 4.390, 5.60, 5.610, 5.630, 5.750, 5.760 BG plc v O’Brien [2001] IRLR 496 ............................................................................. 5.220 BHP Billiton Iron Ore Pty Ltd v Capon [2014] WASC 267 .................................... 6.680 BHP Iron Ore Pty Ltd v AWU (2000) 102 FCR 97 .................... 13.240, 13.250, 13.320 BLB Corporation of Australia Establishment v Jacobsen (1974) 48 ALJR 372 .................................................................................................................... 5.720 BP Australia Pty Ltd v Tarren [2006] NSWCA 305 .................................................. 3.210 xvi

Table of Cases

BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20 ...................................................................................................................... 4.520 BWIU v Odco Pty Ltd (1991) 37 IR 380; 99 ALR 735 ................................ 2.250, 3.100 Baff v NSW Commissioner of Police [2013] NSWSC 1205 .................................. 5.850 Baiada Poultry v VWA [2015] VSCA 344 ................................................................... 6.670 Baiada Poultry Pty Ltd v The Queen (2012) 246 CLR 92; [2012] HCA 14 ......... 6.420, 6.430, 6.440, 6.550, 6.670 Baker v Salisbury City Corporation (1982) 22 IR 168 ....................... 11.10, 11.70, 11.80 Baker v Denkara Ashanti Mining Corp Ltd (1903) 20 TLR 37 ............................ 10.200 Baker v Gough [1963] 1 NSWLR 1345 .................................................................... 11.110 Baker v University of Ballarat (2005) 225 ALR 218 ................................................. 8.100 Baker v University of Ballarat [2005] FCA 99 ........................................................... 11.10 Balfours Bakery v Cooper [2011] FWAFB 8032 ..................................................... 13.210 Balston Ltd v Headline Filters Ltd [1987] FSR 330 .................................................. 5.665 Balthazaar v Department of Human Services (Cth) [2014] FWC 2076 .............. 13.380 Baltic Shipping Co v Dillon (1993) 176 CLR 344 ..................................... 10.260, 12.260 Bampton v Viterra Ltd [2014] SADC 170 .................................................................. 5.250 Bampton v Viterra Ltd [2015] SASCFC 87 ................................................................ 5.410 Banco Office Services Pty Ltd v Cannon (1988) 30 AILR 101 .............................. 5.480 Banerji v Bowles [2013] FCCA 1052 ........................................................................... 5.770 Bank Voor Handel en Scheepvaart NV v Slatford [1953] 1 QB 248 ..................... 2.150 Bank of Credit and Commerce International SA v Aboody [1990] 1 QB 923 ............................................................................................................................... 4.270 Bank of Credit and Commerce International SA v Ali (No 1) [2001] 2 WLR 735 ............................................................................................. 4.200, 5.830, 8.350 Bank of Credit and Commerce International SA v Ali [1999] 2 All ER 1005; [1999] IRLR 226 .................................................................................. 4.200, 5.830 Bank of Credit and Commerce International SA v Ali (No 2) [2000] 3 All ER 51 .................................................................................................... 10.280, 10.320 Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 301; 60 ALJR 362 .................................................................................................................... 6.110, 6.150 Barac v Farnell (1994) 53 FCR 193 ...................................................... 4.310, 4.320, 4.330 Barbaro v Certegy Australia (2003) 126 IR 348 ....................................................... 13.160 Barber v Somerset [2004] 1 WLR 1089 ........................................................... 6.230, 6.300 Barclay v Penberthy (2012) 246 CLR 258 ................................................................... 6.100 Barclay v The Board of the Bendigo Regional Institute of Technical and Further Education [2011] FCAFC 14 .................................................... 13.250, 13.300 Barclays Bank plc v O’Brien [1994] 1 AC 180 ........................................................... 4.270 Barghouthi v Transfield Pty Ltd (2002) 122 FCR 19 .................................... 8.90, 13.110 Barker v Commonwealth Bank of Australia (2012) 296 ALR 706 ....................... 10.310 Barker v Woolworths (SA) Pty Ltd [1998] SAIRComm 49 ..................................... 5.840 Barlow v Neville Jeffress Advertising Pty Ltd (1994) 4 Tas R 391 ......................... 4.280 Barlow v Qantas Airways Ltd (1997) 75 IR 100 ...................................................... 13.210 Barnes v Dawson [1962] NSWR 73 ................................................................. 2.220, 2.260 Barnes v Ranger Uranium Mines Pty Ltd (1993) 44 FCR 331 .............................. 10.240 Barnett v Territory Insurance Office [2011] FCA 968 ............................................. 5.410 Barossa Co-op Winery Ltd v Kolarovich (1977) 16 SASR 392 ............................ 10.250 Barratt v Howard [2000] FCA 190 ............................................................................... 2.410 Barrett v Create (Geelong) Inc t/as Create [2010] FWA 5576 ........ 2.230, 2.290, 2.360 Barrett v Ecco Personnel Pty Ltd [1998] NSWCA 30 .............................................. 5.600 Barrett and Women’s Hospital Crown Street, Re [1947] AR (NSW) 565 ............. 8.230 Barretts & Baird (Wholesale) Ltd v Institution of Professional Civil Servants [1987] 1 IRLR 3 ........................................................... 14.270, 14.380, 14.390 Barro Group Pty Ltd v Fraser [1985] VR 577 ................................................ 2.340, 2.420 xvii

Macken’s Law of Employment

Barro Group Pty Ltd v Fraser [2007] VSCA 86 ........................................................ 2.420 Barry v Midland Bank plc [1999] 3 All ER 974 ......................................................... 9.180 Bartholomew v London Borough of Hackney [1999] IRLR 246 .......................... 5.290 Bartlett v Australia and New Zealand Banking Group Ltd (2014) 246 IR 190; [2014] NSWSC 1662 ............................................................................. 8.100, 8.120 Bartlett v Australia and New Zealand Banking Group Ltd [2016] NSWCA 30 ............................ 5.240, 5.260, 5.270, 8.10, 8.100, 8.120, 10.100, 10.150 Bartlett v Wirrina Resort Pty Ltd [2009] SAIRC 56 ............................ 3.50, 4.200, 4.330 Barto v GPR Management Services Pty Ltd (1991) 105 ALR 339 ........................ 4.230 Bartolo v Doutta Galla Aged Services Ltd (No 2) [2015] FCCA 345 ................... 6.240 Barton v Armstrong [1976] AC 104 ............................................................................ 4.250 Baster v London & County Printing Works [1899] 1 QB 901 ..................... 8.180, 8.240 Batten v Ginevra Nominees Pty Ltd [2013] VCC 839 ............................................. 2.420 Batty v Monks (1865) 12 LT (NS) 832 ........................................................................ 9.360 Bau v Victoria [2009] VSCA 107 .............................................. 2.410, 4.490, 6.240, 6.290 Bauman v Hulton Press Ltd [1952] 2 All ER 1121 ................................................... 5.320 Bayley v Osborne (1984) 4 FCR 141 ............................................................................. 9.90 Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341 ............ 5.530, 5.540, 5.550, 5.560, 5.570, 5.600, 5.650 Beach v Reed Corrugated Cases Ltd [1956] 1 WLR 807 ......................... 10.230, 10.250 Beach v Reed Corrugated Cases Ltd [1956] 1 WLR 812 ....................................... 10.250 Beard v London General Omnibus Co [1900] 2 QB 530 .......................................... 6.60 Beard, Re; Beard v Hall [1908] 1 Ch 383 .................................................................... 4.330 Bearingpoint Australia Pty Ltd v Hillard [2008] VSC 115 ............... 4.420, 5.330, 5.340, 5.620, 8.40, 9.140, 10.140, 10.160, 10.220, 11.30 Bearingport Australia Pty Ltd v Hillard [2008] VSC 115 ............................. 4.400, 5.610 Beaudesert Shire Council v Smith (1966) 120 CLR 145 ............................. 14.80, 14.350 Bechara v Gregory Harrison Healey & Co (1996) 65 IR 382 ............................... 13.220 Beck v Castran Gilbert Real Estate Pty Ltd (14 March 2000 .................. 13.110, 13.160 Beck v Darling Downs Institute of Advanced Education (1990) 140 IR 364 ............................................................................................................... 10.230, 10.350 Bednall v Wesley College [2005] WASC 101 .................................................. 5.270, 8.100 Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 .......... 11.10, 14.90 Beerens v Bluescope Distribution Pty Ltd (2012) 39 VR 1; [2012] VSCA 209 .................................................................................................................... 4.250, 5.220 Bell v Lever Bros Ltd [1932] AC 161 ....................................... 5.830, 5.840, 5.850, 8.350 Bell v McArthur River Mining Pty Ltd (1998) 81 IR 436 ........................................ 13.80 Bell v Shire of Dalwallinu [2008] WAIRComm 01269 ............................................. 12.20 Bell-Booth Group v Attorney-General [1989] 3 NZLR 148 ................................... 5.290 Bell Bros Pty Ltd v Transport Workers Union (1966) 8 AILR 352 ........................ 8.240 Bell Bros Pty Ltd v Transport Workers’ Union of Australia, Industrial Union of Workers (WA Branch) (1949) 46 WAIG 1116 .................................... 8.240 Bellia v Assisi Centre Inc [2010] FWA 2904 ................................................................. 4.50 Bellia v Assisi Centre Inc [2011] FWAFB 5944 ....................................................... 13.210 Bendigo Regional Institute of Technical and Further Education, Board of v Barclay (2012) 248 CLR 500; [2012] HCA 32 ............... 13.260, 13.300, 15.270, 15.310 Bennett v Commonwealth [1980] 1 NSWLR 581 ........ 7.20, 7.30, 7.50, 11.110, 11.150 Bennett v Everitt (1988) EOC 92-244 ........................................................................ 15.80 Bennett v Excelsior Land Investment & Building Co Ltd (1893) 14 NSWR (Eq) 179 ...................................................................................................... 14.100 Bennett v President, Human Rights and Equal Opportunity Commission [2003] FCA 1433; (2003) 134 FCR 334 .......................................... 5.770 xviii

Table of Cases

Bents Brewery v Hogan [1945] 2 All ER 570 ............................................ 14.130, 14.190 Berryland Books Ltd v BK Books Ltd [2009] EWHC 1877 ........... 5.530, 5.600, 5.830 Best v Staffordshire University [2005] ICR 782 ......................................................... 6.240 Beverage Packers (Australia) Pty Ltd, Re [1990] VR 446 ......................................... 9.310 Bhasin v Hrynew [2014] SCC 71 .......................................................... 5.170, 5.180, 5.220 Bianchi v Staff Aid Services [2004] AIRC 428 .......................................................... 2.260 Biffa Waste Services Ltd v Maschinenfabrik Ernest Hese GMBH [2008] EWCA Civ 1257 .............................................................................................. 3.60, 3.250 Bilbee v Haas (1889) 5 TLR 677 .................................................................................... 4.50 Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 ................. 4.90, 4.130, 10.100, 10.250 Birch v University of Liverpool [1985] ICR 470 ....................................................... 9.340 Bird v British Celanese Ltd [1945] 1 KB 336 ............................................................... 7.40 Birdanco Nominees Pty Ltd v Money [2012] VSCA 64 ........................................... 4.440 Birdi v Rail Corpoation NSW (t/as Railcorp) [2011] FWA 7728 ......................... 13.160 Birrell v Australian National Airlines Commission (1984) 5 FCR 447 .......... 9.40, 9.60, 9.90, 9.100, 9.140 Bishop v Emora Pty Ltd (unreported, AIRC, Wilcox CJ, 7 February 1997, Wilcox CJ) ...................................................................................................... 13.210 Biviano v Suji Kim Collection (unreported, AIRC, Ross VP, O’Callaghan SDP and Foggo C, 28 March 2002, Print PR915963) ....................................... 13.220 Black v Brimbank City Council (1998) 152 ALR 491 ................................. 9.180, 10.360 Black v Metro Farms Pty Ltd (1993) 60 SAIR 459 ................................................. 10.250 Black Coal Mining Industry Award 2010, Re [2015] FWCFB 2192 ..................... 15.290 Blackadder v Ramsey Butchering Services Pty Ltd (2002) 118 FCR 395; 113 IR 461; [2002] FCA 603 ........................................................................ 4.510, 5.420 Blackadder v Ramsey Butchering Services Pty Ltd (2003) 127 FCR 381 .............. 5.330 Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539 ............. 4.510, 5.330, 5.340, 9.170, 10.140, 11.10, 11.80, 11.90, 11.100, 13.210 Blackmagic Design Pty Ltd v Overliese [2010] FCA 13 ....... 5.540, 5.560, 5.780, 5.830 Blackmagic Design Pty Ltd v Overliese (2011) 191 FCR 1 ..................................... 8.350 Blackwater v Plint [2005] 3 SCR 3; 2005 SCC 58 ........................................................ 6.60 Blaikie v Superannuation Board (SA) (1995) 64 IR 145 ............................................. 8.90 Blake v J Perry Nominees [2012] VSCA 122 ............................................................... 6.60 Blenner-Hassett v Murray Goulburn Co-operative Co Ltd [1999] VCC 6 ......... 13.370 Bliss v South East Thames Regional Health Authority [1987] ICR 700 ............... 5.150, 5.160, 8.40, 10.270 Bloomfield v Jayrook Pty Ltd (2001) 106 IR 350 .................................................... 13.110 Blue Chip Trading Ltd v Helbawi [2009] IRLR 128 ..................................... 4.310, 4.320 Bluesuits Pty Ltd (t/as Toongabbie Hotel) v Graham (1999) 101 IR 28 .............. 13.70 Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 ........................... 5.530, 8.110, 8.120 Blythe v Northwood [2005] NSWCA 221 .................................................................. 5.810 Boaden v Trustee for Shade Unit Trust t/as Clevershade [2013] ACTSC 52 .................................................................................................................................. 6.110 Body Bronze International Pty Ltd v Soleil Tanning Oxford Pty Ltd [2007] FCA 371 ......................................................................................................... 4.250 Bognar v Merck Sharp Dohme Australia) Pty Ltd [2008] FMCA 571 ..................... 9.30 Bohemier v Storwal International Inc (1982) 142 DLR (3d) 8 ............... 10.260, 10.330 Boilermakers Society v Duncan (1947) 58 CAR 111 .................................................. 9.50 Boilermakers and Blacksmiths Society of Australia v BHP Co Ltd; Re Dowling noted (1968) 10 AILR 37 ........................................................................ 8.270 Bold v Brough, Nicholson and Hall Ltd [1964] 1 WLR 201 ..... 10.230, 10.250, 10.360 Bolkiah v KPMG [1999] 2 AC 222 .............................................................................. 5.570 Bolton Gems Pty Ltd v Gregoire [1996] AILR 4 ...................................................... 5.370 xix

Macken’s Law of Employment

Bolwell v Redcliffe Homes Ltd [1999] IRLR 485 ........................................................ 3.50 Bond v Cav Ltd [1983] IRLR 360 ........................................................................ 7.10, 7.90 Bond v Rees Corporate Advisory Pty Ltd [2013] VSCA 13 .................................... 5.620 Bondi Bowling Club Ltd v Federated Liquor and Allied Industries Employees Union (1972) 14 AILR 132 ................................................................. 8.270 Boral Bricks NSW v Frost (1987) 20 IR 70 ................................................ 14.130, 14.150 Boral Resources (Country) Pty Ltd, Re [2011] FWA 6796 ...................................... 12.80 Boral Resources (Qld) Pty Ltd v Pike (1989) 93 ALR 89 ................. 5.450, 5.460, 5.470 Borland v NSW Deputy State Coroner [2006] NSWSC 2002 ................................. 5.850 Borman v Visy Board Pty Ltd [2011] FWA 587 ........................................................ 13.50 Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20; 41 IR 452 ....... 8.220, 10.100, 10.240, 10.340, 10.350, 11.10, 11.70, 12.320, 13.150, 13.160 Bostik Australia Pty Ltd v Liddiard [2009] NSWCA 167 ............................. 3.180, 3.210 Boston Deep Sea Fishing & Ice Co v Ansell (1888) 39 Ch D 339 ............ 5.810, 5.820, 8.130, 8.300, 8.370, 10.40 Botham v Ministry of Defence [2011] UKSC 58; [2012] 2 AC 22 ............ 5.150, 5.240, 5.260 Boulting v Association of Cinematograph Television and Allied Technicians [1963] 2 QB 606 ....................................................... 2.380, 14.110, 14.140 Bournemouth University Higher Education Corporation v Buckland [2010] EWCA Civ 121; [2010] ICR 908 ....................................................... 5.150, 8.30 Bouzourou v Ottoman Bank [1930] AC 271 ............................................................. 8.210 Bowen v Hall (1881) 6 QBD 333 ............................................................................... 14.120 Bowes and Partners v Press [1894] 1 QB 202 .......................................................... 10.350 Bowie v South Australia Brewing Co Pty Ltd (1991) 58 SAIR 357 ........................ 8.370 Bowker v Prophecy Technologies Pty Ltd [1999] NSWIRComm 248 .................. 5.290 Bowker v Software Engineers Australia (NSW) Pty Ltd [2004] NSWIRComm 104 .................................................................................................... 5.290 Bowker v DP World Melbourne Ltd [2014] FWCFB 9227 ................................... 13.400 Bowling v General Motors-Holden Ltd (1980) 50 FLR 79 ..................................... 11.70 Box Hill Institute of TAFE v Johnson [2015] VSCA 245 ........................... 6.230, 6.240 Boyar v The House of Life [2011] FWA 7953 .......................................................... 2.320 Boyne Smelters, Re (1993) 177 CLR 446 .................................................................... 13.10 Boyo v Lambeth London Borough Council [1994] ICR 727 .............. 8.30, 8.40, 9.250, 10.100, 10.180, 10.190, 10.210 Brabazon v Western Mail Ltd (1985) 8 FCR 122 .................................................... 10.370 Brace v Calder [1895] 2 QB 253 ................................................................................. 10.350 Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 142 ALR 99 .......................................................................................................... 9.30, 9.370, 13.120 Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 67 IR 162 ........................................................................................................ 9.30, 9.370, 10.260 Braganzsa v BP Shipping Ltd [2015] UKSC 17; [2015] 1 WLR 1661 .................... 5.240 Brain v Goodyear Tyre & Rubber Co (Australia) Ltd (1959) 58 AR 643 ............ 12.330 Brambles Constructions Pty Ltd v Helmers (1966) 114 CLR 213 ......................... 5.440 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61; ....................................................................................... 4.110, 4.570 Brampton v Viterra Ltd [2014] SADC 170 ................................................................ 4.480 Brand v Monks [2009] NSWSC 1454 .............................................................. 5.710, 5.720 Brandeaux Advisers (UK) Ltd v Chadwick [2010] EWHC 3241 ................ 5.670, 5.840 Brandt v Nixdorf Computer Ltd [1991] 3 NZLR 750 ........................................... 10.330 Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 ................................................................................................................ 1.40 Brar v 13 Cabs [2014] FRWC 2666 .............................................................................. 2.390 Braszell, Re (1984) 26 AILR 222 .................................................................................. 9.150 xx

Table of Cases

Breen v Williams (1996) 186 CLR 71 ................................................... 5.570, 5.830, 8.350 Brekkes v Cattel [1972] Ch 105 .................................................................................. 14.390 Brennan v Kangaroo Island Council (2013) 120 SASR 11 ........................................ 9.30 Brian Moore v LE Stewart Investments Pty Ltd t/as Southern Highlands Taxi Service [2010] NSWIRComm 50 ................................................ 2.390 Bridgestone TG Australia Pty Ltd v Nhut Chau Banh (unreported, AIRC, McIntyre (VP), Duncan DP and Commissioner Jones, 27 July 1998) .......................................................................................................................... 13.150 Bridgewater v Leahy (1998) 194 CLR 457 .................................................................. 4.270 Briers v Australian Telecommunications Commission (1979) 29 ALR 569 .................................................................................................................................. 7.30 Briers v Skilled Group Ltd [2014] TASFC 8 ................................................................ 2.90 Briggs v ICI Ltd (1968) 3 ITR 270 .............................................................................. 9.360 Briggs v Oates [1990] ICR 473 ..................................................................................... 9.330 Briginshaw v Briginshaw (1938) 60 CLR 336 ................................. 8.120, 13.300, 15.220 Brimacombe v Entex Chemicals (SA) Pty Ltd (1986) 28 AILR 489 ........................ 4.80 Brimelow v Casson [1924] 1 Ch 302 ......................................................................... 14.200 Brinks v Kane [2007] NSWSC 62 .................................................................... 5.600, 5.670 Brisbane City Council v Group Projects Pty Ltd (1979) 145 CLR 143 ................. 9.240 Bristow v City Petroleum Ltd [1987] 1 WLR 529 ................................................... 12.160 Britain v Rossiter (1879) 11 QBD 123 ........................................................................ 10.40 Britax Rainsford v Jones (2001) 109 IR 381 ............................................................. 13.150 British American Tobacco Australia Ltd v Gordon (No 3) [2009] VSC 619 .................................................................................................................... 5.710, 5.720 British Building and Engineering Appliances v Dedman [1973] ICR 82 .............. 9.150 British Industrial Plastics Ltd v Ferguson [1940] 1 All ER 479 ............................ 14.130 British Midland Tool Ltd v Midland International Tooling Ltd [2003] EWHC 466 ..................................................................................................... 5.740, 5.840 British Motor Trade Association v Gray [1951] SC 586 ........................................ 14.110 British Motor Trade Association v Salvadori [1949] Ch 556 ................................. 14.150 British Steel Corporation v Granada Television Ltd [1981] AC 1096 .................... 5.720 British Syphon Co Ltd v Homewood [1956] 1 WLR 1190 ...................................... 5.780 British Telecommunications plc v Ticehurst [1992] ICR 383 .................................. 5.420 Broadlex Pty Ltd v Computer Pty Ltd (1983) 50 ALR 92 ..................................... 14.400 Broadmeadows Disability Service [2011] FWA 4063 ............................................... 5.400 Brodie v Singleton Shire Council (2001) 206 CLR 512 ............................................ 1.110 Brodie-Hanns v MTV Publishing Ltd (1995) 67 IR 298 .......................................... 13.50 Bromhead v Graham [2007] NSWCA 257 ................................................................. 9.330 Bromley v Ryan (1956) 99 CLR 362 ............................................................................ 4.280 Brook Street Bureau (UK) Ltd v Dacas [2004] EWCA Civ 217 ............................. 2.180 Brookton Holdings No V Pty Ltd v Kara Kar Holdings Pty Ltd (1994) 57 IR 288 .................................................. 8.20, 8.80, 8.90, 9.40, 9.370, 10.250, 10.360 Broome v Speak [1903] 1 Ch 586 ................................................................................... 4.90 Brophy v Mapstone (1984) 56 ALR 135 ..................................................................... 8.100 Brown v Belleville (City) 2013 ONCA 148 ................................................................ 5.490 Brown v Maurice Blackburn Cashman [2013] VSCA 122 ................ 6.240, 6.250, 6.260 Brown v Southall & Knight [1980] ICR 617 ................................................................ 9.50 Brown Jenkinson & Co Ltd v Percy Dalton (London) Ltd [1957] 2 QB 621 ............................................................................................................................... 5.370 Browne v Commissioner of Railways (1935) 36 SR (NSW) 21 ................................ 7.30 Browning v Crumlin Valley Collieries Ltd [1926] 1 KB 522 ...................................... 7.90 Browning v Great Central Mining Co of Devon Ltd (1860) 5 H & N 856; 157 ER 1423 ...................................................................................................... 4.110 Bruce v AWB Ltd (2000) 100 IR 129 .................... 4.80, 8.20, 8.110, 8.220, 9.190, 9.350 xxi

Macken’s Law of Employment

Bruce v Fingal Glen Pty Ltd (in liq) [2013] FWC 3941 .......................................... 13.110 Brudenell v Frigger [2013] WAIRComm 23 ................................................................. 3.50 Buckenara v Hawthorn Football Club Ltd [1988] VR 39 ............................. 11.40, 11.50 Buckley v Tutty (1971) 125 CLR 353 ............................................................... 4.340, 4.360 Buckman v Barnawartha Abattoirs Pty Ltd (1994) 140 IR 376 ......... 9.40, 9.340, 9.370 Buckman v Barnawartha Abattoirs Pty Ltd (unreported, VSC, Smith J, 28 July 1994) ............................................................................................................. 10.250 Budlong v NCR Australia Pty Ltd [2006] NSWIRComm 288 .................... 5.400, 5.410 Buerckner v Australian Taxation Office (unreported, AIRC, Deegan C, 8 December 2000, Print T4239) ............................................................................... 13.190 Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104; 99 ALR 735 ......... 2.320, 3.100, 3.120, 14.140, 14.150, 14.190, 14.200, 14.210, 14.220 Building Workers Industrial Union of Australia, Re (1979) 41 FLR 192 ...... 7.10, 7.20, 7.90 Buitendag v Ravensthorpe Nickel Operations Pty Ltd [2012] WASC 425 ......... 10.100 Buitendag v Ravensthorpe Nickel Operations Pty Ltd [2014] WASCA 29 ........ 10.100 Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 .... 6.510, 6.520, 6.680 Bulk Frozen Foods Pty Ltd v Excell [2014] TASSC 58 ............................................ 4.430 Bull v Pitney-Bowes Ltd [1967] 1 WLR 223 .............................................................. 4.310 Bulldogs Rugby League Club Ltd v Williams [2008] NSWSC 822 ............ 11.10, 11.40, 11.50 Bullock v Federated Furnishing Trades Society of Australasia (1985) 5 FCR 464 ...................................................................................................................... 14.90 Bunnett v Henderson Federal Spring Works Pty Ltd (1989) 4 VIR 364 ............... 9.170 Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144 ....... 10.270, 10.320, 10.330, 12.260 Burgess v Mount Thorley Operations Pty Ltd [2002] NSWIRComm 106 ........... 4.530 Burke v Serco Pty Ltd [2012] FMCA 1134 ................................................................. 6.600 Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 .......... 3.230, 6.50 Burnie Port Corporation Pty Ltd v MUA (2000) 104 FCR 440; 103 IR 153 ............................................................................................................... 13.250, 13.270 Burrett v Repatriation General Hospital (Daw Park) [2001] SAIRComm 24 .................................................................................................................................. 5.830 Burrows v Rhodes [1899] 1 QB 816 ................................................................ 5.350, 5.360 Burswood Resort (Management) Ltd v Australian Liquor, Hospitality and Miscellaneous Workers’ Union [2000] WASCA 386 .......................... 5.70, 5.410 Burton v Litton Business Systems Pty Ltd (1977) 16 SASR 162 ............ 10.250, 10.360 Burton Group Ltd, The v Smith [1977] IRLR 351 ..................................................... 9.50 Burwood Cinema Ltd v Australian Theatrical and Amusement Employees Association (1925) 35 CLR 528 ............................................................ 1.20 Butler v Fairclough (1917) 23 CLR 78 ........................................................................ 10.90 Butorac v WIN Corp Pty Ltd [2009] FCA 1503 ....................................................... 4.540 Butt v M’Donald (1896) 7 QLJ 68 ............................................................................... 5.190 Byrne v Australian Airlines Ltd (1994) 47 FCR 300 ............................................... 10.240 Byrne v Australian Airlines Ltd (1995) 185 CLR 410; [1995] HCA 2 ....... 4.510, 4.520, 4.530, 5.180, 5.190, 5.230, 8.30, 8.50, 8.130, 9.30, 9.40, 9.50, 9.60, 10.190, 10.240, 10.370, 12.290, 12.320, 12.350, 13.100, 13.150, 13.160, 13.190 Byrne v Australian Ophthalmic Supplies Pty Ltd (2008) 169 IR 236 .................. 13.280 Byrne v Hoare [1965] Qd R 135 .................................................................................. 5.820 Byrne v Kinematograph Rental Society [1958] 1 WLR 762 .................................. 14.390 Byrnes v Treloar (1997) 77 IR 332 ................................................................... 5.770, 8.270 Bysterveld v Shire of Cue [2007] WAIRComm 941 ................................................. 12.20 xxii

Table of Cases

C C & T Grinter Transport Services Pty Ltd, Re [2004] FCA 1148 .......................... 4.200 C H Giles & Co Ltd v Morris [1972] 1 WLR 307 ..................................................... 11.10 CBA v Horvath Jnr [2001] FMCA 43 ......................................................................... 4.160 CBS Songs Ltd v Amstrad Consumer Electronics plc [1988] AC 1013 ................ 14.80 CEPU v ACI Operations Pty Ltd (2005) 147 IR 315 ................................. 11.70, 13.320 CEPU v ACI Operations Pty Ltd (2006) 150 IR 179 ............................................. 13.320 CF, Re [2015] FWC 5272 ............................................................................... 13.390, 13.410 CFMEU v BHP Coal Pty Ltd [2010] FCA 590 ......................................... 13.250, 13.300 CFMEU v BHP Steel (AIS) Pty Ltd [2000] FCA 1008 .......................................... 13.250 CFMEU v Clarke (2008) 170 FCR 574 ....................................................................... 13.50 CFMEU v Clermont Coal Pty Ltd [2015] FCA 1014 ............................................. 13.300 CFMEU v Coal and Allied Operations Pty Ltd (1999) 140 IR 131 ...... 13.250, 13.280, 13.300 CFMEU v Coal and Allied Operations Pty Ltd (No 2) (1999) 94 IR 231 .......... 13.310 CFMEU v Endeavour Coal Pty Ltd [2015] FCAFC 76 ........................... 12.200, 13.300 CFMEU v Foster Wheeler Worley Parsons (Pluto) Joint Venture [2010] FWA 2341 ................................................................................................................... 6.610 CFMEU v Glencore Mt Owen Pty Ltd [2015] FWC 7752 .......................... 5.420, 6.500 CFMEU v HWE Mining Pty Ltd [2011] FWA 8288 ................................................ 4.480 CFMEU v Kodak (Australasia) Pty Ltd (unreported, IRCA, Murphy JR, 21 December 1994) ................................................................................................. 13.160 CFMEU v Mammoet [2013] HCA 36 ....................................................................... 13.240 CFMEU v McCorkell Constructions Pty Ltd (No 2) (2013) 232 IR 290; [2013] FCA 446 ......................................................................................................... 2.130 CFMEU v Mt Thorley Operations Pty Ltd (unreported, AIRC, Leary C, 17 March 1998, Print P9489) ..................................................................... 9.200, 13.350 CFMEU v Newcastle Wallsend Coal Co Ltd (1998) 88 IR 202 ................ 9.200, 13.350 CFMEU v Stuart-Mahoney [2011] FCA 56 ............................................... 13.270, 13.280 CGU Workers Compensation (NSW) Ltd v Garcia [2007] NSWCA 193 ............. 6.320 CH Giles & Co Ltd v Morris [1972] 1 WLR 307 ...................................................... 11.10 CIBC Mortgages plc v Pitt [1994] 1 AC 200 .............................................................. 4.270 CPSU v Blue Star Pacific Pty Ltd (2009) 184 IR 333 ............................................. 13.300 CPSU v Commonwealth (2006) 157 IR 470 ............................................................ 13.240 CPSU v Commonwealth (2007) 163 FCR 481 ........................................................ 13.240 CPSU v Commonwealth [2007] FCA 1861 .............................................................. 13.240 CPSU v Stellar Call Centres Pty Ltd [2000] FCA 1739 .............................. 11.70, 13.320 CPSU v Stellar Call Centres Pty Ltd (unreported, AIRC, Bacon C, 3 August 2000, Print S8849) ..................................................................................... 13.170 CPSU v Telstra Corporation Ltd (2001) 107 FCR 93 ............................... 13.240, 13.250 CPSU v Telstra Corporation Ltd (2001) 108 IR 228 .............................................. 13.310 CPSU v Victoria [1999] FCA 948 .............................................................................. 13.250 CPSU v Victoria (2000) 95 IR 54 ............................................................................... 13.250 CPSU v Victoria (2000) 99 IR 217 ............................................................................. 13.300 CPSU, Community & Public Sector Union v Dept of Human Services Vic [2005] AIRC 932 ................................................................................................ 5.340 CSC Computer Sciences Ltd v McAlinden [2013] EWCA Civ 1435 ..................... 4.530 CSR Ltd v Wren (1997) 44 NSWLR 463 .................................................................... 6.110 CSR Viridian Ltd (formerly Pilkington Australia Ltd) v Claveria [2008] 171 FCR 554 ............................................................................................................ 13.340 Cabassi v Vila (1940) 64 CLR 130 ............................................................................. 14.390 Cable & Wireless plc v Muscat [2006] ICR 975 ......................................................... 3.110 Cachia v State Authorities Superannuation Board (1993) 47 IR 254 .......... 9.240, 9.290 xxiii

Macken’s Law of Employment

Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9; [2006] NSWSC 717 ................................................................................ 4.420, 5.640, 5.690, 5.700, 5.750 Cahill v CFMEU (No 2) (2008) 170 FCR 357 ......................................................... 13.290 Cahill v New South Wales (Department of Community Services) (No 3) [2008] NSWIRComm 123 ........................................................................................ 6.490 Cairns v Visteon UK Ltd [2007] IRLR 175 ................................................................ 3.110 Calverley v Chief Constable of Merseyside Police [1989] 1 AC 1228 ................... 6.320 Camden Exhibition and Display Ltd v Lynott [1966] 1 QB 555 .......................... 14.140 Camden Nominees v Slack [1940] Ch 352 ................................................. 14.200, 14.210 Cameron v Asciano Services Pty Limited [2011] VSC 36 .......................................... 8.20 Campbell v Frisbee [2002] EWCA Civ 1374 ...................................... 4.420, 5.620, 5.720 Campbell v MGN [2004] 2 WLR 1232 ....................................................................... 5.680 Campbell v Mirror Group Newspapers [2004] 2 WLR 1232 .................................. 5.720 Campbell’s Soups Australia v AFMEPKIU (unreported, AIRC, Williams SDP, 18 June 1998, Print Q2121) ........................................................................... 7.120 Canada Cement La Farge Ltd v British Columbia Lightweight Aggregate Ltd (1983) 145 DLR (3d) 385 ............................................................................... 14.330 Canadian Aero Services Ltd v O’Malley (1973) 40 DLR (3d) 371; [1974] SCR 592 ........................................................................................................... 5.550, 5.560 Cannon v Tahche (2002) 5 VR 317 ............................................................................. 2.410 Cantor Fitzgerald International v Bird [2002] IRLR 867 ......................................... 5.620 Cantor Fitzgerald International v Callaghan [1999] 2 All ER 411 ................ 8.20, 9.400 Cantor Fitzgerald International v Horkulak [2005] ICR 402 ................................ 10.170 Canturi v Sita Coaches Pty Ltd (2002) 116 FCR 276 .............................................. 13.250 Capay Holdings Pty Ltd (t/as Cuddles Long Day Centre) v Slattery (1996) 41 AILR 3-494 ................................................................................... 8.50, 13.100 Capital Aircraft Services Pty Ltd v Brolin [2007] ACTCA 8 ....................... 5.310, 5.800 Capral Aluminium Ltd v Workcover Authority of NSW (2000) 49 NSWLR 610; [2000] NSWIRComm 71 ................................................................. 6.680 Carangelo v New South Wales [2015] NSWSC 655 .................................................. 6.230 Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 .......................................... 4.70, 9.180 Carlton & United Breweries Ltd v Tooth & Co Ltd (1986) 7 IPR 581 ............... 14.130 Carmichael v National Power plc [2000] IRLR 125; [1999] 1 WLR 2042 ............. 2.180 Carmichael v National Power plc [2000] IRLR 43 ...................................................... 4.80 Carney v Herbert [1985] AC 301 ................................................................................. 4.310 Carpenters and Joiners Award, Re (1971) 17 FLR 330 ................................. 7.100, 7.110 Carr v Blade Repairs Australia Pty Ltd (No 2) (2010) 197 IR 307; [2010] FCA 688 ............................................................................................................ 4.470, 9.50 Carr v O’Donnell Griffin [2013] NSWSC 840 ................................... 3.170, 6.110, 6.180 Carrier v Georges [2013] NSWSC 401 ........................................................................ 4.330 Carrigan v Darwin City Council [1997] IRCA 1 .......................................................... 8.90 Carrier v Georges [2013] NSWSC 401 ........................................................................ 4.250 Carrington Slipways Pty Ltd v Callaghan (1985) 11 IR 467 ..................................... 6.510 Carsten Pty Ltd v Law Mortgages Queensland Pty Ltd [2004] VSC 258 .............. 4.250 Carter v Australian Glass Manufacturers’ Co Ltd [1955] AR 68 ............................ 9.370 Carter v Geoff Layton & Co Pty Ltd (unreported, FCA, French, Heerey and Drummond JJ, 21 June 1993) ............................................................ 4.230, 10.370 Carter v Gribbles Pathology Pty Ltd (unreported, SASC, Bollen J, 18 February 1994) ........................................................................................................... 9.410 Carter v The Dennis Family Corporation [2010] VSC 406 ............. 5.850, 8.120, 8.250, 8.370, 9.150 Carter v Village Cinemas Australia Pty Ltd (2007) 158 IR 137 ............................. 13.140 Cartwright v Tetrad Ltd [2015] UKEAT/0262/14/JOJ .......................................... 4.130 Cassidy v Minister of Health [1951] 2 KB 34 .............................................................. 2.30 xxiv

Table of Cases

Castle v Rongotai College [1997] ERNZ 505 .......................................................... 10.330 Castlemaine Tooheys Ltd v SA (1990) 169 CLR 436 ................................................ 15.20 Castrol Australia Pty Ltd v Emtech Associates Pty Ltd (1980) 33 ALR 31 .......... 5.720 Catamaran Cruisers v Williams [1994] IRLR 386 ...................................................... 2.360 Caulfield v Broken Hill City Council (1995) 60 IR 221 ............. 9.20, 9.40, 9.190, 9.230 Cavenagh v William Evans Ltd [2013] 1 WLR 238 ............................. 8.130, 9.90, 9.150 Celesta Pty Ltd v Di Risio (unreported, WASC, Ng M, 13 February 1996) ............................................................................................................................ 9.310 Celthene Pty Ltd v WKJ Hauliers [1981] 1 NSWLR 606 ........................................ 5.490 Cementaid (NSW) Pty Ltd v Chambers (unreported, NSWSC, Spender J, 29 March 1995) .......................................................................................................... 5.800 Centennial Northern Mining Services Pty Ltd v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 136 .......................................... 15.290 Cerberus Software Ltd v Rowley [1999] IRLR 690 ................................................... 9.150 Cerberus Software Ltd v Rowley [2001] ICR 1241 ................................................. 10.350 Cerberus Software Ltd v Rowley [2001] ICR 371 .............. 9.150, 9.190, 10.220, 10.350 Cetin v Ripon Pty Ltd (2003) 127 IR 205 ................................................................... 13.70 Chakki v United Yeast Co Ltd [1982] 2 All ER 446 ................................................. 9.250 Chalker v BCC [2002] QIRComm 109 ....................................................................... 4.210 Challenge Realty Ltd v Commissioner of Inland Revenue (1990) 3 NZLR 42 .................................................................................................................... 2.170 Chambers v James Cook University of North Queensland (No 1) (1995) 61 IR 121 .................................................................................................................... 8.290 Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178 ............................................ 5.540 Chapel Road v ASIC (2006) 203 FLR 322 ................................................................. 2.410 Chaplin v Birdogan (1998) 146 FLR 243 .................................................................... 4.230 Chaplin v Leslie Frewin (Publishers) Ltd [1966] Ch 71 ............................................ 4.180 Chapman v Commissioner of Government Transport (1956) 74 WN (NSW) 80 ...................................................................................................................... 9.50 Chapman v Honig [1963] 2 QB 502 .......................................................................... 14.390 Chapman v Letheby & Christopher Ltd [1981] IRLR 440 ........................................ 9.50 Chappell v Times Newspapers Ltd [1975] 1 WLR 482 ......... 8.260, 11.10, 11.60, 11.80 Charlton v Eastern Australian Airlines Pty Ltd (2006) 154 IR 239 ...................... 13.120 Chartbrook Ltd v Persimmmon Homes Ltd [2009] UKHL 38; [2009] 1 AC 1101 ...................................................................................................................... 4.200 Cheltenham Borough Council v Laird [2009] EWHC 1253 .................................... 4.210 Cheng v M Marinos Pty Ltd (t/as The Cheesecake Shop Support Office; SA/NT) [2005] SAIRC 10 ......................................................................................... 4.50 Cheval Properties Pty Ltd v Smithers [2010] FWAFB 7251 .................................... 13.50 Chief Constable of the West Yorkshire Police v Khan [2001] 1 WLR 1947 ............................................................................................................................. 5.280 Child Employment Principles Case, Re (2007) 163 IR 41 .......................................... 4.20 Chittick v Ackland (1984) 1 FCR 254 ............................................................................ 9.90 Chivers v Flower Power Pty Ltd [1998] NSWIRComm 188 ................................... 5.720 Chomentowski v Red Garter Restaurant Pty Ltd (1970) 92 WN (NSW) 1070 ............................................................................................................................. 6.200 Christensen v Railway Commissioners for NSW (1921) 21 SR (NSW) 141 .................................................................................................................................. 9.50 Christie v Johnston Carmichael [2010] UKEAT 0064-09-2707 .............................. 5.320 Christos v Curtin University of Technology (No 2) [2015] WASC 72 ...... 4.490, 6.240 Chubb Security Australia Pty Ltd v Thomas (2 February 2000 ............................ 13.150 Chugg v Pacific Dunlop Ltd (1990) 170 CLR 249 .................................................... 6.440 Civil Service Association of WA v Director General of Department of Community Development [2002] WASCA 241 ................................................... 8.340 xxv

Macken’s Law of Employment

Civil Service Association of WA (Inc) v Director General, Dept of Justice [2003] WAIRComm 7687 ............................................................................ 4.530 Claremont Petroleum NL v Cummings (1992) 110 ALR 239 ................................. 2.380 Claric 218 Pty Ltd t/as Sanity Music v Meldrum (1998) 91 IR 296 ......................... 8.90 Clark v Chief of Defence Force [1999] FCA 1252 .................................................. 5.110 Clark v Clark Construction Initiatives Ltd [2008] UKEAT 0225/07/2902; [2008] IRLR 364 ............................................................................ 2.380 Clark v Nomura International plc [2000] IRLR 766 ......... 5.150, 5.220, 10.160, 10.170 Clark v Oxfordshire Health Authority [1998] IRLR 125 ......................................... 2.180 Clark v Ringwood Private Hospital (1997) 74 IR 413 .............................................. 13.50 Clarke v Catholic Education Office (2003) 202 ALR 340 ..................................... 15.230 Clarke and Metropolitan Meat Industry Board, Re [1967] AR (NSW) 16 ............ 8.370 Claveria v Pilkington Australia Pty Ltd (2007) 167 IR 444 .................................... 13.340 Claveria v Pilkington Australia Pty Ltd (No 2) [2007] FCA 1917 ........................ 13.340 Clea Shipping Corp v Bulk Oil International; The Alaskan Trader [1984] 1 All ER 129 ................................................................................................................. 7.50 Clements v London and North Western Railway Co [1894] 2 QB 482 .... 4.160, 4.170, 4.180 Clifford Davis Management Ltd v WEA Records Ltd [1975] 1 WLR 61 ............. 4.280 Climaze Holdings Pty Ltd v Dyson (1995) 13 WAR 487 ......................................... 2.420 Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd (1998) 27 IR 226 ......................................................................................................... 9.190, 9.360 Clouston & Co Ltd v Corry [1906] AC 122 ........................................ 8.120, 8.250, 8.280 Clunne v Nambucca Shire Council (1995) 63 IR 304 ............................................. 10.230 Clyde & Co LLP v Bates van Winkelhof [2014] UKSC 32; [2014] 1 WLR 2047 ............................................................................................................................. 2.420 Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466 .................................. 12.330 Co-ordinated Industries v Elliott (1998) 43 NSWLR 282 ............................ 5.550, 5.560 Coal & Allied Mining Services Pty Ltd v MacPherson (2010) 185 FCR 383 .......................................................................................................... 5.110, 7.90, 7.100 Coal Miners’ Industrial Union of Workers (WA), Collie v True (1959) 33 ALJR 224 .................................................................................................................. 14.400 Coal Mining Industry (Miners) Award 1954 (NSW), Re (1959) 1 FLR 327 ........................................................................................................................ 9.20, 9.50 Coca Cola Amatil (NSW) Pty Ltd v Pareezer [2006] NSWCA 45 .......................... 6.200 Cockburn v Alexander (1848) 136 ER 1459 .............................................. 10.100, 10.200 Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 .............................................................................................. 4.520, 9.240, 10.40 Coghill v Indochine Resources Pty Ltd (No 2) [2015] FCA 1030 ........................ 10.110 Cohen v Cohen (1929) 42 CLR 91 ................................................................................. 4.50 Cohen v iSOFT Group Pty Ltd (2013) 234 IR 386; 298 ALR 516; [2013] FCAFC 49 ...................................................................................... 3.10, 4.10, 4.530, 9.40 Cohen v iSoft Group Pty Ltd [2012] FCA 1071 .......................................................... 9.40 Cointat v Myham & Sons [1913] 2 KB 220 ................................................................ 5.360 Coles Fossey and Burton, Re (1992) 41 IR 49 ............................................... 9.170, 9.190 Coles/Myer Ltd v Coppin (1993) 11 WAR 20; 49 IR 275 ....................................... 9.190 Coles/Myer Ltd T/as Coles Supermarkets v Sweeting (1993) 47 IR 345 ............. 9.190 Colledge v Bass Mitchells and Butlers Ltd [1988] ICR 125 ................................... 10.360 Collier v Sunday Referee Publishing Co [1940] 2 KB 647 ........................... 5.310, 5.320 Collins v Chubb Protective Services (unreported, AIRC, O’Connor C, 21 November 1997, Print P6862) ......................................................................... 13.160 Collins v Smith (Human Rights) [2015] VCAT 1992 ............................................. 15.230 Colonial Mutual Life Assurance Society Ltd v FSUA (2004) 133 IR 149 ............. 9.190 xxvi

Table of Cases

Colour Control Centre Pty Ltd v Ty (unreported, NSWSC, Santow J, 24 July 1995) .................................................................................................................. 10.120 Colour Control Centre Pty Ltd v Ty [1995] NSWSC 96 .............................. 5.550, 5.560 Colour Quest Ltd v Total Downstream (UK) Ltd Plc [2009] EWHC 540 ........... 3.250 Comcare v PVYW [2013] HCA 41 .................................................................... 6.30, 6.180 Commercial & General Insurance Co Ltd v GIO (NSW) (1973) 129 CLR 374 ...................................................................................................................... 5.440 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 ...................... 4.280 Commercial Banking Co of Sydney Ltd v R H Brown (1972) 126 CLR 337 ............................................................................................................................... 4.210 Commerzbank AG v Keen [2007] ICR 623 ............................................................... 5.230 Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 ........... 10.100, 10.200, 10.230 Commonwealth v Blackwell (1987) 163 CLR 428 .................................................. 10.240 Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 ................................... Commonwealth Bank of Australia v Barker (2013) 214 FCR 450; 233 IR 31; [2013] FCAFC 83 ............... 4.130, 4.490, 4.530, 5.20, 5.140, 5.150, 5.160, 5.190, 5.300, 5.330, 5.520, 10.100, 10.310 Commonwealth Bank of Australia v Barker (2014) 253 CLR 169; [2014] HCA 32 ..... 1.110, 4.390, 4.480, 4.490, 4.500, 4.510, 4.520, 5.10, 5.20, 5.130, 5.140, 5.150, 5.160, 5.170, 5.180, 5.190, 5.220, 5.230, 5.240, 5.260, 5.300, 5.330, 5.420, 5.520, 5.540, 6.330, 8.90, 8.100, 8.120, 10.100, 10.150, 10.320, 12.260, 12.290, 12.310 Commonwealth Bank of Australia v FSUA (2002) 125 FCR 9 .................. 9.170, 9.190 Commonwealth Bank of Australia v FSUA (2007) 157 FCR 329 .......... 13.310, 13.320 Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission (1997) 80 FCR 78 ..................................................... 15.160 Commonwealth of Australia v Cornwell (2007) 229 CLR 519; 81 ALJR 933; [2007] HCA 16 ...................................................................................... 5.300, 6.100 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v ACCC [2007] FCAFC 132 ................................................................................................................ 14.50 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Otis Elevator Co Pty Ltd [2003] AIRC 1351 ....................................................................................... 4.530 Communications, Electrical, Electronic, Energy etc v Alcoa [1998] FCA 788 .................................................................................................................................. 5.80 Compafina Bank v ANZ Banking Group Ltd (unreported, NSWSC, Hunt J, 11 May 1984) ................................................................................................ 5.470 Compass Group (Australia) Pty Ltd v Bartram (2007) 161 IR 307; [2007] FCAFC 26 .................................................................................................................... 2.90 Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226; 60 ALJR 294 .............. 4.510, 4.530, 9.150, 12.350 Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 .............. 4.230 Concrete Constructions Pty Ltd v Government Insurance Office of NSW (1966) 85 WN Pt 1 104 .................................................................................. 4.130 Concut Pty Ltd v Worrell (2000) 75 ALJR 312; [2000] HCA 64 ........ 4.10, 4.80, 4.200, 5.540, 5.550, 5.570, 5.830, 5.840, 8.120, 8.130, 8.350, 9.340 Condon v G James Extrusion Co (1997) 74 IR 283 ................................................. 13.80 Connor v Grundy Television Limited [2005] VSC 466 ..................................................... Connor v Grundy Television Pty Ltd [2005] VSC 466 .......... 8.90, 8.110, 8.120, 8.250, 8.370 Connor v Surrey County Council [2010] 3 All ER 905 ............................................ 6.240 Conray v Scotts RefrigeratEd Freightways Pty Ltd [2008] NSWCA 60 ................ 3.210 xxvii

Macken’s Law of Employment

Consistent Group Ltd v Kalwak [2007] IRLR 560 ................................................... 2.100 Consolidated Press v Thompson (1952) 52 SR (NSW) 75 ........................................ 8.30 Construction, Forestry, Mining & Energy Union v Mammoet Australia Pty Ltd [2013] HCA 36; (2013) 248 CLR 619 ............................................. 5.20, 5.120 Construction, Forestry, Mining and Energy Union v Anglo Coal (Dawson Services) Pty Ltd [2015] FCAFC 157 ........................................ 5.520, 8.120 Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (2001) 203 CLR 645 ..................................... 12.360 Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2014) 253 CLR 243; [2014] HCA 41 ............. 5.410, 13.260, 13.280, 13.300, 15.270 Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2015] FCAFC 25 .................................................................................................... 12.170 Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2014] VSCA 348 ..................................................... 14.10, 14.80, 14.230 Construction, Forestry, Mining and Energy Union – Mining and Energy Division v Tahmoor Coal Pty Ltd [2010] FWAFB 3510 .................................... 12.80 Construction Industry Training Board v Labour Force Ltd [1970] 3 All ER 220 ........................................................................................................................... 4.50 Container Terminals Australia Ltd v Toby (24 July 2000 ......................... 13.160, 13.190 Conti Sheffield Real Estate v Brailey (1992) 48 IR 1 ................................................ 10.50 Continental C & G Rubber Co Pty Ltd, Re (1919) 27 CLR 194 ............................ 9.240 Conway-Cook v Town of Kwinana (2001) 108 IR 421 .............................................. 8.50 Cook v CFP Management Pty Ltd (2006) 152 IR 358 ............................................... 8.80 Cooper v Darwin Rugby League Club Inc (1994) 1 IRCR 130; 57 IR 238 ............ 9.60, 13.120 Coote v Granada Hospitality Ltd [1999] ICR 100 .................................................... 5.280 Coral Leisure Group Ltd v Barnett [1991] ICR 503 ................................................. 4.330 Cori Ponce v DJT Staff Management Services (t/as Daly’s Traffic) [2010] FWA 2078 ....................................................................................................... 13.70 Cornwall County Council v Prater [2006] IRLR 362 ................................................ 2.180 Cornwell v Commonwealth of Australia [2005] ACTSC 14 ........................ 5.300, 6.100 Corporation (Renato Coscia), The v Rodney Higgins [1992] SAWCT 61 ............ 2.390 Corrs Brewers Ltd v Adcock [2007] ICR 93 .............................................. 10.160, 10.170 Corrs Pavey Whiting & Byrne v Collector of Customs (vic) (1987) 14 FCR 434 .......................................................................................................... 5.670, 5.710 Costello v Allstaff Industrial Personnel (SA) Pty Ltd [2004] SAIRComm 13 ................................................................................................... 3.30, 3.90, 3.140, 3.250 Coulderey v Bartrum (1881) 19 Ch D 394 ................................................................. 4.130 Coulter v Woolworths (WA) Pty Ltd [2004] WAIRComm 11973 .......................... 5.850 Country Metropolitan Agency Contracting Services Pty Ltd v Slater [2003] SAWCT 57 ................................................................................ 2.180, 3.90, 4.520 County Securities Pty Limited v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 .................................................................................................. 4.570 Courtaulds Northern Spinning Ltd v Sibson [1987] ICR 329 ................................... 8.20 Courtaulds Northern Spinning Ltd v Sibson [1988] ICR 451 ................................. 5.500 Courtaulds Northern Textiles Ltd v Andrew [1979] IRLR 84 ................................ 5.150 Cowell v British American Tobacco Services Limited [2007] VSCA 301 ............. 5.710 Cowell v Irlmond Pty Ltd (1997) 76 IR 352 ............................................................ 13.120 Cowell v Quilter Goodison & Co Ltd [1989] IRLR 392 .......................................... 2.420 Cox v Ministry of Justice [2016] UKSC 10 .................................................................. 6.60 Cox v Philips Industries Ltd [1976] 3 All ER 161 ................................................... 10.270 Cox v South Australian Meat Corp (1995) 60 IR 293 ............................................ 13.210 Cox & Cross v Sun Alliance Life Ltd [2001] EWCA Civ 649 ................................. 5.290 Coxall v Goodyear Great Britain Ltd [2002] EWCA Civ 1010 ................... 6.140, 6.220 xxviii

Table of Cases

Craig (Deceased), Re [1971] Ch 95 .............................................................................. 4.270 Cramb v Goodwin (1919) 35 TLR 477 ......................................................................... 4.50 Craven v Best Bar Pty Ltd 2013 FWC 206 ................................................................. 6.580 Crawford v Coal & Allied Operations Pty Ltd (unreported, AIRC, Leary (DP), 9 July 2001) .................................................................................................... 13.210 Cream Holdings Ltd v Banerjee [2005] 1 AC 253 ......................................... 5.710, 5.720 Credit Lyonnais Bank Nederland NV v Burch [1997] 1 All ER 144 ..................... 4.270 Credit Suisse v Armstrong [1996] ICR 882 ...................................... 4.400, 9.140, 10.220 Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 ................................................................................................ 4.190, 4.250 Cresswell v Board of Inland Revenue [1984] 2 All ER 713 ....... 5.70, 7.30, 7.40, 8.200, 9.390 Cresswell v IRC [1984] 2 All ER 713 .......................................................................... 5.510 Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 .......... 6.100, 6.110 Crofter Hand Woven Harris Tweed Co Ltd v Veitch [1942] AC 435 .... 14.310, 14.320 Crossley v Faithful & Gould Holdings Ltd [2004] 4 All ER 447; [2004] ICR 1615 ......................................................................................................... 4.510, 5.300 Crown v Clarke (1927) 40 CLR 227 ............................................................................ 4.100 Crowson Fabrics Ltd v Rider [2007] EWHC 2942 ................................................... 5.600 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 .......... 13.150, 13.160, 13.170 Crozier, Re; Ex parte AIRC [2001] FCA 1031 ........................................... 13.150, 13.160 Cruse v Multiplex Ltd (2008) 172 FCR 279 ............................................................... 14.70 Csomore v Public Service Board (NSW) (1987) 10 NSWLR 587; 17 IR 275 ......................................................... 5.30, 5.70, 5.110, 7.30, 11.110, 11.130, 11.150 Cubillo v North Australian Aboriginal Family Violence Legal Service (2011) 211 IR 394 ...................................................................................................... 13.80 Cucanic v IGA Distribution (Vic) Pty Ltd [2004] FCA 1226 ............................... 13.340 Cull v Oil Field Inspection Services Group Pty Ltd [1990] SLT 205 .................. 10.250 Cullen v Trappell (1980) 146 CLR 1 .......................................................................... 10.340 Culpeper v Intercontinental Ship Management Pty Ltd (2004) 134 IR 243 ............................................................................................................................. 13.160 Cummings Engineering Holdings Pty Ltd, Re [2014] NSWSC 250 ......................... 1.60 Cunard Steamship Co v Stacey [1955] 2 Ll R 247 ................................................... 14.130 Cundy v Lindsay (1878) 3 App Cas 459 ...................................................................... 4.200 Currie v Misa (1875) LR 10 Ex 153 ............................................................................. 4.130 Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 ....... 4.350, 5.320, 5.800, 11.20, 11.30, 11.40, 11.50, 11.70 Cusworth v Yorkshire Water Services [1994] UKEAT 366-93-2211 ..................... 5.800 Cutter v Powell (1795) 6 TR 320; 101 ER 573 ................................... 9.240, 10.30, 10.40 Czatyrko v Edith Cowan University (2005) 79 ALJR 839; [2005] HCA 14 ......... 6.110, 6.140

D D’Arcy v SE Dickens Pty Ltd (1992) 5 VIR 85 ......................................................... 9.210 DC Thomson & Co Ltd v Deakin [1952] Ch 646 ........ 14.110, 14.120, 14.130, 14.140, 14.150, 14.160, 14.170, 14.280 DIB Group v Cole [2009] NSWCA 210 ..................................................................... 6.180 DIR v Kiana Sail and Dive Pty Ltd [2005] QIRComm 58 ...................................... 2.270 DL Employment Pty Ltd v AMWU [2014] FWCFB 7946 ...................................... 5.500 D’Lima v Board of Princess Margaret Hospital (1995) 64 IR 19 ......................... 13.120 D’Ortenzio v Telstra (1998) 82 IR 52 ....................................................................... 13.120 DP World Sydney Ltd v Lambley [2012] FWAFB 6949 ........................................ 13.160 xxix

Macken’s Law of Employment

DPP v Amcor Packaging Pty Ltd [2005] 11 VR 557 ................................................ 6.680 DPP v Frewstal Pty Ltd [2015] VSCA 266 ................................................................. 6.520 DPP v Vibro-Pile (Aust) Pty Ltd [2016] VSCA 55 ............................ 6.380, 6.520, 6.560 DR Johnston Group Pty Ltd (Guyra) Abattoir v Arder (1995) 61 IR 107 ........... 9.190 DSG Pty Ltd v Victorian Workcover Authority [2008] VSCA 42; (2008) 20 VR 514 ................................................................................................................... 2.120 DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 ................ 8.220 Dacas v Brook Street Bureau [2004] IRLR 358 ......................................................... 3.110 Dadey v Edith Cowan University (1996) 70 IR 295 ............................................... 13.120 Dadey v Edith Cowan University (unreported, AIRC, Lee, Marshall and North JJ, 2 April 1997) ........................................................................................... 13.120 Dafallah v Fair Work Commission (2014) 225 FCR 559; 242 IR 273; [2014] FCA 328 ............................. 4.490, 5.250, 5.260, 5.270, 10.100, 10.210, 10.320 Dahlstrom v Wagstaff Cranbourne Pty Ltd (unreported, AIRC, Boulton J, Acton SDP and Commissioner Simmonds, 25 September 2000) ............... 13.140 Daily Mirror Newspapers v Gardner [1968] 2 QB 762; [1968] 2 WLR 1239 ............................................................................................... 14.120, 14.150, 14.390 Dais Studio Pty Ltd v Bullet Creative Pty Ltd [2007] FCA 2054 .... 5.540, 5.680, 5.690 Dale v Veda Advantage Information Systems and Solutions Ltd [2009] FCA 305 ...................................................................................................................... 5.290 Dale v William McCulloch & Co Ltd (1883) 9 VLR (L) 136 .................................. 9.370 Dalgety Farmers Ltd (t/as Grazcos) v Bruce (1995) 12 NSWCCR 36 .................. 4.200 Damevski v Guidice (2003) 133 FCR 438; 129 IR 53; [2003] FCAFC 252 ......... 2.290, 3.50, 3.70, 3.90, 3.100, 3.120, 4.50, 4.60, 4.110, 4.130, 4.570 Daniels v Anderson (1995) 37 NSWLR 438 ............................................................ 10.340 Daniels v Hunter Water Board (1994) ....................................................................... 15.200 Darke v El Debal [2006] NSWCA 86; (2006) 153 IR 73 ......................................... 3.210 Darlaston v Parker [2010] FCA 771 ............................................................................ 6.610 Darmody v National Centre Automotive [2003] FMCA 358 .................................. 4.240 Dart Industries Inc v David Bryar & Associates Pty Ltd [1997] FCA 481; (1997) 38 IPR 389 ............................................................................................. 5.680 Darvell v Australian Postal Corporation [2010] FWAFB 4082 ................... 5.410, 6.140 Dataflow Computer Services Pty Ltd v Goodman [1999] FCA 1625 ................... 4.230 David Jones Ltd v Cukeric (1997) 78 IR 430 .................................................... 9.40, 9.190 David Jones Ltd v Federated Storemen and Packers Union of Aust (NSW) (1985) 14 IR 75 .......................................................................................... 14.160 David Kershaw v Sunvalley Australia Pty Ltd [2007] WAIRComm 520 ............... 2.420 Davidson v Adecco Australia Pty Ltd (t/as Adecco) [2012] FWA 8393 ............... 13.80 Davidson v Commonwealth [2011] FWAFB 6265; (2011) 213 IR 120 ............... 13.110 Davie v New Merton Board Mills [1959] AC 604 ..................................................... 6.190 Davies v Davies (1887) 36 Ch D 359 .............................................................. 4.330, 4.430 Davies v Foreman [1894] 3 Ch 654 ............................................................................. 11.20 Davies v Nyland (1975) 10 SASR 76 ......................................................................... 14.150 Davies v Rhondda District Urban Council (1918) 87 LJKB 166 .............................. 4.70 Davis v Marshall (1861) 4 LT (NS) 216 ........................................................................ 9.40 Davis v Portseal Pty Ltd (1996) 70 IR 320 ................................................................. 8.300 Davis Contractors Ltd v Fareham UDC [1956] AC 696 .......................................... 9.240 Davison v Aurora Energy Pty Ltd (unreported, AIRC, Watson SDP, Williams SDP and Holmes C, 8 March 2001) .................................................... 13.210 Daw v Intel Corporation (2007) ICR 1318 ................................................................ 6.240 Daw v Schneider Electric (Australia) Pty Ltd (2013) 280 FLR 361; [2013] FCCA 1341 ..................................................................................................... 5.410, 6.280 Dawnay, Day & Co v D’Alphen [1998] ICR 1068 .................................................... 4.470 Day v Myer Stores Ltd [2000] FCA 442 ..................................................................... 4.230 xxx

Table of Cases

Day v The Ocean Beach Hotel Shellharbour Pty Ltd [2013] NSWCA 250 .................................................................................................................... 3.210, 3.250 Daykin v Neba International Couriers [2002] WASCA 213 .................................... 2.200 Deadman v Bristol City Council [2007] EWCA Civ 822; [2007] IRLR 888 ........................................................................................................ 4.490, 6.230, 6.330 De Bernardy v Harding (1853) 8 Ex 822; 155 ER 1586 ........................................... 10.40 De Francesco v Barnum (1890) 45 Ch D 430 ........................................................... 4.180 De Lisle v Rose Bay Private Hospital Pty Ltd (No 2) (1997) 75 IR 93 .................. 9.190 De Luxe Red & Yellow Cabs Co-Operative (Trading) Society Ltd v Commissioner of Taxation (1997) 36 ATR 600; [1997] FCA 840 .......... 2.50, 2.390 Deal v Kodakkathanath [2015] VSCA 191 ................................................................. 6.150 Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361 ....................................................................................................................... 9.80 Deemcope Pty Ltd v Cantown Pty Ltd [1995] 2 VR 44 ........................................... 4.250 Deepak Fertilisers & Petrochemicals Ltd v Davy McKee (London) Ltd [1999] 1 All ER (Comm) 69 ..................................................................................... 5.490 Deepcliffe v Gold Coast City Council [2001] QCA 342 ........................................ 14.350 Deeson Heavy Haulage Pty Ltd v Cox [2009] QSC 277 .................. 5.550, 5.600, 5.740 Del Casale v Artodemus (Aust) Pty Ltd (2007) 165 IR 148; [2007] NSWCA 172 ........................................ 5.540, 5.620, 5.660, 5.665, 5.670, 5.680, 5.690 Delaney v Staples [1992] 1 All ER 944 .............................................. 9.140, 9.150, 10.220 Dellabarca v Northern Storemen & Packers Union [1989] 2 NZLR 734 .......... 14.190, 14.290, 14.340 Dellys v Elderslie Finance Corporation Ltd (2002) 132 IR 385; [2002] WASCA 161 .................................................................................................... 4.520, 9.190 Delphic Wholesalers Pty Ltd v Elco Food Co Pty Ltd (1987) 8 IPR 545 .......... 14.120, 14.140 Denham v Midland Employers Mutual Assurance Ltd [1955] 2 QB 437 ............... 3.60 Denmark Productions Ltd v Boscobel Productions Ltd [1969] 1 QB 699 ............. 8.30 Denmeade v Stingray Boats (a firm) [2003] FCAFC 215 ........................................ 4.250 Denny v Denny and Warr [1919] 1 KB 583 ............................................................... 4.330 Denny, Mott and Dickson Ltd v James B Fraser & Co Ltd [1944] AC 265 .................................................................................................................... 9.240, 9.290 Deutz Australia Pty Ltd v Skilled Engineering Ltd [2001] VSC 194 .... 2.60, 3.60, 3.90, 3.210, 5.450 Devonald v Rosser [1906] 2 KB 728 .................................................................... 7.10, 7.90 Dewson v Boom Logistics Ltd [2012] FWA 9027 .................................................. 13.160 Dewson v Boom Logistics Ltd [2012] FWC 760 .................................................... 13.170 Diamond Valley Community Hospital v Hospital Employees’ Federation of Australia (1982) 1 VIR 462 ................................................................................. 9.220 Dibb v Commissioner for Taxation (2004) 136 FCR 388 ........................................ 9.170 Dickins v O2 plc [2008] All ER (D) 154 ......................................................... 6.230, 6.240 Dietmann v Brent London Borough Council [1987] ICR 737 ........ 8.30, 10.210, 11.80 Dietmann v Brent London Borough Council [1988] IRLR 299 ............ 10.180, 10.190, 11.80 Dietrich v Dare (1980) 54 ALJR 388 ................................................................. 4.50, 4.130 Dimbleby & Sons v National Union of Journalists [1984] 1 WLR 427 ............. 14.140, 14.350 Dimbleby & Sons v National Union of Journalists [1984] 1 WLR 67 ................ 14.360 Dinko Tuna Farmers Pty Ltd v Markos (2007) 98 SASR 96; [2007] SASC 166 ............................................................................................................................... 6.680 Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59; (2015) 250 IR 278 ............................................................................................................................... 2.100 xxxi

Macken’s Law of Employment

Director General, Dept of Education and Training v MT [2006] NSWCA 270 ............................................................................................................... 5.400 Director of Fair Work Building Industry Inspectorate v Bragdon [2015] FCA 66 ........................................................................................................................ 6.610 Director of the Fair Work Building Industry Inspectorate, The v Linkhill Pty Ltd (No 7) [2013] FCCA 1097 .......................... 2.150, 2.220, 2.250, 2.290, 2.300 Dismissal of Fitters by BHP, Re [1969] AR (NSW) 399 .......................................... 8.210 Dispute at Metal Manufacturers Ltd, Re [1948] AR (NSW) 818 .......... 7.10, 7.20, 7.30, 10.70, 10.140 Dispute at No 2 Merchant Mill of BHP, Re (1976) 18 AILR 255 .......................... 9.350 Dispute – Board of Fire Commissioners, Re; Re Reports [1971] AR (NSW) 615 .................................................................................................................. 5.850 Distilleries Award, Re (1976) 180 CAR 786 ............................................................... 7.110 District Council of Barunga West v Hand (2014) 120 SASR 228 ............................ 9.30 D’lima v Board of Management, Princess Margaret Hospital for Children (1995) 64 IR 19 ......................................................................................... 9.210 Doherty v New South Wales [2010] NSWSC 450 ......................................... 6.230, 6.240 Dollar Sweets Pty Ltd v Federated Confectioners Association of Australia [1986] VR 383 ........................................................................................... 14.20 Dome Resources NL v Silver (2008) 72 NSWLR 693; [2008] NSWCA 322 ............................................................................................................................... 2.380 Dorman Long & Co v Carroll [1945] 2 All ER 567 ................................................. 9.390 Dotmar Epp Pty Ltd v The Queen [2015] VSCA 241 ............................................. 6.680 Douglas v Hello! Ltd (No 3) [2008] AC 1 .................................................................. 5.680 Douglas-Brown v Isles (unreported, WASC, 2 September 1995) ........................... 9.310 Douglas O’Connor v Uber Technologies Inc (US District Court, Northern District of California, No C-13-3826, Docket No 211) ................... 2.390 Doulis v Victoria [2014] VSC 395 ........................................................ 6.230, 6.240, 6.300 Dover-Ray v Real Insurance Pty Ltd (2010) 204 IR 399; [2010] FWA 8544 ............................................................................................................................. 5.770 Dover-Ray v Real Insurance Pty Ltd (2010) 194 IR 22 .......................................... 13.110 Downe v Sydney West Area Health Service (No 2) (2008) 71 NSWLR 633; 174 IR 385; [2008] NSWSC 159 ........... 4.490, 5.330, 5.410, 5.420, 5.500, 7.20, 7.30, 9.340, 11.10, 11.70, 11.110 Downer EDI Ltd v Gillies [2012] NSWCA 333 ........................................................ 5.550 Doyle v Secure Parking Pty Ltd (1997) (unreported, AIRC, Locke JR, 8 September 1997) ........................................................................................................ 4.250 Doyle v White City Stadium Ltd [1935] 1 KB 110 .................................................... 4.180 Dr Nair v Arturus Capital Ltd [2010] NSWSC 329 .................................................. 2.380 Drake Personnel Ltd v Commissioner of State Revenue (2000) 2 VR 635; 105 IR 122; [2000] VSCA 122 ............................................................... 2.180, 3.90 Drake Personnel Ltd (trading as Drake Industrial) v WorkCover Authority (Inspector Ch’ng) (1999) 90 IR 431 ..................................................... 3.210 Draper v City of Rockingham [2013] WAIRComm 436 .......................................... 4.130 Drive Recruit Pty Ltd v Back [2013] NSWWCCPD 32 ........................................... 2.180 Driver v Air India Ltd [2010] All ER (D) 166 ........................................................... 4.530 Driver Recruitment Pty Ltd v Wedeco Avp Pty Ltd [2008] NSWCA 290 ............ 4.230 Drummond v Canberra Institute of Technology [2010] FWAFB 5455 ............. 13.120 Drury v BHP Refractories Pty Ltd (1995) 62 IR 467 ................................. 8.270, 13.120 Drury v Dulhunty (1921) 21 SR (NSW) 514 .............................................................. 10.50 Duffy v Lake Macquarie City Council [2001] NSWIRComm 118 ......................... 5.400 Dugmore v Swansea NHS Trust [2002] EWCA Civ 189 ............................. 6.140, 6.220 Dukes v Davidson [1930] AR (NSW) 41 .................................................................... 4.210 Dunk v George Waller and Son Ltd [1970] 2 QB 163 ........................................... 10.260 xxxii

Table of Cases

Dunlop Pneumatic Co Ltd v Selfridge & Co Ltd [1915] AC 847 ........................... 4.130 Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd [1915] AC 79 ........................................................................................................................ 10.110 Dunnachie v Kingston Upon Hull County Council [2005] 1 AC 226 ................. 10.320 Dunstan v National Mutual Life Association of Australasia Ltd (1992) 5 VIR 73 ................................................................................................. 9.40, 9.190, 10.350 Dye v Commonwealth Securities Limited [2010] FCA 720 ..................................... 5.400 Dyer v Peverill (1979) 2 NTR 1 ...................................................................................... 9.40

E E v Australian Red Cross Society (1991) 27 FCR 310 .............................................. 12.20 E Wolsley & Co Ltd v Cooper [1939] 1 All ER 290 ................................................. 5.665 EFG Australia Ltd v Kennedy [1999] NSWSC 922 .................................................. 8.100 EPP v Levy [2001] NSWSC 482 .................................................................................. 5.680 EagleBurgmann Australia Pty Ltd v Leabeater (2012) 219 IR 449; [2012] NSWSC 573 ................................................................ 4.340, 5.540, 5.550, 5.560, 5.780 Earney v Australian Property Investment Strategic Pty Ltd [2010] VSC 621 .............................................................................. 8.20, 9.180, 9.370, 10.110, 10.140 Earth Force Personnel Pty Ltd v EA Negri Pty Ltd [2010] VSC 426 .......... 3.70, 4.360 Easling v Mahoney Insurance Brokers (2001) 78 SASR 489 ..................................... 8.90 Eastbourne BC v Foster [2001] EWCA Civ 1091 ..................................................... 4.150 Eastwood v Magnox Electric plc [2005] 1 AC 503 ...... 1.110, 5.150, 7.20, 7.50, 10.280, 10.300, 10.320 Eaton v Brant County Board of Education [1997] 1 SCR 241 ............................... 15.20 Eaton v Robert Eaton Ltd [1988] ICR 302 ................................................................ 2.380 Eaton v Western (1882) 9 QBD 636 ........................................................................... 9.360 Ebb v Fast Fix Steel Fixing Pty Ltd [2007] NSWCA 236 ........................................ 2.120 EdSonic Pty Ltd v Cassidy [2010] FCA 1008 ............................................................ 5.780 Edmonds v Donovan; Disctronics Ltd v Kingston Links Country Club Pty Ltd [2005] VSCA 27 .......................................................................................... 5.560 Education, Director-General of v Suttling (1987) 162 CLR 427; [1987] HCA 3 ............................................................................................... 1.100, 2.410, 12.290 Edward v Tevelick (1854) 4 E & B 59; 119 ER 23 ...................................................... 8.90 Edward Keller (Australia) Pty Ltd v Hennelly (1990) 35 IR 464 .............................. 9.40 Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2011] UKSC 58; [2012] 2 AC 22 ............. 5.150, 5.260, 7.50, 10.50, 10.180, 10.280, 10.310 Edwards v Dowsett (1914) 20 ALR (CN) 17 ............................................................... 9.40 Edwards v North Goonyella Coal Mines Pty Ltd [2005] QSC 242 ....................... 4.510 Edwards v Skyways Ltd [1964] 1 WLR 349 ............................................................. 12.390 Edwards (Inspector of Taxes) v Clinch [1982] AC 845 ........................................... 2.410 Egerton v Brownlow (1853) 4 HL Cas 1; 10 ER 359 ............................................... 4.330 Egg Stores Ltd v Leibovici [1977] ICR 260 ............................................................... 9.290 Ehrman v Bartholomew [1898] 1 Ch 671 .................................................................. 11.30 Einhorn v West Mount Investments Ltd (1969) 6 DLR (3d) 71 .......................... 14.150 Elazac Pty Ltd v Shirreff [2011] VSCA 405 ................................................... 2.220, 2.260 Elcom v Electrical Trades Union of Australia (1983) 5 IR 267 .............................. 8.250 Electricity Commission of NSW v FEDFA [1975] AR (NSW) 504 ........................ 7.30 Electrolux Home Products Pty Ltd v Australian Workers’ Union (2004) 221 CLR 309 ................................................................................................... 12.70, 12.90 Electrolux Ltd v Hudson [1977] Fleet Street Patent Law Reports 312 ................. 5.780 Ellawala v Australian Postal Corporation (unreported, AIRC, Ross VP, Williams SDP and Gay C,17 April 2000, Print S5109) ........................ 13.210, 13.220 Elliott v Kodak Australasia Pty Ltd (2001) 108 IR 23 ....................................... 9.30, 9.40 xxxiii

Macken’s Law of Employment

Elliott v Kodak Australasia Pty Ltd (2001) 129 IR 251; [2001] FCA 1804 ......... 13.300 Elliott v Nanda (2001) 111 FCR 240 ........................................................... 15.200, 15.230 Ellis v Minister for Lands (1985) 82 FLR 58 ........................................................... 12.310 Elphick v Westfield Shopping Centre Management Co Pty Ltd [2010] NSWDC 152 .............................................................................................................. 3.210 Emeco International Pty Ltd v O’Shea (No 2) (2012) 225 IR 471; [2012] WASC 348 ........................................................ 4.420, 4.430, 5.630, 5.640, 5.680, 5.690 Emerald Construction v Lowthian [1966] 1 WLR 691 ............................ 14.120, 14.130 Emery v Commonwealth (1963) 5 FLR 209; [1963] VR 586 ........................ 9.90, 9.120 Employment Advocate v Barclay Mowlem Construction Ltd (2005) 214 ALR 463 .................................................................................................................... 13.250 Employment Advocate v NUW (2000) 98 IR 302 ...................... 13.250, 13.300, 13.310 Employment Advocate v Williamson (2001) 111 FCR 20 ..................................... 13.250 Employment Services Australia Pty Ltd v Poniatowska [2010] FCAFC 92 ............................................................................................................................... 15.230 Employment and Workplace Relations, Minister for v Gribbles Radiology Pty Ltd (2005) 222 CLR 194 ......................................... 3.50, 4.330, 12.100 Encyclopaedia Britannica Australia Ltd v Campbell [2009] NSWCA 286 ............. 4.10, 9.170 Endeavour Coal Pty Ltd v Association of Professional Engineers, Scientists and Managers, Australia [2012] FCA 764 ............................................ 12.80 Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2012] FWAFB 4998 ................................................................................................. 6.500 Enever v The King [1906] 3 CLR 969 ........................................................................ 2.410 English v Rogers [2005] NSWCA 327 ............................................................. 3.170, 6.200 English Joint Stock Bank, Re; Yelland’s Case (1867) LR 4 Eq 350 ...................... 10.230 Enhance Systems Pty Ltd v Cox (AIRC ................................................................... 13.220 Epath WA Pty Ltd v Adriansz [2003] WASCA 175 .................................................. 4.520 Epichealth Pty Ltd v Yang [2015] VSC 516 ............................................................... 4.430 Equal Storm Ltd t/as Merlin’s Ark v Innes (UK EAT ............................................ 5.500 Equity 8 Pty Ltd v Shaw Stockbrocking Ltd [2007] NSWSC 412 .......................... 5.520 Equuscorp Pty Ltd v Haxton [2012] HCA 7; (2012) 246 CLR 498 ....................... 4.320 Erlich v Leifer [2015] VSC 499 ....................................................................................... 6.60 Ermel v Duluxgroup (Australia) Pty Ltd (No 2) [2015] FCA 17 ............................ 6.600 Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 ........................................................................................................................ 4.50, 4.140 Erskine v Chalmers Industries Pty Ltd (unreported, AIRC, Williams SDP, Acton SDP and Commissioner Blair, 30 March 2001) ............. 13.160, 13.210 Esanda Finance Corp Ltd v Kenchington (unreported, SASC, Prior J, 21 May 1993) ................................................................................................................... 9.180 Escobar v Rainbow Printing Pty Ltd (No 2) [2002] FMCA 122 .......................... 15.150 Eshak v Public Transport Corporation (unreported, AIRC, Marshall J, 30 August 1996) ........................................................................................... 8.240, 13.160 Eshak v Public Transport Corporation (unreported, AIRC, Ryan JR, 4 January 1996) .............................................................................................................. 8.240 Eshuys v St Barbara Ltd (2011) 205 IR 302 ............................................... 10.160, 10.170 Ethicon v American Cyanamid Co [1975] AC 396 ....................................... 14.80, 14.90 Ettridge v TransAdelaide [1998] FCA 275 ............................................................... 13.340 Eurobodolla Shire Council v Dufty [2004] NSWCA 450 ........................................ 2.360 Eurymedon, The [1974] 2 WLR 865; [1975] AC 154 ............................................... 5.490 Evans v BHP Steel (JLA) Pty Ltd (2 April 1996 ..................................................... 13.160 Evans v Muller (1983) 151 CLR 117 ......................................................................... 10.360 Evans v Trilab Pty Ltd [2014] FCCA 2464 ......................................... 5.410, 5.730, 6.280 xxxiv

Table of Cases

Evaskow v International Brotherhood of Boilermakers (1969) 9 DLR (3d) 715 ..................................................................................................................... 14.390 Evenden v Guildford City Association Football Club [1975] 3 WLR 251 ............ 9.410 Evening Standard Co Ltd v Henderson [1987] ICR 588 .......... 8.20, 8.40, 11.10, 11.50 Express and Echo v Tanton [1999] IRLR 367 ........................................................... 2.260 Eyles v Cook (1967) 13 FLR 42 ..................................................................................... 8.50

F F C Shepherd & Co Ltd v Jerrom [1987] 1 QB 301 ..................................... 9.240, 9.250 FBIS International Protective Services (Aust) Pty Ltd v MUA (2015) 232 FCR 1 .............................................................................................................. 9.170, 9.190 FHR European Ventures LLP v Cedar Capital Partners LLC [2014] UKSC 45; [2015] AC 250 ......................................................................................... 5.810 FP Group Pty Ltd v Tooheys Pty Ltd [2013] FWCFB 9605 ............. 3.90, 3.140, 3.250, 4.110 FSUA v Australia and New Zealand Banking Group Ltd (2002) 120 FCR 107 .................................................................................................................... 13.250 FSUA v Commonwealth Bank of Australia (2000) 106 IR 139 .............. 13.240, 13.320 FSUA v Commonwealth Bank of Australia (2001) 111 IR 241 ...... 9.170, 9.190, 9.410 FSUA v Commonwealth Bank of Australia (2005) 147 FCR 158 ........................ 13.240 FSUA v Commonwealth Bank of Australia (2005) 224 ALR 467 ....................... 13.320 FWO v Drivecam Pty Ltd [2011] FMCA 600 .......................................................... 13.310 FWO v Kensington Management Services Pty Ltd [2012] FMCA 225 ................... 5.40 FWO v Quest South Perth Holdings Pty Ltd [2015] HCA 45 ................................ 12.30 FWO v Theravanish Investments Pty Ltd & Ors [2014] FCCA 1170 ................. 15.270 Fabbi v Jones (1972) 28 DLR (3d) 224 ..................................................................... 14.140 Faccenda Chicken v Fowler [1986] 1 All ER 617 ...................................................... 5.530 Faccenda Chicken Ltd v Fowler [1985] 1 All ER 724 ............................... 14.330, 14.390 Fagan v Department of Human Services [2012] FWA 3043 ................................ 13.190 Fagan v Public Trustee (1934) 34 SR (NSW) 189 ..................................................... 10.50 Fair Work Ombudsman v Crocmedia Pty Ltd [2015] FCCA 140 ............................. 4.50 Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 ...................................................................................................................... 2.90, 4.50 Fair Work Ombudsman v Drivecam Pty Ltd [2011] FMCA 600 ......................... 13.240 Fair Work Ombudsman v Grandcity (GW) Travel & Tour Pty Ltd [2015] FCCA 1759 ................................................................................................................. 2.100 Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd (2015) 228 FCR 346; 249 IR 256; [2015] FCAFC 37 ....... 2.100, 2.210, 2.280, 2.350, 2.370, 3.50, 3.70, 3.100, 3.110, 3.120, 3.250, 4.60, 4.110, 4.130, 4.570 Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd (2015) 90 ALJR 107; [2015] HCA 45 ............ 2.100, 2.130, 2.210, 2.280, 2.350, 2.370, 3.50, 3.70, 3.100, 3.110, 4.60, 4.110, 4.130, 4.570 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174; 214 IR 306; [2011] FCA 1176 ....................... 2.100, 3.10, 3.80, 3.90, 3.110 Fair Work Ombudsman v Valuair Ltd (No 2) [2014] FCA 759 .............................. 12.30 Fairfax v Birt [2006] NSWSC 995 ................................................................................ 5.640 Fairfax Media Management Pty Ltd v Harrison [2014] NSWSC 470 ....... 5.600, 5.630, 5.640, 5.690 Fairstar Heavy Transport NV v Adkins [2013] EWCA Civ 886 ............................. 5.400 Far Horizons Pty Ltd v McDonalds Australia Ltd [2000] VSC 310 ....................... 5.180 Fardell v Coates Hire Operations Pty Ltd (2010) 201 IR 64 ......................... 9.50, 9.180 Farley v Lums (1917) 19 WALR 117 ........................................................................... 8.270 Farmiloe v Lane Group plc [2004] All ER (D) 08 ......................................... 6.140, 6.220 xxxv

Macken’s Law of Employment

Farquharson v Qantas Airways Ltd (2006) 155 IR 22 ............................................ 13.160 Farrow v Wilson (1869) LR 4 CP 744 ......................................................................... 9.260 Fastidia Pty Ltd v Goodwin (2000) 102 IR 131 ......................................... 13.180, 13.220 Fatimi Pty Ltd v Bryant [2004] NSWCA 140 .......................................................... 14.400 Faucett v St George Bank Ltd [2002] NSWCA 43 ........................................ 6.210, 6.230 Faulkner v BIS Industries Ltd [2012] FMCA 592 ..................................................... 4.300 Fechter v Montgomerie (1863) 33 Beav 22; 55 ER 274 ........................................... 5.320 Federal Supply and Cold Storage Co of South Africa v Angehrn (1910) 103 LT 150 ................................................................................................................. 8.370 Federated Engine Drivers & Firemen’s Association of Australia v Mackay City Council [2006] 181 QGIG 477 ................................................. 5.70, 5.80 Federated Engine Drivers and Firemen’s Association v BHP Co Ltd (1967) AILR 109 ........................................................................................................ 8.180 Federated Engine Drivers and Firemen’s Association of Australia v Adelaide Chemical & Fertiliser Co Ltd (1920) 28 CLR 1 ................................. 12.330 Federated Ironworkers’ Association of Aust NSW Division and Australian Fertilizers Ltd RE Overtime, Re [1977] AR (NSW) 17 .................... 4.530 Federated Liquor and Allied Industries Employees’ Union (NSW Branch) v North Bondi RSL Club Ltd (1980) 22 AILR 206 ............................. 8.210 Federated Mutual Ins Co v Sabine [1920] SALR 284 ............................................... 9.370 Federated Seamen’s Union of Australasia v Commonwealth Steamship Owners Association (1922) 30 CLR 144 ............................................................. 12.290 Federated Storemen and Packers Union, Re; Ex parte Wooldumpers (Vic) Ltd (1989) 166 CLR 311 ................................................................................. 13.10 Federated Storemen and Packers Union of Australia, New South Wales Branch, Re (1987) 22 IR 198 ................................................................................... 8.260 Felthouse v Bindley (1862) 6 LT 157 ........................................................................... 4.100 Ferdinands v Commissioner for Public Employment [2006] HCA 5; (2006) 225 CLR 130 .................................................................................................. 2.410 Ferguson v Strautman Australia Pty Ltd [2009] VCC 184 ..................................... 13.370 Ferraloro v Preston Timber Pty Ltd (1982) 56 ALJR 872 ....................................... 6.140 Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 ........................................................................................................................... 9.240 Fichera v Thomas Warburton Pty Ltd [2012] FWA 4382 ...................................... 13.160 Fidler v Sun Life Assurance Company of Canada (2006] 2 SCR 3 ........ 10.260, 10.330 Figjam Pty Ltd Trading as LJ Hooker Casino v Pedrini [2005] NSWSC 221 ............................................................................................................................... 9.350 Film Financial Consultants v Becker Group Ltd [2006] NSWSC 319 ................. 14.350 Film House Pty Ltd v Silverstein (unreported, VSC, Beach J, 16 November 1990) ........................................................................................................ 11.40 Finance Sector Union of Australia, Re; Ex parte Financial Clinic (Vic) Pty Ltd (1993) 178 CLR 353 ................................................................................... 12.90 Financial Integrity Group Limited v Farmer and Bravium Pty Limited [2009] ACTSC 143 .................................................................................................... 4.320 Financial Sector Union NSW Branch (Geoff Derrick) v Westpac Banking Corporation [2006] NSWIRComm 76 ................................................... 6.490 Finch v Oake [1896] 1 Ch 409 ........................................................................................ 9.50 Finch v Sayers [1976] 2 NSWLR 540 .......................................................................... 9.290 Fink v Fink (1946) 74 CLR 127 .................................................................... 10.160, 10.260 Firefighters’ Union of Australia v Metropolitan Brigades Board (1998) 86 IR 340 .................................................................................................................... 5.100 Firthglow Ltd (t/a Protectacoat) v Szilagyi [2009] EWCA Civ 98; [2009] ICR 835 ....................................................................................................................... 2.100 xxxvi

Table of Cases

Fischer v SMS Employees Pty Ltd (unreported, AIRC, Watson SDP, 19 September 2000) ........................................................................................................ 13.80 Fischer v Telstra Corporation Ltd (unreported, AIRC, Ross VP, Duncan DP and Redmond C, 1 March 1999) ................................................................... 13.180 Fisher v Dick & Co [1938] 4 All ER 467 ...................................................................... 9.40 Fisher v Edith Cowan University (1996) 70 IR 206 ................................................ 13.120 Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 ............................................. 6.680 Fishlock v The Campaign Palace Pty Ltd (2013) 234 IR 1; [2013] NSWSC 531 ................................................................ 4.90, 4.570, 8.20, 10.100, 10.350 Fitch v Dewes [1921] 2 AC 158 .................................................................................... 4.420 Flack v Chairperson, National Crime Authority [1997] FCA 1331 ........................ 5.820 Flamingo Park Pty Ltd v Dolly Dolly Creations Pty Ltd (1986) 65 ALR 500 .................................................................................................... 5.320, 10.260, 10.370 Flanagan v Thales Australia Ltd (t/as Thales Australia) [2012] FWA 6291 ............................................................................................................... 5.400, 13.160 Fletcher v Nott (1938) 60 CLR 55 ............................................................................... 2.410 Flett v Deniliquin Publishing Co Ltd [1964] NSWR 383 ......................................... 10.40 Flinders Ports Pty Ltd v Woolford (2015) 247 IR 451; [2015] SASCFC 6 ............. 2.90, 2.180 Focus National v Wilkinson [2009] SAIRC 30 .......................................................... 4.520 Foggo v O’Sullivan Partners (Advisory) Pty Ltd (2011) 206 IR 87; [2011] NSWSC 501 ............................................................................................................... 4.480 Font v Paspaley Pearls Pty Ltd [2002] FMCA 142 .................................... 15.200, 15.230 Fontin v Katapodis (1962) 108 CLR 177 .................................................................. 14.290 Food Preservers’ Union of Australia v Wattie Pict Ltd (1975) 172 CAR 227 ............................................................................................................................... 9.180 Ford v Milthorn Toleman Ltd [1980] IRLR 249 .......................................................... 8.90 Ford Motor Co Ltd v Amalgamated Union of Engineering & Foundry Workers [1969] 2 QB 303 ...................................................................................... 12.370 Forge v Commonwealth (1995) 58 IR 285 ................................................................. 9.220 Forkserve Pty Ltd v Jack [2000] NSWSC 1064 .......................................................... 5.530 Forkserve Pty Ltd v Pachiaratta (2000) 40 IPR 74 .................................................... 5.665 Formway Group v Batrachenko [2013] FWCFB 9829 ........................................... 13.170 Forstaff v Chief Commissioner of State Revenue (2004) 144 IR 1; [2004] NSWSC 573 .......................................................................................... 2.180, 3.90 Forsyth v Hi Security Fencing Systems Pty Ltd (2007) 166 IR 413 ........................ 13.50 Forsyth v Hi Security Fencing Systems Pty Ltd [2007] AIRC 540 ......................... 2.380 Foster v Parbery; Foster v Elliott [2009] NSWSC 1304 ...................... 3.50, 4.200, 4.330 Foster Bryant Surveying Ltd v Bryant [2007] EWCA Civ 200 ................................ 5.600 Foster Clarke Ltd’s Indenture Trusts, Re [1966] 1 WLR 125 .................................. 9.310 Fosters Group Ltd v Wing (2005) 148 IR 224 ........................................................... 9.170 Fotini Theodorakakis v Behnane [2003] IRC 1337 ................................................... 2.120 Foufoulas v Strang (1970) 123 CLR 168 ......................................................... 6.140, 6.220 Fowler v Commercial Timber Co Ltd [1930] 2 KB 1 ............................................... 9.310 Fowler v Wyatt (1857) 24 Beav 232; 53 ER 347 ........................................................ 4.270 Fox v GIO Australia Ltd [2002] NSWIRComm 318 ................................................ 4.320 Fox v St Barbara Mines Ltd [1998] FCA 621 ............................................. 13.340, 13.360 Francis v Kuala Lumpur Councillors [1962] 1 WLR 1411 ........... 11.70, 11.110, 11.150 Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306 .................................... 4.60, 4.100, 4.120, 4.130, 4.140, 5.300, 5.410, 5.540 Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407 ................................................................................................... 4.470, 4.570 Fraser v Evans [1969] 1 QB 349 ....................................................................... 5.710, 5.720 Fraser v Sydney Harbour Casino Pty Ltd (1997) 79 IR 472 ...................... 9.220, 13.110 xxxvii

Macken’s Law of Employment

Fraser v Thames Television Ltd [1984] QB 44 .......................................................... 5.680 Freeman v KAT Taxi & Hire Cabs [2005] NSWIRComm 1169 ............................ 2.390 Freestone v Kozma (1989) EOC 92-249 .................................................................... 15.80 French v Barclays Bank [1998] IRLR 646 ................................................................... 5.150 French v Chief Constable of Sussex Police [2006] EWCA Civ 312 ...................... 6.320 Friend v Rainer Offermann [2007] WAIRComm 239 .............................................. 5.600 Fryar v System Services Pty Ltd (1995) 60 IR 68 ........................................................ 9.60 Fryar v System Services Pty Ltd (1996) 137 ALR 321 .............................................. 9.180 Furey v Civil Services Association of WA (Inc) (1999) 91 FCR 407; 93 IR 349 .............................................................................................. 9.180, 10.250, 13.360 Future Online Ltd (a firm) v Foulds (Inspector of Taxes) [2004] EWHC 2597 ............................................................................................................................. 2.360 Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd (2009) 81 IPR 1; [2009] FCAFC 2 ................................................................................. 5.580, 5.600, 5.680

G GAB Robins (UK) Ltd v Triggs [2007] ICR 1424 ...................................................... 8.90 GAB Robins (UK) Ltd v Triggs [2008] ICR 529 ............................. 8.90, 10.290, 10.300 GC, Re [2014] FWC 6988 .............................................................................. 13.370, 13.390 GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50 .................................................................................... 4.540, 4.560, 5.180 GEO Group Australia Pty Ltd v United Voice [2011] FWA 9025 ......................... 14.40 GH Operations Pty Ltd (t/as The Grand Hyatt Melbourne), Re (unreported, AIRC (FB), Giudice J President, O’Callaghan SDP and Commissioner Smith, 14 May 2001) ........................................ 13.160, 13.170, 13.220 GPG (Australia Trading) Pty Ltd v GIO Australia Holdings Ltd (2001) 117 FCR 23 ................................................................................................................ 4.290 GWK Ltd v Dunlop Robber Co Ltd (1926) 42 TLR 376 ..................................... 14.400 Gacic v John Fairfax Publications Pty Ltd [2005] NSWSC 1210 ........................... 5.290 Galea v Bagtrans Pty Ltd [2010] NSWCA 350 ..................................... 3.170, 6.50, 6.190 Galea v Cooper [1982] 2 NSWLR 411 ...................................................................... 14.390 Gallagher v Aboriginal Hostels Ltd [2006] AIRC 29 ................................................ 4.530 Galland v Mineral Underwriters Ltd [1977] WAR 116 ........................................... 14.330 Gallotti v Argyle Diamond Mines Pty Ltd [2003] WASCA 166 ............................. 9.210 Galvin v Renito Pty Ltd [1999] FCA 1005 ............................................................... 13.340 Gama v QANTAS Airways Ltd (No 2) [2006] FMCA 1767 ................................. 15.230 Gamboni v Bendigo and Adelaide Bank Ltd (2013) 39 VR 578 ............................ 9.370 Gambotto v Fairfax Publications (2001) 104 IR 303 ................................................ 5.290 Gane v Rail Corporation of New South Wales (2010) 197 IR 138 ...................... 13.160 Gane v Total Freight Agency Pty Ltd (1996) 68 IR 204 ............................................. 9.40 Gapes v Commercial Bank of Australia Ltd (1980) 41 FLR 27; 37 ALR 20 ....................................................................................... 5.70, 5.80, 5.110, 8.50, 10.120 Gardener v Beresford [1978] IRLR 63 ........................................................................ 5.150 Gardiner v Bluescope Steel Pty Ltd [2005] NSWIRComm 1034 ............... 4.210, 5.850 Gardiner v WorkCover/CGU (Country Metropolitan Agency Contracting Services) [2002] SAWCT 64 .............................................................. 2.370 Gardner v Milka-Ware International Ltd [2010] FWA 1589 .................................... 12.20 Garratt v Mirror Group [2011] IRLR 591 .................................................................. 4.530 Garrett v Taylor (1620) Cro Jac 567; 79 ER 485 ..................................................... 14.230 Gartside v Outram (1856) 26 LJ Ch 113 .................................................................... 5.710 Gartside v Qantas Airways Ltd [2013] WAIRComm 1083 ...................................... 4.530 Garuccio v WP Corwhurst Pty Ltd t/as Solver Paints [2010] FWA 9595 ............ 5.850 Gauci v Glaxo SmithKline Australia Pty Ltd (2008) 173 IR 264 ............ 13.100, 13.110 xxxviii

Table of Cases

Gavotte Pty Ltd v Stephen Lenard Garner [2006] AIRC 265 ................................. 4.520 Gaylene May McDonald [2016] FWC 300 ............................................................... 13.380 Gemmell v Sleepmaster Pty Ltd (2005) 145 IR 154 ............................................... 13.120 General Billposting Co Ltd v Atkinson [1909] AC 118 .................................. 5.620, 9.60 General Engineering Services Ltd v Kingston and St Andrew Corp [1989] 1 WLR 69 ....................................................................................................... 8.260 General Manager of the Fair Work Commission v Thomson (No 3) [2015] FCA 1001 ............................................................................................ 5.350, 5.580 General Motors Holdens Pty Ltd v Bowling (1976) 12 ALR 605 ........................ 13.250 General Rolling Stock Company: Chapman’s Case, Re (1866) LR 1 Eq 346 ............................................................................................................................... 9.310 George v Davies [1911] 2 KB 445 ................................................................................. 9.40 George Hudson Ltd v Australian Timber Workers Union (1923) 32 CLR 413 ............................................................................................................................. 12.100 George Trollope & Sons v Martyn Bros [1934] 2 KB 436 ...................................... 5.320 Geraghty v Minter (1979) 26 ALR 141 ....................................................................... 4.420 Gerhardy v Brown (1985) 159 CLR 70 ..................................................................... 15.190 Geros v Mitcham Automatics Vic Pty Ltd (unreported, AIRC, Millane JR, 10 November 1995) ............................................................................................ 8.160 Geys v Société Générale, London Branch [2013] 1 AC 523 ........ 8.10, 8.30, 9.20, 9.50, 9.150, 10.20, 10.250 Giancaspro v SHRM (Australia) Pty Ltd (2005) 145 IR 269 ................................... 9.290 Gibb v United Steel Co [1957] 2 All ER 110 ............................................................... 3.60 Gibney & Gunson Inc v Stewart [2009] NSWSC 855 .............................................. 4.430 Gibson v Bosmac Pty Ltd (1995) 60 IR 1; 130 ALR 245 ........................... 8.220, 13.180 Gibson v Hughes [2006] UKEAT 0371 06 .................................................................. 8.90 Gilchrist, Mensinga & Young v Mondello & Mondello [2001] NSWRT 323 ............................................................................................................................... 4.180 Gilford Motor Co Ltd v Horne [1933] Ch 935 ......................................................... 4.420 Gill v Cape Contracts Ltd [1985] IRLR 499 ................................ 4.30, 4.70, 4.120, 4.280 Gill v Colonial Mutual Life Assurance Society Ltd [1912] VLR 146 ..................... 8.350 Giller v Procopets (2009) 24 VR 1 ..................................................... 5.400, 5.680, 10.260 Giller v Procopets [2008] VSCA 236 ........................................................................... 5.560 Gillespie v Commonwealth (1991) 104 ACTR 1 ......................................... 6.250, 10.370 Gillogly v IAMA Agribusiness Pty Ltd [2002] NSWCA 251 ............ 2.60, 2.360, 2.380, 3.60, 3.190, 3.210, 3.230 Gisborne Garden & Building Supplies Pty Ltd v Australian Workers’ Union [1998] FCA 1323 ........................................................................................... 14.50 Gisda Cyf v Barratt [2010] ICR 1475 ............................................................................ 9.50 Gittani Stone Pty Ltd v Packovic [2007] NSWCA 355 ................................. 6.140, 6.200 Glacier Metal Co Ltd v Dyer [1974] 3 All ER 21 ...................................................... 9.130 Glamorgan Coal Co Ltd v South Wales Miners’ Federation [1903] 2 KB 545 ............................................................................................................... 14.190, 14.200 GlaxoSmithKline Australia Pty Ltd v Ritchie [2008] VSC 164 ....... 5.410, 5.600, 5.660, 5.665, 5.690, 5.700, 5.800 Glebe Island Terminals v Continental Seagram (1993) 40 NSWLR 206 .............. 5.490 Goffett v Recruitment National Pty Ltd (2009) 187 IR 262 ................................... 13.50 Gogay v Hertfordshire County Council [2000] IRLR 703 .... 4.560, 5.150, 5.240, 7.20, 7.50, 10.260 Gold v Essex County Council [1942] 2 KB 293 .......................................................... 2.30 Goldberg v Shell Oil Company of Australia Ltd (1990) 95 ALR 711 ................. 10.350 Golden Plains Fodder Australia Pty Ltd v Millard (2007) 99 SASR 461; [2007] SASC 391 .................................................................................. 2.100, 3.10, 4.200 xxxix

Macken’s Law of Employment

Goldman Sachs JB Were Services Pty Ltd v Nikolich (2007) 163 FCR 62; [2007] FCAFC 120 ................. 4.480, 4.490, 4.520, 4.540, 5.250, 6.100, 6.290, 9.160, 10.240, 10.260, 10.370, 12.260, 13.370 Goldsmith v SPC Ardmona Operations Ltd [2009] VSC 445 ................................ 6.240 Goodchild Fuel Distributors Pty Ltd v Holman (1992) 59 SASR 454 ................. 5.800, 14.110, 14.330 Google Inc v Vidal Hall [2015] EWCA Civ 311 ........................................................ 5.400 Gorczyca v RMIT University (unreported, AIRC, Polites SDP, O’Callaghan SDP and Hingley C,12 September 2002) ..................................... 13.120 Gordon v Victoria [1981] VR 235 ................................ 5.50, 11.10, 11.60, 11.80, 11.140 Gordon and Gotch (Australia) Ltd v Cox (1923) 31 CLR 370 ............................... 8.350 Gore v Van der Lann [1967] 2 QB 31 ......................................................................... 5.490 Gorgevski v Bostik (Australia) Pty Ltd (1991) 39 IR 229 ...................................... 10.240 Gorse v Durham County Council [1971] 2 All ER 666 .................................. 7.30, 8.260 Gothard v Davey [2010] FCA 1163 .................................. 3.10, 3.50, 4.200, 4.330, 9.410 Gould v Minister of National Insurance [1951] 1 KB 731 ...................................... 2.140 Government Cleaning Service (Privatisation) Award (No 2), Re (1994) 55 IR 199 .................................................................................................................... 9.170 Government Transport, Commissioner for v Royall (1966) 116 CLR 314 ........... 5.510 Graincorp Operations Ltd v Markham (2002) 120 IR 253 ................................... 13.160 Gramotnev v Queensland University of Technology (2015) 251 IR 448; [2015] QCA 127 .......................................................... 4.480, 5.180, 5.260, 5.270, 8.100 Grand Central Car Park Pty Ltd v Tivoli Freeholders [1969] VR 62 ................... 14.400 Grant v BHP Coal Pty Ltd [2014] FWC 1712 ........................................................... 5.340 Graves v Cohen (1929) 46 TLR 121 ............................................................................ 9.260 Gray v Motor Accident Commission (1998) 196 CLR 1 ......................................... 10.90 Great Southern E-vents Pty Ltd v Peskops [2007] NSWSC 382 ............................ 5.700 Great Western Railway Co v Bater [1920] 3 KB 266 ................................................ 2.410 Greater Dandenong City Council v ASU (2001) 112 FCR 232; [2001] FCA 349 .............................................................. 11.10, 13.240, 13.270, 13.300, 13.320 Greater Glasgow Health Board’s Application [1996] RPC 207 .............................. 5.780 Greek Orthodox Community of SA Inc v Ermogenous [2002] SASC 384 .................................................................................................................................. 4.50 Green v DB Group Services (UK) Ltd [2006] IRLR 764 ............................ 6.260, 6.290 Gregory v Philip Morris Ltd (1987) 77 ALR 79; 19 IR 258 ...... 4.130, 7.10, 7.20, 8.50, 9.60 Gregory v Philip Morris Ltd (1988) 80 ALR 455 ...... 4.130, 7.10, 8.40, 10.130, 10.190, 10.230, 10.240, 10.330, 10.340, 10.360, 11.10, 11.70, 11.130, 12.320, 13.150 Greig v Insole [1978] 1 WLR 302 .................................... 14.120, 14.130, 14.150, 14.190 Griffin v London Bank of Australia Ltd (1919) 19 SR (NSW) 154 ....................... 8.320 Griffith v ABC [2004] NSWSC 582 ............................................................................ 5.290 Griffith v Richards [1996] QCA 417 ........................................................................... 5.460 Griffiths v Freedom Furniture Pty Ltd [2002] FCA 595 ....................................... 13.340 Griffiths v Secretary of State for Society Services [1974] 1 QB 468 ..................... 9.310 Griffiths & Berens Pty Ltd v Duggan [2008] VSC 201 ............................................ 5.600 Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 ................................................................... 2.380, 5.560, 5.810, 5.820, 10.120 Groeneveld Australia Pty Ltd v Nolten (No 3) [2010] VSC 533 ................ 4.230, 5.830 Grosse v Purvis [2003] QDC 151 ................................................................................ 5.400 Group Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1988] AC 1 .......... 10.90 Grout v Gunnedah Shire Council (No 1) (1994) 57 IR 243 ................. 9.40, 9.60, 9.290 Grout v Gunnedah Shire Council (No 2) (1995) 58 IR 67 ................ 9.40, 9.60, 10.250, 10.330 Grout v Gunnedah Shire Council (No 3) (1995) 59 IR 248 .................... 10.100, 10.200 xl

Table of Cases

Grycan v Table Tennis Australia Incorporated (23 July 1999 ............................... 13.120 Guan v Essential Appliance Rentals Pty Ltd [2011] FWA 383 ............................... 2.260 Guardian Insurance Brokers Pty Ltd v Olbrich [2010] SADC 114 ............ 2.260, 2.420 Gunnedah Shire Council v Grout (1995) 134 ALR 156 ..................... 9.80, 9.100, 9.140 Gunton v Richmond-upon-Thames LBC [1981] Ch 448 .......... 8.30, 8.50, 8.100, 9.50, 9.60, 9.80, 10.100, 10.180, 10.190, 10.200, 10.210 Guorgi v Pipemakers Australia Pty Ltd [2013] QSC 198 ......................................... 6.230 Guthrie v News Ltd (2010) 27 VR 196 .......... 9.30, 9.40, 9.180, 10.110, 10.230, 12.240 Gutnick v Bondi Mizrachi Synagogue [2009] NSWSC 257 ..................................... 11.10 Gutteridge v AC & R Pty Ltd (unreported, AIRC, Cargill C, 9 January 1998) .......................................................................................................................... 13.170

H H W Smith (Cabinets) Ltd v Brindle [1974] 1 WLR 1652 ......................................... 9.60 HC Sleigh v Blight [1969] VR 931 ............................................................................. 14.150 HEF of Australia v Western Hospital (1991) 4 VIR 310 ......................................... 8.340 HRH Prince of Wales v Associated Newspapers Ltd [2007] 3 WLR 222 ............ 5.680 HRX Holdings Pty Ltd v Pearson [2012] FCA 161 .................................................. 11.20 HSUA v Tasmania (1996) 73 IR 140 ......................................................................... 13.250 Hacksall’s Ltd v McDowell [1930] AR (NSW) 620 ....................................... 8.190, 8.200 Haddow v Inner London Education Authority [1979] ICR 202 ............................ 8.370 Hadley v Baxendale (1854) 9 Ex 341; 156 ER 145 ...................................... 10.80, 10.230 Hadmor Productions Ltd v Hamilton [1983] 1 AC 191; [1982] 2 WLR 322 ...................................................................... 14.250, 14.280, 14.350, 14.360, 14.410 Hajuku Pty Ltd v Gates (unreported, AIRC, Harrison SDP, Drake SDP and Raffaelli C, 31 May 2001) ............................................................................... 13.210 Halcyon House Ltd v Baines [2014] EWHC 2216 ........................................ 5.550, 5.600 Haley v Public Transport Corporation of Victoria (1998) 119 IR 242 ....... 9.30, 9.180, 9.230 Hall v A & A Sheiban Pty Ltd (1989) 20 FCR 217 ................................... 15.200, 15.230 Hall v General Motors-Holden Ltd (1979) 45 FLR 272 .......................................... 8.260 Hall v Shieban (1989) 20 FCR 217 ............................................................................ 15.230 Hall v Victorian Football League [1982] VR 64 ......................................................... 4.360 Hall v Woolston Hall Leisure Ltd [2001] ICR 99; [2000] 4 All ER 787; [2001] 1 WLR 225 ......................................................................................... 4.310, 4.330 Hall v Wright (1858) EB & E 765; 120 ER 695 ........................................................ 9.260 Hall (Inspector of Taxes) v Lorimer [1992] 1 WLR 939 .......................................... 2.200 Hall Fire Protection Ltd v Buckley [1995] UKEAT 5-94-0606 .............................. 5.800 Hallam v Harvey [1901] SR (NSW) Eq 155 ............................................................... 4.430 Halliday & Nicholas Insurance Brokers Pty Ltd v Corsiatto [2001] NSWCA 188 ................................................................................................... 5.570, 5.600 Hamberger v CFMEU (2000) 104 IR 45 .................................................................. 13.300 Hambly v Ramsey Butchering Services Pty Ltd (unreported, AIRC, Marsh SDP, Harrison SDP, Larkin C, 23 June 2000) ........................................ 13.110 Hamilton v Lethbridge (1912) 14 CLR 236 ............................................................... 4.180 Hamilton v Nuroof (WA) Pty Ltd (1956) 96 CLR 18 ................................................ 6.60 Hamilton v Whitehead (1988) 166 CLR 121 .............................................................. 2.380 Hamlin v Great Northern Railway Co (1856) 1 H & N 408; 156 ER 1261 ............................................................................................................. 10.260, 10.330 Hamlyn & Co v Wood & Co [1891] 2 QB 448 ............................................................ 4.90 Hammon v Metricon Homes Pty Ltd [2015] FWC 5565 ...................................... 13.390 Hamzy v Tricon International Restaurants (2001) 115 FCR 78 .................... 2.90, 13.70 Hands v Simpson, Fawcett & Co Ltd (1928) 44 TLR 295 ....................................... 8.350 xli

Macken’s Law of Employment

Hanley v Pease & Partners Ltd [1915] 1 KB 698 ........ 7.10, 7.20, 7.30, 7.50, 7.80, 7.90, 10.70, 10.140 Hanna v OAMPS Insurance Brokers Ltd (2010) 202 IR 420; [2010] NSWCA 267 ............................................................................................................... 4.430 Hanna-Pauley v AMP Shopping Centres Pty Ltd [2007] WACA 174 .................... 6.180 Hansen v Mt Martha Community Learning Centre Inc [2015] FCA 1099 ........... 8.120 Hansen v Northern Land Council [1999] NTSC 69 ............................................... 10.320 Hardeman v Children’s Medical Research Institute (2007) 166 IR 196 ................. 12.20 Hardin v The Pub Estate Company Ltd [2005] LL R 595 ........................... 6.230, 6.300 Hardy v Mikropul Australia Pty Ltd [2010] VSC 42 .............. 6.130, 6.150, 6.230, 6.250 Harmer v Cornelius (1858) 5 CB (NS) 236; 141 ER 94 .................... 8.150, 8.160, 8.170 Haros v Linfox Australia Pty Ltd (2012) 219 IR 177; [2012] FCAFC 42 .............. 4.230 Harper v Virgin Net Ltd [2005] ICR 921 ................................................................. 10.210 Harrington v Almar Industries Pty Ltd [2006] ACTSC 51 ...................................... 3.210 Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298; 197 ALR 626; [2003] NSWCA 10 ................................................................... 1.70, 5.560, 5.600, 10.90 Harris & Russell Ltd v Slingsby [1973] ICR 454 .......................................................... 9.90 Harrison v P & T Tube Mills Pty Ltd (2009) 181 IR 162 ........................................ 5.410 Harry M Miller Attractions Pty Ltd v Actors & Announcers Equity Association of Australia [1970] 1 NSWR 614 ............................ 11.80, 14.60, 14.220 Hart v AR Marshall & Sons (Bulwell) Ltd [1977] ICR 539 ..................................... 9.290 Hart v Jacobs (1981) 57 FLR 18 ................................................................................... 4.520 Hart v MacDonald (1910) 10 CLR 417 ....................................................................... 4.540 Harte v Forbes Australia Pty Ltd t/as Hunt Boilers [2011] FWA 6948 .............. 13.160 Hartland v General Exchange Bank Ltd (1866) 14 LT 863 ................................... 10.230 Hartleys Ltd v Martin [2002] VSC 301 ....................................................................... 5.600 Hartman v South Essex Mental Health & Community Care [2005] ICR 782 ............................................................................................................................... 6.230 Hartnett v Aardvark Security Services Pty Ltd [1998] FCA 1025 .......................... 2.360 Harvey & Sons v The Tivoli, Manchester Ltd (1907) 23 TLR 592 ........................ 9.270 Hassan v Nestlé Dairy Products (24 May 2001 ....................................................... 13.160 Hastie v Impress Australia Pty Ltd [2008] AIRC 182 ............................................. 13.110 Hasting v JH Corporate Services Pty Ltd [2000] SASC 216 ...................................... 9.30 Hastings v JH Corporate Security Services Pty Ltd [2000] SASC 216 ..................... 9.30 Hatt v Magro [2007] WASCA 124 ............................................................................... 4.240 Hatton v Sutherland [2002] 2 All ER 1 ........................................................... 6.230, 6.240 Hauxwell v Secretary of State for Trade & Industry EAT 19 June 2002; EAT/386/01 .............................................................................................................. 2.380 Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298 ............................................................................................................................... 4.250 Hawker Siddely Power Engineering Ltd v Rump [1979] IRLR 425 ......................... 8.90 Hawkins v Clayton (1988) 164 CLR 539 ..................................................................... 4.520 Hawkins v Commonwealth Bank of Australia (1996) 66 IR 322 ........................... 9.190 Hawkins v Commonwealth Bank of Australia (No 2) (1996) 70 IR 213 ............. 9.170, 9.180, 9.190 Hawley v Luminar Leisure Ltd [2006] IRLR 817 ........................................................ 3.60 Hawthorn Football Club Ltd v Harding [1988] VR 49 ................................ 11.40, 11.50 Hayes v Dodd [1990] 2 All ER 815 ............................................................. 10.270, 10.370 Hayman v KKUT Pty Ltd [2002] WADC 107 .......................... 3.60, 3.230, 4.250, 5.480 Hayman Reese v AFMEPKIU (2001) 108 IR 441 ............................. 11.10, 11.70, 11.90 Haynes v Doman [1899] 2 Ch 13 ................................................................................. 5.690 Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority [2005] VSCA 185 ....................................................................................................... 3.170 He v Lewin (2004) 137 FCR 266 ............................................................................... 13.340 xlii

Table of Cases

Health, Minister for v Ferry (1996) 65 IR 374 ......................................................... 13.120 Health Administration Corporation v Crocker [2004] NSWIRComm 163 .......... 4.480 Health Services Union v Jackson (No 4) [2015] FCA 865 ........................... 5.350, 5.580 Health Solutions (WA) Pty Ltd v Foley [2014] WASC 197 .......................... 4.210, 4.290 Hearn v O’Rouke (2002) 193 ALR 264 ...................................................................... 4.230 Hebbard v Bell Potter Securities Ltd (2005) 191 FLR 68 ........................................ 4.230 Hederick v Douwma (1970) 12 AILR 47 .................................................................... 9.400 Hedley Byrne v Heller [1964] AC 465 ......................................................................... 5.290 Hegarty v Queensland Ambulance Service [2007] QCA 366 ...................... 6.230, 6.240 Heidt v Chrysler Australia Ltd (1976) 26 FLR 257; 13 ALR 365 ........... 13.280, 13.340 Heine Bros (Aust) Pty Ltd v Forrest [1963] VR 383 ..................................... 11.30, 11.40 Helmet Integrated Systems Ltd v Tunnard [2007] IRLR 126 ......... 5.540, 5.550, 5.780, 5.800 Hem v Cant (2007) 159 IR 113 .......................................... 5.150, 8.80, 8.90, 9.40, 10.360 Henderson v Australian Chamber of Manufactures (1991) 34 AILR 10 ............ 10.250 Henderson v Department of Defence (unreported, AIRC, Guidice P, Williams SDP, Huxter C, 28 July 2000) ................................................................ 13.220 Hendrie v Commonwealth Industrial Gases Ltd (unreported, AIRC, Murphy JR, 25 January 1995) .................................................................................. 8.300 Henly v Mayor of Lyme [1828] 5 Bing 91; 130 ER 995 ........................................... 2.410 Hennessy v Patrick Stevedores Operations Pty Ltd [2014] NSWSC 1716 ........... 3.170, 3.190, 3.210 Henshall v South Pacific Tyres (unreported, AIRC, Lewin C, 12 April 2001) .......................................................................................................................... 13.190 Heptonstall v Gaskin [2004] NSWSC 80 .................................................................... 6.320 Hepworth Heating Ltd v Akers [2003] All ER (D) 33 (Jul) EAT ........................... 4.250 Herbert Clayton and Jack Waller Ltd v Oliver [1930] AC 209 .................. 5.320, 10.260 Herbert Morris Ltd v Saxelby [1916] 1 AC 688 ............................................. 4.330, 5.690 Hermann v Qantas Airways Ltd [2001] AIRC 316 ................................................... 4.480 Heugh v Central Petroleum Ltd (No 5) [2014] WASC 311 ..................... 10.160, 10.170 Hewcastle Catering Ltd v Ahmed [1992] ICR 626 .................................................... 4.330 Hewison v Meridian Shipping Pte [2003] ICR 766 ....................................... 4.210, 4.320 Hewitt v ACTek Custom Engineering Pty Ltd (unreported, AIRC, Lacy SDP, 25 May 2001) .................................................................................................. 13.120 Hewitt v Benale Pty Ltd (2002) 27 WAR 91; [2002] WASCA 163 ......................... 2.120 Hewlett Packard v O’Murphy [2002] IRLR 4 ............................................................ 2.360 Heyman v Darwins Ltd [1942] AC 356 ......................................................................... 9.80 Heywood v Wellers [1976] QB 446 ........................................................................... 10.330 Hickey v McGown [2014] IEHC 19 .............................................................................. 6.60 Hickie v Hunt & Hunt [1998] HREOCA 8 ............................................................. 15.150 Highway v Cunningham (1982) ACLD DT 610 .......................................................... 7.30 Hill v Adult Multicultural Education Services (2008) 171 IR 360 ........................ 13.150 Hill v C A Parsons & Co [1972] Ch 305; [1971] 3 WLR 995 .... 9.40, 9.60, 9.80, 11.10, 11.60, 11.70, 11.110, 11.120 Hill v Compass Ten Pty Ltd (No 2) [2012] FCA 815 ............................................... 4.210 Hill v General Accident Fire & Life Assurance Corporation plc [1998] IRLR 641 .................................................................................................................... 5.150 Hill v Van Erp (1997) 188 CLR 159 ............................................................................ 1.110 Hill v Water Resources Commission (1985) EOC 92-127 ....................................... 15.80 Hillman v Ferro Con (S) Pty Ltd (in liq) [2013] SAIRC 22 ..................................... 6.680 Hilton Hotels of Australia Ltd v Pasovska (2003) 122 IR 428 ............................... 9.290 Hinch v Attorney-General (Vic) (1987) 164 CLR 15 ............................................. 14.100 Hirachand Punamchand v Temple [1911] 2 KB 330 ................................................ 4.130 Hirji Mulji v Cheong Yue [1926] AC 497 ........................................................ 9.240, 9.290 xliii

Macken’s Law of Employment

Hiser v Hardex Co-op Ltd (unreported, NSWSC, Santow J, 14 December 1994) ................................................................................................. 8.90, 9.50 Hitchcock v Beverage Industry Environment Council (2004) 133 IR 393 ........... 13.80 Hitchcock v TCN Channel 9 Pty Ltd (No 2) [2000] NSWCA 82 .......................... 5.680 Hivac Ltd v Park Royal Scientific Instruments Ltd [1946] Ch 169 ............. 5.520, 5.800 Ho v AP Eagers Ltd [2010] FWA 5987 .................................................................... 13.140 Hobbs v Achilleus Taxation Pty Ltd (as trustee for the Achilleus Taxation Trust) [2012] FWA 2907 ........................................................................ 13.110 Hobbs v Capricorn Coal Management Pty Ltd (unreported, AIRC, McIntyre VP, Cartwright SDP and Harrison C, 30 April 2001) .......... 9.290, 13.160 Hochester v De La Tour (1853) 2 El & Bl 678; 118 ER 922 ....................... 8.20, 10.130 Hockey v WIN Corporation Pty Ltd [2013] FCA 772 ...................... 4.230, 4.320, 4.330 Hodgson v Amcor Ltd (2012) 264 FLR 1; [2012] VSC 94 .............. 5.560, 5.580, 5.830, 5.840, 8.130, 8.350, 9.170, 9.380, 10.120, 10.160 Hoekstar v Residual Asco Industries Pty Ltd [2004] NSWSC 564 ............. 4.130, 4.200 Hoenig v Isaacs (1952) 2 All ER 176 .......................................................................... 10.40 Hogan v Wimmera College of TAFE (1993) 5 VIR 412 ......................................... 9.210 Holden v Com-law (No 50) Pty Ltd (1990) 13 QLR 14 ............................................. 9.40 Hollingsworth v Commissioner of Police [No 2] (1999) 47 NSWLR 151; 88 IR 282 ............................................................................................. 4.200, 5.830, 8.350 Hollis v Vabu (1986) 160 CLR 16 ................................................................................ 2.220 Hollis v Vabu (2001) 207 CLR 21 ........... 2.60, 2.100, 2.130, 2.200, 2.250, 2.260, 2.290, 2.330, 2.360, 4.470, 6.60 Holloway v State of Tasmania [2006] TASSC 60 ...................................................... 2.410 Holmes v Jones (1907) 4 CLR 1692 .......................................................................... 10.370 Holmes v RE Spence and Co Pty Ltd (1992) 5 VIR 19 ........................................... 6.430 Holt v Musketts Timber Sales Pty Ltd (1994) 54 IR 323 ........................................... 9.30 Homebush Abattoir, Re [1966] AR (NSW) 371 ........................................................ 8.250 Homecare Direct Shopping Pty Ltd v Gray [2008] VSCA 111 ..................... 3.90, 4.110 Homfray Carpets Pty Ltd and Hycraft Carpets Pty Ltd, Re (1994) 36 AILR 363 .................................................................................................................... 9.180 Homfray Carpets Pty Ltd (Receivers and Managers Appointed) (In liq), Re [1996] 2 VR 235 ................................................................................................... 9.180 Honda Canada Inc v Keays [2008] 2 SCR 362 ....................... 5.170, 9.40, 10.90, 10.330 Hone v Six Continents Retail Ltd [2006] IRLR 49 ........................................ 6.230, 6.300 Honeyman v Nhill Hospital [1994] 1 VR 138 .......................................................... 11.130 Hopkins v Norcross Pty Ltd [1993] 1 All ER 784 .................................................. 10.360 Hopley-Dodd v Highfield Motors (Derby) Ltd [1969] ITR 289 ............................ 9.310 Horkin v North Melbourne Football Club [1983] 1 VR 153 .................. 14.190, 14.290 Horkulak v Cantor Fitzgerald International [2005] ICR 402 ......... 5.150, 5.220, 10.170 Horlock v Beal [1916] 1 AC 486 .................................................................................. 9.280 Horne and McIntosh v Press Clough Joint Venture (1994) EOC 92-556 ............ 15.80 Horsburgh v New Zealand Meat Processors Industrial Union of Workers [1988] 1 NZLR 698 ................................................................................. 10.370 Horvath v Commonwealth Bank of Australia [1999] 1 VR 643 ............................ 4.160 Horwood v Millar’s Timber and Trading Co Ltd [1917] 1 KB 305 ........................ 4.330 Hosking v Runting [2005] 1 NZLR 1 .......................................................................... 5.400 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 ............................................................................................................ 5.540, 5.550 Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157 ...................................................................................................................... 10.90 Hotville Pty Ltd v New South Wales Nurses’ Association [2002] NSWIRComm 338 .......................................................................... 4.250, 4.320, 12.320 Howard v Odhams Press Limited [1938] 1 KB 1 ...................................................... 5.710 xliv

Table of Cases

Howard v Pickford Tool Co Ltd [1951] 1 KB 417 ...................................................... 9.80 Howard v Pilkington (Australia) Ltd [2008] VSC 491 ....................... 5.410, 5.850, 8.370 Howarth v Babin (unreported, AIRC, Wilcox CJ, 30 September 1996) ................ 9.170 Howes v Gosford Shire Council [1962] 62 NSWR 58 ........................................... 11.110 Howl at the Moon Broadbeach Pty Ltd v Lamble [2014] QCA 74 .......................... 6.60 Hubbard v Vosper [1972] 2 QB 84 .............................................................................. 5.720 Hughes v Car Buyers Pty Ltd (2004) 210 ALR 645 ................................................ 15.230 Hughes v London Borough of Southwark [1988] IRLR 55 .................................... 11.60 Hughes v Western Australia Cricket Association (Inc) (1986) 19 FCR 10 ............ 12.20 Hulse v Hulse (1856) 17 CB 711; 139 ER 1256 ......................................................... 4.130 Humberstone v Northern Timber Mills (1949) 79 CLR 389 .................................. 2.250 Hungerfords v Walker (1989) 171 CLR 125 ............................................................... 10.60 Hunkin v Siebert (1934) 51 CLR 538 ............................................................................ 7.20 Hunter Quarries Pty Ltd v New South Wales [2014] NSWSC 1580 ...................... 6.620 Huntley v Thornton (1957) 1 WLR 321 ................................................................... 14.320 Hurskin v Australian Jewish Press Pty Ltd (1996) 69 IR 123 ................................ 13.160 Hurst v Queensland (2006) 151 FCR 562 ................................................................ 15.140 Husher v Husher (1999) 197 CLR 138 ....................................................................... 2.420 Hussein v Secretary of the Department of Immigration and Multicultural Affairs (No 2) [2006] FCA 1263 ..................................................... 4.320 Hussein v Westpac Banking Corporation (1995) 59 IR 103 ...................... 8.340, 13.160 Hutchinson v Metal Manufacturers Ltd [1948] AR (NSW) 818 ............................... 7.60 Hutchinson v Smirlis & Co Shoe Manufacturers (1986) EOC 92-152 .................. 15.80 Hutchinson, Re [1948] AR (NSW) 818 ....................................................................... 10.70 Hyde Park Residence Ltd v Yelland [2001] Ch 143 ....................................... 5.680, 5.720 Hyro Ltd v Eland [2007] NSWSC 1111 ........................................................................ 3.50

I ICI Australia Operations Pty Ltd (t/as Dulux Australia) v Hutton (1993) 47 IR 288 ............................................................................................. 9.160, 9.170, 9.180 IF Asia Pacific Pty Ltd v Galbally (2003) 59 IPR 43; [2003] VSC 192 ...... 4.430, 5.640, 5.690, 5.750 IGA Distribution (Vic) Pty Ltd v Nguyen (2011) 212 IR 141 .............................. 13.210 IIlawarra Area Health Service v Dell [2005] NSWCA 381 ...................................... 6.120 IOOF Building Society Pty Ltd v Foxeden Pty Ltd (2009) 23 VR 536 ......... 9.30, 9.40, 9.50 IPC Business Press Ltd v Gray [1977] ICR 858 .......................................................... 8.30 IRB v Knox Auto Parts (1982) 1 IR 314 .................................................................... 8.360 Ibekwe v London General Transport Services Ltd [2003] EWCA Civ 1075 ............................................................................................................................. 4.510 IceTV v Duncan Ross [2007] NSWSC 635 .................................................... 4.420, 5.600 IceTV v Duncan Ross [2009] NSWSC 980 ................................................................ 5.600 Ikin v The Danish Club “Dannebrog” Inc (2001) 140 IR 101 ...... 9.30, 10.250, 10.330 Il Migliore Pty Ltd v Miss Kelly McDonald [2013] FWCFB 5759; (2013) 236 IR 160 .................................................................................................................. 13.70 Illawarra Area Health Service v Dell [2005] NSWCA 381 ........................... 6.240, 6.250 Ilvariy Pty Ltd v Sijuk [2011] NSWCA 12 .................................................................. 3.180 Imam-Sadeque v Bluebay Asset Management (Services) Ltd [2013] IRLR 344 ............................................................................................................................... 4.400 Immigration & Citzenship, Minister for v Kumar [2009] HCA 10 ........................ 5.720 Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] ICR 524 ............................................................................................................................... 4.560 Inco Ships Pty Ltd v Hardman [2007] FCA 1138 ..................................................... 4.320 xlv

Macken’s Law of Employment

Independent Education Union v Canonical Administrators (1998) 87 FCR 49; 157 ALR 531 ................................................. 5.70, 5.80, 5.100, 5.110, 13.250 Independent Education Union v Geelong Grammar School [2000] FCA 557 ............................................................................................................... 13.280, 13.320 Independent Education Union of Australia v St Francis Assisi School [2003] AIRC 1388 .......................................................................................... 2.260, 2.360 Independent Management Resources Pty Ltd v Brown [1987] VR 605 ............... 5.540, 5.560, 5.660, 5.680 Independent Oil Industries Ltd v Shell Co of Australia (1937) 37 SR (NSW) 394 .................................................................................... 14.120, 14.140, 14.200 Industrial Automation Group Pty Ltd, Re [2010] FWAFB 8868 ......................... 13.130 Industrial Enterprises Pty Ltd v Federated Storemen and Packers Union of Australia (1979) 2 ATPR 40-100 ....................................................................... 14.50 Industrial Registrar v Mejias [2007] NSWIRComm 145 .......................................... 5.720 Informax International Pty Ltd v Clarius Group Ltd (2012) 207 FCR 298; 231 IR 422; [2012] FCAFC 165 ................................................ 2.110, 4.3005.760 Ingham v Metro Quarry Group Pty Ltd [2015] FWC 6472 .................................... 6.580 Ingram v Little [1961] 1 QB 31 .................................................................................... 4.200 Initial Services Ltd v Putterill [1967] 3 All ER 145 ....................................... 5.710, 5.720 Inspector Atkins v Network Production Personnel Pty Ltd [2004] NSWIRComm 71 ...................................................................................................... 3.210 Inspector Christensen v AbiGroup Contractors Pty Ltd [2013] NSWIRComm 111 .................................................................................................... 3.210 Inspector Christensen v MVM Rail Pty Ltd [2013] NSWIRComm 89 ................. 3.210 Inspector Cooper v Schwarz (No 2) [2013] NSWIRComm 112 ............................ 3.210 Inspector Dall v Brambles Australia [2006] NSWIRComm 212 ............................ 6.550 Inspector Dall v Brambles Australia Ltd [2006] NSWIRComm 214 ..................... 6.550 Inspector Dall v Brambles Austrlia Ltd [2006] NSWIRComm 213 ....................... 6.440 Inspector Estreich v Zaccardelli [2012] NSWIRComm 47 ..................................... 6.580 Inspector Hopkins v Byron McIntyre [2003] NSW CMIMC 86 ............................ 2.360 Inspector Jennifer Short v The Crown in the Right of the New South Wales (NSW Police) [2007] NSWIRComm 138 ................................................... 6.490 Inspector Martin v Russell Larkham [2003] NSWIRComm 31 .............................. 6.580 Inspector Morgenthal v Vizy Paper Pty Ltd [2008]NSWIRComm 211 ................ 6.410 Inspector Shepherd v Vinsente Pty Ltd [2013] NSWIRComm 8 ........................... 6.450 Inspector Walker v Earthquake Promotions Pty Ltd (No 2) [2014] NSWIRComm 5 ........................................................................................................ 6.680 Insurance Commissioner v Joyce (1949) 77 CLR 39 ................................................ 8.180 Integrated Group Ltd v Dillon [2009] VSC 361 ........................................................ 4.430 Intercultural Management Services Pty Ltd v White [1999] SASC 4 ....................... 9.20 Interlink Express Parcels Ltd v Night Trunkers Ltd [2001] EWCA 360 ..... 3.60, 3.230 International Flowers and Fragrances (Australia) Pty Ltd v Hoff [2008] VSC 56 ........................................................................................................................ 9.170 International Harvester Export Co v International Harvester Australia Ltd [1983] 1 VR 539 ...................................................................................... 9.310, 9.320 Intico (Vic) Pty Ltd v Walmsley [2004] VSCA 90 ...... 4.520, 5.170, 5.180, 5.270, 8.100 Investa Properties Pty Ltd v Nankervis (No 7) [2015] FCA 1004 ............. 5.530, 5.540, 5.550, 5.560, 5.580, 5.640 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 ..................................................................................................... 4.470 Irani v Southampton and South West Hampshire Health Authority [1985] ICR 590 ................................................................... 11.10, 11.60, 11.100, 11.120 Ireland v Johnson [2009] WASCA 162 .......................................................................... 4.50 Irons v Merchant Capital Ltd (1994) 116 FLR 204 ....................................... 9.40, 10.250 xlvi

Table of Cases

Irving v Kleinman [2005] NSWCA 116 ...................................................................... 4.520 Isbester v Knox City Council [2015] HCA 20 ........................................................... 5.270 Item Software (UK) Ltd v Fassihi [2005] ICR 450 ................ 5.830, 8.350, 10.30, 10.40 Ivory v Palmer [1975] ICR 340 ....................................................................................... 8.50 Izdes v L G Bennett & Co Pty Ltd (1995) 61 IR 439 ................................... 8.210, 8.230

J J Boag and Son Brewing Pty Ltd v Button [2010] FWAFB 4022 ......................... 13.160 J MacFarlane v Dampier Mining Co Ltd (1980) 22 AILR 234 ............................... 4.140 J Ray McDermott (Australia) Pty Ltd v Australian Institute of Marine and Power Engineers (1977) 189 CAR 883 ............................................... 5.70, 10.120 J Williams v Printers Trade Services (1984) 7 IR 82 ................................................. 8.360 JA & BM Bowden & Sons Pty Ltd v Chief Commissioner of State Revenue [2001] NSWCA 125; (2001) 105 IR 66 ...................................... 2.180, 2.290 JGE v The Trustees of the Portsmouth Roman Catholic Diocesan Trust [2012] EWCA Civ 938 ................................................................................................ 6.60 JK v New South Wales [2014] NSWSC 1084 ................................................... 5.460, 6.60 JQAT Pty Ltd v Storm [1987] 2 Qd R 162 ................................................................. 4.430 Jacomb v ASU [2004] FCA 1250 ............................................................................... 15.190 Jager v Australian National Hotels Pty Ltd (1998) 7 Tas R 437 ................................ 9.40 Jaksch & Associates Pty Ltd v Hawks [2005] VSCA 307 ......................................... 5.600 James v Commonwealth (1939) 62 CLR 339 ............................... 14.110, 14.140, 14.210 James v London Borough of Greenwich [2007] ICR 577, ...................................... 2.180 James Miller Holdings Ltd v Graham (1978) 3 ACLR 604 ...................................... 9.310 Janata Bank v Ahmed [1981] ICR 791 ................................................. 5.430, 8.170, 8.240 Jancso v Telstra Corporation Ltd (unreported, AIRC, Giudice P, Harrison SDP and Larkin C, 1 June 2001) ............................................ 13.160, 13.170 Jane Doe v ABC [2007] VCC 281 ................................................................................ 5.400 Jardin v Metcash Ltd (2011) 285 ALR 677; [2011] NSWCA 409 .............. 5.600, 5.610, 5.630, 5.640, 8.30, 8.50, 9.140 Jarrad v Melbourne and Metropolitan Tramways Board [1978] AILR 244 ........... 7.110 Jarratt v Commissioner of Police for New South Wales (2005) 224 CLR 44; [2005] HCA 50 ................................................... 2.410, 4.140, 5.270, 8.100, 10.240 Jarvis v Swans Tours Ltd [1973] 1 QB 233 .............................................................. 10.260 Jeanette Melbourne v JC Techforce Pty Ltd [1998] SAIRComm 62 ...................... 3.140 Jefferson v Paskell [1916] 1 KB 57 ................................................................................. 5.50 Jeffrey v Donald (1901) 9 SLT 199 .............................................................................. 5.390 Jenner v Copperart Pty Ltd (1993) 60 SAIR 20 ......................................................... 9.210 Jennings v Salvation Army (2003) 128 IR 366 ......................................................... 13.340 Jenny Craig Weight Loss Centres Pty Ltd v Margolina [2011] FWAFB 9137 ............................................................................................................................. 13.80 Jetivia SA v Bilta (UK) Ltd [2015] UKSC 23 ............................................................. 4.310 Jewel Food Stores Pty Ltd v Amalgamated Milk Vendors Association Inc (1989) 24 FCR 127 .................................................................................................. 14.160 Joe Lee Ltd v Lord Dalmeny [1927] 1 Ch 300 ......................................................... 14.110 John Fairfax & Sons Ltd v Waterside Workers’ Federation of Australia [1976] Ind Arb Serv 346 ........................................................................................ 14.160 John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995 ......... 4.370, 4.430, 5.640, 5.750, 11.20, 11.50 John Holland Pty Ltd v AMEPKIU (2009) 174 FCR 526 ....................... 13.270, 13.290 John Lucas Hotel Management Services (t/as World Square Pub) v Hillie (2013) 224 IR 260; [2013] FWCFB 1198 .................................................... 13.70 xlvii

Macken’s Law of Employment

John Lysaght (Australia) Ltd v Federated Iron Workers; Re York (1972) 14 AILR 517 ............................................................................................................... 8.370 John Lysaght (Australia) Pty Ltd v Federated Ironworkers Association (1973) 15 AILR 323 .................................................................................................. 8.270 John Michael Design plc v Cooke [1987] ICR 445 ................................................. 14.150 Johns v Gunns Ltd (1995) 60 IR 258 ........................................................................ 13.210 Johnson v Agnew [1979] 2 WLR 487 .......................................................................... 11.80 Johnson v Buttress (1936) 56 CLR 113 ....................................................................... 4.270 Johnson v Combined Instruments Systems (unreported, AIRC Watson SDP, 17 July 1997) ..................................................................................................... 13.80 Johnson v Cross [1977] ICR 872 .................................................................................... 7.90 Johnson v Lindsay & Co [1891] AC 371 ........................................................... 3.60, 3.230 Johnson v Marshall [1906] AC 409 .............................................................................. 5.470 Johnson v Nottinghamshire Combined Police Authority [1974] 1 WLR 358 ............................................................................................................................... 9.380 Johnson v Unisys Limited [2001] 2 All ER 801 ....................................................... 12.260 Johnson v Unisys Ltd [2003] 1 AC 518 ....... 1.110, 5.150, 8.100, 8.120, 10.210, 10.240, 10.270, 10.280, 10.290, 10.320, 10.330 Johnstone v Bloomsbury Health Authority [1992] QB 333 ............ 4.330, 4.470, 5.150, 6.250, 8.210, 9.340, 9.360 Jones v Amalgamated Television Services Pty Ltd [1991] Aust Torts Reports 68,984 ........................................................................................................... 5.290 Jones v Associated Tunnelling Co Ltd [1981] IRLR 477 ......................................... 5.500 Jones v Department of Energy and Minerals (1995) 60 IR 304 ............... 9.170, 13.140 Jones v Lee [1980] ICR 310 ....................................................... 7.50, 8.100, 11.60, 11.120 Jones v Manchester Corporation [1952] 2 QB 852 ......................................... 5.440, 6.40 Jones v Mid-Glamorgan County Council [1997] ICR 815 ......................................... 8.90 Jones v Queensland Tertiary Admissions Centre Ltd (2009) 190 IR 218; [2009] FCA 1382 ..................................................................................................... 15.300 Jones v Queensland Tertiary Admissions Centre Ltd (No 2) (2010) 186 FCR 22 ................................................................. 5.270, 13.240, 13.250, 13.260, 13.300 Jones v State of NSW [2008] FMCA 832 ................................................................. 15.150 Jones v TCE Marketing Australia Pty Ltd (unreported, AIRC, Murphy JR, 10 October 1996) ................................................................................................ 9.150 Jones Bros (Hunstanton) Ltd v Stevens [1955] 1 QB 275 ..................................... 14.150 Josephson v Walker (1914) 18 CLR 691 ....................................................... 10.50, 12.130 Joshi v Panasonic Australia Pty Ltd [2010] FWA 2946 ........................................... 13.180 Journalists (Metropolitan Daily Newspapers) Award, Re (1959) 4 FLR 164 .................................................................................................................................. 9.50 Journalists (Sydney County Council) Award, Re (1959) 58 AR 555 ..................... 12.330 Joyce v Hendricks Pty Ltd [2006] NSWIRComm 1068 ................................ 2.190, 4.200 Joynson v Hunt & Son (1905) 93 LT 470 ..................................................................... 4.50 Jupiter General Insurance Co Ltd v Shroff [1937] 3 All ER 67 .................. 8.250, 8.270 Justice, Department of v Lunn (2006) 158 IR 410 ..................... 13.100, 13.110, 13.120 Jy Smile Centre Pty Ltd v Idameneo (No 123) Pty Ltd [2013] FCCA 336 ........... 4.300

K Kagiyama v Southern Cross Limousines Pty Ltd (unreported, AIRC, Marshall J, 6 January 1997) ...................................................................................... 8.300 Kalouche v Legion Cabs (Trading) Co-operative Society Ltd (1998) 81 IR 415 .......................................................................................................................... 8.290 Kalwak v Consistent Group Ltd [2007] All ER (D) 319 .......................................... 2.180 xlviii

Table of Cases

Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313 ............................................................................................................................. 10.350 Karatjas v Deakin University [2012] VSCA 53 ................................... 6.180, 6.200, 6.550 Kashemije Stud Pty Ltd v Hawkes [1978] 1 NSWLR 143 ....................................... 5.430 Kaye Wilson v Mackay Taxi Holdings Ltd (t/as Mackay Whitsunday Taxis) [2014] FWC 2425 ........................................................................................ 13.140 Keays v J P Morgan Administrative Services Australia Ltd (2012) 224 IR 406; [2012] FCAFC 100 ................................... 4.90, 4.230, 4.240, 4.540, 4.570, 5.510 Keeble v Hickeringill (1709) 11 East 574n; 103 ER 1127 ...................................... 14.230 Keeble v Murray [2014] NSWSC 151 .......................................................................... 2.120 Keegan v Sussan Corporation (Aust) Pty Ltd [2014] QSC 64 ..................... 6.230, 6.240 Keeley v Fosroc International Ltd [2006] IRLR 961 ................................................ 4.490 Keenan v Leighton Boral Amey Joint Venture [2015] FWC 3156 .......................... 6.180 Keith Miller & Sons Builders Pty Ltd v Flemming (1999) 91 IR 399 .................... 13.80 Keldote Pty Ltd v Riteway Transport Pty Ltd (2008) 176 IR 316; (2009) 185 IR 155; [2010] FMCA 394 ................................................................................ 4.300 Kelly v Alford [1988] 1 Qd R 404 ........................................................ 5.360, 5.440, 5.460 Kelly v Commissioner, Department of Corrective Services [2001] NSWCA 148 ............................................................................................................... 4.140 Kelly v Fitzpatrick (2007) 166 IR 14 ............................................................................ 10.50 Kelly’s (Coleambally) Pty Ltd v Malone [2001] NSWCA 146 ................................. 6.150 Kemp Meats Pty Ltd v Tompkins [2014] QCA 125 ................................................. 6.110 Kenefick v Australian Submarine Corporation (1995) 62 IR 107 ........................ 13.140 Kenefick v Australian Submarine Corporation Pty Ltd (1996) 65 IR 366 .......... 13.140 Kenley v JB Hi-Fi (unreported, AIRC, Ross VP, Watson SDP and Holmes C, 22 June 2000) ....................................................................................... 13.160 Kennedy v Cumnock No 1 Colliery Pty Ltd (unreported, AIRC, Giudice P, Harrison SDP and Jones C, 14 June 2001) ..................................................... 13.210 Kennedy v Cumnock No 1 Colliery Pty Ltd (unreported, AIRC, Giudice P, Harrison SDP, Jones C, 19 September 2001) ................................................. 13.210 Kennedy v Queensland Alumina Ltd [2015] QSC 317 ..................... 6.110, 6.130, 6.150 Kennelly v Incitec Ltd [1998] FCA 1470 ...................................................... 5.470, 13.360 Kenyon v Barry Bros Specialised Services Pty Ltd [2001] VSCA 3 ....................... 6.200 Kerr v Goulburn Valley Region Water Authority (unreported, VCC, Morrow J, 20 August 1999) ...................................................................................... 8.300 Kerr v Jaroma Pty Ltd (1996) 70 IR 469 .................................................................. 13.160 Kerrisk v DC Holdings WA Pty Ltd [2013] FCA 1217 ............................................ 4.300 Kerry v Ansett Australia Ltd (unreported, AIRC, Duncan DP, 21 September 1998) ...................................................................................................... 13.190 Kharbanda v Ministry of Transport (No 2) [2008] NSWADT 203 ....................... 4.320 Kidd v Savage River Mines (1984) 6 FCR 398 ............. 4.210, 5.50, 7.100, 7.110, 7.120, 7.130 Kiel v Curwen-Walker (unreported, AIRC, Millane JR, 27 October 1994) ........... 8.160 Kilburn v Enzed Precision Products (Australia) Pty Ltd (1988) 4 VIR 31 ............ 9.40, 10.250, 10.340 Kilminster v Sun Newspapers Limited (1931) 46 CLR 284 ....................................... 9.30 Kinconne Pty Ltd v Brombey (1985) 10 IR 122 .......................................................... 9.50 King v Ag Australia Holdings Ltd (formerly GIO Australia Holdings Ltd) [2002] FCA 151 ................................................................................................. 5.710 King v Freshmore (Vic) Pty Ltd (17 March 2000 ................................................... 13.160 Kirchner v Mayne Nickless Ltd (2000) 140 IR 340 ................................................... 9.180 Kirchner & Co v Gruban [1909] 1 Ch 413 ................................................................. 11.20 Kirk v Industrial Relations Commission (NSW) (2010) 239 CLR 531; [2010] HCA 1 ................................................................................................. 6.420, 6.520 xlix

Macken’s Law of Employment

Kirkland-Veenstra v Stuart (No 2) [2008] VSCA 211; (2008) 177 IR 328 ............ 2.410 Kirwin v Pilbara Infrastructure Pty Ltd [2012] WASC 99 ....................................... 6.440 Kis Australia Pty Ltd v Laud (1988) 30 AILR 103 .................................................. 10.250 Kitano v Commonwealth (1974) 129 CLR 151 ....................................................... 14.350 Klein v Metropolitan Fire and Emergency Services Board (2012) 208 FCR 178; [2012] FCA 1402 ..................................................................... 15.260, 15.270 Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44; 214 ALR 355 ..... 4.540, 6.100, 6.110, 6.140, 6.150, 6.220, 6.230, 6.240, 6.250, 6.300, 6.540, 10.260, 10.330, 10.370 Kofi-Sunkersette OBU v Strauss [1951] AC 243 ......................................................... 4.90 Kolodjashnij v J Boag and Son Brewing Pty Ltd [2010] FWAFB 3258 ............... 13.160 Kondis v State Transport Authority (1984) 154 CLR 672 .......... 3.60, 3.230, 6.50, 6.60 Kone Elevators Pty Ltd v McNay [1997] ATPR 41-564 .......................................... 4.430 Konrad v Victoria Police (1999) 91 FCR 95; [1999] FCA 988 .................. 2.410, 13.100 Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 ................................................................................................................ 8.20 Koops Martin v Reeves [2006] NSWSC 449 ............... 4.420, 4.430, 4.440, 5.630, 5.640 Koowarta v Bjelke-Petersen (1982) 153 CLR 168 ..................................................... 15.30 Kores Manufacturing Co Ltd v Kolok Manufacturing Co Ltd [1958] 2 All ER 65 .................................................................................................................... 4.360 Kovacic v Henley Arch Pty Ltd [2009] VSCA 56; (2009) 22 VR 21 ......... 2.120, 2.220, 2.260, 2.420 Krell v Henry [1903] 2 KB 740 .................................................................................... 9.240 Kronen v Commercial Motor Industries Pty Ltd [2006] SAIRC 31 ...................... 4.530 Kucks v CSR Ltd (1996) 66 IR 182 ........................................................................... 12.120 Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 ........... 6.30, 6.90, 6.150 Kulatilake v Nottingham Area Health Authority (Teaching) (unreported, Court of Appeal, 17 October 1980) ...................................................................... 11.60 Kumberllaynja Community Government Council v Fewings (unreported, AIRC, Ross VP, Watson SDP and Bacon C, 7 May 1998) .......... 13.80 Kwefio-Okai v RMIT University [1999] FCA 1686 .................................................. 9.360 Kweifio-Okai v RMIT University [1999] FCA 1686 ................................................. 9.190 Kwik-Fit (GB) Ltd v Lineham [1992] ICR 183 ................................................ 8.90, 9.100 Kwik-Fit (GB) Pty Ltd v Lineham [1992] ICR 183 ..................................................... 9.50 Kynixa Ltd v Hynes [2008] EWHC 1495 ....... 4.340, 5.530, 5.630, 5.670, 5.740, 5.830, 5.840, 5.850

L LED Technologies Pty Ltd v Roadvision Pty Ltd [2012] FCAFC 3 .................... 14.120 LHMU v Cuddles Management Pty Ltd (2009) 183 IR 89 .......................... 9.50, 13.240 LHMWU v Arnotts Biscuits Ltd (2010) 188 FCR 221 ................ 7.10, 7.50, 7.70, 7.100 LIFFE Administration & Management v Pinkava [2007] 4 All ER 981; [2007] ICR 1489 ............................................................................................. 5.780, 5.790 Labelmakers Group Pty Ltd v LL Force Pty Ltd (No 2) [2012] FCA 512 ............ 5.660 Labelmakers Group Pty Ltd v LL Force Pty Ltd (No 2) [2013] FCA 1059 ............................................................................................................................. 5.560 Laing O’Rourke (BMC) Pty Ltd v Kirwin [2011] WASCA 117 ................... 6.430, 6.440 Laker v Bendigo and Adelaide Bank Ltd [2010] FWA 5713 ................................. 13.170 Lam v Sancy Fashions Pty Ltd (unreported, AIRC, Ryan J, 19 December 1996) .............................................................................................................................. 8.90 Lancashire Fires Ltd v SA Lyons & Co [1997] IRLR 113 ....................................... 5.600 Landmark Underwriting Agency Pty Ltd v Kilborn [2006] NSWSC 1108 ........... 5.600 l

Table of Cases

Landsheer v Morris Corporation (WA) Pty Ltd [2014] WAIRComm 34 ............. 4.480, 5.40, 5.230 Landsheer v Morris Corporation (WA) Pty Ltd [2014] WASCA 186 ......... 4.480, 5.230 Lane v Arrowcrest Group Pty Ltd (1990) 27 FCR 427 .................. 8.130, 10.240, 11.80 Lane v Fasciale (1991) 5 VIR 33 ................................................................................... 11.70 Lane v Fasciale (1993) 35 AILR 425 ............................................................................ 11.10 Lane v Fasciale (1993) 5 VIR 508; 35 AILR 339 ........................................... 8.130, 8.210 Lane and Northern Sydney Central Coast Area Health Service [2006] NSWIRComm 380 ........................................................................................ 5.400, 5.410 Lang v Tenix Defence Systems Pty Ltd (unreported, AIRC, Williams SDP, 20 April 2000) .................................................................................. 13.140, 13.170 Lange v Australian Broadcasting Commission (1997) 189 CLR 520 ..................... 5.710 Langston v Amalgamated Union of Engineering Workers [1974] 1 WLR 185 .......................................................................................................... 5.310, 5.320, 7.80 Lanksford v Business Post Ltd [2004] EWCA Civ 1448 .......................................... 2.360 Largerwall v Wilkinson, Henderson and Clarke Ltd (1899) 80 LT 55 ................... 5.310 Larner v George Weston Foods Ltd [2014] VSCA 62 ...................... 6.230, 6.250, 6.300 Latchford Premier Cinema Ltd v Ennion [1931] 2 Ch 409 ....................................... 9.50 Latham v Federated Municipal and Shire Council Employees Union of Australia (unreported, NSWSC, Lee J, 24 February 1978) ................. 14.260, 14.270 Latham v Municipal and Shire Employees Union of Australia (unreported, NSWSC, Lee J, 24 February 1978) ................................................ 14.280 Latham v Singleton [1981] 2 NSWLR 843 ............. 7.20, 8.260, 14.200, 14.250, 14.260, 14.270, 14.330, 14.340, 14.410 Latimer v AEC Ltd [1952] 2 QB 701 .............................................................. 6.150, 6.180 Laurinda Pty Ltd v Capalba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 ........................................................................................................................ 8.20 Lavarack v Woods of Colchester [1967] 1 QB 278 ................................... 10.250, 10.360 Lavings v Barclay Mowlem Construction (NSW) Ltd (1994) 99 IR 247 ...... 9.20, 9.40, 9.180, 9.190 Lawless v MacKendrick (No 3) [2011] WASC 298 ................................................... 5.450 Lawrence v Attorney General’s Department [2004] NSWIRComm 59 ................ 5.800 Lawrence v Clutha Development Pty Ltd (unreported, FCA, Keely J, 10 May 1985) ................................................................................................................... 9.170 Lawrence v Hobart Coaches Pty Ltd (1994) 1 IRCR 92; 57 IR 218 ...................... 8.220 Lawrence David Ltd v Ashton [1989] ICR 123 ......................................................... 11.10 Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 1 WLR 698 .............................................................................................. 8.20, 8.190, 8.230, 8.250 Laz v Downer Group Ltd (2000) 108 IR 244 .......................................................... 13.340 Leahne Rowley v BHP Billiton Iron Ore [2014] WAIRComm 244 ....................... 5.230 Lederberger v Mediterranean Olives Financial Pty Ltd [2012] VSCA 262; (2012) 38 VR 509 ...................................................................................................... 4.570 Ledington v University of Sunshine Coast (2003) 127 IR 152 ............................. 13.120 Lee v Aerial Taxi Cabs Co-operative Society Ltd [1999] FCA 1727 ...................... 2.390 Lee v GEC Plessey Telecommunications [1993] IRLR 383 .................................... 4.130 Lee v Goldsmith (unreported, AIRC, Ryan JR, 22 December 1994) ..................... 8.160 Lee v Hills Before and After School Care Pty Ltd (2007) 160 IR 440 ................. 13.340 Lee v Lee’s Air Farming Ltd [1960] 3 All ER 420; [1961] AC 12 ........................... 2.380 Lee v Queensland [2015] QDC 83 ............................................................................... 6.230 Lee v Smith [2007] FMCA 59 ......................................................................... 15.50, 15.230 Lee v Smith & (No 2) [2007] FMCA 1092 ................................................................. 15.50 Leech v Preston Borough Council [1985] ICR 192 .................................................. 9.150 Leemon v Treasure Books Australia Pty Ltd (t/as Merchant Sampler Advertising) (1997) 75 IR 138 ............................................................................... 13.220 li

Macken’s Law of Employment

Legal & General Assurance Ltd v Kirk [2002] IRLR 124 ........................................ 5.290 Legal Services Commissioner v Spaulding (Legal Practice) [2015] VCAT 292 ............................................................................................................................... 5.850 Leica Geosystems Pty Ltd v Koudstaal (No 3) [2014] FCA 1129; (2014) 245 IR 422 ...................................................................................................... 5.580, 5.670 Leichhardt Municipal Council v Montgomery (2007) 230 CLR 22 .......................... 6.50 Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1; [2009] HCA 35 ............ 3.170, 3.180, 3.200, 3.210 Lennie v Hawkes & Butterworth (unreported, IRCA, Marshall J, 4 October 1996) ............................................................................................................ 5.110 Lennon v Metropolitan Police Commissioner [2004] 1 WLR 2594 ....................... 5.300 Lennon v South Australia [2010] SASC 272 ....................... 8.90, 10.230, 10.270, 10.320 Leon Laidely Pty Ltd v Transport Workers’ Union (1980) 28 ALR 589; 43 FLR 168 ................................................................................................................. 14.50 Leonard v BlueScope Steel Ltd [2007] NSWIRComm 1023 ................................... 6.140 Leveque and Papaioannou v James Downey as Liquidator of Willow Fashions (Australia) Pty Ltd (In liq) (unreported, VSC, Hayne J, 27 April 1995) .................................................................................................................. 9.410 Levy v Goldhill [1917] 2 Ch 297 .................................................................................... 4.50 Lewandowski v Mead Carney-BCA Pty Ltd [1973] 2 NSWLR 640 ............. 4.90, 4.130 Lewis v Averay [1972] 1 QB 198 .................................................................................. 4.200 Lewis v Condon (2013) 85 NSWLR 99; [2013] NSWCA 204 ................................. 2.100 Liberty Financial Pty Ltd v Scott (No 3) (2004) 11 VR 621; [2004] VSC 490 ............................................................................................................................... 5.680 Liddell v Lembke (1994) 56 IR 447; 127 ALR 342 ................................... 11.110, 11.130 Liddle v Central Australian Legal Aid Service (1999) 150 FLR 142 .................... 11.130 Lifesavers (Australasia) Pty Ltd v Dugan (1986) 53 SAIR 525 ............................... 8.300 Liffe Administration and Management v Pinkava [2007] EWCA 217 ................... 5.780 Liftronic Pty Ltd v Unver (2001) 75 ALJR 867; [2001] HCA 24 .... 6.110, 6.130, 6.150 Limpus v London General Omnibus Co (1962) 1 H & C 526 ................................. 6.60 Lincoln Mills (Aust) Ltd v Gough [1964] VR 193 ..................................................... 2.380 Lindeman v Bentley (unreported, VSC, Beach J, 8 December 1989) ..................... 9.170 Lindner v Murdock’s Garage (1950) 83 CLR 628 ......................................... 4.340, 4.420 Lindsay v Queen’s Hotel [1919] 1 KB 212 ............................................................... 10.250 Linfield Linen Pty Ltd v Nejan (1951) 51 SR (NSW) 280 ....................................... 11.80 Linfox Australia Pty Ltd v Stutsel (2012) 217 IR 52; [2012] FWAFB 7097 ........ 13.160 Linkstaff International Pty Ltd v Roberts (1996) 67 IR 381 ..................................... 8.90 Linnane v Monash University (unreported, AIRC, North J, 2 January 1996) ................................................................................................................ 11.10, 11.70 Lion Laboratories Ltd v Evans [1985] QB 526; [1984] 2 All ER 417 ........ 5.680, 5.720 Lipman Pty Ltd v McGregor [2004] NSWCA 6 .......................................................... 6.50 Lissner v Commonwealth [2002] ACTSC 53 ............................................................. 2.410 Lister v Romford Ice and Cold Storage Co Ltd [1957] AC 555 ..... 5.360, 5.370, 5.430, 5.440, 6.100, 8.170, 8.240, 10.120 Litchfield v Chief Executive, Department of Manufacturing, Innovation, Trade, Resources and Energy (2014) 119 SASR 293 ..................... 9.350 Little v Credit Corp Group Ltd [2013] FWC 9642 ................................................... 5.770 Littlewoods Organisation Ltd v Harris [1977] 1 WLR 1472 ............ 4.370, 5.610, 5.640 Liu v Coms 21 Ltd (unreported, AIRC, Giudice P, Duncan DP and Larkin C, 25 February 2000) .................................................................................. 13.220 Livingstones Australia v ICF (Australia) Pty Ltd (t/as IC Frith & Associates) (2014) 240 IR 448; [2014] FWCFB 1276 .......................................... 13.50 Lloyd v Foster (1988) 30 AILR 6 ................................................................................. 11.60 lii

Table of Cases

Local Government Engineers’ Association of New South Wales v Wollongong City Council (1994) 58 IR 245 .......................................................... 9.400 Lodder v Slowey [1904] AC 442 ................................................................................... 10.40 Loftus v Roberts (1920) 18 TLR 532 ............................................................................. 4.90 Logan v Otis Elevator Co Pty Ltd [1995] IRCA 598 ................................................ 5.500 Logan v Otis Elevator Co Pty Ltd (1999) 94 IR 218 .................................................. 9.40 Logan v Otis Elevator Company Pty Ltd [1997] IRCA 221 .................................... 4.530 Loh v Crabb (1986) 2 VIR 153 .................................................................................. 14.120 London Corporation v Appleyard [1963] 1 WLR 982 ............................................. 5.820 London Drugs v Kuehne (1990) 70 DLR (4th) 51 ................................................... 5.490 London Transport Executive v Clarke [1981] ICR 355 .............................................. 8.30 Long Service Leave (Coal Miners) Award, Re (1962) 4 AILR 74 ........................... 9.250 Lonrho Ltd v Shell Petroleum Co Ltd [1982] AC 173 ................ 14.320, 14.390, 14.410 Lonrho plc v Fayed [1990] 2 QB 479 .............................. 14.120, 14.350, 14.380, 14.400 Lonrho plc v Fayed [1992] 1 AC 448 ................. 14.330, 14.340, 14.350, 14.380, 14.400 Lopes v Marino (1939) 38 AR 188 ............................................................................... 2.420 Louth v Diprose (1992) 175 CLR 621 ......................................................................... 4.280 Lowen v Ivanov (1986) EOC 92-169 .......................................................................... 15.80 Lucas v Moncrieff (1905) 21 TLR 683 ........................................................................ 9.300 Lumley v Gye (1853) 2 E & B 216; 118 ER 749 ....................................... 14.100, 14.110 Lumley v Wagner (1852) 1 De G M & G 604; 42 ER 687 ............... 5.800, 11.20, 11.40 Lupoi v Phillips Fox (unreported, AIRC, Ritter JR, 3 October 1996) ................... 8.320 Lym International Pty Ltd v Marcolongo [2011] NSWCA 303 .............................. 4.570 Lynch v Buckley Sawmills Pty Ltd (1984) 3 FCR 503; 9 IR 469 ............................. 10.50

M M & S Drapers v Reynolds [1956] 3 All ER 814 ....................................................... 4.420 MEAA v Sydney Opera House (M9086 ..................................................................... 4.470 MG Lines Pty Ltd t/as Coniston Station v Navi [2013] NTSC 20 ........................ 4.320 M’Keating v Frame (1921) SC 382 ............................................................................... 5.390 MSB of NSW v Posiden Navigation Inc (1982) 1 NSWLR 72 .............................. 4.330 MSS Security Pty Ltd v Liquor Hospitality and Miscellaneous Union [2010] FWAFB 6519 ................................................................................................. 12.80 MUA v Burnie Port Corporation Pty Ltd (2000) 101 IR 435 ............................... 13.250 MUA v CSL Australia Ltd (2002) 113 IR 326 .............................. 13.250, 13.270, 13.300 MUA v DP World Melbourne Pty Ltd [2014] FCA 1321 ........................................ 8.370 MUA v Fair Work Ombudsman [2015] FCAFC 120 .............................................. 10.370 MUA v Geraldton Port Authority (1999) 93 FCR 34 ................. 13.240, 13.250, 13.300 MUA v Geraldton Port Authority (No 2) (2000) 94 IR 404 .................................. 13.310 MUA v Patrick Stevedores (No 1) Pty Ltd (1998) 79 IR 281 ..... 11.10, 13.240, 13.250, 14.330 Ma v Expeditors International Pty Ltd [2014] NSWSC 859 ................................. 12.240 MacDonald v South Cambridgeshire Rural District Council (NIRC) [1973] ICR 611 ............................................................................................................. 9.60 MacFarlane v Glasgow City Council [2001] IRLR 7 ................................................. 2.260 MacPherson v London Borough of Lambeth [1988] IRLR 470 ................ 11.60, 11.80 Macauslane v Fisher and Paykel Finance Pty Ltd [2003] 1 Qd R 503 ........... 9.30, 9.40, 10.220, 10.360 Macdonald v Australian Wool Innovation Ltd [2005] FCA 105 ................ 4.90, 10.230, 10.250 Machtinger v HOJ Industries Ltd [1992] 1 SCR 986 .................................................. 9.30 Mack Trucks (Britain) Ltd, Re [1967] 1 WLR 780 ..................................................... 9.310 Mackay v Dick (1891) 6 App Case 251 ....................................................................... 5.190 liii

Macken’s Law of Employment

Mackie v Wienholt (1880) 5 Qld SCR 211 ................................................................. 8.200 Mackinnon v Bluescope Steel Ltd [2007] NSWSC 774 ................................ 6.230, 6.250 Macksville & District Hospital v Mayze (1987) 10 NSWLR 708 .......................... 14.390 Macpherson v London Borough of Lambeth [1988] IRLR 470 .............................. 7.30 Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181 ........... 4.330, 4.470 Magill v Magill [2006] HCA 51; (2006) 226 CLR 551 ............................................... 5.180 Magro v Freemantle Football Club Ltd [2005] WASC 163 ..................................... 4.230 Maher v Australian Stevedoring Industrial Board (1953) 77 CAR 24 .................... 8.210 Mahkutai, The [1996] AC 650 ....................................................................................... 5.490 Mahoney v Industrial Register of NSW [1984] 3 NSWLR 315 .............................. 14.60 Maitland Abattoir Pty Ltd v Adams (1987) 23 IR 49 .................................... 8.100, 8.260 Maitland Abattoir Pty Ltd, Re (unreported, 26 March 1986) .................................. 8.260 Major v Ministry of Defence [2003] EWCA Civ 1433 ............................................ 4.320 Major v South Australia [1999] FCA 1648 ............................................................... 13.250 Malik v Bank of Credit & Commerce International SA (In liq) [1998] AC 20 ................................................................................................. 5.140, 5.150, 10.280 Mallinson v Scottish Australian Investment Co Ltd (1920) 28 CLR 66 ................ 10.50 Malloch v Aberdeen Corporation [1971] 2 All ER 1278 ....................................... 11.110 Mallone v BPB Industries Ltd [2002] IRLR 452 ....................................................... 5.220 Malone v BPB Industries Ltd [2002] ICR 1045 ......................................... 10.160, 10.170 Malone v Metropolitan Police Commissioner [1972] 2 WLR 700 .......................... 5.720 Mammoet Australia Pty Ltd v Construction, Forestry, Mining and Energy Union [2010] FWA 4389 ............................................................................ 14.40 Mandla v Dowell Lee [1983] 2 AC 548 ..................................................................... 15.140 Manildra Flour Mills (Manufacturing) Pty Ltd v National Union of Workers [2012] FCA 1010 ....................................................................................... 5.410 Manildra Laboratories v Campbell [2009] NSWSC 987 ...... 5.530, 5.540, 5.600, 5.640, 5.665, 5.740 Mann v Capital Territory Health Commission (1981) 54 FLR 23 ................ 5.310, 7.80 Mann v Capital Territory Health Commission (1982) 148 CLR 97 ............. 4.90, 5.310, 5.320, 5.330, 10.120, 10.140, 10.270 Manubens v Leon [1919] 1 KB 208 ........................................................................... 10.250 Manufacturing Grocers’ Employees Federation of Australia, Re; Ex part Australian Chamber of Manufacturers (1986) 160 CLR 341 ............................. 12.90 Marbe v George Edwards (Daly’s Theatre) Ltd [1928] 1 KB 269 .......................... 5.320 Marchetta v B & P Caelli Constructions (Vic) Pty Ltd (28 March 2001 ............. 13.220 Marco Investments Pty Ltd v Amor [2004] SAIRComm 9 .............. 2.220, 2.290, 2.310 Maritime Union of Australia v DP World Melbourne Ltd [2014] FCA 1321 .................................................................................................................. 5.410, 6.580 Maritime Union of Australia v DP World Brisbane Pty Ltd [2014] FWC 1523 ............................................................................................................................. 6.500 Maritime Union of Australia v Total Marine Services [2009] FWA 187 ............... 14.20 Markarian v The Queen (2005) 228 CLR 357 ......................................................... 13.310 Marks v Commonwealth (1964) 111 CLR 549 ................................................. 2.410, 9.70 Marks and Spencer plc v BNP Paribas Securities Service Trust Company (Jersey) Ltd [2015] UKSC 72 ....................................................................... 4.520, 5.190 Markulin v Drew (1993) (unreported, Young J, Supreme Court NSW, 12 August 1993) .............................................................................................................. 4.330 Marley v Forward Trust Group Ltd [1986] ICR 891 .............................................. 12.390 Marmax Investments Pty Ltd v RPR Maintenance Pty Ltd [2015] FCAFC 127 ................................................................................................................ 5.190 Marriott v Oxford and District Co-op Society (No 2) [1969] 3 WLR 984 .......... 9.340, 9.370 Marropodi v Smith-Roberts (unreported, ACT Supreme Court) ........................... 5.440 liv

Table of Cases

Marsh v Macquarie University (2005) 147 IR 401 ......................... 9.210, 13.110, 13.120 Marshall v English Electric Co Ltd [1945] 1 All ER 653 ........................................... 7.30 Marshall v Glanvil [1917] 2 KB 87 ................................................................................. 4.50 Marshall v Harland and Wolff [1972] 1 WLR 899 ......................................... 9.240, 9.290 Marshall v NM Commercial Management [1997] 1 WLR 1527 ............................. 4.310 Marshall v Whittaker’s Building Supply Co (1963) 109 CLR 210 ........................... 2.130 Marshall (Cambridge) Ltd v Hamblin [1994] ICR 362 ................................. 9.140, 9.150 Martin v South Australia (1982) 49 SAIR 269 .................................................. 8.30, 8.370 Martin v Tasmanian Development and Resources (1999) 89 IR 98 ....................... 4.230 Martin v Yeoman Aggregates Ltd [1983] ICR 314 ................................................... 9.100 Martin Baker Aircraft Co Ltd v Canadian Flight Equipment [1955] 2 QB 556 .................................................................................................................................. 9.40 Mason v Provident Clothing and Supply Co Ltd [1913] AC 724 ........................... 4.420 Mason & Cox v McCann (1999) 74 SASR 438 ............................................................ 3.90 Mason Gray Strange NSW Ltd v Eisdell noted in(1989) 30 AILR 272 ................. 9.150 Master Builders Association of NSW v Building Workers Industrial Union (1984) 13 IR 177 ........................................................................................... 8.360 Mathew v Bobbins (unreported, UK Court of Appeal, 21 June 1980) ..... 4.270, 4.280 Matthews v Clifton [2014] FCA 415 ............................................................................ 5.400 Matthews v Coles Myer Ltd (1993) 47 IR 229 ............................................................. 9.40 Matthews v Cool Or Cosy Pty Ltd [2004] WASCA 114 .......................................... 4.530 Matthews v Kuwait Bechtel Corp [1959] 2 QB 57 ........................................ 5.430, 6.100 Matusiewicz v Expotech Pty Ltd (18 May 2001 ...................................................... 13.120 Maurice Hayes & Associates Pty Ltd v Energy World Corporation Ltd [2006] FCA 783 ......................................................................................................... 4.200 Maw v Jones (1890) 25 QBD 107 .............................................................................. 10.260 Mayer v ANSTO [2003] FMCA 209 ......................................................................... 15.150 Mazza v Syddeck Pty Ltd t/as Royale Limousines [2006] NSWIRComm 44 .................................................................................................................................. 2.390 McAleer v The University of Western Australia [2007] FCA 52; (2007) 159 IR 96 ......................................................................................... 8.100, 12.290, 12.340 McCarthy v FJ Trousers Pty Ltd (12 October 2000 ............................................... 13.140 McCarthy v Windeyer (1925) 26 SR (NSW) 29 ................................................ 9.40, 8.200 McCasker v Darling Downs Co-op Bacon Association (1988) 25 IR 107 ........... 8.240, 8.250, 8.370, 9.230, 10.360 McClelland v Northern Ireland General Health Services Board [1957] 1 WLR 594 .................................................................................................. 9.30, 9.40, 9.230 McClory v The Post Office [1993] IRLR 159 ............................................................ 5.270 McCluskey v Karagiozis [2002] FCA 1137; (2002) 120 IR 147 ..................... 3.50, 9.410 McClymont v Egerton [2015] QCATA 161 ............................................................... 5.440 McConnell v A&PM Fornataro [2011] FWAFB 466 ................................................ 13.50 McConnell-Imbriotis & Eurobanks Pty Ltd [2004] NSWIRComm 1035 ............ 3.250, 4.200 McCormack v Commonwealth [2007] FMCA 1245 ............................................... 15.200 McCormick v Fasken Martineau DuMoulin LLP [2014] SCR 108 ........................ 2.420 McCormick v Riverwood International (Australia) Pty Ltd (1999) 167 ALR 689 ........................................................................................................ 4.230, 10.370 McDonald v Parnell Laboratories (Aust) [2007] FCA 1903; (2007) 168 IR 375 ....................................................................... 4.480, 4.490, 5.850, 10.100, 10.320 McDonald v South Australia (2008) 172 IR 256 .............................. 8.90, 10.270, 10.320 McDonald v The Commonwealth (1945) 46 SR (NSW) 129 .................................... 3.60 McEvoy v Incat Tasmania Pty Ltd (2003) 130 FCR 503 .............................. 9.310, 9.320 McFarlane v Daniell (1938) 38 SR (NSW) 337 .......................................................... 4.310 McGrath v Council of the Municipality of Fairfield (1985) 156 CLR 672 ........... 5.460 lv

Macken’s Law of Employment

McGuirk v The University of NSW [2009] NSWSC 1424 ...................................... 5.730 McIlwain v Ramsey Food Packaging Pty Ltd (2006) 154 IR 511 ........... 13.240, 13.250, 13.300 McIlwain v Ramsey Food Packaging Pty Ltd (No 4) (2006) 158 IR 181 ............ 13.320 McIndoe v BHP Coal Pty Ltd (2 March 2001 ............................................. 8.320, 13.160 McIntosh v Australian Postal Corporation (2001) 140 IR 108 .................. 11.60, 13.320 McIntyre v Special Broadcasting Services Corporation [2015] FWC 6768 .......... 5.400, 15.280 McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 ...... 4.70, 4.110, 4.120, 4.130, 4.480, 4.490, 4.510, 4.530, 4.570, 5.220, 5.230 McKellar v Container Terminal Management Services Ltd [1999] FCA 1101 ............................................................................................................................. 2.410 McKenna v Home Theatre Group Pty Ltd (t/as Home Theatre Group) [2012] FWA 9309 .................................................................................................... 13.130 McKenzie v Meran Rise Pty Ltd t/as Nu Force Security Services (21 September 1999 ....................................................................................................... 13.160 McKernan v Fraser (1931) 46 CLR 343 ...................................................... 14.310, 14.320 McKinnon v WorkCover/CGU (M and R McKinnon Pty Ltd) [2003] SAWCT 84 .................................................................................................................. 2.380 McLaren v Chalet Club Ltd (1951) 101 LJ 598 .......................................................... 5.320 McLean v Tedman (1984) 155 CLR 306 ......................................................... 6.110, 6.150 McLean’s Roylen Cruises Pty Ltd v McEwan (1984) 58 ALJR 423 ....................... 6.150 McLennan v Surveillance Australia Pty Ltd [2005] FCAFC 46; (2005) 142 FCR 105 ................................................................................................ 4.320, 12.350 McLory v Post Office [1992] ICR 758 ..................................................... 7.40, 7.50, 8.100 McMahon v Labor Council of NSW (1985) 10 IR 217 ............................... 11.10, 11.80 McManus v Bowes [1938] 1 KB 98 ........................................................................... 14.110 McManus v Scott-Charlton (1996) 70 FCR 16 ............................................... 8.210, 8.340 McMenemy v Thomas Duryea Consulting Pty Ltd [2012] FWAFB 7184; (2012) 223 IR 125 .......................................................................................... 13.60, 13.80 McMillan v Guest [1942] AC 561 ................................................................................. 2.410 McMillan Britton & Kell Pty Ltd v Work Cover Authority (1999) 89 IR 464 ............................................................................................................................... 6.550 McPherson v Metropolitan Board of Water Supply and Sewerage [1922] AR 53 ............................................................................................................................. 5.40 McRae v Watson Wyatt Australia Pty Ltd [2008] FMCA 1568 ................... 4.230, 4.470 McVicar v Commissioner for Railways (NSW) (1951) 8 CLR 521 ......... 11.110, 12.290 McVinish v Flight West Airlines (8 September 1998 .............................................. 13.210 Meadley v Sort Worx Pty Ltd [2013] FCA 1012 ...................................................... 13.220 Meadow Lea Foods and Australian Workers’ Union (NSW Branch), Re (unreported, Industrial Commission of NSW, Hill J, 6 December 1988) .......................................................................................................................... 12.330 Mears v Safecar Security Ltd [1982] ICR 626 ............................................................ 5.500 Measures Bros Ltd v Measures [1910] 2 Ch 248 .................................. 5.50, 9.310, 11.80 Meek v Port of London Authority [1918] 2 Ch 96 ................................................... 9.370 Melbourne City Council v Australian Municipal, Administrative, Clerical and Services Union [2007] AIRC 116 .................................................................... 4.490 Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20; (2015) 229 FCR 221; (2015) 317 ALR 665 .......... 5.420, 5.520, 5.770, 8.10, 8.120, 8.130, 9.90, 9.150, 10.250 Mendelsons Lawyers Pty Ltd v Hanlon [2013] VSC 320 ........................................... 5.20 Menner v Commissioner of Police (1997) 74 IR 472 ................................................. 7.20 Mercantile Union Guarantee Corp v Ball [1937] 2 KB 498 ......................... 4.170, 4.180 lvi

Table of Cases

Mercer v Associated Electrical Industries Ltd (1968) 3 ITR 188 .............................. 5.40 Merkur Island Shipping Corp v Laughton [1983] 2 AC 570 ....... 14.80, 14.110, 14.130, 14.350, 14.400 Mermaid Marine Vessel Operations Pty Ltd v Maritime Union of Australia [2014] FWCFB 1317 ................................................................................ 14.30 Merrill Lynch (Australia) Ltd v Commissioner of Taxation [2001] FCA 1127; (2001) 113 FCR 79 .............................................................. 5.150, 10.160, 10.170 Mersey Docks & Harbour Board v Coggins and Griffith (Liverpool) Ltd [1947] AC 1 ................................................................................................................... 3.60 Metal Trades Award 1952, Re (1965) 8 FLR 255 ....................................................... 9.360 Metal Trades Awards; Re James Mullan Pty Ltd (1942) 47 CAR 615 .................... 7.110 Metall und Rohstoff v Donaldson Lutkin Inc [1988] 3 All ER 116 .................... 14.340 Metalliferous Mining (Broken Hill) Stand Down Award, Re (1986) 15 IR 362 ............................................................................................................................... 7.120 Metcash Limited v Jardim (No 3) [2010] NSWSC 1096; (2010) 273 ALR 407 ............................................................. 4.340, 4.400, 4.420, 5.600, 8.30, 8.50, 9.140 Metcash Trading Ltd v Scripcariu [2006] NSWCA 78 .............................................. 6.200 Metricon Homes Pty Ltd v Bradley (2009) 181 IR 115 ......................................... 13.160 Metropolitan Borough of Solihull v National Union of Teachers [1985] IRLR 211 .................................................................................................... 14.120, 14.130 Metropolitan Health Service Board v Australian Nursing Federation (2000) 99 FCR 95 ........................................................................................................ 8.20 Metz Holdings Pty Ltd v Simmac Pty Ltd (No 2) [2011] FCA 981; (2011) 216 IR 116 .............................................................................. 4.210, 4.290, 4.420 Meyrick v Stirling Bros Ltd [1892] 1 WALR 51 ......................................................... 8.280 Mezey v South West London and St George’s Mental Health NHS Trust [2007] IRLR 237 (QB); [2010] EWCA Civ 293 .................................................... 11.60 Michaelis Bayley Trading Co Re Dismissal, Re [1979] AR (NSW) 392 .................... 8.90 Mid-City Skin Cancer and Laser Centre v Zahedi-Anarak [2006] NSWSC 844; (2006) 67 NSWLR 569 ..................................................................................... 5.570 Midas Conway v GSL Custodian Services Pty Ltd [2005] AIRC 792 ...................... 4.50 Midland Counties District Bank Ltd v Attwood [1905] 1 Ch 357 .......................... 9.310 Midland Metals Overseas Pte v Christchurch Press Company [2001] NZCA 321 .................................................................................................................. 5.290 Mihajloviv v Lifeline Macarthur [2014] FWCFB 1070; (2014) 241 IR 142 ........... 13.50 Mihaljevic v Longyear (Aust) Pty Ltd (1985) 3 NSWLR 1 ...................................... 6.110 Milardovic v Vemco Services Pty Ltd (Administrator Appointed) [2016] FCA 19 .......................................................................................................... 9.190, 10.150 Miles v Genesys Wealth Advisers Limited [2009] NSWCA 25; (2009) 200 IR 1 ............................................................................... 4.420, 4.340, 4.420, 5.630, 5.700 Miles v Wakefield Metropolitan District Council [1987] AC 539; 2 WLR 795 ........................................................................................................ 2.410, 5.70, 10.120 Miljus v CSR Ltd (No 4) [2010] NSWSC 1325 .......................................................... 3.200 Miller v AIRC (2001) 108 FCR 192 ........................................................................... 13.160 Miller v Locker Group Pty Ltd [2004] WAIRComm 12498 .................................... 4.530 Miller v Miller [2011] HCA 9; (2011) 242 CLR 446 ...................................... 4.310, 4.320 Miller v Royal Derwent Hospital Board of Management [1992] Aust Torts Reports ¶81-175 ............................................................................................ 10.370 Miller v University of New South Wales [1999] AIRC 1233 ................................... 5.510 Mills v Australian Card Services Pty Ltd (unreported, Supreme Court of Victoria, Kaye J, 21 March 1989) ............................................................ 10.230, 10.250 Mills v Industrial Fish Tasmania Pty Ltd (1993) 49 IR 416 ..................................... 8.370 Milovanovic v Transfield Services (Australia) Ltd [2013] SAWCT 37 ................... 2.350 Minato v Palmer Corporation Ltd (1995) 63 IR 357 ......................................... 8.90, 9.50 lvii

Macken’s Law of Employment

Mirams, Re [1891] 1 QB 594 ......................................................................................... 4.330 Mirror Newspaper Co v Crozier (1911) 13 WALR 70 ................................................ 9.40 Mitchell v Pacific Dawn Pty Ltd [2003] QSC 86; [2006] QSC 198 ............. 4.130, 4.250 Mitchell v Pacific Dawn Pty Ltd [2010] QSC 243 ..................................................... 4.250 Mitchell v Senia & Associates (AIRC, Giudice J, Watson SDP, 8 August 2000) ............................................................................................................ 13.110, 13.120 Moama Bowling Club Ltd v Armstrong (1995) 64 IR 238 .................................... 10.240 Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254 ............ 6.30, 6.90, 6.200 Modern Awards Review 2012 – Award Flexibility, Re [2013] FWCFB 2170 ............................................................................................................................. 12.70 Modern Awards Review 2012 – Penalty Rates, Re [2013] FWCFB 1635 ............ 12.150 Mogul Steamship v McGregor, Gow & Co (1889) 23 QBD 598 ........... 14.310, 14.320 Mogul Steamship v McGregor, Gow & Co [1892] AC 25 ......... 14.310, 14.320, 14.390 Mohamed Aly [2015] FWC 4419 ............................................................................... 13.390 Mohamud v WM Morrison Supermarkets [2016] UKSC 11 ..................................... 6.60 Mohareb v Lambert & Rehbein (SEQ) Pty Ltd [2010] QSC 126 ........................... 4.230 Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200 .......... 8.80, 8.90, 9.100, 13.100 Mollinger v National Jet Systems Pty Ltd (unreported, Ross VP, 8 September 1998) .......................................................................... 13.170, 13.190, 13.220 Moloney v Beverage Engineering Pty Ltd (2007) 212 FLR 282 ........................... 13.360 Monarch Insurance & Co Ltd v Steel Mains Pty Ltd [1986] VR 831 ....................... 3.60 Monie v Commonwealth of Australia [2007] NSWCA 230 ........................ 3.130, 5.280 Monks v John Holland Group Pty Ltd [2012] FWA 6453 .................................... 13.140 Montgomery and Commissioner for Superannuation, Re (1985) 3 AAR 69 .................................................................................................................................. 9.230 Montreal Public Service Co v Champagne (1917) 33 DLR 49 ............................... 5.310 Moody Kiddell & Partners Pty Ltd v Arkell [2013] FCA 1066 ............................... 4.420 Moore v Highpace Pty Ltd (18 May 1998 ................................................................ 13.220 Moore v Scolaro’s Concrete Constructions Pty Ltd (in liq) [2004] VSCA 152 ............................................................................................................................... 5.460 Moores v Bude-Stratton Town Council [2000] IRLR 676 ....................................... 5.150 Morante v State Superannuation Board (1998) 84 IR 205 ................ 9.190, 9.350, 9.360 Moreton Bay College v Teys [2008] QCA 422 ........................................................... 8.290 Morgan v Fry [1968] 2 QB 710; 3 WLR 506 .......... 7.20, 8.260, 14.200, 14.280, 14.410 Morgan v Manser [1948] 1 KB 184 ............................................................................. 9.280 Morgan v Workcover Corporation [2013] SASCFC 139 .......................................... 5.730 Mornington Peninsula Shire Council, Re [2011] FWAFB 4809 .................... 5.70, 5.410 Morris v Hanley [2003] NSWSC 42 ............................................................................. 5.540 Morrisey v Transit Australia Pty Ltd [2012] FWA 7988 ......................................... 13.140 Morton v Transport Appeal Board (No 1) [2007] NSWSC 1454 ........................... 5.280 Morton Suntour Fabrics v Shaw (1967) 2 ITR 84 ....................................................... 9.50 Mosey v Australian Customs Services (2002) 116 IR 1 .......................................... 13.100 Moss v Low Hunt & Partners Pty Ltd [2010] FCA 1181 ................. 4.230, 4.240, 5.830 Motovasia Hong Kong Ltd v Allen (unreported, Supreme Court of Victoria, Beach J, 8 August 1994) ........................................................................... 11.40 Mouat v Clark Boyce [1992] 2 NZLR 559 ............................................................... 10.370 Moult v Halliday [1898] 1 QB 125 ............................................................................... 5.290 Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited [2015] HCA 37 ............................................................................................................. 9.30 Moussalli v Western Power (No 3) [2010] FMCA 389 ........................................... 13.340 Mowlem Northern Ltd v Watson [1990] ICR 751 .................................................... 9.130 Moxham v Henderson [1981] 2 NSWLR 282 ............................................................ 10.50 lviii

Table of Cases

Mr M T, Re [2014] FWC 3852 .................................................................................... 13.390 Mr Sun, Re [2014] FWC 3839 ..................................................................................... 13.390 Ms Brenton, Re [2014] FWC 4166 ............................................................................. 13.390 Ms McInnes, application by [2014] FWCFB 1440; (2014) 241 IR 158 ................ 13.370 Ms McInnes, Re [2014] FWC 1395 ............................................................................ 13.380 Ms SB [2014] FWC 2104 ............................................................................................. 13.390 Mt Isa Mines v Pusey (1970) 125 CLR 383 ........................... 6.210, 6.220, 6.230, 10.260 Mulcahy v Hydro-Electric Commission (1998) 85 FCR 170 ................................... 4.230 Mulholland v Bexwell Estates Co (1950) 66 TLR 764 ................................................ 9.40 Mullen v Nepean Shire Council (1946) 16 LGR (NSW) 88 .................................... 5.850 Murphy v Lush (1986) 65 ALR 651 ............................................................................. 14.90 Murphy v Westpac Banking Corporation [2014] FCA 1104 ........ 8.30, 8.40, 9.20, 9.40, 9.50, 9.180, 9.340, 9.350, 9.370, 9.380, 10.160, 10.170 Murray v Donnelly [2000] NSWSC 634 ...................................................................... 5.100 Murray Irrigation Ltd v Balsdon (2006) 67 NSWLR 73; 159 IR 52 ........ 5.850, 10.230, 12.340 Murrihy v Betezy com.au Pty Ltd [2013] FCA 908; (2013) 221 FCR 118; 238 IR 307 ............................................................................. 5.190, 5.730, 10.50, 13.310 Musija v Kresa [2010] VSCA 163 ................................................................................. 2.290 Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 ................................. 4.130, 9.350

N NAB Ltd v Rusu [2001] NSWSC 32 ........................................................................... 5.810 NP Generations Pty Ltd (t/as LJ Hooker Blackwood) v Feneley (2001) 80 SASR 151 .............................................................................................................. 5.600 NSW v Amery [2003] NSWADTAP 16 .................................................................... 15.190 NSW v Amery (2006) 230 CLR 174 ............................................................ 15.130, 15.190 NSW v Burton [2006] NSWCA 12 .............................................................................. 6.210 NSW v Commonwealth of Australia; Western Australia v Commonwealth of Australia (Work Choices Case) [2006] HCA 52; (2006) 229 CLR 1 ................................................................................... 1.20, 2.50, 12.20 NSW v Commonwealth of Australia (1990) 169 CLR 482 ..................................... 12.20 NSW v Eade [2006] NSWSC 84 ....................................................................... 5.460, 5.470 NSW v Fahy (2007) (2007) 232 CLR 486; [2007] HCA 20 .............. 6.150, 6.240, 2.410 NSW v Lepore (2003) 212 CLR 511 .................................................................... 6.50, 6.60 NSW v Mannall [2005] NSWCA 367 ................................................ 6.250, 6.290, 13.370 NSW v Paige [2002] NSWCA 235; (2002) 60 NSWLR 371 ............ 1.110, 6.200, 6.320, 6.330, 9.90, 9.110, 10.320, 10.330, 10.370, 12.260 NSW v Rogerson [2007] NSWCA 346 ....................................................................... 6.320 NSW v Seedsman [2000] NSWSCA 119; (2000) 217 ALR 583 .................. 6.240, 6.250 NSW v Shaw [2015] NSWCA 97; (2015) 248 IR 206 ........... 4.480, 4.490, 4.510, 4.520, 5.160, 5.170, 5.180 NSW Cancer Council v Sarfaty (1992) 28 NSWLR 68 ........... 4.520, 8.10, 9.30, 10.230, 10.340 NSW Local Government Clerical Administrative Energy Airlines & Utilities Union v Bega Valley Shire Council [2013] NSWIRComm 74 ............. 4.90, 4.130, 4.520 NSW Nurses’ Assoc v SW Syd Area Health Service [1994] NSWIRComm 147 .................................................................................................... 4.530 NSW Nurses’ Association v Principal Health Care Finance No 3 Pty Ltd [2009] NSWIRComm 1014 .......................................................................... 3.140, 5.340 NSW Taxi Industry Association v Transport Workers’ Union of NSW [2005] NSWIRComm 1039 ..................................................................................... 2.390 lix

Macken’s Law of Employment

NSW Teachers Federation v Department of Education [1980] AR 860 .... 5.70, 5.100, 7.30, 10.70 NSW Teachers Federation and Director General of Education and Training (No 2) [2008] NSWIRComm 218 ..................................... 4.70, 4.140, 4.480 NTEIU v Monash University [2013] FWCFB 5982 ................................................. 14.40 NTEIU v La Trobe University [2015] FCAFC 142 .................................................. 4.480 NTEIU v University of Wollongong [2002] FCA 31 ............................... 12.120, 13.360 NUW v Davids Distribution Pty Ltd (1999) 165 ALR 550 ........ 11.10, 13.250, 13.280, 13.300, 13.320 NUW v Qenos Pty Ltd [2000] FCA 1340 ................................................................ 13.300 NUW v Tontine Fibres (A Division of United Bonded Fabrics Pty Ltd) (2007) 168 IR 143 .......................................................................................... 9.190, 9.360 NZ Shipping Co Ltd v Satterthwaite & Co Ltd (The Eurymedon) [1974] 2 WLR 865; [1975] AC 154 ...................................................................................... 5.490 NZI Leasing Corporation Ltd v Charles (unreported, Supreme Court of New South Wales, Santow J, 4 October 1995) ................................................... 10.250 Naidu v Group 4 Securitas Pty Ltd [2005] NSWSC 618 ....................................... 13.370 Narich Pty Ltd v Commissioner of Payroll Tax [1983] 2 NSWLR 597 ................ 2.350 Nash v Daracon Mining Pty Ltd [2015] NSWIC 14 ..................................... 6.450, 6.470 Nash v Glennies Greek Coal Management Pty Ltd; Nash v Integra Coal Operations Pty Ltd (No 9) [2015] NSWCIC 15 ........................... 6.460, 6.480, 6.680 Natasha Savic v JAV IT Pty Ltd [2004] AIRC 1223 ...................................... 2.130, 2.260 National Coal Board v Galley [1958] 1 WLR 16 ............................................ 4.90, 10.120 National Coal Board v National Union of Mineworkers [1986] IRLR 439 ............................................................................................................................... 4.490 National Phonograph v Edison-Bell Consolidated Phonograph Co Ltd [1908] 1 Ch 335 ....................................................................................................... 14.400 National Roads and Motorists’ Association v Whitlam [2007] NSWCA 81 ...................................................................................................................... 5.350, 5.370 National Transport Insurance Ltd v Chalker [2005] NSWCA 62 .... 2.60, 2.120, 2.250, 5.460 National Union of Workers v Queensland Wool Centre (1992) 41 IR 78 ............ 9.190 National Workforce Pty Ltd v Australian Manufacturing Workers’ Union [1998] 3 VR 265 ......................................................................................................... 14.60 Nationwide News Pty Ltd v Naidu [2007] NSWCA 337; (2007) 71 NSWLR 471 ......... 4.510, 4.520, 5.20, 5.830, 6.60, 6.100, 6.200, 6.210, 6.230, 6.240, 6.250, 6.260, 6.280, 6.290, 13.370, 14.150 Nelson v Nelson (1978) 139 CLR 310 ........................................................................ 4.320 Nesbitt v Secretary of State for Trade & Industry [2007] UKEAT 0091/07/1008 ............................................................................................................ 2.380 Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370 .............................................. 13.140 Network Ten Ltd v Fulwood (1995) 62 IR 43 .................................... 11.40, 11.50, 11.80 Network Ten Pty Ltd v Seven Network (Operations) Ltd [2014] NSWSC 692 ............................................................................................ 4.30, 11.30, 11.40, 11.110 Neufield v A & N Communications in Print Ltd (in liq) [2008] UKEAT 0177/07/1104 ............................................................................................................ 2.380 Newman v Alarmco [1976] IRLR 45 .......................................................................... 8.290 Newman v Gatti (1907) 24 TLR 18 ............................................................................. 5.320 Newman (Inspector Peter Newman) v Mainland Civil Pty Ltd [2003] NSWIRComm 288 .................................................................................................... 6.490 News Group Newspapers Ltd v SOGAT [1986] IRLR 337 .... 14.110, 14.130, 14.240, 14.250, 14.270 News Ltd v Australian Rugby Football League Ltd (1996) 139 ALR 193 ......... 14.110, 14.120 lx

Table of Cases

Newton v Goodman Fielder Mills Ltd (1997) 81 IR 227 ........................................... 9.40 Nexus Energy Ltd v Cottee [2012] VSC 215 ...................................... 5.600, 5.630, 5.640 Ngo v Link Printing Pty Ltd (1999) 94 IR 375 ............................................ 9.100, 13.110 Nguyen and A-N-T Contract Packers Pty Ltd t/as A-N-T Personnel and Thiess Services Pty Ltd t/as Thiess Services (2003) 128 IR 241 ...................... 3.140 Niceski v Dowell Australia Ltd (1981) 52 FLR 371 ........................... 7.110, 7.120, 8.260 Nicol v Allyacht Spars Pty Ltd (1987) 67 ALJR 640 ................................................. 6.110 Nicoll v Cutts [1985] BCLC 322 .................................................................................. 9.320 Nicolson v Heaven & Earth Gallery Pty Ltd (1994) 57 IR 50 .............................. 13.210 Nicholson v Pymble No 1 Pty Ltd (No 4) (2011) 208 IR 111; [2011] NSWIRComm 96 ...................................................................................................... 6.550 Nielson v City of Swan [2006] WASCA 94 ................................................................ 2.410 Niemann v Smedley [1973] VR 769 ............................................................................. 4.310 Nightingale v Little Legends Child Care (2004) 134 IR 111 .................................... 13.70 Nikolich v Goldman Sachs JB Were Services Pty Ltd [2006] FCA 784 ............... 4.480, 12.260 Nikolich v Goldman Sachs JB Were Services Pty Ltd (2007) 163 FCR 62 ........... 6.210 Nocton v Ashburton [1914] AC 932 ........................................................................... 5.180 Nojin v Commonwealth (2012) 208 FCR 1; [2012] FCAFC 192 ........................... 15.90 Nokes v Doncaster Amalgamated Collieries [1940] AC 1014 ................................. 4.330 Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014 ............. 9.320, 9.410, 12.100 Nokes v Doncaster Amalgamated Colliers Ltd [1940] AC 1014 .............................. 3.50 Nokia Communications Pty Ltd v Davis (IRC Aust, Wilcox J, 1996) .................... 5.770 Nokia Telecommunications Pty Ltd v Davis (unreported, Industrial Relations Court of Australia, Wilcox CJ, 10 October 1996) ............................ 13.210 Nonferral (NSW) Pty Ltd v Taufia (1998) 43 NSWLR 312 .................................... 4.320 Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co [1894] AC 535 ............................................................................................................................... 4.340 North v Television Corp Ltd (1976) 11 ALR 599 ........ 8.20, 8.110, 8.120, 8.250, 8.360 North Australian Workers Union v Newcastle Protective Coating Pty Ltd (1971) 13 AILR 603 ........................................................................................... 8.340 North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd; The Atlantic Baron [1979] 1 QB 705 ............................................................................. 4.250 Northern (except Gisborne) Road Transport Industrial Union v Kawau Island Ferries Ltd [1974] 2 NZLR 617 ................................................................ 14.200 Northern Land Council v Hansen [2000] NTCA 1 ........................... 4.480, 9.20, 10.320 Northern Tableland Insurance Brokers Pty Ltd v Howell (2009) 184 IR 307 ...................................................................................................................... 8.30, 9.150 Northern Territory v Mengel (1995) 185 CLR 307 .......... 2.410, 14.80, 14.110, 14.120, 14.130, 14.140, 14.250, 14.350, 14.380, 14.390, 14.400 Norwest Holst Group Administration Ltd v Harrison [1985] ICR 668 ........ 8.40, 9.80 Norwich City Council v Harvey [1989] 1 WLR 828 ................................................. 5.490 Notcutt v Universal Equipment Co (London) Ltd [1986] 1 WLR 641 ................. 9.290 Nottingham University v Fishel [2000] ICR 1462; IRLR 471 ......... 5.550, 5.560, 5.800, 5.830, 8.350 Nova Plastics Ltd v Froggatt [1982] IRLR 146 ......................................................... 5.800

O O U Norman International Pty Ltd v Baker noted (1993) AILR 152 ................... 9.150 OBG v Allan; Douglas v Hello! (No 3), Mainstream Properties Ltd v Young [2008] 1 AC 1 ............ 14.80, 14.110, 14.120, 14.130, 14.160, 14.230, 14.250, 14.280, 14.350, 14.360, 14.380, 14.390, 14.400, 14.420 lxi

Macken’s Law of Employment

O’Brien v Associated Fire Alarms Ltd [1969] 1 All ER 93 .......................... 5.500, 9.360 O’Callaghan v Loder (1984) EOC ¶92–022 ............................................................. 15.200 O’Connor v Argus and Australasian Ltd [1957] VR 374 ......................................... 9.370 O’Connor v Commissioner for Government Transport (1959) 100 CLR 225 ............................................................................................................................... 6.110 O’Connor v SP Bray Ltd (1937) 56 CLR 464 .......................................................... 10.370 ODL Securities Ltd v McGath [2013] EWHC 1865 ................................................ 5.830 O’Donnell v GIO Australia Ltd (1996) 64 IR 297 ................................. 9.20, 9.40, 9.190 O’Donovan v Western Australian Alcohol and Drug Authority [2014] WASCA 4 ........................................................................................................ 6.230, 6.240 O’Keefe v Williams Muir’s Pty Ltd (t/as Troy Williams The Good Guys) [2011] FWA 5311 ......................................................................................... 5.400, 13.160 O’Laoire v Jackel Ltd (No 2) [1991] ICR 718 ............................................ 10.250, 10.270 O’Leary v Oolong Aboriginal Corporation Inc [2004] NSWCA 7 ...................... 10.330 O’Meara v Stanley Works Pty Ltd (11 August 2006 ............................................... 13.100 O’Neil v Armstrong, Mitchell & Co [1985] 2 QB 418 .................................... 8.90, 10.40 O’Neill v Medical Benefits Fund of Australia [2002] FCAFC 188; (2002) 122 FCR 455 ..................................................................................... 4.230, 4.240, 10.370 O’Neill v T D Williamson Aust Pty Ltd [2008] VSC 398 ........................................ 6.290 O’Sullivan v Management Agency & Music Ltd [1985] QB 428 ................ 4.270, 10.60 O’Sullivan Partners (Advisory) Pty Ltd v Foggo [2012] NSWCA 40; (2012) 218 IR 331 ............................................................................ 5.220, 9.400, 10.160 Oak Filling Station Company (Hollinwood) Ltd v Road Transport Industry Training Board (1968) 3 ITR 290 ........................................................... 2.380 Oanh Nguyen and A-N-T Contract Packers Pty Ltd t/as A-N-T Personnel and Thiess Services Pty Ltd t/as Thiess Services (2003) 128 IR 241 .................................................................................................................. 3.120 Oaten v Select Australasia Pty Ltd [2006] SAIRC 37 ............................................... 3.210 Oates v Consolidated Capital Services Ltd [2009] NSWCA 183 ............................ 5.780 Obatoki v Mallee Track Health & Community Services [2015] FWCFB 1661 ............................................................................................................. 13.370, 13.390 Obee v Railway Commissioners for NSW (1930) 30 SR (NSW) 201 ...................... 9.50 Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd (1986) 160 CLR 626 ....................................................................................... 2.410, 3.210, 3.250 Ogden v Bells Hotel Pty Ltd [2009] VSC 219 ................................................ 6.200, 6.210 Ogilvy and Mather (NZ) Ltd v Turner [1996] 1 NZLR 641 ....................... 9.40, 10.330 Ogle v Comboyuro Investments Pty Ltd (1976) 136 CLR 444 ............................... 11.80 Oldcastle v Guinea Airways Ltd [1956] SASR 325 ................................... 10.100, 10.120 Olsen v Corry and Gravesend Aviation Ltd [1936] 3 All ER 242 .......................... 4.180 Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 ...................................................................................................... 2.130 Omilaju v Waltham Forest London Borough Council [2005] ICR 481 ................... 8.90 On Call Interpreters Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 214 FCR 82; 206 IR 252 ......... 2.50, 2.150, 2.180, 2.210, 2.220, 2.230, 2.250, 2.260, 2.270, 2.280, 2.290, 2.330, 2.350, 2.370, 4.490 Opoku v P & M Quality Smallgoods Pty Ltd (No 6) [2012] NSWSC 478 ............ 3.10, 3.90, 4.110 Optus Networks Pty Ltd v Telstra Corporation Ltd [2010] FCAFC 21 .... 5.570, 5.650 Oram v BHP Mitsui Coal Pty Ltd [2014] QSC 230 .................................................. 6.230 Oran v Cadia Goldmine (16 January 2001 ............................................................... 13.170 Orange City Bowling Club Ltd v FLAIEU [1979] AR (NSW) 90 .......................... 9.210 Orbit Drilling Pty Ltd v The Queen; Smith v The Queen [2012] VSCA 82 ...................................................................................................................... 6.590, 6.670 Orchid Avenue Realty Pty Ltd v Percival [2003] QIC 160 ....................................... 4.320 lxii

Table of Cases

Orden v Myer Grace Brothers (30 June 1998 .......................................................... 13.220 Orman v Saville Sportswear Ltd [1960] 1 WLR 1055 ................................................. 9.40 Ormonoid Roofing & Asphalts Ltd v Bitumenoids Ltd (1930) 31 SR (NSW) 347 ........................................................................................................ 5.690, 9.60 Orr v University of Tasmania [1956] Tas SR 155; (1957) 100 CLR 526 ...... 8.290, 9.20 Orrong Strategies Pty Ltd v Village Roadshow Ltd [2007] VSC 1; (2007) 207 FLR 245 ............................................................................................................... 2.380 Orton v Melman [1981] 1 NSWLR 583 ...................................................................... 4.430 Osman v J Ralph Moss Ltd [1970] 1 Lloyd’s Rep 313 .............................................. 5.360 O’Sullivan Partners (Advisory) Pty Ltd v Foggo (2012) 218 IR 331; [2012] NSWCA 40 .................................................................................................... 4.480 Ottoman Bank v Chakarian [1930] AC 277 .......................................... 8.90, 8.210, 8.260

P P&V Industries Pty Ltd v Porto (2006) 14 VR 1; [2007] VSC 64 ............... 5.830, 8.350 P & M Quality Smallgoods Pty Ltd v Leap Seng [2013] NSWCA 167 .................. 3.210 PMC Holdings Ltd v Smith [2002] EWHC 1575 ...................................................... 4.250 PP Consultants v Finance Sector Union of Australia (2000) 201 CLR 648 ............................................................................................................................. 12.100 PSA v the Zoo [2007] NSWIRComm 1080 ............................................................... 4.530 PSA and Professional Officers’ Association Amalgamated Union of NSW and the Director of Public Employment by his Agent the Director-General of the Department of Human Services (Juvenile Justice) [2010] NSWIRComm 32 ............................................................................ 2.410 Pacific Carriers Ltd v BNP Paribas (2004) 78 ALJR 1045 ......................................... 4.50 Pacific Steel Constructions Pty Ltd v Baharona [2009] NSWCA 406 ....... 3.170, 3.200, 3.210 Page One Records Ltd v Britton [1968] 1 WLR 157; [1967] 3 All ER 822 ........... 11.40 Paisley v American Banknote Australasia Pty Ltd (15 September 2000 .............. 13.100 Palais Parking Station Pty Ltd v Shea (1977) 16 SASR 350 ....................................... 9.90 Palmanor Ltd v Cedron [1978] ICR 1008 ..................................................................... 8.90 Pangallo v Actew Corporation Ltd [2003] HCA Trans 347 .................................... 4.520 Pao On v Lau Yiu Long [1980] AC 614 ...................................................................... 4.250 Papadopoulos v MC Labour Hire Services Pty Ltd (No 4) [2009] VSC 193; (2009) 24 VR 665 .............................................................................................. 3.170 Paras v Public Service Body Head of the Department of Infrastructure (2006) 152 IR 75 ............................................................................................ 8.100, 11.10 Paris v Stepney Borough Council [1951] AC 367 ...................................................... 6.120 Park Cakes Ltd v Shumba [2013] EWCA Civ 974 .................................................... 4.530 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 ...................................................................................................................... 4.240 Parkesinclair Chemicals (Aust) Pty Ltd v Asia Associates Inc [2000] VSC 362 ............................................................................................................................... 4.250 Parkin v South Hetton Coal Co (1907) 98 LT 162 .................................................... 10.30 Parras Holdings Pty Ltd v Commonwealth Bank of Australia [1999] FCA 391 ...................................................................................................................... 4.250 Parry v Woolworths [2008] QCA 26 ........................................................................... 6.470 Pastry Cooks Employees, Biscuit Makers Employees and Flour and Sugar Goods Workers Union (NSW) v Gartrell White (No 3) (1990) 35 IR 70 ...................................................................................................................... 8.190 Patrick v Steel Mains Pty Ltd (1987) 77 ALR 133 ..................................................... 4.230 Patrick Stevedores (No 1) Pty Ltd v Vaughan [2002] NSWCA 422 ....................... 6.230 lxiii

Macken’s Law of Employment

Patrick Stevedores (No 2) Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1 .............. 3.10, 4.200, 9.320, 11.10, 13.240, 13.310, 13.320, 14.330 Patrick Stevedoring Pty Ltd v Chasser (Victorian Work Cover Authority) [2011] VSC 597 .......................................................................................................... 6.600 Patterson v Middle Harbour Yacht Club (unreported, Federal Court of Australia, Whitlam J, 20 March 1996) .................................................................. 10.340 Patterson v Newcrest Mining Ltd (1996) 68 IR 419 ............................................... 13.210 Patterson v Seeley International Pty Ltd (1994) 177 LSJS 209 ............................... 9.190 Patty v Commonwealth Bank of Australia [2000] FCA 1072 ................................. 5.850 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 ............................... 9.240, 10.40 Pavlovic v Commonwealth Bank of Australia (1992) 56 SASR 587 .................... 10.370 Pawel v Advanced Precast Pty Ltd (unreported, AIRCFB, Polites SDP, Watson SDP and Gay C, 12 May 2000) ............................................................... 13.110 Pawel v Australian Industrial Relations Commission (1999) 94 FCR 231 .... 8.70, 8.90, 9.360, 13.100, 13.110 Pay-roll Tax (Vic), Commissioner of v Mary Kay Cosmetics Pty Ltd [1982] VR 871 ............................................................................................................ 2.180 Paynter v Williams (1833) 1 C & M 810; 149 ER 626. ............................................. 4.110 Payzu Ltd v Saunders [1919] 2 KB 581 ..................................................................... 10.350 Peacock, Re; Long v Dow [1930] VLR 9 .................................................................... 9.260 Pearce v Brooks (1866) LR 1 Exch 213 ...................................................................... 4.310 Pearce v Round Oak Steel Works Pty Ltd [1969] 3 All ER 680 .............................. 6.190 Pearson v HRX Holdings Pty Ltd [2012] FCAFC 111; (2012) 220 IR 369 .......... 4.420 Peate v Federal Commissioner of Taxation (1964) 111 CLR 443 .......................... 2.380 Peate v Federal Commissioner of Taxation (1966) 116 CLR 38 ............................ 2.380 Pecenka v Minister for Health [2012] WASCA 250 .................................................. 6.230 Peckham v Moore [1975] 1 NSWLR 353 ................................................................... 4.140 Pedersen v 3MP Radio (unreported, Employee Relations Commission of Victoria in Full Session, E94/0023, 8 March 1994) ............................................ 8.370 Pedersen v Camden LBC [1981] ICR 674 ........................................................... 8.80, 8.90 Pedley v PMS Pty Ltd [2013] FWC 4282 .................................................................... 5.560 Peek v Chief Executive Officer, Australian Government Solicitor [2005] FCA 870 .......................................................................................................... 5.340, 5.410 Peers v Transfield Constructions Pty Ltd [2009] NSWDC 373 .............................. 3.190 Penhall-Jones v State of NSW [2008] FMCA 832 .................................................. 15.200 Penwell Publishing (UK) Ltd v Ornstein [2007] EWHC 1570 ............................... 5.830 Pepper v Webb [1969] 1 WLR 514 .............................................................................. 8.270 Pepper and Hope v Daish [1980] IRLR 13 .................................................................. 8.80 Percival v Fosters Brewing Group Ltd (1993) 49 IR 85 ............................................. 9.40 Percy v Board of National Mission of the Church of Scotland [2006] 2 AC 28 ........................................................................................................................... 2.410 Perilya Ltd v Nash [2015] NSWSC 706 ....................................................................... 6.620 Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 ................... 11.70, 13.210 Perri v Anglo Italian 2013 FWC 10 ............................................................................. 6.580 Personnel Contracting Pty Ltd t/as Tricord Personnel v Construction Forestry Mining and Energy Union of Workers [2004] WASCA 312; (2004) 141 IR 31 ........................................................................................................ 2.370 Petch v Independent Commission against Corruption [2014] NSWSC 1693 ............................................................................................................................. 5.720 Petchell v Du Pradal [2015] QCA 132 ........................................................................ 6.100 Peter Dellys v Elderslie Finance Corporation Ltd (2002) 82 WAIG 1193 ............ 4.510 Peter Zabrdac v Transclean Facilities Pty Ltd [2011] FWA 4492 ........................... 13.70 Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126 ............................................ 4.350 Peters Ice Cream (Vic) Ltd v Todd [1961] VR 485 ................................................... 4.430 lxiv

Table of Cases

Pete’s Towing Services Ltd v Northern Industrial Union of Workers [1970] NZLR 32 ............................................................ 14.200, 14.220, 14.250, 14.280 Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 ............................... 4.570 Petrie v Mac Fisheries Ltd [1940] 1 KB 258 ................................................................. 5.40 Pettett, Re [1956] AR 264 .............................................................................................. 5.850 Phan v Unilever Australia Ltd (unreported, 29 April 1998, AIRC, Watson SDP, Williams and Larkin C) .................................................................. 13.170 Phillipa v Carmel [1996] IRCA 451; [1997] AILR 3 ...................................... 4.320, 4.330 Phillips v Alhambra Palace Co [1901] 1 QB 59 ............................................. 9.270, 9.330 Phoenix Society Ltd v Cavenagh (1996) 25 MVR 143 ............................................. 5.470 Pickard v John Hein & Son Ltd (1924) 35 CLR 1 ..................................................... 7.100 Pickering v JRA Ltd (Scheme Administrators Appointed) trading as Austral Denning (1995) 151 QGIG 466 ........................................................ 8.90, 9.40 Pieter Lips v Supercheap Auto Pty Ltd [2004] WAIRComm 12089 ...................... 5.850 Pilkington v Scott (1846) 15 M & W 657; 153 ER 1014 .......................................... 4.130 Pilmer v Duke Group Ltd (2001) 207 CLR 165 ............................................ 5.830, 8.350 Pilon v Peugeot Canada Ltd (1980) 114 DLR (3d) 378 ......................................... 10.330 Pinawin v Domingo [2012] FWAFB 1359; (2012) 219 IR 128 ............................. 13.130 Pitcher v Langford (1991) 23 NSWLR 142 ................................................................ 2.100 Placer (Granny Smith) Pty Ltd v Specialised Reline Services Pty Ltd [2010] WASCA 148 ................................................................................................... 3.190 Placer Development Ltd v Commonwealth (1969) 121 CLR 353 ....................... 10.160 Planche v Colburn (1831) 8 Bing 14; 131 ER 305 .................................................... 10.40 Plenty & Plenty v Seventh-Day Adventist Church of Port Pirie [2006] SASC 361 ...................................................................................................................... 4.50 Plumb (Australia) Pty Ltd v Stone (1945) 55 CAR 535 ............................................ 8.210 Plumbly v Beatthatquote.Com Ltd [2009] EWHC 321 ............................................ 5.800 Poletti v Ecob (No 2) (1989) 91 ALR 381 .................................................................. 10.50 Police Federation of Australia v Nixon (2008) 168 FCR 340 ............................... 13.300 Police Service (NSW) v Honeysett [2001] NSWCA 452; (2001) 53 NSWLR 592 ................................................................................................... 2.410, 5.460 Police Service Board v Morris and Martin (1985) 156 CLR 397 ............................ 5.850 Pollard v Baulderstone Hornibrook Engineering Pty Ltd [2008] NSWCA 99 .................................................................................................................................. 6.180 Poniatowska v Hickinbotham [2009] FCA 680 ....................................................... 15.230 Ponzio v B&P Caelli Constructions Pty Ltd (2007) 158 FCR 543 .......... 10.50, 13.310, 14.70 Poppy v Service to Youth Council Inc [2014] FCA 656 ........................................ 12.180 Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (1978) 52 ALJR 337 .................................................................................................................... 5.490 Porter, Re; Re Transport Workers Union of Australia (1989) 34 IR 179 ............. 2.230, 2.250, 2.260, 2.340, 2.390 Porton Capital Technology Funds v 3M UK Holdings Ltd [2010] EWHC 114 ................................................................................................................. 5.680 Posluns v Toronto Stock Exchange (1964) 46 DLR (2d) 210 ................ 14.200, 14.210, 14.390 Post Office v Roberts [1980] IRLR 347 ........................................................................ 8.90 Poussard v Spiers and Pond (1876) 1 QBD 410 ........................................................ 9.290 Powdrill v Watson [1995] 2 WLR 312 ......................................................................... 9.320 Powell v Braun [1954] 1 WLR 401 ............................................................................... 4.130 Powell v Brent London Borough Council [1988] ICR 176 .......................... 11.10, 11.60 Powell v Lee (1908) 99 LT 284 ....................................................................................... 4.70 Powerlan Ltd v Squires [2006] NSWIRComm 390 ................................................... 5.800 Pratt v BMA (1919) 1 KB 244 .................................................................................... 14.320 lxv

Macken’s Law of Employment

Predl v DMC Plastering Pty Ltd [2014] FCCA 1066 ...................................... 2.90, 2.180 Premier Pet Pty Ltd t/as Bay Fish v Brown (No 2) [2013] FCA 167 .................. 12.170 President of the Methodist Conference, The v Preston [2013] UKSC 29 .............. 4.50 Prestige Lifting Services Pty Ltd v Williams [2015] FCA 1063 ............................... 5.580 Price v Mouat (1862) 11 CB (NS) 508; 142 ER 895 ................................................. 8.200 Primacy Underwriting Agency Pty Ltd (formerly Landmark Underwriting Agency Pty Ltd) v Kilborn [2007] NSWSC 158 .......................... 5.600 Prime Creative Media Pty Ltd v Vranjkovic [2009] FCA 1030 ............................... 5.600 Primus v State Rail (Passenger Fleet Maintenance) (1999) 90 IR 26 .................... 13.120 Printers & Finishers Ltd v Holloway [1964] 3 All ER 731 ...................................... 5.670 Printing & Kindred Industries Union v Printing & Allied Trades Employers Federation of Australia (1982) 2 IR 320 ......................................... 12.370 Printing Industry Employees Union of Australia v Jackson and O’Sullivan Pty Ltd (1957) 1 FLR 175 ..................................................................... 8.160 Printlinx Pty Ltd v Hughes (17 October 2001, AIRC, Ross VP, Lacy SDP and Holmes C, Print PR910359) ................................................................. 13.220 Prison Officers Association, The v Gough & Cox [2009] UKEAT 0405/09/1712 ................................................................................................ 2.410, 3.250 Pritchard v Briggs [1980] Ch 338 ................................................................. 14.120, 14.130 Pritchard v Dolly Dolly Creations Pty Ltd (1989) 31 IR 231 .................................. 9.210 Proebstel v TechPacific Australia Pty Ltd (6 September 2000 .............................. 13.170 Professional Officers’ Association (Vic) v CSL Ltd [2001] FCA 628 .................. 13.280 Propell National Valuers (WA) Pty Ltd v Australian Executor Trustees Ltd [2012] FCAFC 31; (2012) 202 FCR 158 ......................................................... 5.440 Protectacoat Firthglow Ltd v Szilagyi [2009] EWCA Civ 98; [2009] IRLR 365 ........................................................................................................ 2.100, 2.420, 4.470 Provident Financial Group plc v Hayward [1989] ICR 160 .................................... 11.50 Provident Financial Group plc v Whitegates Estate Agency Ltd [1989] IRLR 84 ...................................................................................................................... 5.320 Prus-Grzybowksi v Everingham (1986) 87 FLR 182 ............................................. 10.350 Public Employment, Commissioner for v The Public Service Association of SA [2001] SAIRC 12; (2001) 122 IR 161 .................................... 4.130 Public Service Association and Professional Officers’ Association Amalgamated Union of NSW v Director of Public Employment [2011] NSWIRComm 152 ........................................... 2.410, 4.70, 4.130, 4.480, 4.490 Public Service Association of NSW v Public Service Board of New South Wales (1985) 12 IR 98 ................................................................................. 11.120 Puccio v Catholic Education Office (1996) 68 IR 407 ............................................. 8.290 Pullen v R & C Products Pty Ltd (1994) 60 IR 183 ...................................... 9.20, 10.270 Purcell v Tullett Prebon (Aust) Pty Ltd [2010] NSWCA 150 .................................. 5.410 Purcell v Tullett Prebon (Australia) Pty Ltd [2010] NSWCA 150 ................ 8.30, 9.140, 10.110, 11.50 Puri v Sydney Strata Pty Ltd [2012] FWA 7317 ....................................................... 13.130 Purvis v Luminar Leisure Ltd (EAT, 27 November 2000) ...................................... 4.520 Purvis v New South Wales (Department of Education and Training) (2003) 217 CLR 92 .................................................................................................... 15.60 Purvis v New South Wales (Dept of Education and Training) (2003) 217 CLR 92 .......................................................................................................... 15.90, 15.100 Putsman v Taylor [1927] 1 KB 741 .............................................................................. 5.690

Q QBE v Orcher [2013] NSWCA 478 .............................................................................. 3.60 lxvi

Table of Cases

QBE Management Services (UK) Ltd v Dymoke [2012] EWHC 80 ........ 5.600, 5.740, 5.840 Qantas v Kearney (26 March 1998 ............................................................................ 13.160 Qantas Airways Ltd v Christie (1998) 193 CLR 280 ..... 13.290, 13.340, 15.180, 15.280 Qantas Airways Ltd v Cornwall (1998) 84 FCR 483 .............................................. 13.160 Qantas Airways Ltd v Fetz (9 June 1998 ................................................................... 13.120 Qantas Airways Ltd v Gama [2008] FCAFC 69 ........................................ 15.220, 15.230 Qantas Airways Ltd v Joyce [2014] WAIRComm 1192 ................................ 4.130, 4.530 Qantas Airways Ltd v Reyn (1 June 2001 ................................................................. 13.160 Qantas Airways Ltd v Transport Workers Union (2011) 211 IR 1 ............ 14.10, 14.50, 14.80, 14.190 Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327 ............................... 9.170 Queensland v Whiteman [2006] QSC 325 .................................................................. 2.380 Queensland Meat Export Co Pty Ltd t/as Smorgon Meat Group v Hawkins (unreported, Industrial Relations Court of Australia, Wilcox CJ, Spender and Moore JJ, 6 December 1996) ....................................................... 9.30 Queensland Police Credit Union Ltd, Re (2013) 279 FLR 420; [2013] QSC 273 ........................................................................................................................ 1.60 Queensland Rail v Wake (2006) 156 IR 393 ..................................... 5.400, 5.410, 13.160 Qui v Steyi Nursing Home (1993) 5 VIR 237 .............................................................. 8.90 Quickenden v O’Connor, Commissioner of the AIRC (2001) 184 ALR 260 ............................................................................................................................. 12.350 Quigley v Commonwealth (1981) 55 ALJR 579 ........................................................ 6.160 Quinn v Australian Stevedoring Industrial Authority (1960) 94 CAR 800 ........... 8.320 Quinn v Gray (2009) 184 IR 279 ...................................................... 9.150, 10.270, 10.320 Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 .... 5.510, 9.40, 9.340, 9.370, 9.380, 10.220, 10.250 Quinn v Jack Shea [1992] 1 VR 567 ............................................................................... 4.10 Quinn v Leathem [1901] AC 495 ................................................................. 14.310, 14.360 Quinn v Overland [2010] FCA 799; (2010) 199 IR 40 .......................... 5.330, 7.10, 7.20

R R v ACR Roofing Pty Ltd (2005) 11 VR 187; [2004] VSCA 215 ................ 6.390, 6.550 R v Associated Octel Co Ltd [1996] 1 WLR 1543 .................................................... 6.380 R v Australian Char Pty Ltd [1995] VSC 168 ..................................... 6.420, 6.430, 6.520 R v BBC; Ex parte Lavelle [1983] 1 WLR 23; ICR 99 .... 8.100, 10.180, 10.190, 11.120 R v Board of Trustees of the Science Museum [1993] ICR 876 ............................ 6.520 R v Borkowski [2009] NSWCCA 102 ......................................................................... 6.680 R v Canberra Contractors Pty Ltd [2016] ACTSC 13 ................................... 6.490, 6.680 R v Commercial Industrial Construction Group Pty Ltd [2006] VSCA 181 ................................................................................ 6.350, 6.460, 6.470, 6.480, 6.680 R v Commercial Industrial Construction Group Pty Ltd [2006] VSCA 181; (2006) 14 VR 321 .................................................................................. 6.350, 6.520 R v Darling Island Stevedoring and Lighterage Company Ltd; ex parte Halliday and Sullivan (1948) 60 CLR 601 ...................................... 5.410, 5.420, 8.210 R v Director of Serious Fraud Office; Ex parte Smith [1993] AC 1 ...................... 5.850 R v East Berkshire Health Authority; Ex parte Walsh [1984] 3 WLR 818 ........... 8.100, 11.120 R v FRH Victoria Pty Ltd [2010] VSCA 18 ............................................................... 6.680 R v Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Co-Op Ltd (1977) 16 SASR 6 .................................................................... 9.170 R v Irvine; DPP v Dynamic Industries Pty Ltd; DPP v Irvine [2009] VSCA 239 ....................................................................................................... 6.580, 6.680 lxvii

Macken’s Law of Employment

R v Judges of the Federal Court of Australia; Ex parte Western Australian National Football League (1979) 143 CLR 190 ................................. 12.20 R v Kelly; Ex parte Victoria (1950) 81 CLR 64 ......................................................... 12.90 R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254 ...................................................................................................................... 1.40, 13.10 R v Kovacs [2009] 2 Qd R 51 ....................................................................................... 4.330 R v McCann [1998] 2 Qd R 56 ..................................................................................... 2.410 R v National Heart and Chest Hospitals; Ex parte Pardhanani (unreported, Court of Appeal, 1984) ......................................................... 11.10, 11.60 R v Portus; Ex parte ANZ Banking Group Ltd (1972) 127 CLR 353 ................... 12.90 R v Secretary of State for Social Services; Ex parte Khan [1973] 1 WLR 187; [1973] 3 All ER 538 .......................................................................................... 9.210 R v Secretary of State for the Home Department; Ex parte Benwell [1984] 3 WLR 843 ..................................................................................................... 8.100 R v Stewart [1938] Qd R 87 ........................................................................................ 10.110 R v Tang (2008) 82 ALJR 1334 .................................................................................... 4.330 R v The Mayor and Town Council of Wigan (1885) 14 QBD 908 .......................... 9.90 R v Tjanara Goreng-Goreng [2008] ACTSC 74 ........................................................ 5.770 R v Tkacz [2001] WASCA 391 ..................................................................................... 2.410 R v Wei Tang [2009] VSCA 182 ................................................................................... 4.330 RBC Dominion Securities Inc v Merrill Lynch Canada Inc (2008) 298 DLR (4th) 1 ................................................................................................................ 5.740 RBG Resources plc v Rastogi [2002] EWHC 2782 .................................................. 5.840 RBG Resources plc v Rastogi [2004] EWHC 1089 .................................................. 5.840 RDF Media Group plc v Clements [2008] IRLR 207 ....................... 5.150, 5.290, 5.400 RMIT v NTEU [2012] FWA 2208 ................................................................... 4.490, 5.410 RS Components Ltd v Irwin [1974] 1 All ER 41 ...................................................... 9.340 Raddock v Air New Zealand Ltd [1997] ER NZ 517 ............................................ 10.330 Radploy Pty Ltd T/A Lake Imaging [2011] FWA 39 ............................................. 12.160 Rahhal v Minister for Immigration [2008] FMCA 933 ............................................. 4.320 Railway Appeal Board: Ex parte Western Australian Government Railways Commission, Re (1999) 92 IR 70 ........................................................... 8.100 Railways, Commissioner for v Ruprecht (1979) 142 CLR 563 ................................ 6.200 Railways, Commissioner for v Scott (1959) 102 CLR 392 ......................................... 9.50 Raimondo v South Australia (1979) 23 ALR 513 ...................................................... 6.200 Rajski v Bainton (1990) 22 NSWLR 125 .................................................................. 14.390 Ralston v Bell [2010] NSWSC 245 ................................................................... 2.120, 3.200 Ramsay v BigTinCan Pty Ltd [2014] NSWCA 324 ....................................... 5.550, 5.560 Ramsay Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237 ............ 2.60, 3.90, 4.110 Ramsey v Annesley College [2013] SASC 72 ...................................... 4.110, 4.520, 5.850 Randall v Aristocrat Leisure Ltd [2004] NSWSC 411 ....................... 8.110, 8.120, 8.250 Ranger Uranium Mines Ltd, Re; Ex parte Federated Miscellaneous Workers’ Union of Australia (1987) 163 CLR 656 .............................................. 13.10 Ranger Uranium Mines Pty Ltd v Federated Miscellaneous Workers’ Union of Australia (1987) 54 NTR 6 ..................................................... 14.340, 14.410 Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 ............. 8.110, 8.120, 8.240, 8.250, 8.370, 9.30, 9.40, 10.160, 10.250 Ranson v Customer Systems Plc [2012] EWCA Civ 841 ................. 5.630, 5.830, 5.840 Raspin v United News Shops Ltd [1999] IRLR 9 ................................................... 10.210 Ratnayake v Greenwood Manor Pty Ltd [2012] FMCA 350 ................................... 5.850 Rauk v Transtate Pty Ltd [2001] Aust Torts Reports ¶66,510 ................................. 2.130 Re Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) [1987] FCA 266; (1987) 14 FCR 434 .................................................................................. 5.680 lxviii

Table of Cases

Re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95 ........................................................................................................................ 1.40, 13.50 Read v Friendly Society of Operative Stonemasons [1902] 2 KB 88 and [1902] 2 KB 732 ......................................................................................... 14.190, 14.200 Reading v Attorney-General [1951] AC 507 ................................................... 5.810, 5.820 Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 .......................................................... 2.150, 2.170 Real Estate Institute of Western Australia Inc v Federated Clerks’ Union of Australia Industrial Union of Workers (WA Branch) (1993) 51 IR 415 .................................................................................................................... 9.350, 9.370 Reda v Flag Ltd [2002] UKPC 38; [2002] IRLR 747; All ER 201 .............. 4.560, 5.240, 10.160, 10.170 Redeemer Baptist School Ltd v Glossop [2006] NSWSC 1201 ................................ 4.50 Redgrave v Hurd (1881) 20 Ch D 1 ............................................................................. 4.210 Redundancy Test Case (2004) 129 IR 155 ................. 9.170, 9.180, 9.190, 9.410, 12.250 2004 Redundancy Test Case Supplementary Decision (2004) 129 IR 57 ............. 9.170, 9.180, 9.190, 9.410 Reed v Blue Line Cruises (1996) 73 IR 420 ...................................................... 2.90, 13.70 Reed Business Information v Seymour [2010] NSWSC 790 ........... 4.340, 5.630, 5.700 Reeve v Commonwealth of Australia [2014] ACTSC 1 ........................................... 5.300 Reeves v New South Wales [2010] NSWSC 611 ....................................................... 5.290 Reg v Mara [1987] 1 WLR 87 ....................................................................................... 6.380 Regan v Redeemer Baptist School Ltd (No 2) [2006] NSWIRComm 198 .............. 4.50 Regina v Moore [2015] NSWCCA 316 ............................................................ 6.120, 6.340 Regional Development Australia Murraylands v Riverland Inc [2015] SASCFC 160 ................................................................................................ 9.240, 10.350 Regional Express Holdings Ltd v Clarke [2007] FCA 957 ...................... 12.330, 12.350 Regulski v Victoria [2015] FCA 206 ................................................... 5.180, 5.190, 10.320 Reichhold Norway ASA v Goldman Sachs [2000] 1 WLR 173 .............................. 5.490 Reid v Australian Institute of Marine and Power Engineers (1990) 33 IR 463 .................................................................................................................................. 7.40 Reid v Campbell Engravers [1990] ICR 435 ................................................................. 8.90 Reid v Explosives Co Ltd (1887) 19 QBD 264 .............................................. 9.310, 9.320 Reid v Howard (1995) 184 CLR 1 ................................................................................ 5.850 Reid v Rush & Tompkins [1990] 1 WLR 212 ............................................................. 4.510 Reigate v Union Manufacturing Co [1918] 1 KB 592 ............................................... 9.310 Reilly v Devcon [2008] WASCA 84 ............................................................................. 6.440 Reilly v Praxa Ltd [2004] ACTSC 41 ................ 9.40, 9.150, 9.180, 9.340, 9.370, 10.340, 10.350 Reilly v Tobiassen [2008] WASC 6; (2007) 70 IR 294 ............................................... 2.280 Reilly v Tobiassen [2008] WASC 6; (2008) 170 IR 294 ............................................. 6.550 Reilly v Victoria (1991) 5 VIR 1 ........................................................................ 11.10, 11.80 Reilly v Victoria (1991) 5 VIR 33 ................................................................................. 11.10 Relaxation Group plc v Rhys-Harper [2003] 4 All ER 1113 ................................... 5.280 Reliable Couriers Pty Ltd v Q-COMP [2005] QIC 51 .................................. 2.120, 2.200 Renard Constructions (ME) Pty Ltd v Minister for Public Works [1992] 26 NSWLR 234 .................................................................................. 5.170, 5.180, 5.220 Reschs Waverley Brewery v Federated Liquor and Allied Industries Employees’ Union (1976) 18 AILR 193 ................................................................ 8.230 Revenue and Customs Commissioners v Total Network SL [2008] 1 AC 1174 .................................................................................... 14.80, 14.330, 14.390, 14.400 Reynolds v Shipping Federation [1924] Ch 28 ......................................................... 14.310 Reynolds v Southcorp Wines Pty Ltd (2002) 122 FCR 301 ......................... 4.520, 9.180 Rheinberger v Huxley Marketing Pty Ltd (1996) 67 IR 154 ........................ 8.50, 13.100 lxix

Macken’s Law of Employment

Rhodes v Forwood (1876) 1 App Cas 256 ................................................................. 5.320 Ricegrowers Co-operative Ltd v Schliebs (31 August 2001 ..................... 13.160, 13.190 Rich v Australian Securities & Investments Commission (2004) 220 CLR 129 ............................................................................................................................... 5.850 Richards v Ankur Kadian [2005] NSWCA 328 ......................................................... 5.710 Richardson v Oracle Corporation Australia Pty Ltd (No 2) [2014] FCAFC 139 .............................................................................................................. 15.230 Richardson v Queensland Corrective Services Commission (1994) 55 IR 475 ............................................................................................................... 11.110, 11.130 Richardson Pacific Ltd v Miller-Smith [2005] WAIRComm 545 ................ 4.520, 4.530 Richmond v Moore Stephens Adelaide Pty Ltd [2015] SASCFC 147 ..................... 8.40 Rickless v United Artists Corporation [1987] 2 WLR 945 ..................................... 14.150 Ridge v Baldwin [1964] AC 40 ........................................................................ 8.100, 11.150 Ridley v Tioxide Australia Pty Ltd (unreported, Industrial Relations Court of Australia, Parkinson JR, 12 November 1996) ...................................... 9.180 Rigby v Ferodo Ltd [1988] ICR 29 ........................ 8.20, 8.30, 8.40, 9.340, 9.400, 10.140 Rigby v Technisearch Ltd (1996) 67 IR 68 ..................................................... 9.40, 10.370 Right Society Ltd v Mitchell and Booker (Palais de Danse) Ltd [1924] 1 KB 762 ........................................................................................................................ 2.140 Riley v WorkCover/Allianz Australia [2002] SAWCT 79 ......................................... 4.320 Rimmer v Jennifer Anne Dahl t/as Dahl’s Nursing Agency (unreported, NSW Compensation Court, Egan J, 18 June 1990) ............................................. 3.130 Rind v Australian Institute of Superannuation Trustees [2013] FWC 3144 ........................................................................................................................... 13.110 Rio Tinto Coal Australia Pty Ltd v Smith (AIRC .................................................... 13.210 Riordan v War Office [1959] 1 WLR 1046 .................................... 9.50, 9.70, 9.90, 9.110 Rishmont Pty Ltd v Tweed City Medical Centre Pty Ltd [2001] QSC 372 ........... 5.560 Riverwood International v McCormick (2000) 177 ALR 193 ........ 4.230, 4.480, 4.490, 4.510, 4.520, 5.250, 9.160, 9.180, 9.340, 9.350, 10.160, 10.240, 12.340 Riverwood Legion & Community Club Ltd v Morse [2007] NSWWCCPD 88 ............................................................................................. 2.380, 4.50 Robat v Iveco Trucks Australia Ltd [2011] FWA 2915 .......................................... 13.220 Robb v Green [1895] 2 QB 315 ............................................................ 5.530, 5.600, 5.690 Robb v Hammersmith and Fulham London Borough Council [1991] ICR 514 ....................................................................................................................... 11.60 Robert Lawrence and Attorney-General’s Department [2004] NSWIRComm 59 ...................................................................................................... 5.800 Robert Roberts v Stewart Hicks Real Estate [2000] NSWIRComm 138 ................. 4.50 Roberts v Gray [1913] 1 KB 520 ...................................................................... 4.170, 4.180 Roberts v High Professional Productions Pty Ltd [2010] FWA 3462 ................... 13.80 Roberts v Hongkongbank of Australia (1993) 35 AILR 213 .................................. 4.230 Roberts v University of New England [2009] FMCA 964 ...................................... 4.240 Roberts v VIEW Launceston Pty Ltd [2015] FWC 6556 ...................................... 13.390 Robertson v Knott Investments Pty Ltd [2010] FMCA 142 ................................... 4.230 Robertson v Knott Investments Pty Ltd (No 3) [2010] FCA 1074 ...................... 10.370 Robertson v South (2000) 140 IR 169 ...................................................................... 13.340 Robins v Sir Charles Gairdner Hospital (1999) 95 IR 27 ........................... 8.280, 13.160 Robinson v Crompton Parkinson Ltd [1978] ICR 401; IRLR 61 ................... 8.80, 8.90 Robinson v Harman (1848) 1 Ex 850; 154 ER 363 ................................................ 10.100 Roche Mining Pty Limited v Graeme Wayne Jeffs [2011] NSWCA 184 .............. 3.170, 3.210 Rock Refrigeration Ltd v Jones [1997] 1 All ER 1; [1996] IRLR 675 ........ 4.420, 5.620, 8.50 lxx

Table of Cases

Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd; Carelli v FS Architects Pty Ltd [2008] NSWCA 39 ................................................................... 6.370 Rofin Pty Ltd v Newton (1997) 78 IR 78 ................................................................... 13.80 Rogan-Gardiner v Woolworths Ltd (2012) 218 IR 417 ......................... 8.30, 9.40, 9.180 Rogan-Gardiner v Woolworths Ltd (No 2) [2010] WASC 290 ............ 8.30, 9.40, 9.180 Roger Bullivant Ltd v Ellis [1987] ICR 464 ................................................................ 11.10 Rojas v Esselte Australia Pty Ltd (No 2) (2008) 177 IR 306 ................................. 13.300 Romero v Auty [2000] VSC 462 (3 November 2002 ................................................ 9.410 Romero v Farstad Shipping (Indian Pacific) Pty Ltd [2014] FCAFC 177; (2014) 231 FCR 403; 247 IR 31 ............................... 4.480, 4.490, 5.250, 5.260, 9.160 Rookes v Barnard [1964] AC 1129 ........ 10.90, 14.230, 14.240, 14.250, 14.260, 14.270, 14.280, 14.390, 14.400, 14.410 Roscorla v Thomas (1842) 3 QB 234; 114 ER 496 ................................................... 4.130 Rose v Dodd [2005] ICR 1776 .......................................................................... 9.250, 9.330 Rose v Plenty [1976] 1 WLR 141 ................................................................................... 6.60 Rose v Telstra Corporation Ltd (4 December 1998 ................................................ 13.160 Rose and Frank Co v Crompton & Bros Ltd [1925] AC 445 .................................... 4.50 Rosedale v Telstra Corporation (22 June 2001 ........................................................ 13.210 Rothenburger Australia Pty Ltd v Poulsen (2003) 58 NSWLR 288 ......... 10.20, 10.110 Rothmans Distribution Services Ltd v Full Court of the Industrial Court of New South Wales (1994) 53 IR 157 .................................................................. 9.190 Rowan v Cornwall [2005] HCA Trans 601 ................................................................. 5.290 Rowbotham v Arthur Lee & Sons Ltd [1975] ICR 109 ........................................... 9.360 Rowe v Capital Territory Health Commission (1981-82) 39 ALR 39 ...................... 4.50 Rowe v TWU (1998) 90 FCR 95 ................................................................................ 13.230 Rowell v Alexander Mackie College of Advanced Education (1988) 25 IR 87 ............................................................... 5.370, 5.440, 5.460, 8.170, 8.240, 10.120 Rowlands v Collow [1992] 1 NZLR 178 ..................................................... 10.260, 10.330 Roy v SNC-Lavalin Australia Pty Ltd [2013] FWC 7309 ....................................... 13.140 Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic) (1997) 97 ATC 5070 ................................................................ 2.180, 2.200, 2.350 Roy Morgan Research Pty Ltd v Commissioner of State Revenue [2005] VSC 136; (2005) 22 VAR 467 .................................................................................. 2.200 Roy Morgan Pty Ltd v Commissioner of State Revenue (Taxation) [2006] VCAT 1204; (2006) 63 ATR 168 ................... 2.90, 2.220, 2.250, 2.330, 2.350 Roy Morgan Research Pty Ltd v Commissioner of Taxation [2010] FCAFC 52; (2010) 184 FCR 448 ............................... 2.50, 2.250, 2.330, 2.350, 2.360 Royal Children’s Hospital v Alexander [2011] APO 94 ........................................... 5.790 Royle v Greater Manchester Police Authority [2007] ICR 281 ................................. 8.90 Royle v Trafford Borough Council [1984] IRLR 184 ................................. 5.100, 10.120 Rubber Plastic and Cablemaking Industry (Consolidated) Award 1983, Re (1989) 31 IR 35 .................................................................................................... 9.360 Rubel Bronze and Metal Co Ltd and Vos, Re [1918] 1 KB 315 ............................ 10.250 Run Corp Ltd v McGrath Ltd [2007] FCA 1669 ...................................................... 4.430 Russell v RCR Tomlinson Ltd [2012] WASC 405 ..................................................... 4.200 Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney (2008) 72 NSWLR 559 ........................ 5.180, 10.270, 10.320, 10.330, 10.360 Russell & Co Ltd v Austin Fryers (1909) 25 TLR 414 ............................................. 4.330 Russian v Woolworths (SA) Pty Ltd (1995) 64 IR 169 ............................................... 8.90 Russo v Westpac Banking Corporation [2015] FCCA 1086 ............ 4.480, 4.540, 4.560, 5.180, 5.220 Rutherford v Melbourne’s Cheapest Tyres Pty Ltd (17 September 2001 ............ 13.220 Rutherford v Poole [1953] VLR 130 ......................................................................... 14.170 lxxi

Macken’s Law of Employment

Ryan v Metropolitan Transit Authority and State Transport Authority (1988) 30 AILR 7 ...................................................................................................... 11.60 Ryan v Textile Clothing & Footwear Union [1996] 2 VR 235 .......... 4.60, 4.130, 4.140, 4.490, 4.520, 4.530, 9.180, 12.370, 12.380, 12.390 Ryde-Eastwood Leagues Club Ltd v Taylor (1994) 56 IR 385 ................................ 2.180

S S v New South Wales [2009] NSWCA 164 ................................................................. 6.230 SA v McDonald (2009) 185 IR 45 ............................................................................... 1.100 SB [2014] FWC 2104 .................................................................................................... 13.390 SBJ Stephenson Ltd v Mandy [2000] IRLR 233 ............................................ 4.470, 5.750 SDAEA v Countdown Stores (1983) 7 IR 273 .......................................................... 9.190 SG&R Valuation Service Company LLC v Boudrais [2008] IRLR 70 ....... 5.320, 5.340 SJP Chicken Processor v WorkCover (No 3) [2006] SAWLRP 7 ............... 2.220, 2.270, 2.280, 2.290, 2.310, 2.360, 2.420 SOS Kinderdorf v Bittaye [1996] 1 WLR 987 ........................................... 14.110, 14.190 SPC Ardmona Operations Ltd v Esam (2005) 141 IR 338 ................................... 13.120 SSC & B Lintas New Zealand Ltd v Murphy [1986] Aust Torts Reports 80-008 .......................................................................................................... 14.330, 14.390 SST Consulting Services Pty Ltd v Rieson (2006) 225 CLR 516 ................ 4.310, 4.430 SW Strange Ltd v Mann [1965] 1 WLR 629 ............................................................... 9.370 Saad v TWT Ltd (1995) 38 AILR 4208 ............................................... 4.230, 9.40, 10.370 Saddington v Building Workers Industrial Union of Australia (1993) 49 IR 323 .............................................................................................................. 9.90, 10.360 Safe Work New South Wales v Waycon Bulk Pty Ltd [2015] NSWDC 254 ............................................................................................................................... 6.640 Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149 ............................................................................................................................... 4.570 Sagar v Ridehalgh & Son Ltd [1931] 1 Ch 310 .......................................................... 4.530 Said v Butt [1920] 3 KB 497 ......................................................................... 14.110, 14.170 St John-Sweeting v University of Adelaide (23 June 1996 ..................................... 13.150 St John Ambulance Australia (NT) Inc v United Voice [2011] FWA 4782 ........... 14.40 St John Shipping Corporation v Rank [1957] 1 QB 267 .......................................... 4.310 St John of God (Care Services) Ltd v Brooks [1992] ICR 715 ................................. 8.90 Salt v Power Plant [1936] 3 All ER 322 .................................................................... 10.230 Saltman Engineering Co Ltd v Campbell Engineering Co [1948] RPC 203 ............................................................................................................................... 5.660 Sammartino v Mayne Nickless (2000) 98 IR 168 .................................................... 13.100 Samways v WorkCover (Qld) [2010] QSC 127 .......................................................... 3.190 Sanders v Neale Ltd [1974] ICR 565 ............................................................................. 8.30 Sanders v Parry [1967] 1 WLR 753 ................................................................................ 9.60 Sanders v Snell (1998) 196 CLR 329 .............. 4.530, 4.540, 8.100, 9.150, 10.220, 14.80, 14.150, 14.350, 14.390 Sanders v Snell (unreported, Federal Court, Full Court, 9 April 1997) ............... 14.120 Sandhu v Jan de Rijk Transport Ltd [2007] ICR 1137 ................................................ 8.90 Sandilands v Australian Newsprint Mills Ltd (1982) 3 IR 386 ................................ 8.260 Sandman v Visyboard, Coolaroo (20 November 2000, AIRC, Polites SDP, Williams SDP and Hingley C, Print T3495) .................................. 8.290, 13.160 Sandra Eldridge v Kemblawarra Child and Family Centre [1999] NSWCA 395 ................................................................................................................. 4.50 Sapevski v Katies Fashions (Australia) Pty Ltd [1997] IRCA 219 ........................ 15.270 Sarker v South Tees Acute Hospitals [1997] ICR 673 ................................ 4.110, 13.100 Sattin v Nationwide News Pty Ltd (1996) 39 NSWLR 32 ....................................... 5.290 lxxii

Table of Cases

Savage v British India Steam Navigation Co Ltd (1930) 46 TLR 294 ................... 8.240 Sayed v Construction, Forestry, Mining and Energy Union [2015] FCA 27 ............................................................................................................................... 15.270 Sayers v Cambridgeshire County Council [2007] IRLR 29 .......................... 6.230, 6.300 Scally v Southern Health & Social Service Board [1992] 1 AC 294 ............ 4.510, 5.300 Scammell v Hurley [1929] 1 KB 419 ......................................................................... 14.170 Scandrett v Dowling (1992) 227 NSWLR 483 ........................................................... 4.480 Scanes v Wilson (1974) 22 FLR 262 ............................................................................ 5.850 Scanlon v Director-General, Department of the Arts, Sport & Recreation [2007] NSWCA 204; (2007) 70 NSWLR 1 ........................................ 2.410 Schaale v Hoechst Australia Ltd (1993) 47 IR 249 .................................................. 10.240 Scharmann v APIA Club Ltd (1983) 6 IR 157 ........... 7.10, 7.20, 8.220, 10.230, 10.330 Schindler Lifts v Debelak (1989) 89 ALR 275 ............................... 5.770, 14.130, 14.140 Schindler Lifts Aust Pty Ltd v Debelak (1989) 89 ALR 275 ........................ 5.560, 5.750 Schroeder Music Publishing Co Ltd v Macaulay [1974] 1 WLR 1308 ....... 4.280, 4.350 Schultz v Capital International Security (24 Oct 2006 ................................................ 3.90 Scott v Commissioner of Taxation [2002] AATA 778 ............................................. 2.420 Scott v Gamble [1916] 2 KB 504 ............................................................................... 14.210 Scott v Stapp [1960] AR 300 ......................................................................................... 2.380 Scott and Pioneer Tourist Coaches Pty Ltd, Re [1956] AR (NSW) 827 ................ 8.240 Scruttons Ltd v Midland Silicones [1963] AC 446 .................................................... 5.490 Seager v Copydex Ltd [1967] 2 All ER 415 ................................................................ 5.680 Sear v Invocare Australia Pty Ltd [2007] WASC 30 .................................................. 4.430 Searle v Moly Mines Ltd (2008) 174 IR 21 ................................................. 13.100, 13.110 Searman v Castell (1795) 1 Esp 270; 170 ER 353 ..................................................... 5.390 Secretary, Department of Defence v HREOC (1997) 78 FCR 208 ....................... 9.220 Secretary, Department of Foreign Affairs v Styles (1989) 23 FCR 251 .............. 15.160 Secretary of State for Employment v ASLEF (No 2) [1972] 2 QB 455 .............. 4.490, 4.530, 5.420, 8.260 Secretary of State for Employment v Globe Elastic Thread Co Ltd [1980] AC 506 .............................................................................................. 9.410, 12.310 Secretary of State for Trade & Industry v Bottrill [1999] ICR 592; [2000] 1 All ER 915 ............................................................................................................... 2.380 Section 109 Review Decision, Re (1999) 90 IR 123 .................................................. 7.100 Section 424 Application to suspend or terminate protected industrial action: Minister for Tertiary Education, Skills, Jobs and Workplace Relations [2011] FWAFB 7444 ................................................................................ 14.40 Secure Employment Test Case [2006] NSWIRComm 38; (2006) 150 IR 1 .................................................................................................................. 2.80, 2.90, 3.10, Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 .......................................................................... 4.520, 5.190, 5.220 Segur v Franklin (1934) 34 SR (NSW) 67 ................................................................... 10.40 Selak v Woolworths Ltd (2008) 171 IR 267 ............................................... 13.150, 13.160 Sellars v Woods (1982) 45 ALR 113 .............................................................................. 9.90 Sellars Arenascene Ltd v Connolly [2001] ICR 760; [2001] IRLR 222 .................. 2.380 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 .................................. 13.160 Sendo Holdings plc v Brogan [2005] EWHC 2040 ....................................... 5.270, 5.800 Sentessy v Woo Ran Australia Pty Ltd (1986) 26 AILR 174 ................................... 4.150 Serafini v Holcim (Australia) Pty Ltd [2011] FWAFB 7794 .................................. 13.210 Serco Gas Services Pty Ltd v Alkemade (21 June 1999 ......................................... 13.190 Serventi v John Holland Group Pty Ltd [2006] FCA 1049 .............. 5.810, 8.120, 8.300 Seven Network (Operations) Ltd v James Warburton (No 2) [2011] NSWSC 386 ................................................................ 4.340, 4.400, 4.430, 5.330, 11.20 Seymour v Stawell Timber Industries Ltd (1985) 9 FCR 241 .................................. 9.310 lxxiii

Macken’s Law of Employment

Shackell v Rosier (1836) 2 Bing (NC) 634; 132 ER 245 ........................................... 5.360 Shahid v Australasian College of Dermatologists [2008] FCAFC 72 .................... 4.230 Shand v Ball (1936) 35 AR 77 ....................................................................................... 2.420 Shane William Bolden v Smith Reid Training Group (970264) Decision No 264/97 .................................................................................................................... 4.50 Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 ............. 2.100 Shaw v ANZ [2014] FWC 3408 ................................................................................. 13.390 Shaw v Bindaree Beef Pty Ltd [2007] NSWCA 125 ................................................. 4.200 Shaw v CCL [2008] IRLR 284 ...................................................................................... 5.150 Shaw v New South Wales (2012) 219 IR 87 ............................................... 10.280, 10.320 Shaw v Pat Thomas Memorial Community House Inc [2012] FWA 8303 ......... 13.130 Shaw Building Group Pty Ltd v Narayan (No 2) [2015] FCA 585 ......................... 5.550 Shea v TRUenergy Servicers Pty Ltd [2014] FCA 271 ............................................. 5.730 Shears v Mendeloff (1914) 30 TLR 342 .................................................................... 14.110 Sheet Metal Workers v Metters Ltd (1948) 60 CAR 972 .......................................... 7.110 Sheffield v Oxford Controls Co Ltd [1979] ICR 396 ................................................. 8.90 Sheldrick v WT Partnership (Aust) Pty Ltd [1998] FCA 1794; (1998) 89 IR 206 ....................................................................... 4.230, 4.240, 8.250, 10.270, 10.330 Shepherd v Felt and Textiles Australia Pty Ltd (1931) 45 CLR 359 ....................... 8.130 Shepherds Investments Ltd v Walters [2006] EWHC 836 ....................................... 5.600 Sheridan International Pty Ltd v CS Brooks Inc [2005] NSWSC 140 ....... 5.460, 5.470 Shields v CUB (1999) 86 FCR 446 ............................................................................ 13.170 Shields v Drysdale (1880) 6 VLR (E) 126 ................................................................... 4.130 Shields Furniture Ltd v Goff [1973] 2 All ER 653 .................................................... 9.340 Shipton v Cardiff Corp (1918) 87 LJKB 51 ................................................................. 4.70 Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206 .................................... 4.510 Shoalhaven City Council v Humphries [2013] NSWCA 390 ................. 6.30, 6.50, 6.90 Shogun Finance Ltd v Hudson [2004] 1 AC 919 ...................................................... 4.200 Shop, Distributive and Allied Employees’ Association v Wollongong Unicentre Ltd [2005] NSWIRComm 1138 .................................................. 5.70, 5.410 Short v City Bank of Sydney (1912) 15 CLR 148 ................................................... 14.120 Short v FW Hercus Pty Ltd (1993) 50 FCR 511 ....................................................... 9.170 Shorten v Australian Meat Holdings (1996) 70 IR 360 .......................................... 13.220 Shortland v The Smiths Snackfood Co Ltd [2010] FWAFB 5709; (2010) 198 IR 237 ......................................................................................................... 2.90, 13.70 Siagian v Sanel Pty Ltd (1994) 1 IRCR 1; 54 IR 185 ......................... 9.60, 9.150, 13.100 Sid Ross Agency Pty Ltd v Actors and Announcers Equity Association of Australia [1970] 2 NSWLR 47 ......................................................................... 14.350 Sid Ross Agency Pty Ltd v Actors and Announcers Equity Association of Australia [1971] 1 NSWLR 760 ....................................................................... 14.230 Sidameneo (No 456) Pty Ltd v Alexander [2011] NSWCA 418 ........................... 14.130 Sidney Blumenthal and Co Inc v US 30 F (2d) 247 ................................................ 14.220 Silberschneider v MRSA Earthmoving Pty Ltd (1987) 68 WAIG 33 ........... 9.50, 9.100 Silcar Pty Ltd v Victorian WorkCover Authority [2012] VSC 357 ............................ 3.50 Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 ....... 5.220, 9.400, 10.160, 10.170, 10.360, 12.240 Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2007] FCA 1047 ..................................................................................................... 14.110 Sim v Rotherham Council [1986] 3 WLR 851; [1986] ICR 897; [1987] 1 Ch 216 .......................................................................... 4.460, 5.100, 7.30, 10.30, 10.120 Simmons v Hoover Ltd [1977] QB 284 ................................................... 7.20, 7.40, 8.260 Simmons Ltd v Hay [1964] NSWR 416 ...................................................................... 9.290 Simpson v Ebbw Vale Steel & Coal Co [1905] 1 KB 453 .......................................... 2.30 lxxiv

Table of Cases

Simpson Design Associates Pty Ltd v Industrial Court of NSW [2011] NSWCA 316 ................................................................................................... 6.520, 6.560 Sims v Gawne [2005] NSWSC 750 .............................................................................. 4.320 Sinclair v Anthony Smith & Associates Pty Ltd (unreported, Industrial Relations Court of Australia, von Doussa J, 1 December 1995) ......................... 9.40 Singh v TAJ (Sydney) Pty Ltd [2006] NSWCA 330 .................................................. 4.320 Singh, Re [2015] FWC 5850 ........................................................................................ 13.390 Sinnott v FJ Trousers Pty Ltd [2000] VSC 124 .......................................................... 6.250 Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 ........................ 5.180 Sipad Holdings DDPO v Popovic (1995) 19 ACSR 108 ......................................... 9.310 Sirijovski v BlueScope Steel Ltd [2007] AIRC 680 .................................................... 5.410 Skeggs v Metropolitan Transport Trust [1997] TASSC 61 ...................................... 4.520 Skilled Engineering Ltd v AFMEPKIU (2001) 108 IR 116 ............. 11.10, 11.70, 11.90 Sklavos v Australasian College of Dermatologists [2016] FCA 179 ........ 4.490, 15.170 Slater v WorkCover/Allianz Aust [2002] SAWCT 27 ................................................. 3.90 Slattery v Public Service Board [1983] 3 NSWLR 41 ...................... 11.80, 11.140, 14.60 Slee and Stockden Pty Ltd v Blewitt (1992) 47 IR 104 ............................................. 9.150 Slevin v Associated Insurance Brokers of Australia (Qld) Pty Ltd (noted ........... 11.10 Slifka v JW Sanders Pty Ltd (1995) 67 IR 316 ............................................... 8.90, 10.340 Slivak v Lurgi (Australia) Pty Ltd [2001] HCA 6; 205 CLR 304 ............................. 6.560 Small v Tyco Projects (Australia) Pty Ltd [2006] NSWIRComm 18 ...................... 4.250 Smallwood v Ergo Asia Pty Ltd [2014] FWC 964 ..................................................... 4.320 Smith v Austin Lifts Ltd [1959] 1 All ER 81 .............................................................. 6.150 Smith v Blandford Gee Cemention Co Ltd [1970] 3 All ER 154 ............................. 4.50 Smith v Christchurch Press Co Ltd [2001] 1 NZLR 407 ......................................... 8.340 Smith v Crossley Bros Ltd (1971) 95 Sol Jo 655 ........................................................ 6.170 Smith v Department of Foreign Affairs and Trade (2008) 173 IR 257 ................. 13.50 Smith v Director-General of School Education (1993) 1 NSWLR 349 .................. 8.90 Smith v Huggins; Ex parte Huggins (1932) 26 QJPR 98 ......................................... 10.50 Smith v Jones (1924) 24 SR (NSW) 444 ...................................................................... 10.30 Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 ....................................... 9.290 Smith v Moore Paragon Australia Pty Ltd (23 January 2003 ................................. 13.220 Smith v Morison [1974] 1 WLR 659 ......................................................................... 14.120 Smith v The Christchurch Press Co Ltd [2001] 1 NZLR 407 ................................. 8.100 Smith v Trafford Housing Trust [2012] EWHC 3221 .............................................. 5.400 Smith v Ward (1998) 45 NSWLR 702 ......................................................................... 4.430 Smith Kline & French Laboratories (Aust) Ltd v Secretary, Dept of Community Services and Health (1990) 22 FCR 73 ........................................... 5.680 Snack Brands Australia and National Union of Workers, NSW [2000] NSWIRComm 243 .................................................................................................... 4.480 Sneddon v State of NSW [2012] NSWCA 7 .............................................................. 5.460 Snelling v John Snelling Ltd [1973] 1 QB 87 .............................................................. 5.490 Snook v London and West Riding Investments Ltd [1967] 2 QB 786 .................. 2.100 Social Security, Department of v Uink (1997) 77 IR 244 ...................................... 13.160 Social Welfare Union Case: R v Coldham; Ex parte Social Welfare Union (1983) 153 CLR 297 .................................................................................................... 2.30 Solectron Scotland Ltd v Roper [2003] UKEAT 0305033107; [2004] IRLR 4 ......................................................................................................................... 4.130 Soliman v University of Technology, Sydney [2008] FCA 1512 ............. 12.120, 12.340 Song v Ainsworth Game Technology Pty Ltd [2002] FMCA 31 .......................... 15.160 Sorrell v Smith [1925] AC 700 .................................................................................... 14.310 Soteriou v Ultrachem Ltd [2002] EWCA Civ 1597 ....................................... 4.320, 4.330 Sothern v Franks Charlesly and Co [1981] IRLR 278 ................................................. 8.80 South Australia v Day (2000) 78 SASR 270 .................................................................. 4.50 lxxv

Macken’s Law of Employment

South Australia v McDonald (2009) 104 SASR 344; 185 IR 45 ................. 8.90, 10.260, 10.270, 10.320, 12.290 South Pacific Manufacturing Co Ltd v New Zealand Security Consultants & Investigations Ltd [1991] 2 NSZLR 282 ..................................... 5.290 South Pacific Resort Hotels Pty Ltd v Trainor (2005) 144 FCR 402 ..................... 15.50 South Sydney Junior Rugby League Club Ltd v Gazis [2016] NSWCA 8 ............. 6.180 South Wales Miners’ Federation v Glamorgan Coal Co [1905] AC 239 ............. 14.120, 14.150, 14.190, 14.200 Southern Group Ltd v Smith (1997) 37 ATR 107 .................................................... 2.380 Southern Water Authority v Carey [1985] 2 All ER 1077 ........................................ 5.490 Speed v Thomas Swift & Co Ltd [1943] KB 557 ...................................................... 6.200 Spencer v Dowling (1997) 2 VR 127 ............................................................................. 8.80 Spencer v Marchington [1988] IRLR 392 ................................................................... 9.130 Spencer Industries Pty Ltd v Collins (2002) 54 IPR 434 .......................................... 5.780 Sperandio v Lynch [2006] FCA 1838; (2006) 160 IR 360 ...................................... 13.340 Spillane v Commonwealth Bank of Australia [2002] QSC 367 ..................... 8.90, 8.100 Spiller v F J Wallis [1975] IRLR 362 ............................................................................ 8.290 Spincode Pty Ltd v Look Software Pty Ltd (2001) VSCA 248 ............................... 5.560 Spotless Catering Services Ltd v Daley (1993) 49 IR 434 ........................................ 9.190 Spotless Catering Services Pty Ltd v FLAIEU (1988) 25 IR 255 ............................. 5.80 Spotless Group Ltd v Blanco Catering Pty Ld [2011] FCA 979 ................. 5.600, 5.670 Sprigg v Arthur J Purslowe & Co Pty Ltd (unreported, Industrial Relations Court of Australia, Tomlinson JR, 5 May 1995) ................... 8.240, 13.160 Sprigg v Pauls Licensed Festival Supermarket (1998) 88 IR 21 ............................ 13.220 Spring v Guardian Assurance plc [1995] 2 AC 296 ............... 4.510, 5.280, 5.290, 5.300, 14.130 Springbank Ltd v Craig [1974] IRLR 7 ......................................................................... 9.60 Staffordshire County Council v Secretary of State for Employment [1987] ICR 956 ........................................................................................................... 9.130 Stancu, Re [2015] FWC 1999 ...................................................................................... 13.380 Standard Life Health Care Ltd v Gorman [2010] EWCA Civ 1291 ........... 5.320, 5.340 Stanfield v Peter J Burgess & Associates Pty Ltd (1992) 42 IR 266 ......................... 9.50 Stanley v Service to Youth Council Inc [2014] FCA 643 ....................................... 12.180 State Dockyard v Electrical Trades Union (1972) 14 AILR 133 ............................. 8.240 State School Teachers’ Union of WA, The v Ken Davis [2012] WAIRComm 966 ....................................................................................................... 4.520 State Taxation, Commissioner of v Roy Morgan Research Centre Pty Ltd [2004] SASC 288; (2004) 90 SASR 12 ................................................. 2.220, 2.350 State Transit Authority of NSW v Seamen’s Union of Australia (NSW Branch) (1994) 53 IR 349 ........................................................................ 7.10, 7.20, 7.50 State Transport Authority v Apex Quarries [1988] VR 187 .................................... 11.80 Steele v Tardiani (1946) 72 CLR 386 ........................................................................... 10.50 Steeples v Lea [1998] Fam Law 75 ............................................................................... 4.270 Stephan v Pacesetters Cleaning Services Pty Ltd (1995) 12 NSWCCR 19 ............ 2.380 Stephens v Australian Postal Corporation [2011] FMCA 448 .............................. 13.260 Stephenson v London Joint Stock Bank (Ltd) (1903) 20 TLR 8 ................... 9.50, 9.100 Stephenson v United Road Transport Union [1977] ICR 893 .............................. 11.120 Steppes Pty Ltd v ALHMWU (1998) 86 IR 337 ....................................................... 9.190 Steri-Flow Filtration Systems (Aust) Pty Ltd v Erskine [2013] FWCFB 1943; (2013) 231 IR 121 ......................................................................................... 13.130 Sterling Commerce (Australia) Pty Ltd v Iliff [2008] FCA 702; (2008) 173 IR 378 ........................................................................................... 4.520, 5.110, 9.190 Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 ..... 2.140, 2.150, 2.240, 2.250, 2.260, 2.340, 3.200, 3.210 lxxvi

Table of Cases

Stevens v Grazcos Co-op (1962) 3 FLR 163 .............................................................. 10.30 Stevenson v Murdoch Community Services Inc [2010] FCA ............................... 13.300 Stevenson v United Road Transport Union [1977] 2 All ER 941 ........................... 8.100 Stevenson, Jordan and Harrison Ltd v McDonald and Evans [1952] 1 TLR 101 ...................................................................................................................... 2.150 Stewart v Amcor Excavations Pty Ltd [2014] FWC 1031 ........................................ 3.140 Stewart v Nickles [1999] FCA 888 ............................................................................. 13.340 Stewart v Ronalds (2009) 259 ALR 86 ........................................................................ 5.290 Stewart & Heriot v Australian Liquor, Hospitality & Miscellaneous Workers Union [2002] AIRC 474 ........................................................................... 4.530 Stilk v Myrick (1809) 2 Camp 317; 170 ER 1168 ...................................................... 4.130 Stillitano v GO Harrison (Liquidator) (unreported, Supreme Court of Victoria, Young CJ, 22 August 1989) ..................................................................... 9.310 Stocks v Magna Merchants Ltd [1973] ICR 530 ...................................................... 10.360 Stoddart v Gates (unreported, WA, Supreme Court, 18 Sept 1996) .......... 5.460, 5.470 Stoelwinder v Southern Health (2000) 97 IR 76; on appeal [2001] FCA 115 .......................................................................................... 4.200, 4.230, 5.560, 10.370 Stojanovic v Commonwealth Club Ltd (unreported, 8 December 1995, Industrial Relations Court of Australia, Moore J) ............................................. 13.340 Stoker v Adecco Gemvale Constructions Pty Ltd [2004] NSWCA 449 ............... 6.120, 6.140, 6.220 Stone v ElectraNet Pty Ltd [2005] SAIRComm 35 ...................................... 4.320, 4.480 Strachan v Liquorland (Aust) Pty Ltd (unreported, Industrial Relations Court of Australia, Moore J, 6 February 1996) ............................... 8.50, 8.90, 13.100 Stratford & Son v Lindley [1965] AC 269 ........ 14.110, 14.130, 14.140, 14.160, 14.250, 14.260, 14.270, 14.350, 14.360 Stratton v Van Driel Ltd [1998] VSC 75 ..................................................................... 6.550 Street v Derbyshire Unemployed Workers Centre [2005] ICR 97 .......................... 5.720 Streeter v Telstra Corporation [2008] AIRCFB 15; (2008) 170 IR 1 ........ 5.850, 13.160 Stringfellows Restaurants Ltd v Nadine Quashie [2012] EWCA Civ 1735 ........... 2.290 Stryke Corporation Pty Ltd v Miskovic [2007] NSWCA 72 ........................ 4.230, 4.240 Stuart-Mahoney v CFMEU (No 2) [2008] FMCA 1015 .......................... 13.270, 13.280 Stubbe v Jensen [1997] 2 VR 439 ................................................................................. 6.100 Stubbs v Holywell Railway Co (1867) LR 2 Exch 311 .............................................. 9.260 Suffolk County Council v Secretary of State for the Environment [1984] ICR 882 ......................................................................................................................... 5.40 Sullivan v Moody (2001) 207 CLR 562 ............................................................ 1.110, 5.290 Sullivan, Sullivan v Sclanders (2000) 77 SASR 419 ................................................... 5.710 Sumpter v Hedges [1898] 1 QB 673 ............................................................................ 10.40 Sunbird Plaza v Maloney (1988) 166 CLR 245 .......................................................... 8.130 Suncorp Metway Insurance Ltd v Grant [2005] QSC 320 ....................................... 2.390 Superannuation, Commissioner for v Bayley (1979) 28 ALR 293 .......................... 9.170 Suresteps v AG McGrath and Sons [2010] NSWSC 169 ......................................... 9.180 Sutherland v Hatton [2002] 2 All ER 1 ........................................................... 6.230, 6.300 Swain v Ramsey Food Packaging Pty Ltd (13 April 2000 ...................................... 13.220 Swain v West (Butchers) Ltd [1936] 3 All ER 261 .................................................... 5.840 Swan v Monash Law Book Co-operative [2013] VSC 326 ........................... 6.250, 6.290 Sweeney v Boylan Nominees (2006) 226 CLR 16 ....................................................... 6.60 Swift Placements Pty Ltd v WorkCover Authority of NSW [2000] NSWIRComm 9; (2000) 96 IR 69 ............................... 2.180, 3.60, 3.90, 3.210, 3.230 Swindells v Victoria [2015] VSC 19 .............................. 2.410, 4.230, 4.520, 5.160, 5.180 Sybron Corporation v Rochem Ltd [1984] Ch 112 ................ 5.830, 5.840, 5.850, 8.310 Sydney Ferries v Morton [2010] NSWCA 156 ........................................................... 2.410 Sykes v Dixon (1839) 9 Ad & E 693; 112 ER 1374 .................................................. 4.130 lxxvii

Macken’s Law of Employment

Syred v BGC (Australia) Pty Ltd [2004] WASC 87 ................................................... 4.510 Szatmary v Federal Storemen & Packers Union of Australia (1984) 8 IR 465 ............................................................................................................................. 14.260 Szentessy v Woo Ran Australia Pty Ltd (1986) 28 AILR 174 ................................. 4.120

T TCFUA v Bellechic Pty Ltd [1998] FCA 1465 ............................................... 9.340, 9.410 TCFUA v Givoni Pty Ltd (2002) 121 IR 250 ............................................................. 10.50 TCN Channel Nine Pty Ltd v Hayden (1989) 16 NSWLR 130 ............................ 10.100 TCN Channel Nine Pty Ltd v Northern Star Holdings Ltd (unreported, Supreme Court of New South Wales, Young JA, 31 May 1990) ....................... 11.40 TNT Australia Pty Ltd v Christie [2003] NSWCA 47; (2003) 65 NSWLR 1 ................................................................................................... 3.60, 3.170, 3.210, 3.230 TNT Australia Pty Ltd v Wills [2004] NSWCA 455 ................................................. 3.210 TNT Worldwide Express (NZ) Ltd v Cunningham (1993) 3 NZLR 681 ............. 2.170 TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd [2007] FCA 151 ............................................................................................................................... 5.680 TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3) [2007] FCA 151 ............................................................................................ 5.680, 5.690, 14.170 TSB Bank plc v Harris [2000] IRLR 157 .................................................................... 5.290 TWU v ACT Government [2013] FWC 1143 ............................................................ 4.520 TWU v BP Australia Ltd (2001) 187 ALR 697 .......................................... 13.270, 13.320 TWU v Cement Australia Pty Ltd [2015] FWC 158 .......................... 5.410, 5.420, 6.500 TWU v De Vito (2000) 140 IR 33 ............................................................... 13.240, 13.250 TWU v Qantas Airways Ltd (2012) 225 IR 13; [2012] FWAFB 6612 ................. 12.110 TWU v K&S Lake City Freighters Pty Ltd [2010] FCA 1225 ............................... 10.100 TWU, Re (1993) 50 IR 171 ............................................................................................ 4.300 Tabro Meat Pty Ltd v Heffernan (2011) 208 IR 101 .............................................. 13.220 Talbot v General Television Corp Pty Ltd [1980] VR 224 ...................................... 5.680 Talbot v NRMA (2000) 50 NSWLR 300 .................................................................... 5.380 Taleski v Virgin Australia International Airlines Pty Ltd [2013] FWC 93 .............. 5.70, 5.410 Tallerman & Co Pty Ltd v Nathan’s Merchandise (Vic) Pty Ltd (1957) 98 CLR 93 ............................................................................................................ 9.140, 9.340 Tame v New South Wales; Annetts v Australian Stations Pty Ltd (2002) 211 CLR 317 ............................................................... 5.290, 6.220, 6.230, 6.240, 6.330 Tampion v Anderson [1973] VR 321 .......................................................................... 2.410 Target Australia Pty Ltd v SDA re Target Retail Agreement [2002] AIRC 369 ............................................................................................................................... 5.500 Tarjan Construction Co Pty Ltd (in liq) and the Companies Act 1936, Re [1964] NSWR 1054 ................................................................................................... 2.380 Tarleton v M’Gawley (1794) 1 Peake 270; 170 ER 153 .......................................... 14.230 Taske v Occupational and Medical Innovations Ltd (2007) 167 IR 298 .............. 8.110, 8.120 Tasker v Shepherd (1861) 6 H & N 575; 158 ER 237 .............................................. 9.270 Tasman Capital Pty Ltd v Sinclair [2008] 75 NSWLR 1 ........................... 10.350, 10.360 Tasmania Development and Resources v Martin (2000) 97 IR 66 ......... 10.230, 13.140 Tasmanian Steamers Pty Ltd v Lang (1938) 60 CLR 111 ........................................ 5.110 Tattsbet v Morrow [2015] FCAFC 62; (2015) 249 IR 440; 233 FCR 46 ....... 2.50, 2.60, 2.210, 2.220, 2.260, 2.280, 2.290, 2.340, 2.350 Taxation, Federal Commissioner of v J Walter Thompson (Australia) Pty Ltd (1944) 69 CLR 227 ............................................................................................. 2.180 lxxviii

Table of Cases

Taxation (Cth), Commissioner of v De Luxe Red & Yellow Cabs Co-operative (Trading) Society Ltd (1998) 82 FCR 507 ..................................... 2.390 Taylor v Caldwell (1863) 3 B & S 826; 122 ER 309 ....................................... 9.240, 9.260 Taylor v Furness Withy Ltd (1969) 6 KIR 488 ........................................................ 11.150 Taylor v Gould & Ors [2011] QSC 203 ........................................................................ 6.60 Taylor v Haileybury [2013] VSC 58 ................................................................. 6.230, 6.250 Taylor v Johnson (1983) 57 ALJR 197 ........................................................................ 4.200 Taylor v Laird (1856) 1 H & N 266; 156 ER 1203 .......................................... 4.70, 10.30 Taylor v National Union of Seamen [1967] 1 WLR 532 ....................................... 11.120 Taylor v Peffer [1996] QSC 248 ................................................................................... 5.560 Technical Staff (TAA) Award 1974, Re [1978] AILR 106 ....................................... 7.110 Telfer v Berkeley Challenge Pty Ltd [2000] NSWCA 24 .......................................... 6.200 Telstra Corp Ltd v Streeter [2008] AIRCFB 15 ......................................................... 5.850 Telstra Corporation v Smith [2009] FCR 577; [2009] FCAFC 103 ........................ 6.410 Telstra Network Technology Group v Kornicki (1997) 140 IR 1 .......................... 13.50 Temperton v Russell [1893] 1 QB 715 ...................................................................... 14.110 Tempo Services Limited v Klooger (2004) 136 IR 358 ............................................ 9.190 Tenix Defence Systems Pty Ltd v Fearnley (22 May 2000 ..................................... 13.220 Termination Change and Redundancy Case (1984) 8 IR 34; 9 IR 115 ...... 9.170, 9.180, 9.190, 9.410, 12.250, 13.10 Tesco Stores v Pook [2004] IRLR 618 ........................................................................ 5.830 The Bendigo Regional Institute of Technical and Further Education, Board of v Barclay [2012] HCA 32 ...................................................................... 13.280 Theedom v British Railways Board [1976] IRLR 250 ................................................. 8.90 “The New York Star” [1981] 1 WLR 138 ................................................................... 5.490 Thickbroom v Newcastle Wallsend Coal Co Pty Ltd (1998) 83 IR 193 .................. 9.50 Thiess Pty Ltd v Industrial Court of NSW (2010) 78 NSWLR 94; [2010] NSWCA 252 ............................................................................................................... 6.520 Thomas v John Shearer Ltd (1991) 40 IR 397 ............................................................. 9.40 Thomas v Lynch (unreported, Industrial Relations Court of Australia, Wilcox CJ, 20 December 1996) ............................................................................... 9.170 Thomas v National Union of Mine Workers (South Wales) Area [1985] 2 WLR 1081 ..................................................................................... 14.110, 14.240, 14.250 Thomas v Westpac Banking Corporation (1995) 62 IR 28 ...................................... 8.290 Thomas v Williams (1834) 1 Ad & E 685; 110 ER 1369 ......................................... 9.300 Thomas A Edison Ltd v Bullock (1912) 15 CLR 679 ............................................ 14.100 Thomas Marshall (Exports) Ltd v Guinle [1979] 1 Ch 227 ......... 8.20, 8.40, 8.50, 9.80, 11.10 Thompson v ASDA-MFI Group plc [1988] 1 Ch 241 ............................................... 5.60 Thompson v IGT (Australia) Pty Ltd [2008] FCA 994; (2008) 173 IR 395 ............................................................................................................................... 5.420 Thompson v John Holland Group Pty Ltd [2012] FWA 10363 ................. 5.400, 5.850 Thompson v Woolworths (2005) 221 CLR 234 ........................................................ 3.190 Thomson v Broadley [2002] QSC 255 ........................................................................ 5.150 Thomson v Orica Australia Pty Ltd [2002] FCA 939; (2002) 116 IR 186 ............ 5.150, 8.80, 10.240, 15.110 Thomson Ecology Ltd v APEM Ltd [2013] EWHC 2875 ............. 4.400, 5.740, 5.800, 5.830, 5.840 Thorne v MTA [1937] AC 797 ..................................................................... 14.340, 14.390 Thorpe v South Australian National Football League (1974) 10 SASR 17 .......... 8.100, 9.40, 10.270, 11.110 Tibaldi Smallgoods (Australasia) Pty Ltd v Rinaldi [2008] VSC 112; (2008) 172 IR 86 .............................................................................. 4.530, 9.190, 12.350 Tillery Valley Foods v Channel 4 Television [2004] EWHC 1075 .............. 5.690, 5.720 lxxix

Macken’s Law of Employment

Tilsner v Kramer [2006] SAIRC 53 ................................................................................ 4.50 Tilson v Alstom Transport [2010] EWCA Civ 1308 ................................................. 3.110 TimePlan Education Group Ltd v National Union of Teachers [1997] IRLR 457 .................................................................................................................. 14.120 Tinning v Newcastle and Suburban Co-op Society Ltd [1942] AR (NSW) 555 ...................................................................................................................... 8.360, 9.20 Tobiassen v Reilly [2009] WASCA 26; (2009) 178 IR 213 ....................................... 6.550 Tobin v Commonwealth of Australia [2013] ACTSC 240 ....................................... 4.220 Todorovic v Waller (1981) 150 CLR 402 .................................................................. 10.240 Together Queensland, Union of Employees v The State of Queensland (Queensland Health) [2015] QIRC 57 ................................................................... 4.130 Tokoda v Westpac Banking Corporation [2012] FWA 1262 ................................... 5.850 Tokyo Network Computing Pty Ltd v Tanaka [2004] NSWCA 263 ........................ 8.20 Toll v Global Market Insite Inc [2015] FCCA 105 ...................................................... 3.50 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 .............. 4.80, 4.480 Tolra v Sanford Transport Industries Industrial Relations Court of Australia ...................................................................................................................... 5.500 Tomko v Palasty [2007] NSWCA 258 .............................................................. 4.200, 4.470 Tomlinson v London, Midland and Scottish Ry Co [1944] 1 All ER 537 ............. 8.100 Toms v Harbour City Ferries Pty Ltd (2015) 229 FCR 537 .................... 13.150, 13.160 Tooheys Pty Ltd v Blinkhorn [2008] NSWSC 499 ...................................... 9.180, 13.250 Toomey v Scolaro’s Concrete Constructions Pty Ltd (No 3) [2001] VSC 477 .................................................................................................................... 5.450, 5.460 Torquay Hotel v Cousins [1969] 1 All ER 522; 2 Ch 106 ......... 14.110, 14.130, 14.140, 14.150, 14.350, 14.370, 14.390 Total Marine Services Pty Ltd v Maritime Union of Australia (2009) 189 IR 407; [2009] FWAFB 368 ..................................................................................... 14.30 Total RISC Technology Pty Ltd v Cannings [2010] NSWSC 1124 ........................ 5.600 Tradition Australia Pty Ltd v Gunson (2006) 152 IR 395 ........................................ 11.10 Transco v O’Brien [2002] IRLR 444 ............................................................................ 5.150 Transco plc v O’Brien [2002] ICR 721 ..................................................................... 10.160 Transfield Pty Ltd v Maccarron [2004] WASCA 78 .................................................. 6.460 Transfield Pty Ltd, Re; Re Dismissal of Union Delegate [1974] AR (NSW) 596 .................................................................................................................. 8.340 Transit Australia Pty Ltd v Transport Workers Union of Australia [2011] FWA 3410 ................................................................................................................... 14.40 Transpacific Industries Pty Ltd v Whelan [2008] VSC 403 ............. 4.130, 4.250, 4.340, 5.630, 5.640, 5.660, 5.680 Travers v NSW (2001) 163 FLR 99; [2000] FCA 1565 ........................................... 15.140 Trent Latham Smith v Department of Foreign Affairs and Trade [2007] AIRC 765 .................................................................................................................... 5.770 Trevor Bechaz v Mariah Hovercraft Australia Pty Limited [2005] AIRC 252 ............................................................................................................................... 5.410 Trevor as Liquidator of Grant Electrical Industries Pty Ltd (In liq), Re (unreported, Supreme Court Western Australia, Scott J, 18 April 1995) ............................................................................................................................ 9.310 Trident Construction Pty Ltd v Australian Builders’ Labourers’ Federated Union of Workers [1984] WAR 245 .................................................. 14.200 Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 .......................................................................................................... 5.370, 5.490 Trigar v Latrobe University (1 November 2000, AIRC, Giudice P, Acton SDP, Gay C, Print T2860) ...................................................................................... 13.120 Triggs v GAB Robins (UK) Ltd [2008] 1 All ER (D) 266 ....................................... 5.150 Triplex Safety Glass Co v Scorah [1938] Ch 211 ....................................................... 5.780 lxxx

Table of Cases

True v Amalgamated Collieries of WA Ltd [1940] AC 537 ..................................... 10.50 Trussed Steel Concrete Co Ltd v Green [1946] 1 Ch 115 ....................................... 2.380 Trustees of Marlborough Girls’ College, Board of v Sutherland [1999] 2 ERNZ 611 .................................................................................................................. 8.100 Trustees of the Roman Catholic Church v Ellis [2007] NSWCA 117; (2006) 70 NSWLR 565 .................................................................................... 4.50, 4.140 Truth and Sportsman Ltd v Molesworth [1956] AR (NSW) 924 .............. 9.370, 10.350 Tucker v Pipeline Authority (1981) 3 IR 120 .................................. 8.100, 10.270, 12.310 Tullet Prebon PLC v BGC Brokers [2010] EWHC 484 ................................. 4.90, 5.740 Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852; (2008) 175 IR 414 .......... 4.330, 4.350, 4.380, 4.400, 4.420, 5.60, 5.340, 5.410, 5.600, 5.610, 5.620, 5.665, 5.690, 5.740, 8.20, 8.30, 8.40, 9.140, 10.220, 11.10, 11.40, 11.50 Tullett Prebon (Australia) Pty Ltd v Purcell [2009] NSWSC 1079 ............ 4.350, 4.400, 5.340, 5.410, 9.140, 10.110, 11.50 Tullett Prebon (Australia) Pty Ltd v Purcell [2010] NSWCA 150 .............. 4.350, 5.340, 5.410 Tullett Prebon Plc v BGC Brokers LP [2009] EWHC 819 ..................................... 5.740 Tullett Prebon PLC v BGC Brokers LP [2010] EWHC 484 .......... 4.400, 4.410, 4.420, 5.620, 5.740, 5.750, 5.760, 5.830, 5.840 Tullett Prebon plc v BGC Brokers LP [2011] EWCA Civ 131; [2011] IRLR 420 ............................................................................................... 4.30, 5.410, 5.540 Tullner v Alston (1987) 22 IR 326 ............................................................................... 8.100 Tunbridge v Linde Material Handling Pty Ltd (unreported decision No 40/97, Patch JR, 31 January 1997) .......................................................................... 4.250 Tunnel Holdings Ltd v Woolf [1976] ICR 387 .......................................................... 9.130 Tunstall v Gordon [1980] ICR 786 .............................................................................. 9.330 Tuohy v Polyfoam (Australia) Pty Ltd [2010] FWA 9112 ............................. 12.40, 13.80 Turner v Australasian Coal and Shale Employees Federation (1984) 6 FCR 177; 55 ALR 635 .......... 4.30, 4.530, 8.20, 8.40, 8.50, 8.110, 9.60, 9.150, 11.10, 11.70, 11.100, 11.110, 11.120 Turner v Mason (1845) 14 M & W 112; 153 ER 411 ............................................... 8.210 Turner v Mindar Holdings Pty Ltd (t/as JTS Ladies & Mens Hairstylists) [2011] FWA 8087 .................................................................................................... 13.120 Turner v Sawdon & Co [1901] 2 KB 653 ........................................................ 5.310, 5.320 Turner v SA (1982) 56 ALJR 839 ................................................................................. 6.140 Turner v The Kings Park Board [1997] WAIRComm 47 ........................................ 4.530 Tuttle v Buck 107 Minn 145; 119 NW 946 (1909) .................................................. 14.310 Tweed District Hospital v Miller (1948) 90 AR (NSW) 25 ........................................ 5.40 Twentieth Super Pace Nominees v TWU [2006] NSWIRComm 218 .................... 5.410 Two Lands Services Pty Ltd v Cave [2000] NSWSC 14 ............................... 5.550, 5.560 Tyco Australia Pty Ltd (t/as Wormald) v CEPU (Qld Division branch) [2011] FWAFB 1598 ................................................................................................. 14.40

U UBS Wealth Management (UK) Ltd v Vestra Wealth [2008] EWHC 1974 ......... 5.740, 5.840 UGL Rail Services Pty Ltd v Janik [2014] NSWCA 436; (2014) 246 IR 320 .............................................................................. 4.120, 4.520, 9.170, 9.380, 10.170 Ulan Coal Mines Ltd v Honeysett (2010) 199 IR 363 ............................................ 13.140 Underdown v Dowford Investments Pty Ltd [2004] WAIRComm 12996 ........... 4.530 Unident Ltd v Delong (1982) 131 DLR (3d) 223 .................................................... 14.110 Uniflex (Australia) Pty Ltd v Hanneybel [2001] WASC 138 .................................... 5.720 lxxxi

Macken’s Law of Employment

Unilever Australia Limited v Pahi; Swire Cold Storage Pty Limited v Pahi [2010] NSWCA 149 ....................................................................................... 3.200, 3.210 Unilever plc v Chefaro Proprietaries Ltd [1994] FSR 135 ....................................... 14.80 Union Traffic Ltd v Transport & General Workers’ Union [1989] IRLR 127 ............................................................................................................... 14.130, 14.140 United Bank v Akhtar [1989] IRLR 507 ............ 4.560, 5.150, 5.240, 5.500, 8.90, 8.210, 9.340, 9.360 United Firefighters’ Union of Australia v Metropolitan Brigades Board (1998) 86 IR 340 .............................................................................................. 5.70, 5.110 United Firefighters’ Union of Australia v Metropolitan Fire and Emergency Services Board (2003) 123 IR 86 ........................... 9.180, 13.250, 13.280 United Firefighters’ Union of Australia v Metropolitan Fire & Emergency Services Board [2010] FWAFB 3009 ................................................ 12.80 United Firefighters Union of Australia v Easy [2013] FCA 763 ....... 5.70, 5.260, 5.410 United Telecasters v Hardy (1991) 23 NSWLR 323 ............................................... 14.390 United Voice Low-paid Authorisation, Re [2011] FWAFB 2633 .......................... 12.110 Universal Thermosensors Ltd v Hibben [1992] 3 All ER 257 .............................. 10.120 Universe Tankships Inc of Monrovia v International Transport Workers Federation [1983] AC 366 .......................................................................... 4.250, 14.390 University of Western Australia v Gray (No 20) [2008] FCA 498 .............. 4.240, 4.480 University of Western Australia v Gray [2009] FCAFC 116; (2009) 179 FCR 346 ........... 4.240, 4.480, 4.510, 4.520, 4.550, 5.550, 5.660, 5.570, 5.680, 5.690, 5.780, 5.790 University of Western Australia v Gray [2010] HCA Trans 11 ................... 4.480, 4.510 University of Wollongong v Metwally (1984) 158 CLR 447 ................................... 15.30 University of Wollongong v NTIEU [2002] FCA 360 ........................................... 10.190 Unsworth v Tristar Steering and Suspension Australia Limited [2008] FCA 1224; (2008) 175 IR 320 .............................. 5.330, 5.340, 13.30, 13.280, 13.300 Ur-Rahman v Ahmad [2013] ICR 28 ........................................................... 10.280, 10.320 Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118 ...................................... 10.90 Urquhart v Automated Meter Reading Services (Australia) Pty Ltd (2008) 172 FCR 73 .................................................................................................. 12.100 Utah Development Co v Seaman’s Union of Australia (1977) 1 ATPR ¶40-049 .......................................................................................................... 14.50, 14.160

V V-Flow Pty Ltd v Holyoake Industries (Vic) Pty Ltd [2013] FCAFC 16 ............... 5.560 VMT v Corporation of the Synod of the Diocese of Brisbane [2007] QSC 219 .......................................................................................................... 5.280, 5.290 Vabu v Federal Commissioner of Taxation (1996) 33 ATR 537 ............................ 2.360 Vacik Distributors Pty Ltd v Kelly (1995) 12 NSWCCR 30 .................................... 2.260 Vakante v Addey & Stanhope School [2004] 4 All ER 2004 ....................... 4.320, 4.330 Valantine v Technical and Further Education Commission [2007] NSWCA 208 ............................................................................................................... 5.850 Vallette v GrainCorp Operations Ltd (8 March 2001, AIRC, Marsh SDP, Harrison SDP and Cargill C, Print PR902074) ......................... 8.280, 13.160, 13.220 Van Camp Chocolates v Aulsebrooks Ltd [1984] 1 NZLR 354 ............. 14.350, 14.390 Van Efferen v CMA Corp Ltd [2009] FCA 597; (2009) 183 IR 319 ......... 5.270, 10.50, 10.180, 10.190, 10.210, 10.230, 10.280, 10.310 Various Claimants v Institute of the Brothers of the Christian Schools [2012] UKSC 56; [2013] 2 AC 1 ................................................. 2.60, 3.250, 4.50, 6.60 Vdoukakis v DJ Cussen Pty Ltd (AIRC .................................................................... 13.220 Veal v Sundance Marine Pty Ltd [2013] FWCFB 8960; (2013) 238 IR 55 ............ 13.50 lxxxii

Table of Cases

Venables v Hornby [2003] UKHL 65 .......................................................................... 2.380 Venning v Wormald (Australia) Pty Ltd (1991) 41 IR 85 ......................................... 8.300 Vergara v Ewin [2014] FCAFC 100; (2014) 223 FCR 151 ......................... 10.90, 15.200 Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2006] ICR 327 ............................................................................................................. 2.60, 3.250 Vickers v Ambulance Service of NSW [2006] FMCA 1232 ................................. 15.180 Vickery v Assetta [2004] FCA 555 ............................................................................. 13.340 Victoria v CPSU [2011] FWA 9245 ............................................................................. 14.40 Victoria v Commonwealth (1996) 187 CLR 416 ...................... 1.20, 9.210, 12.20, 13.10 Victoria v Grant [2014] FCAFC 184 ........................................................... 13.300, 15.270 Victoria University of Technology v Wilson [2004] VSC 33; (2004) 60 IPR 392 ........................................................................ 4.480, 5.550, 5.560, 5.780, 5.790 Victorian Hospitals’ Industrial Association v Australian Nursing Federation [2011] FWAFB 8165 ............................................................................. 14.40 Victoria WorkCover Authority v Carrier Air Conditioning Pty Ltd [2006] VSCA 63 ..................................................................................................................... 3.210 Victorian WorkCover Authority v Centro Property Management (Vic) Pty Ltd [2013] VSC 587 ................................................................................ 3.170, 3.210 Victorian WorkCover Authority v Direxa Engineering Australia Pty Ltd (No 1) [2013] VCC 1039 .......................................................................................... 3.210 Victorian WorkCover Authority v Game [2007] VSCA 86; (2007) 16 VR 393 ............................................................................................ 2.220, 2.260, 2.420, 3.110 Vijioca v TNT Australia Pty Ltd [2014] FWC 4790 .................................................. 5.800 Vincent v Woolworths Ltd [2016] NSWCA 40 .............................................. 6.150, 6.180 Vine v National Dock Labour Board [1957] AC 488 ............................... 11.110, 11.120 Visiting Medical Officers Assoc v Australian Industrial Relations Commission (2006) 153 IR 228 .............................................................................. 4.200 Visscher v AIRC [2007] FCAFC 206 ........................................................................ 10.190 Visscher v BHP Petroleum Pty Ltd [2002] NSWSC 65 ........................................... 4.130 Visscher v Giudice (2009) 239 CLR 361 ............... 8.30, 8.40, 8.50, 9.60, 11.60, 12.350, 13.100, 13.110 Vista Paper Products, Re (1993) 67 ALJR 604 ........................................................... 13.10 Visy Board v WorkCover [2011] SAWLRP 1 ............................................................. 5.800 Visy Board Pty Ltd v AFMEP & KIU (1999) 91 IR 88 ......................................... 14.100 Vodafone Pacific Ltd v Mobile Innovations Ltd [2004] NSWCA 15 ......... 4.540, 5.180 Volkswagen Canada Ltd v Spicer (1978) 91 DLR (3d) 42 ..................................... 14.390 Volunteer Eco Students Abroad Pty Ltd v Reach Out Volunteers Pty Ltd [2013] FCA 731; (2013) 102 IPR 161 ...................................... 4.100, 5.600, 5.680 Voros v Dick (2013) 237 IR 248; [2013] FWCFB 9339 ................................ 2.180, 2.390

W WA Fork Truck Distributors Pty Ltd v Jones [2003] WASC 102 .... 5.550, 5.600, 5.840 WD and HO Wills Ltd v Jamieson [1957] AR (NSW) 547 ..................................... 8.320 WT Partnership (Aust) Pty Ltd v Sheldrick [1999] FCA 843; (1999) 96 IR 202 ............................... 4.230, 4.240, 8.250, 9.150, 10.220, 10.270, 10.330, 10.340 WV Management Pty Ltd v Norvic Food Processing Pty Ltd [2009] VSC 570 ............................................................................................... 3.170, 3.180, 6.150 Waddell v Mathematics.com.au Pty Ltd [2013] NSWSC 142 ............. 8.100, 9.30, 9.230 Wade v Victoria [1999] 1 VR 121 ................................................................................. 5.290 Wales & Wales v Nycon Protective Services [2005] NSWIRComm 1082 ............ 2.190, 3.250, 4.200 Walker v Andrew (2002) 116 IR 380 ......................................................................... 10.170 lxxxiii

Macken’s Law of Employment

Walker v Citigroup Global Markets Pty Ltd & Anor [2005] FCA 1678; (2005) 226 ALR 114 ........... 4.230, 4.240, 5.180, 5.300, 8.10, 10.100, 10.320, 10.340 Walker v Hirsch (1884) 27 Ch D 460 .......................................................................... 2.420 Walker v Industrial Court of New South Wales (1994) 53 IR 121 ......................... 9.190 Walker v Josiah Wedgewood & Sons [1978] ICR 744 ................................................. 8.90 Walker v Northumberland CC [1995] IRLR 35; [1995] ICR 702 .................. 5.150, 8.90 Walker v Salomon Smith Barney Securities Pty Ltd [2003] FCA 1099; (2003) 140 IR 433 ............................................................................ 4.230, 4.240, 10.370 Walker v Zurich Australian Insurance Ltd [2001] QCA 296 ..................... 9.210, 13.120 Walker Ltd v Casey [1989] FCA 409 ............................................................................ 5.110 Wall v Westcott (1982) 1 IR 252 ................................................................................... 8.290 Wallace v United Grain Growers Ltd [1997] 3 SCR 701 ............................ 9.150, 10.330 Wallace Constructions Specialties Ltd v Manson Insulation Inc (1993) 106 DLR (4th) 169 .................................................................................................. 14.330 Wallis v Day (1837) 2 M & W 273; 150 ER 759 ........................................................ 4.330 Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 ............ 4.420, 4.430, 5.630, 5.640 Wallwork v Fielding [1922] 2 KB 66 .............................................................................. 7.40 Walsh v Commercial Travellers’ Association of Victoria [1940] VLR 259 ........... 4.210 Walsh v Greater Metropolitan Cemetery Trust [2014] FCA 456 ............................ 5.730 Walsh v The Police Association (2000) 140 IR 58 ..... 9.240, 9.290, 11.10, 11.70, 11.80 Walters & Tamworth Aboriginal Respite Care Committee Inc [2006] NSWIRComm 1004 .................................................................................................. 5.770 Walton v Mermaid [1996] 142 ALR 681 ................................................................... 13.160 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 .................... 4.120, 9.410 Wandsworth LBC v D’Silva [1998] IRLR 193 ........................................................... 4.490 Wannberg v Alloa Holdings Pty Ltd t/as Energy Publications (unreported, 31 July 1996, Industrial Relations Court of Australia, Ritter JR) ................................................................................................................... 13.340 Wanneroo, City of v AMAC and S Union [2006] FCA 813 .................................. 12.120 Wanneroo, City of v Holmes (1989) 30 IR 362 ....................................................... 12.120 Warburton v Taff Vale Railway (1902) 18 TLR 420 ................................................... 7.30 Wardle v Hamersley Iron Pty Ltd 2013 FWC 1812 .................................................. 6.580 Ware & De Freville v MTA [1921] 3 KB 40 ............................................... 14.320, 14.390 Wark v Melbourne City Toyota (20 May 1999 ......................................................... 13.210 Warman International Ltd v Dwyer (1995) 182 CLR 544 ................ 5.540, 5.550, 5.810 Warner Bros Pictures Inc v Nelson [1937] 1 KB 209 ................................... 11.20, 11.40 Warramunda Village Inc v Pryde [2002] FCAFC 58; (2002) 116 FCR 58 ............... 5.40 Warren v Mendy [1989] 3 All ER 103; [1989] 1 WLR 853 ...................................... 11.40 Water and Sewerage Employees Union (NSW), Application by [1976] 18 AILR 187 .................................................................................................................... 9.380 Waters v Public Transport Corporation (1991) 173 CLR 349 ................ 15.100, 15.130, 15.160 Waterside Workers Awards, Re (1957) 1 FLR 119 ..................................................... 10.30 Waterson v Mortgage Acceptance Corporation Ltd (unreported, Supreme Court of New South Wales, Priestley JA, 23 June 1993) ..................... 9.40 Watiyawanu Community Government Council v Jones (30 June 2000 ................. 13.80 Watts v Australian Postal Corporation [2014] FCA 370 ........................................ 15.170 Watts v Rake (1960) 108 CLR 158 ............................................................................. 10.350 Weddall v Barchester; Wallbank v Wallbank Designs [2012] EWCA Civ 25 .................................................................................................................................... 6.60 Weiss v Barker Gosling (1993) 16 Fam LR 728 ........................................................... 4.90 Welbourn v Australian Postal Commission [1984] VR 257 ......... 5.70, 5.80, 7.20, 7.30, 7.50, 8.260, 10.140 lxxxiv

Table of Cases

Weld-Blundell v Stephens [1920] AC 956 ................................................................... 5.720 Weldon & Co v Harbison [2000] NSWSC 272 .................................. 5.550, 5.560, 5.600 Wesfarmers Dalgety Ltd v Williams [2005] WASC 287 .................... 4.210, 4.520, 5.460 Wesoky v Village Cinemas International Pty Ltd [2001] FCA 32 ............ 5.330, 10.140, 10.220 Wessex Dairies v Smith [1935] 2 KB 80 ..................................................................... 5.600 West v Kneels Ltd [1987] ICR 146 ................................................................................ 9.50 West v Steggles Ltd (11 May 2000 ............................................................................. 13.220 West Midlands Cooperative Society Ltd v Tipton [1986] 2 WLR 306 ................... 8.100 Westbridge Foods Ltd v Radovitz [2005] EWHC 3249 ........................................... 5.800 Westen v Union des Assurances de Paris (1996) 88 IR 259 ................ 8.90, 9.30, 9.370, 13.120 Western Australian Government Railways v ARU (WA) (1981) 23 AILR 238 ............................................................................................................................. 10.120 Western Excavating (ECC) Ltd v Sharp [1978] ICR 221 ...................... 5.150, 8.80, 8.90 Westfield Holdings v Adams (2001) 114 IR 241 ..................................................... 10.360 Westfield Limited v Helprin (1998) 82 IR 411 ......................................................... 10.150 Westpac Banking Corp v Robinson (1993) 30 NSWLR 668 ................................... 4.280 Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 .... 4.220, 4.230, 4.480, 4.490, 4.520, 4.530, 4.540, 5.230, 5.250, 5.300, 5.510, 8.30, 8.40, 9.20, 9.30, 9.40, 9.50, 9.180, 9.340, 9.350, 9.370, 9.380, 10.160, 10.170 Westrupp v BIS Industries Ltd [2015] FCAFC 173 .................................................... 6.30 Wheeler v Philip Morris (1989) 97 ALR 282; 32 IR 323 ........... 10.240, 10.340, 12.320, 13.150 Wheeler v QualityDeep Ltd [2005] ICR 265 .............................................................. 4.330 Whelan v Waitaki Meats Ltd [1991] 2 NZLR 74 ....................................... 10.330, 10.370 White v Australian and New Zealand Theatres Ltd (1943) 67 CLR 266 .............. 5.320 White v Reflecting Road Studs [1991] IRLR 331; [1991] ICR 733 ............. 5.500, 9.340 Whitfield v De Lauret & Co Ltd (1920) 29 CLR 71 ................................................. 10.90 Whitlam v Insurance Australia Group Ltd [2005] NSWSC 83 ............................... 2.380 Whitlam v NRMA [2007] HCATrans 484 .................................................................. 5.370 Whitling v South Pacific Tyres (12 April 2001 ......................................................... 13.190 Whitlow v Alkanet Construction [1975] IRLR 321 .................................................. 8.290 Whittacker v Delmina Pty Ltd [1998] VSC 175 ............................................. 6.380, 6.520 Whittaker v Child Support Registrar [2009] FCA 188 ............................................ 14.120 Whittaker v Unisys Australia Pty Ltd [2010] VSC 9; (2010) 26 VR 668 ..... 4.70, 4.480, 4.490, 4.530, 5.510, 8.20, 8.30, 9.170, 9.180, 9.190, 9.370, 10.140, 10.350, 12.240 Whitwood Chemical Co v Hardman [1891] 2 Ch 416 ...................... 11.10, 11.20, 11.30 Wilden Pty Ltd v Green [2009] WASCA 38 ............................................................... 5.830 Wilding v British Telecommunications plc [2002] ICR 1079 ................................ 10.350 Wilkie v National Storage Operations Pty Ltd [2013] FCCA 1056 ........................ 5.500 Wilkinson v Downton [1897] 2 QB 57 ....................................................................... 6.290 Willett v Victoria [2013] VSCA 76 ............................................................................. 13.370 Willey v Synan (1937) 57 CLR 200 .............................................................................. 5.820 William Fitzpatrick v Mt Arthur Coal Pty Ltd [2015] FWC 2343 ........................ 13.210 William H Parsons v The Sovereign Bank of Canada [1913] AC 160 ................... 9.320 William Hill v Tucker [1999] ICR 291 ............ 4.400, 5.60, 5.320, 5.330, 10.140, 10.220 Williams v AFMEPKIU (2009) 178 IR 458 ............................................................. 13.270 Williams v Hursey (1959) 103 CLR 30 ............................ 14.110, 14.140, 14.340, 14.400 Williams v MacMahon Mining Services Pty Ltd [2010] FCA 1321 .......................... 2.90 Williams v North’s Navigation Collieries (1889) Ltd [1904] 2 KB 44 ................ 10.120, 11.110 Williams v Printers Trade Services (1984) 7 IR 82 .................................................... 8.180 lxxxv

Macken’s Law of Employment

Williamson v Paul and Kalamboyas (t/as Century 21 Eden Estates) [2002] SAIRC 43 .......................................................................................................... 4.50 Willis v Gibson; Capital Radiology Pty Ltd (t/a Capital Radiology; Carroll) [2015] FWC 1131 ..................................................................................... 13.390 Willis v Health Communications Network Ltd [2007] NSWCA 313; (2007) 167 IR 425 ................................................................... 4.510, 4.520, 9.180, 9.190 Willis Australia Group Services Pty Ltd v Mitchell-Innes [2015] NSWCA 381 .................................................................................................................. 8.280, 10.100 Willmott v Woolworths Ltd [2014] QCAT 601 ............................................... 4.10, 5.400 Willow Fashions (Australia) Pty Ltd (In liq), Re (unreported, Hayne J, 27/4/1995, SC Vic) ..................................................................................................... 3.50 Wilson v Darling Island Stevedoring Co (1956) 95 CLR 43 .................................... 5.490 Wilson v Ferguson [2015] WASC 15 ........................................................................... 5.680 Wilson v Racher [1974] ICR 428 .......................................................... 8.240, 8.270, 8.370 Wilson v Tyneside Window Cleaning [1958] 2 QB 110 ................................ 6.160, 6.180 Wilsons and Clyde Coal Co Ltd v English [1938] AC 57 ................... 6.50, 6.150, 6.160 Wilton & Cumberland v Coal & Allied Operations Pty Ltd [2007] FCA 725; (2007) 161 FCR 300 .................................................................... 3.90, 3.110, 4.110 Wiluszynski v London Borough of Tower Hamlets [1988] IRLR 154 ...... 5.70, 10.120 Wimmera College of TAFE v Hogan (unreported, Employee Relations Commission of Victoria, E94/0186, 12 August 1994) ....................................... 9.210 Windross v Transact Communications Pty Ltd [2002] FMCA 145 .......................... 9.30 Windsor Smith v Liu (1998) 140 IR 398 ................................................................... 13.150 Winter v Australian National Hotels Ltd (1995) 60 IR 316 ........................... 8.90, 8.260 Wise Group v Mitchell [2005] ICR 896 ........................................ 10.100, 10.210, 10.240 Wiseman v Professional Radio & Electronics Institute of Australia (1979) 35 FLR 24 .................................................................................................... 12.330 Wishart v National Association of Citizens’ Advice Bureau [1990] ICR 794 ...................................................................................................................... 4.70, 11.70 Witham v Holloway (1995) 183 CLR 525 ................................................................. 14.100 Withers v General Theatre Corp Ltd [1933] 2 KB 536 .......................................... 10.200 Withers v Perry Chain [1961] 1 WLR 1314 .................................................... 6.140, 6.220 Withyman v New South Wales [2013] NSWCA 10 ..................................................... 6.60 Wodrow v Commonwealth (1993) 45 FCR 52 ........................................................ 10.370 Wolters v The University of the Sunshine Coast [2013] QCA 228 ........................ 6.260 Wolters v University of the Sunshine Coast [2013] QCA 228 .................... 6.230, 6.240 Wood v Bayfield Newport Hotel Pty Ltd (unreported, Industrial Relations Court of Australia, Moore J, 13 March 1997) ..................................... 9.380 Wood v District Council of Crystal Brook (1992) 42 IR 189 ............................... 10.360 Woodham v Roberts Ltd [2010] TASSC 31 ............................................................... 4.330 Woodhouse v ADA Manufacturing Co Ltd [1954] SASR 263 .............................. 10.160 Woodman v Hoyts Corporation Pty Ltd (2001) 107 IR 172 .......... 8.300, 8.320, 13.160 Woods v Durable Suites Ltd [1953] 1 WLR 857 ....................................................... 6.120 Woods v W M Car Services (Peterborough) Ltd [1981] ICR 666; [1982] ICR 693 ................................................................... 5.140, 5.150, 5.160, 8.20, 8.80, 8.90 Woodward v Hutchins [1977] 1 WLR 760 ................................................................. 5.720 Woolley v Dunford (1972) 3 SASR 243 ........................................ 14.110, 14.130, 14.140 Woolworths (SA) Pty Ltd v Russian (1996) 66 IR 13 ................................................. 8.90 Woolworths Ltd v Brown (2005) 145 IR 285 .......................................................... 13.160 Woolworths Ltd v Olson [2004] NSWCA 372 ................................... 4.420, 4.430, 5.640 Woolworths Ltd v Perrins [2015] QCA 207 ................................................... 6.230, 6.240 Woolworths Ltd t/as Produce and Recycling Distribution Centre, Re (2010) 192 IR 124; [2010] FWAFB 1464 ............................................................... 12.90 lxxxvi

Table of Cases

WorkCover Authority (NSW) v NSW Police Service (No 2) (2001) 104 IR 268 .......................................................................................................................... 6.490 WorkCover Authority (NSW) (Inspector Green) v Big River Timbers Pty Ltd [2006] NSWIRComm 279; (2006) 156 IR 341 .............................................. 6.450 WorkCover Authority (NSW) (Inspector Howard) v Baulderstone Hornibrook Pty Ltd [2009] NSWIRComm 92; (2009) 186 IR 125 .................. 6.680 WorkCover Authority (NSW) (Inspector Maddaford) v Coleman (2004) 138 IR 21 .................................................................................................................. 13.370 WorkCover Authority of NSW v Techniskil-Namutoni Pty Ltd [1995] NSWIRComm 282; [1995] NSWIRC 127 ................................................. 6.380, 6.410 WorkCover Authority of NSW (Inspector Ankucic) v Drake Personnel Ltd (t/as Drake Industrial) [2000] NSWIRComm 1134 ..................................... 3.210 WorkCover Authority of NSW (Inspector Callaghan) v Rowson [1994] NSWIRComm 199 .................................................................................................... 6.550 WorkCover Authority of NSW (Inspector Campbell) v James Gordon Hitchcock [2004] NSWIRComm 87 ...................................................................... 6.410 WorkCover Authority of NSW (Inspector Gordon) v Gregory Ronald Wallis (Full Court, Industrial Court NSW, unreported, matter no CT 1011 of 1995, 14 August 1996, Fisher P, Glynn and Hill JJ) ............................. 6.580 WorkCover Authority of NSW (Inspector Page) v Woolworths Ltd [1994] NSWIRComm 207 ........................................................................................ 6.550 WorkCover Authority of NSW (Inspector Robinson) v Milltech Pty Ltd [2001] NSWIRC 51 ................................................................................................... 6.490 WorkCover Authority of NSW (Inspector Wilson) v Chubb Security Australia Pty Ltd [2005] NSWIRComm 263 ........................................................ 6.410 Workcover Corp (San Remo Macaroni Co) v Da Ping (1993) 5 WCATR 367 SC SA ................................................................................................................... 4.320 Workpac Pty Ltd v Steel Cap Recruitment Pty Ltd [2008] WASC 238; (2008) 176 IR 464 ...................................................................................................... 4.430 Wormleaton v Thomas & Coffey Ltd (No 4) [2015] NSWSC 260 .......................... 6.50 Wribass Pty Ltd v Swallow (1979) 38 FLR 92 .............................................. 14.50, 14.160 Wright v Cheadle Hume Pty Ltd t/as Macedon Spa [2010] FWA 675 ................ 13.220 Wright v Gasweld (1991) 22 NSWLR 317 .................................................................. 5.690 Wright v Gasweld, Pty Ltd (1991) 22 NSWLR 317 .................................................. 5.660 Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317 .... 4.430, 5.610, 5.640, 5.680, 5.690 Wright v Optus Administration Pty LTd [2015] NSWSC 160 ................................ 3.210 Wright v Ramsey Food Packaging No 2 Pty Ltd [2007] AIRC 606 ..................... 13.220 Wright v TNT Australia Ltd (1989) 85 ALR 442 ...................................................... 4.230 Wurth, Ex parte; Re Flanagan (1957) 58 SR (NSW) 51 .............................................. 9.50 Wyatt v Kreglinger [1933] 1 KB 793 ........................................................................... 4.310 Wylie v ANI Corp Ltd [2000] QCA 314 ............................................. 5.440, 5.460, 6.100 Wynns Winegrowers Pty Ltd v Foster (1986) 16 IR 381 .......................................... 9.190 Wyong Shire Council v Shirt (1980) 146 CLR 40 ...................................................... 6.140

X X v Commonwealth (1999) 200 CLR 177 ...................................... 5.440, 13.290, 15.180 X v Y [1988] 2 All ER 648 .............................................................................. 5.680, 14.200

Y Yango Pastoral Co Pty Ltd v First Chicago Australia Pty Ltd (1978) 139 CLR 410 ...................................................................................................................... 4.320 lxxxvii

Macken’s Law of Employment

Yaraka Holdings Pty Ltd v Giljevic [2006] ACTA 6; (2006) 149 IR 339 .... 2.90, 2.120, 2.230, 2.250, 2.290, 2.310, 2.320, 2.330, 2.420 Yeda Research and Development Co Ltd v Rhône-Poulenc Rorer International Holdings Inc [2008] 1 All ER 425 .................................................. 5.780 Yellow Cabs of Australia Ltd v Colgan [1930] AR (NSW) 137 .............................. 2.390 Yetton v Eastwoods Froy Ltd [1967] 1 WLR 104 ................................................... 10.350 Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201 ............................... 8.320, 13.160 Yong Fu Zhang v Mei Hu t/as Edern Furniture and WorkCover Authority of NSW [2006] NSWWCCPD 15 ........................................................ 4.320 Young v Tasmanian Contracting Services Pty Ltd [2012] TASFC 1 .......... 3.100, 3.110 Yousif v Commonwealth Bank of Australia (2010) 193 IR 212 ...... 4.70, 4.480, 4.490, 5.400, 9.160

Z Zacka, Louise T Landlord v Brown, Nicole, Rennie, June &, and Fellowes, Donny Tenant [1998] NSWRT 136 ...................................................... 4.180 Zafiriou v Saint-Gobain Administration Pty Ltd [2014] VSCA 331 ......... 4.480, 4.490, 9.160 Zappia v Universal Music Australia Pty Ltd [2012] FWAFB 6108; (2012) 225 IR 122 ...................................................................................................... 12.40, 13.80 Zhang v Royal Australian Chemical Institute (2005) 144 FCR 347 ..................... 13.340 Zheng v Cai [2009] HCA 52 ........................................................................................... 4.50 Zhu v Treasurer of NSW (2004) 218 CLR 530 ........................... 14.120, 14.190, 14.210 Zinc Corp Ltd v Hirsch [1916] 1 KB 541 ..................................................................... 7.40 Zoltaszek v Downer EDI Engineering Pty Ltd (No 2) [2010] FMCA 938 .......... 2.360 Zomojo Pty Ltd v Hurd (No 2) [2012] FCA 1458 ........................................ 5.550, 5.560 Zoneff v Elcom Credit Union Ltd (1990) 94 ALR 445 ......................................... 10.370 Zubrinich v Pasminco Metals – BHAS Pty Ltd (1994) 61 SAIR 154 ...................... 8.90 Zuellig v Pulver [2000] NSWSC 7 .................................................................................. 9.40 Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 561 ................................... 2.30, 2.140, 2.220 Zurich Australian Insurance Ltd v Amec Services Pty Ltd [1998] WASCA 68 ................................................................................................................. 2.420

lxxxviii

Table of Statutes Commonwealth

s 46PO(4): 15.230 s 46PP: 15.220 s 46PR: 15.220 s 46PW: 12.70, 12.150, 15.290 s 49: 15.220 s 140: 15.220 Pt IIB, Div 1: 15.220

Acts Interpretation Act 1901 s 3: 15.270 s 13: 15.270 s 15AA: 15.270

Age Discrimination Act 2004: 15.30, 15.140

Australian Human Rights Commission Regulations 1989

s 3(a): 15.10 s 5: 2.50 s 15(2): 15.120, 15.160 s 16: 15.100 s 18: 15.50 s 18(4): 15.180 ss 18 to 25: 2.50 s 25: 15.70 s 39: 15.190 s 39(8): 15.190 ss 44 to 47: 15.190

reg 4(a)(iii): 4.210

Building and Construction Industry Improvement Act 2005 s 43: 13.290 s 44: 13.270 s 45: 13.290

Carer Recognition Act 2010 s 5: 12.170

Civil Aviation Safety Regulations 1998

Agency Workers Regulations 2010: 3.260

reg 99.015: 4.90

Australian Constitution s 51(i): 12.20, 13.10, 13.230 s 51(xx): 1.20, 12.20, 13.10, 13.230, 13.380 s 51(xxix): 1.20, 13.10 s 51(xxxi): 12.350 s 51(xxxv): 1.20, 12.20, 13.10, 13.230 s 51(xxxvii): 1.20 s 52: 13.230 s 52(i): 13.380 s 122: 12.20, 13.230

Commonwealth Conciliation and Arbitration Act 1904 s 9(1): 15.310

Competition and Consumer Act 2010: 4.290, 5.380, 6.90, 14.10, 14.50, 14.110, 14.390

Australian Federal Police Act 1979 s 23: 2.410 s 24: 2.410 s 25: 2.410 s 64B: 2.410

Australian Human Rights Commission Act 1986: 15.30, 15.290 s 46P(1): 15.220 s 46PF: 15.220 s 46PH(1): 15.220 s 46PJ: 15.220 s 46PL: 15.220 s 46PM: 15.220 s 46PN: 15.220 s 46PO(2): 15.220 lxxxix

s 4: 4.300 ss 45D to 45E: 14.160 ss 45D to 45EB: 14.10, 14.50 s 45E: 14.280 s 45DB: 14.50 s 45DD(3): 14.50 s 51(2): 4.340 s 76: 5.380 s 77A: 5.380 ss 77A to 77C: 5.380 s 77B: 5.380 s 82: 10.370 s 87: 4.290 s 137C: 6.90 Pt VIB: 10.370 Sch 2, Australian Consumer Law: 1.50, 4.210, 4.230, 4.290, 14.400 s 18: 14.400 s 4: 4.240

Macken’s Law of Employment

ss 200AA to 200J: 1.60 s 201B: 6.590 s 201J: 2.380 s 203C: 2.380 s 203D: 2.380 s 206J: 1.60 s 212: 5.380 s 405: 11.90 s 558(1): 9.310 s 558(2): 9.310, 9.320 s 1317E: 1.70, 10.120 s 1317G: 1.70, 5.380 s 1317H: 1.70, 5.380, 10.120 s 1317H(1)(2): 5.580 s 1317J: 10.120 ss 1317AA to 1317AE: 5.730 Pt 2D.1: 10.120 Pt 5.3A: 9.320

Competition and Consumer Act 2010 — cont

s 18: 4.230, 4.240, 4.280, 4.530, 5.300, 5.470, 5.720, 5.830, 6.90, 6.100, 10.370 s 19: 6.90 s 20: 4.290, 4.300 s 21: 4.250, 4.290, 4.300 s 22: 4.250, 4.290, 4.300 s 22(2)(a): 4.300 s 22(2)(d): 4.300 s 22(2)(l): 4.300 s 22(3)(e): 4.300 s 22(3)(f): 4.300 ss 29 to 38: 6.90 s 31: 4.230, 4.240, 4.280, 10.370 s 51AA: 4.290 Pt VIB: 6.90

Conciliation and Arbitration Act 1904: 1.20, 13.30

Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011: 1.60

s 4: 2.30 s 61(d): 12.100 s 144: 11.70

Copyright Act 1968: 5.650 s 35(6): 5.780

Corporations Amendment (Improving Accountability on Termination Payments) Act 2009: 1.60

Corporations Act 2001: 1.50, 1.60, 1.70, 2.380, 4.150, 5.560, 5.570, 5.580, 5.730 s 4: 6.590 s 9: 1.70, 2.380, 2.410, 5.580, 6.590 s 27(2): 1.20 s 50AAA: 12.100, 13.70 s 79: 5.580 s 124: 4.150 s 125: 4.150 s 128: 4.150 s 131: 4.150 s 180: 1.70 s 181: 1.70 s 181(1): 5.580 s 182: 1.70, 5.580 s 182(1): 5.580 s 183: 1.70, 5.580, 5.650 s 183(1): 5.540, 5.580 s 185: 5.580 s 198A(1): 2.380 s 198D: 2.380 s 199A: 5.380 s 199A(3): 5.380 ss 199A to 199C: 1.60 s 199B(1): 5.380 ss 200A to 200J: 2.380 s 200E: 2.380 s 200F(2): 2.380 s 200G: 1.60 s 200G(1)(b): 2.380 s 200J: 1.60 s 200AA: 1.60

Crimes Act 1900 s 319: 14.400

Crimes Act 1914 s 4AA: 10.50, 13.310, 13.410 s 70: 5.650

Criminal Code Act 1995 s 271.1A: 4.320 s 474.17: 6.270 Divs 139 to 142: 5.810 Div 270: 4.330 Div 271: 4.330

Defamation Act 2005 s 18: 5.290 s 25: 5.290, 5.770 s 30: 5.290 s 30(3): 5.290 s 30(3)(d): 5.290 s 30(3)(g): 5.290 s 30(3)(h): 5.290 s 30(3)(i): 5.290 s 30(4): 5.290 Pt 4, Div 3: 5.290

Designs Act 2003 s 13: 5.780

Disability Discrimination Act 1992: xc

Table of Statutes

15.10, 15.30, 15.190, 15.250, 15.260, 15.280, 15.290, 15.300, 15.310

Disability Discrimination Act 1992 — cont

15.30, 15.50, 15.90, 15.140, 15.170, 15.180, 15.200, 15.310

s 3(e): 13.230 s 6(1): 1.20 s 10(1)(2): 2.110 s 11: 2.50 s 12: 2.90, 2.410, 4.50, 6.600, 10.50, 12.60, 12.70, 12.100, 12.300, 13.120, 13.240, 13.260, 13.380 s 13: 4.50, 13.60 s 14: 12.20 s 14(2)(a)(ii): 12.20 s 15(1)(b): 4.50 s 18: 13.360 s 19: 5.70, 5.410, 7.30, 8.260, 14.30 s 19(1): 5.120, 5.420, 14.70 s 19(1)(d): 14.30 s 19(2): 5.120, 6.600, 14.70 s 19(2)(c): 5.410, 14.30 s 22: 9.330, 9.410, 13.70, 13.360 s 22(1): 7.40 s 22(2)(a): 7.40 s 22(2)(b)(ii): 7.100 s 22(3): 13.70 s 22(5): 13.70 s 22(6): 13.70 s 22(7): 13.70 s 23: 12.250, 13.130, 13.360 s 23(2): 13.70 s 23(4): 13.70 s 26: 13.30 s 26(1): 12.50 s 26(2): 12.50 ss 26 to 30: 1.20 s 27: 1.80, 12.50, 12.260 s 27(1A): 3.30, 12.50, 13.30 s 27(2): 1.90, 3.30, 5.400, 6.340, 12.50, 12.160 s 27(2)(b): 6.30 s 27(2)(e): 4.20 s 27(2)(g): 2.50, 12.70, 12.220 s 28: 2.30 s 29: 12.50 ss 30A to 30S: 12.20 s 30C(1)(a): 4.50 s 30G: 13.230 s 30M(1)(a): 4.50 s 30R: 13.230 ss 31 to 36: 2.50 s 33: 2.30 s 34: 2.30 ss 37 to 42: 2.50 s 44: 11.90, 13.360 s 44(2): 12.170 ss 44 to 47: 12.60 s 45: 5.270, 9.150, 10.50, 11.90, 12.320 s 45E: 14.10 s 47: 2.30 s 48: 13.60

s 3(a): 15.10 s 4: 15.170 s 4(1): 2.50 s 5(1): 15.170 s 5(2): 15.170 s 5(3): 15.170 s 6(2): 15.170 s 6(3): 15.160 s 6(4): 15.120, 15.160 s 11: 15.170 s 15: 15.50 ss 15 to 21: 2.50 s 18: 15.180 s 21A: 15.180 s 21B: 15.180 s 35: 15.50, 15.200 s 37: 15.50 s 39: 15.50 s 47(1): 15.190 ss 55 to 58: 15.190 Pt 2, Div 1: 15.50

Disability Discrimination and Other Human Rights Legislation Act 2009: 15.100, 15.170 Electronic Transactions Act 1999 s 14: 4.100

Equal Opportunity for Women in the Workplace Act 1999 s 3: 15.40 s 6(1): 15.40

Evidence Act 1995 s 140(2): 13.300

Fair Work Act 2009: 1.10, 1.20, 1.30, 1.40, 1.110, 2.50, 2.60, 2.90, 2.100, 2.110, 2.120, 2.130, 2.260, 2.410, 3.30, 3.40, 3.50, 3.80, 3.260, 4.50, 4.80, 4.250, 4.330, 4.480, 4.490, 4.570, 5.100, 5.120, 5.130, 5.260, 5.270, 5.400, 5.500, 6.240, 6.260, 6.270, 6.280, 6.600, 6.610, 8.10, 8.80, 8.90, 8.260, 9.190, 9.200, 10.10, 10.20, 10.50, 10.190, 10.370, 11.10, 11.90, 12.10, 12.20, 12.30, 12.50, 12.60, 12.80, 12.90, 12.100, 12.110, 12.170, 12.180, 12.220, 12.230, 12.260, 12.300, 12.390, 13.20, 13.30, 13.80, 13.100, 13.140, 13.150, 13.230, 13.240, 13.250, 13.260, 13.270, 13.280, 13.290, 13.300, 13.330, 14.10, 14.20, 14.30, 14.60, 14.70, 14.420, xci

Macken’s Law of Employment

ss 114 to 116: 12.60 s 115: 12.230 s 117: 8.10, 9.20, 9.30, 9.50, 9.180, 12.240, 13.20, 13.50, 13.330, 13.360 s 117(2): 4.390, 9.30 s 117(2)(b): 12.240 s 117(3): 13.360 ss 117 to 118: 12.60 s 119: 9.160, 9.170, 13.20, 13.330, 13.360 s 119(1): 9.180 s 119(2): 9.180, 12.250, 13.360 ss 119 to 123: 12.60 s 120: 9.180 s 121(1)(a): 13.360 s 121(1)(b): 13.360 s 122: 9.170 s 122(1)(b): 12.250 s 122(2): 9.190, 13.360 s 122(3): 9.190, 13.360 s 122(4): 13.360 s 123: 12.240 s 123(1): 9.180, 13.360 s 123(1)(c): 2.90 s 123(3): 2.90, 9.180, 13.360 s 123(4): 9.180, 13.360 s 124: 4.80, 4.460 ss 124 to 125: 12.60 s 125: 2.90, 4.80, 4.460 ss 132 to 168K: 1.30 s 134(1): 12.150 s 136: 8.360, 9.20, 9.50, 9.190 s 136(2)(a): 15.190, 15.290 s 137: 12.70 s 139: 7.100, 10.240, 13.10 s 139(1)(g): 5.350 ss 139 to 155: 5.110, 12.60 s 140: 12.60 s 141: 9.20, 9.160, 9.190 s 143: 13.80 s 144: 12.70 s 144(4): 12.70 s 145(3): 12.70 s 145(4): 12.70 s 145A: 12.60 s 146: 12.60 s 147: 6.300, 12.60 ss 149B to 149D: 12.60 s 150: 12.70 s 151: 12.70 s 152: 12.70 s 153: 12.70 s 153(1): 15.190, 15.290 s 155: 12.70 s 156: 12.150 s 157(1): 12.150 s 157(3): 12.150 s 158: 12.150 s 161: 12.70 ss 168A to 168D: 12.60

Fair Work Act 2009 — cont

s 48(1): 13.80 s 48(2): 13.80 s 48(4): 13.80 s 50: 5.270, 9.150, 10.50, 11.90 s 52: 13.80 s 52(1): 13.60 s 53(1): 13.80 s 54: 12.80, 13.80 s 55(1): 12.60 s 57: 12.80 ss 59 to 131: 1.30 s 62: 2.90, 12.60 s 62(3): 12.170 ss 62 to 64: 6.300, 12.60 s 63: 12.170 s 64: 12.170 s 65: 12.60, 12.170 s 65(1): 2.90 s 65(2): 2.90, 12.170 s 65(4): 12.170 s 65(5A): 12.170 s 67(2): 2.90 ss 67 to 85: 12.60, 12.180 s 71(2): 12.180 s 71(3): 12.180 s 72: 12.180 s 73(1): 12.180 s 76(4): 12.180 s 79A(2): 12.180 s 80: 12.180 s 81A: 12.180 s 82A: 12.180 s 84: 12.180 s 84A: 12.180 s 86: 2.90 ss 86 to 94: 12.60 s 87: 12.190 s 87(3): 12.190 s 90: 12.190 s 93: 12.190 s 94: 12.190 s 95: 2.90 ss 95 to 107: 12.60 ss 96 to 99: 12.200 s 101: 12.200 s 102: 2.90, 12.200 ss 104 to 106: 12.200 s 106: 2.90 s 107: 12.200 s 108: 2.90 ss 108 to 112: 12.60 s 109: 12.210 ss 110 to 111: 12.210 s 111: 2.90 s 112: 12.210 s 113: 2.50, 3.30 s 113(2): 12.70 ss 113 to 113A: 12.60, 12.220 s 114: 2.90 xcii

Table of Statutes

ss 310 to 320: 9.410 s 311: 9.410, 12.100, 13.70 s 311(3): 12.100 s 311(4): 12.100 s 311(5): 12.100 s 311(6): 12.100 s 314: 12.100 s 318: 12.100 s 319: 12.100 s 322: 4.130, 4.330 s 323: 9.150, 10.30, 12.10, 12.160 s 323(2): 12.10 ss 323 to 326: 4.530, 12.160 ss 323 to 327: 4.130, 4.330 s 324: 9.150, 12.160 s 325: 12.160 s 326: 10.30, 12.70, 12.160 s 327: 12.160 s 329: 12.40 s 332: 12.40 s 332(3): 13.80 s 333: 5.160, 13.60, 13.80, 13.220 s 336(1): 13.230 s 336(1)(d): 15.270 ss 337 to 339: 13.230 s 338: 13.230 s 339: 13.230 s 340: 2.130, 4.10, 5.730, 11.90, 13.250, 13.260 s 340(1): 6.600 s 340(1)(a): 8.260 s 340(2): 13.240, 13.260 ss 340 to 342: 6.600 ss 340 to 350: 14.70 s 341: 5.730, 13.260 s 341(1): 6.600 s 341(1)(a): 13.270 s 341(1)(b): 8.260 s 341(1)(c)(ii): 5.730 s 341(2): 14.20 s 341(2)(c): 8.260 ss 341(3) to (5): 4.250 s 341(a): 13.270 s 342: 2.130, 6.600, 7.50, 13.240, 15.260 s 342(1): 4.10, 13.240, 13.250, 15.260 s 342(1)(d): 6.280 s 342(2): 13.240, 15.260 s 342(2)(a): 13.250 s 342(3): 7.100, 13.240, 15.260 s 342(4): 7.100, 13.240, 15.260 s 343: 4.250, 13.270 s 344: 4.250, 13.270 s 345: 4.230, 13.270 s 346: 13.280, 13.300, 15.270 s 346(a): 13.280 s 346(b): 13.280 s 346(c): 13.280 ss 346 to 347: 11.10 ss 346 to 350: 11.90, 14.310

Fair Work Act 2009 — cont

ss 169 to 257: 1.30 s 172: 13.10 s 172(1)(a): 12.90 s 172(1)(b): 12.90 s 172(1)(c): 12.90 s 172(1)(d): 12.90 ss 172 to 181: 12.80 ss 173 to 178: 12.80 s 180(4): 12.80 s 182: 12.80 ss 185 to 201: 12.80 s 186(4): 15.190, 15.290 s 186(5)(b): 14.30 s 186(6): 12.90 s 187AA: 14.70 s 189: 12.80 s 193: 12.60, 12.80 s 194: 15.290 s 194(a): 12.90, 15.190, 15.290 s 194(b): 12.90 s 194(c): 12.90, 13.10 s 194(d): 12.90, 13.10 s 194(e): 12.90 s 194(f): 12.90 s 194(g): 12.90 s 194(h): 12.90 s 194(ba): 12.90 s 195: 15.190, 15.290 s 198C: 2.380 s 199B: 2.410 s 202: 12.90 s 203(2)(b): 12.90 s 203(3)-(7): 12.90 ss 207 to 216: 12.350 s 212: 2.410 s 219(2): 12.80 ss 219 to 227: 12.80 s 226: 12.80 s 228: 12.80, 14.20 s 228(1): 12.80 s 228(2): 12.80 ss 229 to 233: 12.80 s 236-237: 12.80 s 236(2): 12.80 s 236(3): 12.80 ss 238 to 239: 12.80 ss 258 to 281A: 1.30 ss 260 to 265: 12.110 s 266: 12.110 ss 282 to 299: 1.30 ss 285 to 299: 12.140 s 287: 2.90 s 293: 9.150, 10.50 s 294: 2.90, 10.30 s 294(2)(c): 12.190 s 295: 2.90 s 298U(b): 13.320 ss 300 to 306: 1.30 ss 310 to 316: 3.50 xciii

Macken’s Law of Employment

s 384(2): 13.70 s 384(2)(a): 13.70 s 384(2)(b): 13.70 s 385: 13.90 s 385(a): 13.100 s 385(c): 13.20, 13.130 s 385(d): 9.160, 13.140 s 386: 13.100, 13.110, 13.240 s 386(1): 8.80 s 386(1)(a): 13.100 s 386(1)(b): 13.110 s 386(2): 13.110, 13.120 s 386(2)(a): 9.210, 13.120 s 386(2)(b): 13.120 s 386(2)(c): 9.370, 13.110 s 386(3): 13.120 s 387: 13.50, 13.150, 13.160 s 387(a): 6.540, 13.130, 13.160 s 387(b): 8.100, 13.170 s 387(c): 8.100, 13.170 s 387(d): 13.170 s 387(e): 13.180 s 387(f): 13.190 s 387(g): 13.190 s 387(h): 13.150, 13.190 s 388: 13.20 s 388(1): 13.130 s 389: 9.160, 9.200, 13.140 s 389(2): 13.140 s 390(1): 13.200 s 390(3): 1.40, 13.200, 13.210 s 390(3)(a): 13.210, 13.220 s 390(3)(b): 13.220 s 391: 13.50 s 391(1)(b): 13.210 s 391(1A): 13.210 s 391(2): 13.210 s 391(3): 13.210 s 391(4): 13.210 s 392: 13.50 s 392(2): 13.220 s 392(2)(a): 13.220 s 392(2)(b): 13.220 s 392(2)(c): 13.220 s 392(2)(d): 13.220 s 392(2)(e): 13.220 s 392(2)(f): 13.220 s 392(2)(g): 13.220 s 392(3): 13.220 s 392(4): 10.320, 10.330, 12.260, 13.220 s 392(5): 13.220 s 392(5)(b): 13.220 s 392(6): 13.220 s 392(6)(b): 13.220 s 394(2)(a): 13.50 s 394(2)(b): 13.50, 13.310 s 394(3): 13.50 s 396(b): 13.60 s 396(c): 13.130

Fair Work Act 2009 — cont

s 347: 15.270 s 347(a): 13.280 s 347(b): 13.280 ss 347(c) to (g): 13.280 s 348: 13.280 s 349: 13.280 s 350: 13.280 s 351: 6.280, 9.220, 11.10, 11.90, 12.200, 13.290, 15.10, 15.260, 15.270, 15.280, 15.300 s 351(1): 13.230, 13.290, 15.270, 15.280 s 351(2): 13.290, 15.270, 15.280, 15.310 s 351(2)(a): 13.290, 15.280 s 351(2)(b): 15.280 s 351(2)(c): 15.280 s 351(3): 13.290, 15.280 s 352: 9.290, 11.10, 12.200, 13.230, 13.290, 13.340 s 353: 12.70, 13.290 s 354: 13.290 s 355: 4.250, 13.290 s 357: 2.100 ss 357 to 359: 2.100, 2.110, 2.260, 3.110, 4.210, 4.300, 12.30, 13.230 s 358: 2.100, 3.70 ss 358 to 359: 3.70 s 359: 2.100, 3.70 s 360: 13.250 s 361: 13.300, 13.340, 15.270 s 361(2): 13.300 s 365: 1.40, 13.310, 15.300 s 366: 13.310, 15.300 s 366(2): 13.310 s 368: 1.40, 13.310, 15.300 s 368(3): 13.310 s 369: 13.310, 15.300 s 369(1)(b): 1.40 s 370: 13.310 s 371(1): 15.300 s 371(1)(a): 13.310 s 371(2): 15.300 s 372: 13.310, 15.300 s 374: 15.300 s 379: 12.240 s 380: 13.60 s 381: 13.210 s 381(1)(a): 13.50 s 381(1)(b): 13.50 s 381(1)(c): 13.50 s 381(2): 1.40, 13.50, 13.150 s 382: 13.60 s 382(a): 13.60 s 382(b): 13.60 s 382(b)(iii): 5.160 ss 382 to 384: 2.90, 3.140 s 383(a): 13.70 s 383(b): 13.70 s 384: 9.50 s 384(1): 13.70 xciv

Table of Statutes

s 473(1): 8.260 s 473(2): 8.260 ss 473 to 475: 4.320, 12.270 s 474: 5.100, 5.120, 7.30, 8.260, 14.70 s 474(1): 14.70 s 474(2): 14.70 s 474(2)(2A): 14.70 s 474(3): 14.70 s 475: 5.120, 7.30, 14.70 s 475(1): 8.260 s 475(2): 8.260 ss 480 to 500: 6.610 s 494: 6.610 s 495: 6.610 s 498: 6.610 s 499: 6.610 s 505(1): 6.610 s 507: 14.70 ss 523 to 525: 7.10 s 524: 7.100, 7.130, 13.70 s 524(1): 7.100 s 524(2): 7.100 s 524(3): 7.100 s 525: 7.100 s 526(3)(a): 7.130 s 530: 9.200 s 530(1): 13.350 s 530(2): 13.350 s 530(3): 13.350 s 530(4): 13.350 s 530(5)(a): 13.350 s 530(5)(b): 13.350 ss 530 to 532: 9.160 ss 530 to 533: 13.20, 13.330 ss 530 to 534: 13.350 s 531(1): 13.350 s 531(2): 13.350 s 531(3): 13.350 ss 531 to 533: 9.200 s 532: 13.350 s 534: 13.350 s 539: 10.50, 12.320, 13.310, 13.410, 14.30, 15.300 s 539(2): 10.50, 11.90, 12.30, 12.160, 13.50, 13.340, 13.350, 13.360 ss 542 to 543: 12.300 s 543(3): 10.50 s 544: 13.310, 15.300 s 545: 5.270, 9.50, 10.100, 11.90, 12.320 s 545(1): 10.50, 13.310, 13.340, 13.350, 15.300 s 545(2): 2.100, 10.50, 11.90, 12.30, 13.310, 13.320, 13.350, 14.330, 15.300 s 545(2)(a): 13.50 s 545(2)(b): 13.340, 14.30 s 545(2)(c): 13.340 s 545(3): 13.360 ss 545 to 546: 13.220

Fair Work Act 2009 — cont

s 396(d): 13.140 ss 396 to 399: 13.50 s 400: 13.50 s 400A: 13.50 ss 400A to 404: 13.50 s 401: 13.50 s 405: 13.50 ss 406 to 477: 14.20 s 408: 7.30, 14.70 ss 408 to 414: 14.30 s 409: 14.30 s 409(1): 14.30 s 409(2): 14.30 s 409(3): 14.30 s 409(4): 14.30 s 409(5): 14.30 s 410: 14.30 s 411: 7.30, 13.240, 14.30 s 412: 14.30 s 412(3): 14.30 s 413(3): 14.30 s 414(2): 14.30 s 414(3): 14.30 s 414(4): 14.30 s 414(5): 14.30 s 414(6): 14.30 s 414(7): 14.30 s 415: 14.20, 14.110 s 417: 14.30 s 417(3): 14.30 s 418: 14.30, 14.100 ss 418 to 422: 14.10 s 419: 14.30 s 420(2): 14.30 s 422: 14.30 s 423: 12.110, 14.30, 14.40 s 423(7): 14.40 s 424: 14.30, 14.40 s 424(2): 14.40 s 425: 14.30, 14.40 s 426: 14.30 s 426(6)(a): 14.40 s 431(1): 14.40 ss 431 to 434: 14.40 ss 435 to 469: 14.20 s 437(3): 14.30 s 441: 14.30 s 443: 14.30 s 459: 14.30 s 459(1): 14.30 s 470: 5.120, 7.30, 8.260, 14.70 s 470(1): 14.70 s 470(3): 14.70 s 470(4): 14.70 ss 470 to 473: 5.70 s 471: 5.100, 7.30 s 471(4): 14.70 s 472: 7.30, 8.260, 14.70 s 473: 5.120, 7.30, 8.260, 14.70 xcv

Macken’s Law of Employment

s 786(1): 13.350 s 786(2): 13.350 s 786(3): 13.350 s 787: 13.350 s 789BB: 2.120 s 789BC: 2.120 s 789FC: 2.50, 2.110 s 789FC(2): 13.380 s 789FD: 13.380 s 789FD(1): 13.390 s 789FD(2): 13.390 s 789FE(1): 13.370 s 789FF(1): 6.270, 13.370, 13.410 s 789FG: 13.370 s 789FI: 13.380 s 792(1): 13.270 s 792(5): 13.270 s 793: 14.110 s 793(1)(i): 13.270 s 809: 13.300 Ch 3: 1.10 Pt 2-2: 12.10 Pt 2-2, Div 4: 13.260 Pt 2-4: 12.60, 12.390 Pt 2-5: 12.110 Pt 2-8: 12.100, 13.270 Pt 3-1: 1.30, 1.40, 4.300, 7.50, 7.70, 7.100, 8.10, 8.60, 8.260, 10.140, 10.150, 10.190, 10.370, 11.10, 12.260, 13.10, 13.20, 13.30, 13.230, 13.260, 13.300, 13.250, 13.340, 14.20, 15.260 Pt 3-1, Div 3: 13.260 Pt 3-1, Div 4: 13.280 Pt 3-1, Div 5: 13.290 Pt 3-2: 1.30, 8.260, 9.200, 10.370, 11.10, 12.10, 12.240, 12.260, 13.10, 13.50, 13.90, 13.110, 13.240 Pt 3-3: 1.10, 12.80, 12.90, 14.10 Pt 3-3, Div 9: 13.280 Pt 3-4: 12.90 Pt 4-1: 6.610, 7.70, 7.100, 9.20, 9.50, 9.150, 9.190, 10.50, 10.370, 13.50, 13.230, 13.310, 13.340, 13.350, 13.360 Pt 5-2: 1.40 Pt 5-2, Div 3: 13.310, 15.300 Pt 6-1: 13.40 Pt 6-4: 8.10, 10.190, 10.370 Pt 6-4B: 10.370, 13.10, 13.370, 13.380

Fair Work Act 2009 — cont

s 546: 13.310, 13.340, 15.300 s 546(2)(b): 10.50, 13.410, 15.300 s 548: 12.300 s 550: 3.80, 13.410 s 570: 15.300 s 592: 13.370 s 611: 13.50 s 617: 1.40 s 638(1)(a): 13.120 s 642(6): 13.340 s 665(3): 13.340 s 665(4): 13.340 s 701: 2.100 s 722: 13.40 s 723: 13.40, 13.340, 15.280 s 725: 13.40 s 727: 13.40 s 728: 13.40 s 729: 13.40 s 730: 13.40 s 731: 13.40 s 732: 13.40 s 734: 13.40 s 739(2): 12.60 ss 758 to 762: 13.360 s 760: 13.20, 13.330 s 770: 13.340 s 771: 13.340 s 772: 13.20, 13.330, 13.340, 15.260, 15.280 s 772(1): 13.340 s 772(1)(a): 9.290, 13.290 s 772(1)(b): 13.340 s 772(1)(c): 13.340 s 772(1)(d): 13.340 s 772(1)(e): 13.340 s 772(1)(f): 13.290, 13.340, 15.250 s 772(1)(g): 13.340 s 772(1)(h): 13.340 s 772(2)(a): 13.340 s 772(2)(b): 13.340 s 772(3): 13.340 s 772(4): 13.340 s 773: 13.340 s 774(1)(a): 13.340 s 774(2): 13.340 s 776: 13.340 s 777: 13.340 s 778(a): 13.340 s 778(a)(ii): 13.340 s 778(b): 13.340 s 783: 13.340, 15.270 s 785(1): 13.350 s 785(2): 13.350 s 785(3): 13.350 s 785(4): 13.350 s 785(5)(a): 13.350 s 785(5)(b): 13.350 ss 785 to 788: 13.20, 13.330

Fair Work Amendment Act 2012: 1.40, 13.50 Fair Work (Commonwealth Powers)Act 2009 s 5: 2.410

Fair Work (Registered Organisations) Act 2009: 13.260, 15.50 xcvi

Table of Statutes

Fair Work Regulations 2009: 12.90, 15.260 reg 1.07: 13.360 reg 1.13: 1.90, 5.730 reg 1.14: 1.90, 4.20 reg 1.14(b): 1.90 reg 1.14(c): 1.90 reg 2.08: 12.90 reg 2.12: 4.330, 12.160 reg 2.13: 12.40, 13.80, 13.220 reg 2.13(1): 13.60 reg 2.13(2): 13.60 reg 2.13(3): 13.60 reg 3.01: 11.10, 12.200, 13.230, 13.290, 13.340 reg 3.05(6): 13.80 reg 3.06: 13.220 reg 3.30: 13.350 reg 6.04: 13.290, 13.340 Sch 2.2: 12.90

Income Tax Assessment Act 1997 ss 82 to 130: 10.340 ss 82 to 160: 10.340 ss 83 to 295: 10.340 s 118-37: 10.340 Divs 84 to 87: 2.280 Divs 85 to 87: 2.110

Independent Contractors Act 2006: 2.50, 2.110, 2.120, 2.130, 3.260, 4.300, 12.280, 13.260 s 3(1)(a): 4.300 s 3(1)(b): 4.300 s 3(1)(c): 4.300 s 4: 4.300 s 5(2): 4.300 s 5(4): 4.300 s 7: 12.280 s 7(1): 4.300 s 7(2)(b): 4.300 s 8(2): 2.50, 2.110 s 10: 2.50 s 11: 4.300 s 11(1)(b): 2.360, 4.300 s 12: 4.300, 12.280 s 12(3): 4.300 s 14(3): 4.300 s 15(1): 4.300 s 16: 4.300 Pt 3: 4.300

Fair Work (State Referrals and Other Measures) Act 2009: 1.20 Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 Sch 12A: 13.70, 13.360 Sch 18, Pt 1: 1.40

Fair Work (Transitional Provisions and Consequential Amendments) Act 2010 Sch 5, Pt 3: 12.60

Independent Contractors Regulations 2007 reg 4: 12.280 reg 6: 4.300

Family Law Act 1974 s 85A: 4.330

Federal Circuit Court of Australia Act 1999

Industrial Relations Act 1988: 1.20, 2.410, 12.260, 13.10, 13.120, 13.160, 14.10

s 79(3): 15.240

s 162: 14.10 s 170DC: 13.180 s 170DE(1): 13.10 s 170DE(2): 13.10 s 312: 14.400 s 334: 14.20 s 654(7): 10.330 Div 3, Pt VIA: 13.100

Federal Court of Australia Act 1976 s 21: 11.120 s 23: 13.320 s 43(2): 15.240

Fringe Benefits Tax Assessment Act 1986 s 138B: 2.50

Government and Related Employees Appeal Tribunal Act 1980: 5.850 Human Rights and Anti-Discrimination Bill 2012: 15.50

Industrial Relations Reform Act 1993: 1.20, 12.20, 12.100, 13.10, 14.20 Insurance Contracts Act 1984: 5.370, 5.450, 5.490 s 9(1)(e): 5.370, 5.450 s 48: 5.370 s 65: 5.370 s 66: 5.370, 5.440, 5.450, 5.460, 5.470 s 66(b): 5.470

Income Tax Assessment Act 1936: 10.340 xcvii

Macken’s Law of Employment

s 19(3): 6.480, 6.500, 6.520, 6.540 s 19(4): 6.480 s 19(5): 6.480 s 20: 6.550 s 20(2): 3.200, 6.550 s 21: 6.370, 6.550 s 22: 6.560 s 22(2)(e): 6.560 s 22(2)(e)(i): 6.560 ss 22 to 25: 6.560 ss 22 to 25: 6.370 ss 22 to 26: 6.560 s 23: 6.560 s 24: 6.560 s 25: 6.560 s 26: 6.370, 6.560 s 27: 6.570, 6.580, 6.590 s 27(4): 6.590 s 27(5): 6.590 s 28: 6.270, 6.370, 6.570, 6.580 s 29: 6.570, 6.580 s 31: 6.670 s 31(2): 6.670 s 32: 6.670 s 33: 6.670 s 34: 6.570 s 34(1): 6.620 s 34(2): 6.620 s 35: 6.460, 6.640 ss 35 to 38: 6.460 s 36: 6.640 s 37: 6.640 s 38: 6.370, 6.640 s 39: 6.640 s 46: 6.370, 6.450 ss 47 to 49: 6.350, 6.390 ss 50 to 59: 6.390 ss 68 to 69: 6.390 s 84: 6.600 s 85: 6.600 s 85(5): 6.600 s 86: 6.600 s 88: 6.600 s 104: 6.600 s 105: 6.600 s 116: 6.610 s 117: 6.610 s 118: 6.610 s 119: 6.610 s 120(5): 6.610 s 121: 6.610 s 121(2): 6.610 s 122: 6.610 s 124: 6.610 s 126: 6.610 s 127: 6.610 s 128: 6.610 s 142: 6.610 s 144: 6.610

Legislative Instruments Act 2003: 12.120 s 7(1): 12.120

Metal Trades Award 1952: 9.360 Migration Act 1958: 4.20, 4.330 s 14: 4.320 s 235: 4.20, 4.320 s 235(1): 4.320 s 235(3): 4.320 s 245C: 4.320 ss 245AA to 245AP: 4.20 s 245AB(1): 4.320 s 245AC: 4.320 s 245AC(2): 4.320 s 245AC(4): 4.320 s 245AC(5): 4.320 s 245AD(1)(2): 4.320 s 245AE: 4.320 s 245AG(2): 4.320 s 245AH: 4.320 s 245AEA: 4.320 s 245AEB: 4.320 s 245SAB(4): 4.320 s 245SAB(5): 4.320 s 486R: 4.320

Model Work, Health and Safety Act 2011: 3.210, 6.70, 6.250, 6.270, 6.340, 6.350, 6.360, 6.370, 6.390, 6.420, 6.430, 6.440, 13.380 s 3: 6.350 s 4: 6.250, 6.550, 6.590 s 5: 6.370 s 5(1): 6.370 s 5(2): 6.370 s 5(3): 6.370 s 5(4): 6.370 s 5(5): 6.370 s 5(6): 6.370 s 5(7): 6.370, 13.380 s 5(8): 6.370 s 7: 3.30, 3.210, 13.380 s 7(1): 6.370, 6.390 s 7(2): 2.410, 6.390 s 7(3): 6.390 s 8(1): 6.410 s 8(2): 6.410 s 9: 6.590 s 10: 6.370 s 12A: 6.350, 6.510 s 14: 6.450 s 16: 6.370, 6.450 s 16(3): 6.450 s 17: 6.460, 6.520 s 18: 6.420 s 19: 6.270, 6.350, 6.370, 6.480, 6.490 s 19(1): 6.480, 6.520, 6.660 s 19(2): 6.480, 6.520 xcviii

Table of Statutes

reg 158: 6.470 reg 161: 6.470 reg 166: 6.470 reg 176: 6.470 reg 178: 6.470 reg 182: 6.470 reg 221: 6.470

Model Work, Health and Safety Act 2011 — cont

s 145: 6.610 s 146: 6.610 s 148: 6.620 s 155: 5.850, 6.620 s 171: 6.620 s 172: 5.850 s 191(1): 6.650 s 191(2): 6.650 s 192: 6.650 s 193: 6.650 s 195: 6.650 s 196: 6.650 s 197: 6.650 s 216: 6.350 s 216(2): 6.630, 6.670 s 216(3): 6.660 s 220: 6.660 s 222: 6.660 s 230(4): 6.340 s 236: 6.660 s 237: 6.660 s 238: 6.660 s 244: 6.350 s 244(3): 6.350 s 247: 6.590 s 252: 6.590 s 254: 6.610 ss 254 to 266: 6.620 s 267: 6.70 s 271: 6.620 s 272: 5.380, 6.450 s 275: 6.340 s 275(4): 6.350 s 789FD(1): 6.260 Pt 9: 6.410 Pt 10: 6.410

Model Work, Health and Safety Regulation 2011: 6.340 reg 5(7): 6.370 reg 7: 6.370 reg 7(1): 6.370 reg 7(2): 6.370 reg 7(3): 6.370, 13.380 regs 33 to 38: 6.250 reg 34: 6.470 regs 34 to 36: 6.470 reg 35: 6.470 reg 36(1): 6.470 reg 36(5): 6.470 reg 38(3): 6.460 reg 39: 6.480 reg 40: 6.480 reg 41: 6.480 reg 44: 6.470 reg 46: 6.580 reg 46(4): 6.580 reg 66: 6.470 reg 77: 6.470

National Health and Pensions Insurance Act 1938 Sch 1: 2.30

Occupational Health and Safety Act 2004 s 16: 6.660 s 17: 6.660 s 137: 6.660

Paid Parental Leave Act 2010: 12.180 Patents Act 1990 s 13: 5.780 s 15: 5.780

Privacy Act 1988: 4.210, 5.280, 5.400, 5.650 s 6: 5.280, 6.610 s 6C: 5.400 s 6D: 5.280, 5.400 s 7B(3): 5.280, 5.400 s 16A: 5.400 s 18N: 5.400

Public Interest Disclosure Act 2013: 5.730 Public Service Act 1922: 12.310 Public Service Act 1999: 2.410, 5.650 Racial Discrimination Act 1975: 15.30, 15.120, 15.160, 15.180, 15.190, 15.310 s 3(1): 2.50 s 8: 15.190 s 9: 15.50 s 9(1): 15.60 s 9(1A): 15.60 s 10: 15.190 s 15: 2.50, 15.50

Safety, Rehabilitation and Compensation Act 1988: 6.30, 13.260 s 5A(2): 6.210 s 5B(1)(3): 6.30 ss 42 to 52A: 6.90 s 45(1)(a): 6.210

Seafarers Rehabilitation and Compensation Act 1992: 6.30 Sex Discrimination Act 1984: 15.10, xcix

Macken’s Law of Employment

s 82: 10.370, 14.390 s 82(1AAA): 10.370 Pt V: 1.50, 4.290 Pt IV: 14.390 Pt VIB: 6.90

Sex Discrimination Act 1984 — cont

15.30, 15.50, 15.70, 15.80, 15.120, 15.140, 15.160, 15.180, 15.190, 15.200 s 3(b): 15.10 s 4(1): 2.50 s 5(1): 15.60 s 5(2): 15.60 s 7B: 15.120, 15.160 s 7C: 15.120, 15.160 s 7D: 15.190 s 8: 15.100 s 12: 15.50 s 13: 15.50 s 14: 15.50 s 14(2)(d): 15.50 ss 14 to 20: 2.50 s 17: 15.180 s 28A(1A): 15.200 s 28B: 15.200 s 28B(6): 15.200 s 28B(7): 15.200 s 30(1): 15.180 s 30(2): 15.180 s 40: 15.190 s 40(1)(g): 15.190 ss 44 to 47: 15.190 s 105: 15.50 s 106: 15.50, 15.200 s 108: 2.120 Pt II, Div 3: 15.50

Trade Practices (Boycotts) Amendment 1980: 14.10 Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Act 2015: 4.300 Unemployment and Sickness Benefits Act 1944: 2.30 s 15: 2.30

Workers’ Compensation and Injury Management Act 1981 s 93K: 6.210 s 93K(4)(d): 6.210

Workplace Amendment (Work Choices) Bill 2005: 13.110 Workplace Gender Equality Act 2012: 15.10, 15.30, 15.40 s 3: 15.40 s 3(1): 15.40 s 3(2A): 15.40 s 13: 15.40 s 13(5): 15.40 s 16: 15.40 s 19(2): 15.40 s 19(3): 15.40 s 19C: 15.40 Sch 1: 15.40

Sex and Age Discrimination Legislation Amendment Act 2011: 15.50, 15.200 Social Security Act 1991: 13.380 Social Services Consolidation Act 1947

Workplace Relations Act 1996: 1.20, 1.30, 5.120, 8.80, 9.180, 9.320, 10.10, 11.70, 11.90, 12.20, 12.350, 13.10, 13.20, 13.120, 13.140, 13.230, 13.260, 13.270, 13.280, 13.340, 14.20, 14.60, 14.330

s 111: 2.30

Stevedoring Industry Act 1956 s 44(1)(b): 14.400 s 44(2): 14.400

s 16: 12.20 ss 16(3)(h) to (j): 12.160 s 89A: 12.60 s 149(1)(d): 4.330 s 166A: 14.20 s 170CE: 13.10 s 170CH(3): 5.340 s 170CH(6): 13.220 s 170CL: 13.10 s 170CM: 13.10 s 170CN: 13.10, 13.20 s 170CP(5): 13.10 s 170FA: 13.10 s 170GA: 13.350 s 170LJ: 12.350 s 170CBA(1): 13.70

Superannuation Guarantee (Administration) Act 1992 s 12: 2.50 s 12(3): 2.50

Trade Practices Act 1974: 1.50, 4.250, 4.290, 10.270, 10.330, 14.10, 14.50, 14.110, 14.160 s 52): 6.100 s 51A: 4.240 s 51AA: 4.290 s 52: 4.230, 4.240, 4.280, 4.530, 5.470, 5.720, 10.370, 14.400 s 53B: 4.230, 4.240, 4.280, 10.370 s 76: 14.390 c

Table of Statutes Workplace Relations Act 1996 — cont

Workplace Relations Amendment (Fair Termination) Act 2003: 13.70

s 170CBA(3): 13.70 ss 187AA to AD: 14.70 s 289K: 13.270 s 298K: 14.330 s 298K(1): 14.330 s 298L(1)(h): 13.270 s 356: 13.10 s 358: 12.360 s 367(2): 12.350 s 513: 7.100, 13.10 s 513(1)(l): 7.100 ss 513 to 515: 3.30 s 580(4): 12.100 s 581: 12.100 s 634(7): 13.70 s 642(3): 13.120 s 642(4): 13.110 s 643(8): 13.20, 13.140 s 643(9): 13.20, 13.140 s 652(3): 13.150 s 654(9): 12.260 s 659(2)(a): 13.290 s 659(2)(f): 13.290 s 660: 13.10 s 660(1): 13.350 s 660(2): 13.350 s 661: 9.30 s 665(2): 13.340 s 668: 13.350 s 720: 10.50 s 772(1)(a): 13.290 s 789: 13.280 s 790: 13.270 s 792(1): 13.270 s 792(3): 13.250 s 792(4): 13.270 s 792(8): 13.270 s 793(1)(a): 13.280 s 793(1)(b): 13.280 s 793(1)(c): 13.280 s 793(1)(d): 13.280 s 793(1)(e): 13.280 s 793(1)(f): 13.280 s 793(1)(g): 13.280 s 793(1)(h): 13.280 s 793(1)(i): 13.270 s 793(1)(j): 13.280 s 793(1)(k): 13.280 s 793(1)(l): 13.280 s 793(1)(m): 13.280 s 793(1)(n): 13.280 s 793(1)(o): 13.280 s 809: 13.300 Pt 10A: 9.190 Pt 12, Div 4: 13.20 Pt 12, Div 4, subdiv C: 11.110 Pt 16: 11.10, 13.30, 13.230, 13.240, 13.250 Pt XA: 1.30

Workplace Relations Amendment (Termination of Employment) Act 2001 Sch 1, item 9: 13.120

Workplace Relations Amendment (Work Choices) Act 2005: 1.20, 1.30, 1.40, 10.10, 11.80, 12.20, 12.60, 12.100, 12.110, 12.190, 12.260, 13.10, 13.20, 13.120, 13.140, 13.270, 13.320, 13.350, 14.20, 14.70 s 89A(2): 13.10 s 170CD(1A): 13.120 s 643: 13.10 s 659: 13.20 s 660: 13.20 s 661: 13.10, 13.20 s 663(5): 13.10 Sch 1, cl 143: 13.10

Workplace Relations Regulations 1996 reg 8.5: 12.360 reg 8.6: 12.360 reg 8.7: 12.360 reg 30B(1)(d): 13.70 reg 30B(3): 13.70

Workplace Relations Regulations 2006 reg 2.8.5: 3.30 reg 6.07: 13.350 reg 8.5(5): 13.10 reg 12.6: 13.340 reg 12.9: 13.10, 13.20, 13.350 Ch 12, Pt 8: 13.10 Pt 12: 13.350

Workplace Relations and Other Legislation Amendment Act 1996: 12.270, 14.10 Sch 5, item 49: 13.10 Sch 5, item 50: 13.10 Sch 5, item 51: 13.10

Australian Capital Territory Age of Majority Act 1974: 4.160 Civil Law (Wrongs) Act 2002 s 21: 5.440 s 101: 6.110 ci

Macken’s Law of Employment

s 24: 6.560 s 25: 6.560 s 26: 6.370, 6.560 s 27: 6.570, 6.590 s 27(4): 6.590 s 27(5): 6.590 s 28: 6.570, 6.580 s 29: 6.570 s 31: 6.670 s 31(2): 6.670 s 34: 6.570 s 35: 6.460 s 36: 6.640 s 37: 6.640 s 38: 6.370, 6.640 s 39: 6.640 s 46: 6.370, 6.450 s 84: 6.600 s 85: 6.600 s 155: 6.620 s 171: 6.620 s 191(1): 6.650 s 191(2): 6.650 s 193: 6.650 s 195: 6.650 s 197: 6.650 s 216: 6.350 s 230(4): 6.340 s 244(3): 6.350 s 247: 6.590 s 252: 6.590

Crimes (Child Sex Offenders) Act 2005: 4.20 Criminal Code 2002 s 356: 5.810

Discrimination Act 1991: 1.80, 15.30, 15.150 s 4A(2): 15.100 s 8: 15.70, 15.120

Electronic Transactions Act 2001: 4.100 Health Records (Privacy and Access) Act 1997: 5.400 Holidays Act 1958: 12.230 Law Reform (Misrepresentation) Act 1977: 4.230 Long Service Leave Act 1976: 12.220 Model Work Health and Safety Act 2011: 6.70, 6.340, 6.350, 6.360, 6.370, 6.390, 6.420, 6.440 s 4: 6.550, 6.590 s 5: 6.370 s 5(2): 6.370 s 5(3): 6.370 s 5(4): 6.370 s 5(5): 6.370 s 5(6): 6.370 s 5(7): 6.370 s 5(8): 6.370 s 7: 3.30, 3.210 s 7(1): 6.390 s 7(2): 6.390 s 7(3): 6.390 s 8(1): 6.410 s 8(2): 6.410 s 10: 6.370 s 12A: 6.350 s 14: 6.450 s 16: 6.370, 6.450 s 16(3): 6.450 s 17: 6.460, 6.520 s 18: 6.420 s 19: 6.370, 6.480, 6.490 s 19(1): 6.520, 6.660 s 19(2): 6.520 s 19(3): 6.480, 6.540 s 19(3)(g): 6.500 s 19(4): 6.480 s 19(5): 6.480 s 20(2): 3.200 s 21: 6.370, 6.550 s 22: 6.560 ss 22 to 25: 6.370 s 23: 6.560

Model Work Health and Safety Regulation 2011: 6.340 Money-lenders Act 1936 s 13: 4.160

Partnership Act 1963 s 7(3): 2.420 s 38: 9.270, 9.330 Pt 6: 9.270, 9.330

Public Interest Disclosure Act 1994: 5.730 Public Sector Management Act 1994: 2.410 Workers Compensation Act 1951: 6.30 s 4: 6.30 s 31(2): 6.30 s 31(3): 6.30 s 36: 6.30

Workplace Privacy Act 2011: 5.400 cii

Table of Statutes

New South Wales

s 21A(3): 6.680

Criminal Procedure Regulations 2005 reg 20: 2.410

Annual Holidays Act 1944 s 2: 2.50 s 3: 2.50

Electronic Transactions Act 1999: 4.100

Anti-Discrimination Act 1977: 1.80, 15.30, 15.120, 15.150

Employees Liability Act 1991: 5.460, 5.470

s 4A: 15.100 s 4B: 2.120 s 24(1): 15.120 s 25(3): 15.180 s 40(3): 15.180 s 49D: 15.180 s 52: 15.50 s 53: 15.50 s 54: 15.190 s 91A(3): 15.220 ss 91A(5) to (9): 15.220 s 108(2)(a): 15.230

ss 3 to 5: 5.460 s 5: 5.460, 5.470 s 6(1): 5.460 s 7: 5.480

Employers’ Liability Act 1897 s 3: 2.30

Employment Protection Act 1982 s 7: 9.190 s 8: 9.190

Employment Protection Regulation 2001

Apprenticeship and Traineeship Act 2001

Pt 3: 9.190

s 32: 4.160, 4.170

Essential Services Act 1988 s 16: 7.90

Associations Incorporation Act 1984: 4.140

Fair Trading Act 1987 s 27: 4.230 s 49: 4.10 s 50: 3.20

Child Protection (Working with Children) Act 2012: 4.20 s 9: 4.20

Children and Young Persons (Care and Protection) Act 1998: 4.20

Fair Trading Regulation 2012

Civil Liability Act 2002: 6.30, 6.90

Frustrated Contracts Act 1978: 9.240

reg 15: 3.20 s 11(2): 10.40

s 5C: 6.150 s 26X: 6.100

Government Sector Employment Act 2013: 2.410

Civil Procedure Act 2005 s 121: 4.330 s 122: 4.330

Health Records and Information Privacy Act 2002: 5.400

Civil and Administrative Tribunal Act 2013

Industrial Arbitration Act 1901 s 2: 2.30

s 60(1): 15.240 s 60(2): 15.240

Industrial Arbitration Act 1940 s 88F: 12.50

Contracts Review Act 1980: 1.90

Industrial Powers (Commonwealth Powers) Act 2009: 1.20

Crimes Act 1900 s 60E: 6.270 s 178BA: 4.210 s 178BB: 4.210 s 341: 5.840 Pt 4A: 5.810

Industrial Relations Act 1996: 4.300 ss 101 to 104: 9.410 s 106: 12.50 s 106(2): 4.300 s 146A(2): 5.120, 14.70 s 154: 11.120 Ch 2, Pt 9: 9.20 Ch 6: 12.280

Crimes (Sentencing Procedure) Act 1999 s 21A: 6.680 ciii

Macken’s Law of Employment

s 8(2): 6.410 s 10: 6.370 s 12A: 6.350 s 14: 6.450 s 16: 6.370, 6.450 s 16(3): 6.450 s 17: 6.460, 6.520 s 18: 6.420 s 19: 6.370, 6.480, 6.490 s 19(1): 6.520, 6.660 s 19(2): 6.520 s 19(3): 6.480, 6.540 s 19(3)(g): 6.500 s 19(4): 6.480 s 19(5): 6.480 s 20(2): 3.200 s 21: 6.370, 6.550 s 22: 6.560 ss 22 to 25: 6.370 s 23: 6.560 s 24: 6.560 s 25: 6.560 s 26: 6.370, 6.560 s 27: 6.570, 6.590 s 27(4): 6.590 s 27(5): 6.590 s 28: 6.570, 6.580 s 29: 6.570 s 31: 6.670 s 31(2): 6.670 s 34: 6.570 s 35: 6.460 s 36: 6.640 s 37: 6.640 s 38: 6.370, 6.640 s 39: 6.640 s 46: 6.370, 6.450 s 84: 6.600 s 85: 6.600 s 155: 6.620 s 171: 6.620 s 172(1): 5.850 s 191(1): 6.650 s 191(2): 6.650 s 193: 6.650 s 195: 6.650 s 197: 6.650 s 216: 6.350 s 230(4): 6.340 s 244(3): 6.350 s 247: 6.590 s 252: 6.590

Industrial Relations Act 1996 — cont

Sch 1: 2.110

Industrial Relations (Child Employment) Act 2006: 1.90, 4.20 Industrial Relations (Commonwealth Powers) Act 2009: 12.20 s 3: 1.20

Insurance (Application of Laws) Act 1986: 5.370 s 5: 5.370

Law Reform (Miscellaneous Provisions) Act 1946 s 5: 5.440

Law Reform (Miscellaneous Provisions) Act 1965 s 8: 6.100, 6.110

Law Reform (Vicarious Liability) Act 1983: 2.410 Legal Profession Uniform Law s 93: 5.830 s 121: 4.20

Long Service Leave Act 1955: 12.220 Marine Safety Act 1998 s 140: 4.20

Minors (Property and Contracts) Act 1970: 4.160, 4.180 s 6(3): 4.180 s 8: 4.180 s 18: 4.180 s 19: 4.170, 4.180 s 26: 4.180 s 30: 4.160, 4.180 s 31(1): 4.160

Model Work Health and Safety Act 2011: 6.70, 6.340, 6.350, 6.360, 6.370, 6.390, 6.420, 6.440 s 2: 5.850 s 4: 6.550, 6.590 s 5: 6.370 s 5(2): 6.370 s 5(3): 6.370 s 5(4): 6.370 s 5(5): 6.370 s 5(6): 6.370 s 5(7): 6.370 s 5(8): 6.370 s 7: 3.30, 3.210 s 7(1): 6.390 s 7(2): 6.390 s 7(3): 6.390 s 8(1): 6.410

Model Work Health and Safety Regulation 2011: 6.340 regs 368 to 378: 5.390 reg 378: 5.400

Occupational Health and Safety Act 1983: 3.210 civ

Table of Statutes

s 19: 5.720

Occupational Health and Safety Act 1983 — cont

s 15: 6.520 s 15(2): 6.420 s 16: 6.520

Public Holidays Act 2010: 12.230 Public Interest Disclosures Act 1994 s 17: 5.770

Occupational Health and Safety Act 2000: 6.550

Residential Tenancies Act 2010

s 8(1): 6.510, 6.520 s 8(2): 6.520 s 10(1): 6.550 s 11(1): 6.560 s 20: 6.340

s 9(1): 2.400

Restraints of Trade Act 1976: 4.430 s 4(1): 4.430

Work Health and Safety (Mines and Petroleum Sites) Act 2013: 6.350

Partnership Act 1892 s 1(1): 2.420 s 2(1)(2): 2.420 s 2(1)(3): 2.420 s 2(1)(3)(b): 2.420 s 3: 2.420 s 4: 2.420 s 33: 9.270, 9.330 s 60: 2.420 s 67: 2.420 s 67A: 2.420 s 70: 9.270, 9.330

Workers Compensation Act 1926: 2.30 s 16: 2.30

Workers Compensation Act 1987: 6.30 s 4: 6.30 s 9A(1): 6.30 s 10: 6.30 s 11A: 6.210 s 11A(1): 6.30, 6.210 s 24: 4.320 ss 151 to 151T: 6.90 s 151E: 6.90, 6.210 s 151R: 6.100 s 151R: 6.100, 6.290 s 151Z: 6.30, 6.90

Passenger Transport (Drug and Alcohol) Testing Regulation 2010: 5.400, 6.150 Payroll Tax Act 2007

Workman’s Compensation Act 1916: 2.30

s 7: 2.50 s 13: 2.50 ss 37 to 42: 2.50

Workplace Injury Management and Workers Compensation Act 1998: 6.30

Police Act 1990: 2.410 s 27: 2.410 s 41: 2.410 s 42: 2.410 s 51: 2.410 s 74: 2.410 s 84: 2.410 s 85: 2.410 s 213: 2.410 Pt 6B: 2.410 Pt 11A: 2.410

s 4(1)(b): 2.30 Sch 1, cl 10: 2.390

Workplace Relations Act 1996 s 127A: 2.390

Workplace Surveillance Act 2005: 5.400 s 23: 5.400

Police Legislation Amendment (Civil Liability) Act 2003 s 9B(3): 5.460

Northern Territory

Privacy and Personal Information Protection Act 1998: 5.400

Age of Majority Act: 4.160

s 62: 5.400

Property (Relationships) Act 1984: 4.330

Anti-Discrimination Act: 1.80, 15.30

Protected Disclosures Act 1994: 5.730

Anti-Discrimination Regulations

s 20(3): 15.100 reg 2: 15.230

s 9A: 5.720 cv

Macken’s Law of Employment

s 25: 6.560 s 26: 6.370, 6.560 s 27: 6.570, 6.590 s 27(4): 6.590 s 27(5): 6.590 s 28: 6.570, 6.580 s 29: 6.570 s 31: 6.670 s 31(2): 6.670 s 34: 6.570 s 35: 6.460 s 36: 6.640 s 37: 6.640 s 38: 6.370, 6.640 s 39: 6.640 s 46: 6.370, 6.450 s 84: 6.600 s 85: 6.600 s 155: 6.620 s 171: 6.620 s 191(1): 6.650 s 191(2): 6.650 s 193: 6.650 s 195: 6.650 s 197: 6.650 s 216: 6.350 s 230(4): 6.340 s 244(3): 6.350 s 247: 6.590 s 252: 6.590

Child Protection (Offender Reporting and Registration) Act: 4.20 Criminal Code Act s 88: 5.810

Electronic Transactions Act s 13: 4.100

Information Act: 5.400 Law Reform (Miscellaneous Provisions) Act s 15(1): 6.110 s 22A: 5.460, 5.470 s 22A(1): 5.460 s 22A(2): 5.460 Pt IV: 5.440

Long Service Leave Act: 12.220 Model Work Health and Safety Act: 6.70, 6.340, 6.350, 6.360, 6.370, 6.390, 6.420, 6.440 s 4: 6.550, 6.590 s 5: 6.370 s 5(2): 6.370 s 5(3): 6.370 s 5(4): 6.370 s 5(5): 6.370 s 5(6): 6.370 s 5(7): 6.370 s 5(8): 6.370 s 7: 3.30, 3.210 s 7(1): 6.390 s 7(2): 6.390 s 7(3): 6.390 s 8(1): 6.410 s 8(2): 6.410 s 10: 6.370 s 12A: 6.350 s 14: 6.450 s 16: 6.370, 6.450 s 16(3): 6.450 s 17: 6.460, 6.520 s 18: 6.420 s 19: 6.370, 6.480, 6.490 s 19(1): 6.520, 6.660 s 19(2): 6.520 s 19(3): 6.480, 6.540 s 19(3)(g): 6.500 s 19(4): 6.480 s 19(5): 6.480 s 20(2): 3.200 s 21: 6.370, 6.550 s 22: 6.560 ss 22 to 25: 6.370 s 23: 6.560 s 24: 6.560

Model Work Health and Safety Regulation: 6.340 Partnership Act s 37: 9.270, 9.330

Personal Injuries (Liabilities and Damages) Act: 6.30, 6.90 Police Administration Act s 148B: 2.410 s 148C: 2.410

Public Holidays Act: 12.230 Public Interest Disclosure Act: 5.730 Public Interest Disclosures Act s 6: 5.730

Public Sector Employment and Management Act: 2.410 Return to Work Act: 6.30 s 3A: 6.30 s 4(1): 6.30 s 4(2): 6.30 s 4(2A): 6.30 s 4(5): 6.30 s 4(6): 6.30 cvi

Table of Statutes

s 5(2): 6.370 s 5(3): 6.370 s 5(4): 6.370 s 5(5): 6.370 s 5(6): 6.370 s 5(7): 6.370 s 5(8): 6.370 s 7: 3.30, 3.210 s 7(1): 6.390 s 7(2): 6.390 s 7(3): 6.390 s 8(1): 6.410 s 8(2): 6.410 s 10: 6.370 s 12A: 6.350 s 14: 6.450 s 16: 6.370, 6.450 s 16(3): 6.450 s 17: 6.460, 6.520 s 18: 6.420 s 19: 6.370, 6.480, 6.490 s 19(1): 6.520, 6.660 s 19(2): 6.520 s 19(3): 6.480, 6.540 s 19(3)(g): 6.500 s 19(4): 6.480 s 19(5): 6.480 s 20(2): 3.200 s 21: 6.370, 6.550 s 22: 6.560 ss 22 to 25: 6.370 s 23: 6.560 s 24: 6.560 s 25: 6.560 s 26: 6.370, 6.560 s 27: 6.570, 6.590 s 27(4): 6.590 s 27(5): 6.590 s 28: 6.570, 6.580 s 29: 6.570 s 31: 6.670 s 31(2): 6.670 s 34: 6.570 s 35: 6.460 s 36: 6.640 s 37: 6.640 s 38: 6.370, 6.640 s 39: 6.640 s 46: 6.370, 6.450 s 84: 6.600 s 85: 6.600 s 155: 6.620 s 171: 6.620 s 191(1): 6.650 s 191(2): 6.650 s 193: 6.650 s 195: 6.650 s 197: 6.650 s 216: 6.350

Return to Work Act — cont

s 4(6A): 6.30 s 4(8): 6.30 s 52: 6.90 s 54: 6.90

Surveillance Devices Act: 5.400

Queensland Anti-Discrimination Act 1991: 1.80, 15.30, 15.150 s 10(4): 15.100

Child Employment Act 2006: 4.20 Civil Liability Act 2003: 6.30, 6.90 Coal Mining Safety and Health Act 1999 s 39(1)(c): 5.340

Criminal Code Ch 42A: 5.810

Electronic Transactions (Qld) Act 2001 s 23: 4.100

Fair Work (Commonwealth Powers and Other Provisions) Act 2009: 1.20 Fair Work (Commonwealth Powers) and Other Provisions Act 2009: 12.20 Holidays Act 1983: 12.230 Industrial Relations Act 1999 s 5(1)(c): 2.110 ss 67 to 71: 9.410 s 237: 14.110 s 275: 2.110 s Ch 3, Pt 4, Sch 3: 9.190

Law Reform Act 1995 s 5: 6.110 s 17: 4.160 Pt 3: 5.440

Long Service Leave Act 1999: 12.220 Model Work Health and Safety Act 2011: 6.70, 6.340, 6.350, 6.360, 6.370, 6.390, 6.420, 6.440 s 4: 6.550, 6.590 s 5: 6.370 cvii

Macken’s Law of Employment

s 32(5): 6.30, 6.210 s 35: 6.30 s 36: 6.30 s 107: 6.210 s 237: 6.210 ss 237 to 239A: 6.90 s 305B: 6.230 s 305H: 6.110, 6.150 s 306I: 6.210 s 309: 6.290 Sch 2, Pt 1: 2.200

Model Work Health and Safety Act 2011 — cont

s 230(4): 6.340 s 244(3): 6.350 s 247: 6.590 s 252: 6.590

Model Work Health and Safety Regulation 2011: 6.340 Partnership Act 1891 s 5(1): 2.420 s 6(1)(b): 2.420 s 6(1)(c): 2.420 s 6(1)(c)(ii): 2.420 s 36: 9.270, 9.330 s 61: 9.270, 9.330 Ch 3: 2.420 Ch 4: 2.420

Working with Children (Risk Management and Screening) Act 2000: 4.20

Pay-roll Tax Act 1971 s 2: 2.50 s 8A: 2.50 ss 13G to 13LA: 2.50

Police Service Administration Act 1990 s 5.3: 2.410 s 5.4: 2.410 s 5.7: 2.410 s 10.5: 2.410

Private Employment Agents Act 2005: 4.10

South Australia Age of Majority (Reduction) Act 1970: 4.160 Child Sex Offenders Registration Act 2006: 4.20 Civil Liability Act 1936: 6.30, 6.90 s 59: 5.460, 5.470 s 72: 14.390

Criminal Law Consolidation Act 1935 s 150: 5.810 Sch 11: 5.840

Property Law Act 1974 s 55: 5.490

Public Interest Disclosure Act 2010: 5.730

Defamation Act 2005 s 23: 5.290 s 28(4): 5.290

s 12: 5.730

Public Officers Superannuation Act 1988 s 4(1): 2.410

Public Service Act 2008: 2.410 Residential Tenancies Act 1994 s 25A: 2.400

Workers Compensation and Rehabilitation Act Regulation 2014 Sch 12: 6.210

Workers’ Compensation and Rehabilitation Act 2003: 6.30, 6.210 s 2: 2.200 s 4: 6.30 s 32(1)(a): 6.30 s 32(2): 6.30, 6.210 s 32(3): 6.30 s 32(3)(ba): 6.30, 6.210

Education Act 1972: 12.290 s 78: 4.20

Education Regulations 1997: 12.290 Electronic Transactions Act 1999: 4.100 Employment Agents Registration Act 1993: 4.10 Equal Opportunity Act 1984: 1.80, 15.30, 15.150 Fair Work Act 1994 s 4: 2.110

Fair Work (Commonwealth Powers) Act 2009: 1.20, 12.20 Frustrated Contracts Act 1988: 9.240 s 7: 10.40 cviii

Table of Statutes

s 24: 6.560 s 25: 6.560 s 26: 6.370, 6.560 s 27: 6.570, 6.590 s 27(4): 6.590 s 27(5): 6.590 s 28: 6.570, 6.580 s 29: 6.570 s 31: 6.670 s 31(2): 6.670 s 34: 6.570 s 35: 6.460 s 36: 6.640 s 37: 6.640 s 38: 6.370, 6.640 s 39: 6.640 s 46: 6.370, 6.450 s 84: 6.600 s 85: 6.600 s 155: 6.620 s 171: 6.620 s 191(1): 6.650 s 191(2): 6.650 s 193: 6.650 s 195: 6.650 s 197: 6.650 s 216: 6.350 s 230(4): 6.340 s 244(3): 6.350 s 247: 6.590 s 252: 6.590

Holidays Act 1910: 12.230 Industrial and Employee Relations Act 1994: 2.410 Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001: 5.440 s 3(1): 6.110 s 4(1)(b): 6.110 s 6(9)(c): 5.460, 5.470

Listening and Surveillance Devices Act 1972: 5.400 Long Service Leave Act 1987: 12.220 Minors Contracts (Miscellaneous Provisions) Act 1979 s 4: 4.160 s 6: 4.180

Misrepresentation Act 1971: 4.230 Model Work Health and Safety Act 2012: 6.70, 6.340, 6.350, 6.360, 6.370, 6.390, 6.420, 6.440 s 4: 6.550, 6.590 s 5: 6.370 s 5(2): 6.370 s 5(3): 6.370 s 5(4): 6.370 s 5(5): 6.370 s 5(6): 6.370 s 5(7): 6.370 s 5(8): 6.370 s 7: 3.30, 3.210 s 7(1): 6.390 s 7(2): 6.390 s 7(3): 6.390 s 8(1): 6.410 s 8(2): 6.410 s 10: 6.370 s 12A: 6.350 s 14: 6.450 s 16: 6.370, 6.450 s 16(3): 6.450 s 17: 6.460, 6.520 s 18: 6.420 s 19: 6.370, 6.480, 6.490 s 19(1): 6.520, 6.660 s 19(2): 6.520 s 19(3): 6.480, 6.540 s 19(3)(g): 6.500 s 19(4): 6.480 s 19(5): 6.480 s 20(2): 3.200 s 21: 6.370, 6.550 s 22: 6.560 ss 22 to 25: 6.370 s 23: 6.560

Model Work Health and Safety Regulation 2012: 6.340 Occupational Health, Safety and Welfare Act 1986 s 23: 6.560 s 24: 6.560

Partnership Act 1891 s 1(1): 2.420 s 2(1)(b): 2.420 s 2(1)(b)(ii): 2.420 s 6(c)(ii): 2.420 s 33: 9.270, 9.330 s 68: 9.270, 9.330 Pt 3: 2.420

Police Act 1998 s 65(1): 2.410 s 65(2): 2.410

Police (Complaints and Disciplinary Proceedings) Act 1985: 2.410 Public Sector Act 2009: 2.410 Residential Tenancies Act 1995 s 5: 2.400 cix

Macken’s Law of Employment

Return to Work Act 2014: 6.30

Model Work Health and Safety Act 2012: 6.70, 6.340, 6.350, 6.360, 6.370, 6.390, 6.420, 6.440

s 4(1): 6.30 s 7(1)(2)(a): 6.30 s 7(2)(a): 6.30 s 7(2)(b): 6.30 ss 7(2) to (4): 6.30, 6.210 s 7(3)(a): 6.30 s 7(8): 6.30 s 71(9): 2.380 s 71(11): 2.380 s 71(12): 2.380 ss 71 to 75: 6.90 s 84: 6.210

s 4: 6.550, 6.590 s 5: 6.370 s 5(2): 6.370 s 5(3): 6.370 s 5(4): 6.370 s 5(5): 6.370 s 5(6): 6.370 s 5(7): 6.370 s 5(8): 6.370 s 7: 3.30, 3.210 s 7(1): 6.390 s 7(2): 6.390 s 7(3): 6.390 s 8(1): 6.410 s 8(2): 6.410 s 10: 6.370 s 12A: 6.350 s 14: 6.450 s 16: 6.370, 6.450 s 16(3): 6.450 s 17: 6.460, 6.520 s 18: 6.420 s 19: 6.370, 6.480, 6.490 s 19(1): 6.520, 6.660 s 19(2): 6.520 s 19(3): 6.480, 6.540 s 19(3)(g): 6.500 s 19(4): 6.480 s 19(5): 6.480 s 20(2): 3.200 s 21: 6.370, 6.550 s 22: 6.560 ss 22 to 25: 6.370 s 23: 6.560 s 24: 6.560 s 25: 6.560 s 26: 6.370, 6.560 s 27: 6.570, 6.590 s 27(4): 6.590 s 27(5): 6.590 s 28: 6.570, 6.580 s 29: 6.570 s 31: 6.670 s 31(2): 6.670 s 34: 6.570 s 35: 6.460 s 36: 6.640 s 37: 6.640 s 38: 6.370, 6.640 s 39: 6.640 s 46: 6.370, 6.450 s 84: 6.600 s 85: 6.600 s 155: 6.620 s 171: 6.620 s 191(1): 6.650

Whistleblowers Protection Act 1993: 5.730 s 4(1)(a)(iv): 5.730

Tasmania Age of Majority Act 1973: 4.160 Anti-Discrimination Act 1998: 1.80, 15.30, 15.150 s 14(3): 15.100

Child Care Act 2001 s 15B: 4.20

Civil Liability Act 2002: 6.30, 6.90 Criminal Code 1924 s 192: 6.270

Education Act 1994 s 82: 4.20

Electronic Transactions Act 2000 s 11: 4.100

Industrial Relations Act 1984 s 3: 2.110 s 47(2): 9.30 s 49: 10.40

Industrial Relations (Commonwealth Powers) Act 2009: 1.20, 12.20 Law Reform (Miscellaneous Provisions) Act 1956 s 22A(3): 5.460

Limited Partnerships Act 1908: 2.420 Listening Devices Act 1991: 5.400 Long Service Leave Act 1976: 12.220 Minors Contracts Act 1988: 4.160 cx

Table of Statutes

Victoria

Model Work Health and Safety Act 2012 — cont

s 191(2): 6.650 s 193: 6.650 s 195: 6.650 s 197: 6.650 s 216: 6.350 s 230(4): 6.340 s 244(3): 6.350 s 247: 6.590 s 252: 6.590

Accident Compensation Act 1985: 3.100 s 7: 2.390

Age of Majority Act 1977: 4.160 Associations Incorporation Act 1981: 4.140

Work Health and Safety Regulation 2012: 6.340

Child Employment Act 2003: 4.20

Partnership Act 1891

Commercial Arbitration Act 1984 s 38(5): 9.150, 10.270, 10.320

s 6(1): 2.420 s 7(b): 2.420 s 7(c): 2.420 s 7(c)(ii): 2.420 s 38: 9.270, 9.330 s 83: 9.270

Commercial Arbitration Act 2011 s 34A: 9.150

Commonwealth Powers (Industrial Relations) Act 1996: 1.20, 12.20

Personal Information Protection Act 2004: 5.400

Crimes Act 1958 s 176: 5.810

Police Regulation Act 1898

Crimes Act 2011

s 52: 5.460

s 21A: 6.270

Police Service Act 2003

Electronic Transactions Act 1999: 4.100

s 65(1): 2.410 s 65(2): 2.410

Employment Relations Act 1993: 1.20

Public Interest Disclosure Act 2002: 5.730

Equal Opportunity Act 2010: 1.80, 15.30, 15.150

State Service Act 2000: 2.410

s 8: 15.70, 15.100 s 9(2): 15.120 s 9(3): 15.160 s 19: 15.170 s 20: 15.170 s 139: 15.210 s 144: 15.210 s 159: 15.210 s 160: 15.210

Statutory Holidays Act 2000: 12.230 Workers Rehabilitation and Compensation Act 1988: 6.30, 6.210 s 3(1): 6.30 s 3(2A): 6.30 s 25(1)(a): 6.30 s 25(1)(b): 6.30 s 25(1A): 6.210 s 25(2)(ba): 6.30 s 25(6): 6.30 s 25(7): 6.30 s 97: 5.460 s 132: 6.90 s 132A: 6.90 s 133: 6.90 s 136: 6.90 s 138AA: 6.90, 6.210 s 138AA: s 138AB: 6.90 s 138AD: 6.90

Fair Trading Act 1999 s 13: 4.230

Fair Work (Commonwealth Powers) Act 2009: 1.20, 12.20 Health Records Act 2001: 5.400 Long Service Leave Act 1992: 12.220 Occupational Health and Safety Act 1985: 6.420 s 4: 6.420 s 20: 6.370 s 21: 6.370, 6.430, 6.520, 6.550 s 21(3): 3.30 s 22: 6.380, 6.520

Wrongs Act 1954 s 2: 6.110 s 3: 5.440 cxi

Macken’s Law of Employment Occupational Health and Safety Act 1985 — cont

Police Regulation Act 1958 s 123(2): 2.410

s 26: 6.370 s 143: 6.350 ss 207 to 203: 6.370

Privacy and Data Protection Act 2014: 5.400

Occupational Health and Safety Act 2004: 6.340, 6.520, 6.560

Public Administration Act 2004: 2.410

s 2: 6.350 s 5(1): 6.410, 6.500, 6.550 s 5(2)(a): 2.410 s 20: 6.420 s 21: 6.480 s 21(1): 6.70, 6.270, 6.420, 6.430, 6.500, 6.520 s 21(3): 6.390 s 23(1): 3.210 s 25: 6.580 s 25(1): 6.580 s 26: 6.550 ss 27 to 31: 6.560 s 32: 6.670 s 35: 6.350 s 35(2): 6.390 s 36: 6.350 ss 37 to 39: 6.630 s 38: 6.640 s 39: 6.640 s 76: 6.600 s 77: 6.600 s 135: 6.660 s 136: 6.660 s 144: 6.590 s 145: 6.590 s 149: 6.340 s 150: 6.340 s 152: 6.340 s 154: 5.850 s 162: 6.560

Public Holidays Act 1993: 12.230 Public Sector Employment (Award Entitlements) Act 2006: 2.410 Residential Tenancies Act 1997 s 12: 2.400

Swan Hill Pioneer Settlement Authority (Repeal) Act 1994 s 51AA: 4.290

Supreme Court Act 1986 s 50: 4.160 s 51: 4.160

Surveillance Devices Act 1999: 5.400 Victoria Police Act 2013: 2.410 Whistleblowers Protection Act 2001: 5.730 s 3: 2.410

Working with Children Act 2005: 4.20 Workplace Injury Rehabilitation and Compensation Act 2013: 6.30, 6.210 s 3: 6.30 s 40: 6.30, 6.210 s 40(2)(3): 6.30 s 40(7): 6.210 s 46: 6.30 s 50: 6.30 s 50(1): 6.30 s 50(2): 6.30 s 50(3): 6.30 s 318: 6.90 s 318(1): 6.210 s 324: 6.90 ss 326 to 328: 6.90 s 335: 6.90, 6.210 s 340: 6.210 Sch 1, cl 9: 2.120 Sch 1, Pt 1, cl 14: 2.410

Occupational Health and Safety Regulations 2007: 6.340 reg 1.1.8: 6.390

Owner Drivers and Forestry Contractors Act 2005: 12.280 s 21: 12.280

Partnership Act 1958 s 5(1): 2.420 s 6(2): 2.420 s 6(3): 2.420 s 6(3)(b): 2.420 s 37: 9.270, 9.330 s 60: 2.420 s 67: 2.420 s 70: 9.270, 9.330

Wrongs Act 1958: 6.30, 6.90

Payroll Tax Act 2007

s 24: 5.440 s 25: 6.110

s 7: 2.50 s 13: 2.50 cxii

Table of Statutes

Western Australia

s 19: 6.370, 6.480 s 19(1)(c): 6.350 s 19A: 6.670 s 20: 6.580 s 20(2)(d): 6.640 s 20A: 6.670 s 21: 6.580 s 21A: 6.670 s 22: 6.370, 6.550 s 23: 6.370, 6.560 ss 23C to 23F: 6.390 s 23F: 3.30 s 23F(4): 3.210, 3.250 s 23G: 6.480 s 23I: 6.640 ss 23I to 23L: 6.640 s 23L: 6.640 ss 26 to 28A: 6.600 s 35(1)(c): 6.350 ss 35A to 35D: 6.600 s 55: 6.590 s 55I: 6.660 s 56: 6.600 s 57: 6.340 s 57(7): 6.350 s 57(8): 6.340, 6.350 Pt VI: 6.650 Div 3: 6.660

Age of Majority Act 1972: 4.160 Children and Community Services Act 2004 Pt 7: 4.20

Civil Liability Act 2002: 6.30, 6.90 Coal Industry Superannuation Act 1989 s 4: 2.50

Criminal Code Act 1913 Ch XIII: 5.810

Electronic Transactions Act 2011: 4.100 Employment Agents Act 1976: 4.10 Equal Opportunity Act 1984: 1.80, 15.30, 15.150 s 5: 15.100 s 127(b)(i): 15.230

Health Services (Conciliation and Review) Act 1995 s 4: 5.400 s 25: 5.400

Industrial Relations Act 1979: 13.30 s 23: 13.30 s 23A: 13.30 s 27: 13.30 s 29: 13.30 s 29AA: 13.30 ss 96B to 96L: 13.30 s 115: 2.410 Sch 3: 2.410

Law Reform (Contributory Negligence and Tortfeasors’ Contribution) Act 1947 s 3A: 6.110 s 7: 5.440

Limited Partnerships Act 1909 s 4(2): 2.420 s 6(1): 2.420

Occupational Safety and Health Regulations 1996: 6.340 Occupiers Liability Act 1985: 6.180 Owner Drivers (Contracts and Disputes) Act 2007: 12.280 Partnership Act 1895 s 7: 2.420 s 8(2): 2.420 s 8(3): 2.420 s 8(3)(b): 2.420 s 44: 9.270, 9.330

Police Act 1892 s 137(3): 2.410 s 137(5): 2.410

Property Law Act 1969 s 11: 5.490

Long Service Leave Act 1958: 12.220

Public Interest Disclosure Act 2003: 5.730

Occupational Safety and Health Act 1984: 6.250, 6.340

Public Sector Management Act 1994: 2.410

s 3: 6.420, 6.550 s 3(4): 2.410 s 3A: 6.670 s 4(2): 6.350 s 5: 6.350

Public and Bank Holidays Act 1972: 12.230 Residential Tenancies Act 1987 cxiii

Macken’s Law of Employment

s 40: 5.780

Residential Tenancies Act 1987 — cont

s 5: 2.400

School Education Act 1999 s 29: 4.20

Surveillance Devices Act 1998: 5.400 Whistleblowers Protection Act 1986: 13.340 Workers’ Compensation and Injury Management Act 1981: 6.30, 6.210 s 5: 6.30 s 5(1): 6.30, 6.210 s 5(4): 6.30, 6.210 s 5(c): 6.30 s 5(d): 6.30 s 19: 6.30 ss 93A to 93S: 6.90 s 93K: 6.210

Public Interest Disclosure Act 1998: 5.710, 5.720, 5.730 Sex Discrimination Act 1975: 4.310 Statutes of Labourers of 1349 and 1350: 1.10 Truck Act 1896: 12.160 Wages Act 1986: 12.160

New Zealand Employment Relations Act 2000 s 4: 5.180

Waterfront Industries Act 1953: 14.200

Imperial and United Kingdom United States Apportionment Act 1870: 10.40 Australian Courts Act 1828: 2.30 Bribery Act 2010: 5.810 Data Protection Act 1998: 5.290 Employers and Workman Act 1875: 2.30

Civil Rights Act of 1964 s 703: 15.160

False Claims Act: 5.730 Norris–La Guardia Act: 14.90 Trade Union Acts of 1871 and 1876: 14.20

Employment Rights Act 1996: 2.380, 5.710, 5.720, 5.730, 10.50 s 43B: 5.730 s 92: 5.270 s 182: 2.380

Human Rights Act 1998: 5.680 Industrial Relations Act 1971: 11.60, 11.120 Lord Tenterden’s Act (Statute of Frauds Amendment Act 1828) s 5: 4.160

Masters and Servants Act 1828: 2.30 Merchant Shipping Act 1894: 14.130 Misrepresentation Act 1967: 4.230

Treaties and Conventions Convention Concerning Discrimination in Respect of Employment and Occupation: 13.340 Convention Concerning Equal Opportunities and Equal Treatment for Men and Women Workers: Workers with Family Responsibilities: 13.340 European Convention on the Human Rights

National Insurance Act 1946: 2.30 Patents Act 1977 s 39(1): 5.780

Art 10: 8.330

International Covenant on Civil and Political Rights: 5.270 cxiv

Table of Statutes

ss 784 to 788: 13.350 s 789: 13.350

Termination of Employment Convention 1982: 13.10, 13.40, 13.70, 13.100, 13.120, 13.340, 13.350, 13.360 Termination of Employment Recommendation 1982: 13.10, 13.100, 13.340, 13.360

cxv

1

Employment Law in an Age of Statutes “Legislation and the common law are not separate and independent sources of law; the one the concern of Parliaments, the other the concern of courts. They exist in a symbiotic relationship.” [Brodie v Singleton Shire Council (2001) 206 CLR 512 at 532 [31] per Gleeson CJ.]

[1.10] [1.20] [1.20] [1.30] [1.40] [1.50] [1.60] [1.70] [1.80] [1.80] [1.90] [1.100] [1.110]

Introduction ......................................................................................................... 1 Federal Industrial Legislation ............................................................................. 3 Influence of the Australian Constitution ........................................................ 3 Fair Work ........................................................................................................ 6 Fair Work institutions .................................................................................... 6 Other Federal Legislation ................................................................................... 8 Executive employment contracts and corporations legislation .................... 8 Senior employees’ duties under the Corporations Act 2001 ........................ 9 State Laws ........................................................................................................... 9 State discrimination statutes .......................................................................... 9 State laws dealing with other matters ......................................................... 10 Public sector workers ................................................................................... 10 Coherence Between Common Law and Statute ............................................... 11

Introduction [1.10] This book, now in its eighth edition, is essentially about the way that the law in Australia constructs and regulates the individual employment relationship. Despite the rising incidence of outsourcing and contracting, many Australian workers continue to derive their livelihood from employed work. This book deals with the principles of law that govern the relationship between employers and their employees. The first edition of this book (authored by the Hon James J Macken, Carolyn Sappideen née Moloney and Greg McCarry, and published in 1978) was entitled The Common Law of Employment, and primarily focused on a comprehensive analysis of the common law of employment. At that time, Australia’s traditional system of collective industrial relations made it easier to separate “employment” law (governed predominantly by common law principles) from “industrial law”, embedded in a system of conciliation and arbitration of collective industrial disputes. Over time, successive editions have included an increasing amount of material on statutory incursions into the common law of employment. Australia has experienced a period of considerable change in its system of labour laws over the past two decades, as a consequence of government responses to the economic pressures created by the globalisation of capital markets.1 The so-called “deregulation” of labour markets has ironically required the enactment of extensive 1

See generally, Conaghan, Fischl and Klare, Labour Law in an Era of Globalization: Transformative Practices & Possibilities (Oxford University Press, Oxford, 2002).

2

Ch 1: Employment Law in an Age of Statutes

statutory provisions, and the creation and recreation of new regulatory institutions. Much of that new regulation concerns collective labour relations: the permitted role of trade unions, the regulation of collective industrial action, the establishment and empowerment of agencies (such as the Fair Work Commission, the Fair Work Ombudsman and the Australian Building and Construction Commission) to supervise industrial activity and police compliance with the system. A thorough study of collective labour relations and the regulation of the system as a whole is outside the scope of this book. Our focus on the individual employment relationship means that we explain and consider those statutory provisions that influence the obligations that employers owe their employees as individuals. Major changes in the legislative environment directly affecting the regulation of the individual employment relationship – particularly the federal enactment of legislated minimum employment conditions – in recent years have prompted the current authors to reconfigure this book into two Parts. The common law continues to provide the essential bedrock of principles defining and governing that relationship, so the chapters in Part One explain and analyse common law doctrines and principles (principally in contract and tort), and how they have developed (to a greater or lesser extent) to accommodate contemporary expectations of the parties to typical employment relationships. Chapter 2 explains the way in which law (especially evolving common law tests) constructs the concept of “employment” as a distinct category of work relationship. Chapter 3 considers the phenomenon of labour hire. Chapters 4 through to 6 explain the creation, construction and interpretation of employment contracts and the respective duties of employers and employees, primarily according to the common law, but always recognising important statutory influences. Employer duties in respect of work health and safety, for example, cannot be understood without reference to the extensive statutory scheme which has all but eclipsed common law duties of care (see Chapter 6). Chapters 7 to 11 deal with suspension and termination of employment contracts and the range of remedies available for breach of employment contracts at common law. Part Two then turns to a close examination of some particular statutory aspects of employment. The engagement of labour has long been a field heavily regulated by statutory law, and any notion that employers and employees have ever enjoyed complete “freedom of contract” is naïve indeed. Sometimes statutes have been enacted to address the risks of exploitation faced by the most vulnerable workers as a consequence of their unequal bargaining power. We might describe this as protective legislation, and include statutes that mandate minimum wages and conditions of employment as examples. However statutory intervention in labour markets has not always been protective of worker interests. For example, after the Black Death devastated the population of agrarian labourers in England, the crown enacted the Statutes of Labourers of 1349 and 1350, to protect the interests of feudal landowners by freezing wages at pre-plague rates, and imposing harsh punishments on workers who abandoned their masters to take advantage of their newly acquired market power.2 This is an historical example of legislation used as an instrument of labour market regulation, and there are many examples of the use of statutes to influence labour market activity today. The provisions in the Fair Work Act 2009 (Cth) governing the restrictions on employees’ ability to take “protected industrial action” in support of their collective bargaining claims, provide one important example (see Chapter 14).3 The chapters in Part Two focus principally on those statutory provisions that are relevant to the obligations of employers and employees as parties to employment 2

3

For readers interested in ancient labour history, see the first edition of this work, which provides a more detailed excursion through the labour laws of earlier centuries: see Macken, Moloney and McCarry, The Common Law of Employment (Law Book Company Ltd, Sydney, 1978), pp 1-6. See Fair Work Act 2009 (Cth), Pt 3-3.

Federal Industrial Legislation

relationships. In Chapter 12 we review the statutory obligations that underpin minimum wages, working hours, leave and other employee entitlements. The interrelationship between statutory instruments (such as awards and enterprise agreements) and the common law employment contract is analysed in order to understand employers’ obligations in respect of the provision of wages and working conditions. In Chapter 13 we deal extensively with the individual employee’s statutory entitlement to complain of unfair dismissal or adverse action, or bullying behaviour at work (see [13.370]). Chapter 15 addresses Australian anti-discrimination laws (outside of the Fair Work Act 2009 provisions) and their influence in employment regulation. In Chapter 14, on Taking Industrial Action, we explain the old industrial torts in relation to the statutory immunities from suit for “protected industrial action” in the Fair Work Act 2009 that limit workers’ exposure to those potential tort claims. In Australia today, the regulation of legitimate industrial action falls within Ch 3 of the Fair Work Act 2009, headed “Rights and Responsibilities of Employees, Employers, Organisations, etc”, so what we may once have framed as an “industrial tort” is potentially the exercise (under the heavy constraint of special rules) of a “right to take protected industrial action”. We do not, however, explain in any detail all of the processes for negotiating and making enterprise agreements, or mounting collective industrial action, nor the restrictions on union rights of entry to workplaces, nor many other aspects of the regulation of collective labour relations. These are meat for studies on collective industrial law. It is, however, important that we locate the regulation of individual employment relationships within the broader framework of Australian labour market regulation. To this end, we provide here a brief history of Australian labour and employment laws, and also a general overview of the current scheme of federal regulation under the Fair Work Act 2009, principally for the purpose of explaining the relationship between the common law and statutory regulation of employment relationships in Australia. Detailed explanation of statutory workplace laws is reserved for the chapters in Part 2. The relationship between common law and statutory regulation frequently gives rise to concerns about “coherence” between the two systems of law, so we reflect on the problem of coherence at [1.110].

Federal Industrial Legislation Influence of the Australian Constitution [1.20] Any consideration of Australia’s employment laws must acknowledge the important role played by the framers of the Australian Constitution who, in their wisdom, determined that at federation, the new Commonwealth parliament should not have broad powers to regulate employment and labour relations for the whole nation, but should only have power to make laws with respect to “the conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State” (the labour power).4 This meant that the States retained the ability to make effective laws for employment conditions within their own boundaries. States had their own industrial relations statutes, as well as legislation mandating certain employment rights for matters such as annual leave and long service leave. The States also regulated work health and safety, and a range of other matters relevant to employment. The framing of s 51(xxxv) also meant that federal legislation in this field was limited to the establishment of a system for the conciliation and arbitration of interstate industrial disputes. While the Commonwealth relied solely on s 51(xxxv) for industrial regulation, direct legislation of employment conditions was considered to be impossible. Federal influence over the pay and conditions of employees was, however, 4

Australian Constitution, s 51(xxxv).

3

4

Ch 1: Employment Law in an Age of Statutes

achieved by the establishment of an industrial tribunal empowered to settle interstate industrial disputes by the making of awards. The Conciliation and Arbitration Act 1904 (Cth) created a highly centralised federal compulsory conciliation and arbitration system, which depended for its effective functioning on high levels of industrial representation of employees by registered trade unions.5 Trade unions developed a practice of serving logs of claims on many employers in an industry, so that these federal awards, containing detailed wage scales, work classifications, and other conditions of employment, would bind employers across an industry.6 Meanwhile, intrastate matters continued to be regulated by state awards and legislation. All States in Australia also adopted similar systems of compulsory conciliation and arbitration in this early period in the history of the Australian federation.7 Chapter 12 deals in some detail with the relationship between federal and State awards and the common law contract of employment. The system of conciliation and arbitration was maintained in the Industrial Relations Act 1988 (Cth). Federal regulation did not change significantly until after the discovery of the potency of the corporations power in s 51(xx) for making laws with respect to the rights and responsibilities of incorporated employers. The Industrial Relations Reform Act 1993 (Cth) (introduced by the Keating ALP government) introduced provisions permitting collective bargaining at enterprise level between employers and unions, and between employers and employees without representation by unions. These enterprise agreements (initially called “certified agreements” in the case of union agreements, and “enterprise flexibility agreements” when made directly with employees) could be made about any matters pertaining to the employment relationship, and would be binding upon employers in respect of all employees covered by the agreement. This legislation also introduced the first federal unfair dismissal laws, allowing eligible individual employees to bring applications for reinstatement after a “harsh, unjust or unreasonable” dismissal (see Chapter 13). This reforming statute also relied on the external affairs power in s 51(xxix) to introduce some measures based on International Labour Organization conventions.8 The Industrial Relations Reform Act 1993 was challenged by the Victorian government in Victoria v Commonwealth,9 but the High Court held that the Act’s reliance on the corporations power was sound, and so opened a door to further incursion of Commonwealth legislation into employment relations. In 1996, the Industrial Relations Act 1988 was substantially amended and renamed as the Workplace Relations Act 1996 (Cth). This enactment reduced the content of federal awards to 20 allowable award matters, maintained collective bargaining for certified agreements and introduced a new statutory instrument called an Australian Workplace Agreement (AWA), which allowed employers to enter into binding statutory agreements with individual employees. (AWAs were abandoned with the introduction of the Fair Work Act 2009.) Nevertheless, the most radical reforms were left until the 5 6

7

8 9

Burwood Cinema Ltd v Australian Theatrical and Amusement Employees Association (1925) 35 CLR 528. For a detailed understanding of the Australian conciliation and arbitration system, see Isaac and Macintyre (eds), The New Province for Law and Order: 100 Years of Australian Industrial Conciliation and Arbitration (Cambridge University Press, Cambridge 2004). South Australia and Victoria were the first jurisdictions to establish compulsory arbitration in 1894 and 1896 respectively. See Creighton, Ford and Mitchell, Labour Law Materials and Commentary (Law Book Company Limited, Sydney, 1983), p 9. Ironically, Victoria was also the first State to move away from a compulsory arbitration system under the Employment Relations Act 1993 (Vic). Later, in 1996, the Victorian Parliament referred its power to legislate on industrial relations to the Commonwealth under s 51(xxxvii) of the Constitution. For example, ILO Convention Concerning the Termination of Employment at the Initiative of the Employer, 1982, ILO C158. (1996) 187 CLR 416.

Federal Industrial Legislation

government of the day held power in both houses of parliament, and was able to introduce the Workplace Relations Amendment (Work Choices) Act 2006 (Cth) (Work Choices). Work Choices abandoned the making of new federal awards by the process of conciliation and arbitration (although it permitted their retention in edited form throughout a transitional period of five years), and introduced a set of legislated minimum terms and conditions of employment to apply to all employees covered by the Act. Crucially, Work Choices introduced provisions overriding most State industrial laws for all constitutional corporations, so that incorporated employers were no longer bound by State industrial laws (with some exceptions, noted in [1.90]).10 Although the Work Choices laws were short-lived, many of the most radical changes remained with the introduction of the Fair Work Act 2009. The federal statute continues to state an intention to cover the field, so most State industrial relations laws do not apply to constitutional corporations.11 Since the enactment of the Fair Work Act 2009, all States bar Western Australia have enacted statutes referring powers over industrial relations matters to the Commonwealth, so that all private sector employers in those States (whether incorporated or not) are covered by federal legislation.12 In December 2009, the Commonwealth Parliament enacted the Fair Work (State Referrals and Other Measures) Act 2009 which gave effect to earlier State referral legislation13 in all States except Western Australia by which these States referred their private sector industrial powers to the Commonwealth parliament. Victoria had already surrendered industrial matters to the Commonwealth by a referral of power from 1 January 1997 after the enactment of the Workplace Relations Act 1996 (Cth).14

10

11

12

13

14

See Owens, “Unfinished Constitutional Business: Building a National System to Regulate Work” (2009) 22 Australian Journal of Labour Law 258. A constitutional challenge to the Work Choices legislation was defeated in New South Wales v Commonwealth (2006) 229 CLR 1. See Fair Work Act 2009 (Cth), ss 26 – 30. “Non-excluded” matters of State law that continue to apply to national system employers are listed in s 27(2) and include matters such as superannuation, workers’ compensation, occupational health and safety, long service leave and a number of other specific matters. See Industrial Powers (Commonwealth Powers) Act 2009 (NSW), Fair Work (Commonwealth Powers) Act 2009 (Vic), Fair Work (Commonwealth Powers and Other Provisions) Act 2009 (Qld), Fair Work (Commonwealth Powers) Act 2009 (SA), Industrial Relations (Commonwealth Powers) Act 2009 (Tas). See the precise terms of the relevant State referrals legislation where the public sector workers are not employed by the Crown in right of the State. For example in New South Wales the definition of State public sector employee in s 3 of the Industrial Relations (Commonwealth Powers) Act 2009 (NSW) excludes any employee of a state-owned corporation. State referral legislation differs as to subject matters which are expressly excluded from the State referrals. For example, in the case of New South Wales, Victoria and Queensland a matter dealt with in State anti-discrimination or superannuation or workers’ compensation or occupational health and safety legislation is expressly excluded from the State referral. Although Western Australia has not referred powers, the great majority of employers and employees in that State are in the national system in any event because most employers are trading or financial corporations and therefore are constitutional corporations, all of which are “national system employers” under s 6(1) of the Fair Work Act 2009. Industrial Powers (Commonwealth Powers) Act 2009 (NSW), Fair Work (Commonwealth Powers) Act 2009 (Vic), Fair Work (Commonwealth Powers and Other Provisions) Act 2009 (Qld), Fair Work (Commonwealth Powers) Act 2009 (SA), Industrial Relations (Commonwealth Powers) Act 2009 (Tas). See the Commonwealth Powers (Industrial Relations) Act 1996 (Vic).

5

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Ch 1: Employment Law in an Age of Statutes

Fair Work [1.30] The Fair Work Act 2009 has operated, with some amendments, since 1 January 2009. This legislation provides for mandatory terms and conditions of employment through the imposition of 10 “National Employment Standards” (the NES),15 the creation of modern awards that cover employees across occupational groups,16 and through provisions enabling the making and enforcement of enterprise agreements for those with the industrial muscle to secure wages and conditions in excess of the relevant award.17 The nature and scope of the safety net constituted by the NES and modern awards is discussed at [12.60]. There are also provisions enabling (in limited circumstances) the Fair Work Commission (FWC) to make certain kinds of “workplace determinations” when industrial negotiations have failed to result in an agreement.18 The Act also empowers the FWC to set minimum wages19 and to make “equal remuneration orders”.20 Employers cannot contract out of these statutory instruments by ordinary common law employment contracts. The Fair Work Act 2009 also expanded access to the federal unfair dismissals jurisdiction which had been significantly restricted by Work Choices The scope of the unfair dismissal jurisdiction under the Fair Work Act 2009 is examined in Chapter 12. The Fair Work Act 2009 also consolidated a number of earlier provisions creating certain rights against discriminatory or “adverse” treatment (including the freedom of association rights formerly in Pt XA of the old Workplace Relations Act 1996 (Cth), and the Workplace Relations Act 1996 protections from unlawful dismissal) into “General Protections” for workplace rights (see [13.230]-[13.320]). The unfair dismissal protections in Pt 3-2 of the Act, and the General Protections in Pt 3-1, cannot be ignored by employers considering decisions to terminate employment contracts, so readers of Chapter 8 (Termination by the Employer) need to be mindful of the statutory rights of employees, described in Chapter 12.

Fair Work institutions [1.40] When most of the provisions of the Fair Work Act 2009 commenced on 1 July 2009, a new regulator now known as the Fair Work Commission (FWC),21 was created with a broad responsibility for supervising the new regime. The FWC replaced the AIRC (although it is organised in a similar way and retained most of its members),22 the Fair Pay Commission and the Workplace Authority. It co-exists with the Fair Work Ombudsman (FWO) which is a separate agency23 exercising important enforcement functions and advising parties on their rights and responsibilities; the Australian Building and Construction Commission (ABCC) which exercises special enforcement powers relating to construction industry industrial relations; and the Fair Work Divisions of the Federal Court and the Federal Circuit Court. The FWC exercises 15 16 17

18 19 20 21

22 23

See Fair Work Act 2009 (Cth), Pt 2-2, ss 59 – 131. See Fair Work Act 2009 (Cth), Pt 2-3, ss 132 – 168K. See Fair Work Act 2009 (Cth), Pt 2-4, ss 169 – 257. For an illuminating study on the incidence of collective bargaining, see van Wanrooy, Wright and Buchanan, Who Bargains? A Report Prepared for the NSW Office of Industrial Relations by the Workplace Research Centre (The University of Sydney, May 2009). See Fair Work Act 2009 (Cth), Pt 2-5, ss 258 – 281A. See Fair Work Act 2009 (Cth), Pt 2-6, ss 282 – 299. See Fair Work Act 2009 (Cth), Pt 2-7, ss 300 – 306. The Fair Work Commission was initially named “Fair Work Australia” when the Fair Work Act 2009 (Cth) was first enacted, but the name was changed at the recommendation of President Iain Ross by the Fair Work Amendment Act 2012 (Cth) with effect from 1 January 2013. Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), Sch 18, Pt 1. See Fair Work Act 2009 (Cth), Pt 5-2.

Federal Industrial Legislation

a similar range of functions to the AIRC, which it replaced with the exception of minimum wage fixing. This function of the former Fair Pay Commission is now allocated to a Minimum Wage Panel within the FWC.24 It is important to understand that the FWC does not exercise any judicial functions. Even when Fair Work Commissioners are exercising arbitral powers to determine unfair dismissal applications, they are exercising administrative power, and are not determining legal rights. This is because the Boilermaker’s doctrine holds that only courts can exercise the judicial power of the Commonwealth.25 It is the Boilermaker’s doctrine that makes the distinction between an interests dispute and a rights dispute so important in our system of federal workplace laws. Interests disputes can be arbitrated by a body exercising administrative power, provided that legislative provisions confer upon that body the power to create new rights. The traditional system for making industrial awards (abandoned with the introduction of the Work Choices laws from March 2006)26 permitted the creation of new rights (that is, new award conditions) to resolve industrial interests disputes. Rights disputes, on the other hand, concern the application and interpretation of existing legal entitlements, and must be resolved by a court exercising judicial power, unless the parties themselves have entered into a contract to permit some other form of dispute resolution. Such a contract is a private arbitration agreement, and will be enforceable depending upon prevailing State law.27 The Boilermaker’s doctrine has influenced the choice of dispute resolution processes for unfair dismissal applications. Unfair dismissal applications go to the FWC for conciliation (often these days via a telephone conference)28 and if that fails the matter will be set down for arbitration. An unfair dismissal application is treated as a plea for the creation of a new right to reinstatement,29 and the Fair Work Commissioner weighs up the competing interests of employer and employee, and possibly others at the workplace, before making a decision that balances these interests, and achieves a “fair go all round”.30 So although consideration of the contractual rights and responsibilities of employers and employees may influence the outcome of an unfair dismissal application, the FWC is not bound to enforce employment contracts according to their own terms. Readers should be mindful of the distinction between the employer’s right to terminate employment contracts at common law (see Chapter 8), and the constraints imposed by the statutory unfair dismissal scheme (see Chapter 13). The statutory protections against discriminatory treatment in the General Protections in Pt 3-1 of the Act are, however, conceived as legal rights to be free from victimisation at work. Although the FWC plays a role in preliminary attempts to resolve general 24 25

26 27 28 29

30

Fair Work Act 2009 (Cth), Pt 5-1, Div 4B, s 617. R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254 at 323 (Webb J), 296 (Dixon CJ, McTiernan, Fullager and Kitto JJ), affirmed in Attorney-General of the Commonwealth of Australia v R [1957] AC 288 (PC). See also Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 at 267-8. For commentary see Sawer, “The Separation of Powers in Australian Federalism” (1961) 35 ALJ 177; Wheeler “Original Intent and the Doctrine of the Separation of Powers in Australia” (1996) 7 PLR 96. See Workplace Relations Amendment (Work Choices) Act 2005 (Cth). See Stewart and Riley “Working Around Work Choices: Collective Bargaining and the Common Law” (2007) 31 MULR 903, 927-36. See MacDermott and Riley, “ADR and Industrial Tribunals: Innovations and Challenges in Resolving Individual Workplace Grievances” (2011) 38(2) Mon LR 82-102. In reality, more claims result in an award of compensation, which may be made if the FWC has determined that reinstatement is not appropriate in all the circumstances: Fair Work Act 2009 (Cth), s 390(3). See Fair Work Act 2009 (Cth), s 381(2). The expression “a fair go all round” originated in a decision of Sheldon J in the NSW Industrial Commission in Re Loty and Holloway v Australian Workers’ Union [1971] AR(NSW) 95.

7

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Ch 1: Employment Law in an Age of Statutes

protections claims by conciliation,31 and may arbitrate a dispute if both parties agree to submit to arbitration,32 the ultimate decision-maker in determining a General Protections claim must be a court exercising the judicial power of the Commonwealth (see Chapter 13).

Other Federal Legislation [1.50] A range of other federal enactments influence the rights and responsibilities of employers and employees, and may feature in litigation to resolve employment disputes. Federal anti-discrimination statutes prohibiting unlawful discrimination on the basis of race, sex, disability and age are explained in Chapter 15. Other statutes dealing ostensibly with commercial activity and the regulation of corporations can also affect the respective rights and obligations of employers and employees, for example, the Australian Consumer Law (Competition and Consumer Act 2010 (Cth) Sch 2) (explained in [4.240]).33 and the Corporations Act 2001 (Cth), particularly the provisions restricting termination payments to executives.

Executive employment contracts and corporations legislation [1.60] A number of provisions in the Corporations Act 2001 (Cth) seek to control the risk that directors and officers of public corporations may abuse their privileged positions when contracting with their corporate employers. The Corporations Act 2001 (Cth), ss 200AA – 200J, impose some restrictions on the ability of corporations to include certain termination benefits in service contracts with “managerial or executive officers” (defined in s 200AA).34 These restrictions were amended by the Corporations Amendment (Improving Accountability on Termination Payments) Act 2009 (Cth), following public scrutiny of directors’ emoluments in major public companies after the global financial crisis. Essentially, the restrictions require that payments to executives (and also to their relatives and associates) made in respect of the executive’s departure from office must be approved by a resolution of the members of the corporation if they are to be effective. There are exceptions for certain payments, including genuine pension payments, so long as certain limits (not exceeding one year’s base salary) are observed.35 Payments made in breach of these provisions are deemed to be held on trust for the corporation.36 Section 206J, introduced after the global financial crisis by the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011 (Cth), also banned any arrangements that would effectively permit an executive to hedge elements of a remuneration package (for instance share options) from exposure to the risk of poor corporate performance.

31

See Fair Work Act 2009 (Cth), ss 365 and 368.

32 33

See Fair Work Act 2009 (Cth), s 369(1)(b). The Australian Consumer Law in Sch 2 of the Competition and Consumer Act 2010 (Cth) comprises the provisions formerly enacted as Pt V of the Trade Practices Act 1974 (Cth). The Trade Practices Act 1974 was renamed and revised from 1 January 2011. See Fenwick and Sheehan, “Share-based Remuneration and Termination Payments to Company Directors: What are the Rules?” (2008) 26 C&SLJ 71; Sheehan, “The Regulatory Framework for Executive Remuneration in Australia” (2009) 31 SLR 273-308. See Corporations Act 2001 (Cth), s 200G.

34

35 36

Corporations Act 2001 (Cth), s 200J. See Re Cummings Engineering Holdings Pty Ltd [2014] NSWSC 250; Re Queensland Police Credit Union Ltd (2013) 279 FLR 420; [2013] QSC 273 at [12]-[41].

State Laws

See also the rules in Chapter 10 of the Australian Stock Exchange Listing Rules that restrict listed companies from including certain terms in executive remuneration contracts.37 The Corporations Act 2001 (Cth), ss 199A – 199C, make void any contract that purports to indemnify a corporation’s directors for certain breaches of directors’ duties, and also any contract term by which a corporate employer agrees to pay insurance premiums on policies covering these particular risks.

Senior employees’ duties under the Corporations Act 2001 [1.70] Employees who are also company directors and officers will bear a range of duties under the Corporations Act 2001 (Cth) in addition to duties owed under their employment contracts, or under any fiduciary duty recognised in equity, and these corporate law duties regularly make an appearance in statements of claim when employers seek remedies against departing executives. Section 180 imposes a duty of care and diligence (subject to a “business judgment” defence) on directors and officers of a corporation. “Director” is defined (in s 9) to include persons who, although not officially appointed to such a position, are influential decision-makers because “the directors of the company or body are accustomed to act in accordance with the person’s instructions or wishes”. Section 181 imposes a duty upon directors and officers to exercise their powers and discharge their duties in good faith in the best interests of the corporation, and for a proper purpose. Section 182 imposes a duty to refrain from improper use of the employee’s position to gain an advantage for the employee or another or to cause detriment to the corporation. Section 183 imposes a similar prohibition in respect of the use of information gained in the employee’s capacity. Sections 182 and 183 are distinquished from ss 180 and 181 in that they also apply to “employees”, and are not limited to directors, officers, or indeed executive level employees.38 These statutory provisions have been argued in cases against departing employees who have sought to take away confidential information in order to compete with the former employer39 (see [5.680]). The significance of these statutory duties is that breach may give rise to statutory remedies. Each of these sections is a civil penalty provision, and may give rise to a declarion of contravention under the Corporations Act 2001, s 1317E, and subsequently a pecuniary penalty order under s 1317G, or a compensation order under s 1317H.

State Laws State discrimination statutes [1.80] Many State laws that affect employment relationships continue to apply, even to

national system employers, as a consequence of s 27 of the Fair Work Act 2009.40 They include the State and Territory anti-discrimination statutes: • Anti-Discrimination Act 1977 (NSW) • Equal Opportunity Act 2010 (Vic) • Anti-Discrimination Act 1991 (Qld) 37

38 39 40

See, for example, r 10.17B which provides that executive directors’ remuneration must not include a commission on or percentage or operating revenue, and r 10.18 which prohibits termination benefits payable upon a change in shareholding or control of the company. For commentary on directors’ duties, see Justice R I Barrett, Robson’s Annotated Corporations Legislation (subscription series, Thomson Reuters). See for example Harris v Digital Pulse Pty Ltd (2003) 197 ALR 626. See Chapter 15 for a full discussion of these statutes and their operation in the employment law context.

9

10

Ch 1: Employment Law in an Age of Statutes

• Equal Opportunity Act 1984 (WA) • Equal Opportunity Act 1984 (SA) • Anti-Discrimination Act 1998 (Tas) • Discrimination Act 1991 (ACT) • Anti-Discrimination Act (NT). These statutes and their implications are explained in Chapter 15.

State laws dealing with other matters [1.90] Statutes dealing with the following matters, listed in the Fair Work Act 2009, s 27(2), will also continue to apply to national system employers: • superannuation; • workers’ compensation; • occupational health and safety; • matters relating to outworkers; • child labour (but see the limitation provided in Fair Work Regulations 2009 (Cth), reg 1.14);41 • training arrangements (except in relation to safety net terms and conditions of employment);42 • long service leave; • leave for victims of crime; • attendance for jury service or emergency service duties; • declaration and prescription of public holidays (but not rights and obligations of employers and employees on those holidays); • provision of essential services; • regulation of employee and employer associations and their membership; • workplace surveillance; • business trading hours; • claims for enforcement of employment contracts (except for unfair contracts review).43 According to the Fair Work Regulations 2009, reg 1.13, State laws dealing with whistleblowers, environmental protection, health services, and transport or safety operations will continue to apply to national system employers.

Public sector workers [1.100] Although most public sector workers, however described (for instance as public “servants” or “officers”) are engaged under a contract of employment, it is a 41

42 43

State child labour laws are only applicable to national system employers to the extent that they deal with the times when children can be employed. Child labour laws such as the Industrial Relations (Child Employment) Act 2006 (NSW) can no longer be used to impose more onerous obligations on employers of minors than are imposed by the NES and modern awards. See Riley, “Employing Minors in New South Wales: The Industrial Relations (Child Employment) Act 2006 (NSW)” (2007) 20 AJLL 295. See Fair Work Regulations 2009 (Cth), reg 1.14(b). Fair Work Regulations 2009 (Cth), reg 1.14(c), provides that the Contracts Review Act 1980 (NSW) will not apply to national system employers in respect of their employment contracts.

Coherence Between Common Law and Statute

contract which has some special and often unusual features.44 The extent to which such workers’ rights are governed by contract will depend on the terms of the relevant public sector legislation which may define the parties’ rights so completely as to exclude any terms implied by common law.45 This was held to be the case in State of South Australia v McDonald,46 a case in which a public sector school teacher sought to bring an action for damages against his employer for breaches of a duty of care, and an alleged duty not to destroy trust and confidence in the relationship. An extensive set of public sector regulations governing his employment as a State public servant, including detailed disciplinary and grievance procedures, were held to preclude any room for finding any implied terms in his employment contract. Readers with an interest in the regulation of public sector employment should consult specialist texts.47

Coherence Between Common Law and Statute [1.110] As the foregoing paragraphs have shown, employment in Australia is governed by a complex web of laws. The legal regulation of the individual employment relationship is firmly embedded in the common law, mainly the law of contracts, and much of the exposition in this book (particularly in Part 1 to follow) concentrates on common law doctrines and principles. Nevertheless, parties to employment contracts do not enjoy complete freedom of contract. The employer–employee relationship is also regulated in various ways by statute (at both federal and State level), and by regulations and instruments (such as awards and enterprise agreements) which are made and are enforceable under statute. In Chapter 2 we shall see that many modern welfare schemes attach obligations to the existence of an employer–employee relationship. So, for example, only employees will be entitled to the benefits conferred by workers’ compensation schemes and compulsory superannuation contributions. Employers and employees cannot contract out of their statutory obligations. As former Chief Justice of the High Court of Australia, the Hon Murray Gleeson has observed, these sources of law are not separate and independent, “[t]hey exist in a symbiotic relationship.”48 (Or at least, they must be interpreted as operating in a consistent and coherent manner, notwithstanding the many occasions in practice when different laws appear to conflict or cause confusion.) Statutory obligations do not automatically become terms of the employment contract (see [12.290]). Statutory obligations and entitlements are enforceable according to the provisions of the statute. Nevertheless, the enactment of statutory schemes regulating matters relevant to employment has had considerable influence on the development of the common law of employment (see [5.150]). In developing common law doctrines, the courts have been wary of the problem of maintaining “coherence” between common law principles and statutory law.49 This concern has influenced the development of the employer’s duty of care in tort, where the alleged duty of care to the employee conflicts with a statutory duty. For example, a teaching institution owes a duty of care to its teaching staff, however it will not be found to have breached this duty by conducting a vigorous investigation of alleged child abuse, so 44 45 46 47 48 49

See McCarry, Aspects of Public Sector Employment Law (Lawbook Co, 1988), pp 11-22. Director-General of Education (NSW) v Suttling (1987) 162 CLR 427 at 437. (2009) 185 IR 45. See Pittard and Weeks (eds), Public Sector Employment in the 21st Century (ANU Press, Canberra, 2007). Brodie v Singleton Shire Council (2001) 206 CLR 512 at 532 [31]. See Hill v Van Erp (1997) 188 CLR 159 at 231; Sullivan v Moody (2001) 207 CLR 562 at 580; State of New South Wales v Paige (2002) 60 NSWLR 371 at 390 [93] and 395-400 [132]-[155].

11

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Ch 1: Employment Law in an Age of Statutes

long as that investigation is conducted in compliance with the institution’s statutory obligations under child protection legislation.50 The problem of coherence has also influenced the development of a common law duty (accepted in England but now banished from Australian law) “not to act in a manner calculated or likely to destroy mutual trust and confidence” in the employment relationship (see [5.140]–[5.160]). In the United Kingdom, the existence of statutory remedies for unfair dismissal first gave rise to the development of this duty, but also subsequently curtailed the development of common law damages for breach of the mutual trust and confidence obligation, where the employee claimed that the fact or manner of termination constituted a breach of this obligation.51 And in Australia, the High Court has denied the existence of any mutual duty of trust and confidence, because (among other reasons) common law development of such an obligation would risk incoherence with a burgeoning suite of specific statutory obligations upon employers.52 While employers must be ever wary of the potential existence of statutory obligations affecting their staff engagements, there is nevertheless wide scope for employers and employees to contract above and in addition to the statutory minima provided by legislation. Many aspects of the employment relationship (particularly in the realm of employee obligations towards employers) are not touched by statutory regulation, and have been left to private regulation between the parties. We turn now, in the next few chapters, to the common law of employment. Unlike statutory regulation, which has experienced dramatic and radical change in recent decades, the common law has developed gradually and incrementally under the pressure of evolving community expectations about the respective rights and responsibilities of employees and employers. First, however, we must establish the subject of our study: the employment relationship. Chapter 2 explores the subject of employment law by examining the development of the common law concept of employment from its roots in master and servant law, to contemporary understandings of the contract of employment. The concept of employment is ever more significant, given that the Fair Work Act 2009 depends upon the common law definition of employment in identifying those workers who are able to claim the protection of the statutory provisions.

50 51

52

See, eg, State of New South Wales v Paige (2002) 60 NSWLR 371. See Johnson v Unisys Ltd [2003] 1 AC 518; Eastwood v Magnox Electric plc; McCabe v Cornwall County Council [2005] 1 AC 503, discussed at [5.150]. See Brodie, “Mutual Trust and Confidence: Catalysts, Constraints and Commonality” (2008) 37 ILJ 329; Bogg, “Bournemouth University Higher Education Corporation v Buckland: Re-establishing Orthodoxy at the Expense of Coherence?” (2010) 39 ILJ 408. See Commonwealth Bank of Australia v Barker (2014) 253 CLR 169, see [5.160].

2

The Relationship of Employer and Employee “The parties cannot create something which has every feature of a rooster, but call it a duck and insist that everybody else recognise it as a duck.” [Re Porter; Re Transport Workers Union of Australia (1989) 34 IR 179 at 184 per Gray J on the question of whether truck owners were employees or contractors.]

[2.10] [2.20] [2.30] [2.40] [2.50] [2.70] [2.70] [2.80] [2.90] [2.100] [2.110] [2.120] [2.130] [2.140] [2.160] [2.160] [2.200] [2.350] [2.360] [2.380] [2.380] [2.390] [2.400] [2.410] [2.420] [2.430]

Introduction ....................................................................................................... 13 Employee – An Evolving Concept ................................................................... 14 Master–servant and social welfare legislation ............................................ 14 The role of the contract of employment ...................................................... 16 Employment – conferring rights and duties ................................................ 18 Employer and Employee ................................................................................... 21 Introduction .................................................................................................. 21 Changes to traditional patterns of work ..................................................... 21 Casuals ......................................................................................................... 23 Disguised employment .................................................................................. 26 Dependent contractors ................................................................................. 28 Deemed employees ....................................................................................... 30 Independent contractors contrasted ............................................................. 31 The Modern Test: The Emergence of the Multi-factor Test ............................ 33 The Multi-factor Test ........................................................................................ 36 Introduction .................................................................................................. 36 Hollis v Vabu ................................................................................................ 38 Express declaration of intent ....................................................................... 51 Incorporation ................................................................................................ 51 Distinguishing Other Relationships .................................................................. 53 Company directors ....................................................................................... 53 Bailment – taxi drivers ................................................................................. 57 Tenant ............................................................................................................ 58 Offıce – offıce holder .................................................................................... 59 Partnership ................................................................................................... 62 Conclusion ......................................................................................................... 64

Introduction [2.10] The modern law of employment has as its foundation a contract of employment which regulates the relationship between employer and employee. What do we mean by “contract of employment”, “employer” and “employee”? Why is it important to distinguish employment from other forms of work? This chapter is divided into two parts: the first part gives a brief explanation of the development of the modern contract of employment as a mechanism for regulating the relationship between employer and employee; and the second part examines, at length, who is an employee.

14

Ch 2: The Relationship of Employer and Employee

Employee – an evolving concept [2.20] It is often assumed that workers, labourers, and servants have always comprised a single group of employees, but this was not so until well into the 20th century. Although early authority distinguished between a contract for services (independent contractor) and a contract for service (servant), servants, labourers and higher status employees were not categorised into a single group of employees. Prior to that, legislatively and judicially, the scope of protective and other punitive legislation extended to those engaged in manual work (such as servants and labourers) but did not extend to non-manual work such (a manager or a clerk).1 It roughly approximated the distinction between blue collar workers paid wages and white collar workers paid a salary. Why the distinction? One key reason was the reach of master–servant legislation and the later social welfare legislation.

Master–servant and social welfare legislation [2.30] In Britain, the classifications were shaped by Master and Servant legislation that imposed criminal penalties for servants and labourers for breaching their contract whereas higher status employees, such as clerks, did not come within the scope of the statutes.2 The principal matters covered by the Acts were: failure to commence service, absenting from service without leave, misconduct while at work, loss of or damage to property of the “employer” in the worker’s case, failure to pay wages due and ill-treatment of the worker.3

Cases were heard before two magistrates and penalties of a fine or imprisonment for up to three months could be imposed.4 Imprisonment was usual for workers although this was dropped in later legislation.5 Despite the repeal of legislation in the United Kingdom in 1875, replacement legislation, the Employers and Workman Act 1875 providing remedies for breach of the contract of service, continued to exclude higher status employees.6 This legislation became increasingly unimportant because workers could, by giving as little as one hour’s notice needed to end the contract, leave work without being in breach of the statute.7 Similar distinctions can be found in social legislation such as the Workers’ Compensation Acts which provided compensation for work injuries. In their earliest forms, Workers’ Compensation legislation did not cover higher paid middle class employees who were regarded as being able to look after themselves.8 British commentators suggest that the final step in removing the distinction between different classes of employees came with the passing of the National Insurance Act 1946 (UK). The Act adopted a single distinction between employment under a contract for service 1 2 3 4 5

6

7 8

Deakin and Morris, Labour Law (6th ed, Hart Publishing, 2012), p 22. Deakin and Morris, Labour Law (6th ed, Hart Publishing, 2012), p 22. Merritt, “The Historical Role of Law in the Regulation of Employment – Abstentionist or Interventionist” (1982) 1(No 1) Aust JL & Soc 56 at 60-1. Merritt, “The Historical Role of Law in the Regulation of Employment – Abstentionist or Interventionist” (1982) 1(No 1) Aust JL & Soc 56 at 60-1. Merritt, “The Historical Role of Law in the Regulation of Employment – Abstentionist or Interventionist” (1982) 1(No 1) Aust JL & Soc 56 at 61 referring to the Employers and Workmen Act 1875 (UK). Employers and Workmen Act 1875 (UK) discussed in Deakin, The Contract of Employment: A Study in Legal Evolution (ESCR Centre for Business Research, University of Cambridge, Working Paper 203, July 2001), pp 24-8. Deakin, The Contract of Employment: A Study in Legal Evolution (ESCR Centre for Business Research, University of Cambridge, Working Paper 203, July 2001), p 28. Deakin, The Contract of Employment: A Study in Legal Evolution (ESCR Centre for Business Research, University of Cambridge, Working Paper 203, July 2001), p 30 citing Simpson v Ebbw Vale Steel & Coal Co [1905] 1 KB 453 at 458 per Collings MR.

Employee – an evolving concept

and self-employment for purposes of the payment of benefits.9 This laid the foundation for treating all employees, whether labourers or professionals, clerks or managers as employed under a contract of service and entitled to the benefits of social welfare legislation.10 The lead given by social legislation was followed in the courts with the adoption of broader tests to determine whether an individual was an employee.11 The later section of this chapter will deal in more detail with the tests for determining whether a person is an employee or is self-employed. The Australian experience was moulded by similar forces. Master and Servant legislation in Australia12 had, however, a much broader reach than its British counterpart and remained in effect and active for a much longer period as a means of providing a disciplined workforce.13 The situation in Australia was made more complex by a system of compulsory arbitration at both State and federal levels that had been introduced in Australia in the early 1900s.14 Early industrial arbitration Acts, in the main, adopted the nomenclature of employer and employee; the latter was defined as a person “employed in any industry”.15 Although the statutes defined “industry” broadly, judicial interpretation construed the legislation as being limited to disputes between employer and employee, synonymous with the relationship of master–servant.16 This was important because of the lingering view that a master–servant relationship could not exist in relation to employees of higher status, especially professionals.17 The statutes also excluded vulnerable independent contractors who comprised a significant proportion of the existing workforce.18 These were later included either in an expanded definition of employee (worker) or as deemed employees.19 It has been suggested that it was not until 1983 that the High Court finally accepted that all classes of employees could be involved in industrial disputes and covered by the federal industrial legislation.20 9

10 11

12 13

14 15 16 17 18 19 20

National Insurance Act 1946 (UK). It distinguished between employed earners under a contract of service and the self-employed; prior to that wage-dependent workers included labourer, servant and workman, Deakin, The Contract of Employment: A Study in Legal Evolution (ESCR Centre for Business Research Working Paper 203, June 2001), p 31. Deakin, The Contract of Employment: A Study in Legal Evolution (ESCR Centre for Business Research, University of Cambridge, Working Paper 203, June 2001), p 31. The tests for determining whether the person was an employee reflected this wider conception, Deakin, The Contract of Employment: A Study in Legal Evolution (ESCR Centre for Business Research, University of Cambridge, Working Paper 203, June 2001), p 32. See, for example, Gold v Essex County Council [1942] 2 KB 293; Cassidy v Minister of Health [1951] 2 KB 34; in Australia, see Zuijs v Wirth Brothers Pty Ltd (1955) 93 CLR 561 and see [2.160]. English legislation applied by virtue of the Australian Courts Act 1828. New South Wales introduced its own Act in 1828: Masters and Servants Act 1828 (9 Geo IV No 9). Howe and Mitchell, “Evolution of the Contract of Employment: A Discussion” (1999) 12 AJLL 1 at 5. Some 32,000 prosecutions were recorded in New South Wales between 1930 and 1963, Merritt, “The Historical Role of Law in the Regulation of Employment – Abstentionist or Interventionist?” (1982) 1(1) Australian Journal of Law and Society 56 at 61. It was finally abolished in all States; the last one repealed was in 1995 in Western Australia, see Creighton and Stewart, Labour Law (4th ed, Federation Press, 2005), [18.41]. Howe and Mitchell, “Evolution of the Contract of Employment: A Discussion” (1999) 12 AJLL 1 at 5. Howe and Mitchell, “Evolution of the Contract of Employment: A Discussion” (1999) 12 AJLL 1 at 9, and see Industrial Arbitration Act 1901 (NSW), s 2; Conciliation and Arbitration Act 1904 (Cth), s 4. Howe and Mitchell, “Evolution of the Contract of Employment: A Discussion” (1999) 12 AJLL 1 at 10. Howe and Mitchell, “Evolution of the Contract of Employment: A Discussion” (1999) 12 AJLL 1 at 12. Howe and Mitchell, “Evolution of the Contract of Employment: A Discussion” (1999) 12 AJLL 1 at 10-11. See [2.110], [2.120]. Howe and Mitchell, “Evolution of the Contract of Employment: A Discussion” (1999) 12 AJLL 1 at 15 citing the Social Welfare Union Case: R v Coldham; Ex parte Social Welfare Union (1983) 153 CLR 297.

15

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Ch 2: The Relationship of Employer and Employee

As in Britain, Australian social welfare legislation had a role to play. Early Commonwealth social insurance legislation such as the Unemployment and Sickness Benefits Act 1944 (Cth) did not distinguish between different classes of employee. It gave wide discretion to the Director-General to refuse payment of unemployment benefits.21 Whether the Director-General continued to apply distinctions between classes of employees based on manual labour is speculative. Other social legislation, such as workers’ compensation legislation provided compensation for injured “workers”.22 In the 1920s, legislation did not cover all workers23 nor did it cover persons earning more than a prescribed amount.24 The emphasis was on manual labour.25 Uncertainty continued as to whether professionals were covered.26 These restrictions gradually disappeared. Australian Workers’ Compensation statutes now cover all employees,27 professionals, clerks, managers and blue collar workers and a range of vulnerable workers (many of whom would otherwise be considered independent contractors), either through an expanded definition of employee (worker) or by deeming them to be employees (workers) for the purposes of the Act.28 As noted earlier, the last steps in the acceptance of a single class of employees occurred in 1983, when the High Court held that all classes of employees could be involved in industrial disputes29 for the purposes of the federal legislation, thus removing the remnants of the earlier distinctions.

The role of the contract of employment [2.40] So long as the different classifications of workers existed, the role of the contract of employment as the key instrument regulating employment remained in 21

22

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24

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26 27 28 29

The Unemployment and Sickness Benefits Act 1944 (Cth), s 15 simply refers to the claimant for benefits as “employed”. Section 28 permitted the Director-General to postpone payment of unemployment benefits if in the Director-General’s opinion “(i) that person is a seasonal or intermittent worker; and (ii) the income of that person is sufficient for the maintenance of himself and the persons who are ordinarily maintained by him notwithstanding a period of temporary unemployment”. See also ss 33, 34, 47 (withdrawal of benefit based on the amount of income). The Social Services Consolidation Act 1947 (Cth), s 111 excluded Aboriginal Australians “unless … satisfied that, by reason of the character and of the standard of intelligence and social development of that native, it is desirable that this section should not apply”. See also the earlier National Health and Pensions Insurance Act 1938 (Cth), Sch 1 (sickness, disablement, medical benefits). The changing nomenclature is instructive. In New South Wales the 1916 Act was titled the Workman’s Compensation Act 1916; the 1926 Act was the Workers Compensation Act 1926, the latter clearly covering women as well. See, for example, Employers’ Liability Act 1897 (NSW), s 3 where a “workman” was defined as “a seaman, a railway servant, and any other person who being a labourer, servant in husbandry, journeyman, artificer, handicraftsman, miner, or otherwise engaged in manual labour … has entered into or works under a contract with an employer … and whether it is a contract of service or a contract personally to execute any work or labour”. Howe and Mitchell, “Evolution of the Contract of Employment: A Discussion” (1999) 12 AJLL 1 at 8. The Workers Compensation Act 1926 restricted coverage to workers (except manual labourers) whose earnings did not exceed £750. A succession of Acts amended this limit and the special exception for manual labourers was removed. The 1953 amendments increased the amount to £2,000. In New South Wales, the monetary restriction was finally removed in 1957, see Boulter, Workers Compensation Practice in New South Wales (LBC, 1966), p 72. Reflected also in the compensation available for defined injuries (Table of maims), primarily loss of limbs, fingers, toes or loss of sight or hearing, see as an example the now repealed Workers Compensation Act 1926 (NSW), s 16. Howe and Mitchell, “Evolution of the Contract of Employment: A Discussion” (1999) 12 AJLL 1 at 8. There are some very limited exceptions, see, for example, Workplace Injury Management and Workers Compensation Act 1998 (NSW), s 4(1)(b) “worker”. Howe and Mitchell, “Evolution of the Contract of Employment: A Discussion” (1999) 12 AJLL 1 at 8. And see [2.120] Howe and Mitchell, “Evolution of the Contract of Employment: A Discussion” (1999) 12 AJLL 1 at 15 citing the Social Welfare Union Case: R v Coldham; Ex parte Social Welfare Union (1983) 153 CLR 297.

Employee – an evolving concept

doubt.30 Merritt argues that the Master and Servant Acts set the foundations for implied obligations under the contract of employment. The Acts imposed criminal penalties for leaving the employment, misconduct, loss of the employer’s property, failure to pay wages, ill treatment and detention of the servant’s property.31 These were forerunners for the implied obligations under the contract of employment. Whilst the Master–Servant legislation may have provided the framework for the modern contract of employment, in Australia, as in Britain, social legislation was equally important in aligning the contract of employment with a single class of employees and adopting the contract of employment as the basis of entitlement.32 Simon Deakin explains:33 The “contractualisation” of the employment relationship was associated with the gradual spread of social legislation in the fields of workmen’s compensation, social insurance and employment protection. The terms “contract of employment” and “employee” came into general use as a description of wage-dependent labour only as a result of this process. Contractualisation had two central aspects: the placing of limits on the employer’s legal powers of command, limits which were given a contractual form as either express or implied terms; and the use of the employment relationship as a vehicle for channelling and redistributing social and economic risks, through the imposition on employers of obligations of revenue collection, and compensation for interruptions to earnings.

The relationship between workers with higher status (such as professionals, managers and clerks) and employers was described in terms of the contract of employment.34 Typically lower status workers providing manual labour in domestic service, on farms and in factories were referred to as servants under a relationship of service reflecting the relation of a domestic servant to the master of the household.35 High status groups such as managers and professionals were regarded as “employees” and governed by contracts of employment and paid salaries; “servants” or “workers” were paid “wages”, regulated by legislation and protected under social security legislation.36 Although, as we have shown, there is now a single category of employees embracing the old categories, vestiges of the old distinctions are still visible. Lower status workers looked to awards for their rights and obligations, higher status employees relied on employment contracts.37 The terms and conditions of employment for lower status workers were largely determined through collective bargaining processes in contrast to individual contract bargaining for professional and managerial groups. Inequality of bargaining power was likely to be lessened in relation to professionals and managers who were able to negotiate individual contracts of employment. The contract of employment has had a limited role in general industrial regulation. Although the common law of employment provides the foundation for the regulation 30

31 32 33 34 35 36 37

A contract may exist before the employee starts work and the relationship of employer and employee is established; similarly the contract may continue to bind after the relationship of employer and employee has been terminated, see Honeyball and Pearce, “Contract, Employment and the Contract of Employment” (2006) 35 Ind LJ 30; Deakin, The Many Futures of the Contract of Employment (ESCR Centre for Business Research, University of Cambridge, Working Paper No 191). Merritt, “The Historical Role of Law in the Regulation of Employment – Abstentionist or Interventionist” (1982) 1(1) Aust JL & Soc 56 at 67-68. Deakin, The Many Futures of the Contract of Employment (ESRC Centre for Business Research, University of Cambridge, Working Paper No 191, Dec 2000), p 2. Deakin, The Many Futures of the Contract of Employment (ESRC Centre for Business Research, University of Cambridge, Working Paper No 191, Dec 2000), p 5. Freedland, The Personal Employment Contract (OUP, 2003), p 16. Deakin and Morris, Labour Law (6th ed, Hart Publishing, 2012), p 22. Merritt, “The Historical Role of Law in the Regulation of Employment – Abstentionist or Interventionist” (1982) 1(1) Aust JL & Soc 56 at 56-57. Employee’s views of whether their conditions derive from industrial agreements, awards of common law contracts are reported in Van Wanrooy, Wright, Buchanan et al, Australia at Work in a Changing World (Workplace Research Centre, University of Sydney, Nov 2009), pp 64-69.

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of the employment relationship, the contract of employment operates within a broader context of social and industrial regulation. For many workers it has been the award or industrial agreement that governs their daily working lives; it is the award that sets the basic terms and conditions of the employment.38 The contract of employment, up until recent legislative changes, was rarely significant for a blue collar worker who had been fired. At common law, an employee lawfully dismissed by the required notice had no remedy against the employer even if the dismissal was unfair (see [8.100]). There were no implied terms in the contract of employment providing for grievance procedures nor redundancy payments where jobs were lost through restructuring. These were common in awards and industrial agreements and now under the National Employment Standards (see [12.60]). For most employees, the common law relating to dismissal (see [8.100]) was secondary to the more extensive protection under awards, industrial agreements and unfair dismissal legislation (see [13.50]). Social legislation provided more extensive protection and benefits to employees. Work Health and Safety statutes imposed statutory duties to provide safe workplaces. Workers’ compensation legislation, which did not require proof that the employer was at fault, provided a more extensive regime for compensation for injury to workers. Statutory provisions, awards and industrial agreements gave significant benefits to employees in relation to annual, long service and other leave. But as one leading author has remarked, “far from being cowed by statutory assault, the contract of employment has emerged more resilient … statutory rights have been built upon the common law contractual framework, so that whilst the contract is of diminishing importance as a direct independent source of rights, it remains central to the operation of … statutory provisions”.39 We leave to Chapters 1 and 12 the discussion on how far the common law of employment provides the substratum for industrial regulation of employment. Although statutes, awards and industrial agreements provided important regulatory mechanisms for the employment relationship, the establishment of this relationship was largely left to the common law.40 The employment relationship was, and is, crucial to conferring rights and duties both statutory and under the general law. This is examined in the next section

Employment – conferring rights and duties [2.50] The distinction between employees and others performing work continues to be important in conferring rights and imposing obligations under both statutory and common law. “Employment” (employer/employee) is the central concept upon which obligations and rights are constructed.41 This is evident for the purposes of industrial relations,42 workers’ compensation,43 work health and safety,44 compulsory superannuation contributions,45 tax deductions,46 annual, long service47 and other 38

39

40 41

42

For a recent review of the continuing importance of award pay and conditions in the non-public sector, see Wright and Buchanan, Award Reliance (Fair Work Commission, Research Report 6/2013, December 2013), award reliance. Elias, “The Structure of the Employment Contract” (1982) 35 CLP 95; O’Sullivan, Turner, Kennedy, Wallace, “Is Individual Employment Law Displacing the Role of Trade Unions?” (2015) 44(2) Ind LJ 222. Preferred to a statutory definition, see Productivity Commission, Workplace Relations Framework, Final Report (30 November 2015) pp 812-3; Office of the Australian Building and Construction Commissioner, ABCC Sham Contracting Inquiry Report 2011 (November 2011), p 30. Deakin and Morris, Labour Law (6th ed, Hart Publishing, 2012), p 59. And see the previous note. Employment is less important for purposes of anti-discrimination and Work Health and Safety legislation (see [6.340]). See Age Discrimination Act 2004 (Cth), ss 5 (employment), 18 – 25; Disability Discrimination Act 1992 (Cth), ss 4(1) (employment), 15 – 21; Sex Discrimination Act 1984 (Cth), ss 4(1) (employment), 14 – 20; Racial Discrimination Act 1975 (Cth), ss 3(1) (employment), 15 and see [13.370] in relation to the anti-bullying provisions of the Fair Work Act 2009 (Cth), s 789FC. The Fair Work Act 2009 (Cth) regulates national system employers and employees with just over 70% of employees regulated by that Act, see Productivity Commission, Workplace Relations Framework,

Employee – an evolving concept

leave,48 and taxes such as payroll tax,49 and fringe benefits tax.50 It is also important for the purpose of fixing the limits of liability for the wrongdoing of others; an employer is liable for the wrongdoing of an employee acting within the course of employment but generally not liable for the wrongdoing of an independent contractor.51 In some jurisdictions an employee (but not an independent contractor) is entitled to be indemnified by the employer against liability for negligence committed in the course of employment.52 Contracts of employment confer benefits on employees as well as providing a suitable vehicle for the imposition of taxes, such as payroll and fringe benefits tax. These obligations combined with the needs of flexibility and economic efficiency provide incentives for employers to explore alternatives to engaging employees. An employer may see significant advantages in utilising the services of an independent contractor to avoid some of these obligations.53 It is particularly useful for shifting risk

43

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46 47

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50 51 52 53

Final Report (30 November 2015), “Employment Arrangements” Figure 1, p 6 and see [12.20]. The Fair Work Act 2009 (Cth), s 11 defines employer and employee has having their ordinary meaning and thus adopts the common law meaning of these terms. Workers’ compensation legislation provides a no fault compensation system for injured workers, primarily employees under a contract of service, see [6.30]. Certain classes of persons who would not qualify as employees are deemed to be employees for these purposes; these deeming provisions are unaffected by the Independent Contractors Act 2006 (Cth), s 8(2). Statutory duties to provide a safe workplace are not limited to employees and can extend to self-employed contractors, see “Safety at Work”, [6.390]. Common law duties of care to employees are more onerous than duties owed to an independent contractor, see [3.190]. Employer superannuation contributions are required to be made on behalf of employees: Superannuation Guarantee (Administration) Act 1992 (Cth), s 12. Note that the section is not limited to employees and can include some independent contractors. Section 12(3) provides that a person working under a contract “that is wholly or principally for the labour the person the person is an employee of the other party to the contract”, see De Luxe Red & Yellow Cabs Co-Operative (Trading) Society Ltd v Commissioner of Taxation (1997) 36 ATR 600; Roy Morgan Research Pty Ltd v Commissioner of Taxation (2010) 184 FCR 448; On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) (2011) 214 FCR 82; Tattsbet Ltd v Morrow (2015) 233 FCR 46. Individual State statutes may extend benefits beyond employees, see, for example, Coal Industry Superannuation Act 1989 (WA), s 4 (“mine worker” includes certain independent contractors). These arrangements would not be affected by the Fair Work Act 2009 (Cth) or the Independent Contractors Act 2006 (Cth) (unless regulations otherwise provide Independent Contractors Act 2006 (Cth), ss 8(2), 10 and see [4.300]. See https://www.ato.gov.au/business/payg-withholding/payments-you-need-to-withhold-from. The National Employment Standards under the Fair Work Act 2009 (Cth) set out leave entitlements applying to national system employers and employees, see [12.180]–[12.220]. Long service leave under State legislation is not excluded ( s 27(2)(g) subject to the operation of s 113 (under federal industrial instruments)). Other State legislation relating to leave such as Annual Holidays Act 1944 (NSW), ss 2, 3 can apply only to employees not covered by the federal law, see New South Wales v Commonwealth of Australia; Western Australia v Commonwealth of Australia (2006) 81 ALJR 34; (2006) 229 CLR 1; [2006] HCA 52 at [355]-[359]. Parental, compassionate, and other leave are typically accorded to employees under awards and workplace agreements and now under the National Employment Standards, see below [12.180]–[12.220]. Employers are required to pay payroll tax subject to a wages threshold. See as illustrations, Payroll Tax Act 2007 (NSW), ss 7 (extended beyond employees to others), 13 (wages), 37 – 42 (employment agencies); Pay-roll Tax Act 1971 (Qld), ss 2 (Dictionary “wages”), 8A and note ss 13G – 13LA; Payroll Tax Act 2007 (Vic), ss 7, 13 and note extension to employment agencies (ss 37 – 42) and contractors (ss 31 – 36). Fringe Benefits Tax Assessment Act 1986 (Cth), s 138B and see Australian Taxation Office, Fringe Benefits Tax: A Guide for Employers (NAT 1054). An attempt to extend the principle to agents who were not employees has been rejected, see [6.60]. See also [6.50] regarding an employer’s non-delegable duty towards employees. There is no statutory right of indemnity for an independent contractor, see [5.350], [5.430]. See [2.110] in relation to dependent contractors.

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from the employer to the contractor.54 It could once have been said with some confidence that the creation of an independent contractor relationship could be achieved quite simply by either of two mechanisms: by the inclusion of a “substitution clause” – a contractual provision allowing the person who is to provide services the unlimited and absolute right to delegate the task,55 and/or by requiring the person providing services to incorporate (see [2.360]). Recent cases suggest that courts will examine whether these clauses reflect the reality of the relationship, for example, whether in fact, the worker was required to provide their own labour and not that of a substitute (see [2.260]). Sometimes a corporate structure may simply be a facility for payment (see [2.360]) which does not automatically exclude an employment relationship.

The same test for all purposes? [2.60] Whether a person is an employee or has some other status is important in a variety of contexts mentioned earlier in this chapter at [2.50]. In some instances the question whether a person undertaking work is an employee might not arise simply because there is no existing contract. The parties may not intend to enter into a contractual relationship, for example, where the person is a volunteer. These issues are examined in Chapter 4 where the requirements for a valid contract of employment are discussed, see [4.50]. Although legislation frequently uses employment (employee) as a basis for imposing obligations and conferring benefits, the policies underpinning common law liability and relevant legislative regimes may be quite different. Consequently, taxation legislation aimed at ensuring that there is efficient collection of taxation revenues56 is very different from workers’ compensation schemes for injured workers. Similarly, policies underpinning torts liability including vicarious liability of an employer for the wrongdoing of an employee during the course of employment57 are again different from legislation providing for unfair dismissal. Despite this, the question of who is an employee is to be determined from case law across many areas.58 If employment status is seen as a mechanism for protection and delivery of social benefits, then it may make sense to have a single meaning. But when employment status can easily be avoided, and employees are displaced by dependent contractors fairly readily, then this calls into question whether a single meaning of “employee” should be adopted. For example, we have already noted the broader protection accorded to persons who are not employees under workers’ compensation, work health and safety 54

55

56 57

58

Insurance and work health and safety are just two of the risks that may be shifted to the contractor. In the case of an employee acting within the course of employment, the risks lie with the employer; but if an independent contractor carries out the work, risks relating to the work generally lie with the contractor. In the transport industry it shifts the responsibility for maintenance of equipment and the investment of capital to the contractor, see Waite and Will, Self-employed Contractors in Australia: Incidence and Characteristics (Productivity Commission Staff Research Paper, Feb 2002, AusInfo, Canberra, 2001), p 5. Davies and Freedland, “Labour Markets, Welfare and the Personal Scope of Employment Law” (2000) 16(1) Oxford Review of Economic Policy 84 at 87; Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 at 391 and Stewart, “Redefining Employment? Meeting the Challenge of Contract and Agency Labour” (2002) 15(3) AJLL 235. And see Australian Air Express Pty Ltd v Langford [2005] NSWCA 96 and [2.260]. See [2.50]. As to deductions required to be made, see https://www.ato.gov.au/Forms/Voluntaryagreement-for-PAYG-withholding. Such as deterrence, risk allocation and accident reduction, see Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2006] ICR 327 (CA). See also Gillogly v Iama Agribusiness Pty Ltd [2002] NSWCA 251 (duty to temporary employee, “pro hac vice”); Deutz Australia Pty Ltd v Skilled Engineering Ltd [2001] VSC 194 at [107], see [3.220]. In the United Kingdom (but not Australia) vicarious liability has been extended where the person is in a relationship “akin to employment”, see The Catholic Welfare Society v Various Claimants [2012] UKSC 56; [2013] 2 AC 1 and see [6.60]. See Ramsey Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237. But Allsop CJ in Tattsbet v Morrow (2015) 233 FCR 46 at [4]-[5], recognises the importance of the statutory context in making the determination.

Employer and employee

and equal opportunity legislation.59 In the High Court case, Hollis v Vabu,60 couriers who were owner-drivers, had been held in an earlier decision not to be employees for taxation purposes however, the High Court held that bicycle couriers were employees for the purposes of vicarious liability (see [2.200]). Courts do not see their role as engaging in “judicial social engineering” by encouraging particular types of relationships even if it is thought an employment relationship is overall more beneficial to workers.61 But courts and tribunals in recent times are swayed far less by contractual clauses inserted to avoid creating an employment relationship than the reality of the relationship. An important consideration is that only in exceptional situations is a person seeking employment in a position to negotiate or bargain for particular contractual terms; nearly all employment contracts are made on a “take it or leave it” basis. The person may be presented with a contract which is represented as creating an independent contractor relationship. If this is a misrepresentation so that, in reality, it creates an employment relationship, the sham contracting provisions of the Fair Work Act 2009 may apply, see [2.100].

Employer and employee Introduction [2.70] The growth in part time, fixed contract, casual labour and labour hire arrangements appears to be a permanent and a relatively stable feature of employment arrangements. For employers, this provides flexibility and the capacity to reduce administrative and employment costs, but there may be significant disadvantages for workers. In response to these changes in the pattern of work, it has been argued without success that the emphasis (and protection) should now be on personal employment contracts which would include both employees and dependent contractors providing their personal services.62 The changing nature and diversity of work relationships influences how courts and tribunals apply the tests to determine whether a person is an employee. A significant proportion of workers no longer work in a traditional employment arrangement – full time, fixed hours, fixed remuneration, at one location and for a single employer – many work part time or are casual. This is reflected in the application of the modern multi-factor test as to whether a contract of employment exists; a person can be an employee even if they work flexible hours, can refuse work, work for multiple employers and in different locations, and are not paid a fixed salary. The multi-factor test is discussed in detail at [2.160]. This following section commences with a general discussion on the diversity of employment arrangements. Sometimes, however, the question is – who is the employer? This issue is discussed in Chapter 2 on Labour Hire.

Changes to traditional patterns of work [2.80] The history of the employer–employee relationship is dynamic and evolving. In the last 30 years in Australia there have been significant changes to the standard patterns of work. The comment made more than a decade ago is still the case: [T]he labour market has witnessed deepening inequality during the last 20 years. At the same time, there have been modest gains in flexibility for workers, but not enough to meet the challenges of diversity. Contrary to the rhetoric of the advocates of market regulation, 59 60 61 62

See footnotes in [2.50]. Hollis v Vabu (2001) 207 CLR 21. National Transport Insurance Ltd v Chalker [2005] NSWCA 62 at [61]. Freedland, The Personal Employment Contract (OUP, 2003).

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we have not witnessed a profusion of new choices for employees to tailor their work arrangements to suit their purposes. Indeed lack of flexibility is evident, as many workers find themselves working harder, working longer, and working in jobs that are more insecure than those of a generation ago … the Australian workforce is now fairly evenly divided between those working as permanent employees, and those working on nonstandard or a more precarious basis … When it comes to work, the key challenge which the community faces in the twenty-first century is how to develop new standards for new times, that is standards for flexibility.63

What is apparent is that there have been significant changes to the standard pattern of full time employment, traditionally permanent, Monday to Friday 9am–5pm. The modern workforce is characterised by high levels of mobility. By November 2013 only 22% of current employees had been with their current employer for 10 years or more and 20% with their current employer for less than one year.64 The last three decades have seen a shift to high levels of part time65 and casual employment,66 fixed term contracts,67 out-sourcing of work,68 the use of labour hire agencies69 together with an increase in the use of contractors rather than employees.70 In 1971 about 76% of workers were full time and permanent; this fell to an estimated 50.2% in 2003.71 This represented the low water mark. By November 2013, 69% of employees were full time.72 The growth of non-traditional forms of employment has slowed since 2001.73 By November 2013, 68% of employees work a standard week – Monday to Friday and 41% have some say in their start or finish times.74 These changes to employment have occurred in a political and commercial environment where employment flexibility is regarded as important to local and global competitiveness and employment opportunity. 63

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68 69 70

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Watson, Buchanan, Campbell and Briggs, Fragmented Futures: New Challenges in Working Life (Federation Press, 2003), p 16. In a 16 year period 1992-2008 most employment growth was in non-standard employment, part time, self employed or employees without leave entitlements (casuals), see Van Wanrooy, Wright, Buchanan et al, Australia at Work in a Changing World (Workplace Research Centre, University of Sydney, Nov 2009), p 44. Australian Bureau of Statistics (ABS), Forms of Employment (Nov 2013) cat 6359.0. See also ABS Labour Mobility (Feb 2013) cat 62090. In 2013, 19% of casuals worked for the one employer for 5–9 years with just over 18% working for less than 12 months with the one employer, see Productivity Commission, Workplace Relations Framework, Final Report (30 Nov 2015), Table 2.5. In November 2013, an estimated 31% of the workforce were part time (ABS, Forms of Employment (Nov 2013) cat 6359.0). They may be employees under fixed term contracts, casual or permanent employees. Full time employees are more likely than part time employees to have leave entitlements: 90% (FT), 47% (PT) (ABS). See [2.90]. Fixed term contracts are for a specified period or for completion of a specified task. It was estimated that 4% of employed persons in November 2013 were employed under fixed term contracts (ABS, Forms of Employment (Nov 2013) cat 6359.0). For historical information on out-sourcing (contracting out), see Secure Employment Test Case (2006) 150 IR 1, and [3.40]. See [3.90]. Just over 9% of employed persons are independent contractors (ABS, Forms of Employment (Nov 2013) cat 6359.0); cf the lower figure of 8.5% for 2015 in Productivity Commission, Workplace Relations Framework, Final Report (30 Nov 2015), “Employment Arrangements 2015”, figure 1, p 5. ABS, Employment Arrangements and Superannuation (April-June 2000), cat 6361.0, p 8; ABS, Changes in Types of Employment in Australia 1992-2003, Australian Labour Market Statistics, cat 6105, p 6 (based on full time employees with paid leave entitlements); Vandenheuvel and Wooden, Diversity in Employment Arrangements (National Institute of Labour Studies), p 2. ABS, Forms of Employment (Nov 2013) cat 6359.0. According to the ABS, 90% of full time employees have paid leave entitlements and 5% found work through a labour hire agency, (ABS, Forms of Employment, Nov 2011) cat 6359. Productivity Commission, The Role of Non-Traditional Work in the Australian Labour Market (Commission Research Paper, May 2006), p 118. ABS, Forms of Employment (Nov 2013) cat 6359.0.

Employer and employee

There is the view that there is a dual labour market “in which privileged ‘insiders’ (full time permanent) … entrench themselves ever more deeply against excluded ‘outsiders’ (casual, part time)”.75 One response might be to change the focus from the individual contract of employment to participation in work over a full working life with a broader notion of work (rather than employment) as the base for providing access to social rights and protections. A suggestion is that there be the provision of “social drawing rights” for the individual to manage work security which could, for example, allow time for training, caring, volunteer work, and time for setting up one’s own business.76 This imaginative approach has yet to be adopted.77 A lasting feature of changes to the standard pattern of work is the high level of casual employment in Australia.

Casuals [2.90] There is the initial problem of how to identify who is a casual employee. Originally a casual employee could have been characterised as a person who had occasional and irregular work. But that is no longer so. There are now “casuals” who work regular hours with a single employer over an extended period of time. Casuals can be long term or short term.78 The case law suggests that there is no single definition but “the most significant factor is that the employer need only offer employment to the casual employee if he or she wishes to do so”.79 Similarly the casual is under no obligation to accept work. Moore J in Reed v Blue Line Cruises Ltd80 suggested: A characteristic of engagement on a casual basis is … that the employer can elect to offer employment on a particular day or days and when offered, the employee can elect to work. Another characteristic is that there is no certainty about the period over which employment of this type will be offered. It is the informality, uncertainty and irregularity of the engagement that gives it the characteristic of being casual.

Where a person works over an extended period of time as a casual employee, this is generally characterised as a series of separate employment contracts each time the person undertakes work rather than a single continuous contract of employment.81 But, 75 76

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79 80

81

Deakin, The Many Futures of the Contract of Employment (ESRC Centre for Business Research, University of Cambridge, Working Paper No 191, Dec 2000), p 16. Supiot (ed), Transformation of Labour and Future of Labour Law in Europe, Final Report (European Commission, 1999); Bernier, Social Protection for Non-Standard Workers Outside The Employment Relationship (Research for the Federal Labour Standards Commission, Quebec, 10 Jan 2006), Part 111. See its consideration and the assessment of the inherent difficulties of implementation in Canada: Bernier, Social Protection for Non-Standard Workers Outside The Employment Relationship (Research for the Federal Labour Standards Commission, Quebec, 10 Jan 2006), Part 111. ABS reported in November 2013 that 22% of employees had been in their job for more than 10 years and 20% with the current employer for less than 1 year; 20% were casual employees without paid leave entitlements (ABS, Forms of Employment (Nov 2013) cat 6359.0). Roy Morgan Research Pty Ltd v Commissioner of State Revenue (Taxation) [2006] VCAT 1204 at [47] (a payroll tax case). Reed v Blue Line Cruises Ltd (1996) 73 IR 420 at 425. See also Hamzy v Tricon International Restaurants (2001) 115 FCR 78 (a casual works on demand with lack of advance commitment to duration of work); Yaraka Holdings Pty Ltd v Giljevic (2006) 149 IR 339 at 355; Williams v MacMahon Mining Services Pty Ltd [2010] FCA 1321. (Employee though described as a casual and whose employment could be terminated on one hour’s notice was not a casual. Work was stipulated, and regular with provision for the future with a roster system and travel arrangements.) Predl v DMC Plastering Pty Ltd [2014] FCCA 1066. See as a rare case where there was a single continuing contract of service, AJ Mills & Sons Pty Ltd v Transport Workers’ Union of NSW [2009] NSWIRComm135; (2009) 187 IR 56 (required attendance as race steward throughout the year) and see dicta of Stanley J in Flinders Ports Pty Ltd v Woolford [2015] SASCFC 6; (2015) 247 IR 451 at [84] (on call and duty to work when rostered on).

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depending on the terms of the statute, the series of contracts may be sufficient “continuous service” for purposes of long service leave and some other statutory entitlements.82 Statistically there is a reasonably close relationship between those who self report as casuals and the test of whether the employee has paid leave (sick and annual) entitlements (excluding those who are employed by their own business).83 The number of hours worked is not the test as just over 30% of casuals work full time.84 It was estimated that by 2014, nearly 20%, of all employed persons could be classified as casuals.85 This rate has been relatively stable for more than a decade.86 But whether it is an artefact of particular market conditions or represents permanent structural change to the employment market is debatable.87 Casual employment is often seen as a stepping stone to permanent full time employment. Excluding full time students, a study reported in 2013 found the conversion rate from casual to permanent employment is below 30%.88 Systemic factors which diminish the capacity to gain permanent employment include age, limited periods in paid employment, living in disadvantaged localities, working in industries with high rates of casualisation, part time work or working for small businesses. For many being a casual may be long term89 and very insecure with many casuals experiencing periods of unemployment.90 82

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90

See, for example, Flinders Ports Pty Ltd v Woolford [2015] SASCFC 6; (2015 247 IR 451 (long service leave); Briers v Skilled Group Ltd [2014] TASFC 8 (workers compensation); Compass Group (Australia) Pty Ltd v Bartram [2007] FCAFC 26; (2007) 161 IR 307; Shortland v The Smiths Snackfood Co Ltd [2010] FWAFB 5709; (2010) 198 IR 237. The meaning of “casual” depends on the terms of the award or agreement, Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365. The absence of leave entitlements is utilised by the ABS, Labour Statistics: Concepts, Sources and Methods (2013) cat 6102.0.55.001. For earlier research on classification issues, see Wooden and Warren, The Characteristics of Casual and Fixed-Term Employment: Evidence from the HILDA Survey (Melbourne Institute of Applied Economic and Social Research, Working Paper No 15/03, June 2003), pp 1, 4-9. Shomos, Turner and Will, Forms of Work in Australia (Productivity Commission, Melbourne, 2013), Table H4 p.129. 69.5% work part time, ABS, Australian Labour Market Statistics (2014) cat 6105.0. ABS Australian Labour Market Statistics (2014) cat 6105.0 (19.9% of all working persons including owner managers) and 23.9% of employees. The HILDA survey covering the period 2001-2010, reported 2.6% of men and 2.4% of women were hired through a labour hire company, Buddelmeyer, McVicar, Wooden, “Non-Standard “Contingent” Employment and Job Satisfaction: A Panel Data Analysis” (Institute for the Study of Labour, Aug 2013) IZA DP No 7590, Table 1, but there is variation depending on the data source, see Shomos, Turner and Will, Forms of Work in Australia (Productivity Commission, Melbourne, 2013), Table B.5 p.80. Shomos, Turner and Will, Forms of Work in Australia (Productivity Commission, Melbourne, 2013), Table 3.4 pp 36, 80; ABS, Australian Labour Market Statistics (2014) cat 6105.0 estimates the figure at 19.9%. Shomos, Turner and Will, Forms of Work in Australia (Productivity Commission, Melbourne, 2013), chapter 4 and Table B3 p 80. Males at 28% and 21% for females based on HILDA surveys by Watson, “Bridges or Traps? Casualisation and Labour Market Transitions in Australia” (2013) 55(12) JIR 6. Watson reviews the earlier findings of Buddelmeyer and Wooden, “Transitions Out of Casual Employment: The Australian Experience” (2011) 50(1) JIR 109, 115 (based on HILDA surveys). There appears to be little conversion from part time to permanent full time employment, see Cai, Law and Bathgate, “Is Part-Time Employment a Stepping Stone to Full-Time Employment?” (2014) 90 (No 291) Economic Record 462. In 2013, 19% of casuals worked for the one employer for 5- 9 years with just over 18% working for less than 12 months with the one employer, see Productivity Commission, Workplace Relations Framework, Final Report (30 Nov 2015) Table 2.5. Buddelmeyer and Wooden, “Transitions Out of Casual Employment: The Australian Experience” (2011) 50(1) JIR 109, 115-116 (based on HILDA surveys). See also Productivity Commission, Workplace Relations Framework, Final Report (30 Nov 2015) Figure 2.5, p 110.

Employer and employee

What distinguishes casuals from fixed term and permanent employees is the differentiation in work entitlements,91 the lack of training and career opportunities,92 adverse health outcomes especially for those working non-standard hours,93 lack of job security, irregular hours, fluctuating pay and marginalisation in decision-making in the workplace.94 There is some older evidence that labour hire workers have higher injury rates.95 Not surprisingly casuals lack bargaining power and have less opportunities to negotiate employment terms and conditions than permanent full time employees.96 Casuals miss out on benefits tied to permanency, such as redundancy, termination notice, paid annual, sick, compassionate and long service leave and parental leave.97 Casual loadings98 are intended to compensate for the loss of these leave entitlements.99 From an employer’s perspective, casual contracts offer flexibility and the ability to employ labour, particularly specialised labour, when

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97 98

99

Under the Fair Work Act 2009 (Cth) casuals have limited rights under National Employment Standards – all casuals are excluded from the benefits of the notice and redundancy provisions, s 123(1)(c) (and note further exceptions under s 123(3)), paid annual leave (s 86) and personal leave (s 95). Casuals who are not long term casuals (defined s 12) have the benefit of the standards relating to maximum weekly hours (s 62), community services leave (not paid jury service) (ss 108, 111), public holidays (s 114), two days unpaid carer’s leave and two days unpaid compassionate leave (ss 102, 106) and a Fair Work Information statement (s 125). Long term casuals can request flexible working arrangements (s 65(2)) and unpaid parental leave (s 67(2)). There are also limited rights under the unfair dismissal provisions, see Fair Work Act 2009 (Cth), ss 382 – 384 and [13.70]. See [12.20]-[12.50] as to the reach of the Fair Work Act 2009. Watson, “Contented Workers in Inferior Jobs? Re-Assessing Casual Employment in Australia” (2005) 47 JIR 371 at 378; Richardson and Liu, Changing Forms of Employment and Their Implication for the Development of Skills (National Institute of Labour Studies, Flinders University, 16 Sept 2005); Secure Employment Test Case [2006] NSWIRComm 38; (2006) 150 IR 1 (type of work may require little training, at [172]). Ulker, Do Non-standard Hours Cause Negative Health Effects? Some Evidence from Panel Data (Centre for Economic Policy Research, ANU, April 2006, Dp No 518) cf Richardson, Lester and Zhang, “Are Casual and Contact Terms of Employment Hazardous for Mental Health in Australia” (2012) 54(5) JIR 557 suggesting that there is no effect in relation to mental health. The literature is summarised by Watson, “Contented Workers in Inferior Jobs? Re-Assessing Casual Employment in Australia” (2005) 47 JIR 371 at 372. See also Befort, “Revisiting the Black Hole of Workplace Regulation: A Historical and Comparative Perspective of Contingent Work” (2003) 24(1) Berkeley J Emp & Lab Law 153. Parliament of Australia, House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), [4.78]-[4.79]. And see Underhill, “Submission to ABCC Inquiry into Sham Arrangements and the use of Labour Hire in the Building Industry”, available at https://www.fwbc.gov.au/sites/g/files/net666/f/Dr.%20Elsa%20 Underhill%2C%20Deakin%20University.pdf But it is not clear whether this continues to be the case with the much stronger occupational health and safety requirements on worksites. The result might also be skewed if labour hire workers are employed in industries involving significant risk such as the construction industry. They are more likely to be reliant on award provisions, Van Wanrooy, Wright, Buchanan et al, Australia at Work in a Changing World (Workplace Research Centre, University of Sydney, Nov 2009), p 53. In relation to National System employers and employees, see . Award or agreement free employees are governed by casual loadings set as part of the National Minimum Wage by Fair Work Australia under the Fair Work Act 2009 (Cth), ss 287, 294, 295. Modern awards and agreements cover other casual employees, see [12.60]. Loadings represent loss of annual and personal leave (generally 15-20% of loading), loss of redundancy and termination notice (generally 4% of loading), balance compensates for loss of training and promotion, uncertainty as to hours and termination, see Productivity Commission, Workplace Relations Framework, Draft Report (Aug 2015), Box 20.2, p 719. There is no recent evidence whether these loadings are sufficient compensation, the older evidence that it does not is reported by Watson, “Contented Workers in Inferior Jobs? Re-Assessing Casual Employment in Australia” (2005) 47 JIR 371 at 380-382.

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Ch 2: The Relationship of Employer and Employee

needed.100 Casual employees are not necessarily dissatisfied with their lot. It seems that for particular groups, such as women101 and students, casual work is an attractive option.102 As noted earlier in this chapter, casual work for some workers may provide a “stepping stone” to permanent employment but for most casual work is inferior because of the lack of job security.103

Disguised employment [2.100] The relationship between the parties (although described, represented or

“disguised”104 as an independent contractor relationship) may be an employment relationship. As will be seen from Hollis v Vabu (see [2.200]), courts are not bound by the labels the parties give to the agreement, instead they will examine the existing system and work practices to assess whether the person is an employee.105 Under the general law, the contract (or particular clauses) purporting to create an independent contractor relationship may be a sham and may never have been intended to have legal effect. There are also the sham contracting provisions of the Fair Work Act 2009, ss 357 – 359, which proscribe particular conduct relating to the misrepresentation of employment relationships and conduct to induce employees to become contractors. Under the general law the issue of whether a work contract, or a particular clause, is a sham most frequently arises in relation to clauses inserted with the intention of excluding an employment relationship;106 particularly clauses giving the worker a right to provide a substitute to do the work (see [2.260]). At common law, a contract (or a particular clause) is a sham and not enforceable where both parties intend to give a false appearance so that contract appears to be something it is not; it is a “counterfeit, a disguise or a false front”.107 But for most workers there may be no real choice but to agree to the contract if they want the job; this is hardly a situation where both parties

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106 107

Productivity Commission, Workplace Relations Framework, Final Report (30 Nov 2015), pp 802803. There are special needs for flexible work arrangements in the building and construction industry, see Office of the Australian Building and Construction Commissioner, ABCC Sham Contracting Inquiry Report 2011 (Nov 2011), p 52. See Buddelmeyer, McVicar, Wooden, “Non-Standard “Contingent” Employment and Job Satisfaction: A Panel Data Analysis” (Institute for the Study of Labour, Aug 2013) IZA DP No 7590 (the exception is female labour hire workers with lower satisfaction rates). Under the Fair Work Act 2009, long term casuals may request flexible working arrangements to care for pre-school children or a child with a disability, see s 65(1), (2). Productivity Commission Workplace Relations Framework, Final Report (30 Nov 2015), pp 801-802. See, Buddelmeyer, McVicar, Wooden, “Non-Standard “Contingent” Employment and Job Satisfaction: A Panel Data Analysis” (Institute for the Study of Labour, Aug 2013) IZA DP No 7590. For recent analysis flowing from the Household, Income and Labour Dynamics in Australia survey (HILDA), see Buddelmeyer, McVicar, Wooden, “Non-Standard “Contingent” Employment and Job Satisfaction: A Panel Data Analysis” (Institute for the Study of Labour, Aug 2013) IZA DP No 7590. See also McGuiness, Wooden, Hahn, “Job Insecurity and Future Labour Market Outcomes” (Institute for the Study of Labour, July 2012) IZA DP No 6764. Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [137] et seq per North and Bromberg JJ. The judgment of the Full Federal Court was overturned on appeal on a different point, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45. See also Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [142]-[150] per North and Bromberg JJ, Barker J taking a similar view. The judgment of the Full Federal Court was overturned on appeal on a different point, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45. See also Fair Work Ombudsman v Ramsey Food Processing Pty Ltd [2011] FCA 1176; (2011) 198 FCR 174 (sham employer company). Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 at 453-454 per Lockhart J; Lewis v Condon [2013] NSWCA 204; (2013) 85 NSWLR 99. See also Pitcher v Langford (1991) 23 NSWLR 142 (employer asks a contracting party to sign employment contracts to take advantage of lower insurance premiums, no sham); Golden Plains Fodder Australia Pty Ltd v Millard [2007] SASC

Employer and employee

have a common intention to deceive.108 This inequality of bargaining power, where the employer dictates contractual terms, has led to a more liberal test of whether a contract (or clause) is a sham in the United Kingdom.109 If the reality is “that no one seriously expects that a worker will … provide a substitute … the fact that the contract expressly provides for these unrealistic possibilities will not alter the true nature of the relationship”.110 The UK Supreme Court in Autoclez Ltd v Belcher adopted a purposive approach: [T]he relative bargaining power of the parties must be taken into account in deciding whether the terms of any written agreement in truth represent what was agreed and the true agreement will often have to be gleaned from all the circumstances of the case, of which the written agreement is only a part.111

In that case, valeters (car cleaners) signed written contracts which described them as contractors with a right to provide a substitute to do their work. They were held to be employees based on the reality of the relationship. They were not working in their own businesses, did not display the normal attributes of independent contractors, were subject to detailed direction and control and despite the contractual clause112 were required to provide their own personal services.113 It means that clauses in a signed contract are not conclusive on the issue of whether the worker is an employee. The decision suggests that in employment cases, where employers largely dictate the terms of the employment,114 courts may adopt a contextual approach which allows a court or tribunal to examine a written term in the context of the whole agreement including “how the parties conducted themselves in practice and what their expectations of each other were”.115 It is unnecessary to use the language of a “sham transaction” or to decide whether there is an intent to deceive, there is a more general principle that applies.116 The High Court in Hollis v Vabu, the primary authority on the tests for an employment relationship, stressed the need to examine the totality of the relationship which: is to be found not merely from these contractual terms. The system which was operated thereunder and the work practices imposed by Vabu go to establishing “the totality of the relationship” between the parties; it is this which is to be considered.117

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111 112

113 114

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391; (2007) 99 SASR 461 (nominal employer) and in the United Kingdom, Snook v London and West Riding Investments Ltd [1967] 2 QB 786 at 802 per Diplock LJ. See also, Rooles and Stewart, “The Reach of Labour Regulation: Tackling Sham Contracting” (2012) 25 AJIL 258. See for example Fair Work Ombudsman v Grandcity (GW) Travel & Tour Pty Ltd [2015] FCCA 1759 (migrant signed as a contractor by an experienced business operator who significantly underpaid the worker; the worker thought an ABN number was a tax file number). Autoclenz Ltd v Belcher [2011] UKSC 41; [2011] ICR 1157 at [35]. Autoclenz Ltd v Belcher [2011] UKSC 41; [2011] ICR 1157 at [25]-[26], [29] approving the first instance decision of Elias J in Consistent Group Ltd v Kalwak [2007] IRLR 560 at [57]-[59]; Firthglow Ltd (t/a Protectacoat) v Szilagyi [2009] EWCA Civ 98; [2009] ICR 835. Autoclenz Ltd v Belcher [2011] UKSC 41; [2011] ICR 1157 at [35]. Most did not know they could provide a substitute, probably did not understand the contract and at least one signed without reading it, Autoclenz Ltd v Belcher [2011] UKSC 41; [2011] ICR 1157 at [20]; Autoclenz Ltd v Belcher [2009] EWCA Civ 1046 at [61] per Smith LJ and see Bogg, “Sham Self-Employment in the Supreme Court” (2012) 41(3) Ind LJ 328. Autoclenz Ltd v Belcher [2011] UKSC 41; [2011] ICR 1157 at [36]-[38], Lord Clarke delivering the judgment of the court. Which must be taken into account, Autoclenz Ltd v Belcher [2011] UKSC 41; [2011] ICR 1157 at [35] per Lord Clarke delivering the judgment of the court and Bogg, “Sham Self-Employment in the Supreme Court” (2012) 41(3) Ind LJ 328. Autoclenz Ltd v Belcher [2009] EWCA Civ 1046 at [53] per Smith LJ. See discussion at [4.570] It may not be necessary to determine formally whether the agreement was a sham, see Fair Work Ombudsman v Ramsey Food Processing Pty Ltd [2011] FCA 117 at [101], [103] per Buchanan J. And see Conaglen, Sham and Trusts in Simpson, Stewart (eds), Sham Transactions (Oxford University Press, 2013), pp 122-140. Hollis v Vabu (2001) 207 CLR 21 at 33 [24]. See also Fair Work Ombudsman v Quest South Perth

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The Fair Work Act 2009, ss 357 – 359 prohibits an employer from engaging in sham contacting.118 There will be a breach if the employer (a) misrepresents to existing or future employees that they are contractors (s 357),119 or (b) dismisses employees (or threatens dismissal) for the purpose of re-engaging them as contractors (s 358), or (c) knowingly makes false statements to persuade employees to become independent contractors (s 359).120 It is a defence to s 357 that the employer did not know that the contract was a contract of employment and did not act recklessly. Despite this limitation, these provisions provide an important mechanism for determining whether there is “disguised employment”, that is, whether a person engaged as a contractor is an employee. These provisions offer significant advantages for employees. A complaint can be made to the Fair Work Ombudsman121 in relation to breaches under the Fair Work Act 2009 and proceedings can be brought by an industrial association or inspector.122 In addition, the Fair Work Ombudsman can perform an educative role and be proactive in auditing areas where sham contracting is more likely to occur.123 The imposition of penalties may also operate as a deterrent against future breaches.124 If workers are contractors they may be particularly vulnerable and economically dependent upon a single employer. As will be seen in the next section, there is no special legal protection for this group of workers.

Dependent contractors [2.110] Although a person providing services may technically and legally be a contractor,125

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119 120 121

122

123

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125

and

not

a

“disguised”

employee,

many

are

“dependent

Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [148] per North and Bromberg JJ (overturned on appeal without reference to this issue, [2015] HCA 45); Australian Air Express Pty Ltd v Langford [2005] NSWCA 96; (2005) 147 IR 240 at [65]; Australian Salaried Medical Officers v ACT Visiting Medical Officers Association [2005] AIRC 525 at [25]; Protectacoat Firthglow Ltd v Szilagyi [2009] EWCA Civ 98; [2009] IRLR 365 at [73] per Smith LJ and see Davies, “Sensible Thinking about Sham Transactions” (2009) 38 Ind LJ 318. The CFMEU estimates that in the construction industry, 26-46% of all contracting arrangements involved sham contracts, CFMEU Contracting and General, “Race to the Bottom: Sham Contracting in Australia’s Construction Industry” (A Report by CFMEU Construction and General March 2011), p 2. But see criticism, Office of the Australian Building and Construction Commissioner, ABCC Sham Contracting Inquiry Report 2011 (Nov 2011), pp 86-90. See Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCA 45. See discussion, Productivity Commission, Workplace Relations Framework, Final Report (30 Nov 2015), pp 807-815. In 2013-2014, the Ombudsman received 447 complaints on this issue. The complaints investigated related to workers in administration and support services (20%), rental, hiring and real estate (8%), public administration and safety (7%), construction (7%), and transport, postal and warehousing (6%). See Fair Work Ombudsman, Annual Report 2013-2014 (Australian Government, Oct 2014). The Fair Work Ombudsman is an inspector under the Act, Fair Work Act 2009 (Cth), s 701. And see Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256. The judgment of the Full Federal Court was overturned on appeal on a different point, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45. Court orders can include compensation for loss suffered because of the contravention, Fair Work Act 2009 (Cth), s. 545(2). See, for example, Fair Work Ombudsman Sham Contracting and the Misclassification of Workers in the Cleaning Services, Hair and Beauty and Call Centre Industries (Nov 2011) and Office of the Australian Building and Construction Commissioner, ABCC Sham Contracting Inquiry Report 2011 (Nov 2011), pp 44-47. Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59; (2015) 250 IR 278. See for example, Australian Building & Construction Commissioner v Inner Strength Steel Fixing Pty Ltd [2012] FCA 499. In Nov 2013, 9% of employed people were independent contractors (ABS, Forms of Employment (Nov 2013) cat 6359.0).

Employer and employee

contractors”126 who frequently work for, and are economically dependent upon, a single employer. They have most (but not all) of the attributes of an employee. In the past they tended to be in lower skilled occupations, such as plant machinery operators and drivers, with minimal control over their work arrangements.127 There may be a lack of appreciation on their part; that they are independent contractors, the extent to which they have lost benefits, and the extent of risk they have assumed.128 There is evidence that self-employed workers take more risks and may be under greater pressure to achieve targets than employees.129 They are in an unequal bargaining position when it comes to big business.130 Prior to the Independent Contractors Act 2006 (Cth), legislation in some States deemed certain classes of contractors to be employees.131 But these provisions are effectively overridden by the Fair Work Act 2009 [12.50] and the Independent Contractors Act 2006 (which is discussed at [4.300]). Many retain the protection of workers’ compensation deeming provisions which are unaffected by the Independent Contractors Act 2006, s 8(2) unless regulations provide otherwise: s 10(1)(2). Quantifying the number of dependent contractors is difficult, and perhaps pointless in the current environment,132 as there is little prospect of legislation giving them greater protection.133 There is recognition of dependent contractors in the taxation legislation which seeks to curb the types of tax deductions that can be made by persons parading as contractors. The taxation provisions are important because the tests used to restrict deductions reflect the tests utilised to decide whether a person is an employee.134 It has been argued, but not accepted, that a uniform test for employment 126

127 128

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130 131 132

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134

See ACTU submission to the House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Inquiry into Independent Contractors and Labour Hire Arrangements (March 2005), p 7. This view was not shared by employer organisations or federal government departments, see Parliament of Australia, House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), pp 12-13, [2.30]. Parliament of Australia, House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), [2.59]. For example, the need for public liability insurance, see Parliament of Australia, House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), [5.138]. See Clayton and Mitchell, Study of Employment Situations and Worker Protection in Australia (A Report for the International Labour Office, Sept 1999), p 46 illustrating by reference to owner drivers in the transport industry. See also Parliament of Australia, House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), [4.108]-[4.109]. See Parliament of Australia, House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), at [5.59]-[5.71]. NSW: Industrial Relations Act 1996, Sch 1; Qld: Industrial Relations Act 1999, ss 5(1)(c), 275; SA: Fair Work Act 1994, s 4; Tas: Industrial Relations Act 1984, s 3. The ACTU suggests 40% of all contractors are dependent based on whether they have authority over their own work, see ACTU “Lives on Hold” (Report of the Independent Inquiry Into Insecure Work in Australia, 2012), p 16. Other factors could include whether: they have employees; more than one active contract; say in their start and finish times; the period of time they have been with the one business, see ABS, Forms of Employment (Nov 2013) cat 6359. See Fair Work Act 2009 (Cth), ss 357 – 359 (sham contracting) discussed at [2.100]. The proposal to create a third category of work, the dependent contractor was not recommended by the report by the Office of the Australian Building and Construction Commissioner, ABCC Sham Contracting Inquiry Report 2011 (Nov 2011), p 29. Unions have had some limited success in including clauses in enterprise agreements dealing with the terms of engagement for contractors and labour hire workers but note the recommendation that the Fair Work Act 2009 (Cth) should be amended to make these restrictions unlawful: Productivity Commission, Workplace Relations Framework, Final Report (30 Nov 2015), p 820. See also Office of the Australian Building and Construction Commissioner, ABCC Sham Contracting Inquiry Report 2011 (Nov 2011), pp 54-56. First, the results test is satisfied if: 75% of income for work, contracted to achieve a particular result, provides tools or equipment and is liable to rectify defective work. If this test is not met, deductions

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might adopt similar tests.135 The taxation legislation, although recognising the status of a dependent contractor, does not confer any special protection on the dependent contractor nor convert them to an employee, nor does it affect the position at common law.136 If the person is a contractor and not an employee the Independent Contractors Act 2006 may provide a remedy for harsh or unfair contracts137 (see discussion at [4.300]). There are also broader protections available under the anti-bullying provisions of the Fair Work Act 2009 extending to contractors.138 A contractor may for some purposes be deemed to be an employee.

Deemed employees [2.120] Sometimes, the benefit of a particular statute may be extended to others who are not, or who may not be, employers and employees in the common law sense. One way of extending this benefit is to deem those in the otherwise excluded or doubtful groups to be employees.139 The purpose is to broaden the protection of beneficial legislation to groups that are seen as vulnerable to exploitation. A different use of the deeming device can occur where the worker is clearly an employee, but it is not clear who is the employer. To obviate this, “deeming” provisions, whereby one person or entity is deemed or declared to be the employer, have been inserted, for example, in some anti-discrimination legislation.140 A person can be deemed to be an employee for a particular statutory purpose but be an independent contractor for other purposes. For example, a person may be deemed an employee for purposes of the workers’ compensation legislation141 but this would not make them an employee for purposes of vicarious liability. It is generally accepted that the statutory deeming provisions apply only in relation to the particular statutory

135 136 137 138 139 140 141

are restricted if less than 80% of income is received from each client and the individual concerned satisfies one of the three tests: unrelated client test, employment test or business premises test. The unrelated client test requires income from two or more unrelated clients and services resulting from public solicitation such as advertising; the employment test is satisfied if 20% of the work is done by employees, subcontractors or other entities, or if the person has had apprentices for at least six months. The business premises test is satisfied where the person has their own work premises for more than 50% of the time and that they are used exclusively by them and separated from a private residence and physically separate from the client’s or their associate’s premises, see Income Tax Assessment Act 1997 (Cth), Div 85 – 87. Productivity Commission, Workplace Relations Framework, Final Report (30 Nov 2015), see pp 812-813. Compare the position in United Kingdom, see Collins, Ewing and McColgan, Labour Law (Cambridge University Press, 2012), p 203. Informax International Pty Ltd v Clarius Group Ltd [2012] FCAFC 165; (2012) 207 FCR 298. Fair Work Act 2009 (Cth), s 789FC and see [13.380]. See, for example, deeming provisions of the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic), Sch 1, cl 9. See, for example, Sex Discrimination Act 1984 (Cth), s 108 (Commonwealth employees); AntiDiscrimination Act 1977 (NSW), s 4B (deemed employers, for example, police). See as illustrations: Yaraka Holdings Pty Ltd v Giljevic [2006] ACTCA 6; (2006) 149 IR 339; Reliable Couriers Pty Ltd v Q-COMP [2005] QIC 51; Hewitt v Benale Pty Ltd [2002] WASCA 163; (2002) 27 WAR 91; Ralston v Bell [2010] NSWSC 245; cf Kovacic v Henley Arch Pty Ltd [2009] VSCA 56; (2009) 22 VR 21.

Employer and employee

purpose.142 These provisions can only have effect in so far as they are not excluded by the Independent Contractors Act 2006 and the Fair Work Act 2009143 (see [4.300], [2.50]). Most litigation concerns the question whether the worker is an independent contractor or an employee.

Independent contractors contrasted [2.130] In determining whether the person is an employee or an independent contractor, the primary distinction is between those employed under a contract of service (employee) and those that are engaged under a contract for services (selfemployed independent contractors). There is no intermediate legal category of persons who provide their personal services. The worker must be either a contractor or employee.144 Employees provide their personal services, are more highly regulated, in a subordinate relationship and subject to direction and control by the employer. In exchange for providing a worker with a wage and employment security, an employer gains authority to direct the worker’s activities. According to the traditional economic model, what the worker loses in control and autonomy is compensated by income and security. The employer reduces transactions costs by not having to negotiate the bargain for each task, and gains control ….145

Conversely, the self-employed146 (usually independent contractors) are regarded as free actors, operating their own businesses with high levels of autonomy and equal bargaining power in the provision of defined services or an end result.147 Tradespersons and professionals form the two largest groups of independent contractors.148 An independent contractor status may provide benefits not available to an employee, such as: the ability to minimise taxation through partnership and corporate structures; taxation deductions for travel and business expenditure including

142

143

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145 146 147

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National Transport Insurance Ltd v Chalker [2005] NSWCA 62 at [71]-[72] doubting earlier contrary dicta. A deeming provision in workers’ compensation also applies to limitation of damages provisions in that legislation, see Hewitt v Benale Pty Ltd (2002) [2002] WASCA 163; 27 WAR 91; Ebb v Fast Fix Steel Fixing Pty Ltd [2007] NSWCA 236. See also Fotini Theodorakakis v Behnane [2003] IRC 1337; DSG Pty Ltd v Victorian Workcover Authority [2008] VSCA 42; (2008) 20 VR 514; Keeble v Murray [2014] NSWSC 151. Note the Fair Work Act 2009 (Cth) (from July 2012), in relation to a Commonwealth outworker entity, deems workers in the Textile, Clothing and Footwear Industry to be employees: ss 789BB, 789BC. Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [173] per Bromberger and North JJ. The judgment of the Full Federal Court was overturned on appeal on a different point, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45. Fudge, Tucker and Vosko, “Changing Boundaries in Employment: Developing a New Platform for Labour Law” (2003) 10 Can Law & Employment LJ 329 at 331. There are some who are not contractors, such as farmers and artists. The unfair contracts provisions in the Independent Contractors Act 2006 (Cth) recognise that that is not always the case, see [4.300]. The Act does not define an independent contractor for these purposes. Similarly, vulnerable contractors may be deemed workers for particular purposes, such as workers’ compensation legislation, see [2.50], [2.120]. Note also the Fair Work Act 2009 (Cth), ss 340, 342 relating to adverse action discussed in CFMEU v McCorkell Constructions Pty Ltd (No 2) [2013] FCA 446; (2013) 232 IR 290 and discussion at [13.240]. As to the effect of an employee becoming an incorporated contractor on liability of the original employer, see Rauk v Transtate Pty Ltd [2001] Aust Torts Reports ¶66,510. The estimate is that in Nov 2013, self-employed contractors constituted just over 9% of all employed persons. Most male self-employed contractors work in construction (31%), and in relation to women most (20%) work in the professional, scientific and technical services industry: ABS, Forms of Employment (Nov 2013) cat 6359.0.

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IT equipment and telephone;149 greater financial rewards; flexibility in choosing time and place of work,150 and utilising substitute labour.151 For the contractors advantages included: freedom to choose working hours, decide when to take holidays, who they work for, what type of work they undertake and what rates they wish to charge … better lifestyle, better balance between work and family; and better money.152

Conversely, the disadvantages are many. These include the capital costs of the business, insurance, business record keeping, loss of benefits such as workers’ compensation, annual, sick and long service leave, superannuation contributions and lack of security because of fluctuating demand, the need to constantly chase work and be paid, fewer holidays, long hours and difficulty in securing loans, see above [2.110]. The Making it Work inquiry concluded that: The advantages for independent contractors appear to be more apparent for those at higher skilled work levels which would apply to professionals, engineers and managers. Other submissions suggest that those that are less able to have control over working procedures, are unable to subcontract, and who are reliant mainly on one client have poorer economic and social outcomes.153

A review of the various factors (below) to determine whether a person is an independent contractor or an employee suggests that they are premised on a conception of an independent contractor that does not necessarily reflect today’s realities. Cleaners, labourers, owner-drivers including couriers, taxi drivers and canvassers, may be independent contractors.154 But they are very different from self employed groups such as tradespersons and professionals who invest capital and skill in their own enterprise and who form a neat fit with the various tests for employment set out later in this chapter. The difficulties are: first, independent contractors such as cleaners and labourers may be low skilled with little capacity for advancement and limited resources for capital investment;155 secondly, many of them, not so very long ago, would have been employees within the workforce; thirdly, these various indicia lose sight of employment as a method of providing protection and distribution of social goods within the community.156 Now some of the most vulnerable must provide their own protection. As we have seen in the earlier part of this chapter, there are many financial incentives for the engagement of independent contractors rather than employees. There continues to be a significant volume of cases on this issue, many dealing with the sham 149 150

151

152 153 154 155 156

As to taxation advantages, see Productivity Commission, The Role of Non-Traditional Work in the Australian Labour Market (Commission Research Paper, Melbourne, May 2006), p 45. 62% of independent contractors report authority over their own work, with 64% able to subcontract; 80% have no employees, 13% have been in their current business for less than one year, 39% for more than 10 years; 85% have some say in start and finish times and 56% work only weekdays in their jobs (ABS, Forms of Employment (Nov 2013) cat 6359.0). Submissions to AIRC in Natasha Savic v JAV IT [2004] AIRC 1223 at [20] and see Parliament of Australia, House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), pp 127-129. Parliament of Australia, House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), p 22 at [2.55]-[2.56]. Parliament of Australia, House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), p 23 at [2.58]. In November 2013, independent contractors were just over 9% of employed persons, ABS, Forms of Employment (Nov 2013) cat 6359.0. Waite and Will, Self-employed Contractors in Australia: Incidence and Characteristics (Productivity Commission Staff, Research Paper, AusInfo Canberra, 2001), Table 5.7, p 47. Fudge, Tucker and Vosko, “Changing Boundaries in Employment: Developing a New Platform for Labour Law” (2003) 10 Can Law & Employment LJ 329.

The modern test: the emergence of the multi-factor test

contracting provisions of the Fair Work Act 2009 (see [2.100]). A sample contract frequently used to create an independent contractor relationship is set out in Chapter 3 at [3.100]. These contracts are not necessarily successful in avoiding an employment relationship, if the reality is that the person is an employee, see [3.100]. The High Court in Hollis v Vabu157 accepted that the ultimate question for distinguishing between an employee and an independent contractor is whether (after considering the totality of the evidence, see the multifactor test at [2.160]) the person is, in reality, working in their own business. This is discussed in detail at [2.120] and sections following.

The modern test: the emergence of the multi-factor test [2.140] The earliest test for determining whether the person was an employee158 was the control test. It emphasised the capacity to direct not only what work was to be done but how it was to be done. It was closely aligned to labouring and manual work where little discretion or skill was needed in carrying out the task. The position of the professional with high levels of autonomy, discretion and skills was not easily susceptible to detailed control about how the work was to be done.159 In Stevens v Brodribb Sawmilling160 Mason J observed (citations omitted): It is said that a test which places emphasis on control is more suited to the social conditions of earlier times in which a person engaging another to perform work could and did exercise closer and more direct supervision than is possible today. And it is said that in modern post-industrial society, technological developments have meant that a person so engaged often exercises a degree of skill and expertise inconsistent with the retention of effective control by the person who engages him. All this may be readily acknowledged, but the common law has been sufficiently flexible to adapt to changing social conditions by shifting the emphasis in the control test from the actual exercise of control to the right to exercise it, “so far as there is scope for it”, even if it be “only in incidental or collateral matters” … Furthermore, control is not now regarded as the only relevant factor. Rather it is the totality of the relationship between the parties which must be considered.161

The “control test” (as it is commonly known) “has frequently been treated as critical and decisive of the legal quality of the relationship”162 between the parties. McCardie J in Performing Right Society Ltd v Mitchell and Booker (Palais de Danse) Ltd said (citations omitted): The distinction between “servant” and “independent contractor” does not seem to rest merely on the magnitude of the task undertaken. Thus, whilst a labourer employed to cleanse drains at 5s for the job was held to be a servant and not a contractor, a plumber called in by a landlord to mend a leaky cistern was held to be an independent contractor and not a servant. A licensed drover has been held to be an independent contractor and not a servant on the ground that he exercised an independent calling. So, too … a gas-fitter was held to be an independent contractor. On the other hand, I conceive that a general manager, at a high salary, of a partnership, or the managing director of a limited company at an even higher salary, are usually servants and not independent contractors, and in many cases a partnership or a limited company has been held liable for their negligence or breach 157 158

159 160 161 162

Hollis v Vabu (2001) 207 CLR 21 at 39. The majority approved Windeyer J’s statement to this effect in Marshall v Whittaker’s Building Supply Co (1963) 109 CLR 210 at 217. This was in the context of determining whether the person was a servant under master-servant legislation or a “worker” for social legislation, see Deakin, The Contract of Employment: A Study in Legal Evolution (ESCR Centre for Business Research, Working Paper 203, June 2001), p 29. Deakin, The Contract of Employment: A Study in Legal Evolution (ESCR Centre for Business Research, Working Paper 203, June 2001), p 29. Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 24, 28-29. See also Wilson and Dawson JJ at 36. Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 36. Gould v Minister of National Insurance [1951] 1 KB 731 at 734.

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of duty … It seems, however, reasonably clear that the final test, if there be a final test, and certainly the test to be generally applied, lies in the nature and degree of detailed control over the person alleged to be a servant. This circumstance is, of course, one only of several to be considered, but it is usually of vital importance … ’The relation of master and servant exists only between persons of whom the one has the order and control of the work done by the other. A master is one who not only prescribes to the workman the end of his work, but directs, or at any moment may direct, the means also, or, as it has been put, “retains the power of controlling the work” … A servant is a person subject to the command of his master as to the manner in which he shall do his work … and the master is liable for his acts, neglects and defaults, to the extent to be specified. An independent contractor is one who undertakes to produce a given result, but so that in the actual execution of the work he is not under the order or control of the person for whom he does it, and may use his own discretion in things not specified beforehand.163

Where the work involved specialist skills and knowledge, actual control of the work and how it was to be performed would be difficult. In Zuijs v Wirth Bros Pty Ltd164 a circus trapeze artist was injured in a fall while performing. The court held that he was an employee and therefore entitled to workers’ compensation. The High Court commented that: a false criterion is involved in the view that if, because the work to be done involves the exercise of a particular art or special skill or individual judgment or action, the other party could not in fact control or interfere in its performance, that shows that it is not a contract of service but an independent contract … The duties to be performed may depend so much on special skill or knowledge or they may be so clearly identified or the necessity of the employee acting on his own responsibility may be so evident, that little room for direction or command in detail may exist. But that is not the point. What matters is lawful authority to command so far as there is scope for it. And there must always be some room for it, if only in incidental or collateral matters.165

It is now sufficient if there is scope for control over incidental matters – a marked shift from the classical requirement of the right to control the actual work. The court in Zuijs added: There are countless examples of highly specialised functions in modern life that must as a matter of law be performed on the responsibility of persons who possess particular knowledge and skill and who are accordingly qualified. But those engaged to perform the functions may nevertheless work under a contract of service. The fact that the performance of a task depends on a natural gift or on some laboriously acquired accomplishment does not necessarily mean that the performer cannot be a servant. It is only in the most mechanical of operations that anyone can dictate absolutely the mode of performance. The nature of the task is not conclusive. An artisan may be an independent contractor while the most highly skilled technician is a servant. A skilled craftsman may have highly individual gifts and yet be under a contract of service. His value as a servant lies in his individuality and he frequently is employed just because he can exercise specialised skill which the employer of such a servant can direct the objective to which the servant’s skill is to be addressed but he is powerless to control the manner in which the servant’s skill is exercised.166

It is now clear that the control test is just one factor to be applied in determining whether a person is an employee. It is still, however, a very strong factor in determining employment status. The importance of the element of control is dealt with further under the multi-factor test (see [2.220]). [2.150] This “control test” proved difficult to apply and led to attempts by the courts to formulate different approaches. The best known of these is the so called “organisation” test championed by Denning LJ: “I would observe the test of being a 163 164 165 166

Right Society Ltd v Mitchell and Booker (Palais de Danse) Ltd [1924] 1 KB 762 at 766-768. Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 561. Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 561 at 571. Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 561 at 571-572.

The modern test: the emergence of the multi-factor test

servant does not rest nowadays on submission to orders. It depends on whether the person is part and parcel of the organisation.”167 In Stevenson, Jordan and Harrison Ltd v McDonald and Evans, Denning LJ said: One feature which seems to run through the instances is that, under a contract of service, a man is employed as part of the business, and his work is done as an integral part of the business; whereas, under a contract for services, his work, although done for the business, is not integrated into it but is only accessory to it.168

But as MacKenna LJ remarked in Bank Voor Handel en Scheepvaart NV v Slatford:169 This raises more questions than I know how to answer. What is meant by being “part and parcel of the organisation”? Are all persons who answer this description servants? If only some are servants, what distinguished them from the others if it is not their submission to orders? Though I cannot answer these questions I can at least invoke the dictum to support my opinion that control is not everything.

The “organisation” test has not been generally adopted or applied by Australian courts as a primary test. In Stevens v Brodribb Sawmilling Co Pty Ltd, Mason J commented that he was: unable to accept that the organisation test could result in an affirmative finding that the contract is one of service when the control test either on its own or with other indicia yields the conclusion that it is a contract for services. Of the two concepts, legal authority to control is the more relevant and the more cogent in determining the nature of the relationship. This comment applies with equal, if not greater force to the competing view, expressed by Denning LJ in Bank Voor Handel, that the test is an independent method of determining who is an employee and who is an independent contractor, and in this way seeks to replace the traditional approach of balancing all the incidents of the relationship between the parties.170

Whilst the organisation test may be useful where professional workers are concerned because of the lack of detailed control,171 it is especially unhelpful where the person concerned is an atypical worker.172 Even then in relation to some employees, particularly casuals, they are less likely to be integrated into the organisation than other full time or contract employees. There is evidence, for example, that casual staff are less likely to obtain training and less likely to have opportunities for promotion etc (see [2.90]). Despite the difficulties with the organisation test, the extent to which that the person is integrated into the employer’s business is regarded as one of the factors relevant to whether a person is an employee.173 We now turn to examine in detail the modern approach to determining whether a person is an employee, the multi-factor test.

167 168 169 170 171 172

173

Bank Voor Handel en Scheepvaart NV v Slatford [1953] 1 QB 248 at 295. Stevenson, Jordan and Harrison Ltd v McDonald and Evans [1952] 1 TLR 101 at 110. Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 at 524. Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 27-28. Wilson and Dawson JJ similarly doubted the value of the test, see at 36-37. Even then different conclusions can be drawn, see, eg, Australian Salaried Medical Officers Federation v ACT Visiting Medical Officers Association [2005] AIRC 525; (2005) 153 IR 228 at [20]. For example, an agency contractor or employee may be integrated into the client’s workplace but not an employee of the client, see Chapter 3, but this is not always the case, a part time employee may be integrated into the business, On Call Interpreters Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [287]. See The Director of the Fair Work Building Industry Inspectorate v Linkhill Pty Ltd (No 7) [2013] FCCA 1097 (other litigation on appeal issues see [2015] FCAFC 99); On Call Interpreters Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [285]-[289].

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The multi-factor test Introduction [2.160] The multi-factor test is used to decide whether the person is an employee. It is important not only in distinguishing independent contractors but also in deciding whether, for example, a bishop, volunteer or someone described as a company director or partner is an employee. Common to all employees is the requirement that they provide their personal service to the employer.

Personal Relationship [2.170] The special defining feature of an employment relationship is that it is a personal relationship between the employer and employee. Consequently, an employee cannot be transferred to a new employer against her or his will (see [3.50]); the employee undertakes to provide the employee’s own skill and labour and not that of a delegate (see [2.260]); a company cannot be an employee (see [2.360]) and the relationship is such that the employee owes a duty of loyalty and fidelity to the employer [5.520]. This element of personal service again reflects the early history of the employer–employee relationship. The personal nature of the relationship is emphasised in Ready Mixed Concrete (South East) Pty Ltd v Minister of Pensions and National Insurance.174 There, MacKenna J said: A contract of service exists if these three conditions are fulfilled. (i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service.175

It is this requirement of personal service that is a crucial factor in distinguishing an employee from an independent contractor (see below [2.260]). In the United Kingdom a further minimum requirement for a contract of employment is the mutuality of obligation to provide and accept work.

The irreducible minimum – mutuality of obligation [2.180] In the United Kingdom there is a long held view that no contract of employment can exist if there is no duty on the employer to provide work and no duty on the employee to accept work. This mutuality of obligation is regarded as the irreducible minimum required for a contract of employment.176 Consequently, if there is no duty to offer and accept work, the worker is not an employee and is outside the protection of dismissal legislation.177 The situation might be different if the court could find continuous obligations arising through a global contract which linked together the 174

175 176 177

Ready Mixed Concrete (South East) Pty Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497, applied in Challenge Realty Ltd v Commissioner of Inland Revenue (1990) 3 NZLR 42; TNT Worldwide Express (NZ) Ltd v Cunningham (1993) 3 NZLR 681. Ready Mixed Concrete (South East) Pty Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 at 515. But see, arguing otherwise, Deakin and Morris, Labour Law (6th ed, Hart Publishing, 2012), at [3.29] pp 164-169. Clark v Oxfordshire Health Authority [1998] IRLR 125 (work when needed); Carmichael v National Power plc [2000] IRLR 125; [1999] 1 WLR 2042 (HL) (casual tour guides, no claim for dismissal); Brook Street Bureau (UK) Ltd v Dacas [2004] EWCA Civ 217 (cleaner working through agency); James v London Borough of Greenwich [2007] ICR 577, contrast Kalwak v Consistent Group Ltd [2007] All ER (D) 319 (despite contractual terms, held agency workers were employees). See also Davies, “Casual Workers and Continuity of Employment” (2006) 35 Ind LJ 196 discussing Cornwall County Council v Prater [2006] IRLR 362; Davies, “The Contract for Intermittent Employment” (2007) 102 Ind LJ 36.

The multi-factor test

short term hiring into a single contract.178 The mutuality requirement is based on the premise that a contract of employment not only requires an exchange of work for wages but also mutual promises for future performance. It assumes the continuance of a long term stable relationship in which work continues to be offered and accepted.179 In Australia, courts have no difficulty in finding that a contract of employment exists in relation to casuals even if there is no overarching contract and the casual is free to refuse to work and the employer has no obligation to continue to offer work.180 Where a person works as a casual over an extended period of time, this is generally characterised as a series of separate employment contracts rather than a single continuous contract of employment.181 In Forstaff v Chief Commissioner of State Revenue,182 McDougall J distinguished the English cases on this issue saying: [T]he irreducible minimum of mutual obligation necessary to create a contract of service … should be expressed, not as an obligation on the one side to provide and on the other to perform work, but as an obligation on the one side to perform work (or provide service) and on the other side to pay. That would be entirely consistent with the approach of the Full Federal Court in BWIU v Odco … … it is essential that the putative employer be obliged to pay the putative employee in accordance with the terms of the contract for services reasonably demanded under it, and that the putative employee be obliged to perform such services. That is as much so where the service consists of standing and waiting as where it is active.

His Honour went on to hold (at [105]) that the contract of employment came into existence when the agency offered work which was accepted. It did not come into effect at the earlier point of time when the worker completed an application form and was put on the agency’s books.183 It is clear that whilst a casual is actually undertaking an assignment a contract of employment can exist. But it is also possible, in exceptional circumstances that casuals, particularly long term casuals, can be regarded as being employees in relation to periods in which they are not working.184 In Federal Commissioner of Taxation v J Walter Thompson (Australia) Pty Ltd185 actors were not paid for rehearsals but only for actual performances. The actors were held to be employees for the whole period of time including rehearsals on the basis that they were required to attend and were subject to detailed control and direction during those rehearsals. The New South Wales Industrial Commission in Swift Placements Pty Ltd v

178 179 180

181

182

183 184 185

Deakin and Morris, Labour Law (6th ed, Hart Publishing, 2012), pp 164-169. Freedland, The Contract of Employment (1976), pp 21-22. JA & BM Bowden & Sons Pty Ltd v Chief Commissioner of State Revenue [2001] NSWCA 125; (2001) 105 IR 66; Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic) (1997) 97 ATC 5070. See also On Call Interpreters Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252. Predl v DMC Plastering Pty Ltd [2014] FCCA 1066. See as an exceptional case, AJ Mills & Sons Pty Ltd v Transport Workers’ Union of NSW [2009] NSWIRComm135; (2009) 187 IR 56 (race steward required to attend every race meeting) and dicta Stanley J in Flinders Ports Pty Ltd v Woolford [2015] SASCFC 6; (2015) 247 IR 451 at [84] (on call and duty to work when rostered on). Forstaff v Chief Commissioner of State Revenue [2004] NSWSC 573; (2004) 144 IR 1 at [90], [91] (payroll tax). In Country Metropolitan Agency v Slater [2003] SAWCT 57, the Full Bench noted (at [80]) that the United Kingdom decisions, such as Brook Street Bureau (UK) Ltd v Dacas [2004] EWCA Civ 217, were instructive only in “intuitive terms”. Compare James Vorosv Dick [2013] FWCFB 9339; (2013) 237 IR 248 at [13]. See also Drake Personnel Ltd v Commissioner of State Revenue [2000] VSCA 122; (2000) 105 IR 122 at [39]; Drive Recruit Pty Ltd v Back [2013] NSWWCCPD 32. See Davies, “The Contract for Intermittent Employment” (2007) 202 Ind LJ 36 as to what obligations may apply whilst the casual is not undertaking work. Federal Commissioner of Taxation v J Walter Thompson (Australia) Pty Ltd (1944) 69 CLR 227.

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WorkCover Authority of NSW186 applied this decision in finding that there was a continuing contract of employment between an agency and a casual. The casual had a duty to check daily whether work was available and an obligation to accept that work. This gave rise to a continuing contract of employment which could commence before performance of any work for a client.187 There is the suggestion that where the person in question can work whenever they wish, this demonstrates that the requisite control necessary for the establishment of an employment relationship does not exist.188 But it is now clear that this is only one of the factors relevant to the existence of an employment relationship.189 Casuals, especially long term casuals, have been given some protection against dismissal under legislation, industrial awards and agreements. In the United Kingdom there is another development that has not been followed in Australia, that is, in some situations courts have been prepared to find joint employment.

Joint employment [2.190] The authorities assume that there is just a single employer. But there might be

advantages, where there are a number of related companies190 and particularly in the labour hire situation, in considering whether there could be joint employers. In the labour hire situation it may be advantageous where one party has day-to-day control and the other party has authority in relation to such matters as hire and fire, payment etc. But Australian courts have refused to follow this approach. This is discussed in Chapter 3, Labour Hire, [3.250]. We now turn to the High Court decision in Hollis v Vabu which established the modern approach for testing whether the person is an employee.

Hollis v Vabu [2.200] It is now settled that the test for determining whether a contract of employment exists is the multi-factor test. The leading authority is the High Court decision in Hollis v Vabu191 which stresses the need to examine the “totality of the relationship” between the parties. In the joint judgment, Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ observed: It should be added that the relationship between the parties, for the purposes of this litigation, is to be found not merely from these contractual terms. The system which was operated thereunder and the work practices imposed by Vabu go to establishing “the totality of the relationship” between the parties; it is this which is to be considered.

The assessment of the totality of the relationship takes into account a range of factors relevant to the particular circumstances of the case, with the weighting and range of factors varying from case to case and sometimes may point in opposing directions. The exercise is not just a mechanical one of ticking off the boxes one by one but rather: 186 187 188 189

190 191

Swift Placements Pty Ltd v WorkCover Authority of NSW [2000] NSWIRComm 9 at [53]-[58]. See also Ryde-Eastwood Leagues Club Ltd v Taylor (1994) 56 IR 385. Casual status may change where the worker becomes obliged to accept work, Predl v DMC Plastering Pty Ltd [2014] FCCA 1066. Commissioner of Pay-roll Tax (Vic) v Mary Kay Cosmetics Pty Ltd [1982] VR 871. JA & BM Bowden & Sons Pty Ltd v Chief Commissioner of State Revenue [2001] NSWCA 125; (2001) 105 IR 66 at [90] (seasonal workers were employees); Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic) (1997) 97 ATC 5070 at 5078-5079 (interviewers doing market surveys); On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252. Wales & Wales v Nycon Protective Services [2005] NSWIRComm 1082; Joyce v Hendricks Pty Ltd [2006] NSWIRComm 1068 at [39]. Hollis v Vabu (2001) 207 CLR 21 at 33 [24].

The multi-factor test

The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another.192

In Hollis v Vabu a bicycle courier was held to be an employee for purposes of determining whether the employer was vicariously liable for the courier’s negligence. Hollis, the plaintiff, was injured when struck by an unidentified cyclist on the footpath. The cyclist was wearing a jacket with the words “Crisis Couriers” on it. Crisis Couriers was owned and operated by Vabu. The High Court held that the courier was an employee. Although the couriers supplied their own bikes and paid the expenses of running the bikes, they were not running their own businesses. This conclusion could be drawn from a variety of factors. Some factors were directly related to whether couriers were in business on their own account: the work did not require special skills or qualifications; there was no opportunity to “freelance” or build up goodwill; the couriers’ finances were supervised with no scope to bargain for rates; although the couriers had to provide their own bikes and pay for repairs, the modest costs involved did not tell against an employment relationship, only that the employer had the superior bargaining position and the bikes could be used for purposes other than work. It was also clear that the company had extensive control over the couriers: there were strict rules concerning attendance and assignment of work rosters; the couriers were unable to refuse work and it was assumed, were unable to delegate their jobs. The couriers wore uniforms with the company logo advertising the company and were required to maintain personal dress standards in carrying out the job. There were also rules relating to annual leave and leave requests. Finally, it was clear that there was significant exercise of actual control over the couriers not just in incidental matters. The High Court held that would be “unrealistic” to regard the couriers as anything but employees. Consequently, the courier was an employee and Vabu was held liable to Hollis for the negligence of its courier. Following Vabu, litigation continued on whether couriers could be contractors. In Reliable Couriers Pty Ltd193 (unlike Vabu), the couriers could decide what jobs they would take, had no fixed start time, could work for others if they wished, were encouraged to wear the uniform, could employ staff and delegate work as well as be incorporated as a company; couriers also provided their own motor vehicles. They were asked to advise as a matter of courtesy if they were not going to work on a particular day. Was that sufficient to ensure that they were contractors? It was held by the Queensland Industrial Court that the couriers were contractors not employees.194 Although the assessment is made by reference to the totality of the relationship, it is apparent that some factors pull more weight than others. An employment relationship will not exist if the putative employee does not provide personal services but engages an employee or contractor to do the work ([2.260]) or where the enterprise involves high levels of business risk and there is a very significant investment of capital [2.250]). In contrast, high levels of control over what and how the person performs the job continues to be a very strong indicator of an employment relationship (see [2.220]). 192

193 194

Hall (Inspector of Taxes) v Lorimer [1992] 1 WLR 939 at 944 per Mummery J cited with approval by Winneke P in Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic) (unreported, Vic CA, 24/10/1997) at 7-9; Roy Morgan Research Pty Ltd v Commissioner of State Revenue [2005] VSC 136; (2005) 22 VAR 467 at [10]. Reliable Couriers Pty Ltd v Q-COMP [2005] QIC 51; Daykin v Neba International Couriers [2002] WASCA 213. Nor were the couriers deemed “workers” for the purposes of the Workers’ Compensation and Rehabilitation Act 2003 (Qld), Sch 2, Pt 1, s 2.

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The issue raised most frequently is whether the worker is an employee or an independent contractor in relation to which the High Court in Hollis v Vabu said that the ultimate question to determine whether a person is an independent contractor or an employee is whether the person is in business on their own account.

“In business on their own account” [2.210] This section provides an overview of the tests for determining whether the person performing the work is doing so for the purpose of running his or her own business.195 The relevant factors may be viewed by comparing how the features of the relationship are consistent with: running a business; with the status of an independent contractor and the presence or absence of factors that are consistent with the existence of an employment relationship. In any individual case the presence or absence of these factors is taken into account in making an overall assessment of whether the individual is an employee. The relevant factors are individually considered in more detail below. A business196 will normally involve taking risks in pursuit of profits and the capacity to create goodwill for the business. It will involve a level of repetition and continuity in delivering services to customers or clients. A business frequently employs others to carry out the work and will usually advertise and promote itself to the public in order to obtain business. Depending on the type of business, it will also normally require equipment and assets to carry on a business as well as the need to establish basic business systems, procedures, software, accounting and banking requirements. It may involve carrying on a profession or trade. A business will be subject to regulatory requirements, such as taxation, Goods and Services Tax (GST), the need for an Australian Business Number (ABN) and so on.197 Whilst these features point to the operation of a business, the work undertaken by an individual may not conform to this traditional model of a business because a business of any size is more likely to be provided under a company structure. Viewing the issue from the perspective of independent contractors operating their own businesses,198 contractors, unlike employees, will usually be able to negotiate remuneration with the client, will not be dependent upon (or work exclusively for) one client, will have the potential for profit on the activity undertaken, be able to promote and generate goodwill for their own business and be subject to deductions for defective or inferior work. They are not required to personally provide the work and may engage employees or contractors for that purpose. Independent contractors frequently contract (and are paid) for a result such as the completed installation of equipment. Usually independent contractors will provide their own equipment and pay for repairs and 195

196 197 198

Bromberg J in On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [208], [209] divided the issue into two questions: (i) whether the person whose status is in question has their own business and (ii) whether the work is done for that person’s own business; this approach was also followed in Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 by North and Bromberg JJ. The judgment of the Full Federal Court was overturned on appeal on a different point, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45. The status of this approach is unclear with Jessup J commenting in Tattsbet Ltd v Morrow [2015] FCAFC 62; (2015) 249 IR 440 that “their Honour’s observations were…obiter” at [62], Allsop CJ at [3] (White JJ agreeing), and see Pittard, “Independent Contractor Versus Employee: A Question of Legal Approach” (2015) (June) Employment Law Bulletin 62. These factors are drawn from On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [210]-[217] per Bromberg J. On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [210]-[217] per Bromberg J. These factors are taken from Bromberg J’s summary in On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [217]-[220].

The multi-factor test

replacement.199 They are not normally subject to direction in relation to the use and management of their own business assets, and, unlike employees, are not subject to detailed control as to how they perform work; they will not usually be integrated into the “client’s business”; they will have no leave entitlements, and will look after their own tax.200 So, interpreters who overwhelmingly worked for just a couple of agencies, provided their own services, were unable to negotiate rates, did not advertise, carried no risk in pursuit of profits and had no capacity to create goodwill or profit in relation to any business, were held not to be operating a business.201 Their perception that they were self employed because they were free to reject or accept work and held an ABN number carried little weight in the assessment.202 Also confirming that the interpreters were employees,203 the agency exercised considerable control over interpreters to ensure that they met performance standards and could impose sanctions for non-performance in much the same way as employees were dealt with.204 The right to refuse work (as is the case with casuals) was not inconsistent with an employment relationship.205 Interpreters wore badges advertising the agency and the work undertaken was for and on behalf of the agency and any goodwill accrued to the agency.206 Consequently interpreters were held to be employees.207 The foregoing discussion is relevant where the question is whether the worker is an employee or an independent contractor working in their own business. But the multi-factor tests are not limited to this issue. The person whose status is in question may be, for example, a partner or a director of a company. An important factor in determining their status is control to which we now turn.

Control [2.220] Where the putative employer exercises detailed control over what the worker does and how it is done, this is a strong indicator of an employment relationship. But the absence of detailed control does not pull equal weight in the opposite direction. In 199 200 201 202 203

204

205 206

207

For discussion of this, see On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [276]-[282]. These factors are taken from Bromberg J’s summary in On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [217]-[220],[243]. On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [240]-[258]. On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [244]. There appears to be considerable overlap in Bromberg J’s two questions: whether the person was carrying on a business and “whose business was the economic activity being performed in and for?” and such an approach has not yet been endorsed by later authority, see On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252. This approach was not followed in Tattsbet Ltd v Morrow [2015] FCAFC 62; (2015) 249 IR 440 at [62] per Jessup J, Allsop CJ and White J agreeing and see Pittard, “Independent Contractor Versus Employee: A Question of Legal Approach” (2015) (June) Employment Law Bulletin 62. On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [261]-[264]. The Agency also exercised control over peripheral matters such as punctuality (at [265]). On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [267]. On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [261]-[264]. The Agency also exercised control over peripheral matters such as punctuality (at [271]-[275]). Two of the interpreters were held to be independent contractors in business on their account; they worked for a range of clients, did their own billing and accrued a level of goodwill etc. On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [233]-[238].

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Hollis v Vabu,208 the High Court accept that “control” is only one of the factors to be taken into account in deciding whether a person is an employee; “it is the totality of the relationship that must be considered”.209 The High Court in Hollis adopt the approach in Zuijs v Wirth Brothers Pty Ltd,210 that even if the employer cannot control how the work is to be done, it is sufficient if the employer has the right to control “so far as there is scope for it” and even if limited to collateral or incidental matters. Control may be manifested in a huge variety of ways: from stipulating work hours; requiring a uniform or a particular style of clothing; workplace rules; detailed instructions relating to the work itself and how it is to be carried out; and, quality control procedures.211 In Linkhill,212 workers were held to be employees based on a range of factors: particularly because the company exercised control over workers by directing them where they were to work; they specified the tasks to be undertaken; required particular invoice and timesheet procedures and set work times; and, workers reported to, and were monitored by, company’s representatives. But significant detailed control over the work does not automatically create an employment relationship. So in Elazac Pty Ltd v Shirreff,213 the worker (Shirreff) was held not to be an employee despite being given instructions (sometimes hourly) about what was to be done and when with the expectation that the instructions would be carried out immediately.214 Control was outweighed by the circumstance that Shirreff had engaged his own employees to perform the contracted work, see [2.260]. Similarly in Tattsbet Ltd v Morrow,215 a Tattsbet agent was not an employee despite working in Tattsbet premises, using their “equipment, methods and systems” with little or no capacity to change the way she worked. But this was counterbalanced by other factors: she had been appointed an agent under a series of agency agreements; she was permitted and did employ others to carry out the work, paying workers compensation premiums and entering into an enterprise agreement with the union in relation to her employees. She was paid by reference to the value of transactions rather than her personal labour. No tax deductions were made from her remuneration and although this is frequently a neutral factor, the fact that she collected and paid GST and undertook the associated paperwork was a strong factor in deciding that the relationship between Tattsbet and its agent was not an employment relationship and that she was in business on her own account. In relation to some aspects of the job, there may be high levels of autonomy about how the job is to be performed and this is typically the position with skilled and professional employees. Autonomy may be counterbalanced by strategic levels of control. For example, the interpreters in On Call Interpreters Agency may have had 208 209 210 211

212 213 214

215

Hollis v Vabu (1986) 160 CLR 16 at 40-41. Hollis v Vabu (1986) 160 CLR 16 at 40-41. Zuijs v Wirth Brothers Pty Ltd (1955) 93 CLR 561. See as illustrations, Roy Morgan Pty Ltd v Commissioner of State Revenue (Taxation) [2006] VCAT 1204; (2006) 63 ATR 168; Commissioner of State Taxation v Roy Morgan Research Centre Pty Ltd [2004] SASC 288; (2004) 90 SASR 12. The Director of the Fair Work Building Industry Inspectorate v Linkhill Pty Ltd (No 7) [2013] FCCA 1097 at [255], [285]. Elazac Pty Ltd v Shirreff [2011] VSCA 405. But not in relation to how the work was to be performed (at [34]) also it was not a case where Shirreff was a contractor for some purposes and an employee for other purposes (at [39]). For exceptional cases where the person is an employee for some tasks and a contractor for other tasks (apart from deemed employees, see [Barnes v Dawson [1962] NSWR 73; Victorian WorkCover Authority v Game [2007] VSCA 86; (2007) 16 VR 393 at [58] contrast Kovacic v Henley Arch Pty Ltd [2009] VSCA 56; (2009) 22 VR 21. Tattsbet Ltd v Morrow [2015] FCAFC 62; (2015) 249 IR 440 at [70]-[71] per Jessup J (other members of the court agreeing).

The multi-factor test

high levels of autonomy on how they did their job but were not operating their own businesses and were subject to discipline for poor performance.216

Performance of work for others [2.230] If the person works exclusively for one party, this exclusivity and economic dependency points strongly towards an employment relationship. Conversely, if a worker is entitled to work for others, this is a minor factor in the overall assessment pointing towards an independent contractor relationship.217 This is because employees who are part timers and casuals are entitled to work for others and casuals can refuse work.218 This freedom to work for others and refuse work may be economically illusory as Gray J points out in Re Porter; Re Transport Workers Union of Australia:219 [F]or practical purposes, an owner-driver who is heavily indebted to a finance company for the hire purchase of a truck is less independent than a person who is employed to drive a truck owned by the employer. The employee driver may leave and seek a job driving any sort of vehicle with any other employer. The owner-driver must be assured of a steady supply of work in order to keep up payments in respect of the truck, and can only take work for which the particular truck is suitable … [I]n some cases, owner-drivers are reluctant to exercise the notional freedom which they may have to refrain from presenting themselves for work on particular days at their own choice. Evidence was given of a practice of withholding work from owner-drivers for some periods, by way of reprisal for their failure to attend and perform services as desired. In such circumstances, there is no particular reason why a court should ignore the practical circumstances, and cling to the theoretical niceties. The level of economic dependence of one party upon another, and the manner in which that economic dependence may be exploited will always be relevant factors in the determination whether a particular contract is one of employment.

Separate place of work and advertises services [2.240] An inference that workers carry on business on their own account is more easily made if they have a separate location for their business220 and advertise both their business and availability.221 This is more likely for tradespersons and professionals but less likely for low skilled workers. Conversely, attendance at the workplace is less significant when many employees are not required to attend the workplace on a daily basis.

216

217

218 219 220 221

On Call Interpreters Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252. For a case close to the margins see Marco Investments Pty Ltd v Amor [2004] SAIRComm 9 (high levels of autonomy balanced by strategic control) and differing decisions in other jurisdictions, see SJP Chicken Processor v WorkCover (No 3) [2006] SAWLRP 7; Australasian Meat Industry Employees’ Union, Newcastle & Northern Branch v Australian Independent Contractors Agency [2004] NSWIRComm 238. On Call Interpreters Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [238], [285]-[286] (one interpreter with 40% of direct private clients). Conversely if the person does not in fact work for others and is required to work exclusively for the putative employer, this points to employment, Barrett v Create (Geelong) Inc t/as Create [2010] FWA 5576 at [48]-[53]. Yaraka Holdings Pty Ltd v Giljevic [2006] ACTA 6; (2006) 149 IR 339 at 348, [34]-[36]. Re Porter; Re Transport Workers Union of Australia (1989) 34 IR 179 at [14], [26]. Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 37 per Wilson and Dawson JJ. Abdalla v Viewdaze Pty Ltd (2003) 122 IR 215; [2003] AIRC 504 at [35] (entry as a consultant in an industry directory).

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Provision and maintenance of significant tools and equipment [2.250] Where the worker’s investment in capital is substantial and a substantial degree of skill or training is required to use or operate that equipment, the worker will be an independent contractor in the absence of overwhelming indications to the contrary.222 In Hollis v Vabu,223 couriers were held to be employees even though they provided their own bicycles and were responsible for the cost of repairs for their bikes. Additionally they were responsible for the loss or damage to radios and uniforms. This did not make them independent contractors: Viewed as a practical matter, the bicycle couriers were not running their own business or enterprise, nor did they have independence in the conduct of their operations. A different conclusion might, for example, be appropriate where the investment in capital equipment was more significant, and greater skill and training were required to operate it. This is all the more so because the capital outlay was relatively small and because bicycles are not tools that are inherently capable of use only for courier work. The fact that the couriers were responsible for their own bicycles reflects only that they were in a situation of employment more favourable than not to the employer; it does not indicate the existence of a relationship of independent contractor and principal.

Those features of the relationship which point to the person being in business on her or his own account are relevant to the determination whether that person is an independent contractor. Investment of capital is such an indicator. If the person has to purchase their own tools and equipment, this is one factor pointing towards a contractor relationship.224 Conversely where there is no capital investment or financial risk required and no opportunity to profit from sound management or building up of goodwill, this points against the person being self-employed.225 Modest sums spent on tools and equipment will rarely be significant in assessing the totality of the relationship. Nor is the need for a person to have their own motor car necessarily a strong indicator against employment.226 As with any of the other indicia, they must always be counterbalanced against other evidence. For example, the provision of a jackhammer by an employee was counterbalanced by the employee’s ability to buy equipment on the employer’s account.227 The area where the issue consistently arises is that of vehicle owner-drivers. The trend of authority suggests that significant investment, particularly in a truck, is a feature which will in all but the most exceptional cases result in a finding that the owner-driver is self-employed. The status of owner-drivers of heavy vehicles has always proven difficult. In Humberstone v Northern Timber Mills,228 Dixon J said: the contract …was to provide not merely his own labour but the use of heavy mechanical transport … which he maintained and fuelled…. The most important part of the work to be performed by his own labour consisted in the operation of his own motor truck and the essential part of the service for which the respondents contracted was the transportation of their goods by the mechanical means he thus supplied. The essence of a contract of service 222 223 224 225

226

227

228

Abdalla v Viewdaze Pty Ltd (2003) 122 IR 215; [2003] AIRC 504 at 230 (IR). Hollis v Vabu (2001) 207 CLR 21 at 41-42, 44. Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 24 per Mason J. Roy Morgan Research Pty Ltd v Commissioner of State Revenue (Taxation) [2006] VCAT 1204 at [43] (interviewers for market research company); On Call Interpreters Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 (panel interpreters free to reject work). ACE Insurance Ltd v Tifunovsky [2013] FCAFC 3; (2013) 209 FCR 146; Roy Morgan Research Pty Ltd v Commissioner of Taxation [2010] FCAFC 52; (2010) 184 FCR 448 at [40], [41] (particularly if reimbursed). Yaraka Holdings Pty Ltd v Giljevic [2006] ACTA 6; (2006) 149 IR 339 at 349, [40]. See also The Director of the Fair Work Building Industry Inspectorate v Linkhill Pty Ltd (No 7) [2013] FCCA 1097 at [259]. Humberstone v Northern Timber Mills (1949) 79 CLR 389 at 404-405.

The multi-factor test

is the supply of the work and skill of a man. But the emphasis in the case of the present contract is upon mechanical traction. This was to be done by his own property in his own possession and control. There is no ground for imputing to the parties a common intention that in all the management and control of his own vehicle, in all the ways in which he used it for the purpose of carrying their goods he should be subject to the commands of the respondents. In essence it appears to me to have been an independent contract.229

The New South Wales Court of Appeal in Australian Air Express Pty Ltd v Langford commented:230 There is a consistent line of High Court authority supporting the “conventional view” that owners of expensive equipment such as the truck owned by the respondent are independent contractors. As MacKenna J said in [Ready Mixed Concrete (South East) Ltd v Minister of Pensions…such ownership indicates a contract of carriage rather than one of service because “the ownership of the assets, the chance of profit and the risk of loss in the business of carriage are [the owner-driver’s] and not the company’s”.

As the Court in Langford observed, there remains a significant difference between a bicycle (Hollis v Vabu)231 and a truck, the latter more likely indicating that the person is working in their own business.232

Right to delegate or subcontract work [2.260] An employment contract is an agreement to render personal services. If a person engages employees or another contractor to perform the contracted work, then this is the strongest indicator that the person is not an employee.233 A person running a betting agency who engages her own employees to help run the business is running her own business and is not an employee.234 What qualifies as a delegation? A worker may recommend another person to help with the work; this is not necessarily a delegation, it may simply be characterised as an opportunity to introduce other employees to an employer.235 The swapping of assignments or shifts between persons already engaged by the “employer” does not preclude the existence of a contract of employment.236 In MacFarlane v Glasgow City 229

230 231 232

233

234 235 236

Humberstone v Northern Timber Mills (1949) 79 CLR 389 at 404-405. See BWIU v Odco (1991) 99 ALR 735 at 754 for a collection of authorities approved by the High Court. See also National Transport Insurance Ltd v Chalker [2005] NSWCA 62 at [59] and contrast Gray J’s views in Re Porter; Re Transport Workers Union of Australia (1989) 34 IR 179 at 185-186. Australian Air Express Pty Ltd v Langford [2005] NSWCA 96; (2005) 147 IR 240 at [44]. See also National Transport Insurance Ltd v Chalker [2005] NSWCA 62 at [59]. Hollis v Vabu (2001) 207 CLR 21 at 41 [47]. In Langford, the truck cost around $67,000 with annual running expenses of $26,000 (1998), and $32,000 (1999). Cf Advance Resource Services Pty Ltd v Charlton [2006] SAIRC 79; (2006) 157 IR 341 (van originally worth under $1000 at engagement and worth about $2,000 when the issue came before the court not prevent employment); Re Porter; Re Transport Workers Union of Australia (1989) 34 IR 179 at [25], [40], [55] (despite high running costs – up to 55% of gross in expenses, the person was an employee). See also “Business expenditure” [2.340] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 24 per Mason J; Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 at 389; Kovacic v Henley Arch Pty Ltd [2009] VSCA 56; (2009) 22 VR 21 at 27; Elazac Pty Ltd v Shirreff [2011] VSCA 405 at [36] (other factors included tax and financial documentation, operating a partnership, engaging employees, working for others in working hours, no deductions for tax and no paid leave entitlements); Tattsbet Ltd v Morrow [2015] FCAFC 62; (2015) 249 IR 440 at [67], [68]. For the exceptional case where the person is an employee for some tasks and a contractor for other tasks (apart from deemed employees, see Barnes v Dawson [1962] NSWR 73; Victorian WorkCover Authority v Game [2007] VSCA 86; (2007) 16 VR 393 at [58] contrast Kovacic v Henley Arch Pty Ltd [2009] VSCA 56; (2009) 22 VR 21. The latest evidence suggests that 64% of independent contractors can subcontract their own work: ABS, Forms of Employment (Nov 2013) cat 63590.0. Tattsbet Ltd v Morrow [2015] FCAFC 62; (2015) 249 IR 440 and see [2.220]. Kovacic v Henley Arch Pty Ltd [2009] VSCA 56; (2009) 22 VR 21, 27; Elazac Pty Ltd v Shireff [2011] VSCA 405 at [36]. On Call Interpreters Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366 at [253]. Cf

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Council,237 there was no express term in the contract dealing with personal service or the use of a substitute. Gym instructors, if unable to take a class, could arrange for a replacement from the council’s register of approved instructors.238 The replacement was paid directly by the council. Gym instructors were held to be employees even if they could send along a substitute. Falling on the other side of the line is the decision in Australian Air Express Pty Ltd v Langford,239 where the New South Wales Court of Appeal considered whether an owner-driver was a contractor or an employee. A clause in the contract provided: The Contractor may appoint a substitute driver, with the approval of AaE, and shall ensure the substitute driver is suitably qualified to perform the work and complies with the relevant terms of this agreement. The need for a substitute driver shall be determined in consultation between AaE and the Contractor …

The driver argued that he was an employee, that the right to delegate was available only during the period he was on leave and that any substitute driver became an employee of Air Express. This argument was inconsistent with the arrangements the driver made when he went overseas on leave: this included engaging the substitute driver as a subcontractor; training the substitute driver; obtaining Air Express’s approval; taking out workers’ compensation cover for the driver; payment of the substitute driver out of moneys received for the work undertaken by the substitute driver and setting the amount the substitute driver was to receive. The Court of Appeal held that even if the right to appoint a substitute was for a limited period only, the owner-driver was a self-employed contractor: First such a right was inconsistent with the personal obligation inherent in a contract of employment. Secondly, it reflected recognition by the parties to the Owner/Driver Agreement of the importance of [Langford] being able to keep the capital invested in his truck earning income. This was consistent with [Langford] operating his own business in which he bore “the change of profit and the risk of loss” … Thirdly, it reflected a degree of independence in [Langford’s] … use of his truck (at [64]).

The substitution or delegation of contracted work will almost invariably mean that the person is a contractor. But a mere contractual right to do so, even if contained in a formal signed contract, is not conclusive on this issue.240 Where no delegation has taken place,241 was refused,242 or delegation is not possible or likely because of the nature of the work, the substitution clause may not genuinely represent the intention of the parties and may have never been intended to operate. See the discussion of sham contracts at [4.300].

237 238 239 240

241

242

Natasha Savic v JAV IT Pty Ltd [2004] AIRC 1223 at [36]. Similar to the situation if a school teacher was unable to take a class, the teacher might arrange for a colleague at school to take the class, MacFarlane v Glasgow City Council [2001] IRLR 7. MacFarlane v Glasgow City Council [2001] IRLR 7. MacFarlane v Glasgow City Council [2001] IRLR 7. Australian Air Express Pty Ltd v Langford [2005] NSWCA 96; (2005) 147 IR 240. Cf the “mock power to delegate” in Bianchi v Staff Aid Services [2004] AIRC 428. In Express and Echo v Tanton [1999] IRLR 367 (CA) the contract provided: “In the event that the Contractor is unable or unwilling to perform the Services personally he shall arrange at his own expense entirely for another suitable person to perform the Services.” See also Autoclenz Ltd v Belcher [2011] UKSC 41; [2011] ICR 1157. But this does not mean that the contract can only be interpreted by reference to what has actually occurred; lack of enforcement does not mean it is not part of the agreement, an obligation could, for example, be waived, see Express and Echo v Tanton [1999] IRLR 367 (CA) approved Autoclenz Ltd v Belcher [2011] UKSC 41; [2011] ICR 1157 at [19] but see [31]. On Call Interpreters Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [283]-[284]. Cf one of the interpreters who did so, at [233]; Guan v Essential Appliance Rentals Pty Ltd [2011] FWA 383 (low volume of work, delegation unlikely); Re Porter; Re Transport Workers Union of Australia (1989) 34 IR 179 at [29] (substitution refused). See also Guardian Insurance Brokers Pty Ltd v Olbrich [2010] SADC 114 at [104] (delegation impractical).

The multi-factor test

The contractual right to delegate is now just one factor in the overall assessment of the true relationship between the parties.243 The High Court in Australian Mutual Provident Society v Chaplin244 said that an unlimited power to delegate the work was “almost conclusive against the contract being a contract of service” (emphasis inserted). But the written terms of the contract are no longer conclusive.245 In Hollis v Vabu,246 the High Court said that the relationship between the parties, for the purposes of this litigation, is to be found not merely from these contractual terms. The system which was operated thereunder and the work practices imposed by Vabu go to establishing “the totality of the relationship” between the parties; it is this which is to be considered.

Under the Fair Work Act 2009, ss 357 – 359, “sham contracting provisions”, the written terms of the contract may be examined to determine whether they reflect the reality of the relationship, see [4.300]. So both at common law and under the Fair Work Act 2009, courts can examine the totality of the relationship to determine whether a contract of employment exists, therefore, a contractual right to delegate does not automatically rule out a contract of employment.

Representation as part of the employer’s business [2.270] An employment relationship is suggested where the person is required to wear a work uniform or badge with a company logo on it. So it was found in Hollis v Vabu, where the cyclist wore a top featuring the company’s name, “Crisis Couriers”.247 But this is just one factor to be considered in all of the circumstances.248 In relation to owner-drivers, where the other contracting party provides and pays for signage on the van, and even if the driver is required to wear a supplied uniform, this will not necessarily outweigh other factors pointing to an independent contractor relationship.249 Absence of a uniform or company emblem is less important where there is no interaction with the public.250 It is the totality of the relationship that is important. Visiting medical officers in hospitals undertake surgery and treatment of public and private patients; they are subject to a significant level of control in the exercise of their professional skills within the hospital. In Australian Salaried Medical Officers Federation v ACT Visiting Medical Officers Association,251 they were held not to be employees even though they appeared to be integrated into the organisation.

243

244 245

246 247 248

249 250 251

Australian Air Express Pty Ltd v Langford [2005] NSWCA 96; (2005) 147 IR 240 at [65]. See also Australian Salaried Medical Officers v ACT Visiting Medical Officers Association [2005] AIRC 525 at [25]. And see in the UK Autoclenz Ltd v Belcher [2011] UKSC 41; [2011] ICR 1157 and discussion of sham contracts at [4.300]. Australian Mutual Provident Society v Chaplin (1978) 52 ALJR 407 at 410 (Privy Council). See as some of the earlier instances, Stevens v Brodribb Sawmilling Co Ltd [1986] 160 CLR 16 at 26 (one carter had employed his son to drive) per Mason J “power to delegate an important factor”), Independent Education Union of Australia v St Francis of Assisi School [2003] AIRC 1388 at [34]; cf Wilson and Dawson JJ quoting Australian Mutual Provident Society v Chaplin (1978) 52 ALJR 407 at [15] as almost conclusive; Vacik Distributors Pty Ltd v Kelly (1995) 12 NSWCCR 30 at 34 (CA) (the power to appoint substitutes did not override the importance of the right to exercise control). Hollis v Vabu (2001) 207 CLR 21 at [24]. On Call Interpreters Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [271]-[273] (badge). DIR v Kiana Sail and Dive Pty Ltd [2005] QIRComm 58 (T-shirt advertising the business not required to be worn but usually worn in port “to look professional”, not determinative of an employment relationship). Australian Air Express Pty Ltd v Langford [2005] NSWCA 96; (2005) 147 IR 240 at [44]. SJP Chicken Processor v WorkCover (No 3) [2006] SAWLRP 7 at [58]. Australian Salaried Medical Officers Federation v ACT Visiting Medical Officers Association [2005] AIRC 525; (2005) 153 IR 228.

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Ch 2: The Relationship of Employer and Employee

Taxation [2.280] If the person is an employee, the employer is required to deduct income tax from salary and wages. Different obligations apply to independent contractors. A contractor may request that tax be deducted.252 The deduction of income tax from payments to the person is an indication of an employment relationship, although it is largely neutral in effect.253 Similarly, obtaining an ABN (Australian Business Number required for taxation purposes) and completing a business tax return are further factors that may lend colour to the balance in determining whether the person is an employee.254 But obtaining an ABN carries little weight as it may be required as a condition for obtaining the work.255 The older forms of contract purporting to establish an independent contractor relationship forbade the deduction of taxation amounts from moneys owed to the contractor; the more recent versions request that PAYG instalments be deducted, see [3.100]. If the person obtains payment on production of an invoice and GST is added, this points towards an independent contractor relationship.256 A stronger indicator is registration for GST and lodgement of quarterly returns involving a significant level of administration.257

Remuneration or paid by result? [2.290] Another factor to be considered is whether the person is paid a regular wage or salary for the time worked, on an hourly basis or by reference to completion of tasks or by results.258 If the person is able to negotiate rates and is paid a lump sum for the work, this suggests an independent contractor relationship in which the contractor bears the risk of profit or loss.259 In contrast, payment of hourly or fixed rate points to an employment relationship.260 Where a person is paid by results, this is not conclusive but just one factor relevant to determining whether they are in business on their own account. It is not uncommon for employees to be paid piece rates or commission on each sale. Insurance agents paid by the number of policies sold,261 chicken boners paid 252

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254 255

256 257 258

259 260

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Self-employed persons can request PAYG payments be deducted, https://www.ato.gov.au/Forms/ Voluntary-agreement-for-PAYG-withholding. As to the limitation of deductions for dependent contractors, see Income Tax Assessment Act 1997 (Cth), Divs 84 – 87. ACE Insurance Ltd v Tifunovsky [2013] FCAFC 3; (2013) 209 FCR 146 at [37] per Buchanan J, Lander and Robertson JJ agreeing. Compare Aufgang v Kominsky Nominees Pty Ltd [2008] VSC 27 at [34]-[37]; Tattsbet v Morrow [2015] FCAFC 62; (2015) 249 IR 440. Tattsbet Ltd v Morrow [2015] FCAFC 62; (2015) 249 IR 440. On Call Interpreters Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [244]; ACE Insurance Ltd v Tifunovsky [2013] FCAFC 3; (2013) 209 FCR 146 at [34]-[37] per Buchanan J, Lander and Robertson JJ agreeing; Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37. The judgment of the Full Federal Court was overturned on appeal on a different point, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45. SJP Chicken Processor v WorkCover (No 3) [2006] SAWLRP 7 at [62]; Reilly v Tobiassen [2008] WASC 6; (2007) 70 IR 294 at [79], [80]. Tattsbet Ltd v Morrow [2015] FCAFC 62; (2015) 249 IR 440 at [70], [71]. The results test is incorporated into the taxation tests, see [2.120]. Remuneration may be paid by a person who is not the employer, see Damevski v Guidice [2003] FCAFC 252; (2003) 129 IR 53 and [3.100]. Cf Stringfellows Restaurants Ltd v Nadine Quashie [2012] EWCA Civ 1735 (lapdancer paid by patrons) criticised by Albin, “The Case of Quashie: Between the Legalisation of Sex Work and the Precariousness of Personal Service Work” (2013) 42(2) Ind LJ 180. See, for example, Tattsbet v Morrow [2015] FCAFC 62; (2015) 249 IR 440 (betting agency). Musija v Kresa [2010] VSCA 163 (hourly rate to complete carpentry work for house). See discussion in On Call Interpreters Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [276]-[282]. Ace Insurance Ltd v Trifunovski [2013] FCAFC 3; (2013) 209 FCR 146.

The multi-factor test

per carcass,262 or bicycle couriers paid per delivery as in Hollis v Vabu263 were held to be employees subject to significant control and not operating their own businesses. Regular wage or salary payments which are not dependent on the level of skill, difficulty or time required for completion of a task suggest an employment relationship. Whereas if there is a quoted price for a job which involves some risk of making a profit or loss, this suggests that the person is in business on her or his own account.264 Payment on submission of an invoice suggests a business but carries less weight if the employer provides the form.265 A contractor relationship is most likely where there are significant business expenses, particularly where the individual’s net income is less than 50% of total remuneration received. In Tattsbet Ltd v Morrow,266 the individual was held to be operating a business on her own account; one of the factors was that her personal net income from the Tattsbet agency was approximately one third of the total amount received for running the agency; employees’ wages were the most significant component of the business costs.

Right of suspension or dismissal [2.300] A right to suspend267 or dismiss268 is also an indicator of an employment relationship. This will rarely assist, particularly where the putative employer can simply not re-employ in the case of a casual worker or where the contract may be brought to an end by short notice.

Holidays and sick leave and other payments [2.310] As mentioned earlier, casuals would not normally be paid holiday or sick leave as they are paid a wages loading in lieu of this leave. Consequently, the absence of paid leave would not prevent the existence of an employer–employee relationship.269 The non-payment of superannuation contributions, WorkCover levies and payroll tax270 although pointing to an independent contractor status, is probably neutral as it depends upon the view taken by the putative employer about the status of the

262 263

264

265

266 267 268 269 270

Marco Investments Pty Ltd v Amor [2004] SAIRComm 9 (unfair dismissal case); SJP Chicken Processor v WorkCover (No 3) [2006] SAWLRP 7 (workers’ compensation levies). Hollis v Vabu (2001) 207 CLR 21 at [19]; Abdalla v Viewdaze Pty Ltd (2003) 122 IR 215; [2003] AIRC 504 at [40]. See also JA & BM Bowden & Sons Pty Ltd v Chief Commissioner of State Revenue [2001] NSWCA 125; (2001) 105 IR 66 (fruit pickers). On Call Interpreters Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [276]-[282]; BD Investments Pty Ltd v Workers Rehabilitation and Compensation Corporation [1994] SASC 4673 (forfeiture of commission of door to door salesman if job underquoted); Yaraka Holdings Pty Ltd v Giljevic [2006] ACTCA 6; (2006) 149 IR 339 at 351, [49]; cf Advance Resource Services Pty Ltd v Charlton [2006] SAIRC 79; (2006) 157 IR 341 (set rate, no room for negotiation even if a loss on the individual job). The Director of the Fair Work Building Industry Inspectorate v Linkhill Pty Ltd (No 7) [2013] FCCA 1097 (form and content dictated); Marco Investments Pty Ltd v Amor [2004] SAIRComm 9 at [82] (tally of all outputs by a group of workers). See also Barrett v Create (Geelong) Inc t/as Create [2010] FWA 5576. Tattsbet Ltd v Morrow [2015] FCAFC 62; (2015) 249 IR 440 at [69]. At common law, there is generally no right to suspend in the absence of a statutory or contractual right, see [7.10]. As a recent example, see The Director of the Fair Work Building Industry Inspectorate v Linkhill Pty Ltd (No 7) [2013] FCCA 1097 at [262]-[263]. Yaraka Holdings Pty Ltd v Giljevic [2006] ACTCA 6; (2006) 149 IR 339 at 351, [50]. This is calculated as a percentage of the payroll but does not include payments to contractors unless they were deemed to be employees, see [2.50].

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worker.271 Moreover, independent contractors can be deemed employees for particular purposes, such as workers’ compensation. This does not convert them into employees for all purposes (see [2.120]).

Profession, trade or calling [2.320] Professionals and tradespersons are the two largest groups of independent contractors and groups most likely to be in business on their own account. But the fact that the person is in a profession or trade by itself is likely to be a minor factor. Medical practitioners, lawyers, and tradespersons can all be employees.272 Conversely, a builder’s labourer can be an independent contractor.273 The fact that a licence would be required if the person was not an employee is only a minor consideration.274

Goodwill or saleable assets [2.330] If the work undertaken is likely to enhance the value of a worker’s own

business, this is evidence of a contractor relationship.275 But this is unlikely where there is little capacity to generate goodwill in areas such as interviewers for market research,276 bicycle couriers277 and interpreters working for an agency,278 to name just a few.

Business expenditure [2.340] A further factor is the amount expended on business expenses and the ratio of business expenses to income.279 In AMP v Chaplin,280 Lord Fraser noted that the ratio of expenses to income between 40 and 50% was more consistent with the person carrying on business on their own account rather than as an employee. In Stevens v Brodribb Sawmilling Co Pty Ltd281 the ratio of expenses to gross income for one of the contractors was 71%.282 In Tattsbet Ltd v Morrow,283 Morrow was held to be operating a business on her own account where the personal net income from the 271 272

273

274 275 276

277 278 279 280 281 282

283

Marco Investments Pty Ltd v Amor [2004] SAIRComm 9; SJP Chicken Processor v WorkCover (No 3) [2006] SAWLRP 7 at [55]. Medical practitioners can be employees; an additional factor pointing to employment is where medical records belong to the practice rather than the doctor, see Boyar v The House of Life [2011] FWA 7953. Contrast Australian Salaried Medical Officers Federation v ACT Visiting Medical Officers Association [2005] AIRC 525; (2005) 153 IR 228. Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104; Accident Compensation Commission v Odco Pty Ltd (1990) 64 ALJR 606; Yaraka Holdings Pty Ltd v Giljevic [2006] ACTCA 6; (2006) 149 IR 339 at 352-353, [59] (although not an employee, the worker was deemed a worker for workers’ compensation purposes). Abdalla v Viewdaze Pty Ltd [2003] AIRC 504; (2003) 122 IR 215 at [45]. Yaraka Holdings Pty Ltd v Giljevic [2006] ACTCA 6; (2006) 149 IR 339 at 351, [52]-[53]. Roy Morgan Research Pty Ltd v Commissioner of State Revenue (Taxation) [2006] VCAT 1204 at [41]-[42]; Roy Morgan Research Pty Ltd v Commissioner of Taxation [2010] FCAFC 52; (2010) 184 FCR 448. Hollis v Vabu (2001) 207 CLR 21. On Call Interpreters Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [274]-[275]. See Barro Group Pty Ltd v Fraser [1985] VR 577 at 581. Australian Mutual Provident Society Ltd v Chaplin (1978) 18 ALR 385 at 394. Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at [10] per Mason J. See also Australian Air Express Pty Ltd v Langford [2005] NSWCA 96; (2005) 147 IR 240 at [44] (the truck cost $67,000 odd and had annual running expenses of $26,000 (1998), and $32,000 (1999), the driver was held to be an independent contractor). The high running costs of a truck did not deter Gray J from finding an employee relationship in Re Porter; Re Transport Workers Union of Australia (1989) 34 IR 179 at [25], [40], [55] (up to 55% of gross in expenses). Tattsbet Ltd v Morrow [2015] FCAFC 62; (2015) 249 IR 440 at [69].

The multi-factor test

Tattsbet agency was approximately one third of the total amount received for running the agency; this also indicated the opportunity for profit from the business.284

Express declaration of intent [2.350] The parties to the contract may expressly declare that the contract does not create an employer–employee relationship and that the party providing the services is a self-employed independent contractor. The terms of the contract are relevant but it is clear that the parties cannot, by labelling the contract as an independent contract, alter what is in reality a contract of employment.285 Such a statement will not prevent an employment relationship where the person is clearly an employee such as where the contract prescribes in great detail the nature of the work and how it is to be carried out.286 Where there is no written contract,287 or the contract is only partly written, ambiguity may be resolved by oral statements and the parties’ conduct.288 It is sometimes suggested that the common law tests give preference to form over content.289 But the authorities suggest an increased willingness by the courts to look beyond the written form to determine the true nature of the relationship between the parties, see [2.200], [4.570]. In short, the expressed intention of the parties as to the character of the relationship is only one, but sometimes an important factor, to be taken into account when determining whether or not an employment contract has been entered into.290

Incorporation [2.360] It is assumed in the Australian authorities that incorporation automatically prevents an employment relationship with the other contracting party even if the person is sole owner and shareholder of the company and is providing personal 284

285

286

287 288 289

290

Other factors included the hiring of employees by the agent, undertaking the usual obligations of an employer including payment of the usual benefits to employees, entry into an EBA and membership of an employers’ organisation, Tattsbet Ltd v Morrow [2015] FCAFC 62; (2015) 249 IR 440 at [66]-[69]. Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 (the judgment of the Full Federal Court was overturned on appeal on a different point, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45); On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [188]-[194]; ACE Insurance Ltd v Trifunovski [2013] FCAFC 3; (2013) 209 FCR 146; Australian Mutual Provident Society v Allan (1978) 52 ALJR 407 at 409; Roy Morgan Research Pty Ltd v Commissioner of Taxation [2010] FCAFC 52; (2010) 184 FCR 448 at [38], [39]. As to the effect of a contract between other parties on status, see Australian Salaried Officers’ Federation (NSW) (on behalf of Bruce Hall) v South West Sydney Area Health Service [2006] NSWIRComm 101. Query the view that an estoppel can prevent a party asserting that they are not an independent contractor where the contract so provides, Milovanovic v Transfield Services (Australia) Ltd [2013] SAWCT 37. Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [148]-[150] per North and Bromberg JJ, the judgment of the Full Federal Court was overturned on appeal on a different point, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45; Narich Pty Ltd v Commissioner of Payroll Tax [1983] 2 NSWLR 597 (PC) (detailed duties for Weightwatchers lecturer); Roy Morgan Research Centre v Commissioner of State Revenue (Vic) (1997) 37 ATR 528; Commissioner of State Taxation v Roy Morgan Research Centre Pty Ltd [2004] SASC 288; (2004) 90 SASR 12; Roy Morgan Research Pty Ltd v Commissioner of State Revenue (Taxation) [2006] VCAT 1204 at [43] (detailed stipulations in interviewer’s manual relating to interviewer’s duties, for example, “how to get your foot in the door”). Oral statements have similar effect, Roy Morgan Research Pty Ltd v Commissioner of State Revenue (Taxation) [2006] VCAT 1204 at [41]-[42]. Statements and conduct of the parties may form part of the “contractual matrix” in deciding whether the relationship is one of employment, see discussion Chapter 4 at [4.570]. See NSW Government, Submission to the Standing Committee on Employment, Workplace Relations and Workforce Participation, Inquiry into Independent Contracting and Labour Hire Arrangements (11 March 2005), p 46. Tattsbet Ltd v Morrow [2015] FCAFC 62; (2015) 249 IR 440 at [65].

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services.291 A court could not “lift the corporate veil” and treat the contractor as an employee: “an employer does not usually have employee corporations”.292 This does not, however, address the difficulty that workers are frequently in an unequal bargaining position and are effectively forced to incorporate in order to get work.293 Occasionally courts have been prepared to decide that there is an employer–employee relationship.294 So that interviewers employed by a market research company were held to be employees for purposes of superannuation despite the fact that they were able to incorporate. The Full Federal Court accepted that: [T]he ability of an interviewer to incorporate as a factor entitled to little weight because the entity selected to do the work (conduct interviews) was the individual interviewer, and the company featured only as the recipient of the fees that would otherwise have been paid to the interviewer.295

On this same principle, insurance representatives were held to be employees despite the fact that contracts of appointment were nominally with their companies.296 Despite the existence of the corporate structure, the insurance representatives were still required to personally provide services and sell insurance; they could not employ others to undertake this work for them. The company structure allowed the diversion of income but did not amount to an agreement under which the company contracted to provide the services of its employee to the insurance company.297

Other factors [2.370] Provision of training may point towards an employment relationship as it demonstrates the “integration, attachment and commitment” unlikely in the relationship between two businesses but common in an employment relationship.298 291

292

293 294

295 296 297 298

If the contract is between the individual and the putative employer, the fact that the individual may have a company and it operates a business is relevant to whether the individual is an employee, Barrett v Create (Geelong) Inc t/as Create [2010] FWA 5576 at [15], [23]-[29]. In relation to workers’ compensation levies, see SJP Chicken Processor v WorkCover (No 3) [2006] SAWLRP 7. SJP Chicken Processor v WorkCover (No 3) [2006] SAWLRP 7 at [40]; Vabu v Federal Commissioner of Taxation (1996) 33 ATR 537 at 539, per Meagher JA quoted with approval in Hollis v Vabu (2001) 207 CLR 21 at 30 [19]; Independent Education Union of Australia v St Francis Assisi School [2003] AIRC 1388 at [46]; Zoltaszek v Downer EDI Engineering Pty Ltd (No 2) [2010] FMCA 938. See Deakin and Morris, Labour Law (6th ed, Hart Publishing, 2012), pp 226 228 discussing the British cases on “lifting the corporate veil”; see Catamaran Cruisers v Williams [1994] IRLR 386 (employee forms a company and charges the employer solely for purposes of avoiding PAYE tax, held entitled to bring a claim for constructive dismissal); Hewlett Packard v O’Murphy [2002] IRLR 4; Lanksford v Business Post Ltd [2004] EWCA Civ 1448. See also Parliament of Australia, House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), [5.149]-[5.159]. Parliament of Australia, House of Representatives Standing Committee on Employment, Making it Work (Aug 2005), [5.149]-[5.159]. Contracts. See Hartnett v Aardvark Security Services Pty Ltd [1998] FCA 1025 per Wilcox J; Gillogly v Iama Agribusines Pty Ltd [2002] NSWCA 251 at [79] (temporary transfer from employee owned company to client). See also Inspector Hopkins v Byron McIntyre [2003] NSW CMIMC 86 (business name). Note the special provision for “one man” or family companies in the federal unfair contracts provisions, see Independent Contractors Act 2006 (Cth), s 11(1)(b). Note also the differing approach in the United Kingdom where legislation allows an assessment whether, if there had been no intermediary, the worker would have been “employed” by the client, see Future Online Ltd (a firm) v Foulds (Inspector of Taxes) [2004] EWHC 2597 (Ch). See also Eurobodolla Shire Council v Dufty [2004] NSWCA 450 (duty to employee of one man company as if it were employer). Roy Morgan Research Pty Ltd v Commissioner of Taxation [2010] FCAFC 52; (2010) 184 FCR 448 at [43]. See ACE Insurance Ltd v Trifunovski [2013] FCAFC 3; (2013) 209 FCR 146 at [15]-[153] per Buchanan J, Landers and Robertson JJ agreeing (each representative signed the contract personally). See ACE Insurance Ltd v Trifunovski [2013] FCAFC 3; (2013) 209 FCR 146 at [15]-[153] per Buchanan J, Landers and Robertson JJ agreeing. On Call Interpreters Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366 at [288].

Distinguishing Other Relationships

Public liability insurance, income protection and professional indemnity insurances may also be a factor.299 But this is not likely to be an overwhelming factor in assessing the totality of the relationship.300 A duty to indemnify may also be relevant. An employee’s duty to indemnify the employer for damage resulting from “any wilful or negligent act or omission or misfeasance” if it does no more than reflect an employee’s liability to the employer is neutral in effect.301 Where income is diverted to a company, a duty to indemnify by the company may be relevant but ineffective if the person concerned is an employee.302 Similarly a duty to work in a timely and professional manner achieving a high standard of workmanship, comply with work safety laws, follow safe working practices and report difficulties in performing the work can be consistent both with the status of an independent contractor and an employee.303

Distinguishing Other Relationships Company directors [2.380] A company director304 can have the dual status of an “officer” for purposes of corporations legislation and at the same time be an employee of that company.305 This is the case even if it is a one person company and the director its sole employee. This is because the company is a separate entity and has capacity to enter into contracts even with its sole director/shareholder.306 It is not in legal theory impossible or incompatible for a person to be both governing director in sole control of a company and servant of that company or its agent to contract on its behalf … assuming that the company was not a sham [reference omitted]. If a 299

300

301

302 303 304

305

306

Gardiner v WorkCover/CGU (Country Metropolitan Agency Contracting Services) [2002] SAWCT 64 at [19]; On Call Interpreters Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 206 IR 252 at [234], [236], [256], [290]. Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [34], [197]-[199] per Bromberg and North JJ. The judgment of the Full Federal Court was overturned on appeal on a different point, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45. PA duty to indemnify by employee does not add to the common law position and is in any event modified in some jurisdictions, see Personnel Contracting Pty Ltd t/as Tricord Personnel v Construction Forestry Mining and Energy Union of Workers [2004] WASCA 312; (2004) 141 IR 31 at [128] per Simmons J and statutory amendments to the indemnity rule, see [5.460]. See also ACE Insurance Ltd v Trifunovski [2013] FCAFC 3; (2013) 209 FCR 14 (indemnity by employee’s company ineffectual). Personnel Contracting Pty Ltd t/as Tricord Personnel v Construction Forestry Mining and Energy Union of Workers [2004] WASCA 312 at [40] per Steytler J, cf Simmonds J at [114], [115]. For the purposes of the Corporations Act 2001 (Cth), s 9, definitions of “officer”, include shadow directors, a director is a person appointed to that position, regardless of the name given to that person. It goes on to further provide (b) a person: (i) who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or (ii) who has the capacity to affect significantly the corporation’s financial standing; or (iii) in accordance with whose instructions or wishes the directors of the corporation are accustomed to act (excluding advice given by the person in the proper performance of functions attaching to the person’s professional capacity or their business relationship with the directors or the corporation). See Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296. Note in South Australia under the Return to Work Act 2014 (SA), s 71(9), (11), (12), a claim for common law damages for injuries received at work by an employee cannot be made where the employee is also a director. Note also the statutory restrictions on indemnifying officers of a company, see [5.380]. Lee v Lee’s Air Farming Ltd [1961] AC 12, followed in Hamilton v Whitehead (1988) 166 CLR 121 and see Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424 at [45]-[52].

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company is duly incorporated and registered under the Act and the proper records are kept in due form and the prescribed returns are made, it continues to exist as a legal entity.307

The seminal case establishing this principle, Lee v Lee’s Air Farming Ltd,308 commented on the question of control: The right to control existed even though it would be for the deceased, in his capacity as agent for the company, to decide what orders to give.309

The principle in Lee’s Air Farming Ltd is well established despite the apparent anomalies that it produces. The High Court in Andar Transport Pty Ltd v Brambles Ltd310 accepted that “the circumstance that a company may ultimately be owned or controlled by one person will not affect its status as a legal entity that is distinct from its members or controllers”. Consequently a “one man company” could be liable for failure to exercise due care for the safety of its employee. Under the Corporations Act 2001 (Cth), s 198A(1), unless the company’s constitution provides otherwise, directors are given power to manage the business of the company; they can confer any of their powers on a managing director (s 198C) and they may appoint a director as managing director who will be involved in the day-to-day running of the company.311 Whether the managing director qualifies as an employee is to be tested by reference to the normal tests for determining whether a contract of employment exists. In the case of public companies, the status of the managing director or Chief Executive Officer will, in all but an exceptional case, be spelt out in formal documentation. This is less likely where there is a small private company and the director is the controlling or sole shareholder. In Trussed Steel Concrete Co Ltd v Green,312 a managing director was held to be an employee in the following circumstances: he was obliged under his contract to devote all of his time to the affairs of the company; he was required to do all in his power to develop the company business and not to engage in any other business; the employment could be brought to an end by the company by notice in writing.313 Is it inconsistent with the employment relationship that a director/controlling shareholder could dismiss her or himself giving rise to an entitlement to a redundancy payment? In Secretary of State for Trade & Industry v Bottrill,314 the applicant was the managing director and holder of the only share in the company, although it was intended that the sole 307

308 309

310

311

312 313 314

Peate v Federal Commissioner of Taxation (1964) 111 CLR 443 at 480 per Windeyer J affirmed on appeal Peate v Federal Commissioner of Taxation(1966) 116 CLR 38 (Privy Council). As illustrations, see Gillogly v Iama Agribusiness Pty Ltd [2002] NSWCA 251; Stephan v Pacesetters Cleaning Services Pty Ltd (1995) 12 NSWCCR 19 (CA). Contrast Attwood v Barley Marketing Board (NSW) [1982] WCR 94 (board member not an employee); Riverwood Legion & Community Club Ltd v Morse [2007] NSWWCCPD 88 (director paid honorarium not an employee). Lee v Lee’s Air Farming Ltd [1960] 3 All ER 420. The organisation test might prove more fruitful for these purposes: Oak Filling Station Company (Hollinwood) Ltd v Road Transport Industry Training Board (1968) 3 ITR 290 (two directors, controlling shareholders, directors’ wages to be included for purposes of assessing a training levy for employees). Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424 at [47]. See also Hamilton v Whitehead (1988) 166 CLR 121 at 128; McKinnon v WorkCover/CGU (M and R McKinnon Pty Ltd) [2003] SAWCT 84. Corporations Act 2001 (Cth), s 201J: “The directors of a company may appoint 1 or more of themselves to the office of managing director of the company for the period, and on the terms (including as to remuneration), as the directors see fit.” See also s 198D, delegation of powers to a managing director. Trussed Steel Concrete Co Ltd v Green [1946] Ch 115. See also Boulting v Association of Cinematograph Television and Allied Technicians [1963] 2 QB 606 (CA) (eligibility for union membership). Secretary of State for Trade & Industry v Bottrill [1999] ICR 592; [2000] 1 All ER 915 (CA). See also Sellars Arenascene Ltd v Connolly [2001] ICR 760; [2001] IRLR 222 (CA) (unfair dismissal); Nesbitt v Secretary of State for Trade & Industry [2007] UKEAT 0091/07/1008.

Distinguishing Other Relationships

shareholding would be temporary. The company went into voluntary liquidation and the issue was whether the director/employee was entitled to redundancy payments.315 The applicant had entered into a signed contract of employment with the company, was paid a salary from which the usual taxation deductions were made. He was not paid director’s fees, worked regular hours exclusively for the company and was entitled to holiday and sick pay. When the company got into financial difficulties, a receiver was appointed and the applicant dismissed. It was held that he was entitled to a redundancy payment under the Employment Rights Act 1996 (UK) as an employee. The Court of Appeal said that the existence of a controlling shareholding is one of the factors that is relevant to whether there is a contract of employment; in some cases it might be decisive. The court observed that it will be relevant to first consider whether there was a genuine contract between the company and the director/shareholder: In this context how and for what reasons the contract came into existence … and what each party actually did pursuant to the contract are likely to be relevant considerations.316

If the contract is not a sham,317 then the various factors relevant to the determination of whether there was a contract of employment would be examined. In this respect: The degree of control exercised by the company over the shareholder employee is always important … [It may be] appropriate to consider whether there are directors other than or in addition to the shareholder employee and whether the constitution of the company gives that shareholder rights such that he is in reality answerable only to himself and incapable of being dismissed.318

Where the controlling shareholder is also a director, it is relevant to determine whether as a director there is ability to vote on matters in which the director has a personal interest,319 such as the termination of the contract of employment. More recent authority questions whether “the decisive factor is whether the individual in fact exercises real control over the company”.320 The question is rather whether a contract of employment should be given effect. In making this assessment, the following factors are relevant: (1) Where there is a contact ostensibly in place, the onus is on the party seeking to deny its effect … (2) The mere fact that the individual has a controlling shareholding does not of itself prevent a contact of employment arising. Nor does the fact that he in practice is able to exercise real or sole control over what the company does (3) Similarly, the fact that he is an entrepreneur, or has built the company up, or will profit from its success, will not be factors militating against a finding that there is a contract in place. Indeed, any controlling shareholder will inevitably benefit from the company’s success, as will many employees with share option schemes (4) If the conduct of the parties is in accordance with the contract that would be a strong pointer towards the contract being valid and binding. For example … if the individual works the hours stipulated … 315

316 317 318

319 320

In the United Kingdom on insolvency, redundancy payments, wages, leave entitlements, etc can be recouped from the Secretary of State rather than the company: Employment Rights Act 1996 (UK), s 182. It is funded by employee contributions, see discussion Hauxwell v Secretary of State for Trade & Industry EAT 19 June 2002; EAT/386/01. Secretary of State for Trade & Industry v Bottrill [1999] ICR 592; [2000] 1 All ER 915 (CA). See Forsyth v Hi Security Fencing Systems Pty Ltd [2007] AIRC 540 (person appointed director, paid dividends instead of wages, found to be in reality an employee). Secretary of State for Trade & Industry v Bottrill [1999] ICR 592; [2000] 1 All ER 915 (CA). Compare the different result in Hauxwell v Secretary of State for Trade & Industry EAT 19 June 2002; EAT/386/01 (husband and wife each 50% shareholding, made all the decisions for the company). See The Laws of Australia (Lawbook Co), [4.2.1910]. Clark v Clark Construction Initiatives Ltd [2008] UKEAT 0225/07/2902; [2008] IRLR 364.

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(5) Conversely, if the conduct of the parties is either inconsistent with the contract … or in certain key areas where one might expect it to be governed by the contract is in fact not so governed … (6) In that context, the assertion that there is a genuine contact will be undermined if the terms have not been identified or reduced into writing. This will be powerful evidence that the contract was not really intended to regulate the relationship any way. (7) The fact that the individual takes loans from the company or guarantees its debts could exceptionally have some relevance…but in most cases such factors are unlikely to carry any weight. There is nothing intrinsically inconsistent in a person who is an employee doing these things … It would wholly undermine the Lee approach if this were to be sufficient to deny the controlling shareholder the right to enter into a contract of employment. (8) Although the courts have said that the fact of there being a controlling shareholding is always relevant and may be decisive, that does not mean that the fact alone will ever justify a Tribunal in finding that there was no contract in place …321 Difficulties arise where it is not clear in a particular situation whether a managing or executive director has also been engaged as an employee. Such an engagement might be a matter to be inferred from the facts, including the title or description applied to the person, whether a weekly wage is drawn or whether fees are paid, say on an ad hoc basis, whether there is an express contract or a board minute employing the person, and what functions are performed by the person,322 whether the person has leave entitlements, participates in an employee share scheme and superannuation and is subject to supervision.323 The answer to the question whether the director is also an employee may determine, for example, the applicability of statutory requirements governing the termination of employees,324 or the availability of a statutory benefit such as a redundancy payment,325 or workers’ compensation,326 or annual holidays327 or the entitlement of a person to payment of wages and holiday pay on the appointment of a receiver of a company.328 If the director is also an employee, the dual status can have important implications. Directors have significant statutory obligations under corporations law with special provisions for appointment and removal.329 Subject to some limited exceptions with monetary limits, the Corporations Act 2001 (Cth) prohibits the payment of benefits in connection with a person’s retirement from a board or managerial office in a company except where the payment has been approved by resolution at the company’s general

321 322 323 324 325 326 327 328 329

Clark v Clark Construction Initiatives Ltd [2008] UKEAT 0225/07/2902 at [98]; Neufield v A & N Communications in Print Ltd (in liq) [2008] UKEAT 0177/07/1104. Eaton v Robert Eaton Ltd [1988] ICR 302 at 304. Queensland v Whiteman [2006] QSC 325; Southern Group Ltd v Smith (1997) 37 ATR 107. See also Venables v Hornby [2003] UKHL 65 at [21]-[23]. Trussed Steel Concrete Co Ltd v Green [1946] 1 Ch 115. Secretary of State for Trade & Industry v Bottrill [1999] ICR 592; [2000] 1 All ER 915 (CA). Lee v Lee’s Air Farming [1960] 3 All ER 420. Note in SA limitations on recovery of common law damages by directors, see Return to Work Act 2014 (SA), s 71(9). Scott v Stapp [1960] AR 300. Re Tarjan Construction Co Pty Ltd (in liq) and the Companies Act 1936 [1964] NSWR 1054. In relation to private companies, the appointment or removal of directors is governed by the private company’s constitution. In the absence of that, a director may be removed by resolution of shareholders: Corporations Act 2001 (Cth), s 203C. In relation to a public company, removal can only be by resolution of the shareholders, see ss 203D, 200E.

Distinguishing Other Relationships

meeting.330 There is an exception where the benefit is a genuine payment by way of damages for breach of contract331 or is a payment for past services.332

Bailment – taxi drivers [2.390] The question whether a person is an employee or has a different status may

arise in cases of bailment. This arises particularly in relation to taxi drivers.333 Under the usual arrangement, the owner of the vehicle (the bailor) leases the vehicle to the driver (the bailee) on certain terms and conditions with the vehicle being returned to the owner as stipulated under the agreement. Under these agreements, the vehicle is used by the driver to ply for hire with the driver usually retaining an agreed percentage of the fares as remuneration. At times, drivers may work on wages only, or by retaining all fares collected and paying the owner an agreed lease fee for a given number of hours of hire. A long stream of authorities establishes that where the taxi driver is free to ply for hire under a leasing agreement, the driver will be regarded as an independent contractor–bailee rather than an employee.334 This was held as long ago as 1930 in Yellow Cabs of Australia Ltd v Colgan,335 and confirmed in a long line of authorities including De Luxe Red & Yellow Cabs Co-Operative (Trading) Society Ltd v Commissioner of Taxation.336 There Hill J in the Federal Court held that a taxi driver was an independent contractor not an employee: First, the driver pays the owner and not the other way around … While the fixed payment method more clearly is marked as a bailment, than the gross percentage of meter method, I do not think that ultimately a distinction should be drawn between them. Second, where there is an agreement in writing (as in Perth and Melbourne), or implied by legislation (as in NSW), that agreement is one of bailment and not specifically of employment. Indeed, in NSW, the relationship of employment is expressly negated … Third, although some control is exercised by the operators over the drivers, that control is only such as is necessary to ensure compliance with legislation concerning taxis rather than such as to signify an employment relationship. There is an element of control exercised as well by the network operators, to their own drivers as well as to the drivers of other [taxis]. But that control is only such as is necessary for the running of a network, it does not signify an employment relationship. Disciplinary steps, where taken, are taken by the networks as networks rather than the operators, and where the operators are members of the network, the disciplinary action stems from the network relationship rather than from an employment relationship. 330 331

332 333

334 335 336

See Corporations Act 2001 (Cth), ss 200A – 200J. See also Chapter 1 “Executive employment contracts and corporations legislation”, [1.60]. Subject to monetary limits, Corporations Act 2001 (Cth), s 200F(2). See Lincoln Mills (Aust) Ltd v Gough [1964] VR 193. See also Orrong Strategies Pty Ltd v Village Roadshow Ltd [2007] VSC 1; (2007) 207 FLR 245; Claremont Petroleum NL v Cummings (1992) 110 ALR 239 at 279; Whitlam v Insurance Australia Group Ltd [2005] NSWSC 83 at [249]-[253]; Dr Nair v Arturus Capital Ltd [2010] NSWSC 329. Subject to monetary limits, Corporations Act 2001 (Cth), s 200G(1)(b) and see Dome Resources NL v Silver [2008] NSWCA 322; (2008) 72 NSWLR 693. For a discussion on the types of arrangements involving taxi driving, see New South Wales Taxi Industry Association v Transport Workers’ Union of New South Wales [2005] NSWIRComm 1039 (4 May 2005). In relation to hire car drivers, see Mazza v Syddeck Pty Ltd t/as Royale Limousines [2006] NSWIRComm44; Suncorp Metway Insurance Ltd v Grant [2005] QSC 320. In the US litigation continues on whether Uber drivers are employees, see, Douglas O’Connor v Uber Technologies Inc (US District Court, Northern District of California, No C-13-3826, Docket no 211) (drivers are employees). For two exceptional instances, see The Corporation (Renato Coscia) v Rodney Higgins [1992] SAWCT 61; Re Porter; Re Transport Workers Union of Australia (1989) 34 IR 179. Yellow Cabs of Australia Ltd v Colgan [1930] AR (NSW) 137 at 163. De Luxe Red & Yellow Cabs Co-Operative (Trading) Society Ltd v Commissioner of Taxation [1997] 36 ATR 600 (Hill J); (1997) FCA 840, and affirmed in (1998) 78 IR 349. See also James Voros [2013] FWCFB 9339; Brar v 13 Cabs [2014] FRWC 2666.

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Other factors pointing against an employment relationship were that the drivers could choose the location for work and could work as much or little as they wished. Drivers were responsible for incidentals such as change, street directories, petrol, cleaning the vehicle, and in some instances additional insurance. His Honour continued:337 It is only in NSW that industrial legislation requires payment of long service leave, sick pay and workers compensation premiums. While these matters support in that State an argument in favour of employment, the industrial legislation must be viewed against the background of the Yellow Cab decision in 1930 and the many subsequent determinations thereafter in which it has been accepted that the relationship is one of bailment and not employment …

This was affirmed on appeal to the Full Federal Court who observed:338 [I]t would be wrong to seek to divorce the issue of the true character of the relationship from its well established general law and statutory setting. When the present circumstances are viewed in that setting or context, a conclusion that the drivers are bailees in a joint adventure is appropriate, notwithstanding the degree of control reserved to the bailor. Such a reservation is not, as was noted in Yellow Cabs, necessarily inconsistent with a bailment relationship.

Taxi drivers may be deemed employees for purposes of workers’ compensation legislation. Different considerations may apply to Uber drivers who own their own vehicles.

Tenant [2.400] An employee may have other formal relationships with the employer. The employee may be required to “live in” at the workplace raising the question whether the employee is also a tenant under a lease with the employer. If the employee is dismissed or leaves the employment, does the employee have to leave the accommodation? Residential tenancies legislation in New South Wales makes express provision. The Residential Tenancies Act 2010 (NSW), s 9(1) provides that: An agreement or arrangement under which a person is given the right to occupy premises for the purpose of a residence in return for, or as part of remuneration for, carrying out work in connection with the premises or the person’s employment is taken to be a residential tenancy agreement.

This means that the rights and duties are subject to the residential tenancies legislation. In other States, such as Victoria, the legislation excludes residency arrangements under contracts of employment.339 Subject to residential tenancies legislation in each jurisdiction, the rule has been stated as follows (footnotes omitted): An employee occupying premises belonging to his or her employer may be a tenant. If it is a term of the employment that the employee is required to live on the premises where he or 337

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De Luxe Red & Yellow Cabs Co-Operative (Trading) Society Ltd v Commissioner of Taxation (1997) 36 ATR 600. Taxi drivers may be deemed employees for purposes of workers’ compensation, see Workplace Injury Management and Workers Compensation Act 1998 (NSW), Sch 1, cl 10; Accident Compensation Act 1985 (Vic), s 7; The Corporation (Renato Coscia) v Rodney Higgins [1992] SAWCT 61 (driver not a lessee held to be an employee). Note also the application of the New South Wales unfair contracts jurisdiction, Brian Moore v LE Stewart Investments Pty Ltd t/as Southern Highlands Taxi Service [2010] NSWIRComm 50 and the earlier federal unfair contracts jurisdiction (Workplace Relations Act 1996 (NSW), s 127A), Lee v Aerial Taxi Cabs Co-operative Society Ltd [1999] FCA 1727. See also Freeman v KAT Taxi & Hire Cabs [2005] NSWIRComm 1169. Commissioner of Taxation (Cth) v De Luxe Red & Yellow Cabs Co-operative (Trading) Society Ltd (1998) 82 FCR 507 at 522. Compare the exceptional cases of Re Porter; Re Transport Workers Union of Australia (1989) 34 IR 179 and The Corporation (Renato Coscia) v Rodney Higgins [1992] SAWCT 61 both holding that where no lease was signed the driver was an employee. Residential Tenancies Act 1997 (Vic), s 12. And see Residential Tenancies Act 1994 (Qld), s 25A; Residential Tenancies Act 1995 (SA), s 5; Residential Tenancies Act 1987 (WA), s 5. See also, Adelaide Hebrew Congregation Inc v Engel [2007] SADC 23 (expiry of contract of employment no right to remain in possession). Cf the different types of arrangements in Australian Workers Union, WA Branch, Industrial Union of Workers v BHP Billiton Iron Ore [2005] WAIRComm 706.

Distinguishing Other Relationships

she works, and that requirement is associated with the nature of the employment in order to perform the work and duties involved, the employee is not a tenant. The circumstances of the case must be taken into account, and if the special nature of the employee’s duties require him or her to live at the place of work in order to perform them properly, the employee will not be a tenant, even if the employer did not require the employee to live there. In these circumstances, the employee is not a tenant unless the parties do something further to bring about the creation of a tenancy, such as expressly granting a lease or accepting rent. However, if the purpose is to give the employee a concession, and occupation is not necessary to the employment, then there is a landlord tenant relationship.340

Officer – office holder [2.410] Historically, a distinction has been drawn between an employee and the holder of an office. There is no simple definition of what an “office” is or how an incumbent “officer” is to be defined,341 or distinguished from a “public officer” holding a “public office”. An “office” implies a subsisting, permanent or continuing substantive position which is “independent of the person who fills it, and which goes on and is filled in succession by successive holders”.342 This is hardly illuminating. There are clear cases of “offices” that existed at common law, such as a police officer and offices set up by statute. But “offices” can describe a vast range of appointments from chairperson or vice-president of a local golf club to the CEO of a large multi-national company.343 The fact that a person holds an office does not mean that that person cannot be an employee at the same time.344 Generally, a “public officer” will be charged with a public duty to act;345 frequently they will be paid from the public purse but this alone is not the distinguishing factor.346 In the context of claims in tort for damages for abuse of a public office, the duties imposed must be owed to the public.347 The context in which the issue is raised is important with the courts more likely to take an expansive view of who is a public officer for purposes of claims for abuse of office or corruption in office. But these considerations are beyond the purview of a book on the law of employment.348 One feature of an office holder is that where the office holder exercises an independent discretion that discretion is not subject to the control of the appointor.349 “Officer” or “public officer” are terms that are commonplace in 340 341

342 343 344

345 346 347 348 349

See The Laws of Australia (Lawbook Co), [28.7.15]. For a historical review, see Marks v The Commonwealth (1964) 111 CLR 549 at 567 per Windeyer J. Legislation frequently defines who is a “public officer” for particular purposes, see as illustrations: NSW: Criminal Procedure Regulations 2005, reg 20; Qld: Public Officers Superannuation Act 1988, s 4(1); Vic: Whistleblowers Protection Act 2001, s 3; Corporations Act 2001, s 9, defining an officer of a corporation. Great Western Railway Co v Bater [1920] 3 KB 266 at 274; McMillan v Guest [1942] AC 561 at 564 per Lord Atkin; Edwards (Inspector of Taxes) v Clinch [1982] AC 845. Percy v Board of National Mission of the Church of Scotland [2006] 2 AC 28 at [20] per Lord Nicholls. Percy v Board of National Mission of the Church of Scotland [2006] 2 AC 28 at [20] per Lord Nicholls; at [87] per Lord Hope; The Prison Officers Assoc v Gough & Cox [2009] UKEAT 0405/09/1712. See generally, Rodgers, “Public Employment and Access to Justice in Employment Law” (2014) 43(4) Ind LJ 373. Henly v Mayor of Lyme [1828] 5 Bing 91; 130 ER 995 at 107-108 (Bing). This was in the context of an action for misfeasance in public office, see Tampion v Anderson [1973] VR 321 at 337 per McInerney J, on appeal Tampion v Anderson[1973] VR 715. Tampion v Anderson [1973] VR 715 at 720, 722; Northern Territory of Australia v Mengel (1995) 69 ALJR 527 at [5] per Brennan J; Cannon v Tahche (2002) 5 VR 317. See the useful discussion in R v McCann [1998] 2 Qd R 56; Cannon v Tahche (2002) 5 VR 317; Nielson v City of Swan [2006] WASCA 94. Attorney General (NSW) v Perpetual Trustee (1955) 92 CLR 113 at 129 per Viscount Simonds: “there

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legislation which provides for special statutory methods of appointment and imposes statutory duties on the appointee. There are a vast range of officers/public officers appointed by legislation relating to corporations,350 customs, migration, fisheries management, quarantine, Ombudsman, electoral, parliamentary and law officers, officers of an industrial organisation,351 to name just a few. Typical holders of public offices are police officers352 and senior public servants.353 Nowadays these appointments are largely governed by special regulatory regimes set up under statute.354 It has been suggested that most often officers, at least within the public service, qualify as employees at the same time as being an “officer”.355 This is, on the basis that they are subject to detailed direction and control such as to satisfy tests for employment356 (see [2.160]), and inferences to that effect can be drawn from the governing legislation.357 So although the relationship of the Crown and public servants may be largely governed by statute, this does not preclude the existence of a contract of employment to the extent that it does not conflict with the statutory provisions.358

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353 354

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358

is a fundamental difference between the domestic relation of servant and master and that of the holder of a public office and the State which he is said to serve. The constable falls within the latter category. His authority is original not delegated and is exercised at his own discretion by virtue of his office.” Corporations Act 2001 (Cth), s 9 defines an officer for the purposes of that Act. Note ss 199B and 212 regarding insurance and indemnity available to an officer as defined, see [5.380] in relation to indemnification of corporate officers. In the Fair Work Act 2009 (Cth) an officer is defined in s 12 as an official of the association; or a delegate or other representative of the association. See Carabetta, “Employment Status of the Police in Australia” (2003) MULR 1. In relation to Work Health and Safety legislation, police officers may be either deemed to be employees or within the definition of “worker” for purposes of the uniform Work Health and Safety Act 2011 (Cth), s 7(2): see [6.390] and in Western Australia, Occupational Health and Safety Act 1984 (WA), s 3(4), Victoria, Occupational Health and Safety Act 2004 (Vic), s 5(2)(a), and deemed employees under Workplace Injury Rehabilitation an Compensation Act 2013 (Vic), Sch 1, Pt 1, cl 14. See also Bau v State of Victoria [2009] VSCA 107. Special regimes relating to dismissal are common in relation to police officers, and police officers are subject to separate legislative regimes, see in: New South Wales Police Act 1990 (NSW), Pt 6B and Warburton, “Reviewing the Exercise of Discretionary Power by the Commissioner of Police to Remove Police Officers from the NSW Police Service: Modifying the Industrial Standard for Review” (2004) 17(1) AJLL 64; South Australia, Police (Complaints and Disciplinary Proceedings) Act 1985 (SA) (overriding the Industrial and Employee Relations Act 1994 (SA)), and Ferdinands v Commissioner for Public Employment [2006] HCA 5; (2006) 225 CLR 130; Victoria, Victoria Police Act 2013 (Vic); Western Australia, Industrial Relations Act 1979 (WA), s 115 and Sch 3 and more generally in relation to public officers, Pt 11A. Under the Industrial Relations Act 1988 (Cth), the Australian Federal Police were able to obtain registration independently of the question as to whether police were employees, see Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188. See generally, McCarry, Aspects of Public Sector Employment Law (LBC, 1988). See, for example, public servants are governed by public sector management legislation in most States and Territories: Cth: Public Service Act 1999; ACT: Public Sector Management Act 1994; NSW: Government Sector Employment Act 2013; NT: Public Sector Employment and Management Act; Qld: Public Service Act 2008; SA: Public Sector Act 2009; Tas: State Service Act 2000; Vic: Public Administration Act 2004; Fair Work (Commonwealth Powers)Act 2009, s 5; Public Sector Employment (Award Entitlements) Act 2006; WA: Public Sector Management Act 1994. McCarry, Aspects of Public Sector Employment Law (LBC, 1988), pp 11-22. The statute may specifically declare that the person appointed has a contract of employment, see, for example, police officers, Police Act 1990 (NSW), ss 27, 41, 42, 74, 84, 85 and see Police Service of New South Wales v Honeysett (2001) 53 NSWLR 592; Police Service Administration Act 1990 (Qld), ss 5.3, 5.4, 5.7; Australian Federal Police Act 1979 (Cth), ss 23, 24, 25. See also Public Service Assoc and Professional Officers Association v Director of Public Employment [2011] NSWIRComm 152 at [75]-[86]. McCarry, Aspects of Public Sector Employment Law (LBC, 1988), p 18. New South Wales police are regarded as having a concurrent status of employee and public officer: Police Service of New South Wales v Honeysett (2001) 53 NSWLR 592, cf Konrad v Victoria Police (1999) 91 FCR 95; [1999] FCA 988 (see [101]), see also New South Wales v Fahy (2007) 81 ALJR 1021 at [97]. Director-General of Education v Suttling [1987] HCA 3; (1987) 162 CLR 427 at [5] per Brennan J.

Distinguishing Other Relationships

There is at least one area where the holding of a public office continues to have some importance.359 It is the principle that at common law there is no vicarious liability for the wrongs of an office holder when carrying out independent discretionary duties of that office but the “officer” remains liable.360 This assumes particular importance in relation to police officers carrying out arrests which involve the exercise of an independent discretion not subject to the control of the Commissioner of Police. The general principle has been subject to much criticism: [I]t was linked to the long discredited theory that vicarious liability rested on the master having expressly or impliedly authorised the servant’s tort (here the servant’s authority derived from independent grant). Nor can it be justified [on] … the principle that governments must be free to exercise certain functions on a policy level free from individual claims for compensation … On the contrary, vicarious liability may serve the cause of deterrence and could often offer the only means of redress because of the difficulty of identifying the individual culprit.361

The rule has been abrogated in New South Wales362 and in all jurisdictions363 the rule has been abrogated in relation to police officers so that the Crown is liable for torts committed by police officers within the course of their employment.364 The High Court in Jarratt v Commissioner of Police for New South Wales365 considered one other aspect of the relationship between the Crown and the holder of an office. It is the common law rule that the “King may refuse the services of any officer of the Crown and suspend or dismiss him from his office”,366 that is, dismissal at pleasure without notice and without reasons. The case concerned the 359

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362 363 364

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366

McCarry, Aspects of Public Sector Employment Law (LBC, 1988), p 13 suggests some other points of distinction: salary may attach to an office whether or not work was performed, Miles v Wakefield Metropolitan District Council [1987] AC 539; the crime of embezzlement by an employee might not cover an officer; liability of public officers under criminal legislation for corruption in the discharge of their office, see, for example, R v Tkacz [2001] WASCA 391. Additionally, actions for misfeasance in public office may be available, see Northern Territory v Mengel (1995) 185 CLR 307. Special procedures may exist for removal from office which would need to be followed to bring an office to an end, see Marks v The Commonwealth (1964) 111 CLR 549. As to the duty to accord a statutory office holder natural justice, see Jarratt v Commissioner of Police NSW (2005) 224 CLR 44, discussed later in this section. Enever v The King [1906] 3 CLR 969 at 975-976; McKellar v Container Terminal Management Services Ltd [1999] FCA 1101. The principle extends beyond public officers and can include a ship’s pilot appointed under statute to carry out pilotage duties, see Oceanic Crest Oceanic Crest Shipping Co v Pilbara Harbour Services (1986) 160 CLR 626. But where the conduct is that of an officer who is an employee and does not involve the exercise of an independent discretion, there may be vicarious liability, see Chapel Road v ASIC (2006) 203 FLR 322 and authorities there cited. Cf McKellar v Container Terminal Management Services Ltd [1999] FCA 1101. Fleming, The Law of Torts (10th ed, Lawbook Co, 2011), [19.80] and see Carabetta, “Employment Status of the Police in Australia” (2003) 27 MULR 1; Qld Law Reform Commission, Vicarious Liability (Report No 56, Dec 2001). Law Reform (Vicarious Liability) Act 1983 (NSW). The Australian Capital Territory is a special case, see Lissner v Commonwealth [2002] ACTSC 53. In relation to police officers there is statutory protection against liability where conduct occurs in the course of their duties and in good faith (honestly) see NSW: Police Act 1990, s 213; NT: Police Administration Act, s 148B and see s 148C (vicarious liability); SA: Police Act 1998, s 65(1) and (2) (Crown liability); Tas: Police Service Act 2003, s 65(1) and see (2) (Crown liability), Holloway v State of Tasmania [2006] TASSC 60; Vic: Police Regulation Act 1958, s 123(2) (State liability); WA: Police Act 1892, s 137(3) and see (5) (Crown liability). See also Qld: Police Service Administration Act 1990, s 10.5 (vicarious liability); Cth: Australian Federal Police Act 1979, s 64B (vicarious liability). Jarratt v Commissioner of Police for New South Wales (2005) 224 CLR 44. See also Scanlon v Director-General, Department of the Arts, Sport & Recreation [2007] NSWCA 204; (2007) 70 NSWLR 1; Sydney Ferries v Morton [2010] NSWCA 156 at [91]; Kirkland-Veenstra v Stuart & Ors (No 2) [2008] VSCA 211; (2008) 177 IR 328; PSA and Professional Officers’ Association Amalgamated Union of NSW and the Director of Public Employment by his Agent the DirectorGeneral of the Department of Human Services (Juvenile Justice) [2010] NSWIRComm 32. Fletcher v Nott (1938) 60 CLR 55 at 77 per Dixon J; cf Marks v The Commonwealth (1964) 111 CLR 549 at 586.

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Deputy Commissioner of Police who was dismissed without notice and without an opportunity to be heard prior to that dismissal. Mr Jarratt had been appointed to a term of five years as Deputy Commissioner of Police. The governing statute, the Police Act 1990 (NSW), s 51 permitted the Governor in Council on the recommendation of the Commissioner of Police to remove an executive officer from office “at any time”. Although the High Court was not called upon to finally decide whether the common law rule, dismissal at pleasure, continued, Gleeson CJ remarked (at [7]): It is no longer appropriate to account for the rule in terms redolent of monarchical patronage … The rule has a distinct rationale in its application to the armed services, but in its application to the public service generally it is difficult to reconcile with modern conceptions of government employment and accountability.367

The High Court suggested that the principle can, in any event, be supplanted by legislation such as that existing in New South Wales under the Police Act 1990.368 Under that Act, although there was a power to dismiss at any time, the power to dismiss could only be exercised by giving the Deputy Commissioner an opportunity to hear and respond to allegations and adverse reports: It can now be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person’s rights, interests or legitimate expectations, the rules of natural justice regulate the exercise of that power unless they are excluded by plain words of necessary intendment …369

As this was not done, the dismissal was invalid and Mr Jarratt was entitled to compensation for wrongful removal from office. The relevant statute may exclude or modify the right to natural justice as was the position under amendments following the Jarratt decision.370

Partnership [2.420] Partnerships are governed by partnership legislation in all Australian jurisdictions. This legislation defines a partnership as: the relation which exists between persons carrying on a business in common with a view of profit and includes an incorporated limited partnership.371

The business carried on collectively by the partners is called a “firm” and the name under which business is carried out the “firm name”.372 The question whether the person is an employee or partner may arise in several ways. First, the issue of partnership may arise where it is unclear whether work is being performed as a partner in the business or as an employee of that business. Secondly, the 367 368 369

370 371

372

And see the critical obiter comments by McHugh, Gummow and Hayne JJ in a joint judgment [64]-[80]. Cf Callinan J at [135], [137]; Heydon J at [157]. Jarratt v Commissioner of Police for New South Wales (2005) 224 CLR 44; [2005] HCA 50 at [10], [26] per Gleeson CJ; McHugh, Gummow, Hayne JJ at [79]; Callinan J at [141]; Heydon J at [157]. Annetts v McCann (1990) 170 CLR 596 at 598 per Mason CJ, Deane and McHugh JJ cited with approval by the court, see at [26] per Gleeson CJ; at [51], [88] per McHugh, Gummow and Hayne JJ]; at [118], [138]-[144] per Callinan J; at [151], [159] per Heydon J. See also Barratt v Howard [2000] FCA 190; Swindells v State of Victoria [2015] VSC 19 (mining warden removed from office). The Police Act 1990 (NSW), s 51 was amended subsequently to read “An executive officer may be removed from office at any time for any or no reason and without notice …”. NSW: Partnership Act 1892, s 1(1); Qld: Partnership Act 1891, s 5(1); SA: Partnership Act 1891, s 1(1); Tas: Partnership Act 1891, s 6(1); Vic: Partnership Act 1958, s 5(1); WA: Partnership Act 1895, s 7. This is a standard provision in Partnership legislation, see for example, NSW: Partnership Act 1892, s 4 (except for incorporated limited partnerships). Normally a partnership does not have a separate legal status although in most States (not New South Wales) a firm can sue and be sued in the name of the firm. There is now provision for incorporated partnerships in most jurisdictions, see for example, NSW: Partnership Act 1892, Pt 3.

Distinguishing Other Relationships

issue can also arise where, for example, a husband and wife are in partnership and enter into a contract whereby one of them works for another business. Can that person be an employee of that other business? Turning to the first issue, is the person concerned a partner or employee? An agreement to share profits373 is prima facie evidence of partnership but it is possible to share profits without being a partner.374 Legislation specifically provides that “Contract for remuneration of a servant … engaged in a business by a share of the profits of the business does not of itself make the servant … a partner in the business or liable as such”.375 Conversely it is possible to be a partner without sharing profits. Stronger indicators of partnership are agreement to share losses376 and authority to obtain credit on behalf of the partnership.377 The Canadian Courts apply the control/dependency test. The greater influence and participation by the individual in deciding employment conditions and remuneration, the more likely that the person is a partner and not an employee:378 “control over workplace conditions and remuneration is with the partners who form the partnership. In most cases, therefore, partners are not employees of the partnership, they are, collectively, the employer”.379 The orthodox view is that a person cannot be both a partner and an employee of the same business380 as a partnership is not (unlike a company) a separate legal entity and the relationship is one of joint venturers rather than a subordinate employment relationship.381 But it is, at least, arguable that an incorporated limited partnership with legal personality could employ a partner in much the same way as a “one man company” can employ its only shareholder382 (see [2.360]). In relation to unincorporated partnerships, a court can examine whether the relationship is in reality a partnership, leaving scope for arguing in some cases that persons described as non equity partners383 could, in some circumstances be employees. In the second situation, if the person whose status is in question is a partner, can they be an employee in another business? It does not absolutely preclude a concurrent employment relationship.384 For example, in Victorian WorkCover Authority v 373

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377 378 379 380 381 382

383 384

A share of gross returns (before liabilities) does not of itself create a partnership: ACT: Partnership Act 1963, s 7(3); NSW: Partnership Act 1892, s 2(1)(2); Qld: Partnership Act 1891, s 6(1)(b); SA: Partnership Act 1891, s 2(1)(b); Tas: Partnership Act 1891, s 7(b); Vic: Partnership Act 1958, s 6(2); WA: Partnership Act 1895, s 8(2). ACT: Partnership Act 1963, s 7(3); NSW: Partnership Act 1892, s 2(1)(3); Qld: Partnership Act 1891, s 6(1)(c); SA: Partnership Act 1891, s 2(1)(b)(ii); Tas: Partnership Act 1891, s 7(c); Vic: Partnership Act 1958, s 6(3); WA: Partnership Act 1895, s 8(3). Compare Aufgang v Kominsky Nominees Pty Ltd [2008] VSC 27 (doctor entitled to percentage of billings was an employee). ACT: Partnership Act 1963, s 7(3); NSW: Partnership Act 1892, s 2(1)(3)(b); Qld: Partnership Act 1891, s 6(1)(c)(ii); SA: Partnership Act 1891, s 6(c)(ii); Tas: Partnership Act 1891, s 7(c)(ii); Vic: Partnership Act 1958, s 6(3)(b); WA: Partnership Act 1895, s 8(3)(b). Walker v Hirsch (1884) 27 Ch D 460. Limited partners have limited liability but are not entitled to participate in management, see for example, NSW: Partnership Act 1892, ss 60, 67, 67A; Qld: Partnership Act 1891, Chs 3 and 4; SA: Partnership Act 1891, Pt 3; Tas: Limited Partnerships Act 1908; Vic: Partnership Act 1958, ss 60, 67; WA: Limited Partnerships Act 1909, ss 4(2), 6(1). Shand v Ball (1936) 35 AR 77 at 82 per Browne J; see also Lopes v Marino (1939) 38 AR 188. McCormick v Fasken Martineau DuMoulin LLP [2014] SCR 108 (equity partner). McCormick v Fasken Martineau DuMoulin LLP [2014] SCR 108 at [33], per Abella J delivering the judgment of the Court. An incorporated limited partnership would be an exception, see above “Incorporation” [2.360]. Scott v Commissioner of Taxation [2002] AATA 778 at [16]; Cowell v Quilter Goodison & Co Ltd [1989] IRLR 392. See earlier in this section and in the United Kingdom, Clyde & Co LLP v Bates van Winkelhof [2014] UKSC 32; [2014] 1 WLR 2047; Prassl, “Members, Partners, Employees, Workers? Partnership Law and Employment Status revisited” (2014) 43(4) Ind LJ 495. Where the person has limited rights to share profits, and does not contribute capital. Australian Mutual Provident Society v Allan (1978) 52 ALJR 407 at 410-411. In SJP Chicken Processor v WorkCover (No 3) [2006] SAWLRP 7 partnership workers were treated no differently

63

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Ch 2: The Relationship of Employer and Employee

Game,385 a partnership was employed to undertake bricklaying. The work could not proceed because the concreter had not prepared the footings. The partners agreed to do the work at an hourly rate with no separate contract entered into with the partnership. This did not prevent a finding that the partners could in relation to this additional work be employees.386 If the partnership does not separately contract with the putative employer387 for the provision of services but simply provides a vehicle for payments, this will not prevent an employment relationship.388 But the employment of others by the partnership to carry out the contracted work almost conclusively tells against a person in the partnership being an employee.389 Other factors may also tell against the relevant person being an employee. In Barro Group Pty Ltd v Fraser,390 the Victorian Full Court said that the partners were not just partners in name only but also partners in conducting the business. A relevant consideration was that the ratio of business expenditure to income during the relevant period was close to 75%.391

Conclusion [2.430] The transition of the “servant” engaged in manual work and domestic service to employee has been remarkable. Welfare legislation had an important role to play in this transformation. Although the emphasis remains on the requirements of personal service and subjugation to orders as critical to employment, the last 30 years have seen the fragmentation of the labour market through contingent forms of employment such as casual, fixed term and part time employment, labour hire and the provision of services by independent contractors. These are now an entrenched part of the labour market. Labour has become a commodity, nowhere more so that in relation to labour hire. These changes to traditional patterns of employment are likely to continue with commentators arguing that rapid changes in the workplace will lead to a shift in emphasis from employment security to career development with the provision of training, networking and other forms of learning in the workplace.392 Why does it matter that the position of many employees is more precarious? In the chapters following, we will see that courts have dealt with employment as a commercial

385 386 387 388

389 390 391

392

from sole trader contractors, at [76]-[77]; Yaraka Holdings Pty Ltd v Giljevic [2006] ACTA 6; (2006) 149 IR 339 (not relevant that previously payments had been made to a partnership since dissolved). Cf Barro Group Pty Ltd v Fraser [1985] VR 577 at 580; Climaze Holdings Pty Ltd v Dyson (1995) 13 WAR 487 at 495. Barro Group Pty Ltd v Fraser [2007] VSCA 86 at [58]. See also Protectacoat Firthglow Ltd v Szilagyi [2009] EWCA 98; [2009] IRLR 365 (sham partnership arrangement). See also Protectacoat Firthglow Ltd v Szilagyi [2009] EWCA 98; [2009] IRLR 365 (sham partnership arrangement). Victorian WorkCover Authority v Game [2007] VSCA 86; (2007) 16 VR 393 at [58]; Batten v Ginevra Nominees Pty Ltd [2013] VCC 839. See also Zurich Australian Insurance Ltd v Amec Services Pty Ltd [1998] WASCA 68; David Kershaw v Sunvalley Australia Pty Ltd [2007] WAIRComm 520; Guardian Insurance Brokers Pty Ltd v Olbrich [2010] SADC 114 at [105]-[108] and in the United Kingdom, Protectacoat Firthglow Ltd v Szilagyi [2009] EWCA 98; [2009] IRLR 365. Kovacic v Henley Arch Pty Ltd [2009] VSCA 56; (2009) 22 VR 21 at [10]. Barro Group Pty Ltd v Fraser [1985] VR 577. Barro Group Pty Ltd v Fraser [1985] VR 577 at 580. Cf calculation of damages for personal injuries cases: Husher v Husher (1999) 197 CLR 138 and comment on the latter re partnership in Yaraka Holdings Pty Ltd v Giljevic (2006) 149 IR 339 at 350-351 [45]-[47]. Stone, From Widgets to Digits: Employment Regulation for the Changing Workplace (Cambridge Univ Press, 2010), pp 92-96.

Conclusion

transaction. But work is more than just an employee providing labour in exchange for wages or salary. Work defines who we are, individually and collectively … We sweat, we think, we care, we create. Work is how we earn a living, build a material world, develop (or lose) our self esteem and social identity …393

393

Budd, The Thought of Work (Cornell University Press, 2011), p 179. See also Budd, Employment with a Human Face (Cornell University Press, 2004).

65

3

Labour Hire “[R]ebellion … is the refusal to be treated as an object and to be reduced to simple historical terms. It is the affirmation of a nature common to all … which eludes the world of power.” [Albert Camus, The Rebel (Penguin, 1971), p 216.]

[3.10] [3.20] [3.30] [3.40] [3.50] [3.70] [3.80] [3.90] [3.100] [3.120] [3.130] [3.140] [3.150] [3.150] [3.160] [3.220] [3.220] [3.230] [3.240] [3.250] [3.260]

Introduction ....................................................................................................... 67 What is labour hire? .................................................................................... 68 Advantages and disadvantages of labour hire ............................................ 69 Prevalence of labour hire ............................................................................ 70 Transfer of employment? .............................................................................. 71 Converting employees to agency workers ................................................... 75 Labour Hire Arrangements ............................................................................... 76 The employee services model – agency as employer ................................. 76 The Odco Model – worker as independent contractor ............................... 78 Client (host business) as employer .............................................................. 83 No contractual relationship ......................................................................... 83 Dismissal of Labour Hire Workers ................................................................... 84 Labour Hire – Liability to Injured Workers ..................................................... 85 Introduction .................................................................................................. 85 Injury on the client’s (host business) premises ........................................... 85 Liability for Agency Worker’s Conduct ........................................................... 91 Introduction .................................................................................................. 91 Agency worker causes third party injury or damage ................................. 91 Agency worker causes injury or damage to client (host business) ............ 92 Multiple Employers – Joint Employment? ...................................................... 92 Conclusion ......................................................................................................... 94

Introduction [3.10] Chapter 2 noted the long term structural changes to employment with the growth of casual employment and the creation of independent contractor relationships where once the worker would have been a permanent employee. This chapter continues the examination of the changing nature of work relationships. In particular, it discusses the nature of labour hire practices and their implications for the contract of employment. Persons working under labour hire arrangements provide work in a tripartite arrangement – an agency contracts with a client to provide workers to the client (host business). This chapter analyses the nature of labour hire relationships and the adaptation of common law tests of employment to meet the new challenges, as well as the legal problems associated with these arrangements. Two problems emerge: first is the worker an employee and secondly, if the answer is “yes”, who is the employer?1 1

Corporate group structures pose particular difficulties especially where there has been a separation of capital assets from employer obligations: Patrick Stevedores Operations No 2 v Maritime Union of Australia (1998) 195 CLR 1 and see surveying the authorities and the issue of secondment, Gothard v Davey [2010] FCA 1163 at [52]-[64], [203]-[214]; Cohen v iSOFT Group Pty Ltd [2013] FCAFC 49;

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Ch 3: Labour Hire

This chapter also examines the difficulties that arise in areas such as workers’ safety,2 vicarious liability for workers’ negligence and dismissal. The terminology adopted in this chapter is as follows: • “agency” – labour hire company or business • “client” or “host business” – the business which utilises workers from a labour hire company • “worker” – workers engaged by the labour hire company or agency, they may be either independent contractors or employees • “agency employee” – a person who is an employee of the labour hire firm or agency.

What is labour hire? [3.20] The definition of labour hire adopted for statistical purposes is that a labour hire agency is: “A firm that receives commission from a client firm in return for supplying labour to that client for a limited period. It may arrange placements for employees, self-employed contractors, trainees and apprentices.”3 The workers under these arrangements are often referred to as “temps”, agency workers and on-hire workers.4 The definition given does not indicate the diversity of arrangements that exist. The Federal Parliament’s inquiry into independent contractors and labour hire identified several different types of labour hire arrangements.5 The most common is the employee services model.6 There, a person is employed as a casual employee by an agency or labour hire company which in turn arranges work with a client (host business). The person providing labour is an employee of the agency and not an employee of the client. The agency pays the worker and deducts income taxation. The majority of these workers are casual employees.7 A second common arrangement is where the worker is an independent contractor and not an employee of either the agency or its client. This has become known as the

2

3 4 5

6 7

(2013) 234 IR 386; Fair Work Ombudsman v Ramsey Food Processing Pty Ltd [2011] FCA 1176; (2011) 198 FCR 174; Opoku v P & M Smallgoods Pty Ltd [2012] NSWSC 478, Golden Plains Fodder Australia Pty LTd v Millard [2007] SASC 391. See also, Fair Work Ombudsman (PWC), “Phoenix Activity, Sizing the Problem and Matching Solutions” (June 2012); Anderson, “Frauduent Transactions Affecting Employees: Some New Perspectives on the Liability of Advisers” (2015) 39(1) MULR 1. As to the greater risk of injury of labour hire workers, see the New South Wales Secure Employment Test Case [2006] NSWIRComm 38 at [31]. This may not necessarily be the case under the new uniform Work, Health and Safety legislation, see [6.390]. In some instances, a labour hire worker may be deemed to be an employee of the agency, see [3.30]. Laplagne, Glover and Fry, The Growth of Labour Hire Employment in Australia (Productivity Commission, Staff Working Paper, Melbourne, Feb 2005), p xii. Productivity Commission, The Role of Non-Traditional Work in the Australian Labour Market (Commission Research Paper, Melbourne, May 2006), p 21. House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), [3.10]-[3.22], drawing from Brennan, Valos and Hindle, On-hired Workers in Australia: Motivations and Outcomes (RMIT Occasional Research Report, Dec 2003), p 47. Brennan, Valos and Hindle, On-hired Workers in Australia: Motivations and Outcomes (RMIT Occasional Research Report, Dec 2003), p 49. Brennan, Valos and Hindle, On-hired Workers in Australia: Motivations and Outcomes (RMIT Occasional Research Report, Dec 2003), p 50.

Introduction

Odco model, named after the case confirming the status of the worker as an independent contractor and not an employee of either the agency or the client (see [3.100]).8 Agencies may also provide recruitment services. Such agencies merely act as intermediaries, “head-hunters”, bringing employees and employers into contact with one another with a view to the worker entering into a contract of employment with the client. There are a range of other specialist services provided by agencies outside the scope of this book.9 The usual pattern of allocation of responsibilities between the labour hire company and the client (host business) is that the labour hire agency is the worker’s employer responsible for: payment of wages, superannuation and other entitlements; recruitment, dismissal and discipline of employees; workers’ compensation, payroll and other taxes.10 The client (host business) is usually responsible for the selection of particular employees to work onsite, direction of tasks or jobs to be undertaken and determining the work available for labour hire employees onsite. There is joint responsibility under work health and safety legislation.11

Advantages and disadvantages of labour hire [3.30] Many labour hire employees are casual employees of the labour hire company with all the advantages and disadvantages of casual employment (see [2.90]). Undesirable effects of labour hire arrangements include the limited eligibility to make claims for unfair dismissal;12 difficulties in ensuring occupational health and safety with “buckpassing” of responsibilities13 and the “host” business not being responsible for providing the suitable alternative duties for an injured employee.14 It is also seen as disadvantageous for training,15 promotion and career opportunities, job security,16 remuneration17 and other entitlements.18 For some workers, labour hire provides advantages such as variety, flexibility, the ability to balance work and family life, choice of where and when to work, opportunities for on the job training, multi-skilling and 8

9

10 11

12 13 14

15 16

In 2005, Odco contractors worked as farm hands, doctors, secretaries, personal assistants, family day-carers, fishermen, sales persons, cleaners, security guards and building workers: House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), [3.16]. Other forms of arrangements include the provision of employment consulting services, managed project/contract services, and group training organisations, see House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), [3.18]-[3.22]. In New South Wales, labour hire agencies are required to comply with information standards, see Fair Trading Act 1987 (NSW), s 50; Fair Trading Regulation 2012 (NSW), reg 15. See Brennan, Valos and Hindle, On-hired Workers in Australia: Motivations and Outcomes (RMIT Occasional Research Report, Dec 2003), p 30 for a survey of the usual division of responsibility between the labour hire agency and the host business and Work Health and Safety legislation, [6.450]. This relates to their usual status as casual employees, see [13.70]. The evidence is collected in Secure Employment Test Case (2006) 150 IR 1 at Chapter 4 of the judgment. As to duties in relation to work safety, see [6.450]. In Costello v Allstaff Industrial Personnel (SA) Pty Ltd and Bridgestone TG Australia Pty Ltd [2004] SAIRComm 13 (29 March 2004), a labour hire worker was not able to be reinstated to his position with the host company after he suffered a temporary absence caused by injury. If he had been a direct employee of the host he would have been entitled to apply for reinstatement under unlawful dismissal laws. See also the submission to the Secure Employment Test Case (2006) 150 IR 1 at [10]. Parliament of Australia, House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), [4.53], [4.72]. Past research suggested that 66% of labour hire employees would prefer direct employment and 64% would exchange the casual loading for paid leave entitlements, Brennan, Valos and Hindle, On-hired Workers in Australia: Motivations and Outcomes (RMIT Occasional Research Report, Dec 2003), pp 90, 99.

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better wages.19 There are clear advantages to the employer, not only in terms of costs but with the ability to obtain a skilled workforce when required, for the period of time required, with greater control over the work to be done; the risks of recruitment, lay off and dismissal are then transferred to the agency or the worker.20 The Work Choices legislation, which predated the Fair Work Act 2009 (Cth), restricted the capacity of State level legislation, awards21 and industrial instruments to provide significant protection to labour hire workers.22 The current Fair Work Act 2009 (Cth) continues to exclude State laws and awards in relation to national system employers, [1.20], [1.90]. Under s 27(2) of the Fair Work Act 2009, some specific areas continue to apply and consequently can be the subject of State level regulation; areas of special importance to labour hire workers include superannuation, workers’ compensation, occupational health and safety, and long service leave in some situations.23 Some jurisdictions deem labour hire workers to be employees of the labour hire agency in relation to such matters as workers’ compensation,24 with work health and safety legislation imposing duties to ensure the safety of workers on both the labour hire agency and the client.25 As labour hire workers are mostly casual employees or independent contractors they are significantly disadvantaged in comparison to permanent employees. This has been discussed in Chapter 2. Despite a flurry of inquiries between 2001-2005, the position of labour hire workers has not significantly changed.26

Prevalence of labour hire [3.40] Labour hire agencies are an important, but in recent times, relatively small player in the the labour market. Although many workers may find their job through an agency,27 the numbers of workers employed by, or contracted to, labour hire agencies is 17

18

19

20 21 22

23 24 25

26

27

A 2003 survey by Brennan et al found that 60% of the employers it surveyed gave comparable terms and conditions to its directly employed permanent workforce, see Brennan, Valos and Hindle, On-hired Workers in Australia: Motivations and Outcomes (RMIT Occasional Research Report, Dec 2003), pp 24, 68. Laplagne, Glover and Fry, The Growth of Labour Hire Employment in Australia (Productivity Commission, Staff Working Paper, Melbourne, Feb 2005), p 1; House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), [3.28]-[3.35]. House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), [3.23]-[3.27]; Brennan, Valos and Hindle, On-hired Workers in Australia: Motivations and Outcomes (RMIT Occasional Research Report, Dec 2003), p 94. Productivity Commission Workplace Relations Framework (Draft Report, Aug 2015), p 716. For example, in the New South Wales Secure Employment Test Case (2006) 150 IR 1 at [28]. Under the Work Choices legislation, awards and agreements could not include provisions restricting the use of labour hire employees, Workplace Relations Act 1996 (Cth), ss 513 – 515, Workplace Relations Regulations 2006, reg 2.8.5. This is not unqualified, see restrictions set out in Fair Work Act 2009 (Cth), s 113. Anti-discrimination laws are also excepted, see Fair Work Act 2009 (Cth), s 27(1A). The provisions are set out in Tables 3.1a and 3.1b in Safe Work Australia, Comparison of Workers’ Compensation Arrangements in Australia and New Zealand (July 2015). Vic: Occupational Health & Safety Act 1985, s 21(3), “employer”; WA: Occupational Health & Safety Act 1984, s 23F (dual responsibility). And see definition of “worker” under the uniform Work Health and Safety Act 2011, s 7; and see [6.390]. NSW: Labour Hire Task Force (Final Report, Dec 2001); Qld: Submission to Federal Inquiry on Labour Hire and Contracting (2005); SA: Stevens, Report of the Review of the South Australian Industrial Relations System (Workplace Services, Adelaide, October 2002); Vic: Parliament of Victoria, Economic Development Committee, Inquiry into Labour Hire Employment in Victoria (Final Report, June 2005); House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005). The November 2008 estimate was that approximately 5% of employed people obtained their current

Introduction

very much smaller with an estimate that just over 2% of workers are paid by labour hire companies.28 Some of the reasons previously suggested for increases in labour hire have been: a decline in unionised workplaces, a rise in enterprise bargaining, employment of human resources managers together with rising competitive pressures with resultant efforts to optimise the use of labour.29 The use of labour hire can reduce costs in such areas as recruitment, administration and training; it can also result in lower overall costs of wages and other employment entitlements.30 Labour hire continues to diminish but whether this is permanent or simply an artefact of market conditions is not clear. Labour hire is, however, important to the discussion of the contract of employment because it brings into sharp focus the essential ingredients of an employment relationship. It forces consideration of how to determine employment where control is divided between the labour hire company and the host company, where the place and hours of work are variable, where statutory obligations such as superannuation contributions, workers compensation, health and safety requirements are not necessarily found in a single entity and where it is not clear who is the employer or even whether the worker is an employee at all. How should the common law accommodate this? Where there is divided control, could there be joint employment (see [3.250]) or a temporary transfer of employment to the client?

Transfer of employment? No transfer of employment without consent [3.50] The rule at common law is that an employee cannot be transferred to the employment of another person without some act of assent, express or implied, on the employee’s part. This is because the essence of a contract of employment is that it is a freely entered into bargain between two parties in which there is the obligation of personal service to the employer.31 Any fundamental change in the character of one of the parties will end the contract (see Chapter 9). But this does not stop an employee expressly or impliedly agreeing to be transferred, for example, where a business is sold and employees agree to continue on with the new business.32 Agreement by employees

28

29

30 31

32

employment through a labour hire agency. Of these 97% were employees with just 3% independent contractors with most of the employees paid by their new employer and not continuing in a labour hire arrangement, ABS, Australian Labour Market Statistics (Jan 2010) cat 6105.0 (down from 8% in 2001). And see the following note. The 2001 figures fell from 161,800 to 122,200 employees of labour hire agencies in 2008, see ABS, Australian Labour Market Statistics (Jan 2010) cat 6105.0. The HILDA survey covering the period 2001-2010, reported 2.6% of men and 2.4% of women were hired through a labour hire company, Buddelmeyer, McVicar, Wooden, “Non-Standard “Contingent” Employment and Job Satisfaction: A Panel Data Analysis” (Institute for the Study of Labour, IZA DP No 7590, Aug 2013), Table 1 but there is variation depending on the data source, see Shomos, Turner and Will, Forms of Work in Australia (Productivity Commission, Melbourne, 2013), Table B.5 p 80. See also the reporting the 1.8% of labour hire employees regulated by the Fair Work Act 2009 (excludes contractors), Productivity Commission Workplace Relations Framework (Draft Report, Aug 2015), “Employment Arrangements” 2015 Figure 1, p 6 and overall in 2011 an estimated 1.2% of all employed persons, Table B.5, p 83 and Figure 20.1, p 714. Laplagne, Glover and Fry, The Growth of Labour Hire Employment in Australia (Productivity Commission Staff Working Paper, Melbourne, Feb 2005), pp xii, 10-17. See also Productivity Commission, The Role of Non-Traditional Work in the Australian Labour Market (Commission Research Paper, Melbourne, May 2006), pp 26, 41. Productivity Commission, The Role of Non-Traditional Work in the Australian Labour Market (Commission Research Paper, Melbourne, May 2006), ch 3.1. McCluskey v Karagiozis [2002] FCA 1137; (2002) 120 IR 147. In relation to the Fair Work Act 2009 provisions relating to transferring an employee in relation to the transfer of a business, see Fair Work Act 2009 (Cth), ss 310 – 316 and [9.410] and [12.100]. It seems sufficient that the employee knew that there had been a change of employer, this was supported by the documentation and acquiesced to by continuing to work, see Foster v Parbery;

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to be employed by the new company may seriously disadvantage them if the new company is not able to honour the obligations incurred by the former employer.33 In McCluskey v Karagiozis,34 a company undergoing restructure sought to transfer 240 employees to restructured companies (shell companies) within the group. The restructured companies had no assets and would not have been able to pay the employees their entitlements in excess of $2.5 million. There would be a serious risk to the employees if they were held to be employed by the restructured companies. There was no consultation with the employees who knew nothing of the transfer; most of the employees were unskilled and from non-English speaking backgrounds.35 It was held that since the employees had not consented to the transfer they remained the employees of the pre-structured company. Merkel J in the Federal Court reaffirmed the principle from Nokes v Doncaster Amalgamated Collierys Ltd,36 that: a free citizen, in the exercise of his freedom, is entitled to choose the employer whom he promises to serve, so that the right to his services cannot be transferred from one employer to another without his assent.

Despite the common law rule, a number of factors point to the diminishing importance of the nature of the “personal” relationship between employer and employee which is the basis of the rule that an employee must consent to the transfer of employment. The fragmented nature of the employment relationship combined with the proliferation of labour hire practices, high levels of casualisation where workers may work for multiple employers, and the provision for continuance of obligations where there has been a transfer of the employer’s business, all suggest that labour is increasingly being regarded as a “commodity” rather than a personal relationship.37 The common law principle that an employee cannot be transferred to a new employer without her or his consent is relevant to the question whether an employee could be transferred temporarily to another employer.

Temporary transfer? [3.60] Plant hire companies may only hire out expensive machinery with the plant hire company’s qualified operator. This practice challenges the traditional concept that an employee’s responsibilities are owed to a single employer who can direct not only what tasks are to be undertaken but how the work should be carried out. Where equipment and the operator are hired out to a client, significant control remains with the plant hire

33

34

35 36 37

Foster v Elliott [2009] NSWSC 1304; Bartlett v Wirrina Resort Pty Ltd [2009] SAIRC 56 at [28]. As to the effect of the Fair Work Act 2009 provisions relating to transfer of business see discussion at [9.410] and [12.100]. In relation to the previous provisions, see Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd (2005) 222 CLR 194 at [48]. Would a clause in the employment contract authorising assignment or novation of the contract be sufficient? Cf Hyro Ltd v Eland [2007] NSWSC 1111. See Re Willow Fashions (Australia) Pty Ltd (In liq) (unreported, Hayne J, 27/4/1995, SC Vic) noted in Damevski v Giudice [2003] FCAFC 252; (2003) 133 FCR 438 at [140] by Merkel J (employees agree to be re-employed by a related company, previous employer not liable for unpaid wages; transfer effective even if dishonest). Sometimes the transfer to an intermediary might be regarded as not changing the status of employees despite their signing up, see Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 discussed at [3.110]. The decision was overturned on appeal but without reference to this issue, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45. McCluskey v Karagiozis [2002] FCA 1137; (2002) 120 IR 147. See also Gothard, in the matter of AFG Pty Ltd (Receivers and Managers appointed) (in liq) v Davey [2010] FCA 1163; Brudenell v Frigger [2013] WAIRComm 23; Silcar Pty Ltd v Victorian WorkCover Authority [2012] VSC 357; Toll v Global Market Insite Inc [2015] FCCA 105. As to redundancy, see Chapter 9. The Human Resources Manager who was aware of the restructure was in a different position. Nokes v Doncaster Amalgamated Colliers Ltd [1940] AC 1014 at 1020 per Viscount Simon LC. See also Bolwell v Redcliffe Homes Ltd [1999] IRLR 485. See Riley, Transfer of Business under the Fair Work Act (Sydney Law School, Legal Studies Research Paper no 10/66, July 2010).

Introduction

company but the directions as to what tasks are to be done reside with the client (host business). This division of control can be accommodated by regarding the plant hire company as a general employer and suggesting that in some circumstances the client is the worker’s temporary employer (pro hac vice – for this occasion). This has the effect that if there is a temporary transfer of the employment to the client, the client could be vicariously liable for the tortious conduct of its temporary employee.38 In the Mersey Docks case, the Mersey Docks and Harbour Board lent a crane and driver to a stevedoring company. The hiring conditions provided that the driver was the servant of the hirer (client) during the period of hire. Due to the driver’s negligence, an employee of the stevedoring company was injured. Who was liable? Despite the contractual term, the Mersey Docks and Harbour Board were held vicariously liable. The House of Lords laid down the following principles:39 the test turn[s] on where the authority lies to direct, or to delegate to, the workman the manner in which the vehicle is driven. It is this authority which determines who is the workman’s superior. In the ordinary case, the general employers exercise this authority by delegating to their workmen discretion in method of driving … if, however, the hirers intervene to give direction as to how to drive which they have no authority to give, and the driver pro hac vice complies with them, with the result that a third party is negligently damaged, the hirers may be liable as joint tortfeasors.40 Many factors have a bearing on the result. Who is the paymaster, who can dismiss, how long the alternative service lasts, what machinery is employed – have all to be kept in mind. The expressions used in any particular case must always be considered in regard to the subject matter under discussion. Amongst the many tests suggested I think that the most satisfactory by which to ascertain who is the employer at any particular time, is to ask who is entitled to tell the employee the way in which he is to do the work upon which he is engaged. If someone other than the general employer is authorised to do this, as a rule, this will be the person liable for the employee’s negligence. But it is not enough that the task to be performed should be under his control, he must also control the method of performing it. It is true that in most cases no orders as to how a job should be done are given or required; the person is left to do the work in his own way. But the ultimate question is not what specific orders, or whether any specific orders were given, but who is entitled to give the orders as to how the work should be done. Where a man driving a mechanical device, such as a crane, is sent to perform a task, it is easier to infer that the general employer continues to control the method of performance since it is his crane and the driver remains responsible to him for its safe keeping.41

Subsequent cases have drawn a distinction between cases such as the Mersey Docks case, where a complicated piece of machinery and a driver are lent, and cases where labour only (and labour not necessarily of a highly skilled character), is lent. In the former case it was easy to infer that the general employer did not intend to permit the hirer to have control over the owner’s specialist equipment in the sense of being able to tell the worker how to work it. The inference of control by the client (host business) might more easily be made in the latter case where there was unskilled labour.42 38

39 40 41 42

Mersey Docks & Harbour Board v Coggins and Griffith (Liverpool) [1947] AC 1; Kondis v State Transport Authority (1984) 154 CLR 6; QBE v Orcher [2013] NSWCA 478 per Tobias J, McColl JA agreeing, contrast McFarlan JA at [3]. See also Gillogly v IAMA Agribusiness Pty Ltd [2002] NSWCA 251 and [3.120]. Mersey Docks & Harbour Board v Coggins and Griffith (Liverpool) Ltd [1947] AC 1. Mersey Docks & Harbour Board v Coggins and Griffith (Liverpool) Ltd [1947] AC 1 at 12 per Lord Simond (joint tortfeasor with the employee). Mersey Docks & Harbour Board v Coggins and Griffith (Liverpool) Ltd [1947] AC 1 at 17 per Lord Porter. Gibb v United Steel Co [1957] 2 All ER 110 at 114.

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There are two general comments that may be made at this stage. The first is that the doctrine of temporary employment reflected the dominance of the control test in determining whether there was a contract of employment. The notion of temporary employment provided a useful device for accommodating the difficulty of divided control and was relied on as a basis for attributing responsibility. We have seen in the previous chapter that control, whilst important, is now just one of the relevant factors in determining whether a contract of employment exists. The current tests of employment can accommodate the division of responsibility between an agency and the client without the need for a concept of a temporary transfer of the employee. Secondly, the doctrine of temporary employment developed in the context of determining who should be liable for the damage or injury caused by the negligent worker (vicarious liability). There is now no justification for giving the principle of temporary employment any wider operation.43 But if there has been a temporary transfer of employment, the client (host business) will be vicariously liable for the torts of the agency employee. The temporary employment test reflects the wider reach of vicarious liability in circumstances where, although a person is not formally an employee, there has been an exercise of control sufficient to impose liability on the person exercising control.44 The status of the doctrine of temporary employment was examined in the Victorian case of Deutz Pty Ltd v Skilled Engineering.45 There Skilled Engineering, a labour hire company, hired out a forklift driver to Deutz Australia Pty Ltd. The forklift driver, whilst driving the forklift, negligently caused extensive damage to Deutz’s property. Ashley J referred to the Mersey Docks case and the reluctance of courts to conclude that there had been a temporary transfer of employment for the purposes of vicarious liability. His Honour observed:46 if a genuine transfer of the servant was necessary before the temporary employer could be held liable there would be no “doctrine of master and servant pro hac vice” at all, and the man would simply cease to be the servant of one employer and become the servant of the other.

Ashley J was of the view that the tests for determining whether a contract of employment exists are not relevant to the question of temporary employment:47 [T]he courts have had to construct a framework for deciding when circumstances … are sufficient to shift the responsibility of vicarious liability from general to temporary employer. The framework which has been constructed owes something to the criteria for determining whether a contract of service has been created; but I think that it would be quite wrong to seek to draw the analogy too far.

His Honour suggested the following principles:48 • Only in exceptional circumstances will a general employer (agency) be able to shift vicarious responsibility to a temporary employer. • Transfer will be less readily inferred when a worker is hired out with a machine or where a skilled worker is provided. 43

44 45 46 47 48

See Deutz Australia Pty Ltd v Skilled Engineering Ltd [2001] VSC 194 at [107]. The contrary view was accepted in the United Kingdom Court of Appeal in Interlink Express Parcels Ltd v Night Trunkers Ltd [2001] EWCA 360 at [70] and Gillogly v IAMA Agribusiness Pty Ltd [2002] NSWCA 251; Swift Placements Pty Ltd v WorkCover Authority of New South Wales (Louise May) [2000] NSWIRComm 9 at [70]-[72] (no transfer assuming that the principle applied in an OH&S prosecution). Cf Hayman v Kkut Pty Ltd [2002] WADC 107. Note the different principle applied in TNT v Christie (2003) 65 NSWLR 1 (discussed at [3.210]). Johnson v Lindsay & Co [1891] AC 371 at 377 per Lord Herschell. Deutz Pty Ltd v Skilled Engineering [2001] VSC 194. Deutz Pty Ltd v Skilled Engineering [2001] VSC 194 at [104]. Deutz Pty Ltd v Skilled Engineering [2001] VSC 194 at [108]. Deutz Pty Ltd v Skilled Engineering [2001] VSC 194 at [109]-[112].

Introduction

• Transfer may occur where the agency worker is bound to operate the equipment under the absolute control of the client. • The contractual arrangements between the agency and the client will not effect a transfer. • A transfer may occur in the following circumstances:49 [w]here the hirer can direct not only what the workman is to do, but how he is to do it; Where the hirer “is entitled to tell the employee the way in which he is to do the work”; Where the complete dominion and custody over the servant has passed from one to the other; Where, by an agreement “the employer vests in the third party complete, or substantially complete, control of the employee, so that he is not only entitled to direct the employee what he is to do, but how he is to do it”; Where it can be said that the hirer has such authority to control the manner in which the worker does his work that it can be said that the worker is serving the hirer, not merely serving the interests of the hirer; Where it cannot be said that the reason that the worker subjected himself to control of the so-called temporary employer as to what he did and how he did it was that his general employer told him to do so; Where it can be said that the servant was transferred, not merely the use and benefit of his work.50

It was held that there had been no temporary transfer to the client. The agency retained control. It had recruited the worker, paid his wages, established safety protocols, provided safety training; provided weekly laundered work clothing which was embellished with the agency logo, supervised the worker and had the power of dismissal. Ashley J pointed out the inconvenience of the doctrine where a labour hire agency hires out many thousands of workers over a year for short term assignments.51 In most labour hire cases, the labour hire company (agency) will remain the employer of the worker and vicariously liable for the worker’s torts. Only in exceptional cases will the courts find that there has been a temporary transfer of the employee to the client (host business)52 such that the client will be vicariously liable for the worker’s torts. Temporary employment operates as a device to attribute liability for a worker’s torts to the temporary employer.53

Converting employees to agency workers [3.70] An employer may seek to convert its employees into independent contractors

using a labour hire agency to provide their labour as independent contractors.54 The employer cannot just simply transfer them to the labour hire company; no employee can be transferred from one employer to another without the employee’s consent. 49 50

51 52

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Deutz Pty Ltd v Skilled Engineering [2001] VSC 194 at [113]. For a rare UK example, Hawley v Luminar Leisure Ltd [2006] IRLR 817 (CA) (agency nightclub bouncer held to be temporary employee of nightclub), cf Biffa Waste Services Ltd v Maschinenfabrik Ernest Hese GMBH & ors [2008] EWCA Civ 1257. Deutz Australia Pty Ltd v Skilled Engineering Ltd [2001] VSC 194 at [120]. No transfer: Swift Placements Pty Ltd v WorkCover Authority of New South Wales (Louise May) [2000] NSWIRComm 9 at [72] assuming that the principle applied in an OH&S prosecution. McDonald v The Commonwealth (1945) 46 SR (NSW) 129 (temporary employee where the driver worked for nine months as a driver for the Commonwealth). Denham v Midland Employers Mutual Assurance Ltd [1955] 2 QB 437. Considered in Monarch Insurance & Co Ltd v Steel Mains Pty Ltd [1986] VR 831. Query its application to an injured contractor in Gillogly v IAMA Agribusiness Pty Ltd [2002] NSWCA 251 at [79]. Where the client employs the agency worker as a permanent employee, and the labour hire firms impose penalties, is this a fetter on employment and void as contrary to public policy? See Earth Force Personnel Pty Ltd v EA Negri Pty Ltd [2010] VSC 426 (recruitment fee by labour hire company could be in restraint of trade) and [4.340] and see [4.10].

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Employees can, of course, agree to be employed by a different employer. Short of agreement by the employees, the only way to move to an agency situation is to dismiss the employees according to the termination terms of their contracts of employment and then enter into an arrangement with a labour hire agency to provide labour for the work formerly done by the dismissed employees. This could be a costly exercise if there was a liability to make redundancy payments55 (see [9.160]). But even if the employee technically agrees to become a contractor engaged and paid by a labour hire company, where the labour hire company is little more that the paymaster with everything else staying as before, a court or tribunal could find that the person is an employee of the original employer. This is discussed in detail at [3.100]-[3.110].56 It could also be a breach of the Fair Work Act 2009, ss 358 – 359 where an employer dismisses or threatens to dismiss an employee so as to engage the employee as an independent contractor to undertake the same work (s 358) or knowingly makes a false statement to induce an existing or former employee to enter into an independent contractor relationship with respect to the same work (see s 359 discussed at [2.100]).

Labour Hire Arrangements [3.80] Where a labour hire company provides labour to a business, it does not mean that the client (host business) is the employer. Buchanan J in Fair Work Ombudsman v Ramsey Food Processing Pty Ltd57 commented that labour hire arrangements are unremarkable, lawful and legitimate methods of obtaining labour.58 Under a genuine labour hire arrangement, the worker may be a contractor or an employee of the labour hire company59 rather than an employee of the host business. In very exceptional circumstances, the agreement between the worker and the labour hire company may be found not to be a genuine agreement (see [3.100]-[3.110]). This section begins by examining the employee services model where the labour hire company (agency) is the employer.

The employee services model – agency as employer [3.90] Where the agency or labour hire company provides workers to a client, it is likely that there is no contract of employment between the worker and the client (host business). Nor or is it likely that the agency enters into a contract of employment with the worker as the client’s authorised agent.60 The multi-factor test discussed in Chapter 2 determines whether there is a contract of employment between the agency 55 56

57 58

59 60

As to redundancy, see [9.160] and [13.140]. Damevski v Giudice [2003] FCAFC 252; (2003) 133 FCR 438; Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256. The decision was overturned on appeal but without reference to this issue, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45. [2011] FCA 1176; (2011) 198 FCR 174 at [61]. But labour hire can exploit vulnerable workers, see Fair Work Ombudsman A Report of the Fair Work Ombudsman Inquiry into the Labour Procurement Arrangements of the Baida Group in NSW (June 2015). Note also the possibility that in some cases the host business may be an accessory to breaches of the Fair Work Act 2009, see Fair Work Act 2009 (Cth), s 550. Or the labour hire company or intermediary may be found to be acting as agent for the host business, see note following. See Fair Work Ombudsman v Ramsey Food Processing Pty Ltd [2011] FCA 1176; (2011) 198 FCR 174 at [120] and see Ramsay Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237; cf FP Group Pty Ltd v Tooheys Pty Ltd [2013] FWCFB 9605 at [37]-[39]; Forstaff v Chief Commissioner of State Revenue [2004] NSWSC 573 at [99]-[103]; Slater v WorkCover/Allianz Aust [2002] SAWCT 27 at [40] (affirmed on appeal Country Metropolitan Agency Contracting Services Pty Ltd v Slater & WorkCover/CGU Workers Compensation Insurance (SA) Pty Ltd [2003] SAWCT 57). In Damevski v Guidice [2003] FCAFC 252; (2003) 133 FCR 438 at [172] [3.100] unlike Wilcox and Marshall JJ,

Labour Hire Arrangements

and the worker.61 It is apparent, however, that control operates differently in this context. It is usual that day-to-day control will reside with the client (host business) and likely that the labour hire agency will exercise control over such matters as recruitment, wages and discipline and dismissal.62 Agreements between an agency and the agency employee usually contain a clause that the worker will accept the client’s directions, supervision and instruction. Where control is exercised by both the agency and the client, the problem of divided control could be dealt with in a variety of ways. One option utilised in the United States, and occasionally in the United Kingdom, is to consider joint employment by both the agency and the client.63 Joint employment has been largely rejected by Australian courts in recent times64 despite the advantages for work health and safety and protection of workers’ entitlements (see [3.250], [6.450]). In determining who the employer is, the Australian authorities have emphasised “ultimate control”, such as the right to discipline and dismissal retained by the agency. In Swift Placements Pty Ltd v WorkCover,65 a Full Bench of the New South Wales Industrial Commission remarked: control by an employer over an employee is not to be viewed merely in the on-the-job situation in directing a person what to do and how to do it, but rather in the sense of the ultimate or legal control over the person to require him to properly and effectively exercise his skill in the performance of the work allocated in default of which disciplinary measures may be adopted, including the final step of dismissal.

Where the contract between the labour hire agency and the client (host business) provides that the person is to work at the direction of the client (host business), this does not prevent the agency from being the employer. In Drake Personnel Ltd v Commissioner of State Revenue,66 the Victorian Court of Appeal considered whether Drake Personnel was the employer of temporary staff (temps) that were provided to clients. Temps were put on Drake’s books; temps were not bound to accept work and were paid an hourly rate for time worked. They did not receive pay for long service, holiday or sick leave. Drake deducted income tax, paid workers’ compensation premiums, payroll tax and superannuation contributions for their workers. This was consistent with the temps being Drake’s employees. The court rejected the argument that a temp could not be an employee because the work was done for the benefit of the client because the temp is effectively “working for Drake while working for the client”.67

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Merkel J found that the agency had acted as agent in creating a contract of employment between the client and the worker. See also Homecare Direct Shopping Pty Ltd v Gray [2008] VSCA 111 (contract with Area Manager acting as agent for Homecare); Opoku v P & M Quality Smallgoods Pty Ltd [2012] NSWSC 478. See, for example, Deutz Australia Pty Ltd v Skilled Engineering Ltd [2001] VSC 194 and the application of the multi-factor tests at [125]. Usually the agency worker will be a casual employee of the agency with a separate contract of employment in relation to each accepted assignment. See [2.90] for further discussion. Alternatively the agency worker may be an independent contractor, see [3.100]. Other factors include the provision of safety wear, checking qualifications, OH&S issues, induction training, onsite supervisor, industrial relations, compliance with awards, liability for wages, leave and other employee entitlements, see FP Group Pty Ltd v Tooheys Pty Ltd [2013] FWCFB 9605 at [25],[33]. Joint employment is common in the United States in labour hire situations. See as an example, Schultz v Capital International Security (24 Oct 2006, United States Court of Appeals for the Fourth Circuit). See FP Group Pty Ltd v Tooheys Pty Ltd [2013] FWCFB 9605 at [40]-[44] and [3.250]. (2000) 96 IR 69 at [44]. See also Forstaff v Chief Commissioner of State Revenue [2004] NSWSC 573; Country Metropolitan Agency Contracting Services Pty Ltd v Slater and WorkCover/CGU Workers Compensation Insurance (SA) Pty Ltd [2003] SAWCT 57 per Cawthorne DPJ at [22]; McCusker DPJ at [61], [74]. Drake Personnel Ltd v Commissioner of State Revenue (2000) 2 VR 635. See also Wilton & Cumberland v Coal & Allied Operations Pty Ltd [2007] FCA 725. Drake Personnel Ltd v Commissioner of State Revenue (2000) 2 VR 635 at [54] per Phillips JA.

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The court also rejected the argument that since day-to-day control rested with the client, temps could not be employees. Phillips JA accepted that:68 the fact that the client exercises day-to-day control may be referred back to the contract made between Drake and the temporary; for it is under and by virtue of that contract that the temporary accepts direction from Drake’s client … Why then should the exercise of that control … be taken to deny to the contract between Drake and the temporary the character of employment according to ordinary concepts of the common law?

The Victorian decision Deutz Australia Pty Ltd v Skilled Engineering Ltd69 illustrates the nature of the worker’s employment relationship with a labour hire agency. The agency hired out a forklift driver to Deutz. The agency engaged the worker after interviewing and assessing the worker’s competence as a forklift driver. The agency provided safety training, work clothes and safety equipment. The agency arranged for the work clothes to be laundered weekly. The clothing was marked with the defendant’s logo. The worker was expected to wear the provided work clothes at work. The worker was directed where to work and was accompanied by an agency supervisor at the start of a job. Wages were calculated and paid by the agency based on worksheets provided by the worker. The agency took out workers’ compensation and paid superannuation contributions. It also provided a social club for its workers. The fact that the worker worked under the direction of the client at the worksite did not alter his status as an employee of Skilled Engineering. The client had no power of dismissal or to require the worker to leave the workplace and the worker was bound by the agency safety protocols. The agency was held liable as employer for damage to the client’s property caused by the worker’s negligence. This model is to be contrasted with the Odco Model where workers are engaged as independent contractors.

The Odco Model – worker as independent contractor [3.100] The agency worker may be an independent contractor. Contracts which declare that the worker is an independent contractor are scrutinised to ensure that they reflect the true nature of the relationship, see [2.100]. The discussion begins with the Odco cases. In Accident Compensation Commission v Odco Pty Ltd70 the High Court held that although the worker had a contractual relationship with the “agency” the worker was not its employee. This was, however, an instance where the then Accident Compensation Act 1985 (Vic) deemed that the worker was an employee of the agency for purposes of that Act. In Building Workers’ Industrial Union of Australia v Odco Pty Ltd,71 the Full Federal Court again considered the relationship between the workers and the “agency” “Troubleshooters” (TSA) and the users of the labour. It held that the workers were not employees of the client (host business) or the agency. The contract between the workers and the agency made it clear that they were not employees. The workers were not paid a weekly wage nor did they have the usual leave and other employee entitlements. The workers were not required to work at any particular time, nor did Odco undertake to provide them with work on a particular day. Workers could refuse work but were required to notify the agency of their availability or if they were not continuing to work at a site where workers were still required. When the worker attended a building site, that worker was not subject to control or directions from the agency, so the agency could not direct the 68 69

70 71

Drake Personnel Ltd v Commissioner of State Revenue (2000) 2 VR 635 at [55]. Deutz Australia Pty Ltd v Skilled Engineering Ltd [2001] VSC 194 at [125]. For other illustrations see Mason & Cox v McCann (1999) 74 SASR 438 (leave to appeal to the High Court refused 12/5/2000); Costello v Allstaff Industrial Personnel (SA) Pty Ltd [2004] SAIRComm 13; Forstaff v Chief Commissioner of State Revenue [2004] NSWSC 573. Accident Compensation Commission v Odco Pty Ltd (1990) 64 ALJR 606. Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104.

Labour Hire Arrangements

worker to redo defective work. At best the agency could discuss the issue with the builder and the worker in an effort to resolve the issue. The agency did not retain a right of control over the worker such that the worker was its employee. The payment of an hourly rate did not necessarily point, one way or the other, to an employment contract as it might also be consistent with casual employment. The terms of the agreement and the lack of leave and other entitlements pointed towards an independent contractor relationship.72 Consequently, the Full Federal Court confirmed that the workers were not agency employees. Following the Odco case, labour hire agencies adopted what is known as the Odco contract. The more recent version of the Odco style contract between the worker and the labour hire agency usually contains the following standard provisions with some individual minor variations.73 • I acknowledge and agree that there is no relationship of employer/employee with [X Co] and that [X Co] does not guarantee me any work. I am self-employed and, as such I am not bound to accept any work through [X Co]. • I hereby agree to work for an agreed amount per hour for actual on-site hours or job price to be agreed. • I instruct [X Co] to make deductions in respect of Pay as you Go (PAYG) system of taxation.74 • I hereby agree that I have no claims on [X Co] in respect of Holiday Pay, Long Service Leave, Sick Pay, or any similar payment.75 • I hereby agree that [X Co] has no responsibility or liability to me, except that I am guaranteed to be paid for actual on-site hours worked or agreed job price for work done. • It is agreed that I must carry out all work that I agree to do through the agency of [X Co] in a proper manner and [X Co] is hereby guaranteed against faulty work. All work must be made good. Further, I agree to cover the work (where necessary) for Public Liability, Accident Insurance, Long Service and Holiday Pay and have no claims on [X Co] in respect of the above.

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Other factors are pointed out in the Quest case, see Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [233] per North and Bromberg JJ and see below. Such agreements might not cover all the contractual arrangements. For example, in Odco there were other provisions relating to times to be worked, minimum hours etc: Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104 at [19]. The earlier version forbade the deduction of taxation. This is the modern form of the clause in which contractors can voluntarily agree to have tax withheld under the PAYG system, see Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [41], and see https://www.ato.gov.au/Forms/Voluntary-agreement-for-PAYG-withholding. The decision was overturned on appeal but without reference to this issue, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45. The original Odco contract provided that the worker was not entitled to workers’ compensation but in fact Odco provided workers’ compensation cover to its workers based on the deemed employment found by the High Court in Accident Compensation Commission v Odco Pty Ltd (1990) 64 ALJR 606. In the older forms of the contract, this clause would be omitted in jurisdictions where there was deemed employment under workers’ compensation legislation. The Odco agreement in BWIU v Odco (1991) 37 IR 380 also provided that the agency was not responsible for superannuation. In Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [35] (there was also a separate request that Agency remit super contributions to agency fund or other fund). The decision was overturned on appeal but without reference to this point, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45.

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• I hereby agree to supply my own equipment before commencement of work including safety equipment, where necessary to perform the work, and that I have no claim on [X Co] in respect of the above.76 In the usual Odco contract case, the person will be an independent contractor and not an employee either of the labour hire agency or its client (the host business).77 A series of cases have tested whether the Odco style agreement always avoids an employment relationship. The first of these cases is Damevski v Giudice78 which involved an unfair dismissal claim. There Mr Damevski, a cleaner, “resigned” from his job with Endoxos and signed up with MLC Workplace solutions. He was told that if he did not he would not be getting any work. Before and after his resignation Endoxos continued to provide Mr Damevski with a company van fully maintained by Endoxos, work clothes, mobile phone, job sheets, starting times and equipment necessary for cleaning; Endoxos determined the rate of pay. Damevski worked as part of a team directed by Endoxos’s leading hand. Payments were made by MLC which deducted amounts for accident and public liability insurance, long service leave and superannuation. Damevski worked exclusively for Endoxos and when he was ill notified Endoxos, not MLC. He was removed from the day shift by Endoxos and told to work at another site without the use of the work van or a mobile phone. He was not offered any further work by Endoxos or MLC. A pro forma Odco style agreement to contract was not signed by Mr Damevski. It was held that Damevski continued to be an employee of Endoxos and not an employee of the agency. There was virtually no contact between him and the agency, never a request to MLC to find him work, no direction to work at Endoxos, no contact regarding the availability of work, and no contract between MLC and Damevski relating to the work. When Damevski returned to work after his resignation, nothing changed except that he was paid by MLC. The Federal Court held that Damevski had entered into a new contract of employment with Endoxos. Merkel J distinguished earlier contrary authority:79 In those cases, in general, the hiring agency interviewed and selected the workers, and determined their remuneration, without reference to the client. Usually, a client requesting a worker with particular skills was provided with one, who may or may not have been “on the books” of the hiring agency at the time the order was placed. The workers were usually meant to keep the agency informed of their availability to work, and in many cases were not to agree to undertake work for the client which had not been arranged or directed by the hiring agency. Equipment was either supplied by the worker or by the agency, except for specialist safety equipment which the client often supplied. Dismissal of a worker was only able to be effected by the hiring agency. The client can only advise the hiring agency that the particular worker is no longer required.

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Taken from Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [41]. The decision was overturned on appeal but without reference to this issue, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45. The Australasian Meat Industry Employees’ Union, Newcastle & Northern Branch v Australian Independent Contractors Agency [2004] NSWIRComm 238 finding that chicken boners were independent contractors: “They clearly intend to be, conduct themselves in that manner, and are treated as independent contractors” at [139]. See also Young v Tasmanian Contracting Services Pty Ltd [2012] TASFC 1 (labourer independent contractor even though there was no evidence that he was running his own business). Damevski v Giudice [2003] FCAFC 252; (2003) 133 FCR 438. Damevski v Giudice [2003] FCAFC 252; (2003) 133 FCR 438 at [174]. Merkel J at [172] held that there was a contract of employment on the basis that the labour hire company acted as the client’s agent in bringing about an employment contract with the client (host business).

Labour Hire Arrangements

[3.110] The Full Federal Court followed Damevski in Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd.80 In this case housekeeping staff working as Quest employees at Quest apartments agreed to continue to work for Quest but as independent contractors contracted by the labour hire company, Contracting Solutions.81 Housekeeping staff signed a Contractor Application containing an “Agreement to Contract,” the terms of which are set out at [3.100]. They were then entered into the Contract Solutions payroll system. The housekeeping staff continued to work as before; they worked the same hours, wore Quest uniforms and used Quest equipment. The same roster, timesheets (now unlabelled) and reporting procedures continued. Post conversion, effectively there was little contact with the labour hire company except that payments and payslips were received from them. The case came before the Federal Court on the question whether Quest had been in breach of the sham contracting provisions of the Fair Work Act 2009, ss 357 – 359 (discussed at [2.100]). It was relevant to decide whether the staff had been converted into independent contractors or whether they were Quest employees. The Federal Court held that the housekeepers were Quest employees. Applying the multi factor approach (see [2.160]) they were not independent contractors carrying on their own businesses; they were subject to the direction, supervision and control of Quest; they could not delegate, wore Quest uniforms and were represented as part of Quest’s business.82 It did not matter that Contracting Solutions (CS) was the paymaster83 with differing superannuation, insurance and tax arrangements or that CS controlled rates of pay.84 Consideration of all the circumstances made it clear that the housekeepers were Quest employees.85 The housekeepers, following their resignation, had impliedly entered into a new contract of employment with Quest:86 the conduct of the parties may demonstrate that an initial contract made between a worker and an intermediary was ineffective or inoperative and that the existence of a contract of employment between the worker and the end user is to be implied from their conduct.87

But a new contract of employment should only be implied where absolutely necessary to explain the provision of work to the host business.88 Although, it might be possible for the housekeepers to have two separate contracts, one with Contract Solutions (CS) (as contractors) and the other with Quest (as employees),89 this problem is avoided by 80

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Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256. The decision was overturned on appeal but without reference to this issue, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45. It is assumed that their existing employment contract ended when they signed the Agreement to Contract with Contract Solutions. They completed the application form which stated that they would become independent contractors rather employees of Quest and that “nothing will change in terms of your roster of shifts and you will all get work at QUEST. The pay rates are going to change so you’ll get on flat rate whenever you work but it will be higher than the base rate now”. Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [223] per Bromberg and North JJ. Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [224]-[225]. Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [227]. Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [332]-[333] per Barker J Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [331] per Barker JA. Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [149] per North and Bromberg JJ. Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [171] per North and Bromberg JJ. In exceptional cases a person may be both an independent contractor in relation to some work and an employee in relation to other work, Victorian WorkCover Authority v Game [2007] VSCA 86; (2007)

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the finding that the Agreement to contact with CS did not give rise to legal rights and duties between the housekeepers and Contract Solutions in the absence of an offer and acceptance of actual work.90 CS did not argue the obvious point that the housekeepers by continuing to work at Quest had impliedly accepted an offer of work.91 This convenient omission meant that since there was no effective contract with CS, it opened the way for consideration of whether the provision of labour could be explained on a different basis, in this case as employees of Quest.92 The decision of the Full Court was overturned in the High Court on the issue of the application of the “sham contract” provisions without commenting on other aspects of the Full Court judgment.93 Would it have been different if Contract Solutions offered the housekeepers work at Quest and they accepted and were theoretically working as contractors under that contract? If there is a genuine labour hire arrangement, it is no longer necessary to explain the legal basis for provision of services to a client (host business) or to imply contracts of employment between the worker and the client (host business). But if it is not a genuine labour hire agreement, the agreement is treated as ineffective and disregarded allowing the implication of a new contract of employment94 between the worker and the host business. The agreement will be genuine if the labour hire company is actively engaged in such matters as recruitment, allocation, payment, safety, supervision and management of labour. But if the labour hire company or the intermediary is little more than a paymaster, the agreement may not be genuine.95 So where workers, although signing on as contractors with the labour hire company, continue to work for their former employer under virtually the same terms and conditions, it may be concluded that the labour hire contracts were never intended to operate.96 Similarly, an agreement will not be genuine where former employees are engaged by a company created solely for the purpose of shedding liability and

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93 94 95 96

16 VR 393 at [58]. See also Cable & Wireless plc v Muscat [2006] ICR 975 (CA) (an independent contractor relationship with the agency did not prevent the worker being an employee of the client). Contrast Cairns v Visteon UK Ltd [2007] IRLR 175 (employment contract with agency prevents employment contract with client). But note the differing context in the United Kingdom, see Wilton & Cumberland v Coal & Allied Operations Pty Ltd [2007] FCA 725; (2007) 162 IR 264; Wynn and Leighton, “Will the Real Employer Please Stand Up? Agencies, Client Companies and the Employment Status of the Temporary Agency Worker” (2006) 35 ILJ 301. In contrast to the Odco case, where there had been an offer and acceptance of work, see discussion Fair Work Ombudsman v South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [204]-[207] per North and Bromberg JJ. The decision was overturned on appeal but without reference to this issue, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45. Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [210] per Bromberg and North JJ. The decision was overturned on appeal but without reference to this issue, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45. Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd. [2015] FCAFC 37; (2015) 249 IR 256 at [219]. The decision was overturned on appeal but without reference to this issue, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45 In the United Kindom, see Dacas v Brook Street Bureau [2004] IRLR 358 (CA); Cable & Wireless plc v Muscat [2006] ICR 975 (CA) but a contract will not be implied unless it is necessary to do so, Tilson v Alstom Transport [2010] EWCA Civ 1308 (worker had previously rejected an employment relationship with the client). Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45. On the assumption that the workers had been working under a contract of employment which has ended. Fair Work Ombudsman v Ramsey Food Processing Pty Ltd [2011] FCA 1176; (2011) 214 IR 306. It may not be necessary to determine formally whether the agreement was a sham, see Fair Work Ombudsman v Ramsey Food Processing Pty Ltd [2011] FCA 1176; (2011) 214 IR 306 at [101], [103] per Buchanan J.

Labour Hire Arrangements

functioning only at the direction of, and for the purposes of, the former employer.97 If the agreement is not genuine, courts may imply a new contract of employment with the former employer.98 What then of the Odco decisions? An Odco style contract was used in Quest but it did not achieve the intended outcome of converting employees into independent contractors. In Quest, the majority observed that the Odco decisions preceded Hollis v Vabu ([2.200]) where the High Court said that the ultimate question was whether the workers were working in their own business; this was not emphasised in the Odco decisions. If this is a requirement, it may mean that unskilled workers and labourers would rarely be found to be running their own business.99 In any event in Odco, contractors were very different from the Quest housekeepers and could be considered to be working in their own business: they had substantial business costs, were responsible for their own insurance, were often in skilled trades working both in their own businesses and with the labour hire company, (Troubleshooters), and moved from builder to builder on a daily hire basis; some operated through partnerships, and occasionally through companies and family trusts.100 Moreover there was a genuine labour hire agreement with the labour hire company performing a range of functions in the management and allocation of contractors under which contractors were offered and accepted work.

Client (host business) as employer [3.120] In the usual case an agency will be the relevant employer of the agency worker or there will be an independent contractor relationship between the worker and the agency. But sometimes the worker becomes, or remains, the employee of the client (host business). In the Damevksi and Quest cases (noted at [3.110]) the client, who was the former employer, continued to exercise full control over the worker in all aspects of her or his work.101 Despite the interposition of an agency who paid the worker, the Federal Court held in both cases that workers were the client’s (host business’s) employees. Payment by the agency did not prevent a contract of employment arising between the worker and the client.102 But it has the consequence that the client as employer remains liable for wages if the agency does not pay.103

No contractual relationship [3.130] Where an agency merely acts as a “head hunter” there may be no contract between the agency and the worker – similarly if the agency simply refers potential employees to potential employers.104 In Rimmer v Jennifer Anne Dahl t/as Dahl’s

97 98 99

100 101

102

103 104

Fair Work Ombudsman v Ramsey Food Processing Pty Ltd [2011] FCA 1176; (2011) 214 IR 306. Fair Work Ombudsman v Ramsey Food Processing Pty Ltd [2011] FCA 1176; (2011) 214 IR 306. Query finding of independent contractor under an Odco contract in Young v Tasmanian Contracting Services Pty Ltd [2012] TASFC 1 (labourer independent contractor even though he was not running his own business). Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [233] per North and Bromberg JJ. Damevski v Giudice [2003] FCAFC 252; (2003) 133 FCR 438; Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [224]-[226] per Bromberg and North JJ. Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 99 ALR 735 at 748; Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [224]-[226] per Bromberg and North JJ. See also Oanh Nguyen and A-N-T Contract Packers Pty Ltd t/as A-N-T Personnel and Thiess Services Pty Ltd t/as Thiess Services (2003) 128 IR 241 at [77]. Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 99 ALR 735 at 748. Such as the Commonwealth Employment Service, see Monie v Commonwealth of Australia [2007] NSWCA 230 (duty of care to employer where the CES did not inform of serious criminal convictions).

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Nursing Agency,105 Egan J held that a purported employment contract was nothing more than an arrangement under which the agency found work for a worker within a hospital. He said: Firstly, there is the matter of determining whether the parties intended to enter into a binding legal contract. In this regard there appears to be nothing more than a loose arrangement casting no enforceable obligations upon the other. If the first respondent failed to offer the applicant the opportunity to work at the various nursing establishments she had no legal recourse to force the making of such an offer. Similarly the applicant was under no obligation to accept any offered shift … Whether one takes the test of control, supervision, right to terminate, payment of tax by the employer or enforceability of the arrangements between the applicant and the [agency], the answer is invariably in the [agency’s] favour … the basic proposition regarding the formation of a contract with consideration passing and the right to enforce the arrangement are still appropriate. In my view there was at best an arrangement whereby the [agency] would assist the applicant to obtain work for various nursing homes and hospitals. The applicant was free to accept or reject and, upon carrying out duties, was entitled to look to the nursing establishment for payment in accordance with her award although in some cases she accepted that payment should be channelled through the [agency].

Dismissal of Labour Hire Workers [3.140] The impact of labour hire is felt most acutely when the labour hire worker is “dismissed”. If the worker is an agency casual employee, the agency may simply not offer further work. What is the position of the agency employee? In the Oanh Nguyen case,106 the applicant in a claim for unfair dismissal had been working as an agency casual at the client’s worksite for two and a half years. The client (host business) refused to allow her to continue to work at its business. It was found that her employment was terminated because of her pregnancy in breach of the antidiscrimination legislation. Technically she remained a casual employee of the labour hire agency: “the empty husk of a relationship with [the agency]; that is, the applicant remained ‘on the books’ with [the agency] as a labour hire casual but was not offered any further work”. The agency argued that she had not been dismissed; she was still on their books. The client argued that it could not be subject to an unfair dismissal claim as the agency worker was not their employee. The New South Wales Industrial Relations Commission found that the client was the employer and that a claim for unfair dismissal was available. The Commissioner accepted the views of the South Australian Commission that “[a] casual employee deprived of employment from time-to-time according to a regular roster arrangement may well … reasonably be said to have had his services dispensed with – that constitutes a dismissal”.107 She would likely have qualified also under the Fair Work Act 2009, ss 382 – 384. The Act provides that in relation to national system employees, first the casual must have been employed regularly and on a systematic basis for six months (for small business employers, employment for 12 months) and have a reasonable expectation that the employment would continue on a regular and systematic basis, see [13.70]. Secondly, one or more of 105 106 107

Rimmer v Jennifer Anne Dahl t/as Dahl’s Nursing Agency (unreported, NSW Compensation Court, Egan J, 18 June 1990). Nguyen and A-N-T Contract Packers Pty Ltd t/as A-N-T Personnel and Thiess Services Pty Ltd t/as Thiess Services (2003) 128 IR 241. Nguyen and A-N-T Contract Packers Pty Ltd t/as A-N-T Personnel and Thiess Services Pty Ltd t/as Thiess Services (2003) 128 IR 241. See also Jeanette Melbourne v JC Techforce Pty Ltd [1998] SAIRComm 62; Costello v Allstaff Industrial Personnel (SA) Ltd & Bridgestone TG Australia Pty Ltd [2004] SAIRComm 13; New South Wales Nurses’ Association (on behalf of Yoyet Standen) v Principal Health Care Finance No 3 Pty Ltd t-as Principal Aged Care [2009] NSWIRComm 1014 at [36].

Labour Hire – Liability to Injured Workers

the following must apply to them: they must be covered by a modern award or enterprise agreement in relation to the employment or earnings must be below the high income threshold, [13.60]–[13.80].108

Labour Hire – Liability to Injured Workers Introduction [3.150] Where an agency worker is injured whilst undertaking the client’s work, the issues that arise include the question of criminal liability under the work health and safety legislation (see [6.340]); as where the worker is an employee, liability for workers’ compensation and for common law damages. The contract between the agency and the client may contain a “hold harmless” clause. Under these clauses, the agency agrees to indemnify the client (host business) against the cost of any work health and safety breaches where an agency worker is involved.109

Injury on the client’s (host business) premises [3.160] Where the agency worker is injured at the client’s worksite, both the client and the agency may be liable to pay damages to the injured worker. Liability of the labour hire agency [3.170] Dealing first with the liability of the labour hire agency, where the worker is an agency employee, the agency can be liable both under work health and safety legislation imposing criminal responsibility (see [6.340]) and for damages at common law, see [6.20]. This may be the case even if the agency employee is working on a client’s premises where there may be diminished opportunities to ensure a safe system of work. Mason J in TNT Australia Pty Ltd v Christie said: [I]t would be contrary to principle to enable or even to encourage an employer that operates a labour hire business to treat the normal incidents of the employment relationship as modified simply because its employees are sent off to work for a client. Indeed, the very fact that employees are dispatched to external venues and placed under the de facto management of outsiders will, in some cases, have the practical effect of requiring the employer to adopt additional measures by way of warning or training in order to discharge its continuing common law duty of care to its employees.110

An additional basis upon which the labour hire company employer can be liable is breach of a non-delegable duty of care, [6.50]. The effect of this principle is that a labour hire employer remains liable for a negligent failure to provide a safe system, safe plant and equipment or place of work where it has delegated the task of providing these

108

109 110

For a recent illustration see Stewart v Amcor Excavations Pty Ltd [2014] FWC 1031 (labour hire employee dismissed, lack of available work). See also FP Group Pty Ltd. v Tooheys Pty Ltd [2013] FWCCB 9605. The Victorian Inquiry into Labour Hire recommended that “hold harmless” clauses be prohibited, Inquiry into Labour Hire Employment in Victoria (June 2005), p xxvi. TNT Australia Pty Ltd v. Christie [2003] NSWCA 47; (2003) 65 NSWLR 1 at [67] per Mason P. And see Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority [2005] VSCA 185 at [11]; English v Rogers [2005] NSWCA 327; WV Management Pty Ltd v Norvic Food Processing Pty Ltd [2009] VSC 570 at [76].

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to the client (host business) or some third party and it was the negligence of the client or third party caused injury to the employee.111 In some circumstances both the agency and the client can be liable.112

Client (host business) liability [3.180] Where the injury occurs at the client’s worksite, the client as well as the agency may be liable for failure to take reasonable care for the safety of a worker on site.113 Basten JA in Bostik Australia Pty Ltd v Liddiard114 said that a duty of care may be owed by the client (host business) to a person working at the client’s premises based on: (a) the degree of control or direction exercised of which the third party is entitled to exercise over the worker; [Christie’s case] (b) the condition of plant or premises under the control of the third party, or [occupiers liability] (c) the activities of others on the site, generally for the purposes of the third party’s undertaking or business [duty of co-ordination]. These three categories are examined starting with occupiers’ liability.

Liability as occupier [3.190] The controller of a worksite as occupier has a duty to take reasonable care for the safety of lawful entrants. These include agency employees, agency contractors and other contractors and their employees. So, for example, the occupier would be liable for failure to erect suitable barricades around an onsite pit for which it was responsible where there was a risk that a worker might fall into it.115 The operator of a crane on a worksite has a duty of care to workers in the vicinity to avoid injury to them whatever the status of the worker.116 In Thompson v Woolworths (Qld) Pty Ltd,117 an independent contractor was injured when making deliveries to Woolworths. Although the duty was not that owed to an employee: 111 112

113

114 115 116 117

See Leighton Contractors Pty Ltd v Fox [2009] HCA 35; (2009) 240 CLR 1 at [21]; Pacific Steel Constructions Pty Ltd v Baharona [2009] NSWCA 406 at [128]. Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1 at [21], [48]; Roche Mining Pty Limited v Graeme Wayne Jeffs [2011] NSWCA 184; Galea v Bagtrans Pty Ltd [2010] NSWCA 350; Hennessy v Patrick Stevedores Operations [2014] NSWSC 1716; Andonovski v Park-Tec Engineering Pty Ltd (No 6) [2015] NSWSC 341, contrast W V Management Pty Ltd v Norvic Food Processing Pty Ltd [2009] VSC 570 at [83] (contraction of Q fever not related to state of premises). The responsibility of the party with day to day control may be greater than the labour hire company, see for example, TNT Australia Pty Ltd v Christie [2003] NSWCA 47; (2003) 65 NSWLR 1, TNT (the client) was responsible for 75% of the damages and the labour hire company 25%; Carr v O’Donnell Griffin [2013] NSWSC 840 at [88] apportioning 75% responsibility to company with day to day control of the site and supervision of the injured worker and similarly Victorian Workcover Authority v Centro Property Management (Vic) Pty Ltd [2013] VSC 587 at [132]. As to other types of claims between labour hire agency and client, see Papadopoulos v MC Labour Hire Services Pty Ltd (No 4) [2009] VSC 193; (2009) 24 VR 665. Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1 at [48]. See also Ilvariy Pty Ltd v Sijuk [2011] NSWCA 12 (builder liable to contractor’s employee, a brick cleaner, for unsafe scaffolding on building site); Fleming, The Law of Torts (10th ed, Lawbook Co, 2011), ch 22. Contrast: W V Management Pty Ltd v Norvic Food Processing Pty Ltd [2009] VSC 570 at [83] (contraction of Q fever not related to state of premises). [2009] NSWCA 167 at [139]. Peers v Transfield Constructions Pty Ltd [2009] NSWDC 373. See also Hennessy v Patrick Stevedores Operations Pty Ltd [2014] NSWSC 1716. Placer (Granny Smith) Pty Ltd v Specialised Reline Services Pty Ltd [2010] WASCA 148. See also Samways v WorkCover (Qld) [2010] QSC 127 at [33]-[39]. Thompson v Woolworths (2005) 221 CLR 234 at [27]. See also Gillogly v IAMA Agribusiness Pty Ltd [2002] NSWCA 251.

Labour Hire – Liability to Injured Workers

[Woolworths] established and maintained a system, and its obligation to exercise reasonable care for the safety of people who came onto its premises extended to exercising reasonable care that its system did not expose people who made deliveries to unreasonable risk of physical injury.

A duty of this kind can be owed to labour hire workers who are agency employees and also to those workers who are independent contractors. This is particularly important for contractors under Odco style contracts which we have referred to earlier.

Duty to co-ordinate [3.200] The client (host business) may have a duty to co-ordinate the different activities taking place on the worksite so as to avoid causing injury to workers onsite. In Stevens v Brodribb Sawmilling Co Pty Ltd,118 Brennan J said: An entrepreneur who organizes an activity involving a risk of injury to those engaged in it is under a duty to use reasonable care in organizing the activity to avoid or minimize that risk, and that duty is imposed whether or not the entrepreneur is under a further duty of care to servants employed by him to carry out that activity. The entrepreneur’s duty arises simply because he is creating the risk … and his duty is more limited than the duty owed by an employer to an employee. The duty to use reasonable care in organizing an activity does not import a duty to avoid any risk of injury; it imports a duty to use reasonable care to avoid unnecessary risks of injury and to minimize other risks of injury. It does not import a duty to retain control of working systems if it is reasonable to engage the services of independent contractors who are competent themselves to control their system of work without supervision by the entrepreneur. The circumstances may make it necessary for the entrepreneur to retain and exercise a supervisory power or to prescribe the respective areas of responsibility of independent contractors if confusion about those areas involves a risk of injury. But once the activity has been organized and its operation is in the hands of independent contractors, liability for negligence by them within the area of their responsibility is not borne vicariously by the entrepreneur. If there is no failure to take reasonable care in the employment of independent contractors competent to control their own systems of work, or in not retaining a supervisory power or in leaving undefined the contractors’ respective areas of responsibility, the entrepreneur is not liable for damage caused merely by a negligent failure of an independent contractor to adopt or follow a safe system of work either within his area of responsibility or in an area of shared responsibility.

The duty to co-ordinate is especially important on worksites where there are a multiplicity of trades and workers and where there is considerable capacity for injury unless there is some central co-ordination of activities. Safety in the workplace, particularly construction sites, can be complicated by arrangements involving separate ownership of equipment,119 and a hierarchy of specialist trades, subcontractors and their employees, labour hire workers and managers of the operation – all of whom may have work health and safety obligations. But these obligations do not necessarily determine common law duties of care.120 A principal contractor may be several steps removed from workers who actually carry out the work. In Leighton Contractors Pty 118

119 120

Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at [2]. Mason J also commented at [41]: “Although the obligation to provide a safe system of work has been regarded as one attaching to an employer, there is no reason why it should be so confined. If an entrepreneur engages independent contractors to do work which might as readily be done by employees in circumstances where there is a risk to them of injury arising from the nature of the work and where there is a need for him to give directions as to when and where the work is to be done and to co-ordinate the various activities, he has an obligation to prescribe a safe system of work.” As to duties under the Work Health and Safety legislation, see [6.340], [6.370] and [6.390]. Ralston v Bell [2010] NSWSC 245 (negligently driven vehicle, driver deemed to be agent of owner under motor vehicle legislation). Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1 at [49].

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Ltd v Fox,121 the principal contractor subcontracted with Downview to provide concreting work. It, in turn, subcontracted concrete pumping to contractors who in turn engaged the plaintiff, Fox, a labourer and independent contractor, to assist with the concrete pour. Fox was injured due to the negligence of another contractor’s employee (Stewart) whilst cleaning out concreting equipment. In Leighton it was argued that the principal contractor, Leighton, had a duty to provide occupational health and training to Fox or at least ensure that he had undertaken that training. This was rejected by the High Court: If Leighton owed a duty to Mr Fox and Mr Stewart to provide induction training to them in the safe method of line cleaning, it owed a duty to provide training in the safe method of carrying on every trade and conducting every specialised activity carried out on the site to every worker on the site. There is no reason in principle to impose a duty having this scope on a principal contractor. The latter is unlikely to possess detailed knowledge of safe work methods across the spectrum of trades involved in construction work. And a duty to provide training in the safe method of carrying out the contractor’s specialised task is inconsistent with maintenance of the distinction that the common law draws between the obligations of employers to their employees and of principals to independent contractors.122

It is clear that the principal contractor has a duty of co-ordination but can a duty be owed to workers onsite beyond this duty of co-ordination? Prior to the decision of the High Court in Leighton Contractors Pty Ltd v Fox123 there was a stream of authority building on Stevens v Brodribb,124 which suggested that the duty owed to contractors or their employees under the co-ordination principle might, in some circumstances, be equivalent to that owed by an employer to its employee. The decision in Leighton Contractors makes it clear that there are limits to this approach, the High Court saying: “The relationship between principal and independent contractor is not one which, of itself, gives rise to a common law duty of care, much less to the special duty resting on employers to ensure that care is taken.”125 So there is no duty on the principal contractor to ensure that subcontractors have established safe work practices for their employees.126 The basic principle remains … that the principal has no duty to retain control of the system of work if it is reasonable to engage the services of an independent contractor who is competent to control the system of work without supervision, and the activity has been organised and has been placed in the hands of the independent contractor.127 Had [the works contractor] failed to engage a competent contractor, it may not have avoided liability for the negligent failure of the contractor to take reasonable care to adopt a safe system of work. However, provided that the contractor was competent, and provided that the activity of concrete pumping was placed in the contractor’s hands [the 121 122 123 124 125

126

127

(2009) 240 CLR 1. Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1 at [52]. There was a similar outcome in relation to Downview. Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1. (1986) 160 CLR 16. Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1 at [48]. The judgment of Mason J in Brodribb was also (see [3.200])) cited without additional comment at [62]. The duty does not extend to ensure safe means of access to the worksite where the defendant has no right to control that access: Miljus v CSR Ltd (No 4) [2010] NSWSC 1325. In relation to work health and safety legislation, see uniform Work Health and Safety Act 2011, s 20(2). No duty to employees of subcontractor: Unilever Australia Limited v Pahi; Swire Cold Storage Pty Limited v Pahi [2010] NSWCA 149; Pacific Steel Constructions Pty Ltd v Baharona [2009] NSWCA 406. Pacific Steel Constructions Pty Ltd v Baharona [2009] NSWCA 406 at [87].

Labour Hire – Liability to Injured Workers

contractor] was not subject to an ongoing general law obligation with respect to the safety of the work methods employed by the contractor or those with whom the contractor subcontracted.128

The High Court did not have the occasion to examine whether a general duty of care could be imposed on a labour hire client (host business) where the client has effectively the day to day supervision and control over the labour hire worker. This is discussed in [3.210].

Day to day control [3.210] In TNT v Christie129 both the agency employer130 and the client (TNT as host business) were held to have a duty of care to the labour hire worker. The client (TNT) had day to day control over the agency employee so as give rise to a relationship that was regarded as equivalent to an employer–employee relationship.131 This could give rise to a non-delegable duty so as to make TNT liable for the negligence of a company in relation to the servicing and maintenance of equipment.132 Where the client exercises detailed control and supervision133 over onsite workers, a duty of care beyond co-ordination may be owed, particularly where non skilled labour is concerned. Conversely, no general duty of care will be owed to a competent contractor and/or its employees undertaking the subcontracted work134 or where the labour hire company exercises detailed supervision and control over the agency employee in relation to the work.135 The suggestion that the client (host business) is liable based on a temporary transfer of employment136 is at odds with decisions finding both the labour hire 128 129 130 131

132

133

134

135

136

Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1 at [59]. TNT v Christie (2003) 65 NSWLR 1. The agency had a duty to ensure that care was taken, a non-delegable duty, see discussion at [6.50]. TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1. Note especially the broad statement of principle by Mason J at [41]. The TNT case was applied in Harrington v Almar Industries Pty Ltd [2006] ACTSC 51, approved in Victoria WorkCover Authority v Carrier Air Conditioning Pty Ltd [2006] VSCA 63 at [6]. See also BP Australia Pty Ltd v Tarren [2006] NSWCA 305; Darke v El Debal [2006] NSWCA 86; (2006) 153 IR 73; P & M Quality Smallgoods Pty Ltd v Leap Seng [2013] NSWCA 167; Wright v Optus Administration Pty LTd [2015] NSWSC 160. Contrast TNT Australia Pty Ltd v Wills [2004] NSWCA 455 at [26], [32] (worker contracts through his company with a client, not part of the client’s establishment and not subject to client’s direction or control); Bostik Australia Pty Ltd v Liddiard [2009] NSWCA 167; Hennessy v Patrick Stevedores Operations [2014] NSWSC 1716 (not apply to contracted security services) but does apply where system of work instituted by shopping centre, Victorian Workcover Authority v Centro Property Management (Vic) Pty Ltd [2013] VSC 587. TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1, Mason P at [61]; Foster AJA at [178]-[184], cf the more limited view of Davis AJA at [150],[168]-[172]. TNT was entitled to a contractual indemnity from Crown who supplied the equipment. Not just telling a skilled and competent employee of a contractor what to do and leaving them to do the job as in Pacific Steel Constructions Pty Ltd v Baharona [2009] NSWCA 406, but control as to worksite safety, subject to directions of shift foreman and need to prove competency before commencement of work may suffice: Roche Mining Pty Limited v Graeme Wayne Jeffs [2011] NSWCA 184 (agency employee falls 2.5 metres from dumpster owned by mine operator, failure to provide safe access to vehicle, mine operator had by the regulations full charge and control of all personnel working at the mine). Pacific Steel Constructions Pty Ltd v Baharona [2009] NSWCA 406 at [47] (fall off a ladder); Elphick v Westfield Shopping Centre Management Co Pty Ltd [2010] NSWDC 152 (cleaning contractor set up system of work to unload boxes from an unstable cage owned by Westfield. The contractor had a full time supervisor at the site, Westfield not liable for injury to contractor’s employee). See also Andonovski v Park-Tec Engineering Pty Ltd (No 6) [2015] NSWSC 341 (subsidiary company (not the employer) exercises control and owes a duty of care). Unilever Australia Limited v Pahi [2010] NSWCA 149 (agency had a full time supervisor at the worksite who supervised the work undertaken by the agency employees). See also Victorian WorkCover Authority v Direxa Engineering Australia Pty Ltd (No 1) [2013] VCC 1039. Temporary transfer was referred to but not fully explored in Conray v Scotts RefrigeratEd Freightways Pty Ltd [2008] NSWCA 60 (application for extension of time) but applied in Gillogly v

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company and the client (host business) liable;137 a temporary transfer shifts the liability of the labour hire employer to the client (host business) so that only the host business is liable.138 The sounder basis for liability being imposed on the client (in addition to the labour hire company), is that the client has a duty to retain control over the system of work where it has day to day control over the work performed and where the worker or contractor is not “competent to control the system of work without supervision”.139 In the context of liability for injuries to labour hire workers, a principle which imposes more onerous responsibility on the client (host business) makes good sense when the entity is able to control safety “on the ground”. The client (host business) may be in a position as good as or better than the labour hire agency to take steps to reduce the risk of injury to the worker. The approach which imposes responsibility for workers’ safety on both the client (host business) and the employer is consistent with liability under work health and safety legislation, see [6.370]. The liability of a labour hire agency for the safety of its workers was affirmed by the Industrial Relations Commission of New South Wales in a series of cases involving Drake Personnel Ltd.140 These involved criminal prosecutions under the earlier Occupational Health and Safety Act 1983 (NSW). There the agency had visited the factory and checked the safe operation of the machine to be used by the worker and continued to visit the factory every two weeks. The court held that the agency was liable despite not being in control of the workplace in which the work was being carried out: these circumstances do not obviate or diminish the obligation of the employer under s 15(1) of the Occupational Health & Safety Act to “ensure the health, safety and welfare at work of all [the] employer’s employees.” Indeed, in our view, an employer who sends its employees into another workplace over which they exercise limited control is, for that reason, under a particular positive obligation to ensure that those premises, or the work done, do not present a threat to the health, safety or welfare of those employees.141

Both the client and the agency can be liable: A labour hire company cannot escape liability merely because the client to whom an employee is hired out is also under a duty to ensure that persons working at their workplace are not exposed to risks to their health and safety or because of some alleged implied obligation to inform the labour hire company of the work to be performed.142

137 138

139

140

141 142

IAMA Agribusines Pty Ltd [2002] NSWCA 251 at [79] (temporary transfer of employee from his own company as employer to client) but rejected by Mason P (at [66]) and Foster AJA(at [178]) in TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1 at [178]. See also Deutz v Skilled Engineering Ltd [2001] VSC 194 at [115]. See Mason P (at [66]) and Foster AJA (at [178]) rejecting temporary transfer in TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1. Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd (1986) 160 CLR 626 at 641 per Gibbs CJ. Does this amount to effectively finding that there are two employers? Does this conflict with the rejection of joint employment rejected in Day v The Ocean Beach Hotel Shellharbour Pty Ltd [2013] NSWCA 250 special leave to appeal refused [2014] HCASL 77 (2 April 2014). And see discussion at [3.250]. Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1 at [59]. Mason P in TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1 at [43] said that the duty was based on the duty of co-ordination under Stevens v Brodribbb Sawmilling Co Pty Ltd (1986) 160 CLR 16. Drake Personnel Ltd (trading as Drake Industrial) v WorkCover Authority (Inspector Ch’ng) (1999) 90 IR 431. See also WorkCover Authority of NSW (Inspector Ankucic) v Drake Personnel Ltd (t/as Drake Industrial) [2000] NSWIRComm 1134; Swift Placements Pty Ltd v WorkCover Authority of New South Wales (Louise May) [2000] NSWIRComm 9; Inspector Atkins v Network Production Personnel Pty Ltd [2004] NSWIRComm 71. Drake Personnel Ltd (trading as Drake Industrial) v WorkCover Authority (Inspector Ch’ng) (1999) 90 IR 431 at 455. Drake Personnel Ltd (trading as Drake Industrial) v WorkCover Authority (Inspector Ch’ng) (1999)

Liability for Agency Worker’s Conduct

Under the current uniform Work Health and Safety Act 2011 persons conducting a business or undertaking have a duty to ensure the health and safety of workers so far as is reasonable practicable. “Workers” are defined to include labour hire workers143 so that for purposes of work, health and safety and criminal liability for breaches of that legislation, both a labour hire agency and a client using agency workers are responsible for safety of these workers. There is a duty to consult, co-ordinate activities and co-operate to ensure worker safety, see Chapter 6.

Liability for Agency Worker’s Conduct Introduction [3.220] The agency employee may cause injury or damage either to the client or to a third party whilst working for a client. Whilst an employer is vicariously liable for the tortious wrongdoing of an employee within the course of employment (see [6.60]), there are additional complications for agency employees and host businesses (agency clients). The key principles are: • if the agency employee is guilty of a tort and causes injury to the client or to someone else within the course of employment, then the agency as employer is vicariously liable. • if the client has assumed effective control over all facets of the employee’s work so that the agency employee becomes the temporary employee of the client (see [3.60]), then the client instead of the agency employer can be liable for the tortious conduct of an agency employee if injury is caused to a third party.

Agency worker causes third party injury or damage [3.230] Where the worker is an independent contractor, there is no general vicarious liability for the independent contractor’s negligence on the part of the agency or the client (host business).144 In this section the concern is with liability for employees’ conduct. The first step is to determine whether it is an employment relationship and who is the employer (see Chapter 2). The employer will be liable vicariously for the torts of the employee. We have earlier mentioned the issues that may arise when an agency hires out equipment together with an operator (see [3.60]), in particular the adoption of the concepts of general and temporary employers. Where a client has become a temporary employer (pro hac vice – on this occasion), this could result in the client (host business) becoming vicariously liable for the conduct of the agency employee.145 There is the argument that the doctrine of temporary transfer of employment is one that should be relevant only to vicarious liability and not applicable in a broader

143

144

145

90 IR 431 at 456. See also Oaten v Select Australasia Pty Ltd [2006] SAIRC 37; Inspector Christensen v AbiGroup Contractors Pty Ltd [2013] NSWIRComm 111; Inspector Cooper v Schwarz (No 2) [2013] NSWIRComm 112; Inspector Christensen v MVM Rail Pty Ltd [2013] NSWIRComm 89. See the Model Work Health and Safety Act 2011, s 7; WA: Occupational Safety & Health Act 1984, s 23F(4) (labour hire workers deemed to be employees of both agency and the client). Cf Vic Occupational Health & Safety Act 2004, s 23(1) (duties to persons other than employees) and see [6.390]. But an employer can be liable for injuries to its employees caused by the conduct of an independent contractor where it has a non-delegable duty or where the contractor is engaged on hazardous or dangerous activities on behalf of the client; see Kondis v State Transport Authority (1984) 154 CLR 672; Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520. It also has implications when considering an employer’s duty to statutorily indemnify employees against liability arising in the course of employment (see [5.460]).

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context.146 The Mersey case (see [3.60] reflected the dominance of the control test in deciding employment status. It responded to the issue of divided control by finding that in some circumstances there could be a temporary transfer of employment where effective control was vested in a person who was not the employer. In the Australian context, control is only one of the relevant factors in determining employment. Moreover the control test has been adapted to deal with the problems of divided control (see [2.220]) without the need to rely on the concept of temporary employment. However, the current state of authority is that if there has been a temporary transfer of employment, the client (host business) will be vicariously liable for the torts of the agency employee. The temporary employment test reflects the wider reach of vicarious liability in circumstances where, although a person is not formally an employee, there has been an exercise of control sufficient to impose liability on the person exercising control.147

Agency worker causes injury or damage to client (host business) [3.240] Where the agency employee causes injury or damage to the client similar issues arise. The agency as employer is vicariously liable for an employee’s torts committed within the course of employment. But if the agency employee has become the temporary employee of the client (host business), then the agency as general employer would not be vicariously liable to the client for the worker’s negligence. But as indicated earlier, courts have been very reluctant to find a temporary transfer of employment (see [3.60]).

Multiple Employers – Joint Employment? [3.250] It is in the area of labour hire that it has been mooted that joint employment exists with both the agency and the client liable. The previously accepted position at common law was that the temporary employer principle does not give rise to joint liability on the part of both the general employer and the temporary employer.148 There is English authority suggesting that both the general and the temporary employer could be vicariously liable for an agency employee’s negligence. In Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd,149 the head contractor (the first defendant) had a contract to install factory air conditioning. The ducting work was subcontracted to another contractor (the second defendant) and a third contractor provided fitters and fitters’ mates on a labour only basis. The negligent worker was employed by the third defendant and worked with his supervisor under the direction of a person engaged by the second defendant subcontractor. A young fitter foolishly crawled through one of the ducts damaging the fire sprinkler system and causing extensive water damage. Who was vicariously liable? The subcontractor whose delegate exercised control or the direct employer of the workers or both? The Court of Appeal accepted that there might be sufficient dual control to give rise to vicarious liability by both the second and third 146

147 148 149

Despite the contrary views of the United Kingdom Court of Appeal in Interlink Express Parcels Ltd v Night Trunkers Ltd [2001] EWCA 360 at [70]. A contrary view was also taken in Gillogly v IAMA Agribusiness Pty Ltd [2002] NSWCA 251 and Swift Placements Pty Ltd v WorkCover Authority of New South Wales (Louise May) [2000] NSWIRComm 9 at [70]-[72] (assuming that the principle applied in an OH&S prosecution). Cf Hayman v Kkut Pty Ltd [2002] WADC 107. Note the different principleapplied in TNT v Christie (2003) 65 NSWLR 1 (discussed at [3.210]). Johnson v Lindsay & Co [1891] AC 371 at 377 per Lord Herschell. Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd (1986) 160 CLR 626 at 641 per Gibbs CJ. Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2006] ICR 327 (CA); The Prison Officers Association v Gough & Cox [2009] UKEAT 0405/09/1712; Biffa Waste Services Ltd v Maschinenfabrik Ernest Hese GMBH & ors [2008] EWCA Civ 1257 and see critical comment, Brodie, “The Enterprise and the Borrowed Worker” (2006) 35(1) Ind LJ 87.

Multiple Employers – Joint Employment?

defendants. May LJ held that there could be dual vicarious liability where more than one person had sufficient control. May LJ said [at 49] (citations omitted): If, on the facts of a particular case, the core question is who was entitled, and in theory obliged, to control the employee’s relevant negligent act so as to prevent it, there will be some cases in which the sensible answer would be each of two “employers”. The present is such a case.

Rix LJ took a broader view:150 [I]f consideration is given to the function and purposes of the doctrine of vicarious liability, then the possibility of dual responsibility provides a coherent solution to the problem of the borrowed employee. Both employers are using the employee for the purposes of their business. Both have a general responsibility to select their personnel with care and to encourage and control the careful execution of their employees’ duties, and both fall within the practical policy of the law which looks in general to the employer to organise his affairs, in such a way as to make it fair, just and convenient for him to bear the risk of his employees’ negligence. I am here using the expression “employee” in an extended sense used in the authorities relating to the borrowed employee.

The United Kingdom Supreme Court has followed Rix LJ’s approach in recent child abuse cases finding that where the relationship between the religious institution and the cleric/institution was “akin to that between an employer and an employee”, the institution (or Bishop) could be jointly liable for the cleric’s wrongful conduct.151 Joint employment may provide significant advantages particularly in the labour hire situation where one party has day-to-day control and the other party authority in relation to such matters as hire and fire, discipline and payment with both the agency and the client responsible for safety etc. It might also be useful in protecting worker entitlements etc.152 The concept of joint employment has been utilised in the United States for just this purpose but it has been rejected by recent Australian cases.153 In Australia, it is not unusual to have divided responsibilities, especially where a worker is deemed an employee for particular statutory purposes such as workers’ compensation but operates as an independent contractor for other purposes. The advantage of joint employment is that a worker gains greater protection, for example, in relation to unpaid entitlements154 and in unfair dismissal cases. But joint employment may also cause difficulties with the division of responsibility in such matters as wages, taxation deductions, payroll tax, insurance, superannuation contributions, dispute resolution, discrimination, occupational health and safety, copyright and intellectual property.155 It is, however, not altogether exceptional that someone other than the employer pays 150 151 152

153

154 155

Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2006] ICR 327 (CA) at [77] per Rix LJ. See also Colour Quest Ltd v Total Downstream (UK) Ltd Plc [2009] EWHC 540. The Catholic Child Welfare Society v Various Claimants [2012] UKSC 56; [2013] 2 AC 1. Rejected for South Australia, Stevens, Report of the Review of the South Australian Industrial Relations System (Workplace Services, Adelaide, October 2002) and rejected by ABCC Sham Contracting Inauiry Report (2011), p 140. Discussed in NSW Government, The Standing Committee on Employment, Workplace Relations and Workforce Participation Inquiry into Independent Contracting and Labour Hire Arrangements (11 March 2005) [185]-[188] but previously supported by the ACTU see Parliament of Australia, House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), [4.44]. FP Group Pty Ltd v Tooheys Pty Ltd [2013] FWCFB 9605 at [40]-[44]; Day v The Ocean Beach Hotel Shellharbour Pty Ltd [2013] NSWCA 250 at [33] per Leeming JA, Meagher and Emmet JJA agreeing, special leave to appeal refused [2014] HCASL 77 (2 April 2014. See also Thai, “Unfair Dismissal Protection for Labour Hire Workers? Implementing the Doctrine of Joint Employment in Australia” (2012) 25 AJIL 152. Parliament of Australia, House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), [4.39]. Parliament of Australia, House of Representatives Standing Committee on Employment, Workplace

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wages, deducts tax, makes superannuation contributions156 or is responsible under workers compensation legislation.157 There may, however, be difficulties with conflicting entitlements under awards and industrial instruments.158 In relation to the employee, the perceived difficulties concern implied duties of good faith and loyalty and conflicting instructions from the dual employers.159 These difficulties could quite easily be resolved by agreement between the parties in much the same way as normally occurs in labour hire situations. Joint responsibility is not a rarity; it is common in cases involving work health and safety and liability to an injured worker on a client’s worksite (see [3.160]–[3.210]). Dual employment may resolve some of the difficulties encountered particularly in relation to work health and safety, unfair dismissal and for the protection of worker entitlements.

Conclusion [3.260] The review of labour hire arrangements suggests that those employed through labour hire companies suffer significant disadvantages on two fronts. Those that are agency employees are generally casual employees and suffer all the risks that casual employment brings (see [2.90]). The level of protection that had been gained through industrial instruments for the most vulnerable of these employees, short term casuals, was curtailed under Work Choices legislation and has not improved significantly under the Fair Work Act 2009 (Cth). Independent contractors under Odco style contracts with labour hire agencies are, in the main, significantly disadvantaged in comparison with employees. Although independent contractors value the taxation benefits, flexibility, variety and choice that independent contractor status brings, the evidence is that, in the main, the disadvantages outweigh the benefits (see [2.100]–[2.110]). Contractors who are largely dependent upon a single business for their work have been regarded as “dependent contractors”. Rarely will dependent contractors have equal bargaining power and they are often contracting on a take it or leave it basis. Rather than giving these contractors status equivalent to employees,160 the Independent Contractors Act 2006 (Cth) provides an unfair contracts jurisdiction (discussed at [4.300]). The European Union, Directive on Working Conditions for Temporary Agency Workers (2002),161 establishes a nondiscrimination principle that requires temporary agency workers who have worked for

156 157 158 159 160 161

Relations and Workforce Participation, Making it Work (Aug 2005), [4.40]. See as illustrations of the difficulties that can occur with related companies, Wales & Wales v Nycon Protective Services [2005] NSWIRComm 1082; McConnell-Imbriotis & Eurobanks Pty Ltd [2004] NSWIRComm 1035. Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 at [41]. See for example, WA: Occupational Safety & Health Act 1984, s 23F(4) (labour hire workers deemed to be employees of both agency and the client). Costello v Allstaff Industrial Personnel (SA) Pty Ltd & Bridgestone TG Australia Pty Ltd [2004] SAIRComm 13 at [135]. Parliament of Australia, House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making it Work (Aug 2005), [4.41]. Compare Stewart, “Redefining Employment? Meeting the Challenge of Contract and Agency Labour” (2002) 15 AJLL 1 at 39 (recommending that contractors be deemed employees). The Temporary Agency Work Directive (2008)/104/EC) It initially had a qualifying period of six weeks but permitted extension with the agreement of social partners. In the United Kingdom the qualifying period has been extended to 12 weeks. The directive has been incorporated in United Kingdom legislation via the Agency Workers Regulations 2010 (amended in 2011) and see European Commission Report from the Commission to the European Parliament, the Council, The European Economic and Social Committee and Committee of Regions on the application of Directive 2008/104/EC on temporary agency work.

Conclusion

a qualifying period with the same user to be deemed agency employees and given the same rights and entitlements as permanent employees.162 In Australia in the past, unions had mixed success in limiting labour hire workers on worksites and achieving equal pay for onsite workers (see [3.30]). The federal Work Choices legislation prohibited awards and agreements from dealing with independent contracts and labour hire arrangements undoing much of these advances in protection. The position has not changed under the Fair Work Act 2009 (Cth). A person who is an independent contractor under labour hire arrangements is left to resort to unfair contracts provisions, in particular the Independent Contractors Act 2006 (Cth) (discussed in [4.300]). This is out of step with overseas developments, such as those in the European Union.

162

In the United Kingdom, see https://www.gov.uk/agency-workers-your-rights/your-rights-as-atemporary-agency-worker (guidance only) and see Briggs, Burchell, Millmore, “The Changing World of the Temporary Worker: The Potential HR Impact of Legislation” (2006) 35(2) Personnel Review 191; Nienhuser and Matiaske, “Effect of the “Principle of Non-discrimination” on Temporary Agency Work: Compensation and Working Conditions of Temporary Agency Workers in 15 European Countries” (2006) 37(1) Industrial Relations Journal 64; Hoppa, Mintenb and Toporovac, “Signaling, Selection and Transition: Empirical Evidence on Stepping-stones and Vicious Cycles in Temporary Agency Work” (2015) The International Journal of Human Resource Management 1.

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Formation of a Contract of Employment “It is an attribute of a free society, as we know it, that it is generally left to parties themselves to make bargains. It is therefore left to them sometimes to fail to make bargains or to fail to agree on particular terms. Well meaning, paternalistic interference by courts in the market place, unless authorised by statute or clear authority, transfers to the courts the economic decisions which our law, properly in my view, normally reserves to parties themselves.” [Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 at 133 per Kirby J.]

[4.10] [4.10] [4.20] [4.30] [4.40] [4.50] [4.60] [4.100] [4.130] [4.140] [4.190] [4.250] [4.280] [4.310] [4.460] [4.460] [4.470] [4.500] [4.570]

Introduction ....................................................................................................... 97 The employment contract ............................................................................. 97 Restricted employment ................................................................................. 99 Commencement ............................................................................................. 99 Prerequisites for a Valid Contract ................................................................... 100 Intention to enter into a legal relationship ............................................... 100 Offer and acceptance ................................................................................. 102 Acceptance .................................................................................................. 105 Valuable consideration ............................................................................... 107 Contractual capacity .................................................................................. 109 Absence of vitiating factors ........................................................................ 112 Duress, undue influence ............................................................................. 118 Unconscionable contracts .......................................................................... 121 Unlawful contracts ..................................................................................... 126 Terms of the Contract of Employment ........................................................... 141 Introduction ................................................................................................ 141 Express contractual terms .......................................................................... 142 Implied contractual terms .......................................................................... 149 Relevance of post contractual conduct ...................................................... 158

Introduction The employment contract [4.10] The relationship of employer and employee exists when, as between two persons, a contract of service (an employment contract) has been entered into by each of them with each other. A contract of employment is, like every other contract, a legally binding promise to do (or not to do) something in the future. Subject to anti-discrimination law1 (see Chapter 15) and any obligations imposed by statute,2

1

Care must be taken not to breach anti-discrimination or privacy law in online applications which require personal information to be provided or uploaded, see Willmott v Woolworths Ltd [2014] QCAT 601.

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award or industrial instrument, the employer is “free to pick and choose whomever they wish to employ”, for good or bad reasons. Where employment agencies are involved, in some States they may be required to be registered and there may be restrictions on fees that can be charged to employees.3 The obligations are determined at the commencement of the contract. As a consequence, contract law is often thought to be an ill-fitting legal mantle to govern a dynamic and ongoing relationship between an employer and employee.4 The relationship may span decades and involve changes in work responsibilities, locations and competencies. The employee may be full time, part time or casual; there may be a series of contracts rather than a single contract.5 Contract law may be a suitable vehicle for one-off impersonal transactions such as buying goods and services, but contract law is not easily applied to long term co-operative relationships such as employment relationships.6 Contract law is unsuited to employment relationships also because, unlike commercial contracts where the parties are more likely to be contracting on equal terms allowing a free market to operate, the employee is almost always bargaining on an unequal footing and employment is offered on a “take it or leave it” basis;7 senior executives may be the exception. The nature of the relationship itself depends upon the right to control the employee and a duty on the part of the employee to obey lawful and reasonable orders.8 Despite these difficulties, the individual contract of employment9 remains central to the regulation of the employment relationship even in an environment of modern awards, national employment standards, industrial instruments and agreements arising from collective bargaining processes.10 The relationship between a contract of employment and industrial instruments, awards and agreements is discussed in Chapter 12.

2

3 4

5

6

7

8

9

Note “adverse action” may be taken against a prospective employee under the Fair Work Act 2009, ss 340, 342(1) (item 2 in Table) by refusing to employ or discriminating in relation to terms and conditions of employment, discussed at [15.260]. NSW: Fair Trading Act 1987, s 49; Qld Private Employment Agents Act 2005 (Qld); WA: Employment Agents Act 1976. Note also Employment Agents Registration Act 1993 (SA). There is a vast amount of literature on the topic, for example, Brooks, “Myths and Muddle – An Examination of Contracts for the Performance of Work” (1987) 11 UNSWLJ 48; Freedland, “The Role of the Contract of Employment in Modern Labour Law” in Betten (ed), The Employment Contract in Transforming Labour Relations (Kluwer Law International, 1995), pp 17-28, Naughton, “The Industrial Relations Court and the Contract of Employment” (1998) 20(2) Aust Bar Rev 22; Fudge, “New Wine into Old Bottles?: Updating Legal Forms to Reflect Changing Employment Norms” (1999) 33 UBCL Rev 129, Howe and Mitchell, “The Evolution of the Contract of Employment in Australia: A Discussion” (1999) 12 AJLL 9. There might be, for example, a series of contracts; in relation to casuals see [2.90]. It may not always be clear whether there is a new contract, a variation of an existing contract or whether a later agreement is intended to coexist with an earlier agreement; see Quinn v Jack Shea [1992] 1 VR 567; Concut Pty Ltd v Worrell (2000) 75 ALJR 312, Encyclopaedia Britannica Australia Ltd v Campbell [2009] NSWCA 286; Cohen v iSOFT Group Pty Ltd [2013] FCAFC 49; (2013) 234 IR 386 and see [9.340]. Law Commission of Canada, Contracts in Close Personal Relationships (Submission by A Roy, 25 June 2001), pp 6-7. See also Brodie, “How Relational Is the Employment Contract” (2011) 40(3) Ind LJ 232. 40% of employees report that they were able to negotiate terms of the employment on commencement, Wanrooy, Wright, Buchanan et al, Australia at Work: In a Changing World (Workplace Research Centre, University of Sydney, Nov 2009), p iii. Naughton, “The Industrial Relations Court and the Contract of Employment” (1998) 17 ABR 22; see also Fudge, “New Wine into Old Bottles? Updating Legal Forms to Reflect Changing Employment Norms” (1999) 33 UBCL Rev 129. The relationship moved from one based on status to one of contract (see Kahn-Freund, “Blackstone’s Neglected Child: The Contract of Employment” (1977) 93 LQR 508) over an extended period of time; Merritt, “The Historical Role of Law in the Regulation of Employment – Abstentionist or

Introduction

Restricted employment [4.20] Legislation may restrict particular types of employment. The Migration Act 1958 (Cth) makes it illegal for an employer to allow an illegal worker (unlawful non-citizen) to undertake work or to employ a person on a visa to work in breach of their visa conditions.11 Special restrictions apply to the employment of children12 and there are special legislative requirements for employees working with children; usually a police clearance is required. There is some legislative variability particularly as regards the extent of the employer’s obligations and the nature of the background checks required.13 The New South Wales Act has a direct statutory prohibition against employing (or continuing to employ) a person in child-related work where that person does not have a “working with children” check clearance.14 These statutory prohibitions are especially important in considering whether statutory breach renders any contract of employment unenforceable (see below [4.320]). There is also a large amount of legislation requiring licensing or registration of employees in particular industries.15

Commencement [4.30] An employment contract can come into existence before the establishment of an employer–employee relationship and before the commencement of work.16 An agreement to start employment at a future date gives the contracting parties rights at the time of the agreement. Consequently, an employer who withdraws an accepted offer of employment or an employee who resigns prior to commencement can be liable for breach of contract.17 Similarly, a contract can give rise to rights and obligations which continue after the employment relationship has ended. An agreement not to work for a competitor for a specific period in a limited geographic region may be enforceable after the employment has ended, see [5.610].

10

11 12

13

14 15 16

17

Interventionist?” (1982) 1 Australian J of Law & Soc 56; Howe and Mitchell, “The Evolution of the Contract of Employment in Australia: A Discussion” (1999) 12 AJLL 113. As to whether an employment relationship can operate independently of the contract of employment, see [8.30]. Indeed collective action has been seen as “a countervailing force to counteract the inequality of bargaining power which is inherent and must be inherent in the employment relationship”: Kahn-Freund, Labour and the Law (3rd ed, Stevens & Stevens, 1983), p 8. See also Campling and Gollan, Bargained Out: Negotiating without Unions in Australia (Federation Press, 1999); Deery and Mitchell, Employment Relations, Individualisation and Union Exclusion: An International Study (Federation Press, Sydney, 2000). But see O’Sullivan et al, “Is Individual Employment Law Displacing the Role of Trade Unions?” (2015) 44(2) Ind LJ 222. See Migration Act 1958 (Cth) ss 235, 245AA – 245AP and discussion at [4.320]. State child labour laws have little effect on National system employers under the Fair Work Act 2009 (Cth), s 27(2)(e), Fair Work Regulations 2009, reg 1.14, (times when children can be employed). See NSW: Industrial Relations (Child Employment) Act 2006; Children and Young Persons (Care and Protection) Act 1998; Marine Safety Act 1998, s 140; Child Employment Principles Case (2007) 163 IR 41; Qld: Child Employment Act 2006; SA: Education Act 1972, s 78; Tas: Education Act 1994, s 82; Vic: Child Employment Act 2003; WA: Children and Community Services Act 2004, Pt 7; School Education Act 1999, s 29 Crimes (Child Sex Offenders) Act 2005 (ACT); Child Protection (Working with Children) Act 2012 (NSW); Child Protection (Offender Reporting and Registration) Act (NT); Working with Children (Risk Management and Screening) Act 2000 (Qld); Child Sex Offenders Registration Act 2006 (SA); Child Care Act 2001 (Tas), s 15B; Working with Children Act 2005 (Vic). Child Protection (Working with Children) Act 2012 (NSW), s 9 See, for example, the Legal Profession Uniform Law (NSW) s 121. See Gill v Cape Contracts Ltd [1985] IRLR 499 discussed below [4.120]. Note also the usage of “forward contracts”, and the issue whether duties can be owed to more than one employer, for example during garden leave and under a forward contract, see Tullett Prebon plc v BGC Brokers LP [2011] EWCA Civ 131; [2011] IRLR 420. Turner v Australasian Coal and Shale Employees Federation (1984) 6 FCR 177; Network Ten Pty Ltd v Seven Network (Operations) Ltd [2014] NSWSC 692.

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The law of contract differs markedly from other branches of law. Most laws declare certain rights or obligations and these are made enforceable by the courts. In contract law the enforceable rights or obligations are made by the parties to the contract – and these may be of infinite variety. All the law does is make the bargain enforceable and lay down principles which govern its valid formation and limit any harmful operation of the bargain. The general contract laws are stated very briefly so as to provide the appropriate background for a consideration of those aspects of the law which are of particular relevance to contracts of employment.

Prerequisites for a Valid Contract [4.40] Although the contract of employment may be entered into with the minimum of formality,18 the law holds that before any simple contract is enforceable it is subject to the following requirements: (1) There must be an “intention” between the parties to create a legal relationship, the terms of which are enforceable. (2) There must be an offer by one party and its acceptance by the other. (3) The contract must be supported by valuable consideration. (4) The parties must be legally capable of making a contract. (5) There must be an absence of vitiating factors. (6) The contract must not be rendered ineffective by reason of conduct which is illegal or contrary to public policy. Each of these elements is examined in turn.

Intention to enter into a legal relationship [4.50] The first element essential to the existence of any contract is the requirement that the parties have a mutual intention to create a legally enforceable bargain. It is not uncommon for promises to be made – in particular for the performance of work – for social, religious, political, or other like reasons. Agreements made for such reasons might lack an essential element for their enforceability, that is, they are not entered into with a view to creating a bargain which is intended to create mutual legal obligations and, thus, be enforceable by the courts.19 But there are no prescribed rules (or presumptions) which define classes of case where there will be no intention to create a legal relationship.20 It is to be viewed objectively having regard to the words and conduct of the parties. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened … It is not a search for the uncommunicated subjective motives or intentions of the parties.21

In the employment context, if the putative employee is subject to control relating to the work, wages and leave entitlements are paid, superannuation contributions are made, 18 19 20 21

See “Offer and Acceptance” at [4.60]. In relation to industrial instruments, particularly collective agreements, and the question whether there is an intention to create a legal relationship, see [12.340]-[12.390]. Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 at [25] per Gaudron, McHugh, Hayne and Callinan JJ. Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 at [25] per Gaudron, McHugh, Hayne and Callinan JJ, at [74] per Kirby J. See also Pacific Carriers Ltd v BNP Paribas (2004) 78 ALJR 1045; Australian Salaried Medical Officers’ Federation (NSW) o-b Hall v Syd SW Area Health Service (No 2) [2007] NSWIRComm 243 at [50]. Subsequent conduct is relevant to this assessment, see Damevski v Giudice (2003) 133 FLR 438 at [141], [147] and see [4.570]..

Prerequisites for a Valid Contract

and taxation is deducted, it would be difficult to argue contrary to the objective facts that there is no intention to create a legal relationship.22 Conversely, if a person assists in an honorary capacity without expectation of wages and without any obligation to render any service, this suggests that there is no intention to enter into a legal relationship.23 Although a minister of religion is said to have a purely spiritual (rather than contractual) relationship with the church, “to say that a minister … serves God and those to whom he or she ministers may be right, but that is a description of the minister’s spiritual duties. It leaves open the possibility that the minister has been engaged to do this under a contract of employment.”24 The engagement of an Archbishop by the Greek Orthodox Community of SA Inc gave rise to a contract of employment. In the whole range of matters spiritual and mundane, the organisation gave directions and exercised detailed control over the work of the Archbishop. There was evidence also that the organisation’s records treated the Archbishop (like the priests) as an employee.25 But where volunteers taught as teachers within a church school as part of their ordained ministry, they were held not to be employees. They were paid a discretionary stipend rather than wages and there were no arrangements as to duties, hours, wages or leave.26 This has important implications for the victims of child abuse by church officials and ministers; the position in Australia is that the Bishop or relevant church authority is not vicariously liable for a person who is not their employee.27 In each case the decision has to be made with regard to all the surrounding circumstances and to the facts of each case.28 In Dietrich v Dare,29 the High Court of Australia had occasion to determine whether an offer of employment provided on a 22

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25 26

27

28

29

Adelaide Hebrew Congregation Inc v Engel [2007] SADC 23; Greek Orthodox Community of SA Inc v Ermogenous [2002] SASC 384 (remitted for hearing from the High Court). See also Australian Salaried Medical Officers’ Federation (NSW) o-b Hall v Syd SW Area Health Service (No 2) [2007] NSWIRComm 243 at [50] (intention to enter into a contract of employment both with the University and the Health Service). Riverwood Legion & Community Club Ltd v Morse [2007] NSWWCCPD 88 (director paid honorarium not an employee). Helping out friends does not give rise to an employment relationship: Robert Roberts v Stewart Hicks Real Estate [2000] NSWIRComm 138; Cheng v M Marinos Pty Ltd (t/as The Cheesecake Shop Support Office; SA/NT) [2005] SAIRC 10. Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 at [38] per Gaudron, McHugh, Hayne and Callinan JJ. See also Kirby J at [62], [66] (claim for annual and long service leave on termination of contract). Subsequent proceedings following remittal: Greek Orthodox Community of SA Inc v Ermogenous [2002] SASC 384. See also Bellia v Assisi Centre Inc [2010] FWA 2904. Redeemer Baptist School Ltd v Glossop [2006] NSWSC 1201 (defamation legislation). See also Plenty & Plenty v Seventh-Day Adventist Church of Port Pirie [2006] SASC 361 (relationship did not give rise to contractual relations). Claims against church organisations which are unincorporated associations are particularly difficult: see Trustees of the Roman Catholic Church v Ellis [2007] NSWCA 117. See also Regan v Redeemer Baptist School Ltd (No 2) [2006] NSWIRComm 198 (interim proceedings). Contrast Adelaide Hebrew Congregation Inc v Engel [2007] SADC 23 (contract of employment in formal terms with Rabbi). In the United Kingdom, see The President of the Methodist Conference v Preston [2013] UKSC 29 (not an employee no claim for unfair dismissal) and note the wide reach of vicarious liability to non-employees in the United Kingdom, see next note. But in the United Kingdom a relationship “akin to employment” suffices and an unincorporated church authority and Bishop can be vicariously liable for the wrongdoing of a church official, Catholic Child Welfare Society v Various Claimants [2012] UKSC 56; [2013] 2 AC 1. In Australia, an unincorporated body cannot be liable: Trustees of the Roman Catholic Church v Ellis (2006) 70 NSWLR 565, 573 at [32]; [2007] NSWCA 117 and church authorities are not liable for persons who are not employees. See Bilbee v Haas (1889) 5 TLR 677; Joynson v Hunt & Son (1905) 93 LT 470; Levy v Goldhill [1917] 2 Ch 297; Marshall v Glanvil [1917] 2 KB 87; Cramb v Goodwin (1919) 35 TLR 477; Smith v Blandford Gee Cemention Co Ltd [1970] 3 All ER 154; Construction Industry Training Board v Labour Force Ltd [1970] 3 All ER 220. Dietrich v Dare (1980) 54 ALJR 388.

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trial basis to a physically handicapped person as a claimed act of charity gave rise to an employer–employee relationship. The court held that it did not; nor did it give rise to a contract for services. In fact, it gave rise to no legally enforceable arrangement.30 Government training programs and work experience programs similarly would not usually give rise to a contract of employment.31 The performance of work for payment by a convicted prisoner does not give rise to a contract of employment; there is no intention to create a legal relationship. The work was provided as part of the contractual responsibility to government to provide for the welfare of inmates and to assist their integration back into the community; payments made for work done were not related to any contract but mandated by regulations.32 These are cases where there is no contract of employment as there is no intention to create a legal relationship. In relation to work experience and internships, there may be no intention to create a legal relationship where the placement is for a short period, mainly benefits the individual, does not produce significant benefit for the business and there is no expectation that the person will undertake productive work.33 But if there is the requisite intention to create a legal relationship (determined objectively), and the person is an employee, the Fair Work Act 2009 provisions (where they apply, see [12.20]) can require payment for work undertaken unless it is part of a vocational training course.34 The courts are always alert to ensure that the requirement, that the intention to create a legally binding obligation be present, does not provide a loophole for snipers on the fringes of industrial law. They will carefully examine the whole of the circumstances of the contract.35

Offer and acceptance [4.60] The second essential element of a contract is that the agreement should be made

by way of an offer36 made by one party and accepted by the other party.37 Sometimes it may be difficult to point to an offer and acceptance but the conduct of the parties may lead to the inference that a contract exists.38 30

31

32 33

34

35 36

37

Dietrich v Dare (1980) 54 ALJR 388 at 390. For other recent illustrations see South Australia v Day (2000) 78 SASR 270 (work performed under a legislatively required rehabilitation plan); Sandra Eldridge v Kemblawarra Child and Family Centre [1999] NSWCA 395 (volunteer until funds available); Zheng v Cai [2009] HCA 52 (church volunteer). Shane William Bolden v Smith Reid Training Group (970264) Decision No 264/97 (training program); Williamson v Paul and Kalamboyas (t/as Century 21 Eden Estates) [2002] SAIRC 43 (work experience). But see Rowe v Capital Territory Health Commission (1981-82) 39 ALR 39 (student nurses were employees). Note now the Fair Work Act 2009 (Cth), provisions below. Midas Conway v GSL Custodian Services Pty Ltd [2005] AIRC 792; Ireland v Johnson [2009] WASCA 162. Stewart and Owens, The Nature, Prevalence and Regulation of Unpaid Work Experience, Internships and Trial Periods in Australia, Experience or Exploitation (Report for the Fair Work Ombudsman, January 2013), at [9.16] was approved in Fair Work Ombudsman v Crocmedia Pty Ltd [2015] FCCA 140 at [7]; note payments for expenses were not offset against wages payable, at [13]. Fair Work Ombudsman v Devine Marine Group [2014] FCA 1365 (supposed training program). Under the Fair Work Act 2009, persons undertaking unpaid vocational placements as part of an education or training course authorised “under a law or an administrative arrangement” of the Commonwealth, State or Territory are deemed not to be employees for the purposes of the Act: see s 12 (“vocational placement”),s 13 (national system employee), ss 15(1)(b), 30C(1)(a), 30M(1)(a) and Stewart and Owens, The Nature, Prevalence and Regulation of Unpaid Work Experience, Internships and Trial Periods in Australia, Experience or Exploitation (Report for the Fair Work Ombudsman. January 2013). Rose and Frank Co v Crompton & Bros Ltd [1925] AC 445 applied in Cohen v Cohen (1929) 42 CLR 91; Tilsner v Kramer [2006] SAIRC 53. Sometimes there is a question whether the person making the offer has authority to do so, see Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306 at [99], [103], [234] per Lindgren J (coach had no actual or apparent authority to make an offer of a new contract). As to whether a union can act as agent for its members in entering into an unregistered collective

Prerequisites for a Valid Contract

Offer – communicating the offer [4.70] An offer must be communicated to the person who accepts it.39 An employer will not be held liable to pay for services that are performed other than as the result of a communicated offer.40 While an offer must be accepted by a particular person it need not be addressed to anyone in particular.41 Offers of employment may be made by newspaper advertisement or by notices on factory walls although generally an open advertisement seeking candidates for a job would be characterised as an “invitation to treat” – an invitation inviting potential candidates to offer their services. In contrast, an open offer to bank employees by a consortium takeover bidder to “guarantee” a redundancy policy will have contractual effect and can be accepted by bank employees acting in reliance on the offer.42 An offer may impose conditions upon its acceptance43 and such conditions have to be met by an acceptor unless they are subsequently waived by the offeror. Naturally an offer as a matter of contract law may lapse or be withdrawn at any time before it is accepted.44

Informal offers [4.80] Often contracts of employment are entered into with the minimum of

formality.45 A series of telephone calls may give rise to an employment contract.46 It may be partly oral and partly written.47 A written contract does not necessarily

38

39 40 41

42

43

44

45

agreement which would bind each member individually as a contract of employment, see Ryan v Textile Clothing & Footwear Union [1996] 2 VR 235 (Homfray’s case) and discussion [12.390]. A labour hire agency may enter into a contract on behalf of the employer, see Damevski v Giudice (2003) 133 FCR 438 at [171] et seq and see [3.90]. Damevski v Giudice (2003) 133 CLR 438; Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 (implied contracts between former employee and host business under a labour hire agreement); the decision of the Full Court was overturned on appeal on the issue of the reach of the Fair Work Act sham contracts provisions without reference to this issue, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45 and see [3.110]. For example, Powell v Lee (1908) 99 LT 284. Taylor v Laird (1856) 25 LJ Ex 329. Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256; Shipton v Cardiff Corp (1918) 87 LJKB 51; Davies v Rhondda District Urban Council (1918) 87 LJKB 166; Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424; McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 (representations relating to redundancy intended to be promissory by bidding bank to employees of target bank subject to takeover). For an application in an industrial context, see Ajax Cooke Pty Ltd (t/as Ajax Spurway Fasteners) v Nugent (1993) 5 VIR 551 (redundancy notice posted on employer’s premises as applying to all employees, accepted by continuing in the employment, discussed at [4.130]); cf Whittaker v Unisys Australia Pty Ltd [2010] VSC 9; (2010) 26 VR 668 at [125]-[128]; New South Wales Teachers Federation and Director General of Education and Training (No 2) [2008] NSWIRComm 218 at [94], [97]; Public Service Association and Professional Officers’ Association Amalgamated Union of NSW v Director of Public Employment [2011] NSWIRComm 152. McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 at [199] per Tobias AJA; at [318]; MacFarlan JA at [7]-[13]; Emmett AJA [318] (offer by bidding consortium to bank employees of target bank subject to takeover). The offer may be “subject to satisfactory references”, see Wishart v National Association of Citizens’ Advice Bureau [1990] ICR 794; Yousif v Commonwealth Bank of Australia (2010) 193 IR 212 at [44] (no contract where job offer made but “to be confirmed by paperwork” and by reference to a third party). The doctrine of estoppel may, however, prevent a party from denying that a contract of employment exists, Gill v Cape Contracts Ltd [1985] IRLR 499. Cf McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 (no representation by the employer bank in relation to redundancy payments), per Tobias AJA at [149]-[151], McFarlan JA at [1]; Emmett AJA at [315]. As to the effect of National Employment Standards setting out 10 employment standards applying to all employees covered by the Fair Work Act 2009, see [12.60] and the requirement under the Fair Work Act 2009 (Cth), ss 124, 125 that employers give to employees a Fair Work Information statement.

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preclude earlier verbally agreed terms.48 Discussions will give rise to a legal offer if the words and conduct “would have led a reasonable person in the position of the other party” to believe that an offer had been made.49

Sufficiently definite terms [4.90] Before an offer can be accepted it must be couched in sufficiently definite terms for it to be capable of acceptance.50 An offer may be conditional such as subject to passing a medical or other assessment or examination.51 It may be an offer for employment to come into effect when an earlier employment ends.52 An offer of employment rarely contains the minutiae of the terms but this does not prevent a valid contract of employment. The terms essential for the formation of a valid contract must be sufficiently clear and must be accepted. Remuneration would normally be considered an essential term of the contract.53 Terms are essential if the contract would not be “commercially viable” without the term.54 As will be seen the content of the contract is usually expanded in various ways beyond the bare essentials referred to at the time of offer and acceptance. This occurs by implying terms into the contract, see [4.500]. There are also important questions of how industrial instruments including collective agreements, modern awards and statutory provisions interact with the contract of employment.55 The sources from which the terms of the contract are or can be filled out are discussed later in this chapter. The terms of the contract must be sufficiently definite and not too vague.56 A requirement “to work such days or part days in each week as may reasonably be required by the management”57 is not too vague; the court will imply what is reasonable in the circumstances of the particular contract.58 But there must be some 46 47 48

49 50 51

52 53 54 55

56

57 58

See as an illustration, Brimacombe v Entex Chemicals (SA) Pty Ltd (1986) 28 AILR 489 (SC, SA); Carmichael v National Power plc [2000] IRLR 43 (HL). See Carmichael v National Power plc [2000] IRLR 43 (HL). Bruce v AWB Ltd (2000) 100 IR 129; Concut Pty Ltd v Worrell (2000) 75 ALJR 312 criticised by Carter and Stewart, “The Effect of Formalising an Employment Contract: The High Court Misses an Opportunity” (2001) 17 J Con L 5. Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 291 CLR 165 at [40]. Loftus v Roberts (1920) 18 TLR 532; Broome v Speak [1903] 1 Ch 586; Lewandowski v Mead Carney-BCA Pty Ltd [1973] 2 NSWLR 640 applied in Weiss v Barker Gosling (1993) 16 Fam LR 728. In relation to medical, disability and drugs screening, see Guthrie and Westaway, “Emerging Legal Concerns with Chronic Diseases in the Australian Workplace: Pre-employment Medicals, Functional Capacity Evaluations, Workers’ Compensation and Disability Discrimination” (2009) 16 JLM 803 and in relation to “safety sensitive positions” requiring pre-employment testing for alcohol and drugs, Civil Aviation Safety Regulations 1998, reg 99.015. Tullet Prebon Plc v BGC Brokers [2010] EWHC 484 at [142] (forward contracts). Although an agreement to pay a reasonable price (quantum meruit) might in some circumstances be inferred, see [10.40]. See Macdonald v Australian Wool Innovation Ltd [2005] FCA 105 at [182] per Weinberg J. The relationship between the contract of employment, industrial instruments, agreements, statutes and modern awards is examined in Chapter 12. Note also the impact of anti-discrimination legislation; see Chapter 15, “Discrimination Laws”. Uncertainty about the meaning of a job description may be resolved by reference to extraneous circumstances, Keays v J P Morgan Administrative Services Australia Ltd [2012] FCAFC 100; (2012) 224 IR 406 at [68]-[71]. National Coal Board v Galley [1958] 1 WLR 16; Mann v Capital Territory Health Commission (1982) 148 CLR 97. Hamlyn & Co v Wood & Co [1891] 2 QB 448; Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 at 144 per Hope JA (fully maintained company car). Post-contractual conduct may identify what duties an employee will perform where the contract only refers to the employee’s title, Fishlock v The Campaign Palace Pty Ltd [2013] NSWSC 531; (2013) 234 IR 1. As to bonus schemes see [10.160].

Prerequisites for a Valid Contract

basis upon which courts can determine what is reasonable.59 This may be by reference to accepted industry standards which may change over time. Offers to participate in a yet to be established employee equity scheme60 or to be paid commissions or bonuses to be determined totally at the discretion of the employer61 sometimes may be too vague to be enforceable but much depends upon the interpretation of the agreement.62

Acceptance Unqualified and communicated [4.100] Acceptance of an offer must be unqualified and must correspond with all the

terms of the offer.63 If the offer is conditional, those conditions must be satisfied before there is acceptance.64 So “if the acceptance is not clear and certain, but leaves something to be arranged, something for future discussion and decision, the parties are not ad idem”.65 As with an offer, an acceptance must be communicated to the offeror, either by the means stipulated by the offeror, or by some sufficient means where there is no stipulation.66

Express or implied [4.110] Acceptance may be express or it may be implied. An offer may require written acceptance but, where an offer is silent as to the means of acceptance, an acceptance may be implied from subsequent conduct.67 By starting work in response to an offer of employment a person will generally be held to have impliedly accepted the offer.68 There may be cases where there is no formal offer or acceptance but the court is prepared to 59

60 61 62 63 64 65

66

67

68

A possible implied term not to strike may not be sufficiently certain, NSW Local Government Clerical Administrative Energy Airlines & Utilities Union v Bega Valley Shire Council [2013] NSWIRComm 7 at [64]. Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130. Kofi-Sunkersette OBU v Strauss [1951] AC 243. In relation to discretionary bonuses and whether promises were too uncertain to be enforceable, see [10.160]. Crown v Clarke (1927) 40 CLR 227; Volunteer Eco Students Abroad Pty Ltd v Reach Out Volunteers Pty Ltd [2013] FCA 731; (2013) 102 IPR 161 at [160] (unresolved issues). See [4.90], conditional offer. Appleby v Johnson (1874) LR 9 CP 158 at 164 per Grove J. The acceptance must “respond” to the offer, Francis v South Sydney District Rugby League Club Ltd [2002] FCA 1306 per Lindgren J at [244] (no intention to accept offer by playing rugby). Felthouse v Bindley (1862) 6 LT 157; Volunteer Eco Students Abroad Pty Ltd v Reach Out Volunteers Pty Ltd [2013] FCA 731; (2013) 102 IPR 161 at [153]-[160]. As to email acceptance, see Electronic Transactions Act 1999 (Cth), s 14; Electronic Transactions Act 1999 (NSW), Electronic Transactions Act 1999 (SA); Electronic Transactions Act 1999 (Vic); Electronic Transactions Act 2011 (WA); Electronic Transactions Act 2001 (ACT); Electronic Transactions Act (NT), s 13; Electronic Transactions (Qld) Act 2001 (Qld), s 23; Electronic Transactions Act 2000 (Tas), s 11. McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 (acceptance of offer by continuing to work in reliance on the offer); Damevski v Giudice (2003) 133 FCR 438 at [82]; Australian Salaried Medical Officers’ Federation (NSW) o-b Hall v Syd SW Area Health Service (No 2) [2007] NSWIRComm 243; Wilton & Cumberland v Coal & Allied Operations Pty Ltd [2007] FCA 725; (2007) 161 FCR 300 at [117]; Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256; the decision of the Full Court was overturned on appeal on the issue of the reach of the Fair Work Act sham contracts provisions without reference to this issue, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45 and see [3.110]. Browning v Great Central Mining Co of Devon Ltd (1860) 5 H & N 856; 157 ER 1423; Paynter v Williams (1833) 1 C & M 810; 149 ER 626. Compare Sarker v South Tees Acute Hospitals [1997] ICR 673 (contract in existence prior to commencement of work); Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at 164-177 per Heydon JA. Continuing to work in reliance on a representation by a takeover bidder that a redundancy payment scheme would be continued for two

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find that a contract of employment exists based on the parties’ conduct which indicates mutual assent.69 The question is whether a reasonable person in the position of the parties would have concluded that there is an agreement taking into account the conduct of the parties viewed in the context of the surrounding circumstances.70 Sometimes the only basis upon which the provision of work can be explained is that there is a contract of employment between the parties. In the case of a labour hire agreement which is not genuine, a court may infer a contract of employment between those providing work and the business using their services (host business). This was the position where employees resigned from their employment and signed up with a labour hire company; they continued to work for their former employer just as before. The only real difference was that the labour hire company was the paymaster.71 Sometimes the question is whether there is a new contract of employment or whether the parties have accepted a variation in contractual entitlements; continuing to work without protest indicates acceptance of changed terms. This is discussed in detail at [9.340].

Withdrawal of offer [4.120] A prospective employer may seek to withdraw an offer of employment before acceptance. As a matter of strict contract law no contract of employment can come into existence until the offer is accepted.72 But in some instances despite the withdrawal of the offer of employment, a prospective employer may be estopped from denying the existence of a contract of employment. For example, in Gill v Cape Contracts Ltd73 the plaintiffs, employed as engineers in Belfast, were offered employment in the Shetlands by a rival employer at substantially higher wages. The terms of the offer were that on arrival at the new place of employment the plaintiffs would be required to undergo a medical examination and to sign a contract providing for two hours’ notice of termination during the first month of employment and a week’s notice thereafter. The employment was expected to last six months. The plaintiffs applied for employment and they were told that they were acceptable. They then gave notice to their Belfast employer who, annoyed at the loss of staff, told them that they would not be re-employed again by the company. The plaintiffs received written confirmation of the arrangements but before they left for the Shetlands they were informed by the defendants by telegram that the offer of employment had been withdrawn because of

69 70 71

72

73

years, can constitute acceptance and consideration McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 at [191]-[194] per Tobias AJA; Emmett AJA at [318]; per MacFarlan JA at [10]-[11] (request by takeover bank and reliance provided acceptance and consideration). Ramsey v Annesley College [2013] SASC 72. Wilton & Wilton & Cumberland v Coal & Allied Operations Pty Ltd [2007] FCA 725; (2007) 161 FCR 300 at [126]. Damevski v Giudice (2003) 133 FCR 438; Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd. [2015] FCAFC 37; (2015) 249 IR 256 (the decision of the Full Court was overturned on appeal on the issue of the reach of the Fair Work Act sham contracts provisions without reference to this issue, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45 and see [3.110]. See also Ramsay Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237; cf FP Group Pty Ltd v Tooheys Pty Ltd [2013] FWCFB 9605. See also Homecare Direct Shopping Pty Ltd v Gray [2008] VSCA 111 (contract with Area Manager acting as agent for Homecare); Opoku v P & M Quality Smallgoods Pty Ltd (No 6) [2012] NSWSC 478. As to the duties that may be owed prior to the employee commencing work, see Honeyball and Pearce, “Contract, Employment and the Contract of Employment” (2006) 35(1) Ind LJ 30 (differing legislation may affect Australian cases). Gill v Cape Contracts Ltd [1985] IRLR 499. See also McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 at [149]-[151] per Tobias JA; MacFarlan JA at [7]-[9],[21]; Emmett AJA at [318] (representations not by the employer). Note also A may promise B that C will provide a benefit, if C does not provide the benefit, B may be able to claim damages from A, see UGL Rail Services Pty Ltd v Janik [2014] NSWCA 436; (2014) 246 IR 320 at [161]-[164] per Sackville J (recommendation to parent company relating to executive options).

Prerequisites for a Valid Contract

the threat of industrial action by the unions. At this stage there had been no acceptance in the terms required by the offer of employment; the plaintiffs had not signed on and had not undertaken a medical examination. O’Donnell LJ held that the assurances given to the plaintiffs were intended to induce the plaintiffs to act upon them and the plaintiffs had in fact acted on those assurances. These assurances gave rise to a collateral contract, which was enforceable by the plaintiffs. The case is probably better characterised as an example of estoppel operating against the defendants.74

Valuable consideration [4.130] The third element essential to the formation of a valid contract is the requirement that the contract be supported by some valuable consideration, “the price tag on the promise”.75 Only a contract made by deed, one that is “signed, sealed and delivered”, or which is deemed to be so, needs no consideration to support it.76 A valuable consideration may consist of “some right, interest, profit, or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered, or undertaken by the other in respect of the promise”.77 Consideration must always be valuable but the “value” need bear no relationship to the promise itself: A creditor might accept anything in satisfaction of his debt except a less amount of money. He might take a horse, or a canary, or a tomtit if he chose, and that was accord and satisfaction; but, by a most extraordinary peculiarity of the English common law, he could not take 19s 6d in the pound; that was nudum pactum … That was one of the mysteries of English common law.78

Consideration must be legal and must not be too vague, uncertain or illusory.79 It may be present or future but cannot be past.80 Where a person is under an existing obligation to carry out a duty, a promise to perform that duty cannot amount to a valuable consideration for the promise; but an agreement to perform more than is required by an existing obligation will be valuable consideration.81 Consideration must be possible to be performed and must move from the person who gives the

74

75 76 77 78 79

80 81

Burrows, “Contract and Reliance in Hiring for Employment” (1986) ILJ 133 and see Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; Szentessy v Woo Ran Australia Pty Ltd (1986) 28 AILR 174 (SC, ACT); Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306 at [304] (no reasonable reliance). The phrase is borrowed from Smith, The Law of Contract (2nd ed, 1993), p 67. For example a deed of separation containing a covenant against competition, Transpacific Industries Pty Ltd v Whelan [2008] VSC 403. Currie v Misa (1875) LR 10 Ex 153 at 162. Coulderey v Bartrum (1881) 19 Ch D 394 at 399 and see Hirachand Punamchand v Temple [1911] 2 KB 330; Dietrich v Dare (1980) 54 ALJR 388. Shields v Drysdale (1880) 6 VLR (E) 126; Lewandowski v Mead Carney-BCA Pty Ltd [1973] 2 NSWLR 640 (a salary range not illusory as it gave rise to a duty to pay a minimum); Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 at 144 per Hope JA (maintained company car sufficiently certain but not participation in a non-existent employee equity scheme); Powell v Braun [1954] 1 WLR 401 (bonus). Roscorla v Thomas (1842) 3 QB 234; 114 ER 496. Stilk v Myrick (1809) 2 Camp 317; 170 ER 1168. See also Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306 at [241] per Lindgren J; Amy Linetta Ferguson v TNT Australia Pty Ltd [2014] WAIRCmm 20 (no consideration for contractual variation entitling access to Commission and Bonus scheme). Contrast Draper v City of Rockingham [2013] WAIRComm 436 (collateral contract for payment of bonuses, consideration provided by existing contract).

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consideration to the person receiving it.82 The requirement of consideration is satisfied even if wages are paid by a third party, such as a related subsidiary or service company, or agency performing service functions.83 In contracts of employment, a promise to perform work in exchange for a promise to pay wages constitutes a valuable consideration.84 At common law, the payment need not be by way of wages, provided that what the employee receives is received for the performance of work under the contract.85 However, legislation and industrial regulation have altered this common law position with industrial legislation requiring that wages be paid in money.86 Because the exchange of a promise to work in exchange for a promise to pay for the work constitutes a valuable consideration, the question of validity of an employment contract (under challenge because of an allegation that it lacks consideration) rarely arises. The issue has, however, arisen in the context of unregistered collective agreements between unions and employers. In Homfray’s case, the Full Court of the Supreme Court of Victoria rejected the argument that an unregistered agreement providing over-award redundancy payments was enforceable by individual union members as part of their contracts of employment. Among other things, there had been no consideration provided for the employer’s promise of over-award redundancy payments. Moreover the agreements “were intended by the unions and the company to have practical industrial, as opposed to legal, consequences”.87 The issue of consideration also arises when the employer pays over and above contractual entitlements or when employees agree to reduced benefits such as a pay cut88 without any additional consideration being provided. According to traditional contractual principles, if no additional consideration is given the employer is not legally required to pay additional benefits nor are employees obliged to accept reduced benefits.89 But in these types of cases, it is frequently argued that there is an agreed variation to the contract which binds both parties and that continuing to work qualifies 82 83

84

85

86 87

88 89

Dunlop Pneumatic Co Ltd v Selfridge & Co Ltd [1915] AC 847 followed in Concrete Constructions Pty Ltd v Government Insurance Office of NSW (1966) 85 WN Pt 1 104. Damevski v Giudice (2003) 133 FCR 438 at [171], et seq; Hoekstar v Residual Asco Industries Pty Ltd [2004] NSWSC 564; Visscher v BHP Petroleum Pty Ltd [2002] NSWSC 65; Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 (the decision of the Full Court was overturned on appeal on the issue of the reach of the Fair Work Act sham contracts provisions without reference to this issue, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45) and see [3.110]. Pilkington v Scott (1846) 15 M & W 657; 153 ER 1014 and Sykes v Dixon (1839) 9 Ad & E 693; 112 ER 1374. But it is no part of the consideration from the employer to provide intangible benefits such as work satisfaction etc, Commonwealth Bank of Australia v Barker [2013] FCAFC 83; (2013) 233 IR 31 at [311] per Jessup J (dissenting); Jessup’s approach was followed in the High Court on the more general issue of no implied term of trust and confidence, see discussion at [5.160]. Hulse v Hulse (1856) 17 CB 711; 139 ER 1256. The payment of something other than wages may indicate that there is no intention to create legal relations at all. Where no wage is stipulated, a claim on a quantum meruit may be available; this permits a claim for reasonable remuneration for work already performed and voluntarily accepted by the defendant, see [10.40]. See Fair Work Act 2009 (Cth), ss 322, 323 – 327 in relation to national system employers and employees and discussion [12.20]. See Ryan v Textile Clothing & Footwear Union [1996] 2 VR 235 at 251 per Brooking JA; at 272 per Hayne JA, special leave to appeal to the HC was refused, and see Together Queensland, Union of Employees v The State of Queensland (Queensland Health) [2015] QIRC 57 (agreement not incorporated into individual contracts, see at [25] on the consideration point); Commissioner for Public Employment v The Public Service Association of SA [2001] SAIRC 12; (2001) 122 IR 161; NSW Local Government Clerical Administrative Energy Airlines & Utilities Union v Bega Valley Shire Council [2013] NSWIRComm 74 at [73] (no consideration for employer’s promise) and [12.380]. Cartwright v Tetrad Ltd [2015]UKEAT/0262/14/JOJ. Could the varied terms amount to a collateral contract in which entry into main agreement provides

Prerequisites for a Valid Contract

as acceptance and is sufficient consideration for these additional benefits.90 On traditional contractual principles a promise to continue work as required under the contract is not consideration for a new promise but it seems, that as a pragmatic response to the practice in the workplace, fresh consideration will not be insisted upon in relation to variations to the contract of employment. In Lee v GEC Plessey Telecommunications91 Connell J said: [T]he contention that each improvement in the employees’ terms requires fresh consideration fails to give proper recognition to the value to be attributed by the employer to the continuation of the same workforce in [its] employ and/or to the possibility of making adjustments from time to time to the detail of the contracts of employment without having to issue new contracts whenever adjustments are put into effect.

This argument may be more compelling where there has been a bank merger and the bank’s senior executives could readily terminate their contracts with appropriate notice; there is clearly value in retaining senior employees so that their skills and experience can continue to benefit the employer especially in a transition period with new management.92 This is discussed further at [9. 350].

Contractual capacity [4.140] The fourth requirement for a valid contract is that both parties must have contractual capacity generally and as to the particular contract.93 Special immunities may apply to contracts with certain classes. Historically the Crown has enjoyed a

90

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92 93

the consideration? See Draper v City of Rockingham [2013] WAIRComm 436. In some cases where an employee has suffered detriment by relying on a non-contractual promise, an estoppel may prevent the employer from resiling from the promise to pay, see [4.120]. An undertaking to perform contractual obligations on time might, in some situations, be sufficient consideration, see Musumeci v Windadell Pty Ltd (1994) 34 NSWLR 723 at 747 per Santow J; Mitchell v Pacific Dawn Pty Ltd [2003] QSC 86; [2006] QSC 198 (later proceedings [2010] QSC 243)) or, exceptionally, continuing to work following a redundancy offer, Ajax Cooke Pty Ltd (t/as Ajax Spurway Fasteners) v Nugent (1993) 5 VIR 551 (redundancy notice posted on employer’s premises as applying to all employees, accepted by continuing in the employment); In the matter of ACN 050 541 047 Ltd [2002] NSWSC 586 at [33] (implied term for redundancy payments, consideration provided by continuing in employment); Gregory v Philip Morris Ltd (1987) 77 ALR 79 at 93-94 per Gray J (the issue concerning the effect of the agreement was not expressly dealt with on appeal to the Full Federal Court Gregory v Philip Morris Ltd (1988) 80 ALR 455); Continuing to work in reliance on a representation by a takeover bidder that a redundancy payment scheme would be continued for two years, can constitute acceptance and consideration McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 at [191]-[194] per Tobias AJA; Emmett AJA at [318] and see MacFarlan JA at [10-[11] (a request to do an act and reliance on promises constitute consideration). Note the restricted test applied in the United Kingdom (in relation to acceptance of varied terms) in Solectron Scotland Ltd v Roper [2003] UKEAT 0305033107; [2004] IRLR 4, the test (per Elias J at [30]) “is the employee’s conduct, by continuing to work, only referable to his having accepted the new terms imposed by the employer?” (applied in Cartwright v Tetrad Ltd [2015] UKEAT 0262/14/JOJ (agreed variation for pay cut)) and adopted in Qantas Airways Ltd v Joyce [2014] WAIRComm 1192 at [124]. See also Public Service Association and Professional Officers’ Association Amalgamated Union of NSW v Director of Public Employment [2011] NSWIRComm 152; Coote, “Variation Sans Consideration” (2011) 27 JCL 185; Hough and Spowart-Taylor, “The Doctrine of Consideration: Dead or Alive in English Employment Contracts?” (2001) 17 JCL 193. [1993] IRLR 383 at 389. Continuing to work in reliance on a representation by a takeover bidder that a redundancy payment scheme would be continued for two years, can constitute acceptance and consideration McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 at [191]-[194] per Tobias AJA, Emmett AJA at [318] and see MacFarlan JA (request to act and reliance can constitute consideration) at [10]-[11],[21]. McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 at [193], [210] per Tobias AJA; Emmett AJA at [318] cf MacFarlan JA at [10]-[11],[21]. Occasionally the question of an agent’s authority to enter into contracts arises, see J MacFarlane v Dampier Mining Co Ltd (1980) 22 AILR 234; Ryan v Textile Clothing & Footwear Union [1996] 2 VR 235 (whether union authorised agent in entering into unregistered collective agreement); Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306 at [99], [103], [234] per

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special position. Crown contracts of service at common law were presumed to be terminable without notice unless a statute provided otherwise.94 Special immunities and contractual restrictions apply to diplomats representing foreign governments, illegal immigrants,95 enemy aliens, and persons lacking mental capacity. Questions touching the contractual capacity of such classes have an insufficient general application to employment contracts to warrant consideration. It is otherwise with corporations and minors (infants in older terminology).

Corporations [4.150] There are various classes of corporation, namely, chartered corporations, corporations sole and statutory corporations. There are in addition incorporated limited partnerships and incorporated associations. The great majority of corporations are those which have been created under a general Act of Parliament, and governed by the Corporations Act 2001 (Cth). Such corporations are artificial legal persons which have an existence at law independent of the persons who comprise the corporation. At common law, a corporation has power to do only those things it is empowered to do by the instrument that constitutes it – normally, its Constitution – and those things that the law will imply as reasonably incidental to them.96 It would be most rare for a corporation to lack the capacity to enter into contracts of service.97 The common law position is now affected by the Corporations legislation. The Commonwealth Corporations Act 2001, s 124 provides that a company has the legal capacity of a natural person and s 128 protects persons dealing with a company where the conduct of the company is ultra vires (that is, beyond the legal capacity of the company). Thus an ultra vires contract will bind the company even if prohibited by the company’s constitution.98 Where an employment contract has been entered into on behalf of a company which has not yet been formed, the employment contract can be ratified by the company after incorporation.99 Ratification can be easily inferred from conduct.100 The doctrine of estoppel may also operate to prevent a company from denying the existence of a contract of employment.101

94

95 96 97

98 99 100 101

Lindgren J (coach had no actual or apparent authority to make an offer of a new contract). Unincorporated associations present particular difficulties, Peckham v Moore [1975] 1 NSWLR 353; Affleck v Newcastle Mind [1999] ICR 852; Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 at [32]-[34] per Gaudron, McHugh, Hayne and Callinan JJ; Trustees of the Roman Catholic Church v Ellis [2007] NSWCA 117 which may be remedied in part by Associations Incorporation legislation, see eg, Associations Incorporation Act 1984 (NSW), Associations Incorporation Act 1981 (Vic).. See also McCarry, “Master and Servant – Public Sector Employment – Dismissal under Crown Prerogative Etc” (1988) 62 ALJ 1054 at 1057; Kelly v Commissioner, Department of Corrective Services [2001] NSWCA 148; Jarratt v Commissioner of Police for New South Wales (2005) 224 CLR 44 discussed at [2.410]; New South Wales Teachers Federation and Director General of Education and Training (No 2) [2008] NSWIRComm 218. See [4.320]. Ashbury Railway Carriage & Iron Co v Riche (1875) LR 7 HL 653. A statutory corporation may have limited powers to enter into contractual arrangements. If an “employee” works under these void arrangements, is it a case where the employment relationship exists but the contract does not? See Eastbourne BC v Foster [2001] EWCA Civ 1091, CA (11 July 2001). Corporations Act 2001 (Cth), s 125. Note exceptions in Corporations Act 2001 (Cth), s 128. See Corporations Act 2001, s 131. Sentessy v Woo Ran Australia Pty Ltd (1986) 26 AILR 174 (SC, ACT). Sentessy v Woo Ran Australia Pty Ltd (1986) 26 AILR 174 (SC, ACT).

Prerequisites for a Valid Contract

Minors [4.160] A minor is a person under the age of 18 years.102 The general rule at common law is that a minor may put an end to any contract not being a contract for necessaries or for the minor’s benefit made during minority unless it is ratified103 within a reasonable time after the minor reaches majority.104 This is subject to a number of statutory and common law qualifications. The statutory qualifications are generally concerned with matters unrelated to employment cases and therefore are not given any attention here.105 At common law two categories of contract are binding upon the minor. They are contracts for the supply of necessaries to the minor, and contracts that are for the minor’s benefit.106 Supply of necessaries

[4.170] At common law contracts entered into by a minor for the supply to the minor of “necessaries” binds the minor.107 What is a “necessary” will vary from case to case depending on the requirements of the particular minor. A necessary includes “good teaching and instruction whereby he may profit himself afterwards”.108 A contract of apprenticeship falls within the meaning of “necessary” but such a contract must also be for the minor’s benefit.109 “The contract must be not only within the class of contracts by which an infant may be bound, but it must be one beneficial to the infant.”110

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106 107

108 109 110

Minors (Property and Contracts) Act 1970 (NSW); Age of Majority Act 1977 (Vic); Law Reform Act 1995 (Qld), s 17; Age of Majority (Reduction) Act 1970 (SA); Age of Majority Act 1972 (WA); Age of Majority Act 1973 (Tas); Age of Majority Act 1974 (ACT); Age of Majority Act (NT). In South Australia, Western Australia and the Australian Capital Territory a promise to pay after attaining majority must be contained in writing and signed: see Lord Tenterden’s Act (Statute of Frauds Amendment Act 1828, 9 Geo 4, c 14, s 5); Minors Contracts (Miscellaneous Provisions) Act 1979 (SA), s 4; Money-lenders Act 1936 (ACT), s 13. Contrast Victoria: Supreme Court Act 1986, s 50, ratification not available. For the common law position, see generally, Harland, The Law of Minors in Relation to Contracts and Property (1974), pp 19-26. In Victoria, such contracts or debts cannot be ratified, Supreme Court Act 1986 (Vic), s 50. In New South Wales an agreement entered into by a minor that is not presumptively binding may be affirmed by the court during minority: Minors (Property and Contracts) Act 1970, s 30. Agreements not presumptively binding must be repudiated before the person attains the age of 19 years; the agreement will otherwise be binding even if it would have been void at common law: s 31(1). There are statutory restrictions on employment of minors under 15 years with special provision for work experience programs for students 14 years and over, see Halsbury’s Laws of Australia [165-130] and see Clements v London and North Western Railway Co [1894] 2 QB 482 at 491; Apprenticeship and Traineeship Act 2001 (NSW), s 32 (apprenticeship presumed to be for the benefit of the minor). Loan agreements entered into by minors may be declared void by statute, see Supreme Court Act 1986 (Vic), s 51 and see Horvath v Commonwealth Bank of Australia [1999] 1 VR 643 and subsequent proceedings CBA v Horvath Jnr [2001] FMCA 43. For Tasmania, see the Minors Contracts Act 1988 (Tas). In New South Wales the position is governed by the Minors (Property and Contracts) Act 1970. In New South Wales under the Minors (Property and Contracts) Act 1970, s 19, a contract is presumptively binding if it is for the minor’s benefit at the time of participation. This test is wider than the common law “necessaries” test: see Harland, The Law of Minors in Relation to Contracts and Property (1974). Sale of Goods legislation in the various States imposes an obligation on the minor to pay a reasonable price for necessaries sold and delivered, see Carter, Contract Law in Australia (6th ed 2013),at [15.10]. Coke Litt 172a. Clements v London and North Western Railway Co [1894] 2 QB 482 at 491; Apprenticeship and Traineeship Act 2001 (NSW), s 32 (apprenticeship presumed to be for the benefit of the minor). Mercantile Union Guarantee Corp v Ball [1937] 2 KB 498 at 503; Roberts v Gray [1913] 1 KB 520.

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Contracts for minor’s benefit

[4.180] Contracts for a minor’s benefit, as distinct from those for necessaries, are construed more narrowly by the courts. Contracts of apprenticeship and other contracts for instruction have to be for the minor’s benefit, and so do contracts of employment. Statutory restrictions apply to the employment of minors which will override the position at common law.111 In deciding whether any contract is for the benefit of a minor, the court must look at the whole contract having regard to the circumstances of the case.112 The court will balance advantages and disadvantages in each case and then pass judgment on the whole of the contract.113 Contracts with minors may contain stipulations that impose obligations or restrictions on the minor without thereby ceasing to bind the minor. In fact, “an infant cannot make a contract of service without having in it some incidents which may not in themselves be directly beneficial to him but may be beneficial to the master”.114 In New South Wales the Minors (Property and Contracts) Act 1970 alters the common law rules relating to a minor’s capacity to contract. In New South Wales a contract of employment (a civil act) will be presumptively binding upon the minor if the minor has sufficient understanding and the contract is for the minor’s benefit at the time of entering into the contract.115 Section 6(3) provides that where a person participates in a civil act while that person is a minor and that act is presumptively binding on the minor, that civil act is, at and after the time of the minor’s participation, as binding on the minor and the minor’s personal representative and has effect as if the minor were not under the disability of infancy at the time of the minor’s participation. A leading commentator concludes from these provisions:116 A civil act which is presumptively binding on a minor therefore has the same effect as it would have had at common law had he been of full age. It is only any defence based on infancy which is thus made irrelevant. Defences based on other vitiating factors, such as fraud, mental illness, failure of condition and illegality, remain available.

In both South Australia and New South Wales, the Supreme Court may, if the contract is for the minor’s benefit, grant the minor capacity to enter into the contract117 and in New South Wales, s 30 provides that a court may affirm a civil act entered into by a minor as presumptively binding. This provides a useful procedure if there is any doubt whether a contract of employment is for the minor’s benefit.

Absence of vitiating factors [4.190] The traditional view is that in order for a contract to be valid, it must be entered into with the genuine consent of the parties to the terms of the contract. This consent, according to the traditional approach, is not genuine where the contract is 111 112

113 114 115

116 117

See [4.20]. De Francesco v Barnum (1890) 45 Ch D 430; Clements v London and North Western Railway Co [1894] 2 QB 482; Roberts v Gray [1913] 1 KB 520; Mercantile Union Guarantee Corp Ltd v Ball [1937] 2 KB 498, Hamilton v Lethbridge (1912) 14 CLR 236; Chaplin v Leslie Frewin (Publishers) Ltd [1966] Ch 71. For example, Olsen v Corry and Gravesend Aviation Ltd [1936] 3 All ER 242 at 249. Doyle v White City Stadium Ltd [1935] 1 KB 110 at 133. Minors (Property and Contracts) Act 1970 (NSW), ss 18, 19. Zacka, Louise T Landlord v Brown, Nicole, Rennie, June &, and Fellowes, Donny Tenant [1998] NSWRT 136 (15 July 1998); Gilchrist, Mensinga & Young v Mondello & Mondello [2001] NSWRT 323. Harland, The Law of Minors in Relation to Contracts and Property (1974), p 32. Minors (Property and Contracts) Act 1970 (NSW), s 26; Minors’ Contracts (Miscellaneous Provisions) Act 1979 (SA), s 6; note also the provision for appointment of an agent who may bind the minor, s 8.

Prerequisites for a Valid Contract

entered into as a consequence of mistake, misrepresentation, fraud, duress,118 unconscionability or undue influence. The traditional approach has been to regard these factors as ones that may destroy a contract because the essence of every contract is that the parties enter into it fully and freely, understanding what they are doing and with mutual and genuine agreement as to its terms. But the current understanding is that these factors operate to impose limits to ensure fair bargaining. There are a number of possible vitiating circumstances.

Mistake [4.200] The doctrine of mistake and its effect on the validity of a contract of

employment is only very rarely in question.119 In this section reference is made to the two areas where it might be important: mistake as to identity and mistakes where there has been a failure to disclose information by the employee. The latter is more likely to arise in a claim for wrongful dismissal (see [8.100]). In the context of a personal contract of employment, a mistake as to the identity of the other party to the contract may lead to the contract being unenforceable120 as the correct identity of the parties is an important provision of the contract especially in relation to employees.121 The issue of mistake as to identity in relation to the employer122 has not assumed importance in employment law even though in complicated corporate structures and situations of “vicarious employment” employees might be uncertain who their “employer” is (see Chapter 3).123 Quite aside from the doctrine of mistake, the identity of the employer may be crucially important in insolvency situations where the hiring company may be stripped of assets and employees risk loss of leave and other entitlements.124 A mistake may arise because one of the parties, without any intention to deceive, fails to disclose all the facts relevant to the employment to the other party. However, since there is no general duty of disclosure on contracting parties to contracts of service, this is not a mistake which will allow the other party to avoid the contract: a party may 118

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122 123

124

The modern view is that the contract can be avoided not because the person was pressured into entering into the contract (their will was overborne) but rather than the pressure used was illegitimate, see Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40. Russell v RCR Tomlinson Ltd [2012] WASC 405 (mistaken belief that contract provided for retirement benefit if employment terminated without cause within 5 years). See also Maurice Hayes & Associates Pty Ltd v Energy World Corporation Ltd [2006] FCA 783 at [15] (obvious mistake). The orthodoxy is that in face-to-face situations the contract is operative but may be set aside (voidable) but in paper transactions, the contract may not be operative at all (void), see Carter, Contract Law in Australia (Butterworths, 6th ed 2013), [20.44]. See Shogun Finance Ltd v Hudson [2004] 1 AC 919; Taylor v Johnson (1983) 57 ALJR 197 at 199-200; Hare, “Identity Mistakes: A Missed Opportunity” (2004) 67(6) Mod LR 993. Cundy v Lindsay (1878) 3 App Cas 459; Ingram v Little [1961] 1 QB 31; Lewis v Averay [1972] 1 QB 198. Post-contractual conduct might be admissible to determine the identity of the contracting parties, see Tomko v Palasty [2007] NSWCA 258. Argued but not accepted in Shaw v Bindaree Beef Pty Ltd [2007] NSWCA 125. See as illustrations, In the Matter of C & T Grinter Transport Services Pty Ltd (In liq); Ex parte Fitzgerald & Adams [2004] FCA 1148 at [20]; Golden Plains Fodder Australia Pty Ltd v Millard [2007] SASC 391; Hoekstar v Residual Asco Industries Pty Ltd [2004] NSWSC 564; Wales & Wales v Nycon Protective Services [2005] NSWIRComm 1082; McConnell-Imbriotis & Eurobanks Pty Ltd [2004] NSWIRComm 1035; Dalgety Farmers Ltd t/as Grazcos v Bruce (unreported, CA 3/8/1985, Kirby P); Australian Salaried Medical Officers’ Federation (NSW) o-b Hall v Syd SW Area Health Service (No 2) [2007] NSWIRComm 243; Visiting Medical Officers Assoc v Australian Industrial Relations Commission (2006) 153 IR 228; Joyce v Hendricks Pty Ltd [2006] NSWIRComm 1068; Shaw v Bindaree Beef Pty Ltd [2007] NSWCA 125. And see Chapter 3. As to the importance of identifying the employer to ensure payment of employee entitlements, see AMWU v Southcorp Holdings (Aust Ind Rel Comm, Munro J, 7 March 2001); Patrick Stevedores v MUA (1998) 195 CLR 1; Foster v Parbery; Foster v Elliott [2009] NSWSC 1304; Bartlett v Wirrina Resort Pty Ltd [2009] SAIRC 56 at [28] (implied consent to transfer); Gothard v Davey [2010] FCA 1163. Cf transfer of business cases, discussed at [12.100].

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“observe silence even in regard to facts which he believes would be operative on the mind of the other”,125 although he or she cannot positively mislead, say by giving a false answer to a material question asked by the other party.126 There may be an operative mistake where one of the contracting parties enters into the contract under a serious mistake about its contents in relation to a fundamental term.127 If the other party is aware of this and deliberately sets out to ensure that the first party does not become aware of the mistake, a court of equity will set aside the contract.128 For example, if a prospective employee allows the employer to continue in the mistaken belief that the employee has the necessary professional qualifications essential for the job, that may be a mistake as to a fundamental term.129 The issue is more likely to arise in a claim for wrongful dismissal than in an action to set aside the employment contract.

Misrepresentation Effect of misrepresentation

[4.210] Either innocent or fraudulent misrepresentation130 as to a term in a contract of employment will allow the party who has been misled to avoid the contract.131 For example, the contract can be set aside where a prospective employee lies about her or his qualifications or experience where that is essential for the position or the employer falsely represents that the employee is covered by professional indemnity insurance.132 But where the employment has continued for some time, rescission (restoring the parties to their position before the contract) is usually not possible

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127

128 129 130

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132

Bank of Credit and Commerce International SA v Ali (BCCI SA) [1999] 2 All ER 1005 at 1015 (employer’s failure to disclose; other proceedings Bank of Credit and Commerce International SA v Ali (BCCI SA) (1999) 4 All ER 83; [2000] 3 All ER 51; [2001] 2 WLR 735; [2001] EWCA Civ 636); Concut Pty Ltd v Worrell (2000) 75 ALJR 312 at 319; Hollingsworth v Commissioner of Police [No 2] (1999) 88 IR 282 (employee’s failure to disclose). Note the argument that fiduciary relationships may impose positive duties of disclosure, Concut at 319, but in negotiating a contract employees are entitled to look to their own interests, Stoelwinder v Southern Health (2000) 97 IR 76; on appeal [2001] FCA 115. Whether there is a duty to disclose is discussed at [5.830]. See generally, McCarry, “The Employee’s Right to Silence” (1983) 57 ALJ 607, Collins, “Implied Duty to Give Information During Performance of Contracts” (1992) 55 Mod LR 556, and see discussion at [5.830]. The general rule is that pre-contractual negotiations cannot be brought into evidence to show that there has been a mistake, Chartbrook Ltd v Persimmmon Homes Ltd [2009] UKHL 38; [2009] 1 AC 1101 at [28-[34] per Lord Hoffman. Taylor v Johnson (1983) 57 ALJR 197 at 201. There is an implied warranty which employees give that they are competent to carry out the duties of the job for which they are applying, see [8.150]. Statements relating to future conduct might not qualify as misrepresentations under the general law but can be caught by the Australian Consumer Law, see [4.240]. Note fraudulent misrepresentations may also be illegal, see, for example, Crimes Act 1900 (NSW), s 178BA; and s 178BB (obtaining money by false or misleading statements) and see Hewison v Meridian Shipping Pte [2003] ICR 766. Redgrave v Hurd (1881) 20 Ch D 1. As to misrepresentation as to age and its effect on award wages, see Walsh v Commercial Travellers’ Association of Victoria [1940] VLR 259; Dukes v Davidson [1930] AR (NSW) 41; Kidd v Savage River Mines (1984) 6 FCR 398. As to misrepresentations relating to “sham contracts”, see Fair Work Act 2009 (Cth), ss 357 – 359 discussed [2.100]. Health Solutions (WA) Pty Ltd v Foley [2014] WASC 197 (lied about qualifications and experience); Wesfarmers Dalgety Ltd v Williams [2005] WASC 287 (misrepresentation by the employer that the employee was covered by professional indemnity insurance, implied term of the contract). It may cover false information about pre-existing medical conditions relevant to the employment, see Cheltenham Borough Council v Laird [2009] EWHC 1253 (QB); Gardiner v Bluescope Steel Pty Ltd [2005] NSWIRComm 1034; Hewison v Meridian Shipping Pte [2003] ICR 766.

Prerequisites for a Valid Contract

because it is like trying to “‘mop up all the spilt milk’ from whatever contractual relationship existed (previously), put it back in the milk bottle, and then to assume it never left the bottle.”133 In the case of fraudulent misrepresentation, the innocent party may also sue the other party for damages caused by the misrepresentation in the tort of deceit.134 In relation to employees, if the employee has intentionally given false information relevant to the employment in the application or on interview, a damages claim is available if it can be shown that the employer relied on the information and that this caused damage.135 The more likely outcome is dismissal.136 But if a potential employee is not asked about particular matters, such as prior criminal convictions,137 and does not volunteer false information, this will not normally amount to a misrepresentation. It would be different if there was a duty to disclose the information.138 This issue is discussed at [5.830]. Equally, there may be misrepresentations by employers as to job tenure, future advancement, and benefits. It is usually more advantageous for an employee to sue for misleading and deceptive conduct under the Australian Consumer Law, see below [4.240]. Negligent misrepresentation

[4.220] An innocent but negligent misrepresentation may be the basis of a claim for damages for negligence. Such a claim would be unlikely unless it could be shown that there was reasonable reliance on the information given and that this was known or ought to have been known by the person making the representation or that there had been some undertaking or assumption of responsibility or induced reliance in relation to statements made.139

133

134

135

136

137

138 139

Health Solutions (WA) Pty Ltd v Foley [2014] WASC 197 at [75]. Contrast Metz Holdings Pty Ltd v Simmac Pty Ltd (No 2) [2011] FCA 981; (2011) 216 IR 116 (rescission of contract for the sale of a business and a related contract of employment for misleading and deceptive conduct). Commercial Banking Co of Sydney Ltd v R H Brown (1972) 126 CLR 337; Cheltenham Borough Council v Laird [2009] EWHC 1253 (QB) (inaccurate statements in medical questionnaire). It could also involve illegal conduct, see Hewison v Meridian Shipping Pte [2003] ICR 766 (criminal offence arising from a deceitful representation that P had no condition which would affect his employment, no claim for loss of earnings resulting from unrelated injury). But where an employee “padded” their CV, but otherwise performed the work satisfactorily for the employer’s benefit, common law damages are not equivalent to amounts paid in salary and other benefits, Health Solutions (WA) Pty Ltd v Foley [2014] WASC 197 at [94] and see [10.120]. See, for example, Chalker v BCC [2002] QIRComm 109; Gardiner v Bluescope Steel Pty Ltd [2005] NSWIRComm 1034 (prior back injury); Hill v Compass Ten Pty Ltd (No 2) [2012] FCA 815 (first aid certificate). But restoring the parties to their precontractual position (rescission of the contract) may not be possible, see Health Solutions (WA) Pty Ltd v Foley [2014] WASC 197 (fraudulent misrepresentation about qualifications and experience) contrast Metz Holdings Pty Ltd v Simmac Pty Ltd (No 2) [2011] FCA 981; (2011) 216 IR 116 (rescission for misleading and deceptive conduct including employment contract entered into in conjunction with the sale of a business). As to whether there is a duty to disclose matters even if not asked, see [5.830]. An employer can be liable for discrimination against a person with a criminal record, see Australian Human Rights Commission Regulations 1989 (Cth), reg 4(a)(iii); Australian Human Rights Commission, On the Record Guidelines for the Prevention of Discrimination in Employment on the Basis of Criminal Record (Canberra 2012); Naylor, Patterson and Pittard, “In the Shadow of a Criminal Record: Proposing a Just Model of Criminal Record Employment Checks” (2008) 32(1) MULR 171 and Lexis Nexis Employment Law Bulletin (2012) 18(8), pp 114-135 discussing the issues of recruitment and criminal record checks. There could also be breach of the Privacy Act 1988 (Cth) in some circumstances, see [5.400]. Note the obligations where employees will be working with children, see [4.20] See Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (no negligence); Tobin v Commonwealth of Australia [2013] ACTSC 240 (negligent misstatement relating to superannuation) and discussion at [5.300].

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Statutory remedies

[4.230] In States where legislation similar to the English Misrepresentation Act 1967 has been adopted, damages may also be available for innocent misrepresentations.140 Where there are misrepresentations141 made during contractual negotiations142 prior to taking up the employment, there is potential liability under the “misleading and deceptive conduct” provisions of the Australian Consumer Law legislation, ss 18, 31 (formerly the Trade Practices Act 1974, ss 52, 53B).143 Section 31 (formerly 53B with minor amendments) provides that a person must not, in relation to employment that is to be, or may be, offered by the person or by another person, engage in conduct that is liable to mislead persons seeking the employment as to (a) the availability, nature, terms and conditions of, or any other matter relating to, the employment or (b) any other matter relating to the employment.144

Section 31 is concerned with promises given prior to the commencement of employment which induce the employee to take up the employment.145 Whether it is liable to mislead is determined by reference to “a particular type of reasonable person likely to be applying for the particular employment in question”.146 A promise that an employee’s relocation would be on secondment to another company when the employer never had this intention would be in breach of this provision.147 In O’Neill v Medical Benefits Fund of Australia Ltd,148 a recruiter’s promise that a management position was secure and long term was held to be misleading and deceptive, so that

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144 145

146 147 148

Misrepresentation Act 1971 (SA); Law Reform (Misrepresentation) Act 1977 (ACT). As to whether silence can, in some circumstances, give rise to misleading and deceptive conduct see, Groeneveld Australia Pty Ltd v Nolten (No 3) [2010] VSC 533. Representations as to the future are not actionable if they are made on reasonable grounds (discussed in the next section of this chapter). May extend to contractual variations (Alam v Ecological Development & Construction Pty Ltd [2010] FMCA 411) but not to information unrelated to contractual negotiations: Hebbard v Bell Potter Securities Ltd (2005) 191 FLR 68 at [32]. Erroneous representations by an employee about the employer’s business might not be caught vis-à-vis the employer, Dataflow Computer Services Pty Ltd v Goodman [1999] FCA 1625 per Hely J. See Walker v Salomon Smith Barney Securities Pty Ltd [2003] FCA 1099 at [180] (not disputed on appeal Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101 at [88], [89]); O’Neill v Medical Benefits Fund of Australia (2002) 122 FCR 455; Stoelwinder v Southern Health Care Network (2000) 177 ALR 501 at 503; Patrick v Steel Mains Pty Ltd (1987) 77 ALR 133 at 136; McCormick v Riverwood International (Australia) Pty Ltd (1999) 167 ALR 689 (on appeal Riverwood International v McCormick (2000) 177 ALR 193); Day v Myer Stores Ltd [2000] FCA 442; Shahid v Australasian College of Dermatologists [2008] FCAFC 72 (training program in “trade or commerce”); Mohareb v Lambert & Rehbein (SEQ) Pty Ltd [2010] QSC 126; Robertson v Knott Investments Pty Ltd [2010] FMCA 142; Moss v Lowe Hunt Partners Pty Ltd [2010] FCA 1181 (employer’s financial position). But there is no misrepresentation where the employee proposes the form of words, and has taken legal advice, Hockey v WIN Corporation Pty Ltd [2013] FCA 772. State and Territory legislatures have incorporated the new Australian Consumer Law provisions into their Fair Trading Acts, for example, Fair Trading Act 1987 (NSW), s 27. Walker (David) v Salomon Smith Barney Securities Pty Ltd [2003] FCA 1099 at [187]; Stryke Corporation Pty Ltd v Miskovic [2007] NSWCA 71 at [7]; McRae v Watson Wyatt Australia Pty Ltd [2008] FMCA 156; Haros v Linfox Australia Pty Ltd [2012] FCAFC 42; (2012) 219 IR 177 (no reliance, entire understanding clauses). Employers may also sue under these provisions, see Driver Recruitment Pty Ltd v Wedeco Avp Pty Ltd [2008] NSWCA 290 (unchecked fraudulent references, background or referees, claim against recruitment agency). Swindells v Victoria [2015] VSC 19 at [74] (with reference to the now repealed Fair Trading Act 1999 (Vic) s 13). Sheldrick v WT Partnership (Aust) Pty Ltd (1998) 89 IR 206, on appeal WT Partnership (Aust) Pty Ltd v Sheldrick [1999] FCA 843. O’Neill v Medical Benefits Fund of Australia Ltd (2002) 122 FCR 455.

Prerequisites for a Valid Contract

when the employment was terminated O’Neill was able to claim compensation, based on what he would have earned in his former position.149 There is also a general prohibition of misleading or deceptive conduct by a person in trade and commerce in the Australian Consumer Law, s 18 (formerly s 52 of the Trade Practices Act 1974) which can also apply to contracts of employment. Section 18 requires the conduct to occur “in trade and commerce”. The High Court in Concrete Constructions (NSW) Pty Ltd v Nelson,150 drew a distinction between conduct in the course of an activity that was not itself of a trading character, but was undertaken in the course of or as an incident to trade or commerce and conduct which is itself “an aspect or element of activities or transactions, which, of their nature, bear a trading or commercial character”.151 Decisions on the earlier provision (s 52) held that the section did not apply to incidental activities such as internal communications such as where an employer during the employment makes representations relating to incentive schemes or where inaccurate information is given to an employee which results in the employee being injured.152 The High Court suggested that there is potential for the statutory prohibition on misleading and deceptive conduct to apply if the misleading or deceptive conduct is made “in the course of, or for the purposes of, some trading or commercial dealing between the corporation and the particular employee”.153 The High Court did not make it clear whether this would extend to cover a claim for damages for breach of an express or implied representation made prior to the employment.154 Since Concrete Constructions, a division in judicial views on this issue continues.155 There is also special provision in the Fair Work Act 2009 (Cth), s 345, in relation to false or misleading misrepresentations about “workplace rights” that are made knowingly or recklessly, see [13.260].

149

150 151

152 153 154

155

See also Magro v Freemantle Football Club Ltd [2005] WASC 163 cf Haros v Linfox Australia Pty Ltd [2012] FCAFC 42; (2012) 219 IR 177; Keays v J P Morgan Administrative Services Australia Pty Ltd [2012] FCAFC 100; (2012) 224 IR 406 (reasonable grounds for representations as to the future). Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 603 per Mason CJ, Deane, Dawson and Gaudron JJ. Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 604.Alternatively, in the minority view, the section applies only to conduct which misleads a person in that person’s capacity as a consumer: see at 607, 614, 621, 623 per Brennan, Toohey and McHugh JJ. Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594. Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 604 per Mason CJ, Deane, Dawson and Gaudron JJ. The earlier case holding that s 52 applied to an implied warranty of safety (Wright v TNT Australia Ltd (1989) 85 ALR 442) was mentioned but not regarded as relevant in Nelson (1990) 169 CLR 594 at 601. See Chapter 10. See Barto v GPR Management Services Pty Ltd (1991) 105 ALR 339 at 344-345; Carter v Geoff Layton & Co Pty Ltd (unreported, Full Federal Court, 21 June 1993) (offer of franchise to employee); Roberts v Hongkongbank of Australia (1993) 35 AILR 213; Saad v TWT Ltd (1995) 38 AILR 4208; Chaplin v Birdogan (1998) 146 FLR 243; Stoelwinder v Southern Health Care Network (2000) 97 IR 76; McCormick v Riverwood International (Australia) Pty Ltd (1999) 167 ALR 689 per Weinberg J; Walker v Salomon Smith Barney Securities Pty Ltd (2003) 140 IR 433 per Kenny J; Magro v Freemantle Football Club Ltd [2005] WASC 163. See also Groeneveld Australia Pty Ltd v Nolten (No 3) [2010] VSC 533 (failure to disclose by director fiduciary of conflict of interest, in trade and commerce). Contra that negotiations for the termination of a contract of employment were not in trade or commerce but were internal communications, Martin v Tasmanian Development and Resources (1999) 89 IR 98; Mulcahy v Hydro-Electric Commission (1998) 85 FCR 170; Hearn v O’Rouke (2002) 193 ALR 264; Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (representations as to incentive retention scheme) at [195] per Buchanan, McKerracher JJ (s 52 does not apply to pre-employment representations and in any event does not apply to retention incentive payments); White J expressed no view on this issue, at [345].

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Advantages of a statutory claim [4.240] Claims based on the Australian Consumer Law, ss 18, 31 (formerly Trade Practices Act 1974 (Cth), ss 52, 53B) are likely to be coupled with claims for breach of contract. The statutory claim may, however, provide advantages over a claim for breach of contract. There can be liability under the statutory provisions even if there is no concluded contract156 and even if the representation would not have qualified as a contractual term.157 No fault is required for liability under these provisions.158 Under the statututory provisions, it is sufficient if there is a misleading representation which the plaintiff relies upon and suffers damage.159 There is no need to show an intention to mislead or deceive.160 In the context of an offer of appointment, there may be promises relating to future promotion and salary opportunities, duration of the position and so on. Whereas the law relating to misstatements might not always catch statements relating to future conduct or intentions,161 these are caught by Australian Consumer Law, s 4 (formerly Trade Practices Act 1974, s 51A). The Australian Consumer Law, s 4 presumes that representations relating to future matters are misleading unless the corporation can show that at the time the representations were made they were made on reasonable grounds.162 It would be misleading if an offer of employment was made when there was never any real prospect that it would be confirmed by the representor’s employer.163 But there is no breach simply because later on circumstances change and the substance of the representations are no longer true.164

Duress, undue influence Duress at common law [4.250] A contract of service that has been entered into under duress or by reason of undue influence can be regarded as at an end or continuing (voidable) at the option of 156 157

158

159

160 161 162

163 164

Darmody v National Centre Automotive [2003] FMCA 358 at [86], [87] (plaintiffs resigned from jobs to take up new employment with the defendant which never eventuated). Sheldrick v WT Partnership (Aust) Pty Ltd (1998) 89 IR 206 and on appeal WT Partnership (Aust) Pty Ltd v Sheldrick [1999] FCA 843; O’Neill v Medical Benefits Fund of Australia [2002] FCAFC 188 (representation by head hunter on behalf of the employer that the employment would be “secure and for the long term”); Moss v Low Hunt & Partners Pty Ltd [2010] FCA 1181 (representations of financial soundness of the employer company). Thus where the representation relates to safety, there may be a breach even if the employer has not been negligent, Stryke Corporation Pty Ltd v Miskovic [2007] NSWCA 72. Contrast the implied contractual term which is a duty to take reasonable care, see [6.100]. As to the powers of the ACCC, see for example, Australian Competition and Consumer Commission v Roberson [2008] FCA 1735. Walker v Salomon Smith Barney Securities Pty Ltd [2003] FCA 1099 at [187] on appeal Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101 (plaintiff resigns job to take up a new job on the representation that the new job is long term). See also Darmody v National Centre Automotive [2003] FMCA 358 at [86], [87] (Federal Magistrates Court) (plaintiffs resigned from jobs to take up new employment with the defendant which never eventuated); Moss v Low Hunt & Partners Pty Ltd [2010] FCA 1181 (representations of financial soundness of the employer company). Cf Roberts v University of New England [2009] FMCA 964. Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 197 per Gibbs J. See Carter, Contract Law in Australia (6th ed, 2013), at [18.08]. Sheldrick v WT Partnership (Aust) Pty Ltd [1998] FCA 1794 and on appeal WT Partnership (Aust) Pty Ltd v Sheldrick [1999] FCA 843 (representations of long term commitment to employee honest and on reasonable grounds at the time they were made), at [8.1] per Einfeld J; Keays v J P Morgan Administrative Services Australia Pty Ltd [2012] FCAFC 100; (2012) 224 IR 406. Darmody v National Centre Automotive [2003] FMCA 358 at [86], [87]; cf Hatt v Magro [2007] WASCA 124. Walker v Salomon Smith Barney Securities Pty Ltd [2003] FCA 1099 at [201] and on appeal Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101; University of Western Australia v Gray (No 20) [2008] FCA 498 at [1589], not considered on later appeal University of Western Australia v Gray [2009] FCAFC 116; (2009) 179 FCR 346.

Prerequisites for a Valid Contract

the party who has been under compulsion.165 Duress is actual or threatened violence or imprisonment directed to a party to the contract or to the party’s spouse, parent or child.166 Additionally, in exceptional circumstances, a contract may be unenforceable because of economic duress:167 The law will not give effect to an apparent consent which was induced by the pressure exercised upon one party when the law regards that pressure as illegitimate … Pressure will be illegitimate if it consists of unlawful threats or amounts to unconscionable conduct … Even overwhelming pressure, not amounting to unconscionable or unlawful conduct, however, will not necessarily constitute economic duress.168

In Universe Tankships Inc of Monrovia v International Transport Workers Federation,169 the plaintiff, in order to avoid an economically disastrous black ban by the defendant union, paid a substantial sum to the defendant’s welfare fund. The plaintiff sought to recover the amount paid. Lord Scarman said: There must be pressure, the practical effect of which is compulsion or absence of choice. Compulsion is variously described in the authorities as coercion or the vitiation of consent. The classic case of duress is, however, not the lack of will to submit but the victim’s intentional submission arising from the realisation that there is no other practical choice open to him.170

In Australia the following principles have been applied: [First] the threat or conduct … need not be directed to the person or property of the victim … but can be to the legitimate commercial and financial interests of the party. Secondly, if the conduct or threat is not unlawful, the resulting agreement may nevertheless be set aside where the weaker party establishes undue influence (actual or presumptive) or unconscionable conduct based on an unconscientious taking advantage of his or her special disability or special disadvantage in the sense identified in Amadio … Thirdly, where [there is] … a contravention of a statutory provision such as s 51AA, s 51AB or s 51AC [unconscionable conduct provisions] of the Trade Practices Act 1974 [now Australian Consumer Law, Pt 2-2], the Court may be entitled to take into account a broader range of circumstances than those considered relevant under the general law. However, it does not follow that because … there was a material inequality of bargaining

165 166 167

168

169 170

It is sufficient if duress is one of the reasons for entry into the contract, Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40. See, for example, Barton v Armstrong [1976] AC 104. In relation to sexual harassment, see Chapter 15. North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd; The Atlantic Baron [1979] 1 QB 705; Universe Tankships Inc of Monrovia v International Transport Workers Federation [1983] AC 366; Pao On v Lau Yiu Long [1980] AC 614; Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298; Mitchell v Pacific Dawn Pty Ltd [2006] QSC 198, later proceedings refusing relief in relation to a settlement agreement, Mitchell v Pacific Dawn Pty Ltd [2010] QSC 243. It would not include a threat to sue, see Beerens v Bluescope Distribution Pty Ltd [2012] VSCA 209; (2012) 39 VR 1. Crescendo Management Pty Ltd v Westpac Banking Corp (1988) 19 NSWLR 40 at 45, 46 per McHugh JA, and see Deemcope Pty Ltd v Cantown Pty Ltd [1995] 2 VR 44; Parras Holdings Pty Ltd v Commonwealth Bank of Australia [1999] FCA 391; Parkesinclair Chemicals (Aust) Pty Ltd v Asia Associates Inc [2000] VSC 362. Lawful industrial action should not qualify, Finn J in Australasian Meat Industry Employees’ Union v Peerless Holdings Pty Ltd [2000] FCA 1047 at [51]-[55] (AWA industrial action). Universe Tankships Inc of Monrovia v International Transport Workers Federation [1983] AC 366. Universe Tankships Inc of Monrovia v International Transport Workers Federation [1983] AC 366 at 400. See also Lord Diplock at 383-384. See also Mitchell v Pacific Dawn Pty Ltd [2003] QSC 86 (refusal to pay certified sum to contractor to coerce contractor to accept a lower sum), later proceedings refusing relief in relation to a settlement agreement, Mitchell v Pacific Dawn Pty Ltd [2010] QSC 243.

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power, a contract between such parties will necessarily be set aside. Most “contracts of adhesion” will fall into that category, but most will be valid.171

The issue rarely arises in individual employment contracts even if an employee is driven through economic necessity to accept employment on unfavourable terms on a take it or leave it basis.172 The finding of economic duress is difficult to demonstrate even if an employee could show that there is a threat to breach or actual breach of an existing employment contract in order to force the employee to agree to a variation to an existing contract or to enter into a new less favourable contract.173 The concepts of duress and coercion also apply to the protection of workplace rights and entry into agreements under the Fair Work Act 2009 (Cth).174 The Fair Work Act 2009 provisions are discussed at [13.260.] Undue influence

[4.270] A more subtle form of pressure arises in undue influence cases. Undue influence occurs where such influence is exercised over the will of one of the contracting parties that the plaintiff’s ability to make decisions is impaired so that the transaction cannot be regarded as “the free, voluntary and independent act of the weaker party”.175 Wherever the court finds undue influence it will not allow a transaction to stand.176 Delay in making the allegation of undue influence will defeat the action.177 171

172

173

174

175 176

177

Australian & New Zealand Banking Group Ltd v Karam (2005) 64 NSWLR 149 at [66]; Denmeade v Stingray Boats (a firm) [2003] FCAFC 215; Carsten Pty Ltd v Law Mortgages Queensland Pty Ltd [2004] VSC 258; Small v Tyco Projects (Australia) Pty Ltd [2006] NSWIRComm 18; Transpacific Industries Pty Ltd v Whelan [2008] VSC 403. See PMC Holdings Ltd v Smith [2002] EWHC 1575 (QB) (service agreement, usual staff agreement, queries raised in argument – can a threat to breach a contract qualify as economic duress? Is the defence still available if the threat has passed?). The unconscionability provisions of the Trade Practices Act 1974 (Cth) have been replaced by the new Australian Consumer Law, ss 21, 22. Doyle v Secure Parking Pty Ltd (1997) AIRC (8 Sept 1997, Locke JR) (no duress where employee would not be made permanent unless new contract signed); Transpacific Industries Pty Ltd v Whelan [2008] VSC 403 at [46]-[50] (no duress where justified threat of summary dismissal leading up to deed of separation). Cf Hayman v Kkut Pty Ltd [2002] WADC 107 (duress where employee required to sign a deed of indemnity prior to commencing work). Contrast Tunbridge v Linde Material Handling Pty Ltd (unreported decision No 40/97, Patch JR, 31 January 1997), (employee with financial problems forced to sign a deed of release to secure severance payment, no duress). Would a demand for repayment of embezzled funds to an employee’s family in return for non-prosecution, suffice? Cf Carrier v Georges [2013] NSWSC 401. This might also amount to a constructive dismissal, see Hepworth Heating Ltd v Akers [2003] All ER (D) 33 (Jul) EAT (no threat of unlawful conduct, threat of lawful termination); PMC Holdings Ltd v Smith [2002] EWJC 1575 (contract affirmed by later conduct). Breach of contract alone unlikely to be sufficient to constitute duress, see Body Bronze International Pty Ltd v Soleil Tanning Oxford Pty Ltd [2007] FCA 371 at [29]. Would breach of an award suffice as unlawful conduct? See Hotville Pty Ltd v NSW Nurses’ Association [2002] NSWIRComm 338. Note also Fair Work Act 2009 provisions relating to sham contracts and where an employee agrees to sign on as an independent contractor when threatened with dismissal. Fair Work Act 2009 (Cth), s 343, (coercion in relation to workplace rights extends to prospective employees, s 341(3) – (5)); s 344 (undue influence and undue pressure in relation to National Employment standards, modern awards, enterprise agreement, individual flexibility arrangements, guarantee of annual earnings, deduction in relation to the performance of work); s 355 (action or threatened action to coerce the employment or non-employment of a particular person, engagement or non-engagement of independent contractors or in relation to the allocation of work or duties). These are civil remedy provisions, see [12.30]. Bridgewater v Leahy (1998) 194 CLR 457 at 478. As to the proper basis for claims based on undue influence, see Birks, “Undue Influence as Wrongful Exploitation” (2004) 120 LQR 34. Fowler v Wyatt (1857) 24 Beav 232; 53 ER 347 at 237 (Beav), 348 (ER); CIBC Mortgages plc v Pitt [1994] 1 AC 200; Credit Lyonnais Bank Nederland NV v Burch [1997] 1 All ER 144 (junior employee with modest wage mortgages flat to provide unlimited guarantee for indebtedness of employer). Allcard v Skinner (1887) 36 Ch D 145.

Prerequisites for a Valid Contract

Three different situations may arise.178 First, some relationships are by their very nature so close that undue influence may be presumed. These include such classes of person as spiritual advisers, medical practitioners, solicitors and persons who stand in the position of parents (loco parentis). In Mathew v Bobbins,179 the English Court of Appeal declined to enlarge the established list of presumptive relationships to include that of master and servant. Secondly, outside these formal relationships, there will be a presumption of undue influence if it can be shown that there in fact existed a relationship of trust and confidence.180 Thirdly, even in relationships where there is no presumption, relief on the ground of undue influence may nevertheless be available if the weaker party proves domination was in fact exercised.181 This occurred where a junior employee on a modest wage mortgaged her flat as a guarantee for her employer’s loan.182 Conversely, undue influence may be an issue where an 84-year-old employer made lavish gifts to an employee who acted as his secretary and companion.183 Although duress and undue influence are distinct defences, they can be seen as part of the court’s wider jurisdiction to protect against unconscionable contracts.

Unconscionable contracts [4.280] Unconscionable dealing looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so.184

In the employment context, it is very unlikely that there will be the relevant unconscionability sufficient to set aside the contract. This is particularly the case as unfairness or unequal bargaining power between the parties does not, of itself, constitute a special disability which may be the basis of the claim for unconscionability.185 Provided that the formal requirements for the creation of a contract are present, the common law did not overly concern itself with fairness or with the adequacy of the bargain between the parties. Doctrines of undue influence and duress are often considered to be underpinned by the wider principles of unconscionability.186 Unconscionability is also relevant to the operation of the doctrine of estoppel, which may prevent a party from refusing to honour a non-contractual representation or promise.187 Unconscionable dealing may itself provide a ground for 178 179 180 181 182

183 184 185 186 187

See Bank of Credit and Commerce International SA v Aboody [1990] 1 QB 923 at 953 and approved by HL in Barclays Bank plc v O’Brien [1994] 1 AC 180 at 189. Mathew v Bobbins (Unreported, CA UK, 21 June 1980); referred to in (1980) 54 ALJ 744, Credit Lyonnais Bank Nederland NV v Burch [1997] 1 All ER 144 at 152, 154, 158. This is used in a different sense to any contractual obligation of trust and confidence (now rejected in Australia in relation to employers), see [5.160]. Johnson v Buttress (1936) 56 CLR 113 at 134-135 per Dixon J. Credit Lyonnais Bank Nederland NV v Burch [1997] 1 All ER 144; Steeples v Lea [1998] Fam Law 75 (receptionist offers house as security under very disadvantageous terms). Cf O’Sullivan v Management Agency & Music Ltd [1985] QB 428 (relationship of manager and young musician/composer was one of trust and confidence). In re Craig Decd; Meneces v Middleton [1971] Ch 95. Commercial Bank of Australia v Amadio (1983) 151 CLR 447 at 474 per Deane J followed in Westpac Banking Corp v Robinson (1993) 30 NSWLR 668. Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 462 per Gibbs CJ. See, for example, Louth v Diprose (1992) 175 CLR 621. See, for example, Gill v Cape Contracts Ltd [1985] IRLR 499 and [4.120]. Note also Australian Consumer Law, s 31 (formerly Trade Practices Act 1974 (Cth), s 53B) – employment agencies are prohibited from engaging in misleading conduct in relation to job offers: see [4.230]) and s 18 (formerly s 52) – false and misleading conduct.

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setting aside a contract.188 In the leading case, Commercial Bank of Australia Ltd v Amadio,189 Mason J expressed the principle as follows: Relief on the ground of unconscionable conduct will be granted when unconscientious advantage is taken of an innocent party whose will is overborne so that it is not independent and voluntary, just as it will be granted when such advantage is taken of an innocent party who, though not deprived of an independent and voluntary will, is unable to make a worthwhile judgment as to what is in his best interest.

This power to set aside contracts on grounds of unconscionability is extremely limited and has little impact on contracts of employment. Under the general law, a plaintiff employee must be able to demonstrate that the defendant employer knew or ought to have known of a special disadvantage and exploited that disadvantage. Special disadvantage includes poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary.190

The mere fact that a contract is entered into between parties in unequal bargaining positions does not provide a basis for interference.191 It may, however, make the courts more alert to the possibility that a restraint of trade clause in the contract might be contrary to public policy and void.192 Indeed, as we saw in Chapter 2, the very notion of a bargain was in practice a fiction for almost all employees as there was usually a total imbalance in the bargaining positions of the parties; employees were obliged to take the terms offered by the employer or go elsewhere. Even where an employee is able to take advantage of the doctrines of unconscionability, they are not likely to be of much use. This is because the remedy available under the general law is to set aside the contract. Thus it would be of no help to an employee who wished to retain employment on more favourable terms, to enforce a non-contractual promise or to seek damages.193 Statutory unconscionability [4.290] General law principles of unconscionability have been adopted in the Competition and Consumer Act 2010 (Cth), formerly the Trade Practices Act 1974 (Cth). Section 20 of the Australian Consumer Law194 (formerly Trade Practices Act 1974, s 51AA) provides: A person must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law from time to time.

The section does not apply to conduct prohibited by ss 21, 22 of the Australian Consumer Law dealing with unconscionable contracts for the provision of goods and 188 189 190 191 192

193 194

See Finn, “Unconscionable Conduct” (1994) 8 J Con L 37 at 39. Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 461. See also Louth v Diprose (1992) 175 CLR 621. Bromley v Ryan (1956) 99 CLR 362 at 405 per Fullagar J. Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 462 per Gibbs CJ. See [4.340]. For example, Schroeder Music Publishing Co Ltd v Macaulay [1974] 1 WLR 1308 at 1315-1316 per Lord Diplock; Clifford Davis Management Ltd v WEA Records Ltd [1975] 1 WLR 61; Mathew v Bobbins (unreported, UK Court of Appeal, 21 June 1980, but referred to in (1980) 54 ALJ 744). Cf Barlow v Neville Jeffress Advertising Pty Ltd (1994) 4 Tas R 391. Note the possibility that in some circumstances there may be a tort duty to take care, thus giving the potential for a damages claim: see Finn, “Unconscionable Conduct” (1994) 8 J Con L 37 at 42. The Australian Consumer Law in Sch 2 of the Competition and Consumer Act 2010 (Cth) comprises the provisions formerly enacted as Pt V of the Trade Practices Act 1974 (Cth). The Trade Practices Act 1974 was renamed and revised from 1 January 2011. The commentary provided here assumes that the relocation of former s 51AA (and indeed the whole of former Pt V of the Trade Practices Act 1974) into a separate schedule of the Act dedicated to consumer protection will not affect the precedent value of the cases discussed here.

Prerequisites for a Valid Contract

services (which does not apply to contracts of employment, see below). The fore-runner to s 20 (s 51AA) was enacted to link the equitable cause of action for unconscientious dealing with the much more extensive remedies and procedures available under the former Trade Practices Act 1974,195 now the Competition and Consumer Act 2010, s 87. Under s 87, the court has discretion to make such orders as it thinks appropriate to compensate a person who has suffered or is likely to suffer loss or damage from a contravention of the Australian Consumer Law, or to prevent or reduce such loss. Orders may include a declaration that the whole or part of the contract is void, or a declaration varying the contract and declaring that it is to have effect as so varied. The court may also make an order refusing to enforce any or all of the provisions of the contract. Additionally, orders may be made requiring a refund of money or return of property as well as payment for loss or damage.196 It was not until ACCC v Samton197 that the Full Federal Court held that unconscionable conduct within former s 51AA (now s 20) was not limited to cases of unconscionable dealing where advantage was taken of a person under a special disability (the Amadio-style case) but extended to include other equitable doctrines, such as equitable estoppel. The Full Court approved the earlier Federal Court decision of French J in ACCC v CG Berbatis Holdings Pty Ltd (No 2)198 which indicated that the expression “unconscionable” in the statute might extend to include at least duress and undue influence. However, in GPG (Australia Trading) Pty Ltd v GIO Australia Holdings Ltd,199 Gyles J in the Federal Court expressed the narrower view that the section did not extend to incorporate all equitable grounds of relief in which unconscionable conduct was an element but only extended to unconscionable dealing. In Australian and New Zealand Banking Group v Kara,200 the New South Wales Court of Appeal considered how the concept of economic duress should be accommodated within established equitable principles. The Court of Appeal held that it was best to restrict consideration to threatened or actual unlawful conduct and that the term “economic duress” should be abandoned and the term “illegitimate pressure” preferred. The High Court was given an opportunity, which it did not take, to resolve uncertainties about the scope of s 51AA (now s 20) in ACCC v CG Berbatis Holdings Pty Ltd.201 The majority disposed of the case on the narrow equitable ground of unconscionable dealing holding that mere inequality of bargaining power did not constitute a special disadvantage sufficient to attract the doctrine of unconscionable dealing. Ultimately therefore, in the absence of High Court authority, uncertainty continues as to whether s 20 incorporates the broader range of equitable doctrines in which unconscionable conduct is an element. As noted in the previous section, employees very rarely are able to take advantage of unconscionability under the general law and equally under the Australian Consumer Law. Independent contractors – statutory unconscionability and unfair contracts [4.300] Increasingly, as we have seen in Chapters 2 and 3, work is being performed in Australia in relationships other than under a contract of employment. In relation to 195 196

197 198 199 200 201

See Healey, “Unconscionable Conduct in Commercial Dealings” (1993) 1 TPLJ 169. In exceptional circumstances, it may extend to rescinding a contract of employment entered into in conjunction with the sale of a business, see Metz Holdings Pty Ltd v Simmac Pty Ltd (No 2) [2011] FCA 981; (2011) 216 IR 116 (rescission for misleading and deceptive conduct) but in the usual case this is not possible, see Health Solutions (WA) Pty Ltd v Foley [2014] WASC 197 (fraudulent misrepresentation about qualifications and experience) including employment contract entered into in conjunction with the sale of a business). ACCC v Samton (2002) 117 FCR 301. ACCC v CG Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491. GPG (Australia Trading) Pty Ltd v GIO Australia Holdings Ltd (2001) 117 FCR 23. Australian and New Zealand Banking Group v Karam (2005) 64 NSWLR 149. ACCC v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51. See Dean, [2004] SLR 12.

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small businesses (which can include independent contractors) remedies for unconscionable contracts involving the provision of goods and services202 may be available under ss 21, 22 of the Australian Consumer Law, “Unconscionable conduct in business transactions”.203 Although these provisions are principally directed to unconscionable conduct in commercial dealings, they can overlap with the unfair work contracts provisions in the Independent Contractors Act 2006 (Cth).204 The Independent Contractors Act 2006 was enacted to protect the freedom of independent contractors to enter into contracts for services in which at least one party is a constitutional corporation.205 Effectively the purpose of the legislation was to exclude independent contractors from State-based industrial regulation206 and to provide a limited unfair contracts jurisdiction.207 The pivotal concept is that there must be “a contract for services.” This adopts the common law distinction between a contract of employment (a contract of service) and a contract for services, see [2.60]. The Act also requires that in order to constitute a “contract for services”208 the services contract must have “the requisite constitutional connection” specified in s 5(2) but the contractor need not be a natural person.209 However, subject to some narrow exceptions, it is only independent contractors who are natural persons who may seek review of their contract for services under Pt 3 of the Act.210 The main exception is for independent contractors that are corporations where “the work to which the contract

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For the purposes of s 20 of the Australian Consumer Law, it should be noted that the term “services” is defined in the Competition and Consumer Act 2010, s 4 to include contracts for the performance of work, but to exclude the performance of work under a “contract of service”, that is, a contract of employment. The provision is wider than the general law “unconscionability”, In determining whether there is unconscionability giving rise to a breach of s 22, a court can take into account these non-exclusive factors: the relative bargaining positions of the parties, unfair tactics and the extent to which the parties acted in good faith (s 22(2)(a), (d), (l)); whether there were genuine negotiations, equivalent treatment with other customers, s 22(3)(e), (f). The provision is wider than the general law “unconscionability”, see ACCC v Simply No-Knead (Franchising) Pty Ltd (2000) 104 FCR 253; ACCC v 4WD Systems Pty Ltd (2003) 200 ALR 49; ASIC v National Exchange Pty Ltd [2005] FCAFC 226; Attorney-General of New South Wales v World Best Holdings Ltd (2005) 63 NSWLR 557. Note also new unfair contracts provisions in relation to small businesses, Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Act 2015 (Cth) (in effect from 12 November 2016). The Independent Contractors Regulations 2007 (Cth), reg 6 (identifying “other review proceedings” for the purposes of s 14(3) of the Act) makes it clear that parties to independent work contracts may seek a review of contracts under the provisions of the competition legislation as an alternative to unfair contracts review under s 12 of the Independent Contractors Act 2006. Independent Contractors Act 2006 (Cth), s 3(1)(a) or is otherwise within the legislative power of the Commonwealth by having the “requisite constitutional connection”, see definition s 5(2). See also s 3(1)(b), (c). It is sufficient if it “relates to the performance of work”: see ATS (Asia Pacific) Pty Ld v Dun Oir Investments Pty Ltd [2012] FCA 1460. It expressly excludes State and Territory laws which deem certain parties to a services contract to be an employer or an employee Independent Contractors Act 2006 (Cth), s 7(1). Unfair contracts legislation in the States is expressly excluded from applying to parties to a contract for services Independent Contractors Act 2006 (Cth), s 7(1). One express exception to the statutory scheme for regulating services contracts erected by the Independent Contractors Act 2006 is contained in s 7(2)(b) thereof which effectively preserves the State legislation in New South Wales and Victoria for regulating independent contractors involved in the transport industries in those States. The other exception in s 7(2)(b) is for outworkers. Services need not be provided to the other party to the contract, see Kerrisk v DC Holdings WA Pty Ltd [2013] FCA 1217; Jy Smile Centre Pty Ltd v Idameneo (No 123) Pty Ltd [2013] FCCA 336 (dental services to patients). Independent Contractors Act 2006 (Cth), s 4 definition of “independent contractor”. Independent Contractors Act 2006 (Cth), s 11.

Prerequisites for a Valid Contract

relates is wholly or mainly performed by a director of the body corporate or a member of the family of a director” of the corporation.211 Part 3 vests an exclusive unfair contracts jurisdiction in respect of services contracts in the Federal Magistrates’ Court and the Federal Court of Australia. An application for review of a contract must be filed within 12 months of the date on which the contract ends.212 The jurisdiction is much narrower than under the unfair contracts jurisdiction under the Industrial Relations Act 1996 (NSW) which previously applied in NSW.213 The grounds for review under the Independent Contractors Act, Pt 3 are that the contract214 is harsh or unfair. However, the court is expressly limited by s 12(3) to considering only the terms of the contract and other relevant matters existing at the time when the contract was made.215 The court in determining if a contract is harsh or unfair under Pt 3 is directed to have regard to:216 (a) the relative strengths of the bargaining positions of the parties to the contract, and, if applicable any persons acting on behalf of the parties; and (b) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, a party to the contract; and (c) whether the contract provides total remuneration that is, or is likely to be, less than that of an employee performing similar work; and (d) any other matter that the court thinks is relevant. The court may make orders varying or setting aside the contract.217 The relatively few decisions under the federal Act suggests that it plays only a small role in protecting independent contractors in their bargaining with big business.218 The reality is that the Independent Contractors Act 2006 has not been utilised by dependent contractors (see [2.100]) for whom these provisions may have provided remedies. It should not be surprising that this group of vulnerable contractors often beholden to a single client do not have the financial means or capacity to initiate court proceedings to ensure fair treatment. Cognate with the Independent Contractors Act 2006 are the provisions in 211 212 213

214

215

216 217

218

Independent Contractors Act 2006 (Cth), s 11(1)(b). Independent Contractors Regulations 2007 (Cth), reg 6. The act applies to terminated contracts, Informax International Pty Ltd v Clarius Group Ltd [2012] FCAFC 165; (2012) 231 IR 422 at [174]. Re Transport Workers Union of Australia (1993) 50 IR 171 at 214. Munro J regarded the New South Wales and federal unfair contracts jurisdictions as sufficiently similar to justify reference to the New South Wales jurisdiction in determining questions of fairness in the federal jurisdiction. For detailed commentary on the NSW jurisdiction see earlier editions of this work, particularly Chapter 13 of the 5th edition, published in 2002. For the most detailed account of the New South Wales provisions, see Phillips and Tooma, The Law of Unfair Contracts in NSW (Lawbook Co, Sydney, 2004). Extends to “a condition or collateral arrangement that relates to a services contract” which is deemed to be part of that services contract if the condition or arrangement has the requisite constitutional connection, Independent Contractors Act 2006 (Cth), s 5(4); Faulkner v BIS Industris Ltd [2012] FMCA 592. There is no requirement that a clause argued to be unfair be valid, Informax International Pty Ltd v Clarius Group Ltd [2012] FCAFC 165; (2012) 231 IR 422 (restrictive covenant). Informax International Pty Ltd v Clarius Group Ltd [2012] FCAFC 165; (2012) 231 IR 422; but evidence as to what occurred may demonstrate the capacity of the contract to be unfair, at [188], [189]. Contrast s 106(2) of the Industrial Relations Act 1996 (NSW) which allows the New South Wales Industrial Court to find that a relevant contract was an unfair contract either “at the time that it was made or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason”. Independent Contractors Act 2006 (Cth), s 15(1). Under Independent Contractors Act 2006 (Cth), s 16; Orders may extend to matters predating the order as well as prospectively, Informax International Pty Ltd v Clarius Group Limited [2012] FCAFC 165; (2012) 231 IR 422. The first decision was Keldote Pty Ltd and Ors v Riteway Transport Pty Ltd (2008) 176 IR 316; (2009) 185 IR 155; [2010] FMCA 394.

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Pt 3-1 of the Fair Work Act 2009 (Cth), which deal with “sham arrangements” that are really employment relationships misrepresented as independent contracting relationships, see discussion at [2.100].219

Unlawful contracts [4.310] The last essential element in a valid contract is that it must not be entered into for illegal consideration220 nor have for its object a purpose which is either illegal or contrary to public policy; nor must it involve a statutory breach which renders the contract unenforceable.221 Employment contracts found to be illegal in the requisite sense are void and unenforceable. But this will occur only in the clearest of cases where statute or public policy demands it.222 The illegality may be very minor and not lead to the conclusion that the contract is contrary to public policy.223 If there is illegality, the courts may be able to find that the contractual obligations not involving illegality are still enforceable after striking out those sections affected by the illegality.224 For example, a court may refuse to enforce a duty of confidentiality where serious criminal conduct is involved,225 but this leaves otherwise intact the contract of employment. Similarly where a clause is void in restraint of trade, that clause might be excised leaving other obligations under the employment contract still effective (see [4.430]). Modern decisions reveal a much more liberal response to illegal conduct if the transgression is minor, especially if unintended, and unenforceability will result in severe economic consequences and inconvenience, particularly for innocent parties. It may be questionable … whether public policy is well served by driving from the seat of judgment everyone who has been guilty of a minor transgression.226

The contract of employment may be affected by statutory illegality.

219 220

221 222

223 224

225 226

See Fair Work Act 2009 (Cth), ss 357 – 359. Marshall v NM Commercial Management [1997] 1 WLR 1527 at 1532. If a minor part of the consideration is illegal it may be severable, McFarlane v Daniell (1938) SR (NSW) 337 (provision in restraint of trade severable); Carney v Herbert [1985] AC 301 at 311; Bull v Pitney-Bowes Ltd [1967] 1 WLR 223; cf Wyatt v Kreglinger [1933] 1 KB 793. Pearce v Brooks (1866) LR 1 Exch 213 (hire of carriage for purposes of prostitution); cf Barac v Farnell (1994) 53 FCR 193 (receptionist undertaking routine office duties at a brothel). Miller v Miller [2011] HCA 9; (2011) 242 CLR 446. There is continuing uncertainty in the United Kingdom, see Jetivia SA v Bilta (UK) Ltd [2015] UKSC 23; Hounga v Allen [2012] EWCA Civ 609; [2014] 1 WLR 2889 (trafficked worker). Barac v Farnel (1994) 53 FCR 193 (receptionist undertaking routine office duties at a brothel). Attorney-General v Gray [1977] 1 NSWLR 406 (contract held to be severable as to lawful payments where a teacher was paid at higher rate in breach of statute); McFarlane v Daniell (1938) 38 SR (NSW) 337 (consideration illegal in part by reason of a clause in restraint of trade; this did not render the entire contract void); Niemann v Smedley [1973] VR 769 (agreement to allot shares to employees valid despite an illegal provision permitting the company to finance the purchase, the financing clause was severable); Blue Chip Trading Ltd v Helbawi [2009] IRLR 128 (foreign student working excessive hours). See also SST Consulting Services Pty Ltd v Rieson (2006) 225 CLR 516. A v Hayden (1984) 156 CLR 532. For discussion whether this can be extended to other wrongdoing, see [5.710]. St John Shipping Corporation v Rank [1957] 1 QB 267 at 288-289 per Devlin J; Hall v Woolston Hall Leisure Ltd [2001] 1 WLR 225 (CA) (failure to deduct tax from salary did not prevent a claim under Sex Discrimination Act 1975 (UK)).

Prerequisites for a Valid Contract

Statutory illegality [4.320] An employment contract may be tainted by illegality arising under statute.227 In Yango Pastoral Co Pty Ltd v First Chicago Australia Pty Ltd,228 Gibbs ACJ explained: (1) the contract may be to do something which the statute forbids (2) The contract may be one which the statute expressly or impliedly prohibits (3) The contract although lawful on its face may be made in order to effect a purpose which the statute renders unlawful, or (4) The contract although lawful according to its terms, may be performed in a manner which the statute prohibits. It is rare for contracts of employment to fail by reason of illegality,229 but there are some circumstances where that might be the outcome. For example, it is arguable that statute impliedly prohibits the formation of a contract of employment in relation to a person who has not had the required statutory background checks where the employment involves working with children.230 Contracts of employment for work by illegal immigrants or visitors or overseas students in breach of their work-related conditions of their visas might also be impliedly prohibited, discussed below. A person might be employed to work in a real estate agency to undertake general duties. But if, among their other duties, the employee undertook the work of a real estate salesperson without the required licence this would be a criminal offence but not necessarily render the contract of employment unenforceable.231 The authorities draw distinctions between three types of cases:232 (i) an express statutory provision against the making of a contract … by fastening upon some act which is essential to its formation, whether or not the prohibition be absolute or subject to some qualification such as the issue of a licence; (ii) an express statutory prohibition, not of the formation of a contract… but of the doing of a particular act; an agreement that the act be done is treated as impliedly prohibited by the statute and illegal; and (iii) contracts … not directly contrary to the provisions of the statute by reason of any express or implied prohibition in the statute but which are “associated with or in furtherance of illegal purposes”. Even if the contract is not expressly or impliedly prohibited, the contract may still be unenforceable: “the courts act not in response to a direct legislative prohibition but … from ‘the policy of the law’” which requires the court to consider “the nature, scope and terms of the statute, the nature of the evil against which it is directed, the nature of the conduct prescribed and the pre-existing state of the law” and whether “the legislative purpose will be fulfilled without regarding the contract … as void and 227

228 229

230 231 232

Equuscorp Pty Ltd v Haxton [2012] HCA 7; (2012) 246 CLR 498. In Hotville Pty Ltd v New South Wales Nurses’ Association [2002] NSWIRComm 338, terminations in breach of an award were valid at common law and not illegal even if subject to statutory penalty for breach. Yango Pastoral Co Pty Ltd v First Chicago Australia Pty Ltd (1978) 139 CLR 410 at 413. Inco Ships Pty Ltd v Hardman [2007] FCA 1138 (false statements in certificate of medical fitness); Fox v GIO Australia Ltd [2002] NSWIRComm 318; Hockey v WIN Corporation Pty Ltd [2013] FCA 772 (payments on termination did not make provision for withholding tax). See [4.20]. Orchid Avenue Realty Pty Ltd v Percival [2003] QIC 160 (prohibition on employment of a real estate salesperson without a registration certificate); Sims v Gawne [2005] NSWSC 750 (27 July 2005). Cited with approval in Miller v Miller [2011] HCA 9; (2011) 242 CLR 446 at [26].

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unenforceable.”233 If the employment contract is completely unenforceable it has very serious consequences for the employee. The employee will not be able to recover unpaid wages,234 may not be able to recover workers’ compensation when injured at work235 and may be prevented from claiming compensation for wrongful or unfair dismissal where available.236 Moreover courts are alert to the consequences of declaring a contract of employment unenforceable where this results in the exploitation of vulnerable workers.237 Consequently, by applying the “statutory purpose” test, it will need to be a very clear case before a contract of employment will be held void and unenforceable.238 Courts have held that even if a criminal offence had been committed, a receptionist at an illegal brothel was able to rely on her employment to claim workers’ compensation.239 Where the purpose of the legislation is protective, this may assist in finding that an agreement which did not comply with legislative requirements was void and unenforceable.240 A statutory provision prohibiting a person from driving whilst their driver’s licence had been suspended did not render unenforceable a contract of employment with the suspended driver.241 Where the illegality does not infect the entire contract, the offending provision may be severed leaving the contract of employment operative.242 Where the statute directly prohibits the employment of particular persons this may provide a stronger basis for finding that a contract of employment is unenforceable. A 233

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236

237 238

239 240 241

242

Miller v Miller [2011] HCA 9; (2011) 242 CLR 446 at [26], [27], [29] citing with approval Nelson v Nelson (1978) 139 CLR 310 at 552 per Deane and Gummow JJ. Applied in Hockey v WIN Corporation Pty Ltd [2013] FCA 772 at [70]. Sometimes there may be recovery independently of the void contract on some other basis, see Equuscorp Pty Ltd v Haxton [2012] HCA 7; (2012) 246 CLR 498. See, in relation to the contract of employment, Stone v ElectraNet Pty Ltd [2005] SAIRComm 35 (unfair dismissal); Hussein v Secretary of the Department of Immigration and Multicultural Affairs (No 2) [2006] FCA 1263 (quantum meruit might not be available for illegal worker). See Australia Meat Holdings Pty Ltd v Kazi [2004] QCA 147 at [72] per McMurdo J (dissenting) (workers’ compensation not recoverable because the contract was prohibited by the Migration Act 1958 (Cth), s 235). But note Workers Compensation Act 1987 (NSW), s 24 (illegal contract to be treated as valid for purposes of the Act). . Illegality may also affect a torts claim, Miller v Miller [2011] HCA 9; (2011) 242 CLR 446. See also Major v Ministry of Defence [2003] EWCA Civ 1433; Inco Ships Pty Ltd v Hardman [2007] FCA 1138 (false medical statement not prevent workers compensation claim). Contrast Hewison v Meridian Shipping Pte [2003] ICR 766 (false statement and criminal offence) (that the P had no medical condition affecting employment. Held: no claim for loss of earnings where epilepsy would have prevented employment as a crane driver, future employment depended upon continuing deceit). See, for example, Blue Chip Trading Ltd v Helbawi [2009] IRLR 128 (foreign student working excessive hours). Nonferral (NSW) Pty Ltd v Taufia (1998) 43 NSWLR 312; Inco Ships Pty Ltd v Hardman [2007] FCA 1138 at [49]. Contrast Australia Meat Holdings Pty Ltd v Kazi [2004] QCA 147 per Williams JA at [44]; Vakante v Addey & Stanhope School [2004] 4 All ER 2004 (immigrant knowingly and wrongly represents that he is entitled to work – no claim for discrimination); Hounga v Adenike Allen [2014] UKSC 47 (Illegal entry of trafficked minor, claim for discrimination available). Severance might be possible, Blue Chip Trading Ltd v Belbawi [2009] IRLR 128 (overseas student working more than permitted hours not allowed to recover minimum wage for additional hours worked). See also Guthrie, “Illegal Contracts Impropriety, Immigrants and Impairment in Employment Law” [2002] Alt LJ 43; (2002) 27(3) Alt LJ 116 Barac v Farnell (1994) 53 FCR 193; Phillipa v Carmel [1996] IRCA 451, Ritter J, (where there was a policy of non-prosecution, an illegal sex worker was held able to claim for unfair dismissal). See McLennan v Surveillance Australia Pty Ltd (2005) 142 FCR 105; Financial Integrity Group Limited v Farmer and Bravium Pty Limited [2009] ACTSC 143. Neither party was aware of the suspension and unenforceability of the employment contract was not within the purposes of the statutory provisions, Riley v WorkCover/Allianz Australia [2002] SAWCT 79 (workers’ compensation claim). For example, under the Fair Work Act 2009 (Cth), ss 473 – 475 any agreement to pay wages during periods of industrial action is illegal and unenforceable, (see [5.120]) but this would normally be severable leaving the contract of employment otherwise enforceable.

Prerequisites for a Valid Contract

statutory provision banning an illegal entrant performing work without permission was held not to prevent the injured worker from recovering workers’ compensation.243 But in relation to a differently worded provision, the Queensland Court of Appeal came to a different conclusion. The Migration Act 1958 (Cth), s 235(3) provides that “an unlawful non-citizen244 who performs work in Australia … commits an offence”. It was held that this effectively prohibited a contract of employment for the performance of work by an illegal immigrant.245 A similar conclusion has been reached in relation to the Migration Act 1958, s 235(1) where a non-citizen is lawfully in the country but has breached the work-related conditions of their visa.246 If the contract is totally unenforceable, this creates serious risks of exploitation of vulnerable workers working excessively long hours, not paid or underpaid for work and threatened with deportation if reported to the authorities.247 One solution may be to permit recovery in relation to work legally undertaken rather than declare the entire contract unenforceable.248 There are additional provisions imposing criminal and civil penalties for illegal work which may also be a basis for arguing that a contract which breaches these provisions is unenforceable, at least to the extent, that it involves illegal work. Section 245AB(1) makes it an offence (and liability for a civil penalty) to allow or continue to allow an unlawful non-citizen to work. Similarly it is an offence if a non-citizen is allowed to work in breach of a visa condition, s 245AC. There is no 243

244 245

246

247

248

Nonferral (NSW) Pty Ltd v Taufia (1998) 43 NSWLR 312 (CA) at 315 per Cole JA, at 319-320 per Stein JA. There the statute prohibited the performance of work by an illegal entrant without permission; this did not prevent a workers’ compensation claim, the court refusing to follow Workcover Corp (San Remo Macaroni Co) v Da Ping (1993) 5 WCATR 367 SC SA. Note in the former case there was a discretion under the Workers Compensation Act 1987 (NSW), s 24 in relation to illegal contracts. Note also Singh v TAJ (Sydney) Pty Ltd [2006] NSWCA 330 (impact of s 235 on a workers’ compensation claim); Yong Fu Zhang v Mei Hu t/as Edern Furniture and WorkCover Authority of NSW [2006] NSWWCCPD 15. Defined in Migration Act 1958, s 14 as a person without a current visa. Australia Meat Holdings Pty Ltd v Kazi [2004] QCA 147; Hussein v Secretary of the Department of Immigration and Multicultural Affairs (No 2) [2006] FCA 1263 at [67] (contract void for illegality and unenforceable; a claim based on quantum meruit would not succeed). See also. Singh v TAJ (Sydney) Pty Ltd [2006] NSWCA 330; Rahhal v Minister for Immigration [2008] FMCA 933 (may be breached as director of company). Cf Kharbanda v Ministry of Transport (No 2) [2008] NSWADT 203 (fit and proper person to drive a taxi); MG Lines Pty Ltd t/as Coniston Station v Navi [2013] NTSC 20. Smallwood v Ergo Asia Pty Ltd [2014] FWC 964 (no unfair dismissal, employer was not an eligible sponsor for 457 visas). See generally re 457 visas, Campbell and Tham, “Labour Market Deregulation and Temporary Migrant Labour Schemes: An analysis of the 457 Visa Program” (2013) 26(3) Aust J of Lab Law 239. It has been estimated that 50,000-100,000 temporary migrant workers are working in breach of their visas, Howells, Report of the 2012 Review of the Migration Amendment (Employer Sanctions) Act 2007 (Dept of Immigration and Citizenship, Canberra 2011), http://www.border.gov.au/ ReportsandPublications/Documents/government-response/howells_report.pdf#search=howells. Note the broader arguments in the public interest for refusing to enforce work agreements which breach the Act, at 30-31. As to remedies available for breach of the Fair Work Act, see Simmons, “Making Possibilities Realities: Compensation for Trafficked People” (2012) 34 Syd LR 511, 535. For a recent example relating to a chain of convenience stores alleged to have exploited overseas students, see A Ferguson, S Danckert, P Hatch, “7-Eleven Scandal: Company Announces Review of Pay Practices”, Sydney Morning Herald (31 August 2015). http://www.smh.com.au/business/workplace-relations/7eleven-scandal-company-announces-reviewof-pay-practices-20150831-gjbof4.html#ixzz3kR04CkbY See, for example, Blue Chip Trading Ltd v Helbawi [2009] IRLR 128 (foreign student working excessive hours). In relation to discrimination claims, see Vakante v Addey & Stanhope School [2004] 4 All ER 2004 (employee at fault in fraudulent misrepresentation to employer, no claim for discrimination); Soteriou v Ultrachem Ltd [2002] EWCA Civ 1597 (CA) (employee involvement, no claim); Hounga v Allen [2014] UKSC 47; [2014] ICR 847 (discrimination claim available to an illegal immigrant, the victim of trafficking). The Productivity Commission recommends that employers be fined “at least the value of any unpaid wages” over and above existing penalties, Productivity Commission Workplace Relations Framework, Draft Report, Aug 2015 p.749, Draft recommendation 21.1.

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breach of s 245C if “reasonable steps at reasonable times” were taken to verify that the “worker is not in breach of a work-related condition”.249 Both provisions impose liability for criminal offences and civil liability penalties.250 However, a person will not be criminally liable unless they knew or were reckless as to whether the worker was entitled to work.251 But they may be liable to a civil penalty irrespective of whether they knew about the workers entitlement to work.252 Similar criminal and civil liability provisions apply to a labour hire agency which refers prospective workers to clients or others.253 There are stronger criminal penalties (five years imprisonment) where the worker is being exploited.254 The definition of “allows” another to work includes an engagement under a contract of service.255 These amendments create specific offences for employing unlawful non-citizens who do not have a right to work in Australia or employing workers in breach of their work related visa conditions; it is arguable that these provisions impliedly prohibit the formation of a contract of employment in those circumstances.256

Contracts contrary to public policy [4.330] A contract may be unenforceable at common law as contrary to public policy. “Public policy” is “that principle of the law which holds that no subject can lawfully do that which has a tendency to be injurious to the public, or against the public good”.257 Stipulations in employment contracts by which the law is brought into public disrepute are contrary to public policy and will make the contract illegal.258 Examples of contracts which are illegal as a result of their containing stipulations contrary to public policy include agreements not to serve in the military forces of the country,259 agreements to evade taxation laws260 and to oust the jurisdiction of the courts.261 249

250 251 252

253 254

255

256

257 258

259 260

The measures taken to verify may include using a computer system to certify the persons work status (VEVO, Visa Entitlement Verification Online) or undertaking other measures prescribed by regulation, Migration Act 1958 (Cth), s 245AC(2). See Migration Act 1958 (Cth), s 486R dealing with the level of civil penalty that may be imposed. Migration Act 1958 (Cth), ss 245SAB(4), 245AC(4) Migration Act 1958 (Cth), ss 245SAB(5), 245AC(5). But they are not liable for a criminal or civil penalty if they have undertaken reasonable steps to verify the workers right to work, see Migration Act 1958 (Cth), s 245AC(2). Migration Act 1958 (Cth) ss 245AE (unlawful non citizens), 245AEA (lawful non citizens in breach of a work-related condition). Migration Act 1958 (Cth) ss 245AD(1)(2), s 245AEB. “[E]exploited” is defined in s 245AH by reference to the definition defined in the Criminal Code Act 1995 (Cth), Schedule, s 271.1A which provides: “For the purposes of this Division, exploitation, of one person (the victim) by another person, occurs if the other person’s conduct causes the victim to enter into any of the following conditions: (a) slavery, or a condition similar to slavery; (b) servitude; (c) forced labour; (d) forced marriage; (e) debt bondage”. And see Simmons, “Making Possibilities Realities: Compensation for Trafficked People” (2012) 34 SLR 311. Migration Act 1958 (Cth), s 245AG(2). It also extends to engagement as a contractor or arrangements for the performance of work by another, taxi drivers under bailments and the like and the leases or licence of premises to be used for sexual services. Discussed by Orr dealing with the legislation prior to 2007, 2013 amendments, “Unauthorised Workers: Labouring Beneath the Law?” in Arup et al (eds), Labour Law and Labour Market Regulation (Federation Press, 2006), p 677. Egerton v Brownlow (1853) 4 HL Cas 1; 10 ER 359. An agreement not to prosecute an employee accused of stealing is not unarguably void as contrary to public policy, Woodham v Roberts Ltd [2010] TASSC 31. Cf the argument relating to duress by a family member who paid the sums embezzled, Carrier v Georges [2013] NSWSC 401 Re Beard; Beard v Hall [1908] 1 Ch 383. Claims by an employee will not normally be barred unless there is complicity by the employee in the breach, Hall v Woolston Hall Leisure Ltd [2001] ICR 99 (CA); Hewcastle Catering Ltd v Ahmed [1992] ICR 626 (tax evasion scheme with involvement by, but no benefit to employees did not prevent unfair dismissal claim); Wheeler v QualityDeep Ltd [2005] ICR 265. See also Vakante v Addey &

Prerequisites for a Valid Contract

There are many classes of contract which are illegal because they infringe some rule of common law. Thus, an agreement to commit a crime or a tort and agreements in restraint of marriage or those tending to injure the public service or harm the state are illegal at common law. Similarly, contracts for immoral purposes or which promote immoral purposes were also unenforceable at common law. In recent times, reflecting a more liberal society, courts have generally taken an approach which protects employees provided that this does not in effect result in enforcement of payment for sexual services.262 In relation to wages, a clause which allows payment of wages otherwise than by cash is unenforceable.263 Nor will courts permit an employee to assign salary to an extent that will leave the employee without sufficient means of support.264 An employer who has lent an employee money cannot require the employee to remain in the employment until the debt is repaid.265 This is because employees cannot be forced to work for another without their consent. Similarly, a stipulation which would give an employer a right to transfer an employee to the service of another without the consent of the employee is contrary to public policy:266 “no employee is an asset in the employer’s balance sheet to be bought and sold”.267 This is to be distinguished from labour hire arrangements (see Chapter 3) and the operation of the Fair Work Act 2009 (Cth) provisions relating to transfer of businesses.268 Many of the circumstances offensive to public policy are rarely of any moment in employment cases.269 The main exceptions are agreements that reduce an employee to

261 262

263

264

265 266

267 268 269

Stanhope School [2004] 4 All ER 2004 (employee at fault in fraudulent misrepresentation to employer, no claim for discrimination); Soteriou v Ultrachem Ltd [2002] EWCA Civ 1597 (CA) (employee involvement, no claim). Claims under the anti-discrimination legislation may be an exception, Hall v Woolston Hall Leisure Ltd [2001] ICR 99 (CA) (claim available for breach of anti-discrimination legislation where employer without complicity of employee does not deduct tax from salary). See also Hockey v WIN Corporation Pty Ltd [2013] FA 772 (contract not involving illegality relating to tax obligations for redundancy payments). Australian Agricultural Co v Federated Engine-drivers and Firemen’s Association of Australia (1913) 17 CLR 261 (attempt to exclude jurisdiction of court void). Coral Leisure Group Ltd v Barnett [1991] ICR 503 (claim for dismissal available as procurement of prostitutes not part of employee’s contract); Barac v Farnell (1994) 53 FCR 193 (workers’ compensation paid to a receptionist undertaking routine office duties at a brothel even if criminal offence involved); Phillipa v Carmel [1997] AILR 3 at 130, Ritter J, (Industrial Relations Commission NSW) (where there was a policy of non prosecution, a sex worker was held able to claim for unfair dismissal). Contrast Markulin v Drew (1993) (unreported, Young J, Supreme Court NSW, 12 August 1993) (duties include sexual services, no claim for breach of contract); B v McM (1987) 8 SR (WA) 36 (personal injuries claim for loss of income derived from prostitution not allowed). Note also the statutory recognition of de facto and domestic relationships, Property (Relationships) Act 1984 (NSW) and the recognition of ante-nuptial agreements, Family Law Act 1974 (Cth), s 85A. Reflecting the philosophy of the early Truck Acts, see now in relation to national system employers, Fair Work Act 2009 (Cth), ss 322, 323 – 327, Fair Work Regulations 2009 (Cth), reg 2.12 in relation to national system employers and employees discussed at [12.160]. Horwood v Millar’s Timber and Trading Co Ltd [1917] 1 KB 305. Note the statutory provisions which impose limits on attachment or garnishee of wages: see, for example, Civil Procedure Act 2005 (NSW), ss 121, 122. But assignment will be valid under the general law if it is reasonable from the assignor’s point of view, Russell & Co Ltd v Austin Fryers (1909) 25 TLR 414; Denny v Denny and Warr [1919] 1 KB 583; Re Mirams [1891] 1 QB 594. Wallis v Day (1837) 2 M & W 273; 150 ER 759. Nokes v Doncaster Amalgamated Collieries [1940] AC 1014 at 1026; MSB of NSW v Posiden Navigation Inc (1982) 1 NSWLR 72; Foster v Parbery; Foster v Elliott [2009] NSWSC 1304; Bartlett v Wirrina Resort Pty Ltd [2009] SAIRC 56 at [28] (implied consent to transfer); Gothard v Davey [2010] FCA 1163. Compare cases involving the transfer of business discussed [12.100]. Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd (2005) 222 CLR 194 at [48] per Gleeson CJ, Hayne, Callinan and Heydon JJ. And see chapter 3 at [3.50]. Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd (2005) 222 CLR 194 (transfer of business under the Workplace Relations Act 1996 (Cth), s 149(1)(d), see [12.100]. For an exceptional case, see A v Hayden [No 2] (1984) 156 CLR 532 (a contractual stipulation

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servile status and contracts in restraint of trade. One class of stipulations in employment contracts which will void contracts, on the ground that they are unlawful because they infringe the common law rules as to what constitutes public policy, are those which are servile; the contract must not contain any “servile incidents”. A person may contract to provide labour or service to an employer but these must not amount to servitude which is contrary to public policy:270 public policy requires that every man shall be at liberty to work for himself, and shall not be at liberty to deprive himself or the State of his labour, skill or talent, by any contract that he enters into … The public have an interest in every person’s carrying on his trade freely: so has the individual. All interference with individual liberty of action in trading, and all restraints of trade of themselves, if there is nothing more, are contrary to public policy, and, therefore, void.271

Migrants, overseas students272 and sex workers are particularly vulnerable to exploitation which in some cases may amount to actual servitude where they may be unable to leave work premises and their passports are taken.273 Because this frequently involves workers from overseas, the employment may breach the Migration Act 1958 and any agreement relating to the work may be unenforceable, see [4.320]. A contract of employment, or a severable part of a contract, may be contrary to public policy because it is in restraint of trade. The common law doctrine making illegal restraints of trade, except to the extent that they go no further than is reasonable to protect the legitimate interests of the covenantors, is still important in Australian law, notwithstanding the enactment of special legislation dealing with competition.274 The doctrine is regularly tested in contests between employers and departing executive and managerial staff. Many of the decisions determining questions of the illegality of express contractual restraints arise as interlocutory injunction applications.

Contracts in restraint of trade [4.340] The following section is concerned with the general principles for determining whether contractual restraints imposed on employees during and after employment are unenforceable as contrary to public policy. Restraints are also known as restrictive or negative covenants. Chapter 5 gives detailed examination to particular types of restraint, non-compete, non-solicitation, non-poaching/recruitment, exclusive service and confidentiality clauses.

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protecting the identity of secret service officers could not be relied upon where its effect would be to hinder the prosecution of criminal proceedings in breach of the public policy protecting the administration of justice). See also discussion whether a contractual duty of confidentiality is enforceable where the person enforcing the confidence has been guilty of iniquitous conduct, see [5.710]. Bowen LJ in Davies v Davies (1887) 36 Ch D 359 at 393; Blackstone, Commentaries, Book 1, p 139. A requirement to work excessive overtime injurious to health is not itself a breach of this rule, Johnstone v Bloomsbury Health Authority [1992] 1 QB 333 at 346 per Stuart Smith LJ discussed [6.300]. Herbert Morris Ltd v Saxelby [1916] AC 688. There can be no enforceable restraint against the particular employee leaving the employment, Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852 at [70]. Reilly, “Protecting Vulnerable Migrant Workers: The Case of International Students” (2012) 25 AJLL 188. See in the criminal context, R v Wei Tang [2009] VSCA 182; R v Tang (2008) 82 ALJR 1334 (sexual servitude of overseas sex workers); R v Kovacs [2009] 2 Qd R 51 (domestic worker). Migrant domestic workers may be particularly at risk, Mantoulavalou, “Servitude and Forced Labour in the 21st Century: The Human Rights of Domestic Workers” (2006) 35(4) Ind LJ 395; Schloenhardt and Jolly, “Honeymoon from Hell: Human Trafficking and Domestic Servitude in Australia” (2010) 32 SLR 671; Criminal Code (Cth), Divs 270, 271. See Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181. For a general treatise on the doctrine see Heydon, The Restraint of Trade Doctrine (3rd ed, LexisNexis Butterworths, Chatswood, 2008).

Prerequisites for a Valid Contract

In executive and managerial level employment contracts275 (and increasingly in relation to other employees), it is usual to include clauses protecting the employer’s business interests both during the employment and after the employment comes to an end.276 For example, a restraint may seek to prevent a former employee working in a particular business or services within a defined geographical area for a defined period of time to prevent the soliciting of the former employer’s customers or employees or using confidential information in a new or competing business.277 Early law was that all restraints on freedom of trade278 were void because, by their very nature, they were contrary to public policy. But if a restraint is reasonable, judged by reference to the parties and to the public, such a stipulation will be valid.279 There are two considerations: first, whether the restraint is a reasonable protection of the employer’s interests and secondly, whether the restraint is contrary to the public interest.280 These two questions are frequently merged with the tendency to emphasise the protection of the employer’s interests rather than giving separate consideration to the public interests involved. In relation to the public interest, in Buckley v Tutty281 the High Court said: The law treats unreasonable restraints as unenforceable because it is contrary to the public welfare that a [person] should unreasonably be prevented from earning [a] living in whichever lawful way [that person] chooses and that the public should unreasonably be deprived of the services of a [person] prepared to engage in employment.

Covenants during the employment [4.350] Initially the courts concerned themselves with covenants not to compete after the termination of the employment.282 But it is now clear that the doctrine also applies to restraints during the employment.283 An “exclusive service” agreement operating during the currency of employment provided it is reasonably necessary to protect the 275

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The restraints may be contained in a variety of instruments, see Austress-Freyssinet Pty Ltd v Kowalski [2007] NSWSC 399 (shareholder and employment agreement); Transpacific Industries Pty Ltd v Whelan [2008] VSC 403; Miles v Genesys Wealth Advisers Ltd [2009] NSWCA 25; (2009) 200 IR 1; Metcash Ltd v Jardim (No 3) [2010] NSWSC 1096 at [42] (deed of separation/release); Kynixa Ltd v Hynes [2008] EWHC 1495 (shareholder agreement); BDO Group Investments (NSW-Vic) Pty Ltd v Ngo [2010] VSC 206 (sales agreement, unit holders agreement and employment contracts); Seven Network v Warburton No 2 [2011] NSWSC 386 (Management Equity Participation Deed). Note also Reed Business Information v Seymour [2010] NSWSC 790 at [42] (not deciding whether restraint of trade doctrine applied to genuine resolution of dispute regarding restraint). It is common in the financial services sector as well as real estate, recruitment, retail, distribution, medical services, information, insurance, media and hairdressing, see Arup et al, “Restraints of Trade: The Legal Practice” (2013) 36(1) UNSWLJ 1 at 6. EagleBurgmann Australia Pty Ltd v Leabeater [2012] NSWSC 573; (2012) 219 IR 449 (product manager, restraint for one year preventing employment etc with a competing business in Australia or New Zealand held valid). “Trade” in this context is not read restrictively and applies to all forms of employment, Buckley v Tutty (1971) 125 CLR 353 at 371-372. Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co [1894] AC 535; Lindner v Murdock’s Garage (1950) 83 CLR 628. The common law rules insofar as they relate to employees are unaffected by the anticompetitive provisions of the Competition and Consumer Act 2010 (Cth), s 51(2). Carter, Contract Law in Australia (6th ed Lexis Nexis), pp 579-580. Buckley v Tutty (1971) 125 CLR 353 at 380 and see Dabscheck, “Sport, Human Rights and Industrial Relations” (2000) 6(2) AJHR 23. For discussion of the continuance of a restrictive covenant under a contract which has come to an end, see Honeyball and Pearce, “Contract, Employment and the Contract of Employment” (2006) 35(1) Ind LJ 30 at 39. Obligations continue even when the relationship as distinct from the contract has come to an end: Tullett Prebon (Australia) Pty Ltd v Purcell [2009] NSWSC 1079 at [38]-[64] affirmed on appeal Tullett Prebon (Australia) Pty Ltd v Purcell [2010] NSWCA 150 (effect of repudiation by employee on contractual obligations). Schroeder Music Publishing Co Ltd v Macaulay [1974] 1 WLR 1308 at 1314 per Lord Reid and at 1315 per Lord Diplock; Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126; Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337; Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852 at [45], [46].

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employer’s interests will be valid.284 Restraints against direct competition during the employment will rarely be judged unreasonable whereas restraints, operating after the employment relationship has ended, will be subject to more careful scrutiny, see [5.800]. Restraints imposed by third parties

[4.360] The doctrine applies not only to restraints imposed by contract between the employer and employee,285 it also applies to restraints imposed by agreements between employers286 and to restraints imposed by some third party or organisation.287 In Buckley v Tutty,288 the rules of the New South Wales Rugby Football League relating to transfer of players were held invalid as being in restraint of trade.

Restraints – protectable interests [4.370] In determining whether the restraint is enforceable, the employer must have a legitimate interest to protect (protectable interest) and the restraint must reasonably protect that interest (reasonableness of the restraint).289 An employer has interests that are capable of protection in confidential information, ([5.650]) customers (“customer connection”, see [5.600]) and staff ([5.740]). It is usual to find three types of covenants in employment contracts whose purpose is to protect those interests. First in relation to customers, there may be covenants which preclude the ex-employee from approaching (or dealing with) the firm’s existing clients or business connections (non-solicitation clauses). Secondly, there are usually covenants for the protection of confidential information and thirdly, in relation to senior executives, covenants against poaching or recruiting employees. All these interests are primarily protected by the use of a non-compete restraint which prevents the former employee from working for, or being involved in, a competing business for a defined period after the employment has ended. Although a pure non-compete covenant is prima facie unenforceable, it was held, in the often-cited case of Littlewoods Organisation Pty Ltd v Harris,290 that a general restriction of the ex-employee’s liberty to take up employment in a rival enterprise for a period of time may be the only feasible way of protecting legitimate interests such as confidential information. This is because it may be particularly difficult to define what will constitute confidential information for purposes of the restraint, see [5.660]; a non-compete covenant also prevents the former employee from soliciting customers for a new business or new employer. The no compete covenant is also a disincentive to recruit staff from the employer in setting up a new business. These are considered in detail in Chapter 5, [5.520]-[5.760].

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Ausdale Enterprises Pty Ltd v Sandford [2006] WASCA 191. Note the criticism by Brooks, “The Limits of Competition: Restraint of Trade in the Context of Employment Contracts” (2001) 24(2) UNSWLJ 27. And see [5.800]. As to restraints contained in other documents see [4.340]. Kores Manufacturing Co Ltd v Kolok Manufacturing Co Ltd [1958] 2 All ER 65 (agreement between corporations not to employ each other’s former employees held void as contrary to the public interest). Also in the US, in relation to non-hire agreements between employers such as Google and Apple, see Lobel, “The New Cognitive Property: Human Capital Law and the Reach of Intellectual Property” (2015) 93 Tex LR 789, 831. Earth Force Personnel Pty Ltd v EA Negri Pty Ltd [2010] VSC 426 (recruitment fee by labour hire company could be in restraint of trade). Buckley v Tutty (1971) 125 CLR 353 at 371-380. See also Hall v Victorian Football League [1982] VR 64; Adamson v West Perth Football Club (1979) 39 FLR 199 at 229-230; Adamson v NSW Rugby League Ltd (1990) 27 FCR 535 and on appeal (1991) 31 FCR 342. John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995 at [26]. Littlewoods Organisation Pty Ltd v Harris [1977] 1 All ER 1472.

Prerequisites for a Valid Contract

Covenant not to terminate the contract [4.380] An employer cannot enforce a covenant by the employee that the employee will not leave or end the employment prematurely: Equity will not enforce a covenant not to give notice or terminate a contract of employment, since to do so would amount to specific enforcement of a contract for personal services … Nor will equity lend its aid to achieving indirectly what it will not permit directly. … [T]here is no “legitimate interest” in preventing a particular employee from leaving employment that will support a restraint of trade. … [I]n this field courts “are bound to be jealous, lest they should turn contracts of service into contracts of slavery”.291

Long notice periods [4.390] There is also the suggestion that very long periods of notice for termination which cannot be justified also amount to a restraint of trade.292 At first sight it is difficult to see that a long period of notice could give rise to a restraint of trade; after all in relation to long serving senior employees with little job mobility, reasonable notice might require a long period of notice, see [9.20]. Long periods of notice can be advantageous for both the employer and the employee; it allows the employer time to find and train replacements, and allows a smooth handover to new employees; for the employee it allows time for making necessary adjustments and finding other employment. But long periods of notice are not necessarily in an employer or an employee’s interest where there is an underperforming employee or an unhappy workplace and the employee wishes to gain more experience or promotion and move on. From the employer’s viewpoint not much is to be gained by long notice periods when contracts frequently provide for payment in lieu of notice,293 the length of notice simply going to the amount of payment [9.150]. For the employee, a long notice period has the negative consequence that the employee cannot lawfully commence other employment during the notice period. Moreover the employer may assume that the employee’s loyalty can no longer be assured and attempt to “freeze out” the employee by providing no work – providing nothing more than a telephone and an empty desk. For the employee this can lead to a rapid diminution in skills, personal distress and prematurely leaving the employment in breach of the contract. These difficulties may be ameliorated to some degree (for what it is worth) if there is a duty to provide available work or if, in some circumstances, the employer’s conduct may be regarded as in breach of an implied duty.294 Consequently long periods of notice are not necessarily in restraint of trade but if they are abused (as has been the case with garden leave with the difference that the employee remains at work) they may be objectionable as effectively sterilising the employee’s capacity to work. Garden leave [4.400] The last three decades has seen growing use of garden leave clauses allowing the employer to keep the employee on their books (technically still employed and paid) but exclude the employee from the workplace when there has been a decision to end the employment. The employer may fear that the employee is no longer loyal and may wish to harm the employer’s interests; the employee may have decided to leave and work for 291 292 293 294

Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852 at [70] per Brereton J. Noted but not argued in BDO Group Investments (NSW-Vic) v Ngo [2010] VSC 206. See also Fair Work Act 2009 (Cth), s 117(2). The Australian High Court in Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 (and at [5.160]) has determined that contracts of employment do not include a term implied by law that employers must not act in a manner calculated to breach mutual trust and confidence, however it remains open for a court to find such a term implied in fact, depending on the circumstances of the case, and whether such a term is necessary to give the contract business efficacy. See [4.520] (implication in fact).

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a competitor but has to serve out a period of notice with the risk that confidential information, customers and other staff are at risk of moving to that competitor. The benefits of garden leave for the employer are that exclusion from the workplace restricts the employee’s access to confidential information, client contact and opportunities to solicit other employees to leave the employment. It also enables the employer to bring in and train replacements and re-establish client connections in anticipation of the employee’s departure. Long periods of garden leave, it was thought, not only avoided the problems and costs of trying to enforce post termination restraints but effectively provided an extended period of protection; restraints preventing competition, soliciting clients or staff during the employment could continue to be enforced295 and the employer protected by the employee’s exclusion from the workplace. It is now clear that the restrictions on the enforcement of post termination restraints cannot be avoided by the use of garden leave clauses which are treated similarly to post termination restraints.296 Any period of garden leave must be added to post employment restraints in determining whether the restraint is reasonably necessary to protect the employer’s interests and in the public interest.297 In some exceptional cases where employees have special skills, very long periods of garden leave may be out of keeping with dicta suggesting that the employer may have an implied duty to provide work if it is reasonably available, [5.310]. Other restrictions

[4.410] Can other restrictions inhibiting an employee leaving the employment (and indirectly restraining free competition) be a restraint of trade? Where the employee leaves work prematurely, the duty to repay any amounts paid as sign on or retention payments, bonuses for future performance or additional payments for serving the full contractual term have been held not to be in restraint of trade298 provided that these payments are intended to be a reward for loyalty and do not hinder the employee’s opportunity to work after leaving the employment.299 Despite the inhibiting effect, a contractual duty to report approaches by competitors is not in restraint of trade;300 indeed in many cases it can be a bargaining chip to achieve greater benefits from the existing employer.

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Imam-Sadeque v Bluebay Asset Management (Services) Ltd [2013] IRLR 344 at [144]-[145]; [2012] EWHC 3511 (QB); Thomson Ecology Ltd v APEM Ltd [2013] EWHC 2875. William Hill Organisation Ltd v Tucker [1999] ICR 291 at [25] per Morritt LJ (Robert Walker and Stuart-Smith LJJ agree); Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852 at [58]; Credit Suisee v Armstrong [1996] ICR 882 at 892. Garden leave clauses have the advantage that reasonableness is judged at the time they are sought to be enforced in contrast to restraints which are judged at the time the contract is entered into, see Tullett Prebon Plc v BGC Brokers [2010] EWHC 484 at [222]. Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852 at [65]-[69], [94]. Note subsequent proceedings when the restraint period had expired, Tullett Prebon (Australia) Pty Ltd v Purcell [2009] NSWSC 1079 (affirmed on appeal [2010] NSWCA 150); Bearingport Australia Pty Ltd v Hillard [2008] VSC 115; Tullett Prebon PLC v BGC Brokers [2010] EWHC 484 at [224]-[225]; cf Metcash Ltd v Jardim (No 3) [2010] NSWSC 1096 at [48]; Seven Network v Warburton (No 2) (2011) 206 IR 450. Nor do they operate as a penalty for breach Tullett Prebon PLC v BGC Brokers [2010] EWHC 484 at [269]. Tullett Prebon PLC v BGC Brokers [2010] EWHC 484 at [267], [271]-[274]. Tullett Prebon PLC v BGC Brokers [2010] EWHC 484 at [67].

Prerequisites for a Valid Contract

Is the restraint reasonable? [4.420] In determining the validity of a restraint, it must be shown first that the employer has a protectable interest (see [4.370]). Secondly, it must be shown that the restraint is reasonably necessary to protect those interests. In determining whether the restraint is reasonable, the courts will look at the circumstances at the time the contract is entered into.301 The validity of the restraint is judged at the time at which the contract is made, and having regard to what it entitled or requires the parties to do as distinct from what they intend to do or have actually done. As the parties have to turn their minds as to what is reasonable at the time the restraint is created, some allowance must be made for potential developments in the role of the employee and the nature of the business for which he or she might be responsible in the future.302 It will also take into account the relative bargaining positions of the parties and whether the employee had the opportunity to seek legal advice.303 This starts with the assumption that parties who bargain on equal terms are in a good position to determine what is reasonable in their own interests. Relevant also is the character of the business itself,304 and the nature of the employee’s connection with it. The closeness of the relationship between the employee and the customer, the more dependent the business is on long-term patronage by customers, and the more senior the employee is with the firm, are all factors that have inclined the courts to allow restraints to stand.305 Amounts paid to the employee for the restraint (restraint payments),306 the employee’s level of remuneration and reimbursed expenses as well as the impact on the employee of the restraint may also be relevant to the reasonableness of the restraint.307

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Lindner v Murdock’s Garage (1950) 83 CLR 628 at 653 per Kitto J; Amoco v Rocca (1973) 133 CLR 310 at 318 per Gibbs J; restraints in deeds of separation/release containing covenants may gain an advantage in this respect. Foreseeable future circumstances can be taken into account, Lindner v Murdock’s Garage (1950) 83 CLR 628 at 653; Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717 at [37] (renewal at the time of promotion). Restraints valid and reasonable at the outset may cease to be enforceable to the same extent where circumstances change, Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852 at [90]-[94] (replacements help re-establish client connection during four months garden leave). Note the different date for assessment of “garden leave” clauses, Tullett Prebon Plc v BGC Brokers [2010] EWHC 484 at [222]. Koops Martin v Reeves [2006] NSWSC 449, Bereton J at [53]; IceTV v Duncan Ross [2007] NSWSC 635 at [57] and see [2009] NSWSC 980. IceTV v Duncan Ross [2007] NSWSC 635 at [58] (and see note above); Miles v Genesys Wealth Advisers Ltd [2009] NSWCA 25; (2009) 200 IR 1 at [81]; Metcash Ltd v Jardim (No 3) [2010] NSWSC 1096 at [48]; Koops Martin v Dean Reeves [2006] NSWSC 449 at [93]. Courts may be more willing to enforce a restraint attached to the sale of a business with goodwill which also involved an employment contract with the vendor, see Metz Holdings Pty Ltd v Simmac Pty Ltd (No 2) [2011] FCA 981; (2011) 216 IR 116; Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852 at [53] (small industry where players well known and not unusual for clients to approach brokers without solicitation); Aussie Home Loans v X Inc Services [2005] NSWSC 285 (anti-poaching clause involving a competitive industry with high staff turnover where loan writers contracts could be ended with one week’s notice). See also Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 at [63] (accountants different to IT consultants). See M & S Drapers v Reynolds [1956] 3 All ER 814; Mason v Provident Clothing and Supply Co Ltd [1913] AC 724; Gilford Motor Co Ltd v Horne [1933] Ch 935; Miles v Genesys Wealth Advisers Ltd [2009] NSWCA 25; (2009) 200 IR 1; Metcash Ltd v Jardim (No 3) [2010] NSWSC 1096. Pearson v HRX Holdings Pty Ltd [2012] FCAFC 111; (2012) 220 IR 369 (exceptionally paid for all but 3 months of the restraint period and allocated 8% shareholding as compensation for the restraint). But payment is not conclusive on whether there is a protectable interest, Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852 at [86]-[87] per Brereton J. Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852 at [53]); Pearson v HRX Holdings Pty Ltd [2012] FCAFC 111; (2012) 220 IR 369; Emeco International Pty Ltd v O’Shea [No 2] [2012] WASC 348; (2012) 225 IR 471 at [176].

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Where the covenant protects customer connection, courts have considered the length of time needed to replace the employee and re-establish client relationships,308 and the period of notice that the employee was required to give on the assumption that this was the period thought sufficient to take measures to replace the employee.309 In relation to the protection required to protect confidential information, the currency of the employee’s knowledge of the employer’s business is relevant.310 Restraints as to time311 or space or both will be judged reasonable or otherwise against the background of the business itself and the employee’s part in it but “as the time of the restriction lengthens and the space of its operations extends, the weight of the onus upon the covenantee grows”.312 Furthermore, where both restraints (time and place) are present: guidance may be derived in dealing with a restriction relating to time from an examination of the restriction which is made in respect of space. And the converse remark is, of course, equally true. For instance, if the restriction in respect of space is extremely limited, it is evident that a very considerable restriction in respect of time may be more acceptable than would otherwise have been the case.313

The foundational concept that restraints are contrary to public policy places the onus of proving that a covenant is reasonable on the person asserting that it is reasonable and as the time of restriction lengthens or the space of its operation grows, the weight of the onus to justify it grows accordingly.314 There are new challenges where the restriction relates to operating in cyberspace.315 For a restrictive covenant to take effect even in the case of wrongful dismissal is not necessarily unreasonable although an employee who accepted the dismissal as a repudiation of the contract may be released from the obligations under the covenant.316

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Miles v Genesys Wealth Advisers Limited [2009] NSWCA 25; (2009) 200 IR 1 at [36]-[39] per Hodgson JA (Basten, Handley JJA agreeing); Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852; Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 at [56] noting that less time might be needed where the employee was one of a team dealing with customers, at [58]. BearingPoint Australia Pty Ltd v Hillard [2008] VSC 115 (180 days notice); BDO Group Holdings (Qld) Ltd v Sully [2015] QSC 166 at [76] (3 months notice period). Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717; (2006) 71 NSWLR 9 (12 months reasonable to re-establish connections and for knowledge to be out of date); Metcash Ltd v Jardim (No 3) [2010] NSWSC 1096 (CEO for 10 years, 12 month restraint contained in mutually agreed settlement in which both parties were legally represented and which was terminable by three months notice, restraint reasonable.) Compare BearingPoint Australia Pty Ltd v Hillard [2008] VSC 115 (12 months non-solicitation, no poaching clauses, 12 months too long not needed to re-establish customer connection or to protect against employees leaving). Periods spent as garden leave are to be set off against post termination restraints, see [4.400]. See also Woolworths Ltd v Olson [2004] NSWCA 372 at [69] (maximum time may be set with a discretion for a shorter time). M & S Drapers v Reynolds [1956] 3 All ER 814. Fitch v Dewes [1921] 2 AC 158 at 163; Geraghty v Minter (1979) 26 ALR 141. As to the effect of a clause allowing the employer to consent, see Emeco Interantional Pty Ltd v O’Shea (No 2) [2012] WASC 348; (2012) 225 IR 471 at [71]-[83]. Fitch v Dewes [1921] 2 AC 158 at 163. As to the effect on defence where the employee uses special software to permanently delete relevant emails, see Moody Kiddell & Partners Pty Ltd v Arkell [2013] FCA 1066. Thorpe, “The Restraint of Trade Doctrine in the Era of Digital Markets” (2015) 32 J Con L 244. Rock Refrigeration Ltd v Jones [1997] 1 All ER 1 (CA); Campbell v Frisbee [2002] EWCA Civ 1374 (CA) and see Wynn-Evans, “Restrictive Covenants, Reasonableness and Wrongful Dismissal” (1997) 113 LQR 377; Clarke, “Repudiation of Contract and Breach of Confidence: General Billposting v Atkinson Revisited” (2003) 32 Ind LJ 43.

Prerequisites for a Valid Contract

Severance [4.430] Courts may be able to sever the offending part of the restraint317 if it is possible to draw a line through the offending words or sections of the restraint so that the contract remains intelligible.318 Courts are generally reluctant to sever offending clauses as it otherwise allows an employer to cast the net as widely as possible to the detriment of the employee in the hope that a court will excise the offending restraint. Practitioners have attempted to facilitate severance by providing a number of alternatives known as step, ladder or cascading clauses.319 So, for example, a restraint may be stated to be enforceable in the alternative for three years, two years, one year, six months with the intention of allowing a court to sever time periods thought to be excessive. Some State courts have upheld these clauses despite the risk that they might be declared void for uncertainty and not a genuine attempt to define the extent of protection reasonably required.320 These cascading clauses severely disadvantage employees as restraints can be pitched beyond what is reasonable with the awareness that if it ever came to litigation a Court could find that a lesser restraint is valid.321 These clauses are likely to exert pressure on an employee to comply with the highest level of restraint and, except for very highly paid executives, to succumb if there is a risk of litigation.322 In New South Wales severance is made easier by the Restraints of Trade Act 1976. Under that Act: 317

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As to the difficulties where the issue of severance was not raised at first instance and where there is a single covenant parts of which are void, Wallis Nomineees (Computing) Pty Ltd v Pickett [2013] VSCA 24 at [73]-[90], [91]-[100] and see Emeco International Pty Ltd v O’Shea (No 2) [2012] WASC 348; (2012) 225 IR 471 at [214]-[220]. See SST Consulting Services Pty Ltd v Rieson (2006) 225 CLR 516 at [46] (three key questions); Hallam v Harvey [1901] SR (NSW) Eq 155 (restraint to apply to an actor “at any place within Australasian colonies or any other part of the world”, the latter part of the restraint could be severed. But courts will not rewrite or read down a restraint, Attwood v Lamont [1920] 3 KB 571; Davies v Davies (1887) 36 Ch D 359 (“so far as the law allows” void); Peters Ice Cream (Vic) Ltd v Todd [1961] VR 485 (“within a reasonable distance” void). See also IF Asia Pacific Pty Ltd v Galbally [2003] VSC 192 at [199]; Emeco International Pty Ltd v O’Shea (No 2) [2012] WASC 348; (2012) 225 IR 471. Note the more extensive operation of the Restraints of Trade Act 1976 (NSW), s 4(1) which provides that a restraint of trade is valid to the extent to which it is not against public policy, whether it is in severable terms or not, see Smith v Ward (1998) 45 NSWLR 702 at 719; Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317; Kone Elevators Pty Ltd v McNay [1997] ATPR 41-564; Woolworths Ltd v Olson [2004] NSWCA 372 and Law Reform Commission NSW, Report on Covenants in Restraint of Trade (LRC9, 6 Aug 1970). See also Stewart, “Drafting and Enforcing Post-Employment Restraints” (1997) 10 AJLL 181. For example, in separate clauses a restraint may be declared to apply for 12 months, 6 months, 3 months, or a geographic area may be progressively restricted, see JQAT Pty Ltd v Storm [1987] 2 Qd R 162; Run Corp Ltd v McGrath Ltd [2007] FCA 1669; Sear v Invocare Australia Pty Ltd [2007] WASC 30; Integrated Group Ltd v Dillon [2009] VSC 361; Hanna v OAMPS Insurance Brokers Ltd [2010] NSWCA 267; BDO Group Holdings (Qld) Ltd v Sully [2015] QSC 166; Seven Network v Warburton (No 2) (2011) 206 IR 450 at [33], [34]; Bulk Frozen Foods Pty Ltd v Excell [2014] TASSC 58 (listing 7 positions, 15 types of product, 6 periods of time, 13 different geographic restrictions, possible 8,190 combinations of covenants). Hanna v OAMPS Insurance Brokers Ltd [2010] NSWCA 267; (2010) 202 IR 420; Bulk Frozen Foods Pty Ltd v Excell [2014] TASSC 58 (Manager, restraint maximum 6 months, covering competing businesses in Tasmania); Epichealth Pty Ltd v Yang [2015] VSC 516 (independent contractor, cascading clause, injunction granted for shortest period 3 months and second step geographical area,10 kilometres); contrast Workpac Pty Ltd v Steel Cap Recruitment Pty Ltd [2008] WASC 238; (2008) 176 IR 464 at [35] (whole restraint void, narrowest restriction 3 months, 5 kilometres from where the employee worked; widest 12 months, 500 kilometers distance to all employer’s offices, 520 possible combinations) and see Arup et al, “Restraints of Trade: The Legal Practice” (2013) 36(1) UNSWLJ 1, 9, 18 recommending legislative change to prevent cascade clauses. In New South Wales, a court can, in any event, read down clauses under the Restraints of Trade Act 1976 which effectively encourages wider restraints than might be considered reasonable. Arup et al, “Restraints of Trade: The Legal Practice” (2013) 36(1) UNSWLJ 1, 12.

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First, the court determines whether the alleged breach (independently of public policy considerations) does or will infringe the terms of the restraint properly construed. Next, the court determines whether the restraint, so far as it applies to that breach, is against public policy. If it is not, the restraint is valid.323

The Act, in s 4(1), declares that “[a] restraint of trade is valid to the extent to which it is not against public policy, whether it is in severable terms or not”. This gives considerable latitude to the New South Wales courts to read down covenants in relation to particular breaches which are too wide to be enforceable under the general law; this may be because the covenant covered a wider area than needed, or was for a longer period than required or broader in its operation than was needed to protect the covenantee’s interests.324 Chapter 5 will give more detailed consideration to the operation of these restrictive covenants. The next section refers to the impact of restraints on creativity and productivity.

Injunctions restraining breach of restraints [4.440] Courts continue to issue injunctions enforcing restraints against former employees despite the potential to sterilise the individual’s capacity to work. Injunctions restraining employees no longer appear to be absolutely exceptional where a person’s right to work is concerned.325 The issue of injunctions to restrain breaches of restrictive covenants is discussed in detail at [11.20]. Although the enforcement of restraints against former employees advantages the individual employer, rigorous enforcement is a serious erosion of employees’ rights to dispose of their labour as they will and may be counterproductive to the public interest more generally. In Koops Martin v Dean Reeves,326 it cut no ice that the employee (subject to a 12 month covenant) was young, inexperienced and starting out in his first job as a financial planner and his boss was a lawyer or that an unqualified accountant, 19 at the time of entering into the restraint, was subject to a three year restraint in relation to clients of the former employer.327 There is survey research of technologybased workers in the United States which suggests that faced with restraints, workers find it difficult to continue in the same type of work and are likely to take a “career detour” or switch to other types of work;328 restraints significantly limit the person’s capacity to work during the restraint period. A survey of Australian practitioners suggests that usually a threatening letter to a former employee is sufficient to ensure compliance329 and that employees are generally risk averse when it comes to court proceedings.330 323 324 325

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328 329 330

Woolworths Ltd v Olson [2004] NSWCA 372 endorsing the view of McLelland J in Orton v Melman [1981] 1 NSWLR 583; John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995 at [6]. Woolworths Ltd v Olson [2004] NSWCA 372 at [41]-[48]; Koops Martin v Dean Reeves [2006] NSWSC 449; Gibney & Gunson Inc v Stewart [2009] NSWSC 855. It has been argued elsewhere that an employer should be put to proof that breach of the restraints caused damage and that injunctions should not be the automatic remedy, see Riley, “Sterilising Talent: A Critical Assessment of Injunctions enforcing Negative Covenants” (2012) 34 SLR 617 and discussion at [11.20]. [2006] NSWSC 449 at [93]. The former employee was 6 years in the job, see Birdanco Nominees Pty Ltd v Money [2012] VSCA 64 (liquidated damages clause providing equivalent to 75% of fees from former clients was valid); note also the new employer provided a much more competitive quote for the same work to be undertaken. Marx, “The Firm Strikes Back: Non-compete Agreements and the Mobility of Technical Professionals” (2011) 76(5) American Sociological Review 695. Arup et al, “Restraints of Trade: The Legal Practice” (2013) 36(1) UNSWLJ 1 at 5. Arup et al, “Restraints of Trade: The Legal Practice” (2013) 36(1) UNSWLJ 1 at 7.

Prerequisites for a Valid Contract

Restraints impact on creativity and productivity [4.450] Restraints, particularly “no compete” restraints, have been claimed to be necessary to provide incentives for employer investment in research and development, and staff training: The orthodox economic model relied on the intuitive understanding that the more strictly a non-compete is enforced, the more a company will invest in building human capital and research and development. Otherwise, the company will fear that its investments will be lost.331

There is, however, evidence that where these covenants are strongly enforced, there is reduced employee mobility, lower employee compensation but no apparent increase in firm value.332 Whilst restraints may encourage employer investment in employees,333 strong enforcement of restraints increases employees disincentives to invest in their own human capital334 and this has a greater impact overall.335 Restrictions which inhibit employee mobility also limit creativity, inventiveness and productivity. When it comes to inventors there is evidence that the most talented inventors leave high enforcement jurisdictions for low enforcement jurisdictions.336 The United States jurisdictions which do not have strong enforcement of “no compete” clauses have larger numbers of patents, higher employment and more new start-up companies. In some fields, no compete restraints might not only positively impede innovation,337 but have a significant detrimental effect on regional economies.338 This adds greater force to the argument that the progressive expansion of enforcement of restraints against employees is inimical to the principle that employees should be able to dispose of their labour as they will.339 There is also the fundamental objection that restraints implicitly assume that employers have some sort of proprietary right in employees human capital – “the skills, ideas, talents and personal charisma of their staff”; these should be seen as personal attributes of individual employees which they are free to exploit to the best of their ability rather than the subject of proprietary rights in the employer.340 The “new 331 332

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Amir & Lobel, “Innovation Motivation: Behavioural Effects of Post-Employment Restrictions” (San Diego Legal Studies Paper No 10-32), at http://www.ssrn.com/abstract=1639367. Garmaise, Ties that Truly Bind: Non-competition Agreements, Executive Compensation and Firm Investment, Journal of Law, Economics & Organization (2009), pp 3-4 (advanced release 3 Nov 2009). Assuming that a restraint is necessary because employees may not be able to pay the costs of their own training and development and the risk that a competitor obtains the advantages of employer funded training, see Posner, Triantis & Triantis, “Investing in Human Capital, The Efficiency of Covenants not to Compete” (Jan 2004), pp 1-2, at http://www.papers.ssrn. Work performance may also suffer, see Amir & Lobel, “Innovation Motivation: Behavioural Effects of Post-Employment Restrictions” (San Diego Legal Studies Paper No 10-32), http://www.ssrn.com/ abstract=1639367; Amir and Lobel, “How Noncompetes Stifle Performance” 2014 (Jan-Feb) Harvard Business Review 26. Garmaise, Ties that Truly Bind: Non-competition Agreements, Executive Compensation and Firm Investment, Journal of Law, Economics & Organization (2009), pp 3-4 (advanced release 3 Nov 2009). Marx, Singh & Fleming, “Regional Disadvantage? Non-compete Agreements and Brain Drain” (2010), at http://www.ssrn.com/abstract=1654719. Samila and Sorenson, Non-Compete Covenants: Incentives to Innovate or Impediments to Growth (May 28, 2009), p 26 at http://www.ssrn.com/abstract=1411172. Samila and Sorenson, Non-Compete Covenants: Incentives to Innovate or Impediments to Growth (May 28, 2009), p 26at http://www.ssrn.com/abstract=1411172. Riley, “Commodifying Sheer Talent: Perverse Developments in the Law’s Enforcement of Restrictive Covenants”, ch 13 in Arup and van Caenegem, Intellectual Property Policy Reform: Fostering Innovation and Development (Edward Elgar, UK, 2009). Riley, “Commodifying Sheer Talent: Perverse Developments in the Law’s Enforcement of Restrictive Covenants”, ch 13 in Arup and van Caenegem, Intellectual Property Policy Reform: Fostering Innovation and Development (Edward Elgar, UK, 2009); Stone, “Knowledge at Work: Disputes over Ownership of Human Capital at the Changing Workplace” (2002) 34 Connecticut LR 721.

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cognitive property not only commodifies intangible knowledge … it changes the quality of that knowledge. In general, employees are discouraged from investing in their human capital when interfirm competition is less likely to occur.”341 Chapter 5 will give more detailed consideration to the operation of these restrictive covenants. This chapter now turns to examine the sources of the content of the contract of employment.

Terms of the Contract of Employment Introduction [4.460] Even though all the valid requirements for formation of a contract may be present, the parties will rarely have directed their attention to, or worked out, all the detailed terms of the contract. The contract may be only partly written or there may be no writing at all. A valid contract of employment can be entirely oral.342 Even relatively detailed employment contracts may be silent on the range and content of duties imposed. This incompleteness provides flexibility to adapt to changing circumstances without having to spell out in advance every possible contingency. Unlike a contract for particular services, the employee agrees to provide service in return for wages and to obey the employer’s lawful and reasonable orders.343 In Sim v Rotherham Council,344 Sim was employed “in full time service exclusively in the capacity of a teacher”. Scott J remarked: The contractual obligations of persons employed in a professional capacity are … defined largely by the nature of their respective professions and the obligations incumbent on those who follow those professions … School teachers have professional obligations towards the pupils in their schools. Their contractual duties must include at the least the duty to discharge those obligations.

This could cover such matters as stopping to assist an injured child, class preparation and marking of homework and so on. Although the contract did not explicitly stipulate this, the refusal to cover for absent teachers in teaching free periods was held to be a breach of the contractual duties imposed on a teacher arising out of normal professional obligations. In addition, there may be a wide variety of matters which are within the employer’s managerial prerogative such as setting the timetable, regulating the time and place of teaching and timetabling non-teaching periods. The teacher has no contractual entitlement to have these unchanged. The employer can change these administrative matters without notice and can require the employee to comply provided the request is reasonable.345 For the ordinary employee the terms and conditions of the employment are to be found from a diversity of sources. There will be first and obviously those matters as to which there is express agreement, be it written or oral. Next, there are terms implied into the contract by law as apt to the employer–employee relationship. An example is the duty to obey orders, which is rarely the subject of express agreement between the parties, but which is a term of the contract none the less. The employee’s duty of fidelity and good faith is again a matter often not adverted to by the parties and implied by law. 341 342 343 344 345

Lobel, “The New Cognitive Property: Human Capital Law and the Reach of Intellectual Property” (2015) 93 Tex LR 789, 839. Note now the requirement under the Fair Work Act 2009 (Cth), ss 124, 125 that employers give to employees a Fair Work Information statement. Deakin and Morris, Labour Law (6th ed, Hart Publishing, 2012), pp 260-261 Sim v Rotherham Council [1987] 1 Ch 216 at 245. Sim v Rotherham Council [1987] 1 Ch 216 at 250.

Terms of the Contract of Employment

These terms implied by law give rise to legal duties which will be dealt with in some detail in the next chapter. They can, in general, be varied or excluded by the express agreement of the parties, see [4.540]. The next class of contractual terms are those implied from the facts or circumstances of the particular case. These may, in appropriate circumstances, include terms implied from an industry custom or practice. This section starts with express contractual terms.

Express contractual terms Introduction [4.470] The employment contract may in varying degrees spell out the rights and obligations of the parties. In its simplest form there may be an oral agreement to work for wages. It may be a very detailed written contract or it may be partially written and partially oral.346 In written contracts, in addition to the usual pay and conditions, it is now not uncommon to find clauses dealing with mobility and flexible working arrangements, grievance procedures, severance pay,347 confidentiality, non-solicitation of customers, non-poaching of employees clauses,348 payment in lieu of notice including “garden leave”349 and redundancy. In the absence of some element of unlawfulness, statutory obligation or prohibition, relevant industrial instrument, or unconscionability,350 provided the agreement is a genuine agreement,351 the parties will be bound by express terms.352 Simply because something is mentioned at the interview353 or provided in the documentation given to the employee prior to commencing the employment does not mean that it becomes an express term of the contract. It is tested by reference to the objective intentions of the parties. General information and advice may not amount to a contractual promise sufficient to give rise to an express term of the contract. In determining whether the relationship is one of employment, in Vabu354 the High Court said that: the relationship between the parties, for the purposes of this litigation, is to be found not merely from these contractual terms. The system which was operated thereunder and the work practices imposed by Vabu go to establishing “the totality of the relationship” between the parties; it is this which is to be considered.355 346 347 348 349 350 351 352

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For a recent illustration McRae v Watson Wyatt Australia Pty Ltd [2008] FMCA 1568, oral promise of redundancy payments not included in written contract. See [9.180]. See as illustrations Dawnay, Day & Co v D’Alphen [1998] ICR 1068 (CA); SBJ Stephenson Ltd v Mandy [2000] IRLR 234. See [9.150]. See [4.250]-[4.290]. As to sham contracts, see [2.100]. As to whether there is a duty not to exercise contractual rights capriciously, see [5.220. See also Johnstone v Bloomsbury Health Authority [1993] QB 333 (damages claim for ill-health caused by overwork available despite contractual requirement of availability up to 88 hours per week). Note the contractual description will not bind Courts where this does not reflect the reality of the relationship, see [2.350]. For example, that free parking is available – not a contractual obligation, see MEAA v Sydney Opera House (M9086, 7 Feb 1996), cited in Australian Rail, Tram and Bus Industry Union v Rail Infrastructure Corporation [2007] AIRC 15 at [151] (construction of certified agreement). Hollis v Vabu (2001) 207 CLR 21 at [24]. In the United Kingdom courts have examined express terms such as the power to delegate to determine whether they are genuine or a sham, see Protectacoat Firthglow Ltd v Szilagyi [2009] IRLR 365 at [55] per Smith LJ; Autoclenz Ltd v Belcher [2011] UKSC 41 and see [2.100].

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The court can look at the surrounding circumstances to determine the meaning of the contract.356 The contract is to be interpreted having regard to “the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract”.357 But according to the traditional view, the conduct of the parties after entry into the contract can only be used to determine whether there is a contract of employment in existence but cannot be used as evidence of the existence of an implied term.358 The authorities are referred to in [4.570].

Contractual terms incorporated from other documents/instruments [4.480] The contract of employment may include contractual terms contained in other documents and may explicitly refer to these other documents as forming part of the employment contract.359 The contract of employment could incorporate by express reference the terms and conditions set out in modern awards, national employment standards or industrial agreements or instruments, see Chapter 12. Contracts of employment quite commonly refer to company manuals, handbooks, codes, work rules containing company “policies and procedures”,360 “instructions and 361 The contract may provide that the employment is subject to an memoranda”.

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Ambiguity is no longer necessary in order to view the contractual provisions in the light of the surrounding circumstances, see Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603 reviewing the authorities. This is the standard approach in the United Kingdom established by Lord Hoffmann in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 912 and accepted by the High Court in Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181 at [11] per Gleeson, CJ, Gummow and Hayne JJ; Carr v Blade Repairs Australia Pty Ltd (No 2) [2010] FCA 688; (2010) 197 IR 307 at [42]-[44]. Post-contractual conduct might be admissible to determine the identity of the contracting parties, see Tomko v Palasty [2007] NSWCA 258 and see [4.570]. If the incorporated document is inconsistent with the written contract, the written contract prevails, Zafiriou v Saint-Gobain Administration Pty Ltd [2014] VSCA 331 at [94],[134]. As to whether a reference to an award or agreement amounts to express incorporation, see [12.320], [12.340], . An invalid regulation cannot be incorporated into an agreement, University of Western Australia v Gray (No 20) [2008] FCA 498 at [90]-[91], [1331] nor will the incorporation of rules if the mechanisms for their operation no longer exist, University of Western Australia v Gray [2009] FCAFC 116; (2009) 179 FCR 346 at [116]-[118] (special leave to appeal refused University of Western Australia v Gray [2010] HCA Trans 11, 12 February 2010). As to the position under enterprise agreements, see Australian Rail, Tram and Bus Industry Union v KDR Victoria Pty Ltd [2013] FCA 330; National Tertiary Education Union v La Trobe University [2015] FCAFC 142 (aspirational statements in reality binding obligations) and [12.340]. As to whether a “course of dealing” can lead to incorporation by subsequent variation of a contract, see McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 at [1289] et seq per Tobias AJA. Gramotnev v Queensland University of Technology [2015] QCA 127; (2015) 251 IR 448; Victoria University of Technology v Wilson [2004] VSC 33 at [82] (required policies to be approved); University of Western Australia v Gray (No 20) [2008] FCA 498 (bylaws relating to intellectual property beyond power), and on appeal University of Western Australia v Gray [2009] FCAFC 116; (2009) 179 FCR 346, special leave to appeal refused University of Western Australia v Gray [2010] HCA Trans 11 (12 February 2010). In Nikolich v Goldman Sachs J B Were Services Pty Ltd [2006] FCA 784 and on appeal [2007] FCAFC 120; (2007) 163 FCR 62 (company policy document Working With Us sent at the same time as the letter of appointment was held by Marshall J (at [127]) to be expressly incorporated where the employee agreed “to comply as applicable” with presently-existing and future “office memoranda and instructions”; Jessup J at [283], [284] thought that it was impliedly incorporated). See also Australian Rail, Tram and Bus Industry Union of Employees West Australian Branch v Public Transport Authority [2005] WAIRComm 1276 (express incorporation where signed job description attached to letter of offer).

Terms of the Contract of Employment

enterprise agreement or award. But not every manual362 or employer’s code of practice,363 award or enterprise agreement (even if expressly mentioned) forms part of the terms of the contract of employment. These may operate as guidelines not intended to have contractual force. The contract may expressly provide that the manual/policy is not part of the contract of employment.364 Other documents may also be incorporated into the contract without express reference in the letter of offer or contractual document. The question is – What did the parties intend? A sheet of paper attached to an employment offer with details of pay, leave etc suggests that the parties intend it to form part of the contract; similarly, a document given to the employee with the letter of offer which includes details of common employee entitlements suggests that the parties intend it to form part of the contract.365 The test of whether a document imposes contractual obligations is the intention of the parties, based on whether a reasonable person would conclude that the person making the promise intended to be contractually bound by the statement: It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe … That, normally requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.366

In Riverwood International v McCormick,367 an employee undertook to “abide by all Company Policies and Practices currently in place, any alterations made to them, and any new ones introduced”. This was taken to refer to company policies and practices contained in a company manual setting out employer obligations and employee 362

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Compare “consensual compacts” not intended to be contractual which are concerned with shared ideals of non-profit organisations, Scandrett v Dowling (1992) 227 NSWLR 483 at 513 per Priestley JA. Procedures contained in a termination policy based on Fair Work Act 2009 requirements relating to unfair dismissal wereheld not to apply to a very senior executive to whom the unfair dismissal provisions did not apply (see [13.80]) and which were unsuitable for a very senior manager, Zafiriou v Saint-Gobain Administration Pty Ltd [2014] VSCA 331 at [121]-[123]. See Yousif v Commonwealth Bank of Australia (2010) 193 IR 212 at [94]-[103]; Public Service Association and Professional Officers’ Association Amalgamated Union of NSW v Director of Public Employment [2011] NSWIRComm 152 at [134], [137] (helpful guide); Amy Linetta Ferguson v TNT Australia Pty Ltd [2014] WAIRCmm 20 (entire contract clause, Policies and Procedures excluded); Russo v Westpac Banking Corporation [2015] FCCA 1066 at [143] (general exclusion clause not affect a specific inclusion clause); Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169. Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62, see Jessup J at [283]-[284]. Cf McDonald v Parnell Laboratories (Aust) [2007] FCA 1903 at [67] (not provided at time of signing); Whittaker v Unisys Australia Pty Ltd [2010] VSC 9; (2010) 26 VR 668 at [155] (no general provision, unsigned, copy of policy not provided); State of NSW v Shaw [2015] NSWCA 97; (2015) 248 IR 206 at [170]-[171](handbook unavailable, employee unaware of it)]. Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 179. For example a policy directed to state agencies who could develop their own policies, not contractual Public Service Association and Professional Officers’ Association Amalgamated Union of NSW v Director of Public Employment 2011 NSWIRComm 152. Riverwood International v McCormick (2000) 177 ALR 193 contrast Whittaker v Unisys Australia Pty Ltd [2010] VSC 9; (2010) 26 VR 668 at [150] distinguishing Riverwood (express reference to particular policies excluded unspecified policy). See also Northern Land Council v Hansen [2001] NTCA 1 (guidelines not referred to in written contract held to be incorporated into contract where referred to in conversations prior to employment); Stone v ElectraNet Pty Ltd [2005] SAIRComm 35 (Information Guide not related to re-negotiation of contract and no express undertaking to abide by them); Hermann v Qantas Airways Ltd [2001] AIRC 316 at [88] (detailed knowledge not required for incorporation); New South Wales Teachers Federation and Director-General of Education and Training (No 2) [2008] NSWIRComm 218 at [103] (contractual incorporation of procedures unnecessary – agreements between Federation and Director-General had statutory force); State of New South Wales v Shaw [2015] NSWCA 97; (2015) 248 IR 206 at [167].

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entitlements. Although the issues were “finely balanced” the Full Federal Court held that the policies contained in the manual had been expressly incorporated by reference into the contract of employment and gave rise to enforceable contractual rights both on the part of the employee and the employer.368 This included rights to redundancy benefits.369 The clause in Riverwood was held to bind both parties to comply with the policies as varied from time to time. Does this mean that the employer can at any time and without the agreement of the employee change the conditions of employment? Mansfield J in Riverwood thought that the power to change policies from time to time would be: constrained by an implied term that it would act with due regard for the purposes of the contract of employment … so it could not act capriciously and arguably could not act unfairly … There might also be a power which, by implication, must be exercised reasonably having regard to the nature of the contract and the entitlements which exist under it.370

North J also was of the view that the employer could not unilaterally make any changes to the policies: A purported agreement which leaves the content of the agreement entirely at the discretion of one party is not contractual in nature. Any alteration or addition to the company policies and practices could only achieve binding contractual effect if there was separate agreement to such alterations or additions, either by way of variation of the existing agreement or by way of entering into a new agreement.371

[4.490] Whilst clauses of the kind utilised in Riverwood provide the employer with flexibility to respond to change, changes that are not beneficial to the employee are likely to be circumscribed by the approaches in Riverwood.372 Even if the document has been expressly or impliedly incorporated into the contract, it still must be asked whether a particular clause in that document is contractual in 368

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371 372

Even though only the employee agreed to “abide” by the policy, it indicates a contractual intention to be bound by both employer and employee, Foggo v O’Sullivan Partners (Advisory) Pty Ltd (2011) 206 IR 87; [2011] NSWSC 50 upheld on appeal [2012] NSWCA 40; Zafiriou v Saint-Gobain Administration Pty Ltd [2014] VSCA 331 at [82]-[84]; Romero v Farstad Shipping (Indian Pacific) Pty Ltd [2014] FCAFC 177; (2014) 247 IR 315 at [56]-[58]. And see discussion McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 at [82] per Tobias AJA; Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 at [337] per McKerracher J. Note the view that Riverwood and Romero could involve a term implied as a matter of fact that policies for the benefit of the employee would not be arbitrarily or capriciously withdrawn, Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 at [110] per Buchanan, J contrast McKerracher J (at [337]) and White JJ (not discussing the issue at [345]). Note the finding by North J at [109] that the equivalent of the relevant clause in the current redundancy agreement was contained in the manual at the time the contract of employment was accepted. Compare Mansfield J at [150], [152] “the letter incorporates by reference the terms set out in the Manual from time to time including the Redundancy Agreement”. Mansfield J at [150], [152]; Health Administration Corporation v Crocker [2004] NSWIRComm 163; Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62 at [122]-[125]; Akmeemana v Murray [2009] NSWSC 979; Snack Brands Australia and National Union of Workers, NSW [2000] NSWIRComm 243; CFMEU v HWE Mining Pty Ltd [2011] FWA 8288 (changes to drug policies); Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 at [110] per Buchanan J; McKerracher J (at [334]) and White JJ (at [341]); Brampton v Viterra Ltd [2014] SADC 170 at [431]-[441]. See also Reynolds and Hendy, “Reserving the Right to Change Terms and Conditions: How Far Can the Employer Go?” (2012) 41(1) Ind LJ 79 and Landsheer v Morris Corporation (WA) Pty Ltd [2014] WAIRComm 34 at [43] (contractual right to increase shift hours without increase in pay, an implied term that the employer would act reasonably in reviewing remuneration); appeal dismissed for want of jurisdiction Landsheer v Morris Corporation (WA) Pty Ltd [2014] WASCA 186. As to possible contractual variation, see [9.340]. Riverwood International v McCormick (2000) 177 ALR 193 at [111]. Note that enterprise agreements may be incorporated into the contract of employment or alternatively override contracts of employment and as new enterprise agreements are entered into the terms and conditions of the contract of employment are accordingly altered, see [12.340].

Terms of the Contract of Employment

nature. A manual formally incorporated into the contract of employment may contain all sorts of information such as administrative processes, availability of services, employee benefits, policies relating to bullying and harassment, media policies and the like. Not all of its provisions will give rise to contractual obligations.373 For example, exhortations to engage in best practice, directions concerning the handling of sickness claims may not qualify.374 In contrast, terms relating to rate of pay,375 hours of work, grievance procedures,376 and redundancy payments are more likely to be contractual in nature.377 It is no objection that the contractual clause deals with matters where there exist statutory duties, such as laws relating to bullying and work health and safety.378 Work rules do not necessarily become part of the employment contract even if the employee expressly undertakes to abide by them. But they may be indirectly enforceable as an expression of the employer’s right to manage and direct what and how the work is to be performed, the so-called “managerial prerogative”:379 [E]very employer is entitled, within the terms and the scope of the relevant contract of employment, to give instructions to his employees and every employee is correspondingly bound to accept instructions properly and lawfully so given. The rule book … constitute(s) instructions given by the employer to the employee in accordance with that general legal right.380

Even if workload policies do not form part of the contract, they may be relevant to the standards to be observed in the employer fulfilling its duty of care to the employee.381 It is now not uncommon for manuals to specifically provide that they do not form a part 373

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378 379 380

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Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62, harassment and grievance procedures contained in an incorporated document did not give rise to contractual obligations, see Black CJ at [35]-[42], Marshall J at [158]-[162], Jessup J at [179]-[207]. Public Service Association and Professional Officers’ Association Amalgamated Union of NSW v Director of Public Employment [2011] NSWIRComm 152 (convenient collection of relevant policies, awards, determinations etc). See, for example, Wandsworth LBC v D’Silva [1998] IRLR 193 (CA) (employer’s code of practice on staff sickness intended to be flexible and informal, did not give rise to contractual obligations); National Coal Board v National Union of Mineworkers [1986] IRLR 439 (conciliation scheme not enforceable); Melbourne City Council v Australian Municipal, Administrative, Clerical and Services Union [2007] AIRC 116. For example, bonus or incentive payments in relation to particular industries, such as bank executives, see [10.160]. Romero v Farstad Shipping (Indian Pacific) Pty ltd [2014] FCAFC 177; (2014) 247 IR 315 at [55]; Christos v Curtin University of Technology (No. 2) [2015] WASC 72 at 154]-[156]. But not in Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62 at [39]-[42], [162], [305]-[315] – the policy was not “promissory in nature” but advisory, suggested by the headings “Feeling Uncomfortable … Where to go for assistance”. Not necessarily in the banking industry, see McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 at [108] per Tobias AJA, MacFarlan JA at [1], Emmett JA at [312] agreeing (no evidence that redundancy provisions normally found in employment contracts with merchant banks). Romero v Farstad Shipping (Indian Pacific) Pty ltd [2014] FCAFC 177; (2014) 247 IR 315 at [52]-[53]. See Downe v Sydney West Area Health Service (No 2) [2008] NSWSC 159 at [342]; Romero v Farstad Shipping (Indian Pacific) Pty ltd [2014] FCAFC 177; (2014) 247 IR 315. Secretary of State for Employment v ASLEF [1972] 2 QB 455 (CA) per Roskill LJ at 507; Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 at [77] per Buchanan, McKerracher and White JJ. An estoppel may operate if there is sufficient reliance even if the rules do not have contractual force, Romero v Farstad Shipping (Indian Pacific) Pty Ltd [2014] FCAFC 177; (2014) 247 IR 315 at [54]; McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 (no representation by the employer) and see the dissenting judgment of Jessup J in Commonwealth Bank of Australia v Barker [2013] FCAFC 83; (2013) 214 FCR 450 at [320], appeal upheld in the High Court Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169. As to the duty to obey lawful and reasonable orders, see [5.410]. Bristol City Council v Deadman [2007] EWCA Civ 822; [2008] IRLR 888.

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of the contract of employment382 thus allowing the employer to set out policies and procedures and provide employee benefits without being subject to legal obligations to comply with them.383 The Federal Court in the Nikolich case384 referred to a number of factors that could be relevant to a finding as to whether particular clauses in an incorporated document were, or were not, contractual (promissory) in nature: the obligations imposed are of a kind normally found in a contract of employment;385 the clauses are promissory in nature – the parties agree to “comply” or “abide” by the obligations,386 or the obligations are expressed in terms of a “duty” and an obligation to “ensure” a safe and healthy work environment;387 the obligations are specific rather than a generalised statement of policies and are consistent with an obligation being imposed on the employer.388 Relevant but not conclusive is that the employee has been required to sign off as having read and understood particular policies.389 This is to be contrasted with clauses which are merely descriptive or aspirational rather than promissory,390 which are better described as “information, encouragement and … education” clauses which set the culture for the organisation.391

382 383

384 385

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387 388 389

390

As in Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169; Yousif v Commonwealth Bank of Australia (2010) 193 IR 212. This is not limited by any implied duty of trust and confidence on the part of the employer, Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 (discussed [5.160]) and see Riley, “Before the High Court, “Mutual Trust and Confidence” on Trial: At Last” (2014) 36 SLR 151, 166. Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62. See also Romero v Farstad Shipping (Indian Pacific) Pty ltd [2014] FCAFC 177; (2014) 247 IR 315. Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62 at [31] per Black CJ, at [324] per Jessup J; McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 at [108] per Tobias AJA (no evidence that redundancy provisions normally found in employment contracts with merchant banks). Performance counselling guidelines that might be modified for the particular circumstances were held not to be promissory in McDonald v Parnell Laboratories (Aust) [2007] FCA 1903 at [72]. See also Zafiriou v Saint-Gobain Administration Pty Ltd [2014] VSCA 331 at [129] (disciplinary policy “guidelines” not binding). As in Riverwood International v McCormick (2000) 177 ALR 193. See also Keeley v Fosroc International Ltd [2006] IRLR 961 (CA); contrast Whittaker v Unisys Australia Pty Ltd [2010] VSC 9; (2010) 26 VR 668 at [150]-[157]; Dafalllah v FairWork Commission [2014] FCA 328; McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62 at [329] per Jessup J, compare Black CJ at [30], [31]. Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62 at [298], [328] per Jessup J. Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62 at [21] per Black CJ, at [327] per Jessup J and see Marshall J at [121], that sign off on some policies did not prevent other clauses having contractual force; Romero v Farstad Shipping (Indian Pacific) Pty Ltd [2014] FCAFC 177; (2014) 247 IR 31. But where there is a “closed policy” unavailable to employees even on request, this points against a policy having contractual force, McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 at [37], [105], [109] per Tobias AJA, McFarlan JA at [4], [19], Emmett AJA at [312]; Cf Dafallah v Fair Work Commission [2014] FCA 328; (2014) 242 IR 273 at [112]-[117]. Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62 at [37]-[42] per Black CJ; at [298] per Jessup J; McDonald v Parnell Laboratories (Aust) [2007] FCA 1903; Bau v State of Victoria [2009] VSCA 107 (no reference to policies); RMIT University v National Tertiary Education Industry Union [2012] FWA 2208 (Behavioural Capability Framework imposing obligations on employees); State of NSW v Shaw [2015] NSWCA 97; (2015) 248 IR 206 at [171] (“suggested criteria”); Zafiriou v Saint-Gobain Administration Pty Ltd [2014] VSCA 331 at [100]-[101] (aspirational – policy to treat employees “with respect … courteous and professional manner and in accordance with the principles of natural justice”; “support and communicate”, freedom from bullying and harassment, diligence, honesty and respect were not contractual terms in a

Terms of the Contract of Employment

The individual circumstances of each case are important. So if there is agreement to “abide by”,392 “comply with”,393 “observe”394 policies, this is a strong indicator of a contractual intention that the policy form part of the contract. Conversely a manual may specifically provide that policies are not part of the contract395 or a particular policy may not be suitable to apply to a senior employee.396 The ability of the employer to unilaterally vary policies from time to time does not necessarily mean that the policy is not part of the contract; however as discussed above, there may be an implied term constraining the exercise of the right to vary. There is the suggestion that in cases such as Riverwood a term might be implied as a matter of fact (at [4.520]) that the employer would comply with imposed policies which operated for the benefit of employees and not arbitrarily or capriciously withdraw these benefits; this approach avoids the “artificiality of proposing contractual force to obviously discretionary procedures, or vision statements or general aspirations” and the “tedious complexity” in dealing with the issue of incorporation.397 This pragmatic response has yet to gain support. Conditions of employment may be imported into the employment contract by express statutory provision.398 But the mere fact that a statute imposes rights and duties on the parties does not, by itself, result in the implication of a contractual term, see [12.240]. Can the terms of an unregistered agreement entered into by the union as agent on behalf of its members constitute an express term in each individual contract of employment? This issue could arise, for example, where a union negotiated with the employer for additional redundancy payments. There are formidable difficulties to achieving this result. A contract can only be made on behalf of others if those persons are identified and have authorised the union to act as agent on their behalf. This poses problems if the agreement is intended to benefit existing and future union members. Even if it were possible to limit the benefits of the agreement to a defined and existing class of employees, there are additional difficulties in enforcing it as part of the individual contract of employment. It would not be enforceable because no consideration was provided for the promises399 and also because it was not intended that the agreement give rise to legally enforceable obligations.400 The interrelationship between individual employment contracts and agreements under the Fair Work Act 2009 (Cth) is considered in Chapter 12, [12.290].

Implied contractual terms [4.500] There is a distinction between implications of law, arising from the very existence of the employer–employee relationship (see [4.510]) and implications of fact arising from the particular facts and circumstances of the parties. The High Court in

391 392 393 394 395 396 397

398 399 400

contract for a medical specialty traineeship, Sklavos v Australasian College of Dermatologists [2015] FCA 179. Contrast Incorporation of a code of ethics On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 214 FCR 82 at [262]. Such as the harassment and grievance procedures in Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62 at [37]-[42] per Black CJ; at [329] per Jessup J. Riverwood International v McCormick (2000) 177 ALR 193. Yousif v Commonwealth Bank of Australia (2010) 193 IR 212. Romero v Farstad Shipping (Indian Pacific) Pty Ltd [2014] FCAFC 177; (2014) 247 IR 315. Yousif v Commonwealth Bank of Australia (2010) 193 IR 212 Zafiriou v Saint-Gobain Administration Pty Ltd [2014] VSCA 331. Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 at [110]-[111] per Buchanan J but see McKerracher J (at [337]) and White JJ (at [344]-[345] expressing no view on the issue as the incorporation issue was conceded). The extent to which this can occur is discussed [12.310]. The issues relating to consideration are noted at [4.130]. Ryan v Textile Clothing & Footwear Union [1996] 2 VR 235 and discussion at [12.370].

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Commonwealth Bank of Australia v Barker401 sets out the conventional means by which terms may be implied402 into a contract: • in fact or ad hoc to give business efficacy to a contract • by custom in particular classes of contract403 • in law in particular classes of contract; or • in law in all classes of contract.404 The High Court added that “Contractual terms implied in law may be effected by the common law or by statute. If effected by the common law they may be displaced by the express terms of the contract or by statute.”405 Terms implied into the contract of employment as a matter of law will be discussed first.

Implications of law [4.510] The inherent nature of the relationship between the parties may give rise to an implied term as a legal incident of that kind or class of contract. These terms implied at law effectively provide “default rules” to govern the contract. Thus, where the parties have not provided in the contract for a period of notice of termination, the law will imply a term that the contract may be determined by reasonable notice on either side.406 Terms implied by law are frequently described as implications arising out of the relationship itself, required through necessity or rules of construction applying to a particular class of contracts.407 Terms implied by law may simply reflect the constant repetition of terms implied in fact based on necessity.408 One difference is that terms implied in fact must be necessary to give “business efficacy” to the contract whereas a term implied in law depends upon more general considerations.409 Any term implied at law must satisfy the requirement that without the term the enjoyment of contractual

401 402

403 404

405 406

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409

Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [21] per French CJ, Bell and Keane JJ. It does not regard as a separate basis for an implied term, terms implied as a matter of construction of the contract, see Carter et al, “Terms Implied in Law: “Trust and Confidence” in the High Court of Australia” (2015) 32 J Con L 203, 215. Assumed to also cover terms implied by a course of dealing and usage, see Carter et al, “Terms Implied in Law: “Trust and Confidence” in the High Court of Australia” (2015) 32 J Con L 203 at 209. A duty to co-operate or a duty to obey the law may be illustrations but see the critical analysis by Carter et al, “Terms Implied in Law: “Trust and Confidence” in the High Court of Australia” (2015) 32 J Con L 203, 211-215. This appears to be an incomplete statement, see Carter et al, “Terms Implied in Law: “Trust and Confidence” in the High Court of Australia” (2015) 32 J Con L 203 at 210. Con-Stan Industries of Australia Pty Ltd v Norwich Winterhur Insurance (Australia) Ltd (1986) 60 ALJR 294 at 297. See also Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206 at 227. It is not necessary where statute governs the relationship, State of NSW v Shaw [2015] NSWCA 97; (2015) 248 IR 206 at [167]. Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [25] per French CJ, Bell and Keane JJ. Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [28] per French CJ, Bell and Keane JJ. And see Knowler and Rickett, “Implied Terms in Australian Contract Law: A Reappraisal after University of Western Australia v Gray” (2011) 37(2) Mon ULR 145. Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [28] per French CJ, Bell and Keane JJ.

Terms of the Contract of Employment

rights could be “nugatory, worthless, or … seriously undermined”410 not whether it is reasonable.411 Terms implied at law must be kept within bounds as they are, in the words of the High Court in Barker:412 a species of judicial law-making and are not to be made lightly. It is a necessary condition that they are justified functionally by reference to the effective performance of the class of contract to which they apply, or of contracts generally in cases of universal implications, such as the duty to co-operate. Implications which might be throught reasonable are not, on that account only, necessary.

These implied terms are frequently expressed as duties owed by parties to the contract, for example, the employer’s duty to take reasonable care for the safety of employees and the employee’s duty to obey orders. These duties, together with the question whether the employer has a duty to act in good faith, are dealt with separately in Chapter 5. Although the terms implied by law are relatively settled, this does not prevent courts suggesting, from time-to-time, new implied terms.413 But, as the quotation above indicates, scope for this appears to be very limited following the High Court decision in Commonwealth Bank of Australia v Barker,414 which held that an employer does not have an implied duty of trust and confidence (see [5.160]). Australian courts have also refused to find a term implied at law that an employer is required to make redundancy payments where an employee has been made redundant415 or that there is a specific implied duty not to harass employees independently of the implied duty to take reasonable care for the safety of 410

411 412

413

414

415

Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [29] per French CJ, Bell and Keane JJ, (quoting Byrne v Australian Airlines (1995) 185 CLR 410 at 450 McHugh and Gummow JJ), see also Keifel J at [60]. Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [36] per French CJ, Bell and Keane JJ. [2014] HCA 32; (2014) 253 CLR 169 at [29] per French CJ, Bell and Keane JJ. And see critical analysis by Carter et al, “Terms Implied in Law: “Trust and Confidence” in the High Court of Australia” (2015) 32 J Con L 203 at 224. Suggested implied term for medical tests, see Blackadder v Ramsey Butchering Services Pty Ltd [2002] FCA 603; (2002) 118 FCR 395 at [67]-[69]; Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539; Australian and International Pilots Association v Qantas Airways Ltd [2014] FCA 32. See Edwards v North Goonyella Coal Mines Pty Ltd [2005] QSC 242 at [37] (statutory rights set out in regulations). A lawful direction to attend a medical exam can be given, see [5.410] duty to obey orders. In the United Kingdom, accepted implied terms relate to notifications of pension entitlements, Scally v Southern Health Board [1992] 1 AC 294 at 307 and an implied term that the employer will take reasonable care in providing a reference, see Spring v Guardian Assurance plc [1995] 2 AC 296 (see Lord Woolf at 353-354) but no implied duty to protect an employee’s economic well being, Crossley v Faithful & Gould Holdings Ltd [2004] 4 All ER 447 and see Ibekwe v London General Transport Services Ltd [2003] EWCA Civ 1075. Scally (above) was not followed in Syred v BGC (Australia) Pty Ltd [2004] WASC 87 but a negligence claim may be available for negligent advice, see [5.300] and it may be acceptable an illustration of a contractual duty to co-operate, see [5.190]. [2014] HCA 32; (2014) 253 CLR 169. See the confused pleading in State of New South Wales v Shaw [2015] NSWCA 97; (2015) 248 IR 206 (no implied term of trust and confidence or good faith in a statutorily based probationary teaching contract). Riverwood International v McCormick (2000) 177 ALR 193 at [63] per Lindgren J; Peter Dellys v Elderslie Finance Corporation Ltd (2002) 82 WAIG 1193 at [15]; Willis v Health Communications Network Ltd [2007] NSWCA 313; (2007) 167 IR 425 at [31(c)], [33], [56]. But this does not prevent an implied term arising from an implication from the facts in the individual case, see In the matter of ACN 050 541 047 Ltd [2002] NSWSC 586 at [33] (implied term for redundancy payments resulting in a variation of the contract, consideration provided by continuing in employment (see [4.130])) or from custom and usage. Contrast McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 (representations by a takeover bidder not the employer). Nor is there a duty to warn an employee of risks and to insure, Reid v Rush & Tompkins [1990] 1 WLR 212.

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employees.416 Nor have Australian courts been prepared (independently of unfair dismissal legislation) to imply into the contract a duty on the part of the employer to give an employee a fair hearing prior to dismissal.417 But even a term implied at law may not be universally applicable to all employment contracts. So, for example, universities may be sufficiently distinctive that an implied term that the employer is entitled to the benefits of work the employee is paid to do might not apply without qualification.418 The issue of whether terms implied at law can always be excluded by express provision is discussed at [4.540].

Implications from facts [4.520] The basis upon which a term will be implied into a contract has been stated in BP Refinery Pty Ltd v Hastings Shire Council,419 where the Privy Council said:

[F]or … a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that “it goes without saying”; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.420

This statement was approved by the High Court in Commonwealth Bank of Australia v Barker,421 the High Court adding that the requirement that terms implied in fact are necessary to give business efficacy to the contract is a “specific application of the criterion of necessity”.422 Where the terms of a negotiated compromise agreement between employers and unions form part of the individual contract of employment, there may be a greater level of difficulty in finding an implied term based on an omission in the agreement; the 416

417 418

419

420

421 422

Nationwide News Pty Ltd v Naidu [2007] NSWCA 377; (2007) 71 NSWLR 471 (before the Commonwealth Bank v Barker). Unnecessary to imply an independent contractual term against intimidation, vilification or harassment when this is sufficiently covered by the implied term of duty of care, Spigelman CJ at [8]; Beazley J at [339]. Discussed [5.260]. University of Western Australia v Gray [2009] FCAFC 116; (2009) 179 FCR 346 at [182] (special leave to appeal refused University of Western Australia v Gray [2010] HCA Trans 11 (12 February 2010)). BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20 at 26 followed in Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 605-606 and Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 332 at 347, 404; Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [21] per French CJ, Bell and Keane JJ, and see Kiefel J at [62], [90]. The High Court in Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 did not refer to earlier High Court decisions indicating that a different approach could apply where the contract does not purport to be a complete contract and is only partly in writing, see Hawkins v Clayton (1988) 164 CLR 539 per Deane J at 573; Byrne v Australian Airlines (1995) 185 CLR 410 at 442. Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [21] footnote 41 per French CJ, Bell and Keane JJ. Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [28] per French CJ, Bell and Keane JJ. The High Court agreed that “it is not enough for a court to consider that the implied term expresses what it would have been reasonable for the parties to agree to. It must be satisfied that it is what the contract actually means”, at [22] per French CJ, Bell and Keane JJ citing Lord Hoffman Attorney General of Belize v Belize Telecom Ltd [2009] UKPC 11; [2009] 1 WLR 1988 at 1994 but see later United Kingdom Supreme Court decision, Marks and Spencer plc v BNP Paribas Securities Service Trust Company (Jersey) Ltd [2015] UKSC 72. Note also that a term “necessary for the reasonable operation of the contract” is not the same as a term required for business efficacy, see Carter et al “Terms Implied in Law: “Trust and Confidence” in the High Court of Australia” (2015) 32 J Con L 203 at 211.

Terms of the Contract of Employment

natural inference would be that the omission was deliberate.423 Obligations imposed under statute,424 award, enterprise agreement,425 national employment standards or other industrial instruments are not necessarily implied into contracts of employment. The interrelationship between these instruments and the implication of terms in a contract of employment are discussed in Chapter 12. There are numerous cases where terms have been implied in fact. As the implication arises out of the circumstances of the particular case (“individualised gap fillers”),426 the cases do not establish general principles for implying terms into contracts of employment. Examples include an implied term that a railway guard is subject to the discipline policy;427 an employee travelling long distances for work is to be paid travel time;428 that an employer should respond reasonably to requests to take long service leave;429 and, that a professional employee is covered by professional indemnity insurance.430 An officious bystander would think that it goes without saying that an employee should adopt a reasonable standard of dress at work.431 In relation to agency employees, there may be an implied term that the user of their services has a right to exercise control over their work.432 Attempts to argue an implied term based on analogy with statutory protections have largely been unsuccessful. It has been held that there were no implied terms in fact or law that dismissal should not be “harsh, unjust or unreasonable”,433 or that the employee would be entitled to a fair hearing before dismissal,434 or that employees should be protected against racial abuse or insults.435 Other illustrations436 where the 423

424 425 426 427 428 429 430

431 432 433 434 435

436

Ali v Christian Salvesen Food Services Ltd [1997] ICR 25 (CA). Note also The Australian Licenced Aircraft Engineers Association v Qantas Airways Ltd [2009] AIRC 268 at [126] “predisposition against implying a term in a certified agreement according to the principles of contract construction”; Actew Corp Ltd v Pangallo [2002] FCAC 325 at [33] “certified agreement is solely a creature of statute”; special leave to the High Court refused, Actew Corp Ltd v Pangallo [2003] HCA Trans 347. No term implied where statutory conditions apply, State of NSW v Shaw [2015] NSWCA 97; (2015) 248 IR 206 at [167]; Swindells v Victoria [2015] VSC 19 and see discussion at [12.290]. As to whether terms might be implied into an enterprise agreement, see AMWU v Toyota Motor Corporation Australia [2013] FWA 8237. So described in University of Western Australia v Gray (2009) 179 FCR 346 at [135]. Australian Rail, Tram and Bus Industry Union of Employees West Australian Branch v Public Transport Authority [2005] WAIRComm 1276. Focus National and Ors v Wilkinson [2009] SAIRC 30. Skeggs v Metropolitan Transport Trust [1997] TASSC 61. Wesfarmers Dalgety Ltd v Williams [2005] WASC 287 (misrepresentation by the employer that the employee was covered by professional indemnity insurance, implied term of the contract). Other illustrations, UGL Rail Services Pty Ltd v Janik [2014] NSWCA 436; (2014) 246 IR 320 at [171] per Sackville J (implied term relating to communication of options recommendation to parent company, no breach). Hart v Jacobs (1981) 57 FLR 18 (caftan) and see Chapter 5, [5.410], duty to obey orders. Country Metropolitan Agency Contracting Services Pty Ltd v Slater and Workcover/CGU Workers Compensation Insurance (SA) Pty Ltd [2003] SAWSC 57 at [50]. Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410 at 422-423, 442-446. Intico (Vic) Pty Ltd v Walmsley [2004] VSCA 90. Such an implied term may be covered by a duty to provide a safe system of work and a safe place of work, see Nationwide News Pty Ltd v Naidu; ISS Security Pty Ltd v Naidu [2007] NSWCA 377; (2007) 71 NSWLR 471 at [341]-[343]. See also Gavotte Pty Ltd v Stephen Lenard Garner [2006] AIRC 265 (argued implied term that the employee would not be using or dealing in drugs or supplying other truck drivers); Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62 (no implied term requiring timely investigation of complaints and resolution of grievances, see Jessup J at [315]-[323]). No implied term in Heads of Agreement between union and employer that the union would not continue or take further industrial action, NSW Local Government Clerical Administrative Energy Airlines & Utilities Union v Bega Valley Shire Council [2013] NSWIRComm 7 at [64]. No implied term of reasonable notice because of a contrary express term – NSW Cancer Council v Sarfaty (1992) 28 NSWLR 68 or contrary to a binding enterprise agreement. TWU v ACT Government [2013] FWC

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courts have refused to imply terms include: no implied term that referees additional to those nominated by the applicant would not be consulted;437 no implied term that individual contracts could be varied by collective negotiations,438 nor a term implied in fact that the defendant would act in good faith and fairly in connection with termination.439 The cases demonstrate a general reluctance to find an implied term in law or fact for redundancy payments with only occasional exceptions.440 Where an obligation has been imposed under an award, it is generally not necessary for the reasonable and effective operation of the contract to imply a similar term into the contract of employment441 (discussed Chapter 12, [12.320]). A term cannot be implied where it is in direct conflict with an express contractual term. This is discussed below [4.540].

Industry custom and practice [4.530] A term may be implied based on trade or industry custom. In Con-Stan

Industries of Australia Pty Ltd v Norwich Winterhur Insurance (Australia) Ltd,442 the High Court set out the following principles relating to the implication of a term based on trade or industry custom: (1) The existence of a custom or usage that will justify the implication of a term into a contract is a question of fact … (2) There must be evidence that the custom relied on is so well known and acquiesced in that everyone making a contract in that situation can reasonably be presumed to have imported that term into the contract … However, it is not necessary that the custom be universally accepted,443 for such a requirement would always be defeated by the denial by one litigant …

437

438 439

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441 442

443

1143 unless the original contract had been varied or there is a new contract without any express term as to notice. But note the difficulties involved in finding that there is a new contract without provision for notice Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 [279]-[289] per Buchanan J, McKerracher J at [334], White J at [341]. Purvis v Luminar Leisure Ltd (EAT, 27 Nov 2000). But in the United Kingdom there may be an implied term similar to the tort duty to take reasonable care in compiling or giving a reference to prospective employers, Aspin v Metric Group Ltd [2004] EWHC 1265 (QB) at [70], see [5.280]. The State School Teachers’ Union of WA v Ken Davis [2012] WAIRComm 966. Dellys v Elderslie Finance Corporation Ltd [2002] WASCA 161; Aldersea v Public Transport Corporation (2001) 183 ALR 545; Irving v Kleinman [2005] NSWCA 116 at [28]. Nor in relation to a complaints policy introduced after the employment commenced, Ramsey v Annesley College [2013] SASC 72 at [193]-[209]. Note the difficulty in implying terms in relation to statutorily regulated employment, see discussion at [12.290]. See discussion “Redundancy”, at [9.160]. Rejecting the claim, see Ryan v Textile Clothing & Footwear Union [1996] 2 VR 235; Riverwood International Australia Pty Ltd v McCormick [2000] 177 ALR 193 (no term implied in law or fact regarding redundancy payments per Lindgren J (dissenting); majority find an express term by incorporation); Epath WA Pty Ltd v Adriansz [2003] WASCA 175; Willis v Health Communications Network Ltd [2007] NSWCA 313; (2007) 167 IR 425 (no implication at law or in fact for redundancy payment); Sterling Commerce (Australia) Pty Ltd v Iliff [2008] FCA 702 [28]-[34]; Cf In the matter of ACN 050 541 047 Ltd [2002] NSWSC 586 at [33] (implied term for redundancy payments resulting in a variation of the contract, consideration provided by continuing in employment, re consideration issues see [4.130]); Richardson Pacific Ltd v Miller-Smith [2005] WAIRComm 545 (express or implied term acted on for 16 years that entitlements equivalent to those under EBA apply to other employees); Reynolds v Southcorp Wines Pty Ltd (2002) 122 FCR 301 (term implied through course of dealing). Byrne & Frew v Australian Airlines (1995) 185 CLR 410 at 423. Con-Stan Industries of Australia Pty Ltd v Norwich Winterhur Insurance (Australia) Ltd (1986) 160 CLR 226 at 236-237. See also Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410 at 423-424, 441. As an illustration where the custom was not established and would have been unworkable, see Australian Rail, Tram and Bus Industry Union v Rail Infrastructure Corp [2007] AIRC 15 at [134]-[142] (certified agreement – only one category of workers affected). See also Stewart & Heriot v Australian Liquor, Hospitality & Miscellaneous Workers Union [2002] AIRC 474.

Terms of the Contract of Employment

(3) A term will not be implied into a contract on the basis of custom where it is contrary to the express terms of the agreement.444 (4) A person may be bound by a custom notwithstanding the fact that he had no knowledge of it. Historically the courts approached this question in a different way. It was said that, as a general rule, a person who was ignorant of the existence of the custom or usage was not bound by it. To this rule there was a qualification that a person would be presumed to know of the usage if it was of such notoriety that all persons dealing in that sphere could easily ascertain the nature and content of the custom. It would then be reasonable to impute that knowledge to a person, notwithstanding his ignorance of it.445 The custom must be “uniform, notorious, reasonable and certain”. It must be so notorious that it is “reasonable to assume that the parties contracted with reference to the custom so that it is … reasonable to import such a term into the contract”; where there is such an established usage, “the courts are spelling out what both parties know and would, if asked, unhesitatingly agree to be part of the bargain”.446 It is has been quite difficult for parties to be able to establish an implied term arising by custom or usage in a particular trade or industry.447 But, for example, there may be a custom in a particular industry that deductions are made for faulty work448 or conversely a custom in the motor trade industry not to pay overtime.449 Long standing mining industry practice such as “last on, first off” for redundancy may be attributable to award obligations rather than industry custom450 and as such “the contract is capable of operating reasonably and effectively in the absence of such a term and in the presence of an award provision offering limited remedies in the event of breach”.451 The existence of an enterprise agreement applying to other workers at the time of entry into the contract does not of itself establish a custom or usage in the workplace.452 A spate of cases453 suggest a more liberal response to finding an implied term arising from custom or usage.454 Many of these illustrations rely on a custom or practice in the individual 444

445 446

447 448

449 450 451 452 453 454

Or a binding enterprise agreement, Australian Rail, Tram and Bus Industry Union v KDR Victoria Pty Ltd [2013] FCA 330 at [21]. As to implied terms based on custom in enterprise agreements, Automotive, Food, Metals Engineering, PKIU v Toyota [2013] FWC 8237 (crediting sick leave). Compare Turner v Australasian Coal and Shale Employees Federation (1984) 55 ALR 635 (ignorance, no implied term in the contract). Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410 at 423; Tibaldi Smallgoods (Australasia) Pty Ltd v Rinaldi [2008] VSC 112; (2008) 172 IR 86 at [49] (term of an award not a term of the contract by reason of custom). It will not be notorious if most of the employees do not know about the custom, Civil Service Association of WA (Inc) v Director General, Dept of Justice [2003] WAIRComm 7687 at [20]. Work rules may be relevant to the implication of terms, Secretary of State for Employment v ASLEF (No 2) [1972] 2 QB 455). Sagar v Ridehalgh & Son Ltd [1931] 1 Ch 310. As to allowable deductions from wages under the Fair Work Act 2009 (Cth), ss 323 – 326; Australian Education Union v Victoria [2015] FCA 1196 (no deduction for work use laptops) and see [12.160]. Kronen v Commercial Motor Industries Pty Ltd [2006] SAIRC 31 (industry custom and practice not to pay managers for overtime). Burgess v Mount Thorley Operations Pty Ltd [2002] NSWIRComm 106 at [146] (no implied term that last on, first off for redundancy purposes). Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410 at 423. Tibaldi Smallgoods (Australia) Pty Ltd v Rinaldi [2008] VSC 112. Especially from Western Australia, see Underdown v Dowford Investments Pty Ltd [2004] WAIRComm 12996 at [36]; Matthews v Cool Or Cosy Pty Ltd [2004] WASCA 114. Particularly in the UK, see Garratt v Mirror Group [2011] IRLR 591 (long standing practice requiring employee to sign compromise agreement for enhanced redundancy payments); CSC Computer Sciences Ltd v McAlinden [2013] EWCA Civ 1435 (implied term based on practice of annual wage increases in line with the Retail Price Index, subject to satisfactory performance); see also Park Cakes Ltd v Shumba [2013] EWCA Civ 974 (enhanced redundancy pay).

155

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workplace or by an individual employer rather than custom across a trade or industry.455 Some instances might be explained as giving rise to an implied term arising from a precontractual prior course of dealing between the parties or a contractual variation;456 a term can be implied based on a prior course of dealing between the parties.457 It has been held that a custom or usage in a particular workplace or with a particular employer may give rise to implied terms that workers be: available for reasonable overtime,458 paid penalty rates for Sunday work,459 given time off in lieu for work on public holidays,460 provided with an employer funded vehicle,461 given redundancy payments,462 allowed flexi days,463 provided with taxis for employees working overtime464 or given payment in lieu of notice.465 A more restrictive view was taken in Homfray’s case. There the court rejected an implied term where the conduct relied upon as demonstrating the implied term was exceptional and infrequent, occurred after commencement of a contract of employment and was followed out of expediency rather than a sense of obligation.466 Problems arise when an employer seeks to remove “privileges” that were previously available to employees467 or where an employer unilaterally announces a policy of improved pay, conditions, redundancy payments or other benefits for employees and later seeks to resile from that policy. It may be difficult to imply a contractual term 455

456

457 458 459 460 461

462

463 464 465 466 467

See Richardson Pacific Ltd v Miller-Smith [2005] WAIRComm 545 at [73] (finding that the custom and practice of an individual employer did not qualify but term implied as reasonable and necessary, at [90]). Note some of the cases concern the interpretation of an award preserving “customs and practices”, Logan v Otis Elevator Company Pty Ltd [1997] IRCA 221, later proceedings, (1999) 94 IR 218. Qantas Airways Ltd v Joyce [2014] WAIRComm 1192, contrast Gartside v Qantas Airways Ltd [2013] WAIRComm 1083; McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 (post contractual conduct). See McHugh and Gummow JJ in Byrne v Australian Airlines (1995) 185 CLR 410 at 442. And see Chapter 6. Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Otis Elevator Co Pty Ltd [2003] AIRC 1351 at [19]. Turner v The Kings Park Board [1997] WAIRComm 47. Underdown v Dowford Investments Pty Ltd [2004] WAIRComm 12996 at [43]. Gallagher v Aboriginal Hostels Ltd [2006] AIRC 29 at [96] (seven years exclusive usage of car by employee). Query whether the evidence was admissible as it was post-contractual conduct, and see [4.570]. Miller v Locker Group Pty Ltd [2004] WAIRComm 12498; Richardson Pacific Ltd v Miller-Smith [2005] WAIRComm 545. Contrast Cohen v iSOFT Group Pty Ltd [2013] FCAFC 49 at [53], (no redundancy payment because alleged custom prior to incorporation; presence of an entire agreement clause, a single instance payment not sufficient). PSA v the Zoo [2007] NSWIRComm 1080. Re Federated Ironworkers’ Association of Aust NSW Division and Australian Fertilizers Ltd RE Overtime [1977] AR (NSW) 17 (20 years’ usage). But not in the face of an express term to the contrary, Sanders v Snell (1998) 196 CLR 329 at [16], discussed Chapter 9 [9.150], “Payment in Lieu of Notice”. Ryan v Textile Clothing & Footwear Union [1996] 2 VR 235 (Homfray’s case) at 260 per Hayne JA (no implied term relating to redundancies).and see [9.160.] Such as free parking, NSW Nurses’ Assoc v SW Syd Area Health Service [1994] NSWIRComm 147 or concessional travel, Australian Railways Union of Workers (WA Branch) v Western Australian Government Railways Commission [1997] WAIRComm 168 (implied term through usage); Civil Service Association of WA (Inc) v Director General, Dept of Justice [2003] WAIRComm 7687 (no contractual obligation to continue shift allowance for those receiving workers’ compensation); Arthurson v State of Victoria [2001] VSC 244 (no implied term for provision of accommodation at reduced rental); Driver v Air India Ltd [2010] All ER (D) 166 (no contractual right to shift allowances even if previously paid); AMWU v Visy Board Pty Ltd [2013] FWC 323 at [89] (wash up allowance and continuous running payments).

Terms of the Contract of Employment

obliging the employer to continue to pay these benefits:468 the course of conduct may occur after commencement of the contract of employment;469 the benefits may be intended to be gratuitous rather than contractual; there may be no prior course of dealing between the parties by virtue of which a term may be express or implied; the provision of benefits is not established as a custom or usage of the trade or industry.470 In some cases the employer is bound to continue to provide these benefits because there is a variation of the contract which employees have accepted and provided consideration for the additional benefits, see [9.340]. The employer might also be bound to continue these benefits if the policies (as varied from time to time) are incorporated into the contracts of employment, see discussion at [4.480]. Similarly if the employer represents to employees that they are entitled to certain benefits, it may be unconscionable to allow the employer to resile from this assumed state of affairs where employees have relied on these representations to their substantial detriment (estoppel);471 there may be substantial detriment if employees could show that, as a consequence of the representations, they decided not to leave and turned down alternative employment.472

Exclusion of implied terms The general rule [4.540] As a general rule, implied terms can be excluded by express contractual terms.473 A provision that an employee can be dismissed on one week’s notice excludes 468

469

470

471

472

473

But there may be a separate promise by a takeover bidder see McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36, Tobias AJA at [191]-[194], MacFarlan JA at [1]; Emmett AJA at [318] (contractual obligations by takeover bidder for bank). There appears to be increased willingness in the United Kingdom to find that these types of improved benefits qualify as terms implied by custom or practice, for example, in relation to enhanced redundancy benefits, annual wage increases etc, see Garratt v Mirror Group [2011] IRLR 591 (long standing practice requiring employee to sign compromise agreement for enhanced redundancy payments); CSC Computer Sciences Ltd v McAlinden [2013] EWCA Civ 1435 (implied term based on practice of annual wage increases in line with the Retail Price Index, subject to satisfactory performance); see also Park Cakes Ltd v Shumba [2013] EWCA Civ 974 (enhanced redundancy pay). See Tibaldi Smallgoods (Australia) Pty Ltd v Rinaldi [2008] VSC 112; Whittaker v Unisys Australia Pty Ltd [2010] VSC 9; (2010) 26 VR 668 at [132]. Contractual variation might be argued, see In the matter of ACN 050 541 047 Ltd [2002] NSWSC 586 at [33] (implied term for redundancy payments resulting in a variation of the contract, consideration provided by continuing in employment) and see McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36. See in relation to the United Kingdom, Brodie, “Reflecting the Dynamics of Employment Relations: Terms Implied from Custom or Practice and the Albion Case” (2004) 33 ILJ 159. Cf in the award context, NSW Nurses’ Assoc v SW Syd Area Health Service [1994] NSWIRComm 147 (free car parking). Can estoppel assist? See Arthurson v State of Victoria [2001] VSC 244; McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36, Tobias AJA at [119]-[151]; Emmett AJA at [315] (no representations by employer). Note the various ways that the plaintiff may have put his case in Commonwealth Bank of Australia v Barker [2013] FCAFC 83; (2013) 233 IR 31 per Jessup J (dissenting) at [320]; (2013) 214 FCR 450, appeal upheld in the High Court [2014] HCA 32; (2014) 253 CLR 169. McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 at [149]-[151] per Tobias AJA, Emmett JAS at [312] (no representations by the employer so no claim for estoppel against employer; But the opportunities of other employment need to be balanced against the benefits of staying in employment, see in relation to Trade Practices Act 1974 (Cth) s 52 claim (now Australian Consumer Law s 18) (at [4.230]), and see Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 Buchanan J at [186]-[196] and McKerracher J at [334], left open by White J at [345]. See Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62 at [319] per Jessup J; Butorac v WIN Corp Pty Ltd [2009] FCA 1503 (query at [23], [24] whether in a suitable case estoppel can override an entire contract clause); Keays v J P Morgan Administrative Services Australia Ltd [2012] FCAFC 100; (2012) 224 IR 406 at [72]. Entire contract clauses normally exclude other provisions but may not preclude good faith and fair dealing GEC Marconi Systems Pty

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an implied duty to give reasonable notice.474 An express contractual term providing for termination by notice excludes an implied term allowing payment in lieu of notice.475 An express term, for example to undertake overtime as required, may limit a duty of care being owed in tort for the health and safety of employees as any tort duty must be examined in the light of the contractual obligations between the parties,476 see [6.25]. Terms implied by law [4.550] In relation to terms implied by law, generally these can be excluded by express provision in the contract.477 An implied duty to give reasonable notice to terminate the contract can be excluded by an express term.478 But in relation to other implied duties such a duties to provide personal service ([2.170]), the duty to obey lawful and reasonable orders, ([5.410]) and to co-operate ([5.190]), a contract which sought to exclude these implied terms may no longer be classified as a contract of employment. These requirements are arguably organising principles applying to employment contracts which cannot be excluded. Can an implied term moderate the exercise of a contractual power? [4.560] There is authority that an implied term may moderate the exercise of an express contractual power. There may be an implied term requiring the employer not to exercise contractual powers arbitrarily or capriciously in relation to core obligations such as employee remuneration.479 Whether this extends to a duty not to relocate480 or suspend481 employees arbitrarily or capriciously is discussed at [5.210]. But any implied term preventing the arbitrary or perverse exercise of a contractual right does not qualify an employer’s contractual rights of dismissal. The implied term cannot exist in the face of an express provision allowing termination at any time without cause.482 The issue may also arise in relation to whether there is a duty of good faith is to be implied483 which fetters the exercise of the employer’s contractual rights under the contract of employment (see [5.170]).

474

475 476

477 478 479

480 481 482

483

Ltd v BHGP Info Tech [2003] FCA 50 at [916] per Finn J; Russo v Westpac Banking Corporation [2015] FCCA 1086 not preclude a duty not to exercise a discretion “capriciously, arbitrarily or unreasonably”. An entire contract clause does not necessarily exclude implied terms as the “agreement” includes both express and implied terms, Hart v MacDonald (1910) 10 CLR 417 at 421 per Griffith CJ, at 430 per Isaacs J. But the implied term might be excluded by a contractual exclusion of all implied terms as far as permitted by law, see Vodafone Pacific Ltd v Mobile Innovations Ltd [2004] NSWCA 15. As to the complications if the original contract had a fixed period of notice and the potential for a varied or new contract without a provision for termination with notice, see Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 at [279]-[289] per Buchanan J, McKerracher J at [334], White J at [341]. Sanders v Snell (1998) 196 CLR 329. Koehler v Cerebos Pty Ltd (2005) 222 CLR 44 at 53-54 (contractual obligations relevant to the content of the duty of care) discussed [6.250]. An express contractual duty to protect the employee may succeed where an implied duty of care may fail, Riley, “Mental Health and Employment: Issues for Lawyers” [2007] UNSWLRS 38 (27 July 2007), p 7. See stating the general principle that terms implied at law can be excluded, University of Western Australia v Gray [2009] FCAFC 116; (2009) 179 FCR 346 at [136]. See [9.30]. Russo v Westpac Banking Corporation [2015] FCCA 1086 (not preclude a duty not to exercise a discretion “capriciously, arbitrarily or unreasonably”) and in relation to pension benefits, see Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] ICR 524. United Bank v Akhtar [1989] IRLR 507. Gogay v Hertfordshire Council [2000] IRLR 703 (suspension where a completely unjustified allegation of sexual impropriety). Reda v Flag Ltd [2002] IRLR 747 (PC). Note Stewart’s view that where dismissal is expressly subject to particular discretion or satisfaction as to a state of affairs, there may be scope for such an implied duty, Stewart’s Guide to Employment Law (5th ed, Federation Press, 2015), p 343. Entire contract clauses normally exclude other provisions but may not preclude good faith and fair dealing GEC Marconi Systems Pty Ltd v BHGP Info Tech [2003] FCA 50.

Terms of the Contract of Employment

Relevance of post contractual conduct [4.570] The conduct of the parties after entry into the contract of employment cannot

be used to interpret or find the meaning of the contract.484 Evidence of post-contractual conduct may only be given in very limited situations to determine: whether a contract has been formed,485 the identity of the contracting parties,486 the proper characterisation of the relationship (employee or contractor), the “identification of the subject matter of the contract,487 or the identification of necessary terms which were not the subject of express provision in a contract not reduced to writing”.488 These situations aside, the traditional contract rule is that subsequent conduct of the parties is not admissible on the interpretation of the contract.489 Subsequent conduct may, however, be relevant to estoppel or to whether there has been a new contract or a variation of the contract.490 In the case of labour hire agreements, subsequent conduct may indicate that the agreement is not genuine and be the basis for implying a contract of employment between the workers and the businesses using the services.491 In Lym International Pty Ltd v Marcolongo492 it was accepted that: Where there is a contract that is wholly in writing, there is no doubt what the contract is – it is the writing. The task of interpretation is ascertaining the meaning that the bystander who knows all the relevant surrounding circumstances would understand from the parties using the words in that writing….. By contrast the task in ascertaining what are the terms of a contract that is not wholly in writing is quite different – the task is finding as a fact what the parties have agreed. A range of post-contractual conduct could be relevant to ascertaining what the parties have agreed. For example, their conduct in carrying out the contract could itself be objective evidence of what they had agreed to, an admission of one of the parties could assist in ascertaining what they have agreed, and business records created to record a report on the contract rather than carry it out could also assist in that task. 484

485

486

487 488 489

490

491

492

But uncertainty about the meaning of a job description may be resolved by reference to extraneous circumstances, Keays v J P Morgan Administrative Services Australia Ltd [2012] FCAFC 100; (2012) 224 IR 406 at [68]-[71]. Brambles Holdings Ltd v Bathurst City Council (2001) NSWCA 61; (2001) 53 NSWLR 153,163-164; Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149 at [99]-[100] per Giles, JA, Hodgson and Campbell JJA agreeing), Lym International Pty Ltd v Marcolongo [2011] NSWCA 303 at [144], Campbell JA (Basten JA and Sackar J agreeing). Although query whether this may be the same as whether a contract was entered into at all, see Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 at [59]; Lederberger v Mediterranean Olives Financial Pty Ltd [2012] VSCA 262; (2012) 38 VR 509. Fishlock v The Campaign Palace Pty Ltd [2013] NSWSC 531; (2013) 234 IR 1. County Securities Pty Limited v Challenger Group Holdings Pty Ltd [2008] NSWCA 193, Spigelman JA. at [27]. See the extensive review of authority in Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603; Lederberger v Mediterranean Olives Financial Pty Ltd [2012] VSCA 262; (2012) 38 VR 509. Fair Work Ombudsman v Quest South Perth Holdings [2015] FCAFC 37; (2015) 249 IR 256 at [149] per North and Bromberg JJ, “the subsequent practice or conduct of the parties … may evidence a variation of the contract” (the decision of the Full Court was overturned on appeal on the issue of the reach of the Fair Work Act 2009 sham contracts provisions without reference to this issue, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45) and see [2.100]. See also McKeith v Royal Bank of Scotland Group PLC; Royal Bank of Scotland Group PLC v James [2016] NSWCA 36 (post contractual course of dealing relevant to variation). Damevski v Giudice (2003) 133 FLR 438 at [141], [147]; Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37; (2015) 249 IR 256 (the decision of the Full Court was overturned on appeal on the issue of the reach of the Fair Work Act 2009 sham contracts provisions without reference to this issue, Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45) and see [3.100], Lym International Pty Ltd v Marcolongo [2011] NSWCA 303 per Campbell JA (at [140] (Sackar JA agreeing) agreed with Spigelman CJ’s analysis of the law on this in County Securities Pty Limited v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 at [27].

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There is potential for a much more liberal approach in the United Kingdom in employment cases where employers largely dictate the terms of employment. Even in the face of a signed, complete written contract, in employment cases, a written term can be examined in the context of the whole agreement including “how the parties conducted themselves in practice and what their expectations of each other were”.493 Although post contractual conduct has been admitted to determine the nature of the relationship (employee or contractor), this, it has been argued, leads the way for English courts and tribunals to take into account post contractual conduct in interpreting the contract of employment even if all of its terms have been reduced to writing.494

493 494

Autoclenz Ltd v Belcher [2009] EWCA Civ 1046 and on appeal, Autoclenz Ltd v Belcher [2011] UKSC 41. Bogg, “Sham Self-Employment in the Supreme Court” (2012) 41(3) Ind LJ 328, 339.

5

Contractual Duties During the Employment “A duty on an employee to disclose … a day’s sickness leave when not genuinely ill or use (of the) employer’s telephone … for private use might be thought intolerable. A duty to confess wrongdoing whether on the part of employer or employee may be thought to require standards extravagant and unattainable in the workplace.” [BCCI v Ali [1999] 2 All ER 1005 at 1018.]

[5.10] [5.20] [5.20] [5.140] [5.170] [5.190] [5.200] [5.210] [5.260] [5.300] [5.310] [5.350] [5.390] [5.400] [5.410] [5.410] [5.430] [5.500] [5.520] [5.590] [5.600] [5.770] [5.780] [5.800] [5.810] [5.820] [5.830]

Introduction ..................................................................................................... 161 Mutual/Dependant Duties ............................................................................... 162 The wages–work bargain ........................................................................... 162 No implied duty of trust and confidence ................................................... 172 Duty of good faith? .................................................................................... 176 Duty to co-operate ..................................................................................... 178 Employer’s Implied Duties ............................................................................. 180 Duty not to exercise discretionary powers arbitrarily, capriciously or unreasonably? ............................................................................................. 181 Investigative and disciplinary processes ................................................... 185 Economic losses ......................................................................................... 189 Duty to provide work? ............................................................................... 190 Indemnity .................................................................................................... 194 Provision of medical assistance ................................................................. 197 No implied term of privacy ........................................................................ 197 Employee’s Implied Duties ............................................................................ 199 Duty to obey ............................................................................................... 199 Duty to use care and skill and to indemnify ............................................. 202 Duties relating to work, location, or methods of work ............................ 209 Duty of fidelity and loyalty ........................................................................ 212 The contractual duty – some particular applications ............................... 219 Soliciting customers, establishing or working for a competing business ....................................................................................................... 219 Comment by an employee .......................................................................... 239 Inventions and other intellectual property ................................................ 240 Exclusive service ........................................................................................ 243 Bribes and secret commissions .................................................................. 245 Duty to account for property ..................................................................... 245 The duty to report derelictions and answer questions .............................. 246

Introduction [5.10] The previous chapter examined the requirements for a valid contract of employment. This chapter deals with the incidents of a special nature attached to this type of contract, terms implied at law, see [4.500].

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Ch 5: Contractual Duties During the Employment

It is usual to divide the duties implied by law into those imposed on the employee and those imposed on the employer. However, there are some mutual obligations imposed on both the employer and employee, such as a duty to co-operate or possibly (but unlikely) a duty of good faith. There are also duties which are interdependent. The wages–work bargain seems to contain two mutually interdependent duties, one imposed on the employer and the other on the employee. It is therefore not useful in a textbook exposition to analyse these under separate “employer” and “employee” duties. The wages–work bargain will be considered first. The previous edition examined in detail the potential for a mutual duty of trust and confidence on the assumption that this was a mutual duty owed by both employer and employee. The High Court subsequently in Commonwealth Bank of Australia v Barker1 held that no such duty could be implied as a matter of law into contracts of employment in Australia. The rejection of any such duty is especially important as it represents a divergence from current industrial law and international approaches which recognise the role of the common law contract of employment in protecting an employee’s dignity and respect in the workplace. The High Court, however, accepted that there could be a mutual duty to co-operate but left open the question whether there could be an implied duty of good faith. The High Court decision in Barker, its rejection of a mutual duty of trust and confidence and its effect on the contact of employment is considered in this first section on mutual duties. This is followed by an examination of whether a duty of good faith could be implied into all contracts of employment and the reach of any mutual duty of co-operation. The other duties implied by the common law will then be considered under the conventional headings – employers’ duties and then employees’ duties.

Mutual/Dependant Duties The wages–work bargain Source of entitlement to wages [5.20] An employee’s entitlement to wages/remuneration2 for work performed arises

out of the contract of employment.3 The benefits that the employee is entitled under the contract do not extend beyond remuneration to the emotional benefits of work such as job satisfaction, a “sense of identity, self-worth, emotional well-being and dignity.”4 This is a consequence of the High Court decision that employers have no implied duty of trust and confidence5 and effectively no contractual duty6 to protect the emotional well-being of employees, see [5.160]. 1 2

3 4

5

6

Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169. Depending on the terms of the contract, this can include such things as car payments and other benefits (Mendelsons Lawyers Pty Ltd v Hanlon [2013] VSC 320) and accommodation which likewise depends on the provision of work, Construction, Forestry, Mining & Energy Union v Mammoet Australia Pty Ltd [2013] HCA 36; (2013) 248 CLR 619. The foundation work for this section was provided by Greg McCarry in earlier editions of this book. Commonwealth Bank of Australia v Barker [2013] FCAFC 83; (2013) 214 FCR 450 at [310] per Jessup J dissenting; the decision of the Full Federal Court was overturned on appeal in the High Court, Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169. See particularly Jessup J in Commonwealth Bank of Australia v Barker [2013] FCAFC 83; (2013) 214 FCR 450 at [312]; the decision of the Full Federal Court was overturned on appeal in the High Court Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169. There may, however be liability for bullying and harassment causing psychiatric injury to the employee, see Nationwide News Pty Ltd v Naidu [2007] NSWCA 377; (2007) 71 NSWLR 471, [6.290].

Mutual/Dependant Duties

The nature of this entitlement to wages can be affected by various statutes and industrial instruments such as awards, and industrial agreements. These normally presuppose the existence of an employer–employee relationship7 and therefore a contract. In almost all cases the award or industrial instrument merely quantifies the amount of salary/wages/remuneration and does not indicate what has to be done to entitle the worker to the wages/salary so quantified, for example, whether service must be performed to earn the stipulated wage or whether mere willingness to serve will be enough or whether there is some other condition or consideration for the salary. An employee’s rights to recover for unpaid or underpaid wages is discussed [10.20]–[10.50]. If there is a contract of employment, then the primary entitlement of the employee to remuneration will be governed by the terms of that contract, subject, of course, to any modification required by any applicable award, industrial instrument, agreement or statute (see Chapter 12).

No work, no pay – Watson’s case [5.30] The term to be implied in the contract of employment has been authoritatively

stated for Australian courts in Automatic Fire Sprinklers v Watson.8 The most comprehensive statement of principle is that of Dixon J who said that a contract of employment: is commonly understood as involving no liability for wages or salary unless earned by service, even though the failure to serve is a consequence of the master’s wrongful act. It is, of course, possible for the parties to make a contract for the payment of periodical sums by the master to the servant independently of his service … But, to say the least, it is not usual. The common understanding of a contract of employment at wages or salary periodically payable is that it is the service that earns the remuneration and even a wrongful discharge from the service means that wages or salary cannot be earned however ready and willing the employee may be to serve and however much he stand by his contract and decline to treat it as discharged by breach. (Emphasis added.)9

The decision made it clear that even though an employee wrongfully discharged cannot recover wages, for they have not been earned according to the terms of the contract, there will be other remedies of varying utility. These might include an action to enforce any accrued but unpaid rights (including previously earned wages), an action on a quantum meruit for work done and not paid for and an action for damages for wrongful dismissal (see Chapters 8, 10). If the employee has been dismissed one could nowadays add relief available for unfair dismissal where this continues to be available (see [13.50]–[13.220]). Rogers J arrived at a not dissimilar conclusion in Csomore v Public Service Board of New South Wales.10 His Honour said: Unless an employer waives the usual requirement of a contract of employment that an employee perform the full range of work properly assigned … or unless the award under which the employee works makes a contrary provision, payment of wages is conditional upon performance by the employee of the full range of work assigned, or, at least, a readiness and willingness to do so.11 7 8 9 10 11

Amalgamated Collieries (WA) Ltd v True (1937) 59 CLR 417 at 423 per Latham CJ and see Chapter 12. Automatic Fire Sprinklers v Watson (1946) 72 CLR 435. Automatic Fire Sprinklers v Watson (1946) 72 CLR 435 at 465. Csomore v Public Service Board of New South Wales (1987) 10 NSWLR 587. Csomore v Public Service Board of New South Wales (1987) 10 NSWLR 587 at 595. The reference to readiness and willingness may be, but is not always, apt in speaking of entitlement to wages; it is relevant to an action for damages.

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Rogers J continued: “The right of the employer is not a right to deduct or a right of set-off. It is the right to deny payment on non-fulfilment by the other party of the obligation which makes the weekly or fortnightly salary payable.”12 Service

[5.40] The passage quoted from Watson says that it is service which earns wages, not work.13 Obviously the service usually required will be work, but service is wider than work. It might include refraining from work, say to be ready for an expected rush order, for “they also serve who only stand and wait”.14 Thus a fireman waiting to be called to a fire,15 employees waiting for equipment to come online or a caretaker or nurse during permitted periods of sleep are at work.16 Service might also include taking leave, as for example, where an employer exercises a statutory or award based right to direct an employee to proceed on long service leave or to implement the “annual close down” so obliging the workforce to take annual leave. It might include being available to work during certain hours, say while the worker is on standby at home.17 Similarly an employee on annual holidays or sick leave is still entitled to wages, even though not actually working; such leave is part of the employee’s service.18 One of the illustrations just given requires further consideration. If part of the service contracted for which can be asked of the employee is standing by for some expected exigency, or perhaps being on standby at home for call out in an emergency, in one sense it can be said that the consideration19 for wages is a readiness and willingness to work (if and when called upon). But whether this is so will depend on the terms, express or implied, in any particular contract of employment. Just as it is inaccurate to say that work earns wages, so it is inaccurate to say that readiness and willingness to work (or serve) earns wages. Either or both may do so, but it will depend whether they are among the services contracted to be rendered and which can lawfully be demanded of an employee in a particular case.20 As Atkinson LJ succinctly put the matter: “it must be ascertained from the contract whether the consideration for the payment of wages is the actual performance of the work, or whether the mere readiness and willingness, if of ability to do so, is the consideration.”21 The right of the employer to give and the obligation of the employee to obey orders is, in the eyes of the law, foremost among the terms of the contract of employment, even though it is often an implied term, the parties having said nothing about it. The nature 12 13

14 15 16

17

18 19

20 21

Csomore v Public Service Board of New South Wales (1987) 10 NSWLR 587 at 598. But this does not necessarily mean that the employee is entitled to be paid for each hour of work where the contract provides an overall “all in rate” for hours worked, see Landsheer v Morris Corporation (WA) Pty Ltd [2014] WAIRComm 34 at [46], appeal dismissed for want of jurisdiction, [2014] WASCA 185. Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 466. Suffolk County Council v Secretary of State for the Environment [1984] ICR 882 at 892, citing Mercer v Associated Electrical Industries Ltd (1968) 3 ITR 188. Australian Workers Union v BlueScope Steel Ltd [2007] NSWIRComm 1022 at [58]; FWO v Kensington Management Services Pty Ltd [2012] FMCA 225 (caretaker); Warramunda Village Inc v Pryde [2002] FCAFC 58; (2002) 116 FCR 58 (nurse, award). Note, Tweed District Hospital v Miller (1948) 90 AR (NSW) 25 at 26 referring, with apparent approval, to the view of Curlewis J in McPherson v Metropolitan Board of Water Supply and Sewerage [1922] AR 53 to the effect that the ordinary meaning of the word “work” includes standing by to work as the employer may require. Australian Workers Union v BlueScope Steel Ltd [2007] NSWIRComm 1022 at [47]. Napier has drawn attention to the different senses in which the word “consideration” can be used in contract law: Napier, “Aspects of the Wage-Work Bargain” (1984) 43 Camb LJ 337. The usage here is “well recognised” even if secondary, but is not the only one. See Napier’s discussion in terms of “performance”: “Aspects of the Wage-Work Bargain” (1984) 43 Camb LJ 337 at 339, 347. Petrie v Mac Fisheries Ltd [1940] 1 KB 258 at 270.

Mutual/Dependant Duties

of the service which is required to earn wages is determined by the extent of the orders which the employer can lawfully give the employee. The orders must be within the scope of what the parties have agreed, they must not require the employee to perform an illegal act nor to undertake some risk the employee has not contracted to undertake or which the employee is not required by law to suffer, see [5.410]. The extent of the service which can be required and which earns wages is determined by the extent of the orders which may be given to the employee under the contract. Wages and damages, readiness and willingness [5.50] The passage quoted from Watson affirms the interdependence of service and wages in a claim for wages; particularly important is the point made in the passage that even if the worker is prevented from working by the wrongful act of the employer, the worker still cannot claim wages.22 The employee, Watson, was willing to work in his old position, refused to treat the contract as at an end, and presented himself for work. Still his readiness and willingness would not have entitled him to wages at common law.23 While the readiness, willingness and ability of the worker are irrelevant in a claim for wages under the contract, they are important if the employee seeks not wages, but damages or injunctive relief. The damages that a wrongfully dismissed employee can recover may, perhaps often will, approximate the amount of the wages lost, but need not do so. The amount of lost wages is only the starting point in the calculation of damages and may be reduced on account of mitigation or increased by the inclusion in the damages of other amounts which the employer is contractually bound to pay commissions, bonuses, severance payments and so on. In any action for damages for breach of contract, including the employment contract, the plaintiff must prove, if put to it, willingness to carry out her or his part of the bargain.24 Nowadays this is assumed in the claim for damages unless challenged by the employer.25 The other situation in which readiness, willingness and ability are relevant is where the plaintiff employee seeks injunctive relief against the employer.26 The injunction has been an exceptional remedy in employment law until relatively recent times (see Chapter 11). But it is clear that if an applicant does seek an injunction, say to restrain breach or termination of an employment contract, the applicant must show that he or she is ready, willing and able to perform her or his side of the bargain.27 Despite the clear enunciation of principles in Watson, there is some contrary opinion28 and cases which suggest that readiness and willingness are necessary to show an entitlement to wages.29 Whether this is so depends upon the terms of the particular contract. The result can be correct in a particular case where the very service contracted 22

23 24 25 26 27

28

29

For an exceptional case where a statute or award required the payment of award wages except in designated circumstances, where the employer’s conduct fell outside the provisions, there may be a duty to pay wages: Kidd v Savage River Mines (1984) 6 FCR 398 (unlawful stand-down), and see Chapter 7. Although he in fact recovered wages because of the terms of long since repealed and now irrelevant wartime regulations. Jefferson v Paskell [1916] 1 KB 57 at 74 per Pickford LJ; Australian National Airlines Commission v Robinson [1977] VR 87 at 91. See Australian National Airlines Commission v Robinson [1977] VR 87 at 91. Gordon v Victoria [1981] VR 235. Measures Brothers Ltd v Measures [1910] 2 Ch 248 at 254 per Cozens-Hardy J; Australian Hardwoods v Commissioner for Railways [1961] 1 WLR 425 at 432-433; Australian National Airlines Commission v Robinson [1977] VR 87; Gordon v Victoria [1981] VR 235. Shaw and McClelland, “Selective Work Bans: “No Work, No Pay” Revisited” (1986) 2 AB Rev 250. See the reply to this article: McCarry, “No Work No Pay: A Replication to Shaw QC and McClelland” (1987) 3 AB Rev 174. Contrast Napier, “Aspects of the Wage-Work Bargain” (1984) 43 Camb LJ 337 at 350. A number are identified and commented upon in McCarry, “No Work, No Pay” (1983) 57 ALJ 378.

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for includes the worker being available or being ready and willing to work. Moreover the result may have been correct in many of these cases as the employees were not willing and ready to perform service, or at any rate the service required at the time, nor did they in fact perform the required service. Ready and willing, but damages for what?

[5.60] An employee who has not rendered service cannot recover wages. If the employee seeks to recover damages for breach of contract because he or she was willing and ready to work, what is the breach? Several possibilities suggest themselves. If the situation is one of wrongful termination, as in Watson, an action for damages could be brought for breach of the contractual term which precluded termination or which precluded it save on proper notice. The second possibility is that the contract is one which requires the employer to supply work and the employer has not done so. The common law has recognised that there are such contracts, but traditionally they form a fairly narrow class of exceptions to the general rule that there is no obligation on an employer to supply work (provided the employer continues to pay wages), see [5.310]. Finally, the employee wrongly excluded will have a remedy for damages if the conduct of the employer amounts to a suspension or stand-down not authorised by statute, award or agreement.30 This is discussed in Chapter 7. Although the circumstances must be rare where the employer’s conduct is neither a wrongful termination, suspension or stand-down, the question is still – what is the employer’s breach? It is implicit in the decisions regarding suspension and stand-down that contracts of employment will normally be construed so as to impose an obligation on the employer to permit the employees during the continuance of the contract of employment an opportunity to earn wages. There is a distinction between “performance related” payment contracts and “time-service contracts”. Under the former, wages are due only if work is completed, typically casual employment; under the latter the employer promises to pay the employee who is available for work.31 This duty might be regarded as an illustration of the duty to co-operate, discussed further [5.190].32 Defective performance

[5.70] First, it seems on general contractual principles that an employer is entitled to

refuse to accept partial performance of duties.33 In Gapes v Commercial Bank of Australia Ltd, Deane J said: “An employer is entitled to decline the services of an employee who refuses to perform significant parts of the job which he is employed to do, at least for so long as that refusal of the employee persists.”34 Similarly: “The employer is entitled to reject the offer of partial service and insist on the full range of duties being performed … The employer may, of course, waive the entitlement to reject part performance, may accept the work done.”35 If the employer refuses to accept part 30

31 32 33 34 35

See [7.50]. An employer may continue to pay an employee even if no work is undertaken particularly in garden leave cases so as to avoid the hardship argument when seeking to enforce restrictive covenants, see Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414 at [56]-[57]; BDO Group Investments (NSW-Vic) v Ngo [2010] VSC 206 at [64]-[65] and [11.20]. Collins, Ewing and McColgan, Labour Law, Text & Materials (Cambridge 2012), p 232. William Hill v Tucker [1999] ICR 291 at [11] and see Thompson v ASDA-MFI Group plc [1988] 1 Ch 241. Miles v Wakefield Metropolitan District Council [1987] 2 WLR 795 at 798 (Lord Bridge). See also Fair Work Act 2009 (Cth), ss 470 – 473 referred to at [5.120]. Gapes v Commercial Bank of Australia (1980) 37 ALR 20 at 25. Csomore v Public Service Board of New South Wales (1986) 10 NSWLR 587 at 599.

Mutual/Dependant Duties

performance, the employer is not obliged to pay wages. It is not necessary that the employer resort to any statutory disciplinary code that may be available before utilising the contractual right.36 While the employer is thus entitled to refuse to accept the performance of services that deviate from the contract, the employer is not obliged to do so, and can, if so minded, accept some deficient form of service offered or performed by the employee. In such a situation, say where the employer accepts the services performed by the employee, although they do not include “banned” work which the worker should have done, it is almost impossible to argue that the employer is not obliged to pay wages. The employer’s remedy, if services are accepted although deficient, is in damages for what it is worth.37 A number of the “no work, no pay” cases in Australia have been or can be explained on this basis. They are cases where the employee has not done the full range of duties of the position, but has done most of them; this defective performance has been accepted, full performance waived or the situation has been acquiesced in, by the employer who has taken the benefit of such services as are performed.38 Although an employer can waive the performance of banned work and accept limited duties, “there must be unequivocal indication that compliance with the earlier direction is no longer required”; mere inaction is insufficient.39 In the Teachers Federation case,40 teachers in certain State schools declined to perform duties required of them by the school principals. These were duties which could properly be asked of them, but they were the subject of an industrial ban. Some of the teachers went and performed other duties which were duties normally performed by teachers but which were not the duties required of them at that time. The statement of facts does not suggest that this occurred with the acquiescence or tacit support of the employer. It was held that the employer was entitled to deduct from the teachers’ salaries an amount proportionate to the time spent in industrial action, even though this other work had been performed.41 The refusal to perform duties may relate to matters marginal to the employment such as the refusal to remove a union badge. This would not amount to a refusal to perform the full range of duties unless there was a clear breach of the employer’s dress code.42 There will, however, be a refusal to perform the full range of duties where safety or allocation of work would be compromised by the refusal to use mobile phones and two-way radios.43 36 37 38

39 40 41

42

Cresswell v Board of Inland Revenue [1984] 2 All ER 713. For example, Wiluszynski v London Borough of Tower Hamlets [1988] IRLR 154 (QBD). Gapes v Commercial Bank of Australia (1980) 37 ALR 20 may be explained on this basis, see Csomore v Public Service Board of New South Wales (1986) 10 NSWLR 587 at 595. The alternative approach in Gapes was that the duty to pay wages in full was mandated under the award, see [5.110]. See also J Ray McDermott (Australia) Pty Ltd v Australian Institute of Marine and Power Engineers (1977) 189 CAR 883 (facilitating performance of other work amounting to waiver of full performance); Welbourn v Australian Postal Commission [1984] VR 257, comment (1984) 58 ALJ 226 (no effective prohibition of other work which was accepted). Independent Education Union v Canonical Administrators (1998) 157 ALR 531 (Ryan J). New South Wales Teachers Federation v Department of Education [1980] AR 860. To like effect Independent Education Union v Canonical Administrators (1998) 157 ALR 531 per Ryan J; United Firefighters’ Union of Australia v Metropolitan Brigades Board (1998) 86 IR 340 (employees refusing to undertake requested tasks were informed that they were being stood aside without pay for the balance of the shift and were to leave the station, employees continued to do other work). Shop, Distributive and Allied Employees’ Association v Wollongong Unicentre Ltd [2005] NSWIRComm 1138 (refusal to remove union badges “Stop: You’re being served by a low paid worker. Support a shoppie” did not constitute a refusal to perform relevant work nor a breach of the relevant dress code); contrast Burswood Resort (Management) Ltd v Australian Liquor, Hospitality and Miscellaneous Workers’ Union [2000] WASCA 386 (wearing badge a breach of strict dress code). As to whether wearing a union t shirt amounted to industrial action under the Fair Work Act 2009

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Employer’s insistence on the banned work

[5.80] The position seems to be that if an employer wishes to exercise the right to require full performance of the contract and to reject defective performance, the employer will need to make its intention manifestly clear. That is, the employer will need to issue unambiguous orders to perform the banned work in priority to all other work; these orders will need to be seriously intended, and not part of a charade. But what is needed? It would seem excessive to require physical confrontation or rough-handed tactics.44 Ryan J in the United Firefighters’ Union case45 thought it sufficient that specific directions were given that employees were to cease work and to leave the work premises. Fine distinctions on issues of fact are often critical. As a general rule, it should be sufficient that the employer makes it clear that the banned work must be performed and that alternative duties are not acceptable and does not facilitate the continuance of work.46 If employees defy the orders given and go ahead and do other work, as in the Teachers Federation case, the employer is not obliged to pay wages at all. If the employer waives these orders, and accepts performance of alternative beneficial duties,47 it seems that the employer will be obliged to pay full wages, although probably without prejudice to the right to sue the employee for damages. Suspension

[5.90] Sometimes the circumstances giving rise to the “no work, no pay” question may also involve an argument that there has been an unlawful suspension. When suspension is imposed according to express contractual provisions, there will be no right to payment because no work is performed. Where there is no contractual right to suspend, whilst there is no entitlement to wages as such, there is a right to claim damages for breach of contract, being the failure to pay wages when the employee is ready, willing and able to perform the work. Given the interdependence of salary and service, irregular suspension is irrelevant to salary entitlement, unless statute makes some special provision in that regard. This situation is perfectly consistent with Watson where it is made clear that even if the worker’s inability to serve is attributable to some wrongful act by the employer, the employee will still not be able to claim wages although a claim for damages may be available. Suspension is considered in detail in Chapter 7.

43 44 45 46

47

(Cth), s 19, see United Firefighters Union of Australia v Easy [2013] FCA 763 and contrast Re Mornington Peninsula Shire Council [2011] FWAFB 4809 (union t shirt contrary to employer’s clothing policy). Note also Taleski v Virgin Australia International Airlines Pty Ltd [2013] FWC 93 (medical reason for longer hair contrary to grooming code, dismissal unfair in the circumstances). Federated Engine Drivers & Firemen’s Association of Australia v Mackay City Council [2006] 181 QGIG 477. Spotless Catering Services Pty Ltd v FLAIEU (1988) 25 IR 255 at 262; Communications, Electrical, Electronic, Energy etc v Alcoa [1998] FCA (6 July 1998). Federated Engine Drivers & Firemen’s Association of Australia v Mackay City Council [2006] 181 QGIG 477. Communications, Electrical, Electronic, Energy etc v Alcoa [1998] FCA 788 (6 July 1998); Independent Education Union v Canonical Administrators (1998) 87 FCR 49; 157 ALR 531 at 72 (FCR) per Ryan J. See also Federated Engine Drivers & Firemen’s Association of Australia v Mackay City Council [2006] 181 QGIG 477. Gapes v Commercial Bank of Australia (1980) 37 ALR 20 (employee informed he could resume duties, keys returned to him and allowed access to bank safe); Welbourn v Australian Postal Commission [1984] VR 257 (employees not permitted to leave post office).

Mutual/Dependant Duties

Apportionment

[5.100] The next aspect of “no work, no pay” to be considered is apportionment. The

issue is raised by cases such as the Teachers Federation case,48 Royle v Trafford Borough Council49 and Sim v Rotherham Council.50 In the Teachers Federation and Firefighters51 cases, it would seem that the whole of the salary was deducted for the whole of the time during which the industrial action continued, notwithstanding that some other work was performed contrary to orders. Refusal to perform duties may be for only part of a pay period. Are employees entitled to be paid for some part of the period, for example, two hours in one day where salary is earned by the day? Can salary be apportioned by, say, the day or by the hour?52 This aspect was not considered to any extent in the judgments, probably because the employers were claiming no more and had deducted no more than a proportionate part of the salary due for the normal pay period.53 In relation to those employees to whom the Fair Work Act 2009 (Cth) applies, it is certainly assumed that wages can be apportioned. It provides that an employer must not pay wages for four hours where some shorter period of unprotected industrial action has taken place; for longer periods payment cannot be made for the period the industrial action continues.54 Similarly, apportionment is assumed if there is protected industrial action and where partial works bans are in place, Fair Work Act 2009, s 471 and see [14.70].

Awards, and industrial instruments [5.110] The “no work no pay” principle is normally applicable to wages set by awards and industrial instruments and agreements as much as to those set in an award-free employment.55 Awards and industrial instruments presuppose the existence of an employer–employee relationship and the common law. Modern awards, enterprise agreements and other industrial instruments will prevail over common law, but only in respect of the matters with which they deal, see Chapter 12. They will rarely deal with all aspects of the employer–employee relationship.56 While the instrument may quantify the salary to be paid, it rarely has anything to say with respect to the implied and underlying contractual term that wages are earned for, and are dependent upon, service. This is particularly the case with the standard template form for modern awards.57 In the past, in an exceptional case an award might have been construed so as to give an absolute right to wages independently of service.58 But where an award 48 49 50 51 52 53 54

55 56 57 58

New South Wales Teachers Federation v Department of Education [1980] AR 860. Royle v Trafford Borough Council [1984] IRLR 184. Sim v Rotherham Council [1986] 3 WLR 851. In Sim it was suggested that the employer may have an equitable right of set-off. Firefighters’ Union of Australia v Metropolitan Brigades Board (1998) 86 IR 340; see also Independent Education Union of Australia v Canonical Administrators (1998) 157 ALR 531. The practical reality is that wages and salaries are in fact apportioned to allow payment for time worked see [11.40]. Note also Murray v Donnelly [2000] NSWSC 634 at [50]. This is consistent with the position where the employee leaves before the end of a pay period, see Chapter 10. In relation to unprotected industrial action, the employer cannot pay for the period of time the employee is engaged in industrial action; if the total duration of the industrial action is less than four hours, the employer cannot pay wages for a four hour period; where the action exceeds four hours, payments cannot be made for the period during which the industrial action continues: Fair Work Act 2009 (Cth), s 474. The new National Employment Standards do not deal with wages, see [12.60]. See Fair Work Act 2009 (Cth), ss 139 – 155 for the content of modern awards and see [12.60]. See illustrations from modern awards available at http://www.fwa.gov.au/documents/modern_ awards.htm. Gapes v Commercial Bank of Australia (1981) 41 FLR 27 at 28-29 per Smithers and Evatt JJ; Lennie v Hawkes (unreported, Marshall J, IRC Aust, 4 Oct 1996); Clark v Chief of Defence Force [1999]

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referred to “times worked”, “overtime worked” this implicitly required that wages are earned by service.59 Similarly where an industrial agreement made provision for additional payments for overtime, shift penalties and work on public holidays, it assumes that it is work that earns the wage.60 There is a principle of general application that a statute or award is not to be taken as withdrawing an employer’s right to refuse to pay wages for periods of non-performance of duty or refusal to perform a significant part of ordinary duties unless the statute, award or industrial instrument compels that conclusion.61 There are many other aspects of salary on which awards are often silent and there too the common law prevails. The position has been expounded by Latham CJ in Tasmanian Steamers Pty Ltd v Lang62 where his Honour, in dealing with a statutory provision that allowed an award-regulated employee to recover wages, said: This section regards the obligation to pay wages under an award as an obligation which can be enforced in an ordinary way – in the same way as in the case of any other obligation to pay wages. Prima facie, therefore, any defence applicable to an ordinary claim for wages would be open to the employer when he was so sued. One defence would be actual payment. Another defence would be tender. These defences depend upon the common law.

Statutory prohibition on payments where industrial action [5.120] Since it is service that earns the wage, workers who go out on strike are not entitled to wages. In the economic boom of the 1960s and 1970s workers, particularly in the building and construction industry, refused to return to work after a strike unless they were paid for the period during which they were on strike or payment was made to a charity or union benefit fund. The practice was first forbidden by the Workplace Relations Act 1996 (Cth), and continued with some modification under the Fair Work Act 2009 (Cth).63 The Fair Work Act 2009 now provides that an employer must not make a payment to an employee (nor the employee ask or receive payment) where the employee engages in industrial action;64 similarly unions are prohibited from making such claims or threatening industrial action to force such payments.65 These provisions are discussed at [14.70].

59 60

61

62 63 64

FCA 1252 Sterling Commerce (Australia) Pty Ltd [2008] FCA 702 at [56]. An award which allowed the employer to make deductions for periods where the employee was absent from duty supported this interpretation, see Australian Bank Employees Union v National Australia Bank Ltd (1989) 31 IR 436 and United Firefighters’ Union of Australia v Metropolitan Fire Brigades Board (1998) 86 IR 340 (Ryan J). United Firefighters’ Union of Australia v Metropolitan Fire Brigades Board (1998) 86 IR 340 (Ryan J). Coal & Allied Mining Services Pty Ltd v Macpherson (2010) 185 FCR 383 at [54], [114]-[116]. The provision of an annualised salary which took into account other allowances and entitlements did not exclude the common law rule (at [53], [114]-[116]). Csomore v Public Service Board of New South Wales (1987) 10 NSWLR 587 at 599 per Rogers J; followed United Firefighters’ Union of Australia v Metropolitan Fire Brigades Board (1998) 86 IR 340 and see Independent Education Union v Canonical Administrators (1998) 87 FCR 49; Walker Ltd v Casey [1989] FCA 409 at [42] (award applying only where employee has attended and offered himself for employment); Coal & Allied Mining Services Pty Ltd v MacPherson (2010) 185 FCR 383 at [32] per Marshall, Cowdroy JJ. Exceptionally an award may “cover the field” leaving no room for the common law principles to operate, Gapes v Commercial Bank of Australia Ltd (1980) 37 ALR 20. Tasmanian Steamers Pty Ltd v Lang (1938) 60 CLR 111 at 124. As to the reach of the Fair Work Act 2009 (Cth), see [12.20]. Fair Work Act 2009 (Cth), ss 470, 473 (protected industrial action); ss 474, 475 (unprotected industrial action) and see definition and exceptions in s 19(1), (2) discussion at [14.70]. Where the employer was mistaken about whether the employees were engaged in industrial action, see Australian Workers Union v BlueScope Steel Ltd [2007] NSWIRComm 1022 at [61] (heard by the NSW Commission under the referral provisions of the Industrial Relations Act 1996 (NSW), s 146A(2)). Providing accommodation for fly in fly out workers is not prohibited by the provisions, see

Mutual/Dependant Duties

Summary – “No Work, No Pay” [5.130] First, the duty to render service and the duty to pay wages or salary are dependent duties, and failure to render the service contracted for absolves the employer from the obligation to pay, not because the employee is in breach of the contract, which the employee is, but because the very terms of the contract so provide. The extent of the service which can be required of the employee is defined by reference to the range of lawful orders which may be given to the employee. The service will normally be work, but need not be confined to that and can include, for example, a readiness and willingness to work as, for example, where a worker is on call after hours. Whether readiness and willingness to work is sufficient to earn the wage will depend on the terms, express or implied, in any particular contract of employment. Secondly, if the employee does not render service, even through the wrongful act of the employer, the employee cannot claim wages as the service on which wages are contractually dependent has not been rendered. If the employee, although not having rendered service, can show readiness and willingness to do so, the employee may have an action in damages against the employer if the employer has been in breach of some express or implied term in the contract, such as the termination clause, the obligation to supply work or possibly the obligation to co-operate. Thirdly, the authorities also support the view that an employer is not obliged to accept less than the service contracted for. If an employer does not intend to accept less than the service contracted for, the employer will need to make these intentions clear by issuing unambiguous and seriously intended orders which the employer then seeks to enforce. If, in such a situation, the employee still manages or chooses to do work other than that required at the time by the employer, the employer will not be bound to pay even if the work is of benefit. The amount of salary or wages which can be withheld for these periods of time may be calculated by reference to the units of time, if any, by which salary or wages are normally calculated.66 Fourthly, a contracting party, such as an employer, is at liberty to accept less than the service contracted for. If this occurs, the employer will be obliged to pay wages, although perhaps having a remedy in damages for the breach of contract by the employee. An employer will be held to have accepted less than the agreed service if the employer, for example, acquiesces in the employee doing all duties save the banned work, or if the employer facilitates the performance of alternative duties, or if the employer’s orders are not seriously intended to be obeyed or are not enforced. Lastly, this law will usually apply to modern awards and enterprise agreements and other industrial instruments. These instruments merely quantify salary or wages and are made against the background of the common law which remains operative to the extent that the award or industrial instrument has not altered it. They presuppose the existence of an employer–employee relationship and also the common law. They rarely have anything to say with respect to the implied and underlying contractual term that wages are earned for, and are dependent upon, service. The wages-work bargain has been treated separately because it contains two mutually interdependent duties, one imposed on the employer and the other on the employee. The previous edition discussed as a mutual duty, the potential for an implied duty of trust and confidence. But it is now clear that in Australia, there is no implied duty of trust and confidence owed by both the employer and employee. The High Court

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Construction, Forestry, Mining & Energy Union v Mammoet Australia Pty Ltd [2013] HCA 36; (2013) 248 CLR 619 discussed McCrystal “Do Fly-in/Fly-out Workers Taking Industrial Action have to Forfeit their Beds as well as their Wages?” (2013) 26 AJIL 352. In relation to unprotected industrial action, see [14.20]–[14.40]. This is subject to the Fair Work Act 2009 (Cth) provisions, see [14.70].

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in Barker67 did accept that there was a duty to co-operate (see [5.190]) but left open the question whether there is a duty of good faith (see [5.170]). The next section considers the implications of the rejection of an implied duty of trust and confidence.

No implied duty of trust and confidence Introduction [5.140] The High Court in Commonwealth Bank of Australia v Barker (Barker) finally put to rest the debate as to whether there is an implied duty of trust and confidence in all contracts of employment. The High Court held that there is no such implied term. It refused to follow the House of Lords decision in Malik v BCCI68 that held that an employer had an implied duty not to “without reasonable and proper cause, conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee”.69 Whilst an employee has a duty of fidelity and loyalty70 to the employer (see [5.520]), the employer has no similar duty to an employee; the duties owed under the contract of employment are not reciprocal.71 In the United Kingdom, the implied duty of trust and confidence72 is seen as a means of restricting managerial prerogative73 and protecting the dignitary interests of employees by ensuring that employees have the right to be treated with dignity and respect in the workplace. The implied term provided the opportunity for the common law to move towards greater standards of fairness long accepted in the industrial jurisdiction, especially in unfair dismissal claims.74 The next section gives a brief overview of the operation of the implied term in United Kingdom to illustrate what its absence may mean for employment relations in Australia and to provide a background to a detailed examination of the High Court decision in Barker.

UK: the implied duty of trust and confidence [5.150] In Woods v W M Car Services (Peterborough) Pty Ltd,75 Lord Denning MR recognised the general duty of an employer to be good and considerate to its employees. The duty was formulated as an implied term not to do anything calculated or likely to 67 68

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Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169. Malik v Bank of Credit & Commerce International SA (In liq) [1998] AC 20 at 46 per Lord Steyn and see Lord Nicholls at 38; Brodie, “Mutual Trust and the Values of the Employment Contract” (2001) 30 ILJ 84 at 93, 99. Woods v WM Car Services (Peterborough) Ltd [1981] ICR 666 at 670 per Browne-Wilkinson VC. Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [30] per French CJ, Bell and Keane JJ. And see Jessup J’s dissenting judgment in the Full Federal Court explaining why the employee’s duty of fidelity and loyalty may not be the same as a duty of trust and confidence, at [304]. See Commonwealth Bank of Australia v Barker [2013] FCAFC 83; (2013) 214 FCR 450 at [303] per Jessup J (dissenting); the decision of the Full Federal Court was overturned on appeal, see Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169. In the United Kingdom there are related additional implied duties, the duty not to act capriciously or arbitrarily in relation to remuneration during the employment which appears to be treated as a separate implied term [5.210]; possibly an independent implied term that the employer will not utilise its contractual rights to dismiss so as to deprive the employee of contractual benefits such as income protection, redundancy and other payments. See Cabrelli, “Discretion, Power and the Rationalisation of Implied Terms” (2007) 36 ILJ 194. Compare Brodie, The Employment Contract: Legal Principles, Drafting and Interpretation (OUP, 2005), [11.9]-[11.18]. Malik v Bank of Credit & Commerce International SA (In liq) [1998] AC 20 at 46 per Lord Steyn and see Lord Nicholls at 38; Brodie, “Mutual Trust and the Values of the Employment Contract” (2001) 30 ILJ 84 at 93, 99. Freeland, “Constructing Fairness in Employment Contracts” (2007) 36(1) Ind LJ 136. Woods v W M Car Services (Peterborough) Pty Ltd [1982] ICR 693 at 698; Lord Denning there cited Courtaulds Northern Textiles Ltd v Andrew [1979] IRLR 84 as authority and see Jessup J’s review in

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destroy or damage the relationship of trust and confidence between them. But it was over a decade before the House of Lords in Malik v BCCI76 endorsed the existence of an implied term of mutual trust and confidence.77 The impetus for this implied term in the United Kingdom was to provide a remedy for employees “squeezed out” of their job.78 This could occur where the employer had made the job so intolerable that the employee resigned. A resignation would not normally qualify as a dismissal under the United Kingdom unfair dismissal legislation. But an employee could be treated as being dismissed if the employer committed a serious breach of the contract which amounted to a repudiation of the contract (see [8.20]). If the employer’s conduct was calculated or likely to destroy or seriously injure the relationship of mutual trust and confidence between the employer and employee, this was a relevant breach of the contract which could provide the foundation for constructive dismissal.79 The duty reflected some of the broader perspectives of public law (the requirement of reasonableness and the protection of reasonable expectations) and equity (the emphasis on trust and confidence), and contract (the duty of good faith). The primary emphasis was, however, upon the maintenance of the personal relationship: The implied obligation constitutes judicial recognition … that the employment contract is not just about economic exchanges (work for wages) but also social or personal relations.80

Breach of the implied term could occur where, during the employment, employees had been subject to sexual harassment,81 bullying, excessive workloads,82 unjustified verbal abuse83 accusations of dishonesty,84 operating a dishonest and corrupt business which affected the employees’ capacity to find new employment,85 vilification of an employee in the press,86 unjustifiable warnings relating to performance,87 fabricating evidence for a sexual harassment claim,88 exercising a contractual right to relocate employees in a manner which is capricious,89 an unjustified request to undergo psychiatric

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his dissenting judgment, Commonwealth Bank of Australia v Barker [2013] FCAFC 83; (2013) 214 FCR 450 at [211] et seq and the High Court in rejecting Barkers claim, [2014] HCA 32; (2014) 253 CLR 169 at [30] et seq per French CJ, Bell and Keane JJ. Malik v Bank of Credit & Commerce International SA (In liq) [1998] AC 20. See also Eastwood v Magnox Electric plc; McCabe v Cornwall County Council [2005] 1 AC 503. Western Excavating (ECC) Ltd v Sharp [1978] 1 QB 761. See the historical survey by Jessup J in the federal court, Commonwalth Bank of Australia v Barker [2013] FCAFC 83; (2013) 214 FCR 450. In the United Kingdom, the implied duty of mutual trust and confidence was not limited to constructive dismissal cases as the House of Lords decision in the Malik case which concerned stigma damages indicates. Brodie, “Mutual Trust and the Values of the Employment Contract” (2001) 30 Ind LJ 84 at 88-89. Western Excavating (ECC) Ltd v Sharp [1978] ICR 221 and discrimination Shaw v CCL [2008] IRLR 284. Triggs v GAB Robins (UK) Ltd [2008] 1 All ER (D) 266. Horkulak v Cantor Fitzgerald International [2005] ICR 402. Moores v Bude-Stratton Town Council [2000] IRLR 676; Hem, Re Coulco Trading Pty Ltd v Cant (2007) 159 IR 113. Malik v Bank of Credit and Commerce International (SA) (In liq) [1998] AC 20. But not if the corruption is minor and not related to inability to find employment: Thomson v Broadley [2002] QSC 255; Hem v Cant (2007) 156 IR 113 (accusation of theft). RDF Media Group plc v Clements [2008] IRLR 207 at [118], [125], [132]. Walker v Northumberland CC [1995] IRLR 35; [1995] ICR 702. Eastwood v Magnox Electric plc; McCabe v Cornwall County Council [2005] 1 AC 503. United Bank v Akhtar [1989] IRLR 507; Johnstone v Bloomsbury Health Authority [1992] QB 333; as rationalised by Brodie in “The Heart of the Matter; Mutual Trust and Confidence” (1996) 25 ILJ 121. See also Clark v Nomura International plc [2000] IRLR 766; Merrill Lynch International (Australia) Ltd v Commissioner of Taxation [2001] FCA 1127 per Lindgren J (capricious exercise of discretion in relation to bonus or salary increments).

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examination,90 or overacting in suspending an employee.91 Failure by the employer to follow its own policies and procedures could suffice.92 The implied term of mutual trust and confidence did not apply to dismissal93 so that an employee could not claim damages in tort or contract for psychiatric injury caused by the manner of the dismissal however brutal it might be.94 The House of Lords accepted that the statutory unfair dismissal legislation prevented the implied term from imposing a duty to act honestly and to refrain from untruthful, unfair or insensitive conduct in dismissing the employee. Effectively the statutory unfair dismissal regime imposed limits on the development of implied terms, at least in relation to dismissal.95

Barker’s case in the High Court [5.160] Barker was a Commonwealth Bank senior executive who had worked for the bank for nearly 28 years. Barker was told that his position was redundant but that in accordance with the Bank’s policies he could apply for any redeployment opportunities. On the day he was notified, he was required to clear his desk, return the mobile phone, leave the premises and his access to the bank’s email and internet terminated. As provided under the Bank’s redundancy policy, opportunities for redeployment (vacancies) were circulated via email but because his access had been stopped, he was unaware of these opportunities. No attempt was made to forward the information on to him. Barker had no contractual entitlement under the Bank’s redundancy policy to redeployment. The manual setting out the policy specifically stated that it did not form any part of the employee’s contract of employment. Barker argued that the Bank had an implied duty of trust and confidence to provide him with these opportunities in accordance with the procedures set out in its redundancy policy. This was rejected, the High Court finding that there is no mutual duty of trust and confidence either as a term implied at law or implied as a matter of fact in the case before it based on necessity.96 The High Court in Barker observed that the English duty of trust and confidence imposed positive duties which reflected “good industrial relations practice, embracing 90 91

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Bliss v South East Thames Regional Health Authority [1987] ICR 700. Gogay v Hertfordshire County Council [2000] IRLR 703. Note its correctness was questioned in Botham v Ministry of Defence; Edwards v Chesterfield Royal Hospital NHS Foundation Trust (heard together) [2011] UKSC 58; [2012] 2 AC 22. There were also Australian examples pre Barker, see Thomson v Orica [2002] FCA 939; (2002) 116 IR 186 at [141]. See also French v Barclays Bank [1998] IRLR 646 (CA) (changed conditions of interest free loan); Gardener v Beresford [1978] IRLR 63 (arbitrary, capricious or inequitable treatment of employee in relation to matters of remuneration); AFMEPKIU v Australian Dried Fruit Sales (1997) 74 IR 386 at 393 (consideration of seniority in determining whether an employee should have his or her employment terminated by way of redundancy); Hill v General Accident Fire & Life Assurance Corporation plc [1998] IRLR 641 at 644 (selection for redundancy arbitrarily for an improper collateral purpose); Transco v O’Brien [2002] IRLR 444 (only permanent employee not offered better redundancy terms); Bournemouth University Higher Education Corporation v Buckland [2010] EWCA Civ 121 (remarking of failed students without reference to original examiner). See also Riley, “Siblings but not Twins: Making Sense of “Mutual Trust” and “Good Faith in Employment Contracts”” (2012) 36(2) MULR 521 (pre Barker). Johnson v Unisys Ltd [2003] 1 AC 518, but there are exceptions such as suspension and where psychiatric or other illness is caused by pre-dismissal unfair treatment: Eastwood v Magnox; McCabe v Cornwall County Council [2005] 1 AC 503; Gogay v Hertfordshire County Council [2000] IRLR 703 (disciplinary procedures leading to suspension). But the decision in Gogay has been questioned, see Botham v Ministry of Defence [2011] UKSC 58; [2012] 2 AC 22; Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2011] UKSC 58; [2012] 2 AC 22 The employee in Johnson v Unisys Ltd [2003] 1 AC 518 had claimed for unfair dismissal but damages were capped. Johnson v Unisys Ltd [2003] 1 AC 518 at [58]. See also Lord Millett at [80]. And see Brodie, “Mutual Trust and Confidence Catalysts Constraints and Commonality” (2008) 37(4) Ind LJ 329; Collins “Compensation for Dismissal: In Search of Principle” (2012) 41(2) Ind LJ 208. Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [43] per

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not only the material conditions of employment such as pay and safety, but also the psychological conditions which are essential to the performance by an employee of his or her part of the bargain”.97 But the High Court held that there was no warrant for Australian courts to effectively legislate for such a duty: [T]he implied duty of trust and confidence as propounded in Malik is directed…to the relationship between employer and employee rather than to performance of the contract. It depends upon a view of social conditions and desirable social policy that informs a transformative approach to the contract of employment in law. It should not be accepted as applicable, by the judicial branch of government, to employment contracts in Australia.98

Jessup J (dissenting) in the Full Federal Court commented also that intangible benefits from employment are not protected by the contract of employment: [E]motions such as senses of identity, self-worth and dignity are felt in the breast of the employee, are highly subjective and would, necessarily be felt to differing extents by different employees … I do not believe that the common law has come close to making the employer responsible for emotions of this kind, or to giving legal consequences to the fact that they are not generated in a particular situation.99

It leaves an employee without a remedy100 where there is no breach of the contract of employment even if an employer’s conduct is outrageous. For example, requiring a difficult employee to undergo an unwarranted psychiatric assessment, or the constant undermining or harassment of an employee in an attempt to make them leave or accept reduced conditions of employment.101 Many would not agree with the remark that “in many instances such jobs are performed perfectly satisfactorily in an environment of mutual hostility and even contempt”.102 An important reason for the High Court in Barker rejecting a mutual duty of trust and confidence is that the statutory unfair dismissal legislation forecloses the development of such a term; Parliament had implicitly stated the reach of an employee’s rights relating to dismissal, see [13.50]. This view has been criticised:103 The statutory unfair dismissal scheme is a completely separate form of regulation, which was never intended to influence or interfere with the construction of employment contracts. It does not, for instance, deal with non-payment of promised bonuses or breaches of obligations to provide a safe workplace, nor does it apply to any managerial employees earning above the high income threshold …104

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French CJ, Keane and Bell JJ. Nor in an individual case based on necessity: Swindells v State of Victoria [2015] VSC 19 at [168]; State of New South Wales v Shaw [2015] NSWCA 97; (2015) 248 IR 206 (no implied term of trust and confidence in a statutorily based probationary teaching contract). And see discussion [4.500]. Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [39] per French CJ, Keane and Bell JJ citing Deakin and Morris, Labour Law (4th ed 2005), p 335. Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [41] per French CJ, Keane and Bell JJ. Per Jessup J (dissenting) in Commonwealth Bank of Australia v Barker [2013] FCAFC 83; (2013) 214 FCR 450 at [310]; the decision of the Full Federal Court was overturned on appeal to the High Court, Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169. Since there is no contractual breach, there can be no constructive dismissal if the employee leaves, see [8.80]. Bliss v SE Thames Regional Health Authority [1987] ICR 700; Woods v WM Car Series (Peterborough) Ltd [1981] ICR 666. Reynolds, “Bad Behaviour and the Implied Term of Mutual Trust and Confidence: Is there a Problem” (2015) 44(2) Ind LJ 262 at 267. Carter et al, “Terms Implied in Law: “Trust and Confidence” in the High Court of Australia” (2015) 32 J Con L 203 at 227. Including Barker, Fair Work Act 2009 (Cth), ss 382(b)(iii), 333, the threshold at the time of publication is $136,700 pa (reviewed annually).

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Allsop J from the NSW Court of Appeal writing extrajudicially in relation to good faith and fair dealing, also commented:105 If … statute is not viewed as a foreign intruder, but as Parliament setting a standard of expected community behaviour in commerce by building on the principles and values of the common law and Equity, it will necessarily develop the common law and be the foundation for the development of principle by the courts that weaves together the two sources of our law. The movement of parliaments into the field of setting standards of business conduct will inevitably engage the courts in developing the general law by reference to those standards.

The High Court in Barker refused to take a similar approach in rejecting the existence of an implied term of trust and confidence. It is here that the statutory unfair dismissal regime, instead of providing inspiration for parallel common law developments, has been used to thwart the infusion of fair dealing into the contract of employment. Consequently the contract of employment does not require fairness in processes leading to dismissal (at [5.260]) and the common law rule – that there is no duty to give reasons for dismissal – continues (see [5.270]). So the opportunities for a coherent system of statute and common law providing standards of fairness to apply to contracts of employment have not been realised. The High Court did not consider whether there is a general contractual duty to act in good faith or confirm whether there is an implied term that contractual powers and discretions are to be exercised reasonably and in good faith.106 The next section considers the issue of whether there is a good faith implied term.

Duty of good faith? [5.170] The High Court in Barker did not consider whether a duty of good faith can

be implied into all contracts of employment.107 On this issue there is mixed authority in the States as to whether there should be an implied term of good faith in all commercial contracts; this issue awaits resolution by the High Court.108 The principal objections to a good faith term are that it would lead to commercial uncertainty and effectively undercut contractual rights.109 Conversely, a good faith term reflects “the reasonable expectations of commercial parties”;110 it requires contracting parties to have “appropriate regard to the legitimate contractual interests” of the other party. Good faith is consistent with such contractual doctrines as unconscionability and statutory “good faith” obligations and with the good faith requirement in Canada,111 the United States and New Zealand.112 The implication of a term of good faith in employment contracts, if it exists, could not (consistently with the High Court decision in Barker) operate as a substitute for the 105 106 107 108

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Allsop J, “Conscience, Fair Dealing and Commerce – Parliaments and the Courts” (FCA) [2015] Fed J Schol 14 at [96]. Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [42] per French CJ, Keane and Bell JJ. [2014] HCA 32; (2014) 253 CLR 169 at [42] per French CJ, Bell and Keane JJ; Kieffel J at [107]. See discussion Allsop J, “Conscience, Fair Dealing and Commerce – Parliaments and the Courts” (FCA) [2015] Fed J Schol 14 at [67]; Renard Constructions (ME) Pty Ltd v Minister for Public Works [1992] 26 NSWLR 234 at 262- 268 per Priestly J. An argument that was rejected by the Canadian Supreme Court, Bhasin v Hrynew [2014] SCC 71 Bhasin v Hrynew [2014] SCC 71. And see, in relation to the manner of termination, Honda Canada Inc v Keays [2008] 2 SCR 362. Bhasin v Hrynew [2014] SCC 71. But note it simply requires that “parties must not lie or otherwise knowingly mislead each other about matters directly linked to the performance of the contract” (at [73]). And see, in relation to the manner of termination, Honda Canada Inc v Keays [2008] 2 SCR 362. The United Kingdom implied duty of trust and confidence is much broader than good faith but incorporates some elements of good faith performance, see [5.150].

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now rejected duty of trust and confidence113 nor could it impose duties of conduct divorced from contractual rights and duties. So, as in the Barker case, it could not require the bank to honour a non-contractual redeployment policy. Nor could any implied term of good faith, consistently with the approach in Barker, impose upon employers “good industrial relations practice embracing … psychological conditions which are essential to the performance by an employee of his or her part of the bargain”.114 If it is implied in all employment contracts, it does not qualify an employer’s right to terminate a contract with appropriate notice or to summarily dismiss for misconduct.115 Nor is it likely to apply to statutorily regulated employment.116

[5.180] If there is a general duty of good faith in performance of a contract, it operates as an organising principle117 inherent in all contracts rather than an implied term.118 It sets a minimum standard of behaviour “that underpins and is manifested in more specific legal doctrines and may be given different weight in different situations”.119 As an organising principle, it informs and finds expression in more specific duties relating to contract performance:120 (1) a duty co-operate (2) a duty to act honestly121 and (3) an obligation to exercise contractual powers “in good faith and reasonably, and not capriciously or for some extraneous purpose”.122 The High Court in Barker specifically confirmed a duty to co-operate (see [5.190]) but did not consider whether there was duty to exercise powers for a proper purpose and not capriciously or arbitrarily (at [5.210]),123 or whether there is a general duty to act honestly. If “good faith” or its more specific manifestations operate as independent implied terms, they must satisfy the “necessity test”, that is, that without such a term “the enjoyment of the rights conferred by the contract would, or could be, rendered nugatory, worthless, or, perhaps

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As to the differences between a good faith duty and an implied duty of trust and confidence, see Riley, “Siblings but not Twins: Making Sense of “Mutual Trust” and “Good Faith” in Employment Contracts” (2012) 36(2) MULR 521 (pre Barker). Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [39] per French CJ, Keane and Bell JJ citing Deakin and Morris, Labour Law (4th ed 2005), p 335. In Canada it does not impose a duty of disclosure or require a contracting party to forgo contractual rights, see Bhasin v Hrynew [2014] SCC 71 at [73]. Intico (Vic) Pty Ltd v Walmsley [2004] VSCA 90 (pre Barker) per Buchanan JA at [23] (Eames and Ormiston JJA agreeing). State of New South Wales v Shaw [2015] NSWCA 97; (2015) 248 IR 206 (rejected in relation to statutorily based probationary teaching contracts). Renard Constructions (ME) Pty Ltd v Minister for Public Works [1992] 26 NSWLR 234 at 268 per Priestly J. In Canada, Bhasin v Hrynew [2014] SCC 71 at [33]. And see Allsop J, “Conscience, Fair Dealing and Commerce – Parliaments and the Courts” (FCA) [2015] Fed J Schol 14 at [38], [73]-[74]. An implied term might only be relevant if a standard exceeding the common law good faith standard was sought to be imposed as a matter of “business efficacy”, see Carter, Contract Law in Australia (6th ed 2013) at [2-19], p 32. Bhasin v Hrynew [2014] SCC 71 at [64] (Canada). Mason J, “Contract, Good Faith and Equitable Standards in Fair Dealing” (2000) 116 LQR 66, 69 suggests “three related notions” (1) co-operation to achieve contractual objects (2) honest standards of conduct and (3) complying with standards that are reasonable in the light of the parties interests. Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444, Edelman J, “honesty in the stricter sense is by … law a duty of universal obligation independently of contract or of special obligation”, referring to Nocton v Ashburton [1914] AC 932 at 954 Lord Haldane approved in Magill v Magill [2006] HCA 51; (2006) 226 CLR 551 at 561 [17] per Gleeson CJ, 615 [207] per Heydon J. And see Bhasin v Hrynew [2014] SCC 71 at [87] (dishonesty requires active misleading or deceiving in relation to performance). Far Horizons Pty Ltd v McDonalds Australia Ltd [2000] VSC 310 at [120] (franchise agreement) and see Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 at [241], [242] per Edelman J. Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [42] per French CJ, Bell and Keane JJ.

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be seriously undermined”124 (see [4.510]). If good faith is a general organising principle, it cannot (unlike an implied term) be excluded by the contract.125 As employees already have duties of fidelity and loyalty, a good faith term is probably unnecessary (see [4.510]). In relation to employers, if there is an obligation of good faith, it would not be permitted to be a substitute for the now rejected duty of trust and confidence.126 Decisions in courts following Barker have rejected any implied term of good faith in employment contracts.127 In contrast to the uncertain position in Australia,128 in many common law countries including the United States and Canada, there is a common law duty of good faith in all contracts requiring parties to “perform their contractual duties honestly and reasonably and not capriciously or arbitrarily”.129 Canadian law also requires good faith in dismissal requiring the employer to be “candid, honest and forthright”.130 In New Zealand, there is a statutory duty of good faith in employment.131 There is significant authority pre and post Barker that an employer has a duty not to act capriciously, arbitrarily or unreasonably in the exercise of discretions relating to remuneration. This is discussed in detail under “Employers Duties”, see [5.210] and [10.160].

Duty to co-operate [5.190] The duty to co-operate is an established principle of contract law. As a matter of general contract law, a duty to co-operate requires parties to the contract to do what is “reasonably necessary to facilitate performance of a contract”; this includes duties 124

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Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 450 per McHugh and Gummow JJ adopted in Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [29] per French CJ, Bell and Keane JJ. Co-operation may alternatively be viewed as a rule of construction applying to all contracts but as a matter of practicality whether viewed as an implied term or a rule of construction, it does not result in a different outcome, [2014] HCA 32; (2014) 253 CLR 169 at [25], [29] per French CJ, Bell and Keane JJ. If it is an implied term, can it be excluded by an “entire agreement” clause? See Vodaphone Pacific Ltd v Mobile Innovations Ltd [2004] NSWCA 15 at [195] per Giles JA (good faith excluded by entire agreement clause giving absolute discretion in contrast to other clauses requiring reasonableness or good faith) but see Paterson, “Implied Fetters on the Exercise of Discretionary Contractual Powers” (2009) 35(1) Mon ULR 45 at 66 and [4.560]. If it is an organising principle, it may not exclude the minimum requirements of honesty, or implied terms GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50 at [922] per Finn J and see Bhasin v Hrynew [2014] SCC 71 at [75]-[78] (Canada) (entire agreement clause did not exclude a duty of good faith). Carter et al, “Terms Implied in Law: “Trust and Confidence” in the High Court of Australia” (2015) 32 J Con L 203 at 227, 229. Generally, courts have refused to find an implied term of good faith in employment contracts: Walker v Citigroup Global Markets Pty Ltd & Anor [2005] FCA 1678; (2005) 226 ALR 114 at [204]- [205]; Intico (Vic) Pty Ltd v Walmsley [2004] VSCA 90 at [23]; [27]-[30]; Swindells v State of Victoria [2015] VSC 19 at [172]; Russo v Westpac Banking Corporation [2015] FCCA 1086; Regulski v State of Victoria [2015] FCA 206 at [219]-[223]; State of New South Wales v Shaw [2015] NSWCA 97; (2015) 248 IR 206 (whether based on an “necessity” or as related to contractual rights, rejected in relation to statutorily based probationary teaching contracts); Gramotnev v Queensland University of Technology [2015] QCA 127; (2015) 251 IR 448. Cf the now questionable pre Barker decision in Russell v The Trustees of the Roman Catholic Church Archdiocese of Sydney [2008] NSWCA 217; (2008) 72 NSWLR 559 (unresolved whether it is a separate implied term or part of the duty of trust and confidence). Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 at 267-268 per Priestley J. Bhasin v Hrynew [2014] SCC 71 at [63]. Note developments in Canadian law requiring good faith in dismissal requiring the employer to be “candid, honest and forthright”, see Lublin, “Wrongful Dismissal – Bad Faith Damages in Canadian Employment Law: Honda Canada Inc v Keays” (2009) 59 UBN LJ 163. Employment Relations Act 2000 (NZ) s 4 (more extensive duty than the duty of trust and confidence).

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not to obstruct or prevent performance or fulfilment of the purposes of the contract and to do such things as required to enable the other party to have the benefit of the contract.132 The duty of contracting parties to co-operate can be viewed in a variety of ways. It may be seen as a specific duty which is part of the duty of good faith (see [5.170]), or an organising principle applying to all contracts,133 a rule of construction or as an express or implied term of the contract.134 It is probably best characterised as a rule of construction135 derived from the judgment of Lord Blackburn in Mackay v Dick:136 Where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect.

The High Court in Commonwealth Bank of Australia v Barker137 thought that nothing turns upon whether it is a rule of construction or an implied term.138 The duty to co-operate, at least in the employment context, continues to be discussed as a contractual implied term. The High Court in Barker accepts that in contracts of employment, like all contracts, there can be an implied duty to co-operate. The duty to co-operate satisfies the necessity test that without such a term “the enjoyment of the rights conferred by the contract would, or could be, rendered nugatory, worthless, or, perhaps be seriously undermined”.139 The implied term is not a substitute for the now rejected implied duty of trust and confidence.140 The term is “directly related to contractual

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Carter, Contract Law in Australia (6th ed 2013) at [2-17], p 31. Described as a universal implication in Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [29] per French CJ, Bell and Keane JJ. It may be implied as a matter of law in contracts generally or implied in fact as a matter of “business efficacy”, E Peden, “Co-operation in English Contract Law – to Construe or Imply?” (2000) 16 J Con L 56 at 60. E Peden, “Co-operation in English Contract Law – to Construe or Imply?” (2000) 16 J Con L 56; Even if it is a separate implied term, damages are not awarded for its breach pointing to its operation as a rule of construction, Carter et al, “Terms Implied in Law: “Trust and Confidence” in the High Court of Australia” (2015) 32 J Con L 203 at 214-215. Note the continuing debates in the UK, see Attorney General of Belize v Belize Telecom Ltd [2009] 1 WLR 1988; Marks and Spencer plc v BNP Paribas Securities Service Trust Company (Jersey) Ltd [2015] UKSC 72. Mackay v Dick (1891) 6 App Case 251 at 263. The High Court in Barker (French CJ, Bell and Keane JJ at [25]) quoted the judgment of Mason J in Secured Income Real Estate (Australia) Ltd v St Martins Investments which characterised the principle enunciated by Lord Blackburn as a principle of construction. See also Byrne v Australian Airlines Ltd [1995] HCA 2; (1995) 185 CLR 410, 448-449 at [70]-[71] per McHugh and Gummow JJ; Butt v M’Donald (1896) 7 QLJ 68 at 70-71 per Griffith CJ approved in Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596 at 607 per Mason J, Gibbs, Stephen and Aitkin JJ concurring and noted without disapproval in Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 per French CJ, Bell and Keane JJ at footnote 73. Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [25], [29] per French CJ, Bell and Keane JJ. But breach does not give rise to a claim for damages and the duty to co-operate does not exist independently of contractual rights and duties, and there is the question whether it can be excluded by an express term, see Carter et al, “Terms Implied in Law: “Trust and Confidence” in the High Court of Australia” (2015) 32 J Con L 203 at 214-215. Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 450 per McHugh and Gummow JJ adopted in Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [29], [37] per French CJ, Bell and Keane JJ. Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [26], [37] per French CJ, Bell and Keane JJ.

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performance”.141 This means that it is not an open ended general duty to cooperate142 but instead a duty to facilitate the enjoyment of contractual rights agreed to by the parties under the contract. This implied duty to co-operate is mutual as it applies to both employers and employees. The failure to keep adequate records needed to calculate the employee’s remuneration under the employment contract is a breach of the implied duty of co-operation as the employer “failed to do all such things as were necessary to enable the applicant to have the benefit of the contract”.143 The failure to advise an employee of contractual rights related to pensions could be characterised as a failure to co-operate.144 The duty to co-operate may require an employer to take steps to facilitate the enjoyment of contractual rights such as bonuses (see [5.230]) or in the case of redundancy, contractual rights to redeployment or transfer.145 But if, as in Barker, employees faced with redundancy have no contractual right to redeployment, there is no corresponding implied duty to co-operate to ensure that they are made aware of redeployment opportunities or facilitate their exercise.146 Employees also have an implied duty to co-operate. If employee’s conduct frustrates the purposes of the contract, for example by engaging in a work to rule or go slow, this would be a breach of their duty to co-operate (see [5.420]).147 There are no sharp lines to be drawn between implied duties. For example, the employee’s duty to answer questions honestly could either be considered as an aspect of the duty of loyalty or a duty to co-operate. Nothing turns on how the duty is characterised.

Employer’s Implied Duties [5.200] In this section, the employer’s implied duties towards employees are considered. The duty to take reasonable care to provide safety at work is dealt with separately in Chapter 6.

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Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [37] per French CJ, Bell and Keane JJ. Otherwise this could provide a substitute to the now rejected duty of trust and confidence Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [26], [37] per French CJ, Bell and Keane JJ and see dissenting judgment of Jessup J Commonwealth Bank of Australia v Barker [2013] FCAFC 83; (2013) 214 FCR 450 at [315]; Marmax Investments Pty Ltd v RPR Maintenance Pty Ltd [2015] FCAFC 127 at [132]-[138]. See also Regulski v Victoria [2015] FCA 206 at [213], [215], [216] (no application to non-contractual policies). Murrihy v Betezy com.au Pty Ltd [2013] FCA 908; (2013) 238 IR 307 (prior to Barker); or refusal to allow the employee access to the workplace, Carter, Contract Law in Australia (6th ed, 2013) at [28-09], p 641 Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [59] per Keifel J (implied term in fact based on necessity (not reasonableness) as the pension entitlement would be of no value unless the employee knew about it), and see Jessup J (dissenting) in Commonwealth Bank of Australia v Barker [2013] FCAFC 83; (2013) 214 FCR 450 at [315] as an illustration of the duty of co-operation. Commonwealth Bank of Australia v Barker [2013] FCAFC 83; (2013) 214 FCR 450 at [315] per Jessup J (dissenting) as an illustration of the duty of co-operation. The Full Court judgment was overturned on appeal, Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169. Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 per French CJ, Bell and Keane at [26], [27] (Gaegler J agreeing at [119]), at [88] per Keifel J that there was no related contractual benefit to which the implied term could apply, no contractual right to redeployment. Stewart’s Guide to Employment Law (5th ed, 2015) at [12.5] gives illustrations of the duty to co-operate which are frequently categorised as related to the duty of fidelity and loyalty, for example, accepting a bribe, see [5.810].

Employer’s Implied Duties

Duty not to exercise discretionary powers arbitrarily, capriciously or unreasonably? [5.210] This section first refers to general considerations related to an implied duty not to exercise discretionary powers arbitrarily, capriciously or unreasonably. It then considers how such an implied term may apply to payment of bonuses and other incentive payments; variation of policies and procedures, transfer or relocation clauses and other discretionary powers.

General duty [5.220] A duty not to exercise contractual powers arbitrarily, capriciously or unreasonably may be seen as an aspect of the duty of good faith which requires an employer to act honestly.148 In the United Kingdom it is frequently seen as an application of the implied duty of trust and confidence149 which has been rejected in Australia. Whilst there is little prospect of the Australian High Court finding a general duty of good faith in employment contracts (see [5.170]), there is a stronger case for arguing a “context specific understanding of what honesty and reasonableness in performance requires so as to give appropriate consideration to the legitimate interests of both contracting parties”,150 in particular a more limited duty of honesty requiring the employer not to act capriciously, arbitrarily or unreasonably in relation to remuneration, see [5.230], [10.160]. The High Court in Barker left open the question whether there could be an implied duty on the part of the employer not to exercise discretionary powers arbitrarily, capriciously or unreasonably. The High Court said that its decision rejecting an implied duty of trust and confidence did not reflect: upon the related question whether contractual powers and discretions may be limited by good faith and rationality requirements analogous to those applicable in the sphere of public law.151

As the High Court indicates, if discretionary powers are fettered, it is by reference to “good faith and rationality requirements” similar to the public law approach for determining whether a discretion vested in a public body or official has been exercised reasonably.152 This does not impose a general standard of reasonableness in the exercise of discretion,153 but refers to decisions that are “so absurd that no sensible person” would make them; this is known as Wednesbury reasonableness.154 Decisions which are made for improper purposes or take into account irrelevant information or 148 149

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This is the view of the Canadian Supreme Court, Bhasin v Hrynew [2014] SCC 71. Some English cases treat this as a separate implied term rather than an application of the duty of mutual trust and confidence, see Cabrelli, “Discretion, Power and the Rationalisation of Implied Terms” (2007) 36 ILJ 194. Bhasin v Hrynew [2014] SCC 71 at [69] (Canada). Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [42] per French CJ, Bell and Keane JJ See in the United Kingdom, Clark v Nomura [2000] IRLR 766 per Burton J; Mallone v BPB Industries Ltd [2002] IRLR 452; Horkulak v Cantor Fitzgerald International [2005] ICR 402 at [46] per Potter LJ. See, for example, BG plc v O’Brien [2001] IRLR 496 (a single employee excluded from improved redundancy terms). Some English cases treat this as a separate implied term rather than an application of the duty of mutual trust and confidence, (which has been rejected in Australia, see [5.160]) and see Cabrelli, “Discretion, Power and the Rationalisation of Implied Terms” (2007) 36 ILJ 194. Beerens v Bluescope Distribution Pty LTd [2012] VSCA 209; (2012) 39 VR 1 at [166]-[167] per Tate JA, Redlich JA agreeing. See also Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596 at 609, [33] et seq per Mason J, Gibbs and Stephen JJ agreeing. “Wednesbury unreasonableness” is named after the decision in Associated Provincial Picture Theatres Ltd v Wednesbury Co [1948] 1 KB 223.

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fail to take into account pertinent information are also objectionable under these principles. In Russo v Westpac Banking Corporation,155 a discretion to pay a bonus was exercised improperly where the supervisor had undertaken a performance assessment before reviewing the individual’s performance and without regard to the required policies and procedures. The conduct will also be unreasonable where the decision-maker takes into account “impermissible factors”, or fails to take into account relevant matters such as the employee’s achievements and favourable reviews; it will also be objectionable where the decision-maker fails to properly investigate allegations of poor performance and makes the assessment without appropriate evidence.156 This is subject to the qualification that the employer is entitled, in the exercise of its discretion, to take into account its own legitimate commercial interests, for example, urgent financial considerations which justify the refusal to make discretionary payments as part of a redundancy package.157

Discretionary pay schemes [5.230] There is substantial authority pre and post Barker that discretions158 relating to remuneration,159 bonuses and other incentive payments must not be exercised arbitrarily, capriciously or unreasonably.160 The question is whether this duty is a separate implied term or an application of the general duty of good faith or an aspect of the duty to co-operate (above [5.170], [5.190]). Does it matter? If it is an implied term, it must comply with the necessity tests, see [4.510]. But it is arguable that it is an illustration of the duty to co-operate which is inherent in all contracts without the need to imply a term to this effect (see [5190]). If it is part of the duty to co-operate, it satisfies the necessity test that without such a term “the enjoyment of the rights conferred by the contract would, or could be, rendered nugatory, worthless, or, perhaps

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Russo v Westpac Banking Corporation [2015] FCCA 1086 at [213]-[266]. Russo v Westpac Banking Corporation [2015] FCCA 1086 at [213]-[266] (note the extraordinary admissions to this effect made by the supervisor who was no longer in the employ of the bank at the time of trial). See also Renard Constructions (ME) Pty Ltd v Minister for Public Works [1992] 26 NSWLR 234,276 per Meagher JA. Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 at [5]-[6] Allsop J (Beasley J agreeing) followed in O’Sullivan Partners (Advisory) Pty Ltd v Foggo [2012] NSWCA 40; (2012) 218 IR 331 (prior to Barker); McKeith v Royal Bank of Scotland Group Plc; Royal Bank of Scotland Group Plc v James [2016] NSWCA 36 per Macfarlan JA at [17],[23], Tobias AJA at [296]-[300], Emmett JA at [322]. (relevant that RBS suffered huge losses during the GFC and was taken over by the United Kingdom Government). As to the various discretions that may be involved in relation to bonuses and incentive payments, see [10.160]. The rule was applied to “ex gratia” payments as part of a redundancy policy in McKeith v Royal Bank of Scotland Group Plc; Royal Bank of Scotland Group Plc v James [2016] NSWCA 36 discussed [10.160]. Where an employer could increase shift hours without increase in pay, an implied term that the employer would act reasonably in reviewing remuneration, Landsheer v Morris Corporation (WA) Pty Ltd [2014] WAIRComm 34 at[38]-[43]; appeal dismissed for want of jurisdiction Landsheer v Morris Corporation (WA) Pty Ltd [2014] WASCA 186. Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 per Buchanan J at [209], McKerracher J at [334], White J at [341] (not capricious or arbitrary to refuse to make payments from a non-existent pool or to refuse to substitute a different method of funding); McKeith v Royal Bank of Scotland Group Plc; Royal Bank of Scotland Group Plc v James [2016] NSWCA 36 (not capricious or arbitrary to require employee to sign a deed of release as a condition for receiving payment), discussed [10.160].

Employer’s Implied Duties

be seriously undermined”.161 The implied term cannot stand in the face of an express provision prohibiting payment of the bonus, for example, where the employee is no longer in employment.162 As employees are very unlikely to sue the employer during the employment, the issue most usually arises on termination or redundancy and is discussed in detail at [10.160].

Other discretionary powers [5.240] Even if there are some situations where there is an implied duty not to exercise a power arbitrarily, capriciously or unreasonably, it does not apply in the face of an express contractual right to terminate the contract: “[A] power to dismiss without cause is a power to dismiss for any cause or none”.163 Similarly, it is suggested that the right to terminate for repudiation or breach is unfettered.164 But the principle could apply to an employer required under the contract to form an opinion whether there was sufficiently serious misconduct to warrant dismissal;165 the employer would have a duty to act reasonably in carrying out investigations and the processes in forming its opinion.166 The processes must be reasonable in a Wednesbury sense (at [5.220]).167 In the United Kingdom the principle has been applied more broadly to such matters as where entitlement to a pension is dependent on forming a relevant opinion.168 In Australia the reach of the principle awaits further elaboration by state level courts and determination by the High Court following the Barker case.169 In the United Kingdom, it has also been held that employers who have contractual rights to relocate employees or suspend employees cannot do so arbitrarily.170 But commentators suggest that in relation to the express right of the employer to transfer the employee to another location, the duty may be one of co-operation. For example, an employer should not 161

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Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 450 per McHugh and Gummow JJ adopted in Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 at [29], [37] per French CJ, Bell and Keane JJ. Leahne Rowley v BHP Billiton Iron Ore [2014] WAIRComm 244; Commerzbank AG v Keen [2007] ICR 623 at [74]-[76], discussed by Cabrelli, “Discretion, Power and the Rationalisation of Implied Terms” (2007) 36 ILJ 194. Reda v Flag Ltd [2002] UKPC 38; [2002] IRLR 747 at [43]; Bartlett v Australian & New Zealand Banking Group Ltd [2016] NSWCA 30, power to dismiss with notice not subject to reasonableness, Macfarlan JA at [87], [89], Meagher JA at [106]-[107], Simpson JA not deciding at [132]-[134]. Courtney, “Reasonableness in Contractual Decision-making” (2015) 131 LQR 552 at 554. ANZ v Bartlett [2016] NSWCA 30, per Macfarlan J at [30]-[32], [49]; Meagher JA at [106]-[107]; Simpson JA at [108] but the right to summarily dismiss depended on objectively determined misconduct rather than the employer’s opinion; were it otherwise it would be sufficient that the employer formed an opinion without the necessity of demonstrating any misconduct. In ANZ v Bartlett [2016] NSWCA 30, it was accepted that the investigation had not been conducted properly; there had been limited investigation, the employee was not provided with a copy of a crucial report and an opportunity to respond to it, as well as non compliance with ANZ’s performance policy to afford procedural fairness ([9]), per MacFarlan JA at [50]-[56], Cf Meagher JA at [98], [106], Simpson JA at [134]. Bartlett v Australian & New Zealand Banking Group Ltd [2016] NSWCA 30 per Macfarlan J at [49]; Meagher JA at [98], Simpson JA at [108]. See Braganzsa v BP Shipping Ltd [2015] UKSC 17; [2015] 1 WLR 1661 (reasonableness required in relation to the employer’s opinion relating to payment of death benefits under a contract of employment) and see Courtney, “Reasonableness in Contractual Decision-making” (2015) 131 LQR 552. Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 rejecting the implication of an implied term of trust and confidence, see [5.160]. United Bank v Akhtar [1989] IRLR 507; Gogay v Hertfordshire Council [2000] IRLR 703 (suspension where a completely unjustified allegation of sexual impropriety) now questioned, see Botham v Ministry of Defence; Edwards v Chesterfield Royal Hospital NHS Foundation Trust (heard together) [2011] UKSC 58; [2012] 2 AC 22.

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require an employee to relocate without being given adequate notice.171 These United Kingdom decisions reflect a broader approach based on the employer’s implied duty of trust and confidence (rejected in Australia) which suggests caution in applying United Kingdom authority, see [9.360].

Variation of policies and procedures [5.250] It is common for employers to reserve the right to vary policies and procedures from time to time through express provision in the contract of employment,172 or by provision in the policies and procedures themselves. These clauses will be construed strictly so that any ambiguity is likely to be resolved in favour of a disadvantaged employee. The previous chapter referred to Riverwood International Australia Pty Ltd v McCormick,173 and the suggestion by Mansfield J (at [152]) that the power to amend or introduce new policies from time to time will be constrained by an implied term that it will act with due regard for the purposes of the contract of employment, so it cannot act capriciously and “arguably could not act unfairly” towards Mr McCormick.174 The issue is: if there is an implied term that the employer will not exercise its powers arbitrarily, capriciously or unreasonably, how would this apply when an employer varies policies and procedures to the detriment of employees? As noted above ([5.220]) the test is not simply whether it is unreasonable and unfair to the employee so that it is only in an extreme case that a variation, even if it disadvantages an employee, will be caught by the implied term.175 In the Riverwood case policies and procedures were held to be incorporated into the employment contract so that they had contractual force. But if workplace policies and procedures are not part of the contract,176 the employer is not obligated to honour those policies nor does the employer have any duty not to act capriciously or arbitrarily in relation to those policies. There appears little scope for claims based on negligence in relation to the absence of, or failure to properly carry out, non-contractual policies on disciplinary procedures.177 Variation is discussed in greater detail at [9.340].

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Deakin and Morris, Labour Law (6th ed, Hart, 2012), p 369 citing United Bank v Akhtar [1989] IRLR 507. In relation to the UK, see Deakin and Morris, Labour Law (6th ed, Hart, 2012), pp 295-304. Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193, see [4.480]. See also Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62 at [122]-[124] per Marshall J. Romero v Farstad Shipping (Indian Pacific) Pty Ltd [2014] FCAFC 177; (2014) 231 FCR 403 (post Barker) citing the trial judge’s views at [41] but not involving any changes to policies, see [59], per Allsop J delivering the judgment of the Court. And see Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 at [77] et seq per Buchanan J, contrast McKerracher J at [336]-[337] and White J at [345] expressing no view. See, as an example in relation to limiting entitlement to redundancy, Bampton v Viterra Ltd [2014] SADC 170 at [441]. For example, they might be expressly excluded or brought into force after commencement of the employment. Dafallah v Fair Work Commission [2014] FCA 328; (2014) 225 FCR 559 at [134]-[136] (duty incompatible with law relating to termination of employment under contract and statute).

Employer’s Implied Duties

Investigative and disciplinary processes No implied duty to act fairly [5.260] At common law, an employer has no implied obligation to undertake investigative and disciplinary processes fairly.178 A duty will be owed if: (a) there is an express contractual provision to this effect;179 (b) in the statutory unfair dismissals jurisdiction (where available) (Chapter 12); (c) where statute sets up formal processes for discipline and dismissal as in public sector employment; or (d) where a binding industrial instrument so provides. Absent contractual or industrial protection, there is no implied duty on the employer to act fairly in undertaking investigative and disciplinary processes.180 Nor is there a common law duty requiring the employer to provide the employee with a right to respond to allegations or reasons for dismissal or discipline. Of course, this is very important in relation to unfair dismissal, see [13.150]. There also appears little scope for claims based on negligence in relation to the absence of, or failure to properly carry out, non-contractual disciplinary policies and procedures.181

No common law duty to give reasons [5.270] At common law there is no obligation on an employer to tell employees the reasons for their dismissal or to give the employee a hearing.182 Despite the arguments that this is inconsistent with unfair dismissal legislation, existence of rights to a fair hearing in the public sector, and under the International Covenant on Civil and

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Under the Fair Work Act 2009 (Cth), certain conduct by an employer may constitute adverse action against an employee exercising a workplace right; this includes in relation to the employee, disciplinary proceedings, investigation, warnings, and suspension from duty, see United Firefighters Union of Australia v Easy [2013] FCA 763 and [13.240]–[13.260]. As to breach of contractual policies in the investigation of complaints by an employee, see Romero v Farstad Shipping (Indian Pacific) Pty Ltd [2014] FCAFC 177; (2014) 231 FCR 403; Gramotnev v Queensland University of Technology [2015] QCA 127; (2015) 251 IR 448. And see Bartlett v Australian & New Zealand Banking Group Ltd [2016] NSWCA 30. In the United Kingdom there is authority that breach of contractual requirements related to investigative and disciplinary procedures leading up to dismissal (derived from particulars of employment mandated under the legislation) cannot give rise to a damages claim. This is because the United Kingdom statutory provisions relating to disciplinary procedures and unfair dismissal effectively restrict common law rights and have the effect that unless the parties expressly agree otherwise, “the parties to an employment contract do not intend that a failure to comply with contractually binding disciplinary procedures will give rise to a common law claim for damages”, see Botham v Ministry of Defence [2011] UKSC 58; [2012] 2 AC 22; Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2011] UKSC 58; [2012] 2 AC 22 per Lord Dyson (Lord Walker agreeing) at [19]-[49] but an employee could seek an injunction or a declaration that the procedure was in breach of contract, at [44] per Lord Dyson (Lord Walker agreeing). See extensive discussion in Deakin and Morris, Labour Law (6th ed (Hart) at pp. 446-448, 459-462. Query whether this varying statutory context in Australia can give rise to a similar view based on the decision in Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 rejecting the implication of an implied term of trust and confidence, see [5.160]. Nor presumably could any “good faith” term require this, see [5.170]. Dafallah v Fair Work Commission [2014] FCA 328; (2014) 225 FCR 559 at [134]-[136] (no duty because it would be incompatible with law relating to termination of employment under contract and statute). See discussion “Summary Dismissal”, [8.100]. This applies to garden leave also, see Sendo Holdings plc v Brogan [2005] EWHC 2040. Contrast the position in relation to a statutory office, see Jarratt v Commissioner of Police for New South Wales (2005) 224 CLR 44 discussed [2.410] and see Isbester v Knox City Council [2015] HCA 20 (conflict of interest of decision-maker). Note also Jones v Queensland Tertiary Admissions Centre Ltd (No 2) (2010) 186 FCR 22 at [116]-[122] (no adverse action under the Fair Work Act 2009 (Cth) not to afford natural justice and see [13.240]).

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Political Rights (ICCPR),183 the courts continue to refuse such claims.184 With the rejection of any implied term of mutual trust and confidence in Barker (see [5.160]), there is no scope for arguing that the common law rule should be modified. In the broader industrial context, the common law rule in relation to disciplinary proceedings has long been abridged by industrial instruments and awards providing grievance procedures which give an employee an opportunity to respond to allegations of improper conduct.185 There may also be circumstances in which reasons have to be given at some stage as a matter of practicality, if not legal obligation: for example, to resist a claim of unfair or wrongful dismissal or to defend a discrimination claim or prosecution for “victimisation” of an employee, say by dismissing the employee for union related activities, see [13.230]. There appears to be no scope for claims based on negligence in relation to the absence of, or failure to properly carry out, non contractual policies on disciplinary procedures.186

No duty to give a reference [5.280] An employer has no implied duty187 to provide an employee with a reference.188 Should this be so? Reminiscent of domestic servants in Victorian England, the lack of a reference may, in some occupations, virtually preclude re-employment. It has been suggested that such a duty may be implied where employment depends upon the provision of a satisfactory reference.189 But there is no Australian authority supporting this view. An employer might be under an obligation to provide a reference if the refusal is discriminatory in breach of anti-discrimination legislation or amounts

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“Rights” to a fair hearing under international instruments are not implied terms and have not been incorporated into domestic law, Gramotnev v Queensland University of Technology [2015] QCA 127; (2015) 251 IR 448 at [180]-[185]. See Intico (Vic) Pty Ltd v Walmsley [2004] VSCA 90; Bednall v Wesley College [2005] WASC 101; Bartlett v Australian & New Zealand Banking Group Ltd [2016] NSWCA 30 Macfarlan J at [87], Meagher JA at [106]-[107], Simpson JA not deciding at [132]-[134] (no duty to act reasonably in carrying investigations where dismissed with appropriate notice); McClory v The Post Office [1993] IRLR 159 at 161, criticised by Brodie, “Mutual Trust and the Values of the Employment Contract” (2001) 30 ILJ 84 at 92. Note the United Kingdom right to request and be given a statement of reasons for dismissal, Employment Rights Act 1996 (UK), s 92. The Fair Work Act 2009 (Cth), ss 45, 50, 545 provides civil remedies for breach. See also Van Efferen v CMA Corp Ltd [2009] FCA 597; (2009) 183 IR 319 (breach of grievance procedure under AWA, any implied term of trust and confidence did not add to this obligation). Dafallah v Fair Work Commission [2014] FCA 328; (2014) 225 FCR 559 at [134]-[136] (duty incompatible with law relating to termination of employment under contract and statute). The Privacy Act 1988 (Cth) presumably does not inhibit giving references. Section 7B(3) exempts employee records provided the conduct engaged in by the organisation as employer was directly related to a current or former employment. The definition of “employee record” in s 6 includes: (a) the engagement, training, disciplining or resignation of the employee; (b) the termination of the employment of the employee (e) the employee’s performance or conduct. There are also exemptions for small business operators, see s 6D. See ALRC Report 108 at 40.6–40.167 recommending removing the exemption and allowing employees access to their own records. In Australia, even an implied term of trust and confidence (not possible after Barker see [5.160]), would not extend to references after the employment ended, see Aldersea v Public Transport Corporation (2001) 183 ALR 545; Morton v Transport Appeal Board (No 1) [2007] NSWSC 1454 at [164]. An agreed reference may sometimes be provided as part in settlement of a dispute between employer and employee. Particularly if it is standard industry practice to require a reference before commencement of employment and the employee has entered the employment on the basis that the employer will provide a reference within a reasonable time of leaving the employment, Spring v Guardian Assurance [1995] 2 AC 296 at 339G, 340A per Lord Slynn; at 353-354 per Lord Woolf, contrast Lord Keith at 315, Lord Goff at 320A, Lord Lowry 327D (self-regulatory body required references to be obtained prior to any appointment).

Employer’s Implied Duties

to unlawful victimisation.190 If the employer does provide a reference, there is no liability in negligence if the reference is defamatory. But a duty to take care in preparing a reference may be owed to prospective employers191 and to third parties who reasonably rely on a negligently given reference.192 Liability for negligent, misleading or defamatory references [5.290] In the United Kingdom, the House of Lords in Spring v Guardian Assurance193 held that an employer can be liable for a negligent reference even if no claim would have been available for defamation;194 this duty might arise in tort or as an implied term in the contract of employment to take reasonable care in preparing references.195 The House of Lords thought that the law of defamation did not provide adequate protection; an employer could provide a reference which was inaccurate but not be liable unless the employee could show that the employer was malicious which in most cases is practically impossible. The reference may have the consequence in particular industries that the employee is practically excluded from further employment.196 The Spring decision is very unlikely to be followed in Australia.197 The High Court of Australia is reluctant to allow the law of negligence to overreach settled areas of law where no claim is available.198 190

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Coote v Granada Hospitality Ltd [1999] ICR 100; Chief Constable of the West Yorkshire Police v Khan [2001] 1 WLR 1947 (refusal to give reference where pending complaint); Relaxation Group plc v Rhys-Harper [2003] 4 All ER 1113 (HL) (refusal to give reference where it was normal practice to do so may be discriminatory). This will depend on general torts principles for recovery of negligently caused economic loss, see generally Sappideen and Vine (eds), Fleming’s The Law of Torts (10th ed, Lawbook Co, 2011) at [28.70] et seq. As it will not involve recovery of damages for reputational injury there will be no potential overlap with defamation claims. In some situations, there might be a tort duty to provide information to a prospective employer; it has been held that a referral agency may have a duty of care to inform a prospective employer of serious personal risks associated with a potential employee: Monie v Commonwealth of Australia [2007] NSWCA 230 (referral by CES of person known to be imprisoned for serious violence, special leave to appeal to the High Court dismissed). VMT v Corporation of the Synod of the Diocese of Brisbane [2007] QSSC 219 (favourable reference given to teacher who had sexually abused students). Spring v Guardian Assurance [1995] 2 AC 296 (HL); Bartholomew v London Borough of Hackney [1999] IRLR 246 (CA) at [17], [18] per Walker LJ; Cox & Cross v Sun Alliance Life Ltd [2001] EWCA Civ 649. Contrast Aspin v Metric Group Ltd [2004] EWHC 1265 (QB) (duty did not extend to statements made to the staff member at the time of dismissal); Legal & General Assurance Ltd v Kirk [2002] IRLR 124 (CA) (no liability for negligent misstatement where no reference sought or given to a third party). Spring v Guardian Assurance [1995] 2 AC 296. The duty may arise either from an implied contractual term that due care and skill will be exercised in the provision of any reference or a tort duty Spring v Guardian Assurance [1995] 2 AC 296 (HL) at 320 per Lord Goff; TSB Bank plc v Harris [2000] IRLR 157; Cox & Cross v Sun Alliance Life Ltd [2001] EWCA Civ 649. Under the law in the United Kingdom, employees may have access to references concerning them under the Data Protection Act 1998 (UK). Spring v Guardian Assurance plc [1995] 2 AC 296 at 320, 340, 354 per Lords Goff, Slynn and Woolf. The implied duty may require the employer to provide a fair and reasonable reference, TSB Bank plc v Harris [2000] IRLR 157 (EAT). See also RDF Media Group plc v Clements [2008] IRLR 207 at [118], [125], [132]; Bartholomew v London Borough of Hackney [1999] IRLR 246; Middlemiss, “The Truth and Nothing but the Truth? The Legal Liability of Employers for Employee References” (2004) 33 ILJ 59. Spring v Guardian Assurance plc [1995] 2 AC 296 at 325B, 326 per Lord Lowry; at 334, 337 per Lord Slynn; at 346, 351 per Lord Woolf. Dicta in the Australian cases following Spring must now be suspect following the Barker case rejecting an implied duty of trust and confidence ([5.160]), see Bowker v Prophecy Technologies Pty Ltd [1999] NSWIRComm 248 (Marks J); Bowker v Software Engineers Australia (NSW) Pty Ltd [2004] NSWIRComm 104; Gambotto v Fairfax Publications (2001) 104 IR 303 at [28]. See also Wade v Victoria [1999] 1 VR 121 (incorrect information provided to the Criminal Justice Commission). Older awards sometimes provided that a “statement of service” must be given to a departing employee, but

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[A]s a matter of principle … if the gist … of a plaintiff’s complaint is that the plaintiff has suffered injury to … reputation and injury to … feelings by reason of what the defendant communicated or published about the plaintiff to third persons, the plaintiff’s remedy, if any, lies in defamation (or injurious falsehood) and not in negligence or breach of contract … To hold otherwise would be to destroy, and not to preserve coherency in the law and the balances which have been struck in the law of defamation between damage to reputation and freedom of expression.199

Quite apart from the contract of employment, an employer may be exposed to liability if a reference or other information given to another about an existing or past employee is defamatory.200 The uniform Defamation Acts provide a defence of qualified privilege201 which an employer giving a reference would be likely to invoke. This would protect the employer against liability even if some of the information given, or the impression created, may be wrong.202 The employer can only rely on this defence if the “publication” of the reference or information was reasonable in the circumstances.203 The defence is not available if the employee can prove that the reference was given maliciously.204 Publication includes the giving or sending of the reference or disclosing the information in it to someone other than the employee. It can include an oral reference given over the phone.

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this is not a reference, and is usually confined to recording the length of service and the capacities in which the employee worked. The New Zealand courts have also been reluctant to allow claims for negligence for loss of reputation, see Bell-Booth Group v Attorney-General [1989] 3 NZLR 148; South Pacific Manufacturing Co Ltd v New Zealand Security Consultants & Investigations Ltd [1991] 2 NSZLR 282. See also Midland Metals Overseas Pte v Christchurch Press Company [2001] NZCA 321. Sullivan v Moody (2001) 207 CLR 562 at [53]-[55]. See also Tame v State of NSW (2002) 211 CLR 317 at [28] per Gleeson J; at [58] per Gaudron J; at [123] per McHugh J; at [323], [325] per Callinan J; Dale v Veda Advantage Information Systems and Solutions Ltd [2009] FCA 305 at [410]-[417]. The High Court did not take up the opportunity to settle this issue in refusing special leave to appeal in Rowan v Cornwall [2005] HCA Trans 601. For a contrary argument, see Descheemaeker, “Protecting Reputation: Defamation and Negligence” (2009) 29(4) OJLS 603. Gacic v John Fairfax Publications Pty Ltd [2005] NSWSC 1210 at [42]. See also Sattin v Nationwide News Pty Ltd (1996) 39 NSWLR 32; Griffith v ABC [2004] NSWSC 582 at [32], [33] (no deceit claim but potential for action for injurious falsehood). Contrast Wade v State of Victoria [1999] 1 VR 121; VMT v Corporation of the Synod of the Diocese of Brisbane [2007] QSC 219 (extension of time granted where the plaintiff was abused by a school teacher employed on the basis of a favourable reference from the defendant’s employee who knew of the teacher’s sexual abuse of children); Reeves v State of New South Wales [2010] NSWSC 611 at [377]-[380] (duty to communicate accurate information concerning the employee); Stewart v Ronalds (2009) 259 ALR 86 at [104] per Hodgson JA (defamation not necessarily cover the field). Moult v Halliday [1898] 1 QB 125 at 129, and see Jones v Amalgamated Television Services Pty Ltd [1991] Aust Torts Reports ¶68,984 (SC (NSW), Hunt J) (where the employee is obliged to inform a third party such as an employer). Note also an action might be available for injurious falsehood for example where it is falsely advised that the employee is no longer available for future employment, Sappideen and Vine (eds), Fleming’s The Law of Torts (10th ed, Lawbook Co, 2011) at [30.230]. This is because the person who receives the information, a potential employer, has an interest in receiving this information and the reference is sent (published) to the potential employer in order to provide information to the potential employer subject to the employer showing that it acted reasonably in the circumstances, uniform Defamation Act 2005, s 30 The employer is protected if the information (and the inferences that can be drawn from that information – imputations) given is substantially true, see uniform Defamation Act 2005, s 25 (SA: s 23). In deciding whether the disclosing of information in the reference was reasonable, the court can take into account a wide range of matters which include – the extent to which the information given was in the public interest, eg, if the employee had been convicted of violence at the workplace; the extent to which the information distinguishes between suspicions, allegations and proven facts; the sources of the information in the matter and the integrity of those sources; whether the information gave an account of the employee’s side of the story and if not, whether a reasonable attempt was made to get a response from the employee; steps taken to verify the information. Defamation Act 2005, s 30(4) (SA: s 28(4)).

Employer’s Implied Duties

Under the uniform Defamation Acts, where information (or inferences to be drawn from statements in a reference) are not substantially true, the Act requires that the publication of the reference (disclosing the information to another) be reasonable in the circumstances. Taking reasonable care to see that the facts stated are accurate and fair and that the opinions stated are those that a reasonably prudent employer might have held, would be relevant to what was reasonable under the Defamation Act 2005, s 30(3). It will also be relevant whether the reference distinguishes between suspicions, allegations and proven facts, the sources of information for the reference and the integrity of those sources, whether steps have been taken to verify the information and whether the employee has been given an opportunity to respond to allegations.205 But a claim for defamation is more restrictive than a torts claim for damages.206 If the only claim is in defamation, unlike the tort of negligence, the employee must show that the statements made (or inferences to be drawn) were defamatory. Not every adverse statement, even if untrue, brings the plaintiff into disrepute and is defamatory.207 A defamation claim is not available if the information given and the inferences to be drawn from that are substantially true.208 In relation to a defamation claim, the employer may decide to apologise and make an offer of amends which may include compensation and correction of the error. If a reasonable offer of amends is refused, this is a defence to a defamation claim.209 Damages recoverable for defamation are assessed differently from a torts claim with special restrictions on the amount that may be recovered under the defamation legislation.210

Economic losses [5.300] There is no general contractual duty211 on the employer to take reasonable care to avoid causing economic loss to employees. The imposition of a general duty would impose unreasonable burdens particularly in situations where the economic interests of the employer and employee are in conflict, such as in redundancy situations.212 The finding of a special implied term requiring the employer to give advice concerning pension rights in Scally v Southern Health & Social Service Board213 could be characterised as an illustration of the duty of co-operation to give effect to a contractual right,214 see [5.190]. Australian courts are unlikely to follow English authority holding that employees may be able to recover financial losses flowing from an employer’s breach of a duty to 205 206

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Defamation Act 2005, s 30(3)(d), (g), (h), (i). Unlike a torts claim, a disclaimer of liability would not protect against a defamation claim, cf Hedley Byrne v Heller [1964] AC 465; Spring v Guardian Assurance plc [1995] 2 AC 296 at 336E per Lord Slynn. A description of an employee as “lame” would not usually be defamatory as such a statement would not diminish the employee in the eyes of the general public, see Spring v Guardian Assurance plc [1995] 2 AC at 334 per Lord Slynn. Defamation Act 2005, s 25. Defamation Act 2005, s 18. Defamation Act 2005, Pt 4, Div 3. Note the potential for a claim based on Australian Consumer Law, s 18, see Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101. Note also a claim based on a fiduciary duty by an employer to an employee almost non-existent: Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306 at [265]-[271]. Crossley v Faithful & Gould Holdings Ltd [2004] ICR 1615 at [42]-[46] (CA). Scally v Southern Health & Social Service Board [1992] 1 AC 294. Keifel J suggests in Barker that there could be an implied term based on necessity (not reasonableness) as the pension entitlement would be of no value unless the employee knew about it, [59], [60] and see [5.160] Commonwealth Bank of Australia v Barker [2013] FCAFC 83; (2013) 214 FCR 450 per Jessup J (dissenting) at [315] as an illustration of the duty of co-operation, see [5.190]; the decision of the Federal Court was overruled by the High Court [2014] HCA 32; (2014) 253 CLR 169.

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take care in the provision of references215 (see [5.290]). The recovery of damages for financial losses flowing from wrongful dismissal are discussed at [10.190]. In tort, the employer has no general duty to avoid causing economic loss to an employee. But if an employer undertakes to provide advice, particularly where the employer has specialised knowledge and access to information, and the employee reasonably relies on this advice, negligence in providing this advice can give rise to liability to the employee for financial losses caused.216 Even if the employee can show that there has been a negligent misrepresentation, say as to the conditions under which incentive payments will be paid, it must still be shown that this was relied upon and caused loss to the employee. An employee arguing that they would have resigned and taken up other employment must provide sufficient evidence of realistic job opportunities.217 As a general rule employees are responsible for obtaining advice on superannuation and pensions and the impact of these on retirement plans. If the employer assumes no responsibility to give advice and has not given advice, the employer does not owe a duty of care either under the contract or in tort.

Duty to provide work? [5.310] Absent an express contractual duty to provide work,218 there is no automatically implied term that an employer has a duty to provide work.219 While the primary obligation of the employer is to pay the agreed remuneration: “a contract of employment does not necessarily, or perhaps normally, oblige the master to provide the servant with work … Provided that I pay my cook her wages regularly, she cannot complain if I take any or all of my meals out”.220 “Broadly speaking, it is enough to say that wages are for the service reasonably demanded under a subsisting relationship of master and servant. A master who sends [a] servant upon a holiday upon full pay can be sued for wages under the contract … They also serve who only stand and wait.”221

But does this mean (subject to paying the employee) that the employer can at any time refuse to give an employee available work, direct the employee not to work, send an employee home or place the employee on garden leave in lieu of working out the period of notice?222 Of course, the employment contract can always expressly make provision for this and it is usual for employment contracts for managers and executives to include 215 216

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Spring v Guardian Assurance plc [1995] 2 AC 296 (discussed [5.200]). Cornwell v Commonwealth of Australia [2005] ACTSC 14 affirmed on appeal on the limitations issue, see Commonwealth of Australia v Cornwell [2007] HCA 16; (2007) 229 CLR 519 (misleading and inaccurate advice about eligibility to join superannuation fund; note the advantage of suing in tort rather than contract in relation to limitation of actions); Lennon v Metropolitan Police Commissioner [2004] 1 WLR 2594 (CA) (advice concerning housing allowance, representation that they would handle it for the employee). There were a series of cases involving negligent misstatements which had the consequence that eligible employees did not join the superannuation fund, the latest of the series is Reeve v Commonwealth of Australia [2014] ACTSC 1. Note the potential for a claim based on Australian Consumer Law, s 18, see Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101. And see Westpac Banking Corporation v Wittenberg [2016] FCAFC 3. Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 per McKerracher J at [339] For example, Montreal Public Service Co v Champagne (1917) 33 DLR 49. Even in the case where a contractor entered into a restrictive covenant to work exclusively for the principal, there was no implied term that the principal would provide work nor would the failure to provide work give rise to a breach of a duty of good faith: Capital Aircraft Services Pty Ltd v Brolin [2007] ACTCA 8 at [24]. Collier v Sunday Referee Publishing Co [1940] 2 KB 647 at 650 per Asquith J. Cf Langston v Amalgamated Union of Engineering Workers [1974] 1 WLR 185; Largerwall v Wilkinson, Henderson and Clarke Ltd (1899) 80 LT 55 and Turner v Sawdon & Co [1901] 2 KB 653; Mann v Capital Territory Health Commission (1981) 54 FLR 23 at 31 (and on appeal (1982) 148 CLR 97). Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 466. See in relation to restraint of trade [4.400].

Employer’s Implied Duties

a clause giving the employer an express right to put them on garden leave and the right to give pay in lieu of notice.223 Here the question is whether the employer can effectively do so in the absence of a contractual or other right to do so. [5.320] At common law there is no generally implied term obliging an employer to provide work. There are exceptions where the essence of the contract is the opportunity to work or to exercise a skill or talent. Where the employment contract is for the performance of a nominated task, the employer has the obligation to allow the task to be performed.224 There is an implied obligation to provide work where “wages are to be paid in the form of commission, because that impliedly created a contract to find employment for the servant”.225 So, too, in the case of theatrical performance and the entertainment industry, the law implies the right to work because for these employees, publicity for performance is necessary for continued employment: “The profession of actor is a profession peculiar in its character and results, for it is to be observed that … success entirely depends on pleasing the public”.226 Where the obligation exists to provide an employee with specific work such as a contract with an actor providing for the actor to play a leading role in a production, this cannot be satisfied by casting that actor in a minor role.227 Aside from the special situations referred to above, the common law did not impose a general duty on the employer to provide work, not even for specially skilled employees for whom work may be necessary to retain skills.228 But there are suggestions of a more liberal approach. As early as 1974, Lord Denning thought that the employer had a duty to provide work: In these days an employer, when employing a skilled man, is bound to provide him with work. By which I mean that the man should be given the opportunity of doing his work when it’s available and he is ready and willing to do it.229

The English Court of Appeal also supported such a right, not only for singers and artists, who are within well established exceptions, but for skilled workers and perhaps chartered accountants. In William Hill v Tucker, the English Court of Appeal held that, in the absence of an express contractual right, a duty to provide work (where it was available) could be implied where the position was “a specific and unique post” and the skills necessary for the proper discharge of duties required their frequent exercise.230 Whether the employer has a duty to provide work is a matter of construction of the particular contract. It is not a term implied as a matter of law. The question is whether under the contract the employer’s obligation extends beyond the 223 224 225

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Awards and industrial instruments commonly provided that the employer may make payment in lieu of notice. George Trollope & Sons v Martyn Bros [1934] 2 KB 436 at 456. Turner v Sawdon & Co [1901] 2 KB 653 at 656; and see Bauman v Hulton Press Ltd [1952] 2 All ER 1121; Rhodes v Forwood (1876) 1 App Cas 256; Standard Life Health Care Ltd v Gorman [2010] EWCA Civ 1291 at [21]. Fechter v Montgomerie (1863) 33 Beav 22; 55 ER 274 at 276 (Beav), 27 (ER) and see Newman v Gatti (1907) 24 TLR 18; Marbe v George Edwards (Daly’s Theatre) Ltd [1928] 1 KB 269; White v Australian and New Zealand Theatres Ltd (1943) 67 CLR 266; Collier v Sunday Referee Publishing Co [1940] 2 KB 647 at 650-651; Flamingo Park Pty Ltd v Dolly Dolly Creations Pty Ltd (1986) 65 ALR 500; Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 at 343-345. Herbert Clayton and Jack Waller Ltd v Oliver [1930] AC 209 and see McLaren v Chalet Club Ltd (1951) 101 LJ 598. Mann v Capital Territory Health Commission (1982) 148 CLR 97 (HC); (1981) 54 FLR 23 (Full Fed Ct), finding no implied duty to provide work to a senior and experienced surgeon; comment (1982) 56 ALJ 328. Langston v Amalgamated Union of Engineering Workers [1974] 1 WLR 185 at 192. William Hill Organisation Ltd v Tucker (1999) ICR 291 (CA) (senior dealer, spread betting); Provident Financial Group plc v Whitegates Estate Agency Ltd [1989] IRLR 84. Compare AMIEU v Central Queensland Meat Export Co (Aust) Pty Ltd (1999) 90 IR 364 at [35] (no implication from the award that work must be provided).

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payment of remuneration to the duty to provide work.231 In William Hill v Tucker, the factors to be taken into account in deciding whether to imply such a duty were “the unique nature of the employee’s role, the skills involved in [the] job and whether those skills would atrophy through lack of use, and the provisions of the particular contract of employment”.232

[5.330] In Australia, a duty to provide work has been implied in relation to an international cinema and film consultant appointed to a specific and unique overseas posting,233 the Director of a Neonatal Intensive Care Unit234 and the Manager of a Drug and Alcohol Unit.235 Where the employee is appointed to a “special and unique” position, a duty is implied on the basis that the employer has an obligation not to deprive the employee of the opportunity of the employment.236 More broadly, it is implicit in the contract that the employee will be given work so as to exercise that skill.237 The duty to provide work may be explicitly excluded by the contract.238 Should the duty to provide work be limited to special and unique positions where skills require constant exercise? The ability to work is not just about the maintenance of skills. Exclusion from work may result in loss of other professional benefits such as keeping up-to-date, maintaining professional and industry networks, accessing training, conferences and specialist briefings.239 It can no longer be assumed that if an employee has been paid it is unimportant whether work is provided: There is now a greater recognition than ever that employment is important to an employee not simply because it provides economic sustenance. Workplaces are a hub of important human exchanges which are vital to the wellbeing of individual workers. Work provides employees with purpose, dignity, pride, enjoyment, social acceptance and many social connections. As well, the performance of work allows for skill enhancement and advances career opportunities. These non pecuniary attributes of work are important and their denial can be devastating to the legitimate interests of any worker, either skilled or unskilled.240

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SG&R Valuation Service Company LLC v Boudrais [2008] IRLR 70 at [20], or “expressed negatively” whether the employer can send the employee home or put the employee on garden leave. SG&R Valuation Service Company LLC v Boudrais [2008] IRLR 70 at [20], [21] (specialised work requiring continuing market contacts, contemporary knowledge and exercise of skills). Contrast Christie v Johnston Carmichael [2010] UKEAT 0064-09-2707 (generalist tax adviser, not unique). Wesoky v Village Cinemas International Pty Ltd [2001] FCA 32. Contrast BearingPoint Australia Pty Ltd v Hillard [2008] VSC 115 (managing director and leader of an information management team not a special and unique post); see further discussion regarding garden leave and payment in lieu, [9.130], [9.150]). Downe v Sydney West Area Health Service (No 2) [2008] NSWSC 159 But contrast the earlier decision Mann v Capital Territory Health Commission (1982) 148 CLR 97 (HC); (1981) 54 FLR 23 (Full Fed Ct), finding no implied duty to provide work to a senior and experienced surgeon. See editorial comment (1982) 56 ALJ 328 Quinn v Overland [2010] FCA 799; (2010) 199 IR 40, but not a Managing Director and leader of an information management team, BearingPoint Australia Pty Ltd v Hillard [2008] VSC 115 at [106]. William Hill Organisation Ltd v Tucker (1999) ICR 291 (CA). Even if there were a duty to provide work, it does not oblige an employer to dismiss employees who are not able to be gainfully employed even if the predominant purpose is to avoid redundancy payments, Unsworth v Tristar Steering and Suspension Australia Limited [2008] FCA 1224. Downe v Sydney West Area Health Service (No 2) [2008] NSWSC 159 at [427]. For example in Seven Network v Warburton (No 2) (2011) 206 IR 450 the contract provided in clause 1(a) “You will make yourself available to carry out those duties specified in Item 1 of the Schedule hereto (the Duties). Seven is entitled but not obliged to require you to perform the Duties. …” Quinn v Overland [2010] FCA 799; (2010) 199 IR 40 at [109]-[110]. Quinn v Overland [2010] FCA 799; (2010) 199 IR 40 at [101]; Downe v Sydney West Area Health Service (No 2) [2008] NSWSC 159 at [410]-[431] (suspension). And see discussion by Jessup J

Employer’s Implied Duties

Callinan and Heydon JJ in the Blackadder case, suggest that the older authorities finding that there was no duty to provide work are not particularly relevant today. Their Honours added: “a desire for … ‘job satisfaction’, and a need for employees … to keep and to be seen to have kept their hands in by actual work have a role to play in determining whether work in fact should be provided” especially in the case at hand where remuneration was related to the work performed.241

Despite this recognition that work is important, not only to earn a wage, but for other benefits such as job satisfaction (a “sense of identity, self-worth, emotional well-being and dignity”), this has not influenced the High Court in Barker to accept that the employer has an implied duty of trust and confidence242 or that contractual duties extend to these intangible benefits of employment. Consequently, there is little prospect that Australian courts will recognise a broader common law duty to provide work beyond the established exceptions. There is no authority protecting an employee, who although paid, is effectively frozen out by being given no work to perform when there is available work ([4.400]), or directed not to perform work for an indefinite period,243 sent home or put on an extended period of “garden leave”.

[5.340] This contrasts with the protection available to an employee in the broader

industrial context. In reinstatement cases,244 the employee is entitled to do the same work as that undertaken prior to the dismissal.245 The issue whether an employer has a duty to provide work may arise indirectly when determining whether an employer is entitled to suspend on full pay ([7.20]), direct the employee not to work, or put the employee on garden leave. The issue is particularly important where the employer, in the absence of an express contractual right,246 seeks to put the employee on garden leave. If there is a breach of the duty to provide work,247 the employee may be able to treat this as repudiation of the contract ([8.20]) allowing the employee to accept the repudiation and end the employment.248 This allows the employee to disregard contractual restraints and immediately commence working for a competitor.

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(dissenting) in Commonwealth Bank of Australia v Barker [2013] FCAFC 83; (2013) 214 FCR 450 at [312]; the Federal Court decision was overruled on appeal to the High Court, Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169. Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539 at [80]. See also the views of the Federal Court Blackadder v Ramsey Butchering Services Pty Ltd (2003) 127 FCR 381 at [65]-[68]. See particularly the dissenting views of Jessup J in Commonwealth Bank of Australia v Barker [2013] FCAFC 83; (2013) 214 FCR 450 at [312]; the Federal Court decision was overruled on appeal to the High Court, Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169. Downe v Sydney West Area Health Service (No 2) [2008] NSWSC 159 at [420], [421]. As to rights when an employee returns from maternity leave, see CPSU, Community & Public Sector Union v Dept of Human Services Vic [2005] AIRC 932 or where the employer claims that there is no suitable work for an employee returning from work injury, New South Wales Nurses’ Association v Principal Health Care Finance No 3 Pty Ltd [2009] NSWIRComm 1014 esp at [43], [52]. The employer is not entitled to impose pre-conditions such as attending a medical examination which certifies fitness, Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539 (orders made under the former Workplace Relations Act 1996 (Cth), s 170CH(3)) but a lawful direction to attend a medical exam can be given at any time, see Peek v Chief Executive Officer, Australian Government Solicitor [2005] FCA 870. See also Grant v BHP Coal Pty Ltd [2014] FWC 1712 (direction under the Coal Mining Safety and Health Act 1999 (Qld), s 39(1)(c)). Even then a covenant will not be permitted to effectively sterilize an employee from exercising relevant skills for long periods of time, Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414 and see “garden leave” ([4.400]). Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414 at [55] (Brereton J restrictions on garden leave not inconsistent with no duty to provide work). The employer’s repudiation also prevents enforcement of restrictive covenants, see [5.620].

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If there is a duty to provide work, it is not unqualified. There must be reasonably available work249 and there is no duty if it is impossible or impracticable for the employer to provide work.250 This would be the case if employees had previously repudiated the contract by indicating they were quitting their jobs in breach of their contract and intended to start working immediately for a competitor.251

Indemnity [5.350] The law implies an obligation on an employer to reimburse the employee for any expense the employee incurs on behalf of the employer, provided such expenditure is authorised expressly or by necessary implication.252 But the obligation to indemnify a servant against loss does not oblige an employer to make good damage to an employee’s property in any general sense.253 Also there is no duty to indemnify the employee for the costs incurred by an employee who brings defamation proceedings for injury to the employee’s reputation. This is the case even if the employee was defamed whilst carrying out the employer’s business.254 The extent of the statutory duty to indemnify employees against torts liability is discussed at [5.460].

Where the employee commits a crime [5.360] The employer’s duty extends to indemnifying the employee against loss where the loss results from a criminal act by the employee acting in the course of employment, provided the employee is not aware of the criminal character of the act.255 In Kelly v Alford,256 the Full Court of the Supreme Court of Queensland following dicta in Lister v Romford Ice and Cold Storage257 held that where an employer was statutorily required to take out insurance and had not done so, a term would be implied into the contract of employment that the employer would not request an employee to carry out an unlawful task, that is to drive the vehicle uninsured. It was further held in Alford that there was an implied term that the employer would indemnify the employee against liability arising out of unlawful conduct where the employee was unaware that the conduct was unlawful. 249

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Unsworth v Tristar Steering and Suspension Australia Limited [2008] FCA 1224. But, for example, stockbrokers generally generate their own work, Tullett Prebon (Australia) Pty Ltd v Purcell [2009] NSWSC 1079 at [42] (not commented upon on appeal which was dismissed Tullett Prebon (Australia) Pty Ltd v Purcell [2010] NSWCA 150). Expressed alternatively that the duty applies only where the employee is ready and willing to work, see SG&R Valuation Service Company LLC v Boudrais [2008] IRLR 70; Standard Life Health Care Ltd v Gorman [2010] EWCA Civ 1291. SG&R Valuation Service Company LLC v Boudrais [2008] IRLR 70 at [24] (note undertakings as to payment at [33]) approved Standard Life Health Care Ltd v Gorman [2010] EWCA Civ 1291. See also BearingPoint Australia Pty Ltd v Hillard [2008] VSC 115. An employer may find it to its advantage to keep the contract on foot so as to enforce restrictive covenants, see [5.610]. Adamson v Jarvis (1827) 4 Bing 66; 130 ER 693; Burrows v Rhodes [1899] 1 QB 816. As to the misuse of credit cards for personal purposes, see Andrews Advertising Pty Ltd v David Andrews [2014] NSWSC 318 at [186]; General Manager of the Fair Work Commission v Thomson (No 3) [2015] FCA 1001; Health Services Union v Jackson (No 4) [2015] FCA 865 (trade union officials). Modern awards may make specific provision for allowances to reimburse employees, Fair Work Act 2009 (Cth), s 139(1)(g). In relation to economic loss, see [5.300]. Nor would such a term be implied in fact on the ground that “it goes without saying”, National Roads and Motorists’ Association v Whitlam [2007] NSWCA 81 (no claim for costs of defamation claim). Shackell v Rosier (1836) 2 Bing (NC) 634; 132 ER 245 and Burrows v Rhodes [1899] 1 QB 816; Cointat v Myham & Sons [1913] 2 KB 220; Osman v J Ralph Moss Ltd [1970] 1 Lloyd’s Rep 313. Cf Askey v Golden Wine Co (1948) 64 TLR 379 at 380. Kelly v Alford [1988] 1 Qd R 404. Lister v Romford Ice and Cold Storage [1957] AC 555 at 570 per Viscount Simonds, at 588 per Lord Radcliffe and at 595 per Lord Tucker.

Employer’s Implied Duties

Can an employer agree to indemnify an employee against any criminal liability whether innocent or not? It is clear law that a contract to indemnify a person against criminal liability is illegal if the crime is one which can only be, or in fact is, committed with guilty intent.258

Negligence and non-criminal wrongs [5.370] In the case of non-criminal wrongs, an employee has no right to an indemnity if the wrong is intentionally and knowingly committed.259 But an agreement to indemnify an employee against non-criminal liability is valid if liability results from innocent or negligent conduct.260 Although an express agreement to indemnify an employee for innocent or negligent conduct will be valid,261 the question remains whether there is an implied term in the contract of employment that the employer will indemnify the employee against such liability. It seems that a term will be implied in respect of innocent conduct,262 but not, in general, with respect to negligent conduct by the employee. In fact, there is at common law a duty on employees to indemnify the employer against their negligent acts to the extent that there is no express agreement to the contrary and subject to statutory modification of the rule in some places (see [5.460]). The employer cannot bring a claim against the employee for negligently caused damage where the employer is covered by insurance unless the employee is guilty of serious and wilful misconduct, see [5.450]. The House of Lords in Lister v Romford Ice and Cold Storage263 held that there was no implied term in the contract of employment that the employee was entitled to the benefit of any insurance policy held by the employer264 nor was the employee entitled to be indemnified by the employer against any liability for negligent conduct in the course of employment.265 Dicta in the New South Wales Court of Appeal suggest some qualification to Lister. In Rowell v Alexander Mackie College of Advanced Education266 Samuels JA said, obiter dicta, that he inclined to the view that: As a matter of law arising out of the relationship of employer and employee, a … term is to be implied in every contract of employment under which a person is required to drive his employer’s motor vehicle. It would be to the effect that the employer would maintain in force an insurance policy in standard form covering both the employer’s and the employee’s liability for damages for loss of or damage to property caused by the negligent driving of the insured motor vehicle by the employee in the course of his employment, and any damage so occasioned to the employer’s own property; and to the further effect that the employer would exhaust its rights under the policy before seeking any recovery from 258 259 260 261

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Treitel and Peel, Law of Contract (13th ed, 2011), p 480. Treitel, and Peel, Law of Contract (13th ed, 2011), p 398; Brown Jenkinson & Co Ltd v Percy Dalton (London) Ltd [1957] 2 QB 621. Treitel and Peel, Law of Contract (13th ed, 2011), p 483. See National Roads and Motorists’ Association v Whitlam [2007] NSWCA 81 at [98], [99] (special leave to appeal to the High Court refused, Whitlam v NRMA [2007] HCATrans 484 (31 August 2007). Adamson v Jarvis (1827) 4 Bing 66; 130 ER 693. Lister v Romford Ice and Cold Storage [1957] AC 555 at 573 per Viscount Simonds and see Lord Tucker at 592. If an insurance policy covers the employer’s liability, the employee is entitled to the benefit of that policy even though not a party to the contract of insurance: Insurance Contracts Act 1984 (Cth), ss 48, 65, 66; Insurance (Application of Laws) Act 1986 (NSW), s 5; and see Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 62 ALJR 508 and see [5.490]. The statutory amendments to this rule are set out in [5.450], [5.460]. Rowell v Alexander Mackie College of Advanced Education (1988) 25 IR 87.

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the employee. This conclusion would be contrary to Lister. But … there is no ground for regarding that case as determinative of industrial conditions at the other end of the world 30 years after it was decided.267

Mahony JA thought that such a term should not be implied into the contract of employment. It did not “go without saying” on the part of employers that there was an obligation in respect of insurance against such property damage. There is no evidence of a general custom or course of conduct in the industrial field in respect of such insurance or such indemnity. And, in so far as such insurance is effected, it does not appear that there is any common agreement upon the terms of the relevant policy or policies such that the court could, within accepted principles, see plainly what the content of any such implied term would be.

Similarly, Young J in Bolton Gems Pty Ltd v Gregoire,268 refused to find a duty on the part of the employer to insure gems entrusted to an employee who negligently failed to properly secure the gems. If there is an insurance policy which covers the employee’s liability, the effect of the Insurance Contracts Act 1984 (Cth) is (with few exceptions) that the employee is entitled to the benefit of that policy even though not a party to the contract of insurance.269

Indemnifying officers of a corporation [5.380] The Corporations Act 2001, s 199A prohibits a company from indemnifying “officers” against liability to the company, liability for pecuniary penalties or compensation,270 or liability to a third party where the conduct was not in good faith. Indemnity as to legal costs is expressly excluded if the costs are incurred in defending or resisting criminal proceedings in which the person is found guilty271 but is otherwise available for costs of defending any proceedings whether civil or criminal, where judgment is given in the officer’s favour.272 Any contract that purports to indemnify directors for certain breaches of directors’ duties is declared void, as is any contract term by which a corporate employer agrees to pay insurance premiums for these risks.273 Special provisions apply to breaches of the restrictive trade practices provisions of the Competition and Consumer Act 2010 (Cth). Under that Act a company cannot indemnify an officer of the company against liability for a pecuniary penalty under s 76 or costs incurred in unsuccessfully defending proceedings under the Act. Any agreement to the contrary is unenforceable, s 77B.274 267 268 269

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Rowell v Alexander Mackie College of Advanced Education (1988) 25 IR 87 at 90, Hope JA agreeing, Mahony JA contra. Bolton Gems Pty Ltd v Gregoire [1996] AILR 4 at 336. Insurance Contracts Act 1984 (Cth), ss 48, 65, 66 and Insurance (Application of Laws) Act 1986 (NSW) and Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107. Note the Insurance Contracts Act 1984 (Cth) does not apply to certain types of insurance including insurance relating to workers’ compensation or personal injury motor accident insurance: s 9(1)(e). Under Corporations Act 2001 (Cth), ss 1317G (pecuniary penalty orders), 1317H (compensation orders). As to s 199A see Talbot v NRMA (2000) 50 NSWLR 300. Corporations Act 2001 (Cth), s 199A(3) and see s 212 (where member approval required). Corporations Act 2001 (Cth), s 199A(3). Note also Competition and Consumer Act 2010 (Cth), ss 77A – 77C – no indemnity against “civil liability” under the Act or costs and the Work Health and Safety Act 2011 (Cth), s 272 (no contracting out or transfer of liability). Corporations Act 2001 (Cth), s 199A(3). Insurance policies cannot be taken out under s 199B(1) to cover “(a) conduct involving a wilful breach of duty in relation to the company; or (b) a contravention of section 182 or section 183” (improper use of information or position to gain advantage or cause detriment to the company). Competition and Consumer Act 2010 (Cth), s 77A. This applies only to officers, not other employees.

Employer’s Implied Duties

Provision of medical assistance [5.390] At one time the personal dimension of the contract of service was treated in a manner reminiscent of the marriage contract in that an employer was “obliged to provide for his servant in sickness and in health”.275 In later times this duty was diminished to an obligation to summon medical assistance where it is needed.276 This responsibility would normally be encompassed within the duty to take reasonable care for the safety of employees. In relation to minor illnesses the employer would be entitled to rely on the employee to seek assistance for themselves. Nowadays work health and safety legislation imposes more onerous obligations on employers, (see [6.500]).277

No implied term of privacy [5.400] In Australia278 at common law, there is no authority according an employee a right of privacy in relation to activities or conduct at the workplace, nor is there any authority extending an employer’s implied duties to cover employee privacy.279 The remedies available to an employee for breach of privacy usually lie outside the contract of employment. The law of defamation and an action for breach of confidence (described at [5.680]) may provide some limited protection against the dissemination of private information concerning the employee to third parties. Australian courts have been reluctant to allow negligence claims to cover injuries to reputation (see [5.290]). Privacy legislation does give some protection.280 The Privacy Act 1988 (Cth) imposes privacy obligations on both public and private sector employers in relation to the collection, use and disclosure of information.281 But this protection is of little value to employees when employees’ records are excepted.282 New South Wales has special legislation applying to the workplace. The Workplace Surveillance Act 2005

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Searman v Castell (1795) 1 Esp 270; 170 ER 353. M’Keating v Frame (1921) SC 382 at 389; and see Jeffrey v Donald (1901) 9 SLT 199. See, for example, AB Oxford Cold Storage v Arnott [2003] VSC 452 and see the model Work Health and Safety Regulation 2011 (NSW), ss 368 – 378 (health monitoring); Safe Work Australia First Aid in the Workplace, Code of Practice Feb 2016. ABC v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 does not foreclose the development of a common law right of privacy at least in relation to natural persons, see Gummow and Hayne JJ at [132], Gaudron J agreeing at [58], Callinan J at [335]; cf Kirby J at [189]; Gleeson CJ at [41]-[43]. See also Grosse v Purvis [2003] QDC 151 (stalker); Giller v Procopets (2008) 24 VR 1; Jane Doe v ABC [2007] VCC 281 (rape victim named in broadcasts). New Zealand courts do recognise a right of privacy under the general law: Hosking v Runting [2005] 1 NZLR 1. See argument in Dye v Commonwealth Securities Limited [2010] FCA 720 (before rejection of trust and confidence term in Barker see [5.160]). In the United Kingdom see, in relation to breach of the duty of mutual trust and confidence (rejected in Australia), RDF Media Group plc v Clements [2008] IRLR 207 at [118], [125], [132] and tort misuse of private information, Google Inc v Vidal Hall [2015] EWCA Civ 311. Yousif v Commonwealth Bank of Australia (2010) 193 IR 212 at [119] et seq; Privacy Act 1988 (Cth); Health Records (Privacy and Access) Act 1997 (ACT); Privacy and Personal Information Protection Act 1998 (NSW); see s 62 limited to public agencies, see Director General, Dept of Education and Training v MT [2006] NSWCA 270; Health Records and Information Privacy Act 2002 (NSW); Information Act (NT); Privacy and Data Protection Act 2014 (Vic); Health Records Act 2001 (Vic); Personal Information Protection Act 2004 (Tas); Health Services (Conciliation and Review) Act 1995 (WA), ss 4, 25. Note also that other legislation may also provide some protection, see, the uniform regulations, Work Health and Safety Regulation 2011 (NSW), reg 378 (confidentiality of employees medical records). See also ALZ v Workcover NSW [2015] NSWCATAP 138 (10 July 2015). Small business operators are exempt, Privacy Act 1988 (Cth), ss 6C, 6D, 16A. Privacy Act 1988 (Cth), s 7B(3), a recommendation for its removal hasn’t been taken up, see ALRC Report 108 at 40.121. But see Matthews v Clifton [2014] FCA 415 (protection of confidential information, employees’ emails). The exemption for employees’ records is limited to current employees so that breaches of privacy relating to job applications may be caught. Note also the

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(NSW)283 applies to camera, computer284 and tracking surveillance. Employees must be notified in advance of surveillance.285 Secret (covert) surveillance may be authorised by a magistrate where particular employees are involved in unlawful activities at work.286 General surveillance legislation in other States relating to listening devices, optical surveillance and tracking devices can extend to workplace surveillance but do not specifically cover computer surveillance.287 Outside the statutory restrictions, employers may promulgate and enforce strict codes relating to the use of the employer provided internet affecting email288 and social media usage. These codes may allow access to (and monitoring of) staff email and online conduct.289 The codes may be incorporated into the contract of employment (see [4.480]), or operate as lawful directions to employees290 (see [5.410]). It is common to find a “zero tolerance” policy in relation to pornographic material such that summary dismissal is often warranted.291 In relation to such matters as drug and alcohol testing, the employer is entitled to require this where it is reasonable in the interests of safety.292 In some industries testing regimes may be a legislative requirement.293 Employee privacy is a serious issue when employers can, without notice to the employee, access what is regarded as private material and communications including blogs and personal websites, Facebook and the like.294 Access to this material may influence hiring and promotion opportunities and may provide evidence for dismissal.

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application of Privacy legislation to pre employment applications, Willmott v Woolworths Ltd [2014] QCAT 601. Neither the Privacy Act 1988 nor a specific provision such as s 18N (credit information) is a workplace law under the Fair Work Act 2009 (Cth): Austin v Honeywell Ltd [2013] FCCA 662 at [60], [71].. Workplace surveillance is excepted from the Fair Work Act 2009 (Cth), s 27(2). Where the employee records without consent, see Duffy v Lake Macquarie City Council [2001] NSWIRComm 118 (secret videoing by sacked employee); Thompson v John Holland Group; Pty Ltd [2012] FWA 10363 and discussion Tredwell and Fletcher, “Smart Devices and Recordings at Work: Legal Challenges” (2015) (May), Employment Law Bulletin at 30. In the United Kingdom, see Oliver, “Email and Internet Monitoring in the Workplace: Information Privacy and Contracting-out” (2002) 31 Ind LJ 321. A pop-up box stating that “I understand that my use of these systems may be monitored to the extent permitted by law” is sufficient notification, see Flanagan v Thales Australia Limited T/A Thales Australia [2012] FWA 6291. Workplace Surveillance Act 2005 (NSW), s 23. Workplace Privacy Act 2011 (ACT); Listening and Surveillance Devices Act 1972 (SA); Listening Devices Act 1991 (Tas); Surveillance Devices Act 1999 (Vic); Surveillance Devices Act 1998 (WA); Surveillance Devices Act (NT). As to possible property in the content of emails, and duty of an employee who has left the employment in relation to business emails, see Fairstar Heavy Transport NV v Adkins [2013] EWCA Civ 886 (copyright, confidential information issues not argued) and see Field, “Does a Company own its CEO’s Emails” (2013) (Feb) NSW L Soc J 58. As to problems where employees own their own devices, see Kneller, “BYO Device The Trend and Risks” (2013 (Feb) NSW L Soc J 55. They must be appropriately communicated to employees, see for example in relation to unfair dismissal, Australian Postal Corporation v Rushiti [2012] FWAFB 7423 (advertised policies, training and pop up boxes when the computer was turned on warning of misuse of facilities for pornographic, offensive material or behaviour.) See also Queensland Rail v Wake (PR974391, 19 October 2006); Budlong v NCR Australia Pty Ltd [2006] NSWIRComm 288; Lane and Northern Sydney Central Coast Area Health Service [2006] NSWIRComm 380 reviewing the authorities on breach of internet and email policies and termination of employment. See discussion Chapter 8, [8.140]. See Chapter 6 at [6.500]. See, for example, Passenger Transport (Drug and Alcohol) Testing Regulation 2010 (NSW). See for example the reach of the Commonwealth Bank’s media policy http://www.hrzone.com/talent/ acquisition/social-media-policy-goes-bad-at-commonwealth-bank and critical comment Thornthwaite, “Social Media, Unfair Dismissal and the Regulation of Employees’ Conduct Outside Work” (2013) 26 AJLL 164.

Employee’s Implied Duties

But in the absence of a tort of interference with privacy,295 or discriminatory employment practices, an employee may have no remedy for this intrusion on their privacy. Intangible intrusions are treated differently to physical intrusions such as where a person takes a personal letter and reads it; that could be a trespass to goods for which the employee would have a remedy. Where the employer seeks to control use of social media or the conduct of employees outside the workplace through policies296 or lawful directions, these must be reasonably related to the employment.297 There appears to be a willingness by courts to protect an employer’s reputational interests based on assumed harm to its brand even in relation to an employee’s conduct or communications outside the workplace. It may, for example, involve tweets that are simply in bad taste, potentially racist or sexist298 but are not directly connected to the workplace. What has not been given due consideration in this context is employee privacy and the deprivation of liberty involved in constraining the individual’s freedom of action and expression outside the workplace.299 Putting aside communications or conduct which harasses, bullies or harms fellow employees, this personal freedom should be respected by requiring a level of tolerance in relation to communications or conduct considered by the employee to be private.300 The authorities are discussed in relation to dismissal at [8.330], [8.340]. Restrictions on the employee’s right to comment on the business affairs of the employer are considered at [5.770].

Employee’s Implied Duties Duty to obey [5.410] One of the most important obligations resting on an employee is the obligation to obey all lawful and reasonable commands given by the employer.301 This is one of the characteristics of the contract of employment which distinguishes it from 295

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Recommended by the Australian Law Reform Commission, For Your Information: Australian Privacy Law and Practice (ALRC Report 108), Recommendation 74; Australian Law Reform Commission, Serious Invasions of Privacy in the Digital Era (ALRC Report 123) recommending a new statutory tort, Recommendation 4 – 2. See the survey of policies by Thornthwaite, “Chilling Times: Social Media Policies, Labour Law and Employment Relations” (2015) Asia Pac JHR & L (advance online issue). In relation to enterprise agreements and the requirement that they satisfy the “better off overall test”, a media policy may be objectionable as exceeding common law obligations, Broadmeadows Disability Service [2011] FWA 4063 at [105]-[110] (employee not allowed to comment about employer on social media at any time, or to engage in “conversations that take place about their employment and during their employment that are provided to a third party that results in the publication on Social Networking Media”). See examples in Wragg, “Free Speech Rights at Work: Resolving the Differences between Practice and Liberal Principle” (2015) 44(1) Ind LJ 1 at 4 and tweets by an SBS sports reporter which resulted in his sacking, McIntyre v SBS [2015] FWC 6768. See also Smith v Trafford Housing Trust [2012] EWHC 3221 at [80]-[85] (demotion for Facebook statement that same sex marriage was “an equality too far”, held demotion was a breach of contract; but otherwise if it was so expressed to be offensive to colleagues). For example codes of conduct for professional sportspersons. See Abril, Levin and Del Reigo, “Blurred Boundaries: Social Media Privacy and the Twenty-First Century Employee” (2012) 49(1) ABLJ 63 at 89 et seq. Wragg “Free Speech Rights at Work: Resolving the Differences between Practice and Liberal Principle” (2015) 44(1) Ind LJ 1; Thornthwaite, “Chilling Times: Social Media Policies, Labour Law and Employment Relations” (2015) Asia Pac JHR & L (advance online issue); Ajunwa et al, “Limitless Worker Surveillance” (2017) 105(3) California Law Rev (forthcoming) But note O’Keefe v William Muir Pty Ltd t/as The Good Guys [2011] FWA 5311 (unfair dismissal upheld where employee, after hours using his own computer, made bullying and harassing comments in relation to another employee to “Facebook friends” who included fellow employees). As to whether duties can be owed to more than one employer, for example during garden leave and

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other types of contract.302 The duty to obey orders303 provides a mechanism or a “governance structure”304 which allows adaption and change to meet the needs of the workplace. In the industrial context, it relies on command rather than a participatory and consultative model of decision-making. Commands by an employer to perform unlawful acts need not be obeyed.305 Unlawful acts will include those which transgress some positive law, for example, to drive a defective or unregistered motor vehicle or to falsify accounting records. But they are not confined to that. An employer cannot lawfully require an employee to do that which the employee has not contracted to do,306 either upon original engagement or by virtue of some subsequent variation. An employer cannot lawfully direct an employee to perform duties outside the scope of the agreed employment.307 The employee may, however, agree to be bound by policies as varied from time to time (see [4.480], [5.250]). In addition to duties provided for in the contract, there are a vast range of matters that are not stipulated in the contract of employment within the employer’s managerial prerogative. In relation to those matters the employer is also entitled to give directions which must be obeyed by employees.308 These can include such matters as email and internet usage policies,309 dress codes,310 attending medical examinations,311 behaviour within the workplace including policies relating to bullying, complaints, performance work plans and the like.312

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under a forward contract, see Tullett Prebon plc v BGC Brokers LP [2011] EWCA Civ 131; [2011] IRLR 420 and in relation to fiduciary duties and duties of loyalty, note duties may not be owed to other companies within a group or subsidiaries or vice versa, Manildra Flour Mills (Manufacturing) Pty Ltd v National Union of Workers [2012] FCA 1010. The contractual obligation to obey orders continues even if the relationship of employer and employee is at an end, Tullett Prebon (Australia) Pty Ltd v Purcell [2009] NSWSC 1079 at [62] (lawful and reasonable direction to employee to return to work following garden leave and further contract repudiation by employee) approved on appeal Purcell v Tullett Prebon (Aust) Pty Ltd [2010] NSWCA 150; earlier proceedings, Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414. An order may be tacit rather than express, Manildra Flour Mills (Manufacturing) Pty Ltd v National Union of Workers [2012] FCA 1010 (standby). The phrase is taken from Collings, Ewing and McColgan, Labour Law Text & Materials (Hart Publishing, 2001), p 106. See also Lobel, “Agency and Coercion in Labor and Employment Relations: Four Dimensions of Power in Shifting Patterns of Work” (2001) 4(1) U Pa J of Labour & Employment Law 121. The right to refuse to do unlawful work is not necessarily the exercise of a workplace right, Daw v Schneider Electric (Australia) Pty Ltd [2013] FCCA 1341; (2013) 280 FLR 361 (directed work in breach of industry standards); Evans v Trilab Pty Ltd [2014] FCCA 2464. Nor is the common contract of employment a workplace instrument, Barnett v Territory Insurance Office [2011] FCA 968. Downe v Sydney West Area Health Service [2008] NSWSC 159 (direction to work at another hospital inconsistent with contractual appointment); GlaxoSmithKline Australia Pty Ltd v Ritchie [2008] VSC 164 (direction not to do other work in spare time not contractually authorised); Trevor Bechaz v Mariah Hovercraft Australia Pty Limited [2005] AIRC 252 (boat builder/shipwright directed to do cleaning/clearing tasks). It must be clear that there is a lawful direction, see Howard v Pilkington [2008] VSC 491. See Bampton v Viterra Ltd [2015] SASCFC 87 reviewing the authorities and discussion [8.200]. See [4.460]. This obviously includes employees’ safety; see Sirijovski v BlueScope Steel Ltd [2007] AIRC 680. See also Tullett Prebon (Australia) Pty Ltd v Purcell [2009] NSWSC 1079 at [73]-[76], [95] (left open whether an order not given in good faith was unreasonable; reasonable to order employee to return to work following garden leave even if extremely unlikely that employee would return as the employee had resigned and working for a competitor in breach of contract), affirmed on appeal [2010] NSWCA 150. Earlier proceedings: Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414. As illustrations, see Queensland Rail v Wake (PR974391, 19 October 2006); Budlong v NCR

Employee’s Implied Duties

Orders which must be obeyed must also be reasonable: If a command relates to the subject matter of the employment and involves no illegality, the obligation of the servant to obey it depends at common law upon its being reasonable … what is reasonable is not … determined … in vacuo. The nature of the employment, the established usages affecting it, the common practices which exist and the general provisions of the instrument, in this case an award, governing the relationship, supply considerations by which the determination of what is reasonable must be controlled.313

[5.420] What is reasonable in any given circumstances will depend upon the particular employment.314 Although it is clear that an employer has no general duty to act reasonably315 nor an implied duty of trust and confidence,316 nevertheless existing

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Australia Pty Ltd [2006] NSWIRComm 288; Lane and Northern Sydney Central Coast Area Health Service [2006] NSWIRComm 380 reviewing the authorities on breach of internet and email policies and termination of employment. See also Australian Postal Corporation v Rushiti [2012] FWAFB 7423. Shop, Distributive and Allied Employees’ Association v Wollongong Unicentre Ltd [2005] NSWIRComm 1138 (refusal to remove union badges “Stop: You’re being served by a low paid worker. Support a shoppie” did not constitute a refusal to perform relevant work nor a breach of the relevant dress code); contrast Burswood Resort (Management) Ltd v Australian Liquor, Hospitality and Miscellaneous Workers’ Union [2000] WASCA 386 (wearing badge a breach of strict dress code). As to whether wearing a union t shirt amounted to industrial action under Fair Work Act 2009 (Cth), s 19, see United Firefighters Union of Australia v Easy [2013] FCA 763 contrast Re Mornington Peninsula Shire Council [2011] FWAFB 4809 (union tee shirt contrary to employer’s clothing policy). Note also Taleski v Virgin Australia International Airlines Pty Ltd [2013] FWC 93 (medical reason for longer hair contrary to grooming code, dismissal unfair in the circumstances). Peek v Chief Executive Officer, Australian Government Solicitor [2005] FCA 870 but not health assessment generally for employees, TWU v Cement Australia Pty Ltd [2015] FWC 158. Cf Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41; (2014) 253 CLR 243 (union member breaches workplace policies prohibiting, harassment, intimidation by waving abusive no scab placard during lawful protest, dismissal valid and not for a discriminatory or prohibited reason); RMIT v NTEU [2012] FWA 2208 (online performance plans); Maritime Union of Australia v DP World Melbourne Ltd [2014] FCA 1321 at [181]-[185]. R v Darling Island Stevedoring and Lighterage Company Ltd; ex parte Halliday and Sullivan (1948) 60 CLR 601 at 601-622 per Dixon J, approved in Harrison v P & T Tube Mills Pty Ltd (2009) 181 IR 162 at [279] (union stickers causing serious disharmony). Reasonableness of orders is also relevant to unfair dismissal claims, [8.210], [13.160] and the employer’s duty of reasonable care for the safety of employees, Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306; Darvell v Australian Postal Corporation [2010] FWAFB 4082 and in relation to a duty to answer questions honestly, see [5.850]. Note also the Fair Work Act 2009 (Cth), s 19(2)(c) and work health and safety legislation preventing victimisation of employees who complain of work hazards, see, Twentieth Super Pace Nominees v TWU [2006] NSWIRComm 218. Cf McCarry, “The Employee’s Duty to Obey Unreasonable Orders” (1984) 58 ALJ 327 and discussion [13.160]. Query whether it might be unreasonable to direct an employee not to work for an extended period of time, see Downe v Sydney West Area Health Service (No 2) [2008] NSWSC 159 but note there is no general duty to provide work, see [5.130]. It may be unreasonable to require the existing workforce to have a general health assessment, TWU v Cement Australia Pty Ltd [2015] FWC 158. Exceptionally there may be an award provision relating to duties to obey orders, for example, in relation licensed aircraft engineers, employees may refuse to work on an aircraft subject to hijack or bomb scare. Although there may be a more limited duty not to exercise discretionary powers capriciously or arbitrarily, see [5.210]. Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 discussed at [5.160].

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caselaw generally accepts there is a duty to obey those orders which are lawful and also reasonable.317 Employment is not servitude in which the employee must obey orders, however extreme or unreasonable.318 The extent to which codes of conduct, policies or directions can apply to an employee’s conduct outside the workplace is discussed at [8.340]. Disobedience of a lawful order may be of such a kind as to justify summary dismissal of the employee and it is frequently in this context that the issue of the duty to obey arises319 (see discussion at [8.190]). The employee’s duty to obey orders assumes a specific direction or required policy relating to the work that it is to be done. But this duty should be seen as an aspect of a broader duty requiring the employee to co-operate in order to get the job done. This has been raised in the context of industrial action where employees are on a “go slow” or “work to rule”320 which may not technically be in breach of a direction or order: Assuming … that the direction to work to rule avoided any specific direction to commit a breach of any express term of the contract … the object of the instruction was to frustrate the very commercial object for which the contracts of employment were made. It struck at the foundation of the consensual intentions of the parties of these contracts, and amounted … to an instruction to commit what were clearly breaches…of those contracts. These are … breaches of an implied term to serve the employer faithfully within the requirements of the contract. It does not mean that the employer could require a man to do anything which lay outside his obligations under the contract, such as to work excess hours of work or work an unsafe system of work or anything of that kind, but does mean that within the terms of the contract the employee must serve the employer faithfully with a view to promoting those commercial interests for which he is employed.321

The duty to obey lawful orders reflects the distinct dominant and subservient roles of master and servant. But the dynamics of workplaces have changed. As has been seen in Chapter 2, with highly skilled professional employees and managers, promotion of the employer’s business is (or should be) more about co-operation, which is by its nature more participatory and consultative.

Duty to use care and skill and to indemnify Employee’s duty to take reasonable care [5.430] An employee has a general duty to exercise reasonable care in carrying out the employment. This obligation is implied as an incident of the contractual relationship of employer and employee and is also imposed independently by the law of torts.322 The 317

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R v Darling Island Stevedoring and Lighterage Co Ltd: Ex parte Halliday (1938) 60 CLR 601 at 621-622 per Dixon J; Thompson v IGT (Australia) Pty Ltd [2008] FCA 994; (2008) 173 IR 395 at [48]-[52] (FCA); Blackadder v Ramsey Butchering Services Pty Ltd (2002) 113 IR 461 at 476 (decision upheld on appeal to the High Court (2005) HCA 22; (2005) 221 CLR 539 (attendance at medical examination); J; CFMEU v Glencore Mt Owen Pty Ltd [2015] FWC 7752 (direction banning smoking in the workplace lawful and reasonable). Cf Transport Workers’ Union of Australia v Cement Australia Pty Ltd [2015] FWC 158 (direction to attend compulsory health assessment for a sector of workers not reasonable). Australian Tramways Employees’ Association v Brisbane Tramways Co Ltd (1912) 6 CAR 35 at 42 approved in Thompson v IGT (Australia) Pty Ltd [2008] FCA 994 at [48]. See as a recent illustration, Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20; (2015) 229 FCR 221. This qualifies as “industrial action” under the Fair Work Act 2009 (Cth), s 19(1), see [14.20]. Secretary of State for Employment v ASLEF (No 2) [1972] 2 QB 455 (CA) at 498 per Buckley LJ. See also British Telecommunications plc v Ticehurst [1992] ICR 383 (CA). Matthews v Kuwait Bechtel Corp [1959] 2 QB 57. As to whether the allocation of risks to a negligent employee can be justified, see discussion in the UK context, Brodie, “Mutual Trust and the Values of the Employment Contract” (2001) 30 ILJ 84 at 97.

Employee’s Implied Duties

duty to take reasonable care is not limited to special skills required by the employment,323 but extends to all tasks whether specialised or not.324

Employee’s liability for torts at common law [5.440] This obligation is especially important when considering liability in tort. When the harm results from the employee’s conduct during the course of employment such as where the employee injures a fellow worker or a customer, both the employee and employer will be liable to a fellow employee325 or to a third party injured as a result.326 Although an injured plaintiff rarely looks to the employee to pay up (the employer being a more convenient source of compensation), the employee is still liable and theoretically susceptible to claims.327 At common law, even where damages are recovered from the employer this does not free the employee from responsibility. An employer is vicariously liable for its employee’s tortious wrongdoing within the course of employment, see [6.60]. Where the employer has been successfully sued328 by someone injured by an employee’s wrongdoing, at common law the employee would have been liable to indemnify the employer on either of two grounds. First, the conduct of the employee may have been a breach of an implied term of the contract of service or a tort duty that the employee would perform duties with reasonable care. Breach of this contractual or tort duty made the employee liable to the employer for the damages paid by the employer to a fellow worker or an injured third party.329 Alternatively, an employer could claim contribution330 from the employee which would usually amount to 100% save in cases where it appeared that the employer was not blameless. Such was 323 324 325

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See [8.150] et seq. Lister v Romford Ice & Cold Storage Co Ltd [1957] AC 555; Kashemije Stud Pty Ltd v Hawkes [1978] 1 NSWLR 143; Janata Bank v Ahmed [1981] ICR 791. The duty includes a duty to take reasonable care not to injure fellow employees: X v Commonwealth (2000) 200 CLR 177 at 188 per McHugh J. It would also apply where employees engage in bullying and harassment of other employees, see [6.260]. Note also liability under work health and safety legislation. Note restrictions on actions where a workers’ compensation claim is available, see [6.90]. Propell National Valuers (WA) Pty Ltd v Australian Executor Trustees Ltd [2012] FCAFC 31; (2012) 202 FCR 158 at [114]-[115] (employee liability for negligent misstatements). It also applies to damage to another person’s property or financial losses. There is no term to be generally implied that the employee is entitled to be indemnified by the employer in relation to the employee’s own negligent conduct during the employment. The employee may owe a separate duty of care to third parties. This does not necessarily require the employer to be sued to judgment: see Brambles Constructions Pty Ltd v Helmers (1966) 114 CLR 213 at 219. Lister v Romford Ice & Cold Storage [1957] AC 555. Note, however, Kelly v Alford [1988] 1 Qd R 404 and Rowell v Alexander Mackie College of Advanced Education (1988) 25 IR 87. A R Griffith v Richards (1996) QCA 417; [2000] 1 Qd R 116; Wylie v ANI Corp [2000] QCA 314; McClymont v Egerton [2015] QCATA 161 and see Marropodi v Smith-Roberts (unreported, ACT Supreme Court) noted (1970) 44 ALJ 4. The status of the principle in requiring the employee to indemnify the employer is doubted but unresolved at High Court level, see Commercial & General Insurance Co Ltd v GIO (NSW) (1973) 129 CLR 374 at 380 although clearly there is a duty to act with reasonable care, X v Commonwealth (2000) 200 CLR 177. Where the employer is insured the right of the insurance company to recover from the employee may be prevented: see Insurance Contracts Act 1984 (Cth), s 66. Under the contribution provisions of the relevant legislation, the employee being a person concurrently liable who “is liable or would if sued have been liable” see legislation allowing claims for contribution: ACT: Civil Law (Wrongs) Act 2002, s 21; NSW: Law Reform (Miscellaneous Provisions) Act 1946, s 5; Vic: Wrongs Act 1958, s 24; Qld: Law Reform Act 1995, Pt 3; SA: Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001; Tas: Wrongs Act 1954, s 3; WA: Law Reform (Contributory Negligence and Tortfeasors’ Contribution) Act 1947, s 7; NT: Law Reform (Miscellaneous Provisions) Act, Pt IV and Sappideen & Vines (eds), Fleming’s The Law of Torts (10th ed, Lawbook Co, 2011) at [11.90]. Contribution is not available if the employee is entitled to be indemnified by the employer.

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the case in Jones v Manchester Corporation,331 where a hospital permitted an inexperienced doctor to act as an anaesthetist without proper supervision. In a claim by the hospital for an indemnity from the doctor, the court refused to grant a complete indemnity to the hospital: “it would be in the highest degree unjust that the hospital board, by getting inexperienced doctors to perform their duties for them, without adequate supervision, should be able to throw all responsibility on those doctors as if they were fully experienced practitioners.”332 There is some protection for the employee where the employer is insured, or in some States where there is statutory protection for the employee, this is discussed in the paragraphs following. Where the employer is insured [5.450] Prior to the enactment of the Insurance Contracts Act 1984 (Cth), s 66, if the employer was insured and insurance covered the damages paid to the fellow worker or third party, the insurance company would have been entitled to pursue any claims the employer might have had in recouping damages paid (the right of subrogation). As the employer had an action against the employee for breach of the duty to take reasonable care in carrying out the employment, technically the insurance company could have sued the employee for an indemnity for any damages paid. The common law position has been modified by the Insurance Contracts Act 1984 (Cth), s 66. The employee333 will not have to pay damages if the employer is insured, and the policy is one to which the Insurance Contracts Act 1984 applies.334 Section 66 of that Act withdraws the insurer’s right to bring proceedings in the employer’s name to recover an indemnity unless the employee’s conduct involves serious or wilful misconduct (discussed at [5.470]). But this is only limited protection because the employer may not have coverage for the particular risk, or the employer may act as a self-insurer or the employer may be required to pay a large amount as a deductible (excess). The long title of the Act declares that its purpose of the Act is to ensure “that a fair balance is struck between the interests of insurers, insureds and other members of the public”. Derrington J in Boral Resources (Qld) Pty Ltd v Pike335 remarked: Conformably with that policy this section in particular was intended to counter the undesirable commercial and social results flowing from the liability of an employee to an employer for loss caused by negligence in the performance of his work … Whilst in most cases an employer wishes to avoid visiting such loss upon his employee where it is a case of simple negligence, a reluctance motivated by industrial and sometimes personal relationships and the vulnerability of employees to such liability in the course of their work, the employer’s insurers are usually under no such inhibition.

The protection of the Act will be lost if the employee is guilty of serious or wilful misconduct. As serious/wilful misconduct similarly qualifies statutory rights of indemnity in some jurisdictions, this is discussed following the examination of statutory rights to indemnity, [5.470]. 331 332 333

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Jones v Manchester Corporation [1952] 2 QB 852. Jones v Manchester Corporation [1952] 2 QB 852 at 871. Responsibility was apportioned: hospital 80%, doctors 20%. This would cover a person who was an employee at the time of the tortious conduct, Toomey v Scolaro’s Concrete Constructions Pty Ltd (No 3) [2001] VSC 477 at [56]. As to labour hire situations, see Deutz Australia Pty Ltd v Skilled Engineering Ltd [2001] VSC 194 at [50]-[59]. See also Lawless v MacKendrick (No 3) [2011] WASC 298. The Act specifically excludes insurance covering workers’ compensation and motor accidents resulting in personal injury or death: see Insurance Contracts Act 1984 (Cth), s 9(1)(e). These are covered by statutory insurance. See also issues in labour hire cases, Deutz Australia Pty Ltd v Skilled Engineering Ltd [2001] VSC 194 at [49]-[58]. Boral Resources (Qld) Pty Ltd v Pike (1989) 93 ALR 89 at 101.

Employee’s Implied Duties

Statutory protection

[5.460] The common law rule that an employee336 is liable to indemnify the employer for torts committed within the course of employment is subject to statutory modification in some States. In New South Wales, Northern Territory and South Australia, an employer who is vicariously liable for the employee’s wrongdoing is required to indemnify the employee and the employer cannot recover contribution337 or indemnity from the employee unless the employee has been guilty of serious and wilful misconduct.338 The protection applies only to employees not to independent contractors.339 In other jurisdictions, Victoria, Queensland, Tasmania, Western Australia and the Australian Capital Territory the common law rule continues to apply.340 Its impact will be blunted where the employer is insured in relation to the loss sustained, see [5.450]. The statutory protection is not all embracing. An employee acting within the course of employment341 would not be entitled to indemnity where (1) the employee has negligently or intentionally damaged the employer’s property; (2) it does not apply if the employee is guilty of serious and wilful misconduct;342 (3) it does not prevent an injured third party suing the employee directly but the employer is required to indemnify the employee provided the conduct is within the course of employment and is not serious and wilful misconduct; (4) it will be of little value if the employer is 336

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In New South Wales this also applies to police officers as employees, see Police Service (NSW) v Honeysett [2001] NSWCA 452. See also State statutory protection for police officers, for example, Police Legislation Amendment (Civil Liability) Act 2003 (NSW), s 9B(3); Police Regulation Act 1898 (Tas), s 52. The Employees Liability Act 1991 also abolishes any right of contribution: see McGrath v Council of the Municipality of Fairfield (1985) 156 CLR 672. See also Sheridan International Pty Ltd v CS Brooks Inc [2005] NSWSC 140. NSW: Employees Liability Act 1991, ss 3 – 5; SA: Civil Liability Act 1936, s 59; NT: Law Reform (Miscellaneous Provisions) Act, s 22A(1), Employees Liability Act 1991 (NSW); Civil Liability Act 1936 (SA), s 59; Law Reform (Miscellaneous Provisions) Act (NT), s 22A. There is a special insurance provision in Tasmania, see Workers’ Rehabilitation and Compensation Act 1988 (Tas), s 97 (duty to insure employees against liability under the Act). There is no such provision in Queensland, see Griffith v Richards [1996] QCA 417; Wylie v ANI Corp Ltd [2000] QCA 314. In New South Wales, South Australia and Northern Territory, if the employee has indemnity insurance, the employer can bring whatever claims the employee would be entitled to bring in respect of the commission of the tort: Employees Liability Act 1991 (NSW), s 6(1); Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA), s 6(9)(c); Civil Liability Act 1936 (SA), s 59, Law Reform (Miscellaneous Provisions) Act (NT), s 22A(2). An independent contractor is not covered but may have a claim for contribution from the employer. But unlike employees, a contribution claim will not necessarily amount to a complete indemnity. It is unlikely that deemed employment for purposes of workers’ compensation legislation will extend so far as to protect the deemed employee for purposes of the statutory indemnity provisions; cf National Transport Insurance Ltd v Chalker [2005] NSWCA 62. Queensland: A R Griffith v Richards (1996) QCA 417; [2000] 1 Qd R 116; Wylie v ANI Corp [2000] QCA 314; Victoria: see Toomey v Scolaro’s Concrete Constructions Pty Ltd (No 3) [2001] VSC 477 (later contribution proceedings Moore v Scolaro’s Concrete Constructions Pty Ltd (in liq) [2004] VSCA 152); Western Australia: Wesfarmers Dalgety Ltd v Williams [2005] WASC 287 (misrepresentation by the employer that the employee was covered by professional indemnity insurance, implied term of the contract). So if it is not in the course of employment, the employer is not liable and the provision is not relevant, JK v State of New South Wales [2014] NSWSC 1084 (sexual abuse of student by teacher). Employees Liability Act 1991 (NSW), s 5; Civil Liability Act 1936 (SA), s 59; Law Reform (Miscellaneous Provisions) Act 1956 (Tas), s 22A(3) (or gross misconduct). The indemnity is of no real value if the employer is uninsured and bankrupt. On the question of indemnification, see also Rowell v Alexander Mackie College of Advanced Education (1988) 25 1R 87; Kelly v Alford [1988] 1 Qd R 404, discussed at [5.350]. In relation to serious and wilful misconduct, see State of NSW v Eade [2006] NSWSC 84; Stoddart v Gates WASC 18/9/96; Sheridan International Pty Ltd v CS Brooks Inc [2005] NSWSC 140; Sneddon v State of NSW [2012] NSWCA 7 (bullying, harassment, victimisation).

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insolvent. In other jurisdictions theoretically the employee’s duty to indemnify under the Lister v Romford Ice principle remains.343 In those jurisdictions providing statutory rights to indemnity, these rights are lost if the employee is guilty of serious/wilful misconduct. An employee can be deprived of the right to an indemnity if the employee is guilty of serious and wilful misconduct. Similar phraseology is employed in workers’ compensation legislation344 and under the Insurance Contracts Act 1984, s 66 with the insurer retaining the right to proceed against the employee, if the employee is guilty of “serious or wilful misconduct”. Serious/wilful misconduct by the employee does not prevent the employer being vicariously liable if the misconduct is sufficiently related to the employment, see [6.60].

[5.470] Whether the employee’s conduct satisfies the serious/wilful misconduct tests is a question of fact in the individual case. It is clearly satisfied where police officers told a plaintiff that unless he confessed they would “load him up” with heroin.345 Drink driving may also be sufficient.346 Wilful misconduct is not satisfied by mere negligence.347 In Boral Resources (Qld) Pty Ltd v Pike348 an employee, Pike, had worked a 17-hour day and after consuming at dinner 12-13 beers (with a blood alcohol reading of about 0.11), he set out to drive four or five kilometres to a motel in the employer’s (Boral’s) vehicle. He fell asleep at the wheel. Extensive damage was caused to Boral’s tanker and trailer when the vehicles left the road. Employees were prohibited from driving whilst affected with alcohol and were liable to immediate dismissal if they did so. Boral’s insurer who had paid a claim for damage to the vehicles was held entitled to recover an indemnity from the employee Pike. The correct approach to s 66 was held to be that: Once it is found … that the employee would be liable to his employer for negligence or breach of contract causing the loss, the correct exercise was to examine the conduct of the employee that gave rise to the damage, and ask whether that conduct arose out of the employment and whether it was serious or wilful misconduct.349

Derrington J in that case explained what was meant by “serious or wilful misconduct”: First, it may amount to intentionally causing the loss. Secondly, echoing a standard which is well known in … insurance, it may alternatively mean an intentional or deliberately reckless course of misconduct with knowledge that it is dangerous and wrong, that is, an

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Qld: A R Griffith v Richards (1996) QCA 417; [2000] 1 Qd R 116; Wylie v ANI Corp [2000] QCA 314; Vic: see Toomey v Scolaro’s Concrete Constructions Pty Ltd (No 3) [2001] VSC 477; WA: Wesfarmers Dalgety Ltd v Williams [2005] WASC 287 (misrepresentation by the employer that the employee was covered by professional indemnity insurance, implied term of the contract). The workers compensation statutory provisions are set out in Safe Work Australia, “Comparison of workers’ compensation arrangements in Australia and New Zealand” (July 2015), Table 3.13. It does not necessarily provide useful analogies: see Boral Resources (Qld) Pty Ltd v Pike (1989) 93 ALR 89 at 115 per Ambrose J. State of NSW v Eade [2006] NSWSC 84. The State was vicariously liable for their conduct but could recover these damages from the officers. This could include any exemplary damages paid to the plaintiff. See also Compafina Bank v ANZ Banking Group Ltd (unreported, Supreme Court, NSW, 11 May 1984, Hunt J). Phoenix Society Ltd v Cavenagh (1996) 25 MVR 143. See Stoddart v Gates (unreported, WA, Supreme Court, 18 Sept 1996) (failure to stop at rail crossing after hearing train whistle). Although possibly grossly negligent conduct or misleading or deceptive conduct (Australian Consumer Law, s 18 (formerly Trade Practices Act 1974 (Cth), s 52)), Sheridan International Pty Ltd v CS Brooks Inc [2005] NSWSC 140 at [29]. Boral Resources (Qld) Pty Ltd v Pike (1989) 93 ALR 89; Hall, “No Skating “round Romford Ice”” (1990) 3 AJLL 301. Boral Resources (Qld) Pty Ltd v Pike (1989) 93 ALR 89 at 95 per Thomas J. Applied in a different context in Kennelly v Incitec Ltd [1998] FCA 1470.

Employee’s Implied Duties

unreasonable perseverance in it with a recognition of its wrongfulness and reckless disregard of any risks … As this implies, the wilfulness must extend to its quality as misconduct.350

What amounts to misconduct for these purposes? The misconduct must be employment-related351 and form the basis upon which the employer would be vicariously liable. In the case of “serious misconduct”, analogies may be drawn to instances where an employer would be justified in summarily dismissing an employee,352 although there is a view that it must be more serious than that required for summary dismissal.353 In general, however, conduct that is prohibited by the employer which would justify summary dismissal will ordinarily constitute serious misconduct; more the case if it also constitutes criminal conduct leading to imprisonment or fine.354 Based on these tests, driving under the influence of alcohol was held by the majority in the Boral case to qualify both as serious misconduct and also as wilful misconduct for the purposes of the Insurance Contracts Act 1984 (Cth), s 66(b). The Boral decision may be of assistance in construing the more generous State legislation355 which gives employee’s rights of indemnity subject to the general qualification that their conduct is not serious and wilful misconduct.356 The conduct must constitute a tort and that same conduct must be serious and wilful misconduct. This makes clear the required connection between the tortious conduct and misconduct, although arguably the circumstances of the Boral case would have resulted in a denial of the indemnity under State legislation as well. If the employee is entitled to an indemnity under State legislation, no question presumably arises for consideration under the Commonwealth Insurance Contracts Act 1984, s 66; the employer would be precluded from recovering an indemnity or contribution from the employee. Since the employer has no right against the employee, consequently the insurer standing in the employer’s place has no right to make a claim. Express indemnity clauses given by employees [5.480] Unless there is a statutory prohibition, unconscionability or duress, an employment contract can contain a provision whereby the employee expressly agrees to indemnify the employer for certain kinds of losses, as for example, a portion of the bad debts incurred by the employer arising from transactions effected for clients for whom the employee was the responsible adviser in the employer’s organisation.357 These clauses will be subject to careful scrutiny to ensure that the employee was not subject to unlawful pressure to sign such an indemnity.358 In those States where an employee is entitled to a statutory indemnity for torts committed in the course of employment, any express clause in the contract cannot override the statutory protection.359 350 351 352 353 354 355

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357 358 359

Boral Resources (Qld) Pty Ltd v Pike (1989) 93 ALR 89 at 107. And see also Boral Resources (Qld) Pty Ltd v Pike (1989) 93 ALR 89 at 115 per Ambrose J. See Chapter 8. Boral Resources (Qld) Pty Ltd v Pike (1989) 93 ALR 89 at 106 per Derrington J; Johnson v Marshall [1906] AC 409 at 413. Boral Resources (Qld) Pty Ltd v Pike (1989) 93 ALR 89 at 115 per Ambrose J. Employees Liability Act 1991 (NSW); Civil Liability Act 1936 (SA), s 59; Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA), s 6(9)(c); Law Reform (Miscellaneous Provisions) Act (NT), s 22A. The New South Wales provision (Employees Liability Act 1991, s 5) also excludes the right to an indemnity if the conduct of the employee is a tort and “did not occur in the course of, and did not arise out of, the employment of the employee”. Banco Office Services Pty Ltd v Cannon (1988) 30 AILR 101. See, eg, Hayman v Kkuit Pty Ltd [2002] WADC 107 (economic duress on employee to sign indemnity). See Employees Liability Act 1991 (NSW), s 7.

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Benefit of exclusion clauses

[5.490] The growing use of exemption clauses (clauses excluding or limiting contracting parties’ liability for breach of contract, negligence, etc) in many modern contracts has led to the question whether an employee is entitled to the protection of this exemption. The issue may arise also in relation to whether an employee of a subcontractor can rely on an exemption clause entered into by the head contractor. The general principle, privity of contract, is that only parties to a contract can acquire rights under it.360 Since the employee will rarely be party to the contract, the employee would not be entitled to take advantage of the exemption clause. It has the strange result that the conduct of an employee whilst working may render the employee liable and the employer, by virtue of the exemption clause, not liable. Whilst the courts have continued to recognise the general principle of privity of contract and reject the view that if the employer is not liable, the employee is also not liable (no vicarious immunity), various devices circumvent the doctrine.361 If it can be found that an employer acts as agent for the employee for the purpose of limiting liability by way of the exemption clause,362 the employee (even though not a party to the contract) would be entitled to the benefit of the exemption clause.363 Alternatively, if a contract between the contracting party and a third party can be implied, then the third party, for our purposes the employee, would be entitled to the benefit of the exemption clause. An appropriately worded exemption clause would give rise to this result. A further device for enabling an employee to take the benefit of an exemption clause in a contract to which the employee is not a party was suggested in Gore v Van der Lann.364 It suggested that an employee may be protected by an exemption clause where there is a provision that the other contracting party will not sue the employee and there is inserted in the contracts of employment an express promise by the employer to indemnify the employee against their liability in tort.365 In that instance, the court in its discretion, at the suit of the employer, may grant a stay of the action against the employee.366 The effect of the authorities is that it is possible to exempt employees from liability and that an appropriately worded exemption clause can bring about this result.367 There is also authority to support the view that if the plaintiff has by contract undertaken to 360 361 362

363 364 365 366

367

Scruttons Ltd v Midland Silicones [1963] AC 446; Wilson v Darling Island Stevedoring Co (1956) 95 CLR 43. See the inroads to the doctrine in Canada, Brown v Belleville (City) 2013 ONCA 148. Agency requires that (i) the contract indicates that the contractor intended by its terms to protect the third party which may include employees of the contracting party, subcontractors and even subcontractors’ employees; (ii) the contractor also contracted for the benefit of the third party; (iii) the contractor has authority to act for the third party which can be satisfied after the event by ratification; (iv) the third party employee provided consideration. See Scruttons Ltd v Midland Silicones Ltd [1963] AC 446 at 474 per Lord Reid, adopted in The Eurymedon [1974] 2 WLR 865; [1975] AC 154; and Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (1978) 52 ALJR 337; and on appeal to the Privy Council [1981] 1 WLR 138. See also Celthene Pty Ltd v WKJ Hauliers [1981] 1 NSWLR 606 at 611; The Mahkutai [1996] AC 650; Southern Water Authority v Carey [1985] 2 All ER 1077 at 1084-1085. NZ Shipping Co Ltd v Satterthwaite & Co Ltd (The Eurymedon) [1974] 2 WLR 865; [1975] AC 154. Gore v Van der Lann [1967] 2 QB 31. Presumably also where the employer is statutorily bound to indemnify the employee; see [5.460]. See also Snelling v John Snelling Ltd [1973] 1 QB 87; Reichhold Norway ASA v Goldman Sachs [2000] 1 WLR 173; Deepak Fertilisers & Petrochemicals Ltd v Davy McKee (London) Ltd [1999] 1 All ER (Comm) 69. But see Glebe Island Terminals v Continental Seagram (1993) 40 NSWLR 206. In Queensland (Property Law Act 1974 (Qld), s 55) and Western Australia (Property Law Act 1969 (WA), s 11), a third party can sue on a contract.

Employee’s Implied Duties

bear a particular risk, there may be no tort duty owed to the plaintiff in relation to that risk,368 so that a plaintiff prevented by contract from suing the employer cannot turn round and sue employees. Where there is a relevant policy of insurance governed by the Insurance Contracts Act 1984 (Cth), the employee will be entitled to the benefit of the employer’s insurance provided the employee is not guilty of serious and wilful misconduct, see [5.450].369

Duties relating to work, location, or methods of work Relocation [5.500] The contract may give the employer an express power to direct the employee to work at another location.370 Whether the employer has a duty not to exercise this capriciously is discussed at [5.240] and [9.360]. But if the contract makes no reference to this issue, can an employee be required to transfer to a workplace which is not specifically mentioned at the time of initial engagement? Browne-Wilkinson J in Jones v Associated Tunnelling Co Ltd371 said, in relation to job mobility: The starting point must be that a contract of employment cannot simply be silent on the place of work: if there is no express term, there must be either some rule of law that in all contracts of employment the employer is (or alternatively is not) entitled to transfer the employee from his original place of work or some term regulating the matter must be implied into each contract. We know of no rule of law laying down the position in relation to all contracts of employment, nor do we think it either desirable or possible to lay down a single rule. It is impossible to conceive of any fixed rule which will be equally appropriate to the case of, say, an employee of a touring repertory theatre and the librarian of the British Museum. Therefore, the position must be regulated by the express or implied agreement of the parties in each case. In order to give the contract business efficacy, it is necessary to imply some term into each contract of employment.372

Browne-Wilkinson J continued that in determining the nature of any implied term the court is entitled not only to look at how the parties would have responded to the officious bystander if asked about mobility, but the nature of the business engaged in, whether the employee had worked at other sites without objection,373 whether there was any provision for payment of expenses when the employee was working away from daily reach of home, what the employee was told when the employment commenced, and the subsequent contractual arrangements entered into with other workers. In the circumstances it may be reasonable to imply some power to require the employee to move and that the reasonable term to imply “as the lowest common denominator of what the parties would have agreed if asked” is a power to direct the employee to work at any place within reasonable daily reach of the employee’s home. 368 369 370

371 372 373

See Norwich City Council v Harvey [1989] 1 WLR 828; and Sappideen and Vines, Fleming’s The Law of Torts (10th ed, 2011) at [12.370], citing London Drugs v Kuehne (1990) 70 DLR (4th) 51. A similar result may apply under the general law, see Trident General Insurance Co Ltd v McNiece (1988) 165 CLR 107. United Bank v Akhtar [1989] IRLR 507 (employee required to move branches at short notice without financial assistance); see also White v Reflecting Road Studs [1991] IRLR 331; Wilkie v National Storage Operations Pty Ltd [2013] FCCA 1056. But this may be qualified by reference to other terms of the contract, see Downe v Sydney West Area Health Service No 2 [2008] NSWSC 159. Jones v Associated Tunnelling Co Ltd [1981] IRLR 477. See also Courtaulds Northern Spinning Ltd v Sibson [1988] ICR 451 at 460. Jones v Associated Tunnelling Co Ltd [1981] IRLR 477 at 480. See, for example, Tolra v Sanford Transport Industries Industrial Relations Court of Australia, 2 October 1996, Walker JR (short term inconvenience due to loss of licence).

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Browne-Wilkinson J expressly rejected the argument that before a term can be implied it is necessary to show precisely what term the parties would have said was obvious.374 The case shows that the law will, in the absence of agreement, imply some term about job mobility. But the term to be implied in a particular case will depend on the facts.375 The case is also of interest as it demonstrates that the actual performance and conduct of the parties were regarded as relevant to determining the nature of the rights and duties between the parties to the contract.376 It moves away from the view of the contract of employment which sees “the formation of contractual terms as an instantaneous and static process, complete as soon as the contract is made”.377 This approach provides some flexibility and reduces the importance of trying to decide whether there has been a later variation of a contract, or even a termination of the contract. But this view has not gained general acceptance, see [4.570]. Ultimately, it may just be a question whether, in the absence of a job mobility clause in the contract, award or industrial agreement, it is reasonable to request the employee to work at another location.378 The issue frequently arises in determining whether there has been a variation of contract (see [9.340]) or the creation of a new contract; it can also arise in dismissal cases where there has been a refusal to relocate, or in relation to whether there is a redundancy, see [9.160]. It may also arise under the Fair Work Act 2009 (Cth) if an employee is relocated for a prohibited reason.379

Change of duties and work methods [5.510] The issue whether the employer is entitled to change the principal duties or the employee’s job is essentially concerned with the question of what are the express or implied terms of the contract of employment. As with change of location, some term must be present, and the general rule is that a contract by which a person is employed in a specific character is to be construed as obliging him to render, not indeed all service that may be thought reasonable, but such service only as properly appertains to that character.380

Accepting that as the general rule of law, the answer to whether a change of duties is permitted in a particular case will almost always have to be derived from the facts of that case, unless, of course, there is express agreement. Just what the job entails might not be clear.381 A position or job description may set out a range of tasks required but 374 375

376 377 378

379

380 381

Compare Equal Storm Ltd t/as Merlin’s Ark v Innes (UK EAT, 2 February 2001) (flexibility too vague and open-ended to be implied as a term). The correct implication might be that the worker will work anywhere in the company’s area, O’Brien v Associated Fire Alarms Ltd [1969] 1 All ER 93. Contrast Logan v Otis Elevator Co Pty Ltd [1995] IRCA 598, Walker JR (appointment to Orange district; breach of contract when required to work in Sydney, Gosford or Canberra). See also Mears v Safecar Security Ltd [1982] ICR 626. See Davies and Freedland, Labour Law, Text and Materials (2nd ed, 1984), pp 297ff. See Downe v Sydney West Area Health Service No 2 [2008] NSWSC 159 (pre CBA v Barker [5.160] limits of an express power regarding job mobility). In relation to agreements, see Target Australia Pty Ltd v SDA re Target Retail Agreement [2002] AIRC 369 (reasonable where 44km distance, additional travelling costs paid) but see DL Employment Pty Ltd v AMWU [2014] FWCFB 7946 (attempted transfer 34 kms Kogarah to Ingleburn, additional expenses to be paid, held redundancy, no acceptable alternative employment) and see [9.360]. For example, if the employee proposed to give evidence of an award breach by the employer so that relocation was a prejudicial alteration of the employee’s employment and contrary to the Act if done for reasons including a prohibited reason, see discussion [13.240]–[13.250]. Commissioner for Government Transport v Royall (1966) 116 CLR 314 at 322. If there is just a job title, extraneous evidence may be led as to what this entails, see Keays v J P Morgan Administrative Services Australia Ltd [2012] FCAFC 100; (2012) 224 IR 406 at [68]-[71].

Employee’s Implied Duties

might also include a catchall requirement that the employee undertake such further tasks as the employer may require.382 For example, an Associate Professor might lawfully be required to take on a leadership and administration role as a first year laboratory director even if this role might normally be undertaken by a junior staff member.383 The change of duties issue is most often raised in the context of determining whether change of duties has resulted in a new contract of employment384 or whether the original contract of employment has been varied, repudiated, or has come to an end by mutual consent or whether the employee is entitled to compensation for redundancy.385 This is discussed in greater detail at [9.370]. There is a distinction between a change of duties or work and a change in the method of doing the same work. While an employee may not be obliged to undertake tasks outside those agreed either initially or by subsequent variation, the employee will be obliged to adapt to different work methods. In Cresswell v IRC386 the Board of Inland Revenue required staff to operate a new computer system to facilitate the work of tax assessors. The plaintiffs refused to operate the new equipment arguing that it constituted a breach of their employment contracts to introduce the new system without their agreement. Walton J held that employees are not entitled to preserve their working obligations completely unchanged from the time they first start work. Provided that the nature of the job has not fundamentally changed the employee cannot object if instead of using paper and pens he or she is now required to use a computer. Walton J said: There can really be no doubt … that an employee is expected to adapt himself to new methods and techniques introduced in the course of his employment. Of course in a proper case the employer must provide any necessary training or retraining … it will, in all cases, be a question of pure fact whether the retraining involved the acquisition of such esoteric skills that it would not be reasonable to expect the employee to acquire them.387

There are many situations where the proper interpretation of the contract will yield the conclusion that the parties agreed from the outset that there would be a change of duties from time to time. This will be especially true of industries or in work situations where the practice of the employer is to move employees around for experience or the like. Such changes, being contracted for, will not mark the end of the contract and the commencement of another, and the agreement for change will be implied from the facts or industry practice. Directions to employees to change work methods can be seen as part of an employee’s duty of obedience to lawful and reasonable orders.388 This gives greater flexibility to the parties to adapt to rapid technological change.

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A common clause in an award provided that the employee will undertake such other additional duties “within his or her competence, skill or ability as the employer may (lawfully) direct from time to time” see Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 at 72 per Buchanan J. Miller v University of New South Wales [1999] AIRC 1233 at [95]-[98]. This was followed by a stream of other litigation the most recent being [2003] FCAFC 180; Abood v Heartland Motors Pty Ltd [2010] NSWIRComm 52 (refinement of job description from time to time); Whittaker v Unisys Australia Pty Ltd (2010) 192 IR 311 at [68]-[86] (additional other duties). Quinn v Jack Chia (1991) 1 VR 567; Westpac Banking Corporation v Wittenberg [2016] FCAFC 33. Note the reluctance to find a new contract in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 at [260],[261] per Buchanan J, McKerracher (at [334]) and White JJ (at [341]) agreeing. Cresswell v IRC [1984] 2 All ER 713. Cresswell v IRC [1984] 2 All ER 713 at 721. And see discussion [9.390].

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Duty of fidelity and loyalty [5.520] Principal among the obligations imposed on the employee389 by the common

law is the duty of fidelity and loyalty.390 The obligations imposed upon an employee by this duty are not easily defined. At the most general level, the duty could be said to embrace every aspect of an employee’s duty towards the employer, varying according to the nature of the employment. So regarded, it would cover many obligations which can be and often are categorised as separate duties, such as attending for work on time and remaining until the end of the allotted period of employment, performing one’s work in a competent manner, and honestly,391 and obeying reasonable and lawful orders. It can be understood to prohibit acts outside the workplace which are inconsistent with continuation of employment. It may be said that any act inconsistent with the terms of contract (whether these terms are express or implied) or injurious to the proper performance of an employee’s duties under the contract will amount to a breach of the duty of faithful service.392 The application of the duty may differ between classes of employees. What could be expected as faithful service by a manual labourer will be very different to that required of a senior manager. The duty of fidelity is not a mutual duty but is owed only by the employee for the benefit of the employer.393 The employee is consequently in an unequal position; the employee has no remedy for the employer’s disloyalty or breach of trust unless there is a breach of a contractual entitlement.394 This section commences with some general principles and then considers some particular situations. These are not intended to be exhaustive but merely illustrative.

The nature of the duty – contract [5.530] In Robb v Green395 Lord Esher MR said that there will always be an implication in the contract that the employee will act with good faith towards the employer.396 The law has imposed duties of confidence and fidelity in a number of situations principally relating to disclosure or use of confidential information. It applies also to an employee leaving the employment and includes a duty to maintain records 389 390 391

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There may be an implied term that agency employees will be prevented from breaching duties of fidelity to the client, see Equity 8 Pty Ltd v Shaw Stockbrocking Ltd [2007] NSWSC 412. For a more general discussion on employee loyalty, see Hajdin “Employee Loyalty: An Examination” (2005) 59 J of Business Ethics 259. Dishonesty in producing a medical certificate for sick leave may be sufficient for dismissal, cf Construction, Forestry, Mining and Energy Union v Anglo Coal (Dawson Services) Pty Ltd [2015] FCAFC 157. This could include such conduct as an employee’s dishonesty, drunkenness, bribery etc. See the illustrations in Chapter 8. See also McCallum and Stewart, “Employee Loyalty in Australia” (1999) 20 Comp Lab Law & Pol J 155. Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at [296]-[305], [340] per Jessup, J (dissenting); the decision of the Full Federal Court was overturned on appeal to the High Court [2014] HCA 32; (2014) 253 CLR 169. Taking photographs (without consent) of the CEO sleeping used to ridicule the CEO to other employees is a “serious breach of trust”, Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20; (2015) 317 ALR 665 at [62]-[65]. Hivac Ltd v Park Royal Scientific Instruments Ltd [1946] Ch 169 at 173. There is apparently a growing trend to require employees (not just at professional and managerial levels) to enter into express loyalty obligations, see McCallum and Stewart, “Employee Loyalty in Australia” (1999) 20 Comp Lab L & Pol J 155 at 158. Robb v Green [1895] 2 QB 315 at 317. In the absence of an express contractual duty, the duty is limited to the specific employer and not to other companies within the group, or a subsidiary or vice-versa, see Manildra Laboratories v Campbell [2009] NSWSC 987 at [69]-[70]; Investa Properties Pty Ltd v Nankervis (No 7) [2015] FCA 1004 at [72] but see AMP Services Ltd v Mann [2006] FCA 256 at 55 (fiduciary duties arising independently of contract of employment).

Employee’s Implied Duties

and assist with handover.397 A departing employee who emails or downloads confidential information for later use398 or damages the employer’s business by deleting important electronic records breaches the duty of fidelity.399 The courts have rested the duty of fidelity on a number of different principles such as property, contract, fiduciary relationship, unjust enrichment and good faith.400 This proliferation of possible principles underpinning obligations of fidelity and good faith arises in part because breaches of confidence can occur in different types of legal relationships in addition to employer and employee, for example, in the relationship between an employee company director and the company.401 However, it seems clear that in the case of employer and employee there is an implied duty of fidelity and good faith, which includes confidentiality, based on contract.402 In Blyth Chemicals v Bushnell403 Dixon and McTiernan JJ said: Conduct which in respect of important matters is incompatible with the fulfilment of an employee’s duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal … But the conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not enough that ground for uneasiness as to future conduct arises.404

Fiduciary obligations [5.540] In addition to contractual obligations, there can exist side by side obligations

derived from other legal sources.405 For example, senior employees such as managers may owe a fiduciary duty to the employer.406 This duty imposes obligations over and above that of a duty of fidelity. 397 398 399

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Kynixa Ltd v Hynes [2008] EWHC 1495 at [322-350]. Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341; APT Technology Pty Ltd v Aladesaye [2014] FCA 966. Argued but substantially not proven in Kynixa Ltd v Hynes [2008] EWHC 1495; Berryland Books Ltd v BK Books Ltd [2009] EWHC 1877. See also Flannigan, “The Fiduciary Duty of Departing Employees” (2009) 14 Can Lab & Emp LJ 355. Jones, “Restitution of Benefits Obtained in Breach of Another’s Confidence” (1970) 86 LQR 463; Ricketson, “Confidential Information – A New Proprietary Interest? Part 1” (1977) 11 MULR 223, Part 2 (1978) 11 MULR 289. Contrast Flannigan, “The [Fiduciary] Duty of Fidelity” (2008) LQR 274 arguing that fiduciary duties are the proper foundation. See, for example, Forkserve Pty Ltd v Jack [2000] NSWSC 1064. The English Court of Appeal would limit the obligation to contract, see Faccenda Chicken v Fowler [1986] 1 All ER 617 at 625. Blyth Chemicals v Bushnell (1933) 49 CLR 66. Blyth Chemicals v Bushnell (1933) 49 CLR 66 at 81-82. For example, employees who have obtained information as a director, officer or employee of a corporation are under an obligation not to improperly use information to gain a benefit for themselves or others or to cause detriment to the corporation under the Corporations Act 2001, s 183(1), see [5.580]. Summing up the authorities see Dais Studio Pty Ltd v Bullett Creative Pty Ltd [2007] FCA 2054 at [100]-[107]; Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172 at [59]-[60] per Hodgson J, McColl JA agreeing; EagleBurgmann Australia Pty Ltd v Leabeater [2012] NSWSC 573; Investa Properties Pty Ltd v Nankervis (No 7) [2015] FCA 1004. Confidential information may also be protected by the equitable action for breach of confidence, see Independent Management Resources Pty Ltd v Brown [1987] VR 605 at 612 per Marks J. Fiduciary duties are not necessarily owed to the subsidiary of the employer or vice-versa, Investa Properties Pty Ltd v Nankervis (No 7) [2015] FCA 1004 at [72]. If there is no express contractual duty, the duty of loyalty is limited to the specific employer and not to other companies within the group, or a subsidiary or vice-versa, see Manildra Laboratories v Campbell [2009] NSWSC 987 at [69]-[70] but see AMP Services Ltd v Mann [2006] FCA 256 at 55 (fiduciary duties arising independently of contract of employment). As to whether duties can be owed to more than one employer, for example during garden leave and under a forward contract, see Tullett Prebon plc v BGC Brokers LP [2011] EWCA Civ 131; [2011] IRLR 420. Exceptional for an employer to owe a

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An employee owes an obligation of loyalty to [the] employer but … will not necessarily owe that exclusive obligation of loyalty, to act in [the] employer’s interest and not in his own, which is the hallmark of any fiduciary duty owed by an employee to [the] employer.407

The first and crucial requirement for finding a fiduciary relationship is stated by Mason J in the High Court in Hospital Products Ltd v United States Surgical Corporation:408 The critical feature of these relationships is that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense. The relationship between the parties is therefore one which gives the fiduciary a special opportunity to exercise the power or discretion to the detriment of that other person who is accordingly vulnerable to abuse by the fiduciary of his position.

Secondly, where a person (fiduciary) has undertaken to act in the interests of another (beneficiary), equity requires the fiduciary to act in the interests of the beneficiary rather than in their own self interest. Typically fiduciaries are subject to the “no profit” and “no conflict” rules. This means that fiduciaries are under an obligation not to profit from the position of trust and not to bring their own interests in conflict with their fiduciary obligations.409 There is a corresponding duty to account for any profits received in breach of their duties.410 These duties are necessary to protect the employer’s assets, confidential commercial information and trade secrets. Fiduciaries, as part of their employment, have access to this information and are in a position to exploit and manipulate this information to their own advantage.411 Thirdly, whether there is a fiduciary relationship depends on the circumstances of the individual case. There is no exhaustive definition of what factors determine whether there is a fiduciary relationship, so it is not sufficient simply to point to an employment relationship.412 Nor does it depend upon the subjective intentions of the

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fiduciary duty to an employee, Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306 at [265]-[271]; Morris v Hanley [2003] NSWSC 42 at [83]-[88] and unlikely in the face of the decision in Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 [5.160] that the employer has no duty of trust and confidence. Helmet Integrated Systems Ltd v Tunnard [2007] IRLR 126 at [36]; Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341 at [230]-[237]. Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41, 96-97 per Mason J. And see Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178 per Deane J at 198-199; ABN AMRO Bank NV v Bathurst Regional Council [2014] FCAFC 65; (2014) 224 FCR 1 at [1066]. In Australia, fiduciaries are subject to negative duties; they do not owe a positive duty to the employer to disclose their own wrongdoing ([5.830]) nor a duty to disclose every clever idea they may have, Blackmagic Design Pty Ltd v Overliese [2010] FCA 13 at [96]. Where there is adequate evidence, an allowance may be made for the cost and effort by the employee in deriving the profits, EagleBurgmann Australia Pty Ltd v Leabeater [2012] NSWSC 573; Warman International Ltd v Dwyer (1995) 182 CLR 544. It is not relevant that the employer was unlikely to have made the profits, for example, because it had withdrawn from that market (at [66]); Investa Properties Pty Ltd v Nankervis (No 7) [2015] FCA 1004 at [85] (but no conflict for a freely given “office” from a client who wished to get rid of it, at [100]). Flannigan, “The Strict Character of Fiduciary Obligation” [2006] NZLR 209 at 209-210. Minimal supervision might point to a fiduciary relationship, Investa Properties Pty Ltd v Nankervis (No 7) [2015] FCA 1004 at [80]. Although this is one of the accepted relationships that may give rise to fiduciary duties, Concut Pty Ltd v Worrell (2000) 75 ALJR 312 at [17], per Gleeson CJ, Gaudron and Gummow JJ; Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 at 69 per Gibbs CJ; at 96 per Mason J; at 141 per Dawson J; Attorney-General v Blake [1998] 2 WLR 805 at 814 (on appeal AttorneyGeneral v Blake [2001] 1 AC 268). For discussion of whether fiduciary obligations are “status based” fiduciary obligations, see Miller, “The Idea of Status in Fiduciary Law”, in Miller and Gold, Contract, Status and Fiduciary Law (OUP, 2016).

Employee’s Implied Duties

parties.413 Fiduciary obligations are also subject to the terms of any contractual arrangements between the parties: “The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction.”414 So, for example, a contract for employment could allow the employee manager to continue to operate an independent business in competition with the employer. [5.550] In the ordinary situation an employee will not be subject to fiduciary duties.415 But sometimes an employee may be in a special situation of trust and confidence where the employee undertakes or agrees to act for or on behalf of, or in the interests of the employer in the exercise of a power or discretion that will affect the interests of the employer.416 Company directors417 and senior managers will normally be fiduciaries when the position involves high levels of discretion and trust.418 Senior academics undertaking roles such as head of department or head of a research centre owe fiduciary duties to the university in relation to business opportunities that come to them in that capacity.419 But even in relation to those senior management employees who qualify as fiduciaries, not every obligation undertaken in the employment is necessarily fiduciary. In Nottingham University v Fishel,420 Dr Fishel was employed full time as scientific director of the university’s infertility research and treatment unit (Nurture). With the knowledge and encouragement of the university but without its written permission, Dr Fishel accepted paid consultancies in private overseas clinics. With no attempt at concealment, he also provided specialist staff under his supervision from the university centre to work in the overseas clinics. Substantial fees were paid to Dr Fishel who retained the profit after paying university staff for their services. Undertaking outside work was a breach of contract unless permission was 413

414 415

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419 420

ABN AMRO Bank NV v Bathurst Regional Council [2014] FCAFC 65; (2014) 224 FCR 1 at [1066]. A clause that the employee is a fiduciary probably achieves nothing: Clarke, “Breach of Confidence and the Employment Relationship” (2002) 31 ILJ 353 at 356. Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 97 per Mason J. Helmet Integrated Systems Ltd v Tunnard [2007] IRLR 126 (salesman designed safety helmet in competition with employer, not a fiduciary); Halcyon House Ltd v Baines [2014] EWHC 2216 (secretary/typist/clerk not a fiduciary); Shaw Building Group Pty Ltd v Narayan (No 2) [2015] FCA 585 at [42]-[43] (financial controller not a fiduciary) and see ABN AMRO Bank NV v Bathurst Regional Council [2014] FCAFC 65 at [1066]. Concut Pty Ltd v Worrell (2000) 75 ALJR 312 at [17], per Gleeson CJ, Gaudron and Gummow JJ; Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 at 69 per Gibbs CJ; at 96 per Mason J; at 141 per Dawson J; Attorney-General v Blake [1998] 2 WLR 805 at 814 (on appeal Attorney-General v Blake [2001] 1 AC 268). See also Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341 at [229]-[242]. Ramsay v BigTinCan Pty Ltd [2014] NSWCA 324; Zomojo Pty Ltd v Hurd (No 2) [2012] FCA 1458 Extensive duties may be imposed under corporations law including duties of confidence, see Downer EDI Ltd v Gillies [2012] NSWCA 333 and [5.580]. Canadian Aero Service Ltd v O’Malley [1974] SCR 592; WA Fork Truck Distributors Pty Ltd v Jones [2003] WASC 102 (general manager); Weldon & Co v Harbison [2000] NSWSC 272 (highly salaried accountant in very small firm); Co-ordinated Industries v Elliott (1998) 43 NSWLR 282 at 288 (project manager); Warman International Ltd v Dwyer (1995) 182 CLR 544 (branch manager); Colour Control Centre Pty Ltd v Ty and ors [1995] NSWSC 96; Two Lands Services Pty Ltd v Cave [2000] NSWSC 14 at [90] (finance consultant); Able Tours Pty Ltd v Mann [2009] WASC 192 (operations manager); Deeson Heavy Haulage Pty Ltd v Cox [2009] QSC 277 (senior managers running the day to day business); EagleBurgmann Australia Pty Ltd v Leabeater [2012] NSWSC 573 (senior salesman); Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341 (manager, most senior employee); Investa Properties Pty Ltd v Nankervis (no 7) [2015] FCA 1004 (senior development manager). But see Flannigan arguing that fiduciary obligations apply to all employees to prevent opportunism, “The [Fiduciary] Duty of Fidelity” (2008) LQR 274. Victoria University of Technology v Wilson (2004) 60 IPR 392 at [150]. Nottingham University v Fishel [2000] ICR 1462 criticised Flannigan, “The [Fiduciary] Duty of Fidelity” (2008) LQR 274. Note in University of Western Australia v Gray [2009] FCAFC 116 it was not argued that Gray had diverted an opportunity for his own benefit, nor was it found that there was any fiduciary breach.

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obtained. The university could not, however, point to any damage sustained as a result of the breach of contract.421 Dr Fishel’s own work was beneficial to the university research and treatment unit as it allowed Dr Fishel to undertake work effectively prohibited in the United Kingdom and apply the benefits of that work to research in the university centre. Dr Fishel was permitted to retain the profits derived from his own personal labours. Was Dr Fishel a fiduciary? If the conduct was a breach of fiduciary duty, the university would be entitled to an account of the profits received. Elias J thought that this could be so only if the employee had undertaken a fiduciary obligation to act solely in the interests of the employer. This was not the case in relation to earnings received by Dr Fishel for his own work in clinics abroad422 which was known and encouraged. In relation to that work there was no contractual duty to bring to the employer every business opportunity. Nor was it the case that Dr Fishel had used his position to make a secret profit; the work arose out of Dr Fishel’s own international reputation. But sending trained embryologists employed by the university to overseas clinics, for which Dr Fishel received a fee, was found to be a breach of a fiduciary obligation. In that respect Dr Fishel had used his position to place his own financial interests above his duty to the university. [5.560] The Fishel case demonstrates that the existence of a fiduciary relationship is important. A fiduciary relationship may give rise to more extensive duties and remedies for breach than an action for breach of contract.423 The key issue is the extent to which an employee owes fiduciary duties. An employee running an errand is obliged to account for the change but this does not impose the sort of obligations that might be imposed on the managing director.424 Although the extent of duties owed by the fiduciary can vary, in relation to an employee who is a fiduciary, they will usually encompass duties of loyalty and confidence. Such duties prevent employees during the employment promoting their own interests at the expense of the employer425 and protect the employer against the misuse of confidential information.426 In general it does not require the employee, even if a fiduciary, to exploit every bright idea they may

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426

The restitutionary claim for profits was dismissed. Similarly rejected was a claim for “springboard” damages, that is, that the overseas work allowed Fishel to establish and maintain links established whilst at the university rather than having to start from scratch when he resigned. Overseas clinics were not in competition with the university clinic. See Schindler Lifts v Debelak (1989) 89 ALR 276; Two Lands Services v Cave [2000] NSWSC 14 at [90]; Victoria University of Technology v Wilson (2004) 60 IPR 392 (other proceedings [2006] VSC 186). Remedies include constructive trust for any benefits or profits held by the fiduciary, a duty to account for profits, equitable compensation and remedies against third parties involved in the breach, see Grimaldi v Chameleon Mining NL (No. 2) (2012) 200 FCR 296; [2012] FCAFC 6 at [183]-[187]; Investa Properties Pty Ltd v Nankervis (No 7) [2015] FCA 1004; Labelmakers Group Pty Ltd v LL Force Pty Ltd (No 2) [2013] FCA 1059 and under the Corporations Act 2001 (Cth), see [5. 580]. But there is no claim for exemplary damages, Harris v Digital Pulse Pty Ltd [2003] NSWCA 10; Giller v Procopets [2008] VSCA 236 at [157]. As to equitable damages for breach, see V-Flow Pty Ltd v Holyoake Industries (Vic) Pty Ltd [2013] FCAFC 16; (2013) 296 ALR 418; Labelmakers Group Pty Ltd v LL Force Pty Ltd (No 2) [2013] FCA 1059. Elias J in Nottingham University v Fishel [2000] ICR 1462. See Ramsay v BigTinCan Pty Ltd [2014] NSWCA 324; Zomojo Pty Ltd v Hurd (No 2) [2012] FCA 1458; EagleBurgmann Australi Pty Ltd v Leabeater [2012] NSWSC 573 (senior salesman). It does not extend to preventing the employee/fiduciary seeking promotion, another job, or negotiating a better deal for themselves, see Stoelwinder v Southern Health [2001] FCA 115 (employee could look to own interests in negotiating a new contract). See also Carter and Stewart, “The Effect of Formalising an Employment Contract: The High Court Misses an Opportunity” (2001) 17 JCL 181 This protects a “maturing business opportunity”: Canadian Aero Services Ltd v O’Malley (1973) 40 DLR (3d) 371; Weldon & Co v Harbison [2000] NSWSC 272 (not prevent unpaid work for family and friends, nor impose a duty to bring new clients to the business) and Rishmont Pty Ltd v Tweed City Medical Centre Pty Ltd [2001] QSC 372; Colour Control Centre Pty Ltd v Ty and ors [1995] NSWSC 96; Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341 at [249]-[258].

Employee’s Implied Duties

have.427 More so in Australia as the fiduciary duty is a negative duty not to engage in conduct which conflicts with the duty to the employer or to misuse their position to their own advantage.428 As we will see, there is a clear overlap between these fiduciary duties and the contractual duty of fidelity. Like the contractual duty, where the fiduciary’s duty of loyalty arises out of the employment relationship, it will end with the employment.429 There is an exception relating to business opportunities that existed during the employment.430 During the continuance of the relationship431 the employee/ fiduciary cannot set up a competing business,432 cannot solicit433 or canvass the employer’s clients for the employee/fiduciary’s existing or future business. But the employee, whether a fiduciary or not, can compete with the employer after the employment has ended, provided that there is no restrictive covenant, breach of confidence or the deliberate acquisition of information during the employment.

Equitable duty of confidence [5.570] There is also an overlap between the employee’s contractual duty of fidelity in not misusing or disclosing confidential information and the equitable duty of confidence.434 There are advantages in relying on the equitable duty as it may reach further to prevent reliance on confidential information by third parties. The equitable action also provides more extensive remedies435 than the contractual duty of confidence owed by an employee. The equitable duty of confidence can continue even if the employment has come to an end provided the information remains confidential and is

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433 434

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Blackmagic Design Pty Ltd v Overliese [2010] FCA 13 at [94] (“clever idea”, product concept not yet a maturing business opportunity). Blackmagic Design Pty Ltd v Overliese [2010] FCA 13 at [96]. Hodgson v Amcor Ltd [2012] VSC 94; (2012) 264 FLR 1 at [1370]- [1371]. But the duty extends to transactions current at the time of leaving employment: Weldon & Co v Harbison [2000] NSWSC 272 at [78]; Co-ordinated Industries v Elliott (1998) 43 NSWLR 282 at 288 (breach where employee gained knowledge and was paid for work undertaken to gain a particular contract for a particular client, the employee used this knowledge to gain the contract after leaving the employment); cf Independent Management Resources Pty Ltd v Brown [1987] VR 605 (no breach – market strategy subject of later tender process). Solicitors may be in a special position, Spincode Pty Ltd v Look Software Pty Ltd (2001) VSCA 248. Blackmagic Design Pty Ltd v Overliese [2010] FCA 13 at [94] (no duty to disclose a “clever or useful idea”). Edmonds v Donovan; Disctronics Ltd v Kingston Links Country Club Pty Ltd [2005] VSCA 27; EagleBurgmann Australia Pty Ltd v Leabeater [2012] NSWSC 573 at [82]; Edmonds v Donovan; Disctronics Ltd v Kingston Links Country Club Pty Ltd [2005] VSCA 27. This includes “garden leave”, see [4.400]. Schindler Lifts v Debelak (1989) 89 ALR 276 at 300-301; Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341. Seldom will there be an implication that the employee might retain “private clients”; cf Taylor v Peffer [1996] QSC 248. It can extend to using websites such as LinkedIn to solicit customers, Pedley v PMS Pty Ltd [2013] FWC 4282. Concut Pty Ltd v Worrell [2000] HCA 64; (2000) 75 ALJR 312 at [26]. Equitable and contract duties may coexist and provide alternative remedies, Optus Networks Pty Ltd v Telstra Corporation Ltd [2010] FCAFC 21 at [38]; University of Western Australia v Gray [2009] FCAFC 116 at [161]; Mid-City Skin Cancer and Laser Centre v Zahedi-Anarak [2006] NSWSC 844; (2006) 67 NSWLR 569; Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341. See, eg, Halliday & Nicholas v Corsiatto [2001] NSWCA 188 and the availability of springboard relief, APT Technology Pty Ltd v Aladesaye [2014] FCA 966. A successful plaintiff may be required to elect between equitable compensation or account of profits, Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341 at [248].

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not in the public domain.436 Even junior employees may be subject to a duty of confidence which continues after the employment finishes.437 This is discussed further [5.680]. Employees employed by companies are also subject to duties imposed by the Corporations Act 2001 which reflect obligations under the general law.

Corporations Act 2001 [5.580] Under the Corporations Act 2001 (Cth), statutory duties are imposed on employees, directors and officers of corporations in relation to misuse of their position or misuse of information. These duties are additional to an employee’s common law duties.438 Unders ss 182(1) and 183(1), an employee must not improperly use their position or information gained as an employee to “(a) gain an advantage for themselves or someone else; or (b) cause detriment to the corporation”.439 The duty not to improperly use information continues after the person ceases to be an employee of the corporation.440 In relation to “officers” of the corporation, they must also “act in good faith in the best interests of the corporation” and for a proper purpose, s 181(1). An officer is defined as a person “(i) who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or (ii) who has the capacity to affect significantly the corporation’s financial standing”. Senior managers frequently satisfy the definition of officer.441 It is not necessary that the employee personally obtains an advantage as the sections apply where a third party obtains an advantage.442 The court may order compensation for damage which can include profits from the breach.443 The effect is that breaches of a fiduciary duty, duty of confidence or duty of loyalty under the general law may in many cases (but not all) be breaches of the Corporations Act 2001 provisions where the employer is a corporation.444 The next section looks specifically at the nature of an employee’s duty of loyalty during the employment and the extent to which the existing implied duty of loyalty is required to protect the employer’s business interests. It will also examine how far an employer can protect its interests by express clauses in employment contracts. 436

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Attorney-General v Blake [1998] 2 WLR 805 at 814 and on appeal Attorney-General v Blake [2001] 1 AC 268 (HL); Bolkiah v KPMG [1999] 2 AC 222 and Clarke, “Confidential Information and Trade Secrets: When is a Trade Secret in the Public Domain?” (2009) 83 ALJ 242. For example, confidentiality of patient records: Breen v Williams (1996) 186 CLR 71. Corporations Act 2001 (Cth), s 185. Corporations Act 2001 (Cth), ss 182, 183 do not require dishonesty or intended breach, and under s 183 the information is not required to be confidential, Investa Properties Pty Ltd v Nankervis (No 7) [2015] FCA 1004 at [279], [286]. In relation to trade union officials subject to similar provisions under different legislation, see General Manager of the Fair Work Commission v Thomson (No 3) [2015] FCA 1001; Health Services Union v Jackson (No 4) [2015] FCA 865 (misuse of credit cards for personal purposes). Corporations Act 2001 (Cth), s 183 – the duty is imposed where a person if they are “or have been” an employee, etc. See also Leica Geosystems Pty Ltd v Koudstaal (No 3) [2014] FCA 1129; (2014) 245 IR 422. A “senior manager” is similarly defined in s 9, and see McEwen, “Fiduciary and Related Statutory Duties of Employees” (2015) 21(3) Employment Law Bulletin. The third party also contravenes the provisions as a “person … involved” in a contravention, note definition s 79; Prestige Lifting Services Pty Ltd v Williams [2015] FCA 1063. Corporations Act 2001 (Cth), s 1317H(1)(2). Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd [2009] FCAFC 2; (2009) 81 IPR 1; Hodgson v Amcor Ltd [2012] VSC 94; (2012) 264 FLR 1 at [1396]-[1401]; Prestige Lifting Services Pty Ltd v Williams [2015] FCA 1063. The statutory provisions do not necessarily catch all conduct that would be a breach of the equitable duties of a fiduciary, see Investa Properties Pty Ltd v Nankervis (No 7) [2015] FCA 1004 at [287] (requires misuse of information but did not apply to a failure to disclose); Andrews Advertising Pty Ltd v David Andrews [2014] NSWSC 318 at [182].

Employee’s Implied Duties

The contractual duty – some particular applications [5.590] The nature of the contractual duty will be illustrated by reference to some common issues: (a) soliciting customers, establishing or working for a competing business; (b) confidential information: unauthorised use or disclosure of information; (c) poaching of employees; (d) unauthorised comment on the employer’s business; (e) inventions; (f) use of the employee’s spare time; (g) bribes and secret commissions; (h) duty to account for employer’s property; (i) duty to answer questions.

Soliciting customers, establishing or working for a competing business Implied contractual duty [5.600] There is a critical distinction between the employee’s obligations during the employment and obligations that may attach after the employment has come to an end. Typically if employees during the employment solicit445 the employer’s customers for the purposes of establishing a competing business,446 or divert the employer’s customers or business opportunities to their own business,447 this will be a breach of the employee’s duty of fidelity.448 Similarly, if during the employment an employee copies, downloads or emails to themselves or future employers lists of customers for future use in a competing business that will be a breach.449 In Robb v Green,450 the defendant, who was employed as a manager, secretly copied a list of the names and addresses of his employer’s customers and then set up a similar business for himself after he had left his employer. He used the list for this purpose and it was held that he was in breach of his obligation to observe good faith. It is clearly established that employees cannot make use of an employer’s time in a conscious and secret manner to advantage themselves in setting up in business in opposition to the 445

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Harris v Digital Pulse Pty Ltd [2003] NSWCA 10; Griffiths & Berens Pty Ltd v Duggan [2008] VSC 201; Crowson Fabrics Ltd v Rider [2007] EWHC 2942 (during employment, contrary to directions, emailing clients advising of the new business); AMP Services Ltd v Mann [2006] FCA 256 at [60]; Deeson Heavy Haulage Pty Ltd v Cox [2009] QSC 277. Cf Weldon & Co v Harbison [2000] NSWSC 272 (employee advising that she was leaving the employment, no breach). As to what amounts to competition see, for example, Total RISC Technology Pty Ltd v Cannings [2010] NSWSC 1124 (no “direct competition” viewed from the perspective of the customer because of difference in delivery and resources required even if the end product is similar); Nexus Energy Ltd v Cottee [2012] VSC 215 (businesses operate in different markets); Fairfax Media Management Pty Ltd v Harrison [2014] NSWSC 470 (different businesses, Yahoo and Fairfax Media). Deeson Heavy Haulage Pty Ltd v Cox [2009] QSC 277; Spotless Group Ltd v Blanco Catering Pty Ld [2011] FCA 979; APT Technology Pty Ltd v Aladesaye [2014] FCA 96; Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341. In relation to senior or executive employees a fiduciary duty may also be owed; the more extensive remedies available for breach of fiduciary duties gives greater advantage, see [5.560]. As examples, see Jaksch & Associates Pty Ltd v Hawks [2005] VSCA 307 (letter requesting clients to deal with employee directly); Brinks v Kane [2007] NSWSC 62; Friend v Rainer Offermann & ors [2007] WAIRComm 239. This includes a database of clients (owned by employer) used by an employee during the employment, see APT Technology Pty Ltd v Aladesaye [2014] FCA 966. Robb v Green [1895] 2 QB 315.

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employer.451 Moreover the employee is under restrictions as to what the employee can do even if the approach comes from the customer or client and the employee merely accepts or acquiesces in the client’s suggestion.452 The implied term does not prohibit the employee during the employment in his or her spare time making some preliminary preparations for setting up a competing business when the employment ends. This will be a matter of degree. There will be a clear breach where the employee during normal working hours, using the employer’s resources, establishes a new competing business453 or starts working for a competitor.454 The decisions in this area are particularly “fact sensitive”. But generally there is no breach for preparatory steps not involving breaches of the duty of confidence, solicitation of customers or diversion of business opportunities. Making inquiries, developing a business plan455 and incorporating a company456 in the employee’s own time are unlikely to be sufficient. But the next steps, financing, renting and equipping premises, and recruiting employees may move beyond preparatory steps and may constitute a breach.457 In summary, when drawing the line between legitimate preparation for future competition and undertaking illegitimate competitive activity before an employee has left [the] employment, the law regards it as unlawful to undertake the following: (1) working for a competitor while still employed; (2) personally competing while still employed; (3) concealing or diverting matured or maturing business opportunities; (4) misusing the employer’s property, including confidential information and assets; and (5) taking the steps necessary to establish a competing business so that it is “up and running” or “ready to go” as soon as the employee leaves [the] employment.458

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Wessex Dairies v Smith [1935] 2 KB 80; Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341 But obtaining information about future commercial opportunities acquired outside the employment where there was no contractual duty to search out, disclose or report future opportunities is not a breach, Manildra Laboratories v Campbell [2009] NSWSC 987 at [93]-[97], [100]. Barrett v Ecco Personnel Pty Ltd [1998] NSWCA 30; IceTV v Duncan Ross [2007] NSWSC 635 at [44]-[55] (later proceedings IceTV v Duncan Ross [2009] NSWSC 980); Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd [2007] FCA 1621; Foster Bryant Surveying Ltd v Bryant [2007] EWCA Civ 200. WA Fork Truck Distributors Pty Ltd v Jones [2003] WASC 102 at [40] (whole infrastructure set up including incorporation, premises, equipment, finance, bank accounts, phones, computers, business cards, motor vehicles, ABN and TFN numbers, accountant projections), cf Deeson Heavy Haulage Pty Ltd v Cox & Ors [2009] QSC 277 (no business plan, no finance arranged). Spotless Group Ltd v Blanco Catering Pty Ltd [2011] FCA 979. The duty of fidelity also extends to periods of notice and garden leave. But note restraints during the employment including periods of notice and garden leave must be reasonable, Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414 at [54]-[69] (restraint not necessarily enforceable for the remaining period of the fixed term contract) and see [4.440]. Manildra Laboratories v Campbell [2009] NSWSC 987 at [113]; GlaxoSmithKline Australia Pty Ltd v Ritchie [2008] VSC 164 at [74]-[77]. Using a work laptop to prepare estimates of expenses, or using the employer’s email to advise that he was leaving to set up his own business, by itself not sufficient, Volunteer Eco Students Abroad Pty Ltd v Reach Out Volunteers Pty Ltd [2013] FCA 731 at [186]. But the offer by a CEO to buy a 51% stake in a competitor may be sufficient, Metcash Ltd v Jardim (No 3) [2010] NSWSC 1069 at [61], and a covenant which prevented the employee acquiring more than 5% interest in a competitor, may be reasonable, Jardin and Jardim Investments Pty Ltd v Metcash Ltd [2011] NSWCA 409 at [104] per Meagher JA, Campbell and Young JJA agreeing. Lancashire Fires Ltd v SA Lyons & Co [1997] IRLR 113; Landmark Underwriting Agency Pty Ltd v Kilborn [2006] NSWSC 1108 at [32] (later proceedings Primacy Underwriting Agency Pty Ltd (formerly Landmark Underwriting Agency Pty Ltd) v Kilborn [2007] NSWSC 158; Griffiths & Berens Pty Ltd v Duggan [2008] VSC 201 at [108]. Berryland Books Ltd v Bk Books & Ors [2009] EWHC 1877 at [23]. See also Shepherds Investments Ltd v Walters [2006] EWHC 836; QBE Management Services (UK) Ltd v Dymoke [2012] EWHC 80

Employee’s Implied Duties

When the employment has come to an end, employees can effectively compete with their former employer in the absence of a restrictive covenant.459 They can approach customers and clients of their former employer.460 They cannot, however, utilise lists of clients or customers of the former employer obtained whilst they were still employed or disclose or use confidential information obtained during the employment.461 It is common for employers to require senior employees to enter into restrictive covenants to protect the employer’s business interests rather than rely on the implied contractual duty of loyalty. Advantages of express covenants protecting employer’s interests

[5.610] In executive and managerial level employment contracts, and increasingly also in relation to other employees in some industries, it is usual to include clauses protecting the employer’s business interests both during the employment and after the employment comes to an end. These restraints are known generically as non-compete clauses. These restraints are restrictive, that is, they require the employee to refrain from certain conduct rather than imposing positive duties to act. This is especially important when the issue of enforcement is concerned, see [11.20]. Chapter 4 noted the negative effects of restrictive covenants on employees and their impact on a creative and productive economy, see [4.450]. An employer has interests in confidential information, customers and staff that are capable of protection by restrictive covenants in contracts of employment. It is usual to find three types of covenants in employment contracts whose purpose is to protect those interests – covenants not to compete by approaching (or dealing with) the firm’s existing clients or business connections, covenants for the protection of confidential information and covenants against poaching or recruiting employees. These interests are primarily protected by the use of a no-compete covenant.462 Although a pure non-compete covenant is prima facie unenforceable, it was held, in the often-cited case of Littlewoods Organisation Pty Ltd v Harris,463 that a general restriction of the ex-employee’s liberty to take up employment in a rival enterprise for a period of time may be the only feasible way of protecting legitimate interests such as confidential information. This is because it may be particularly difficult to define what will constitute confidential information for purposes of the restraint, see [5.660]. Express covenants preventing soliciting of clients, customers or staff or being involved in a competing business are advantageous. This is because the obligations of the employee are made clear in a way which is more forceful than if the matter is left to implication and, more importantly, an express covenant can protect information which would not be protected by the contractual duty or in equity464 as well as protecting an

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(QB) at [257] (detailed plans over 12 months which “mirror” the employer’s business and “rip the heart out” of the employer using “employer’s key people and materials … intended [as] pretty much on a ‘ready to go’ ‘turn-key basis’ with financial backing and offices organised were breaches the duty of fidelity”.) See, for example, Deeson Heavy Haulage Pty Ltd v Cox [2009] QSC 277. Provided there is no breach of confidence (for example, if a list of employees was compiled during the employment), see Halliday & Nicholas Insurance Brokers Pty Ltd v Corsiatto [2001] NSWCA 188; NP Generations Pty Ltd (t/as LJ Hooker Blackwood) v Feneley (2001) 80 SASR 151; Prime Creative Media Pty Ltd v Vranjkovic [2009] FCA 1030. Hartleys Ltd v Martin [2002] VSC 301 at [78]-[80]; Halcyon House Ltd v Baines [2014] EWHC 2216 (QB) at [185]-[187]. It is no objection that a covenant protects more than one interest, Jardin and Jardim Investments Pty Ltd v Metcash Ltd [2011] NSWCA 409 at [91] per Meagher JA, Campbell and Young JJA agreeing. Littlewoods Organisation Pty Ltd v Harris [1977] 1 All ER 1472. Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317 at 333 per Kirby P; at 341 per Samuels JA (express covenant – list of reliable overseas suppliers compiled through trial and error over a number of years protected by express covenant even if not protected in equity).

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employer’s interests in retaining staff. There is the further advantage that express clauses can continue to bind the parties after the employment has ended.465

[5.620] Express covenants are not enforceable by the employer where the employer wrongfully repudiates the contract of employment and this is accepted by the employee.466 So an employee wrongfully or constructively dismissed may no longer be bound by the restraints unless the information protected is in the nature of a “trade secret”467 and protected in equity. It is therefore unsurprising that employees intending to work for a competitor in breach of the restraint sometimes attempt to engineer a constructive dismissal.468 There are several suggested rationales for this principle. Where the employee accepts the employer’s repudiation: the parties are presumed to intend that the restraints no longer apply; it is against public policy to allow enforcement by the repudiating employer or that performance of the contract is a precondition to the operation of the restraints.469 Whatever the basis, it is clear that if the employee accepts the employer’s repudiation, the employee is then free to disregard the express covenants470 unless the information is in the nature of a “trade secret”471 and protected in equity. In Campbell v Frisbee472 the model Naomi Campbell brought an action against her personal assistant, Vanessa Frisbee. Frisbee had sold a story about the model’s personal relationships to a newspaper for £25,000. This was in breach of an express confidentiality agreement. Campbell had previously assaulted Frisbee. The assault was a repudiation of the contract of employment allowing Frisbee to disregard the express covenant.473 Such a rule encourages opportunistic behaviour by employees to elicit a wrongful repudiation which will release them from contractual restrictive covenants.474 There is also an argument that repudiation might not discharge all obligations under the contract but only particular obligations.475 465

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See Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37; BDO Group Investments (NSW-Vic) Pty Ltd v Ngo [2010] VSC 206. Anti compete clauses operating after the employment has ended will be subject to more careful scrutiny than during the employment. Note restraints operating during garden leave are regarded similarly to restraints following termination, Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414; Bearingport Australia Pty Ltd v Hillard [2008] VSC 115 and see [4.400]. Rock Refrigeration Ltd v Jones [1996] IRLR 675; Campbell v Frisbee [2002] EWCA Civ 134 and see Wynn Evans, “estrictive Covenants, Reasonableness and Wrongful Dismissal” (1997) 113 LQR 377; Clarke, “Repudiation of Contract and Breach of Confidence: General Billposting v Atkinson Revisited; Campbell v Frisbee [2002] EWCA Civ 134” (2003) 32 Ind LJ 43; Honeyball and Pearce, “Contract, Employment and the Contract of Employment” (2006) 35(1) Ind LJ 30 at 45, 53. See further the discussion at [8.20] on “Repudiation of contract”. As to the various meanings of this term, see Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172 at [108]-[137] per Campbell JA. See, for example, Tullett Prebon PLC v BGC Brokers [2010] EWHC 484. Bond v Rees Corporate Advisory Pty Ltd [2013] VSCA 13 at [47] citing Carter, Peden and Tolhust Contract Law in Australia (5th ed, Lexis Nexis Butterworths, 2007), p 747. Cantor Fitzgerald International v Bird [2002] IRLR 867 (breach of duty of mutual trust and confidence). See Clarke, “Repudiation of Contract and Breach of Confidence: General Billposting v Atkinson Revisited; Campbell v Frisbee [2002] EWCA Civ 134” (2003) 32 Ind LJ 43; Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414 at [54]; Honeyball and Pearce, “Contract, Employment and the Contract of Employment” (2006) 35(1) Ind LJ 30 at 45-53. As to the various meanings of this term, see Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172 at [108]-[137] per Campbell JA. Campbell v Frisbee [2002] EWCA Civ 1374 (CA). General Billposting Company v Atkinson [1909] AC 118; Rock Refrigeration Ltd v Jones [1997] 1 All ER 1; Campbell v Frisbee [2002] EWCA Civ 1374 (CA). Freedland, (comment) (2003) 32 Ind LJ 43 at 49-51 and see BearingPoint Australia Pty Ltd v Hillard [2008] VSC 115 at [142]. Freedland, (comment) (2003) 32 Ind LJ 43 at 49-51. The Court of Appeal also suggested that express

Employee’s Implied Duties

Non compete covenants

[5.630] Although an employer is not entitled to protect itself against competition from a former employee who has left the employment, the employer is entitled to protect its interests in customer connection by an appropriately limited restraint.476 The restraint may be contained in a variety of instruments such as a contract of employment or a deed of separation or release.477 Where an employee works directly with clients and customers,478 particularly where the employee is the “human face” of the business, there is a risk that the employee will try to solicit customers for a new employer or a new business. The employer is entitled to be safeguarded against use of special knowledge or influence over customers gained as a result of customer contact during the employment.479 It is usual and prudent for the employer to require a non-compete covenant480 preventing the former employee from being involved481 in a competing business482 for a defined period. This covenant protects the employer’s interests in customer connection effectively preventing the soliciting customers483 for a new business or new employer.484 This is subject to the requirement that the restraint is reasonably necessary to protect the employer’s interests, see [4.420]. Illustrative of the reach of a non-compete covenant is the decision in Jardin and Jardim Investments Pty Ltd v Metcash Ltd.485 There, a non-compete covenant provided (in addition to confidentiality restraints): Without limiting the Employee’s duties to the Company, the Employee must not: (a) act in conflict with the Company’s best interests; (b) accept or commence any other employment or engagement without the prior written consent of the Company; (c) compete with the business of the Company or any Related Body Corporate; or (d) hold or be interested in any investments which amount to more than 5 percent of the issued investments of any

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contractual obligations of confidence might be given more weight than implied obligations in deciding whether disclosure was in the public interest, Campbell v Frisbee [2002] EWCA Civ 1374 (CA) at [22] and see Honeyball and Pearce, “Contract, Employment and the Contract of Employment” (2006) 35(1) Ind LJ 30 at 45-53. See Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 referring to the variations on the nature and purpose of the customer connection. This may be contained in a deed of separation/deed of release, Transpacific Industries Pty Ltd v Whelan [2008] VSC 403; Miles v Genesys Wealth Advisers Ltd [2009] NSWCA 25; Jardin and Jardim Investments Pty Ltd v Metcash Ltd [2011] NSWCA 409 or other documents Kynixa Ltd v Hynes [2008] EWHC 1495 (shareholder agreement); BDO Group Investments (NSW-Vic) Pty Ltd v Ngo [2010] VSC 206 (sales agreement, unit holders agreement and employment contracts). Note also Reed Business Information v Seymour [2010] NSWSC 790 at [42] (not deciding whether restraint of trade doctrine applied to genuine resolution of dispute regarding restraint). The “human face” of the company. Described as “farming” (maintaining existing customers) and “foraging” (seeking new customers): Ranson v Customer Systems Plc [2012] EWCA Civ 841. Koops Martin v Reeves [2006] NSWSC 449 at [30]. Or a wider no dealing covenant which does not require solicitation, Lobel, “The New Cognitive Property: Human Capital Law and the Reach of Intellectual Property” (2015) 93 Tex LR 789 at 829. Covenants usually spell out the various capacities that may breach the covenant, such as financier, shareholder, unit holder, consultant, adviser, contractor, principal, agent, manager, employee etc, see for example Nexus Energy Ltd v Cottee [2012] VSC 215. There may be no competition where, for example, the businesses operate in different markets, see Nexus Energy Ltd v Cottee [2012] VSC 215 See also Fairfax Media Management Pty Ltd v Harrison [2014] NSWSC 470 (different businesses of Yahoo and Fairfax Media). As to what constitutes solicitation, where the client makes contact first, see [5.600]. Note the criticism by Riley, “Commodifying Sheer Talent: Perverse Developments in the Law’s Enforcement of Restrictive Covenants”, ch 13 in Arup and van Caenegem, Intellectual Property Policy Reform: Fostering Innovation and Development (Edward Elgar, UK, 2009). Where an employee with the employer’s consent may engage in business or other activity whilst in employment, usually that consent must not be unreasonably withheld, see Emeco International Pty Ltd v O’Shea (No 2) [2012] WASC 348 at [72]-[83] per Edelman J. Jardin and Jardim Investments Pty Ltd v Metcash Ltd [2011] NSWCA 40 at [44].

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class of any one company except where agreed to by the Company or to the extent that any excess over 5 percent is attributable to his position as a representative of the Company.

These restraints were held to be valid to protect the employer’s interests in customer connection and confidential information. [5.640] Without a covenant, employees can be stopped from competing during employment or making preparations to compete later, but they cannot be stopped from canvassing customers after the employment has ceased. A non-compete covenant or a narrower covenant against solicitation of customers can prevent an employee from having any dealings with customers provided it is no more than is reasonably necessary to protect the employer’s customer connection and prevent the employee using personal influence over the customers acquired while in that employment.486 As a general rule covenants will not be enforceable if they seek to prevent a former employee dealing with customers with whom there has been no personal contact on the ground that there has been no capacity for personal influence.487 The key elements are that the employee must be in a position to gain trust and confidence so as to be relied on in a client’s affairs (and)… that the relationship between employee and client is such that there is a possibility that if the employee leaves the business of the employer (they) may carry away the client’s business with them.488

There may be exceptional cases where a covenant can be enforced against a senior manager who has had no direct contact with customers but has specialist knowledge or influence relating to existing or future customers.489 A covenant is unlikely to be enforceable unless it is restricted to the same type of business as that engaged in by the employer.490 Non-compete clauses can also protect the employer’s interests in confidential information.491 There are special advantages in this respect as non-compete clauses can provide broader protection492 than under the implied duty of confidentiality ([5.670]), the equitable duty of confidence ([5.680]) or even an express confidentiality clause ([5.690]): 486 487

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Heydon, The Restraint of Trade Doctrine (3rd ed, LexisNexis, 2008), p 121. See also Arup, “What/Whose Knowledge? Restraints of Trade and Concepts of Knowledge” (2012) 36 MULR 369. John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995 at [31]; Koops Martin v Dean Reeves [2006] NSWSC 449 at [72]-[79]. See also IF Asia Pacific Pty Ltd v Galbally (2003) 59 IPR 43; Transpacific Industries Pty Ltd v Whelan [2008] VSC 403. Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 at [26]. Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717 at [33]; Jardin and Jardim Investments Pty Ltd v Metcash Ltd [2011] NSWCA 409. Contrast Emeco International Pty Ltd v O’Shea (No. 2) [2012] WASC 348 at [183]-[213], Edelman J; Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 at [71],[72] (restraint not enforceable in relation to other clients with whom there was no close influential contact). IF Asia Pacific Pty Ltd v Galbally (2003) 59 IPR 43 at [172]; Koops Martin v Dean Reeves [2006] NSWSC 449 at [72]-[79]; Transpacific Industries Pty Ltd v Whelan [2008] VSC 403 at [66]-[74] (attempts to extend protection of the covenant to related companies generally not effective and will cause the restraint to fail unless severable); Manildra Laboratories v Campbell [2009] NSWSC 987 at [69]-[70]; Nexus Energy Ltd v Cottee [2012] VSC 215; Fairfax Media Management Pty Ltd v Harrison [2014] NSWSC 470. Contrast Fairfax v Birt [2006] NSWSC 995 at [12], [13] (extension to Fairfax group). Query whether a trust or agency argument is available where a third party (for example, a wholly owned subsidiary) seeks to sue on the covenants, see AMP Services Ltd v Mann [2006] FCA 256 at [6], [52] and see Investa Properties Pty Ltd v Nankervis (no 7) [2015] FCA 1004 at [72] (in relation to fiduciaries). These clauses can protect both interests in confidentiality and customer connection, Jardin and Jardim Investments Pty Ltd v Metcash Ltd [2011] NSWCA 409 at [91] per Meagher JA, Campbell and Young JJA agreeing. Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317 at 333 per Kirby P; at 341 per Samuels JA (express covenant – list of reliable overseas suppliers compiled through trial and error over a number of years protected by express covenant even if not protected in equity).

Employee’s Implied Duties

experience has shown that it is not satisfactory to have simply a covenant against disclosing confidential information. The reason is because it is so difficult to draw the line between information which is confidential and information which is not: and it is very difficult to prove a breach when the information is of such a character that a servant can carry it away in his head. The difficulties are such that the only practicable solution is to take a covenant from the servant by which he is not to go to work for a rival in trade. Such a covenant may well be held to be reasonable if limited to a short period.493

The non-compete covenant “removes the temptation for the former employee to offer and for the new employer to solicit confidential information”.494 The employee may also be restrained from substantial investment, or involvement in a competing company.495 However, care must be taken to see that the restraints are carefully drawn because if it is unreasonably wide it will be struck down as being in restraint of trade (see [4.420]).

Confidential Information: Wrongful use or disclosure of confidential information [5.650] Confidential information can be protected in a variety of ways. It may be protected as an implied contractual duty of good faith, in equity in an action for breach of confidence, by express agreement,496 or by statute.497 Confidentiality agreements are quite common for executives and managers and in relation to employees of such persons as models, movie stars and even royalty. They are increasingly being employed even for junior employees, for example, in real estate. We first consider what confidential information is and then the protection accorded by the implied term of loyalty. What is “confidential” information? [5.660] The implied duty of loyalty protects the employer’s confidential information. Information of the requisite kind can be confidential from the very nature of the activity on which the employee is engaged,498 or the existence of a policy of secrecy on the part of the employer499 or designated as such under an express covenant. Confidential information in a commercial context is frequently referred to as “trade secrets” although nothing turns on this description.500 Where information is not in the public domain, it could include such matters as customers’ names, scientific formulae, 493 494 495

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Littlewoods Organisation v Harris [1977] 1 WLR 1472 at 1479 per Lord Denning. Woolworths Ltd v Olson [2004] NSWCA 372 at [67]. Jardin and Jardim Investments Pty Ltd v Metcash Ltd [2011] NSWCA 409, [104] (5% limit not unreasonable). Covenants usually spell out the various capacities that may breach the covenant, see Nexus Energy Ltd v Cottee [2012] VSC 215. The plaintiff may elect between contractual or equitable remedies, Optus Networks Pty Ltd v Telstra [2010] FCFCA 21 at [38]. Where use amounts to breach of copyright, the Copyright Act 1968 (Cth) may apply, see, for example, Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341 at [265]. Corporations Act 2001 (Cth), s 183 imposes duties of confidence on company directors, officers and employees. These are assumed not to be wider than equitable duties of confidence. Duties of confidentiality are also imposed on public servants under statute. The Australian Law Reform Commission found federal legislation contained 506 secrecy obligations under 176 pieces of legislation: Australian Law Reform Commission Secrecy Laws and Open Government in Australia, Report 112 at [3.20]. The key ones are to be found in, eg, Crimes Act 1914 (Cth), s 70; Privacy Act 1988 (Cth); Public Service Act 1999 (Cth). Saltman Engineering Co Ltd v Campbell Engineering Co [1948] RPC 203 at 211, cf Independent Management Resources Pty Ltd v Brown [1987] VR 605 (marketing strategy not confidential information). Note the problems of applying this within a university context, University of Western Australia v Gray (2009) 179 FCR 346. Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37; Transpacific Industries Pty Ltd v Whelan [2008] VSC 403 (projected profit of landfill business confidential). Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co, 2015) at [6.30].

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software programs, profit projections, drawings for production purposes etc.501 Factors that may be relevant to a finding of confidentiality include the following:502 1. The extent to which the information is known outside the business. 2. The extent to which the trade secret was known by employees and others involved in the plaintiff’s business. 3. The extent of measures taken to guard the secrecy of the information. 4. The value of the information to the plaintiffs and their competitors. 5. The amount of effort or money expended by the plaintiffs in developing the information. 6. The ease or difficulty with which the information could be properly acquired or duplicated by others. 7. Whether it was plainly made known to the employee that the material was by the employer as confidential. 8. The fact that the usages and practices of the industry support the assertions of confidentiality. 9. The fact that the employee has been permitted to share the information only by reason of his or her seniority or high responsibility. 10. That the owner believes these things to be true and that belief is reasonable. 11. The greater the extent to which the “confidential” material is habitually handled by an employee, the greater the obligation of the confidentiality imposed. 12. That the information can be readily identified. Know-how [5.665] The protection available to the employer under the implied term does not extend to the employee’s “know-how” which the employee can continue to use after the employment has come to an end. The sort of information that is used every day as part of the employment may amount to know-how even if the employer regards it as confidential: It is in the public interest that, in general, employees be free to work where, and with whom, they will. They may have, as part of their stock of knowledge (sometimes called their “know-how”) information which is not a trade secret, but which their employer may for proper commercial reasons wish to remain confidential. If so, the employees must respect that confidentiality [during the employment] … But it is in the public interest that they and employers and potential employers be free to bargain over the best means of exploiting the employees’ knowledge, experience and talent. The latter may not, in that bargaining process and while they remain with their current employer, disclose any information that is properly confidential to that employer. Subject to that proviso, however, the law will not – in the absence of a suitably confined and otherwise binding restrictive covenant – seek to prevent those who wish to practice their profession or trade from doing so simply because their work for someone other than their former employer may put that former employer at a financial or competitive disadvantage. And this is true even if the exploitation by the former employees for the benefit of their new employer of the employees’ stock of knowledge results in information once confidential to the former 501 502

See for example the wide range of information regarded as confidential in Labelmakers Group Pty Ltd v LL Force Pty Ltd (No 2) [2012] FCA 512. This is an expanded list of factors referred to by Hodgson J in Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172 at [40] drawn from a list in Wright v Gasweld, Pty Ltd (1991) 22 NSWLR 317 at 334 per Kirby P, and expanded by R Dean, The Law of Trade Secrets and Personal Secrets (2nd ed, 2002), p 190.

Employee’s Implied Duties

employer being used to the advantage of the new. Were it otherwise, the benefits of employee mobility for the better exploitation of employee skill and experience would be lost. An employee’s stock of knowledge cannot by deliberate choice be forgotten; and, if retained in the memory, cannot be discarded when the employee carries out tasks, which necessarily draw on that knowledge, for the new employer.503

It is, however, frequently difficult, and in some cases unrealistic, to distinguish what is confidential information from the employee’s stock of knowledge and experience: where the confidential information is something that is ascertainable by enquiry or experiment, albeit perhaps substantial enquiry or experiment, and the know-how which the ex employee is clearly entitled to use extends to knowledge of the question which the confidential information answers, it becomes artificial to treat the confidential information as severable and distinguishable from that know-how; and in that kind of case, courts have tended not to grant relief.504

The following have been held to come within that principle: that a particular chemical worked best at a certain level of dilution,505 or the source of supply of particular types of paper,506 or the name of a particular type of stone507 or the name of a customer or supplier where there has been no deliberate attempt to memorise or copy names.508 Implied contractual duty

[5.670] The employee’s contractual duty of loyalty during the employment extends to confidential information.509 An employee can be in breach of the implied duty of loyalty if during the employment, the employee, for purposes other than the employment, without authority, misuses or discloses confidential information. This can include copying (or memorising)510 plans, designs, software, lists of customers, or formulas for use in other employment or for other persons outside the employment or for other unauthorised purposes.511 It is a breach of duty for the employee to provide a list of the employer’s customers to a future employer. Similarly, it would also be a breach of the implied duty if the employee provides details of confidential business

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507 508 509

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GlaxoSmithKline Australia Pty Ltd v Ritchie [2008] VSC 164 at [46]. It would be curious if the effect were that former employees could be liable for not repeating mistakes and wrong turns experienced in a former employment, Lobel, “Intellectual Property and Restrictive Covenants” (University of San Diego Research Paper Series, Research Paper 08/059, Aug 2008), available at Social Science Research Network Electronic Paper Collection: http://www.ssrn.com/abstract=1226463 at 10. Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172 at [43]; Manildra Laboratories v Campbell [2009] NSWSC 987 at [119]. GlaxoSmithKline Australia Pty Ltd v Ritchie [2008] VSC 164 at [236], [250]. Balston Ltd v Headline Filters Ltd [1987] FSR 330 (chemical in dilution) cited in Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172 at [45]; E Wolsley & Co Ltd v Cooper [1939] 1 All ER 290 (supplier for paper). Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172 at [43] per Hodgson JA, at [146] per Campbell JA. Forkserve Pty Ltd v Pachiaratta (2000) 40 IPR 74; Tullett v Prebon (2008) 175 IR 414 at [157] (not confidential, known information about brokers’ skills, desks and brokers’ earnings). The contractual duty arises independently of an equitable duty of confidence and is unnecessary if the equitable duty is relied upon, Corrs Pavey Whiting and Byrne v Collector of Customs (1987) 14 FCR 434 at 445-446, 454; AG Australia Holdings Ltd v Burton [2002] NSWSC 170 at [196]. Printers & Finishers Ltd v Holloway [1964] 3 All ER 731 at 735 per Cross J. See, in relation to express covenants to similar effect, Leica Geosystems Pty Ltd v Koudstaal (No 3) [2014] FCA 1129; (2014) 245 IR 422. The wholesale transfer of confidential material to a personal email account for purposes unrelated to the employment is a breach of the implied term: Brandeau Advisers (UK) Ltd v Chadwick [2010] EWHC 3241; Kynixa Ltd v Hynes [2008] EWHC 1495 at [359] (breach where confidential information retained after termination).

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opportunities and negotiations in progress to a future employer or downloads this information for the employee’s future use in another business.512 When the employment has ended, even if in theory the implied term can continue to apply, there is no advantage in relying on the implied term where more extensive equitable remedies are available for breach of confidence.513 There is a judicial preference to rely on equitable principles to protect the interests of the employer rather than the contractual implied term.514 Broader protection is available where there is an express covenant, see [5.690]. Equitable duty of confidence

[5.680] The implied term of loyalty is not the only method by which the employer’s confidential information may be protected. The equitable duty of confidence can also provide remedies for the wrongful use515 and disclosure of confidential information.516 A plaintiff in a claim for breach of confidence must satisfy the following requirements: (1) [the confidential information] must be identified with sufficient specificity;517 (2) it must have the necessary quality of confidence518 and not be common or public knowledge;519 (3) it must have been imparted in circumstances giving rise to a duty of confidence; and 512 513

514

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Brinks v Kane [2007] NSWSC 62 (information allowed new employer to under quote on a contract); Spotless Group Ltd v Blanco Catering Pty Ltd [2011] FCA 979. Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172, see Campbell JA at [92], [144]. An implied term would need to satisfy the test of necessity to survive termination of the contract: at [100], [144], [147]-[148]. There is doubt about how far the implied term can survive termination of the employment, see Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172 at [34]-[35] per Hodgson JA; at [79] per Campbell JA, McColl JA agreeing with both judgments. Where the contract has been repudiated by the employer, see [5.620]. The action protects both against disclosure and unauthorised use: Seager v Copydex Ltd [1967] 2 All ER 415 at 417 per Lord Denning MR. The United Kingdom cases indicate the difficulties where information is confidential, the use of pre-disclosure orders, “confidentiality clubs” and interviews with employees and ex employees with post employment confidentiality agreements, see Porton Capital Technology Funds v 3M UK Holdings Ltd [2010] EWHC 114 (Comm); Aon Ltd v JLT Reinsurance Brokers Ltd [2009] EWHC 3448 (QB). Liberty Financial Pty Ltd v Scott (No 3) [2004] VSC 490; (2004) 11 VR 621 [16] (Harper J); Re Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) [1987] FCA 266; (1987) 14 FCR 434 at [14],443; Dart Industries Inc v David Bryar & Associates Pty Ltd [1997] FCA 481; (1997) 38 IPR 389 at 406. But there is no requirement that the covenant specifically identify all confidential information, Emeco International Pty Ltd v O’Shea (No 2) [2012] WASC 348, at [98] per Edelman J. Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172 (sufficient if the information is not freely available to competitors), cf Dais Studio Pty Ltd v Bullet Creative Pty Ltd [2007] FCA 2054 at [84]-[88] (no steps taken to encrypt computer source codes); Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd [2009] FCAFC 2; (2009) 81 IPR 1 at [43] (name of supplier not confidential). Attorney-General v Blake [1998] 2 WLR 805 and on appeal [2001] AC 268; Independent Management Resources Pty Ltd v Brown [1987] VR 605 at 610 (letter shown openly to employees); HRH Prince of Wales v Associated Newspapers Ltd [2007] 3 WLR 222 (disclosure by former employee of private diary with limited circulation to close friends not in the public domain); disclosure to project team members will usually be implicitly authorised, University of Western Australia v Gray [2009] FCAFC 116 at [165]. As to when the information will be in the public domain, see Douglas v Hello! Ltd (No 3) [2008] AC 1 (HL); EPP v Levy [2001] NSWSC 482 at [20] per Barrett J (on the internet, in the public domain) but not necessarily, Australian Football League v The Age Company Ltd (2006) 15 VR 419 at [56]; Volunteer Eco Students Abroad Pty Ltd v Reach Out Volunteers Pty Ltd [2013] FCA 731 at [241]-[244] (publicly available tag line used elsewhere); Clarke, “Confidential Information and Trade Secrets: When is a Trade Secret in the Public Domain?” (2009) 83 ALJ 242.

Employee’s Implied Duties

(4) there is misuse, or threatened misuse without the consent of the person entitled to be protected.520 Courts have been prepared to issue injunctions to restrain future misuses of confidential information particularly where large volumes of identifiably confidential information have been downloaded electronically for purposes unconnected with the employment.521 Although confidential information not involving copyright does not qualify as a property right, the rights to commercially valuable confidential information can be transferred to others who can enforce the confidence.522 For example, a sale by a liquidator to another company can transfer the benefit of confidential information to the purchaser523 or the sale of exclusive rights to wedding photos of celebrities can be enforced by a subsequent purchaser of those rights.524 The action will protect against: the disclosure of personal information gained in confidence;525 the disclosure of confidential damaging information concerning business interests;526 developed creative ideas527 and what has been broadly defined as “trade secrets”.528 It is still open to debate whether in Australia the equitable duty of confidence can have a broader operation to protect against disclosure of private information and activities529 where there is no existing relationship of confidence.530 Although the equitable duty of confidence and the implied contractual term have very different origins, in the employment cases, courts frequently do not distinguish between the employee’s implied contractual obligations and the equitable duty of confidence.

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Smith Kline & French Laboratories (Aust) Ltd v Secretary, Dept of Community Services and Health (1990) 22 FCR 73 at 87 per Gummow J. Whether there is an additional requirement of detriment is doubtful in Australia: Hitchcock v TCN 9 [2000] NSWCA 82 at [29]; Smith Kline at 111-112. For example, Transpacific Industries Pty Ltd v Whelan [2008] VSC 403. Douglas v Hello! Ltd (No 3) [2008] AC 1 (HL) (wedding photos of Douglas-Zeta Jones wedding). TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd [2007] FCA 151 at [75]-[77]. Douglas v Hello! Ltd (No 3) [2008] AC 1. X v Y [1988] 2 All ER 648 (disclosure by employee that hospital doctors were HIV+); Hitchcock v TCN Channel 9 Pty Ltd [2000] NSWCA 82 (disclosure by nanny). See also Australian Broadcasting Commission v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at [34]-[39] per Gleeson CJ and in relation to breach of duty of confidence by disclosure of videos/photos of intimate relationships, see Giller v Procopets (2008) 24 VR 1; Wilson v Ferguson [2015] WASC 15 (facebook). Note the United Kingdom cases are influenced by human rights legislation implementing the European Convention on Human Rights: see Human Rights Act 1998 (UK) and HRH Prince of Wales v Associated Newspapers Ltd [2007] 3 WLR 222 at [69] (disclosure by former employee of private diary); Campbell v MGN [2004] 2 WLR 1232 (HL) (supermodel’s drug addiction); Hyde Park Residence Ltd v Yelland [2001] Ch 143 (images from security camera of Princess Diana and Dodi Al Fayed subject to copyright). Cf Douglas v Hello! Ltd (No 3) [2008] AC 1 (surreptitious photos of Douglas, Zeta Jones wedding regarded as commercially valuable confidential information capable of protection against third parties). Lion Laboratories Ltd v Evans [1985] QB 526 (disclosure might be justified in the public interest). Even though not yet capable of protection by copyright: Fraser v Thames Television Ltd [1984] QB 44; Talbot v General Television Corp Pty Ltd [1980] VR 224. This can protect commercially valuable information that could not be patentable because it lacks inventiveness or novelty, see Stuckey-Clarke and Richardson, “Breach of Confidence”, ch 12 in Parkinson, Principles of Equity (Lawbook Co, 1996), p 421. See the suggested test whether the information is private by Gleeson CJ in ABC v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at [44] (whether its disclosure or observation would be “highly offensive to a reasonable person of ordinary sensibilities”). See Gleeson CJ in ABC v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at [36], [39] and Caldwell, “Protecting Privacy Post Lenah: Should the Courts Establish a New Tort or Develop Breach of Confidence” (2003) 26(1) UNSWLJ 90.

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Where the employment has come to an end, the judicial preference is to apply equitable principles to determine whether the former employee has breached a duty of confidentiality.531 The equitable duty can continue after the employment has come to an end provided the information is not in the public domain. Unlike the contractual duty, it can be enforced against a third party.532 Remedies for the breach of the equitable duty of confidence are more extensive than remedies for breach of contract and can include recovery of profits resulting from breach of confidence.533 On the other hand, an express covenant can protect information which would not qualify as confidential, a trade secret or its equivalent.534 Where the material is subject to copyright, actions for breach of copyright may also be available.535 Express covenants protecting confidential information [5.690] It is common to find confidentiality clauses in contracts of employment to protect the employer’s trade secrets and other confidential information. Where the purpose of the restraint is not primarily to prevent competition from an employee but is designed essentially to protect the trade secrets of an employer, the courts will take a more relaxed view of the restraint. In that situation the employer will have something in the nature of a proprietary interest to protect, as distinct from a mere economic interest. Such a covenant, drafted in reasonable terms, will pass muster, even if it has the incidental effect of limiting an employee’s right to enter into competition with the employer.536 The interests capable of being protected are not limited to trade secrets. Restraints can validly protect a broader range of information which the employer defines as confidential for these purposes, although the employer’s definition is not determinative. Express covenants can protect information that would not qualify for protection in equity as confidential information or a trade secret or its equivalent.537 It is still necessary for the protected information to be truly confidential, in the sense that it is commercially sensitive information that has been kept within the firm,538 see [5.660]. For example, a list of reliable overseas manufacturers and agents which was gained over many years of experience by trial and error where that information was commercially valuable and not disclosed to competitors. This information would not 531

532

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538

Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172 at [34]-[35] per Hodgson J. See also Campbell JA at [79] and whether as a matter of necessity an implied term would apply after the employment had ended: at [100], [144], [147]-[148]. McColl JA agreed with both judgments. Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37; X v Y [1988] 2 All ER 648 (employee sells details of HIV+ hospital doctors to newspapers, newspapers restrained from publication). See generally, Parkinson, The Principles of Equity (Lawbook Co, 1996), ch 12, pp 467-473. Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317 (CA) at 333 per Kirby P; at 339 per Samuels JA. TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3) [2007] FCA 151 (copyright in data and drawings). As to computer generated lists and copyright, see McCutcheon, “The Vanishing Author in Computer-Generated works: A Critical Analysis of recent Australian Case Law” (2013) 367(3) MULR 917. Haynes v Doman [1899] 2 Ch 13 and Putsman v Taylor [1927] 1 KB 741. As to the nature of the information that may be protected at common law, in equity and by restrictive covenant, see [5.650]–[5.700]. For example, in relation to a printing business, it could include internal costs, prices, printing processes, tailor made software and quotation policies not within the public domain that give commercial advantage, see Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717 at [17]-[22]; Dais Studio Pty Ltd v Bullet Creative Pty Ltd [2007] FCA 2054 at [94]. Other examples: Herbert Morris v Saxelby [1916] 1 AC 688; Ormonoid Roofing & Asphalts Ltd v Bitumenoids Ltd (1930) 31 SR (NSW) 347; Robb v Green [1895] 2 QB 315. Note also the possibility of bringing actions for inducing breach of contract against a third party involved in breach, see [14.110]. See Wright v Gasweld Pty Ltd (1991) 39 IR 256 at 271; Del Casale v Artodemus (Aust) Pty Ltd (2007) 165 IR 148.

Employee’s Implied Duties

be protected in equity as a trade secret or as confidential information but could be protected by an express agreement.539 Where the parties have identified particular classes of information as confidential the court will examine whether the former employee in fact had access to that information and whether there is any risk of misuse of that confidential information.540 Usually a contract will in broad terms indicate the type of information that is to be regarded as confidential.541 Information that is freely available542 or trivial would not qualify.543 Relevant considerations include: that skill and effort is required to obtain the information; the employer regards it as confidential information available only to restricted employees; the employee is aware that the information is confidential; it is regarded as confidential within the relevant industry and that the information was made available to the employee because of their seniority or special responsibility in the employer’s business.544 The extension of protection to contractually identified confidential information has been seen as an unwarranted restriction on an employee’s right to exploit “know-how” and an employee’s ability to develop and pursue creative ideas.545 Where these clauses are valid, a court may, in addition to awarding damages, issue an injunction restraining the former employee from breaching these covenants.546 [5.700] This extension beyond trade secrets (protected in equity without express covenants) has negative impacts on employees. The employee is frequently at a disadvantage because of the lack of knowledge of what they are trading off (benefits v detriments) in entering into the agreement. 547 More importantly, it can limit an employee’s opportunities for self advancement and the development and exploitation of the employee’s knowledge and skills.548 An employee’s capacity to work within an industry after the particular employment has ended may be effectively sterilised during the period of restraint. These extended covenants inhibit the use of an employee’s knowledge and skills normally regarded as part of their ordinary “stock in trade” or “know how”. These restraints are also significant disincentives to establishing 539 540 541 542

543

544

545

546

547

548

Wright v Gasweld (1991) 22 NSWLR 317 (information about 3,000 agents and manufacturers in Taiwan was readily available but not a list of those that were reliable). Emeco International Pty Ltd v O’Shea (No. 2) [2012] WASC 348; Fairfax Media Management Pty Ltd v Harrison [2014] NSWSC 470 at [30]. Dais Studio Pty Ltd v Bullet Creative Pty Ltd [2007] FCA 2054 at [95]. For example, in a chemistry book or in published literature or basic knowledge of a professional in the field, see GlaxoSmithKline Australia Pty Ltd v Ritchie [2008] VSC 164. See also Emeco International Pty Ltd v O’Shea (No 2) [2012] WASC 348. Tullett Prebon (Australia) v Purcell [2008] NSWSC 852: (2008) 175 IR 414 at [50] (brokers revenues, brokerage rates easily ascertained in the market, not confidential). Limited disclosure does not prevent the information being confidential: TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3) [2007] FCA 151 at [32], [38]. Taken from the judgment of Kirby P in Wright v Gasweld (1991) 22 NSWLR 317 at 334. See also IF Asia Pacific Pty Ltd v Galbally [2003] VSC 192 at [227], [228] (only effort involved, no special skill, not jealously guarded, not limited to senior employees, not protected); University of Western Australia v Gray [2009] FCAFC 116 at [163]; Tillery Valley Foods v Channel Four Television [2004] All ER (D) 133 (journalist employed as factory worker covertly films food production to expose poor hygiene practices – not confidential despite confidentiality clause); see also Australian Broadcasting Commission v Lenah Game Meats Pty Ltd (2001) 208 CLR 199. Riley, “Commodifying Sheer Talent: Perverse Developments in the Law’s Enforcement of Restrictive Covenants”, ch 13 in Arup and van Caenegem, Intellectual Property Policy Reform: Fostering Innovation and Development (Edward Elgar, UK, 2009) and see [4.420]. As to the importance of employee undertakings in this regard, see Fairfax Media Manaement Pty LTd v Harrison [2014] NSWSC 470 and Chapter 11 “Injunctions”. A subsequent employer aware of these contractual restrictions may risk a claim for inducing breach of contract, [14.110]. Summing up the research, see Lobel, “Intellectual Property and Restrictive Covenants” (University of San Diego Research Paper Series, Research Paper 08/059, Aug 2008), available at Social Science Research Network Electronic Paper Collection: http://www.ssrn.com/abstract=1226463 at 13. Riley, “Who Owns Human Capital? A Critical Appraisal of Legal Techniques for Capturing the Value of Work” (2005) 18(1) AJLL1-25.

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competing businesses (or hiring former employees subject to covenants) because of the risk of protracted litigation. The aim of these clauses may be to restrict competition rather than protect confidential information.549 It has been noted (see [5.630]), that an employer’s interest in maintaining confidentiality can also be indirectly protected by express non-compete clauses preventing the employee working for a competitor or being involved in a competing business for a defined period.550 Public interest disclosure [5.710] Disclosure of confidential information will usually give rise to liability for breach of confidence by an existing or former employee. In exceptional cases there may be no liability.551 Leaving aside disclosure of governmental information,552 there are two lines of authority. First, the predominant Australian view is that certain types of information are not “confidential” and an employee who discloses that information is not guilty of breach of the duty of confidence;553 the enforcement of any such confidence would be against public policy.554 There is no confidence in an iniquity,555 so that an employee who discloses criminal conduct by the employer to the police would not breach a duty of confidence: [I]nformation will lack the necessary attribute of confidence if the subject matter is the existence or real likelihood of the existence of an iniquity in the sense of a crime, civil wrong or serious misdeed of public importance, and the confidence is relied upon to prevent disclosure to a third party with a real and direct interest in redressing such crime, wrong or misdeed.556

A second approach, based on English authorities, argues that there is a defence of disclosure in the public interest which involves a balancing of the interests of the public 549

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552 553 554

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Lobel, “Intellectual Property and Restrictive Covenants” (Univ of San Diego Research Paper Series, Research Paper 08/059, Aug 2008), available at Social Science Research Network Electronic Paper Collection: http://www.ssrn.com/abstract=1226463 at 13; GlaxoSmithKline Australia Pty Ltd v Ritchie [2008] VSC 164 at [46]-[50], [239]. Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717 at [13]; Miles v Genesys Wealth Advisers Ltd [2009] NSWCA 25 at [22]-[27]. A confidentiality clause might, by itself, be effective to restrain a former employee from dealing with the employer’s clients, see Great Southern E-vents Pty Ltd v Peskops [2007] NSWSC 382 (interlocutory application). Confidential information can also be indirectly protected by an investment restraint in relation to competing businesses, Reed Business Information v Seymour [2010] NSWSC 790 at [54], [63]-[69]. As to the maintenance of confidentiality in court proceedings, see Richards v Ankur Kadian [2005] NSWCA 328. Readers should refer to specialist texts on copyright regarding defences to breach of copyright. See Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co., 2015) at [6.280]-[6.285]. There is no contractually implied term to maintain confidence in an iniquity, Corrs Pavey Whiting & Byrne v Collector of Customs (1987) 14 FCR 434 at 456 per Gummow J. See Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co., 2015) at [6.280]. Such as where the confidence related to “widespread or serious fraud”, AG Australia Holdings Ltd v Burton [2002] NSWSC 170 at [196]; Richards v Ankur Kadian [2005] NSWCA 328 at [46] per Beazley J; Sullivan, Sullivan v Sclanders (2000) 77 SASR 419; British American Tobacco Australia Pty Ltd v Gordon (No 3) [2009] VSC 619 at [135]; Brand v Monks [2009] NSWSC 1454 at [243]-[247], [275], [322]-[329] (potential for offence of illegal land clearing). Note also the relevance of “unclean hands” to the award of equitable remedies: British American Tobacco Australia Pty Ltd v Gordon (No 3) [2009] VSC 619. Gartside v Outram (1856) 26 LJ Ch 113 at 114 per Wood VC: “You cannot make me the confidant of a crime or a fraud, and be entitled to close up my lips upon any secret which you have the audacity to disclose to me relating to any fraudulent intention on your part: such a confidence cannot exist” (disclosure that customers defrauded by false business records). In relation to an employer, see Howard v Odhams Press Limited [1938] 1 KB 1 (disclosure by employer of employee’s implication in crossword competition fraud). Corrs Pavey Whiting & Byrne v Collector of Customs (1987) 14 FCR 434 at 454-456 per Gummow J; AG Australia Holdings Ltd v Burton [2002] NSWSC 170 (other proceedings King v Ag Australia

Employee’s Implied Duties

against the disclosure of confidential information. Public interest is not just something that would excite public curiosity. Consequently, although readers might be interested in knowing the identity of football players who had tested positive for illicit drugs, disclosure of their identities was not in the public interest.557 The Australian cases lean towards the first approach, that the duty of confidence does not attach to certain types of information. There is likely to be considerable overlap whichever approach is adopted. On either approach, there are two issues: (1) how far protection extends beyond the disclosure of serious criminal conduct and (2) qualifications on disclosure. Gummow J in the Corrs Pavey case suggested that “iniquity” extended to “the existence or real likelihood of the existence of an iniquity in the sense of a crime, civil wrong or serious misdeed of public importance.”558 Minor criminal conduct will not suffice.559 There is some authority extending protection to disclosure of breaches of consumer protection legislation to the appropriate regulatory authority even where those breaches, if established, attract civil and not criminal sanctions.560 The United Kingdom cases applying a public interest approach have taken a much broader approach. Lord Denning in Initial Services Ltd v Putterill561 said that the exception is not limited to frauds or misdeeds but extends to any misconduct of such a nature that it ought to be disclosed to others in the public interest.562 [5.720] Lion Laboratories Ltd v Evans563 suggests a wider range of circumstances in which the public interest will excuse disclosure of otherwise confidential information. It suggested that disclosure by an employee or former employee will be sometimes permissible even though no misconduct or iniquitous behaviour has been committed by the employer.564 In the Lion Laboratories case the information concerned suspected unreliability or inaccuracy of a breath analysis device, the results of which were widely used as evidence in prosecutions for drink-driving offences. The disclosure was made to the press by former employees of the firm making the device. The United Kingdom cases reached a high water mark in finding that the public interest defence could be

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561 562

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Holdings Ltd (formerly GIO Australia Holdings Ltd) [2002] FCA 151); Sullivan, Sullivan v Sclanders (2000) 77 SASR 419; Australian Football League v Age Company Ltd [2006] VSC 308 at [69], [83]; Cowell v British American Tobacco Services Limited [2007] VSCA 301; British American Tobacco Australia v Gordon (No 3) [2009] VSC 619. Australian Football League v Age Company Ltd [2006] VSC 308 at [94]. What constitutes disclosure in the “public interest” may be assisted by reference to implied protection of freedom of communication Lange v Australian Broadcasting Commission (1997) 189 CLR 520. Corrs Pavey Whiting & Byrne v Collector of Customs (1987) 14 FCR 434 at 454-456 per Gummow J; Australian Football League v Age Company Ltd [2006] VSC 308 at [69] (disclosure by newspapers of drug taking by footballers). Australian Football League v Age Company Ltd [2006] VSC 308 at [94]. Allied Mills v Trade Practices Commission (1981) 34 ALR 105 but left open in AG Australia Holdings Ltd v Burton [2002] NSWSC 170 at [197]. The court’s statement of general principle in Allied Mills that the public interest in disclosure of iniquity will always outweigh the public interest in the preservation of confidentiality is too wide unless iniquity is confined to serious crime: A v Hayden (No 2) (1984) 156 CLR 532 at 545-546 per Gibbs CJ. Initial Services Ltd v Putterill [1967] 3 All ER 145 (price-fixing agreements). Fraser v Evans [1969] 1 QB 349 at 362; Cream Holdings Ltd v Banerjee [2005] 1 AC 253 (former employee gives information of corruption and illegality to newspapers). In the United Kingdom the issue is overtaken by the Protected Disclosures Act 1998 incorporated into the Employment Rights Act 1996 (UK), see [5.730]. Lion Laboratories Ltd v Evans [1984] 2 All ER 417. See also Fraser v Evans [1969] 1 QB 349; Hubbard v Vosper [1972] 2 QB 84; Woodward v Hutchins [1977] 1 WLR 760 and British Steel Corporation v Granada Television Ltd [1981] AC 1096. Lion Laboratories Ltd v Evans [1984] 2 All ER 417 at 423, 433. And see McCallum and Stewart, “The Duty of Loyalty: Employee Loyalty in Australia” (1999) 20 Comp Lab L & Pol’y J 155 at 174-178.

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available to protect disclosure to the press to correct a misleading impression about publicity-seeking pop groups, movie stars and the like.565 The Australian cases insist on “iniquity” and appropriate disclosure to a person who has the capacity to redress the wrong. There is surprisingly little Australian authority applying the iniquity principle to civil wrongs.566 Certainly an employee cannot not justify disclosing a confidential document simply on the ground that it is defamatory.567 But there might be a stronger basis for protection where there is a risk of an environmental disaster; disclosure to relevant authorities might be justified if the general welfare, safety or security of the public is at risk.568 In Australia disclosure to the press to “set the record straight” regarding public figures would not be protected.569 Nor is it clear that in Australia the employees in the Lion Laboratories case would necessarily be protected if they took their claim to the press rather than an agency that had the authority to deal with it. These difficulties might be overcome by legislation allowing appropriate disclosure as is available under the Protected Disclosures Act 1998 (UK) (see [5.730]). The usual rule relating to privileged disclosures is that it must be disclosed no further than is necessary to vindicate the wrong.570 Generally disclosure must be to an appropriate authority. So, for example, in relation to criminal conduct, disclosure would normally be to the police. In rare cases where the whole community may be affected, wider disclosure may be warranted.571 Unsubstantiated allegations would not be protected.572 Lord Denning in Initial Services Ltd v Putterill573 thought that there 565

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569 570

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Conceded in Campbell v Mirror Group Newspapers [2004] 2 WLR 1232 (HL) that the newspaper was entitled to publish that she was a drug addict to “set the record straight”; Campbell v Frisbee (2002] EWCA Civ 1374 (CA) (left open in an interlocutory application); Woodward v Hutchins [1977] 1 WLR 760 at 763-764 per Lord Denning MR; at 765 per Lord Bridge. Query whether a civil conspiracy which interferes with the administration of justice might suffice, British American Tobacco Australia Limited v Gordon & Ors (No 3) [2009] VSC 619 at [120]-[124]. Weld-Blundell v Stephens [1920] AC 956 at 965-6 per Viscount Finlay. Ami Holdings Pty Ltd v Fairfax Media Publications [2009] NSWSC 1484 at [22]; Minister for Immigration & Citzenship v Kumar [2009] HCA 10 at [27]. If the risk does not involve misconduct or wrongdoing on the employer’s part, the iniquity is presumably the failure to alert authorities to the very serious risk of harm to the community. But in the first instance this might require alerting the employer and regulatory authorities rather than immediate resort to the press. Note also Industrial Registrar v Mejias [2007] NSWIRComm 145 (threat to publish confidential information concerning the employer). See, for example, Australian Football League v Age Company Ltd [2006] VSC 308 (drug taking by footballers). Brand v Monks [2009] NSWSC 1454 at [325]-[328] (extent of disclosure of possible illegal land clearing). There is also the suggestion that it is relevant whether disclosures were made in bad faith or for personal profit BLB Corp of Australia Establishment v Jacobsen (1974) 48 ALJR 372 at 379; Street v Derbyshire Unemployed Workers Centre [2005] ICR 97 (in relation to statutorily protected disclosures under the Employment Rights Act 1996 (UK)). Australian Football League v Age Company Ltd [2006] VSC 308 at [67] (but not drug taking by footballers); Uniflex (Australia) Pty Ltd v Hanneybel [2001] WASC 138 (disclosure by former employee to major customer concerning lack of compliance with safety standards, held to be a trade secret and confidential). Australian authorities suggest that it is not enough to simply make an allegation of wrongdoing, the disclosed materials should give rise to a prima facie case before disclosure would be protected Castrol Australia Pty Ltd v Emtech Associates Pty Ltd (1980) 33 ALR 31 at 52 (interlocutory proceedings); AG (Australia) Pty Ltd v Burton [2002] NSWSC 170 at [201]-[203] (allegations of negligence and misleading and deceptive conduct under Trade Practices Act 1974 (Cth), s 52 now Australian Consumer Law, s 18); Chivers v Flower Power Pty Ltd [1998] NSWIRComm 188 (completely unfounded allegations reported to tax office); Brand v Monks [2009] NSWSC 1454 (unproven offence of illegal land clearing). Initial Services Ltd v Putterill [1967] 3 All ER 145; Malone v Metropolitan Police Commissioner [1972] 2 WLR 700; Petch v Independent Commission against Corruption [2014] NSWSC 1693. As to the operation of the defence in cases of breach of copyright, see Hyde Park Residence Ltd v Yelland [2001] Ch 143.

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may be cases where the misdeed is of such a character that the public interest demanded, or at least excused, publication even to the press.574 This is yet to be tested in Australia. Whistleblowers – statutorily protected disclosures [5.730] An employee may be entitled to statutory protection against liability for specific disclosures and protection against detrimental action by the employer in response to the disclosure. Legislation protects employees against victimisation for particular disclosures, for example, for an employer’s breaches of an industrial instrument,575 or “a complaint or enquiry … in relation to his or her employment”576, see [13.260]. Public sector employees may be entitled to statutory protection under State and federal Whistleblower legislation.577 Existing Australian whistleblowing protection is largely limited to the public sector.578 It does not extend to protecting whistleblowing employees in the private sector, although some very limited exceptions exist in South Australia579 and Queensland.580 There is also limited protection for company employees where breaches of the corporations law are reported to relevant authorities under the Corporations Act 2001 (Cth).581 Where employers adopt the Australian National Standard582 or other codes for disclosure, the standard may operate as a contractual term if incorporated into the contract of employment ([4.480]). The Code may also be relevant in dismissal or as a lawful and reasonable direction to employees to comply. The Australian whistleblowing legislation falls well short of the United Kingdom protected disclosure provisions which were enacted by the Public Interest Disclosure Act 1998 (UK) and are now contained in the Employment Rights Act 1996 (UK). The provisions extend to employees within the private sector. Under the provisions in the United Kingdom, protected disclosures may be made in relation to criminal offences, breach of legal obligations, miscarriages of justice, an individual’s health and safety or 574

575 576

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Fraser v Evans [1969] 1 QB 349 at 362; Cream Holdings Ltd v Banerjee [2005] 1 AC 253 (former employee gives information of corruption and illegality to newspapers). It is not a condition that the person affected have a right of reply Tillery Valley Foods v Channel 4 Television [2004] EWHC 1075 (Ch) at [15] et seq. See the restricted right to go to the press in relation to public sector employees in Australia, for example, Protected Disclosures Act 1994 (NSW), s 19 (and see s 9A). Fair Work Act 2009 (Cth), ss 340, 341. Fair Work Act 2009 (Cth), s 341(1)(c)(ii) and see Murrihy v Betezy.com.au Pty Ltd [2013] FCA 908; (2013) 238 IR 307; Walsh v Greater Metropolitan Cemetery Trust [2014] FCA 456; Evans v TriLab Pty Ltd [2014] FCCA 2464; Anderson v BNP Paribas Securities Services [2015] FCCA 2231 (informal complaint). Compare a narrow approach in Shea v TRUenergy Servicers Pty Ltd [2014] FCA 271 (must be related to a contractual or statutory right; the point was not in issue in the appeal which was dismissed, see [2014] FCAFC 167) and see [13.260]. Public Interest Disclosure Act 2013 (Cth); Protected Disclosures Act 1994 (NSW) (no action for breach of statutory duty, McGuirk v The University of NSW [2009] NSWSC 1424); Public Interest Disclosure Act 2010 (Qld); Whistleblowers Protection Act 1993 (SA) (Morgan v Workcover Corporation [2013] SASCFC 139); Public Interest Disclosure Act 2002 (Tas); Whistleblowers Protection Act 2001 (Vic); Public Interest Disclosure Act 2003 (WA); Public Interest Disclosure Act 1994 (ACT); Public Interest Disclosure Act (NT). In some States the public sector is broadly defined, see, for example, Public Interest Disclosures Act (NT), s 6, (extending to public hospitals, universities and nursing homes). In South Australia this protection is available for disclosure of illegal conduct and where there is a substantial risk to public health or safety or to the environment, Whistleblowers Protection Act 1993 (SA), s 4(1)(a)(iv) definition “public interest information”. Public Interest Disclosure Act 2010 (Qld), s 12 provides protection for disclosures where there is a substantial and specific risk to a person with disability or where there is a breach of specified environmental protection legislation. Corporations Act 2001 (Cth), ss 1317AA – 1317AE. Note under the Fair Work Regulations 2009 (Cth), reg 1.13, national system employers are not exempted from State-based whistleblower legislation. Australian Standard AS 8004-2003, Whistleblower Protection Programs for Entities.

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damage to the environment.583 This broader protection reflects the important role of employees in protection of the public interest. This protection is so important that outright statutory protection is warranted subject to suitable limits to exclude claims that are trivial or vexatious. Employees should not have to risk dismissal in order to bring to notice matters which seriously impact on public safety and the public good.

Poaching of employees Contractual duty of loyalty [5.740] The implied duty of good faith does not prevent a former employee whose employment has ended from approaching other employees at the former workplace with a view to their giving lawful notice to terminate their employment and move to a new job.584 Mass defections to competitors have been common in broking,585 legal, finance and banking, where there are specialist, highly remunerated employees operating within expert teams. Mass departures to a competitor can seriously weaken the employer’s business, sometimes delivering a virtual knock-out blow.586 Where the defections are instigated by senior staff this may be a breach of the duty of fidelity without the need to rely on any express covenant.587 Senior staff may also commit breaches where they fail in their duty to report approaches to staff and possible defections to competitors.588 Employees generally have a duty to answer honestly if asked whether they plan to leave to work for a competitor.589 In the absence of a restrictive covenant, there is little that the employer can legally do to stop a former employee organising a mass lawful departure of staff to a competitor.590 Nor, in the 583

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Employment Rights Act 1996 (UK), s 43B. There are continuing suggestions that a scheme be introduced which rewards whistleblowers based on the United States False Claims Act. In the United Kingdom there are still problems: Ashton, “15 years of Whistleblowing Protection under the Public Interest Disclosure Act 1998: Are We Still Shooting the Messenger?” (2015) 44(1) Ind LJ 29; http://www.pcaw.org.uk/. UBS Wealth Management (UK) Ltd v Vestra Wealth [2008] EWHC 1974 (mass defections to new competing business). There can be no enforceable restraint preventing a particular employee leaving the employment, Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414 at [70] and see [4.380]. See for example, RBC Dominion Securities Inc v Merrill Lynch Canada Inc (2008) 298 DLR (4th) 1. For the tactics utilised to avoid this, see Tullett Prebon PLC v BGC Brokers [2010] EWHC 484. See, for example, UBS Wealth Management (UK) Ltd v Vestra Wealth [2008] EWHC 1974 (bridgehead using junior staff to be followed by mass defections of large numbers of senior staff); British Midland Tool Ltd v Midland International Tooling Ltd [2003] EWHC 466. Manildra Laboratories v Campbell [2009] NSWSC 987 at [23]-[25], [123]-[129] (mill manager during employment solicits key employees with whom there was a close connection for a new business; no formal contracts signed, employees resigned with due notice [128], nominal damages only for breach [129]). See also Tullett Prebon PLC v BGC Brokers [2010] EWHC 484; British Midland Tool Ltd v Midland International Tooling Ltd [2003] EWHC 466 (Ch); RBC Dominion Securities Inc v Merrill Lynch Canada Inc (2008) 298 DLR (4th) 1 (mass planned departure without notice); QBE Management Services (UK) Ltd v Dymoke [2012] EWHC 80 (QB); Thomson Ecology Ltd v APEM Ltd [2013] EWHC 2875 at [60]. Kynixa Ltd v Hynes [2008] EWHC 1495 at [274], [283]; Tullett Prebon PLC v BGC Brokers [2010] EWHC 484 at [67]-[69] (contractual duty of desk head to report recruitment of team by outside competitor); British Midland Tool Ltd v Midland International Tooling Ltd [2003] EWHC 466 (Ch) at [95]; UBS Wealth Management (UK) Ltd v Vestra Wealth [2008] EWHC 1974 at [24]. See also the United Kingdom cases holding that senior managers (even if not fiduciaries) have a duty to report any approaches to them to move to competitors, Kynixa Ltd v Hynes [2008] EWHC 1495 at [263], [283]. These breaches assume importance in the issue of injunctions and ordering springboard relief, see Tullett Prebon Plc v BGC Brokers LP [2009] EWHC 819; UBS Wealth Management (UK) Ltd v Vestra Wealth [2008] EWHC 1974 at [4]; QBE Management Services (UK) Ltd v Dymoke [2012] EWHC 80 (QB). Kynixa Ltd v Hynes [2008] EWHC 1495 at [271]-[276]. Although possibly a technical breach, it is doubtful whether this is a dismissible breach, see [8.100] or whether damages would flow from it, see [10.120]. Actions for inducing breach of contract may be available if employees do not give proper notice but

Employee’s Implied Duties

absence of a restrictive covenant or evidence of persuasion, is it necessarily a breach of fiduciary duties for senior managers responsible for the day-to-day running of the business to decide to leave at the same time and go to work for a competitor591 nor indeed for employees who have fortuitously won the lottery from all leaving at once without giving notice.592 From the employees viewpoint, they are entitled to get on, seek new and better employment and use their skills to their best advantage. Anti-poaching/non recruitment covenants [5.750] It is common for senior executive contracts to have non-poaching or non-recruitment covenants.593 These covenants prevent the employee from soliciting other employees to change employment.594 The restraint may be considered necessary to protect the employer’s interests by retaining employees critical for the continued success of the business595 or employees with access to confidential information596 or where employees have significant client connection – both protectable interests.597 But is it sufficient if the only interest the employer seeks to protect is the retention of a stable trained workforce? It has been held that this is a sufficient interest.598 In Cactus Imaging, Brereton J remarked: The cases denying that there is any such legitimate interest emphasise that an employer does not own the workforce, as if employees were akin to stock-in-trade. That is self-evident, but nor does an employer own the customers, who are also not akin to stock-in-trade; yet a connection with customers is unquestionably amenable to protection by covenant. The employees, along with the suppliers and the customers, make up the three relations upon which the profitability of a business depends. The customers are not property, but their connection with the business adds value to the business and is recognised as deserving of protection in the proprietor’s legitimate interest. Similarly, employees are not property, but, all else being equal, a business with a stable trained workforce will be more attractive to a purchaser and command a higher price than one with a workforce which is unstable, disruptive or poorly trained, just as a loyal and satisfied clientele makes a business more attractive and valuable. In my opinion, staff

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there is no breach of contract where employees enter into forward employment contracts with a competitor, the contracts to come into effect when the previous employment contract lawfully ends, even if induced by the offer of higher salaries, large sign on payments and indemnity, Tullet Prebon PLC v BGC Brokers [2010] EWHC 484 at [142] and see [14.110]. Deeson Heavy Haulage Pty Ltd v Cox [2009] QSC 277 at [82]-[96] (no persuasion, each defendant had already decided to leave). Apparently Hewlett Packard IT department did just that, Personnel Today (3 December 2009). Although there might be a damages claim for breach for failing to give notice (see [10.120]) it is a very unlikely. Or a more extended version: “employing, soliciting, engaging or enticing away”. As to what constitutes “solicitation” see Allied Express Transport Pty Ltd v Mears [2010] NSWSC 1112 (insufficient if former employees responded to a general advertisement). Tullett Prebon PLC v BGC Brokers [2010] EWHC 484, senior managers have a duty to report approaches by a rival firm at [68]-[69]. Confidential information may include details concerning the terms and conditions of employment of other employees enabling the exploitation of that information for the benefit of a new employer, Cactus Imaging Pty ltd v Peters [2006] NSWSC 717 at [54]. Allison v BDO (NSW-Vic) Pty Ltd [2010] VSC 35 at [28] per Judd J (other proceedings BDO Group Investments (NSW-Vic) Pty Ltd v Ngo [2010] VSC 206); Aussie Home Loans v X Inc Services [2005] NSWSC 285 especially at [32], [35], [37]. Cf Schindler Lifts Aust Pty Ltd v Debelak (1989) 89 ALR 275; Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717. “Staff connection constitutes part of the intangible benefits, which may give a business value over and above the value of the assets employed in it, and thus comprises part of its goodwill”: John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995 at [32]; IF Asia Pacific Pty Ltd v Galbally [2003] VSC 192 at [125]; BDO Group Investments (NSW-Vic) Pty Ltd v Ngo [2010] VSC 206. Criticised: Riley, “Commodifying Sheer Talent: Perverse Developments in the Law’s Enforcement of Restrictive Covenants”, ch 13 in Arup and van Caenegem, Intellectual Property Policy Reform: Fostering Innovation and Development (Edward Elgar, UK, 2009).

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connection constitutes part of the intangible benefits, which may give a business value over and above the value of the assets employed in it, and thus comprises part of its goodwill. It is amenable to protection by a covenant in a manner similar to customer connection, even in the absence of protectable confidences.599

Additional reasons for protection are: the person subject to the covenant has the advantage of special knowledge of the terms and conditions of employment of staff and this gives advantage to a competitor;600 the employer may have expended considerable sums on staff training which will not be recouped if they leave the employment.601 [5.760] Even if a stable trained workforce is a protectable interest, that is not the end of the inquiry. The restraint must be reasonable as between the parties and in the public interest ([4.420]). It is questionable whether it is reasonable to impose such restraints on employees on modest wages not in managerial positions or in positions of influence.602 Moreover, a general restraint on poaching all employees without discrimination may not be necessary for the reasonable protection of the employer’s interests.603 Thus, it was not reasonable to enforce a 12 month restraint where: the employee subject to the covenant could be terminated on one month’s notice, the employees solicited were loan writers whose employment could be terminated by one week’s notice and this occurred in a competitive industry with frequent employee turnover.604 Loss of employees to competitors is a normal business risk. There is a significant difference between the solicitation of key employees and other employees who might easily and quickly be replaced. In relation to the latter, the courts should not easily be persuaded that a restraint is reasonable and should be enforced, and see [4.420]. These types of anti-poaching covenants may be counter-productive with evidence that, particularly in areas of research and development, productivity and creativity may be enhanced with high staff turnover; the Californian IT industry is regarded as the paradigm example.605 Even in fields where there has been a mass exodus of staff, for example, finance brokers, accommodations are often reached when staff are poached from a competitor – the “hostage” swap.606 This occurs in an environment where employees need to be increasingly mobile, where contracts are short term and capable

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Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717 at [55]. See critical response by Riley, “Sterilising Talent: A Critical Assessment of Injunctions Enforcing Negative Covenants” (2102) 34 SLR 617; Riley, “No Poaching’? Why Not? A Reflection on the Legitimacy of Post-Employment Restrictive Covenants” (2005) 19(1) CLA 3. Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717 at [54]. Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717 at [49] citing SBJ Stephenson Ltd v Mandy [2000] IRLR 233. Aussie Home Loans v X Inc Services [2005] NSWSC 285. See Allison v BDO (NSW-Vic) Pty Ltd [2010] VSC 35 at [28] per Judd J (other proceedings BDO Group Investments (NSW-Vic) Pty Ltd v Ngo [2010] VSC 206); and see Riley, “Commodifying Sheer Talent: Perverse Developments in the Law’s Enforcement of Restrictive Covenants”, ch 13 in Arup and van Caenegem, Intellectual Property Policy Reform: Fostering Innovation and Development (Edward Elgar, UK, 2009). Aussie Home Loans v X Inc Services [2005] NSWSC 285 at [37]. Similarly with short term labour hire employees, Informax International Pty Ltd v Clarius Group Ltd (2012) 207 FCR 298; [2012] FCAFC 165 at [99]. Amir & Lobel, “Innovation Motivation: Behavioural Effects of Post-Employment Restrictions” (San Diego Legal Studies Paper No 10-32) at SSRN: http://www.ssrn.com/abstract=1639367 at 17. Tullett Prebon Plc v BGC [2010] EWHC 484 at [19]. Or apparently the converse a “no hire agreement” between Google and Apple, see The New York Times (April 14, 2014), Opinion and Editorial; O Lobel, “My Ideas, My Boss’s Property”; Lobel, “The New Cognitive Property: Human Capital Law and the Reach of Intellectual Property” (2015) 93 Tex LR 789 at 832.

Employee’s Implied Duties

of being terminated relatively expeditiously.607 Employee mobility is important not only for the individual but as a means of disseminating knowledge. The problem is one of trade-off: Workers engage with technologies, systems, and ideas and frequently move to new companies. The broad policy concern is how to maintain the ability of workers to change their employment freely, and at the same time, facilitate teamwork and corporate investment in research and development projects.608

The protection extended to staff connection and the upholding of anti-poaching clauses runs counter to the free flow of information and the creativity and innovation that employee mobility brings.

Comment by an employee [5.770] Previous discussion (at [5.650]) noted the considerable limitations which exist on the extent to which an employee may disclose or make use of information concerning the employer’s business. However, the duty of fidelity and good faith extends further than that, for in most situations it will also preclude employees from commenting on or speaking adversely to outsiders609 about their employer’s business even where no disclosure or use of information is involved.610 Large organisations usually require employees to comply with media policies; these may be formally incorporated into the employment contract or may be binding as a lawful and reasonable directions.611 This is a very considerable restriction on the rights of an employee to comment in the public interest on the activities or policies of a particular employer. This is the case even if the employer is a large organisation, which has a considerable impact on the local environment or economy. Such matters are often legitimate matters for public debate and employees may, as the law now stands, be precluded from effective participation in that debate.612 607 608

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See Stone, “Knowledge at Work: Disputes over Ownership of Human Capital at the Changing Workplace” (2002) 34 Connecticut LR 721. Lobel, Intellectual Property and Restrictive Covenants (University of San Diego Research Paper Series, Research Paper 08/059, Aug 2008), at SSRN Electronic Paper Collection: http://www.ssrn.com/ abstract=1226463 at 18. Byrnes v Treloar (1997) 77 IR 332 (CA). The employee may also be exposed to claims for defamation and actions for breach of confidence, see Schindler Lifts v Debelak (1989) 89 ALR 275; McCallum and Stewart, “Employee Loyalty in Australia” (1999) 20 Comp Lab L & Pol J 155. Under the 2005 uniform defamation legislation, it is a defence that the information is substantially true, Defamation Acts 2005, s 25. Comments to superiors within the corporate structure are permitted: Nokia Communications Pty Ltd v Davis (IRC Aust, Wilcox J, 10 October 1996). Disparagement to fellow employees and unauthorised photos of a sleeping CEO may be in breach of the duty of fidelity and relevant to dismissal, Melbourne Stadiums Ltd v Sauntner [2015] FCAFC 20. See, for example, Dover-Ray v Real Insurance [2010] FWA 8544 (refusal to remove blog on MySpace alleging employer corruption, available to fellow employees) and see detailed discussion in the context of dismissal at [8.330]; McCarry, “The Contract of Employment and Freedom of Speech” (1981) 19 SLR 333; Walters & Tamworth Aboriginal Respite Care Committee Inc [2006] NSWIRComm 1004 at [51], [55] (unsupported allegations on TV of mismanagement of funds grounds for dismissal). Whistleblower legislation is not all embracing and does not permit public sector employees to comment on government policy, see, for example, Public Interest Disclosures Act 1994 (NSW), s 17, “questioning the merits of government policy” not protected. See for example in relation to Facebook and sexually harassing comments relating to another employee, Little v Credit Corp Group Ltd [2013] FWC 9642. As to the position of Commonwealth public servants and statutory duties, see Bennett v President, Human Rights and Equal Opportunity Commission [2003] FCA 1433; (2003) 134 FCR 334; R v Tjanara Goreng-Goreng [2008] ACTSC 74; Trent Latham Smith v Department of Foreign Affairs and Trade [2007] AIRC 765. In relation to the Commonwealth Public service, the APS code restricting the right to comment does not breach the implied constitutional right to freedom of speech, Banerji v Bowles [2013] FCCA 1052 at [98]-[106] (breach of code even though the tweeter did not disclose her name or job).

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Inventions and other intellectual property [5.780] A question often arises as to who is entitled to the benefit of an invention or

other intellectual property613 created by an employee.614 The formal legal position is summarised by Nettle J in Victoria University of Technology v Wilson:615

The law is well settled upon the position of an officer or employee who makes an invention affecting the business of his or her employer. It is an implied term of employment that any invention or discovery made in the course of the employment of the employee in doing that which he is engaged and instructed to do during the time of his employment, and during working hours, and using the materials of his employers, is the property of the employer and not of the employee. Having made a discovery or invention in the course of such work, the employee becomes a trustee for the employer of that invention or discovery, and he is therefore as a trustee bound to give the benefit of any such discovery or invention to his employer. But the mere existence of the employer/employee relationship will not give the employer ownership of inventions made by the employee during the term of the relationship. And that is so even if the invention is germane to and useful for the employer’s business, and even though the employee may have made use of the employer’s time and resources in bringing the invention to completion. Certainly, all the circumstances must be considered in each case, but unless the contract of employment expressly so provides, or the invention is the product of work which the employee was paid to perform, it is unlikely that any invention made by the employee will be held to belong to the employer.

The term is generally implied as a matter of law.616 The test is whether the invention was made in the course of the employment by the employee doing what the employee was engaged and instructed to do and using the time, opportunity, information or facilities provided by the employer. If the employee was paid to do this type of work then the employer, and not the employee, is the one entitled to the benefit of the invention.617 Much will depend on the particular circumstances or position in which the employee is engaged. A sales manager is not employed to design new equipment and an invention developed in the employee’s own time does not belong to the 613

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This can include copyright in such items as books, software etc; patents, designs and trade marks; see Stewart, Guide to Employment Law (5th ed, Federation Press, 2015), pp 275-277. Note also the role of the equitable duty of confidence prior to patents being achieved and also the problems of applying this within a university context, University of Western Australia v Gray (2009) 179 FCR 346. But there is no duty to bring to the employer’s attention every “clever idea” that the employee may have, Blackmagic Design Pty Ltd v Overliese [2010] FCA 13 at [94]. But a contract may be able to assign an employee’s ideas which are not yet capable of protection as intellectual property, see Lobel, “The New Cognitive Property: Human Capital Law and the Reach of Intellectual Property” (2015) 93 Tex LR 789 at 797-298. Victoria University of Technology v Wilson (2004) 60 IPR 392 at [104]. Note the provisions applying under the Designs Act 2003 (Cth), s 13 and Patents Act 1990, ss 13, 15 and Copyright Act 1968 (Cth), s 35(6) (employer ownership where work is “in pursuance of the terms of his or her employment”; and see Oates v Consolidated Capital Services Ltd [2009] NSWCA 183). In the United Kingdom, the Patents Act 1977, s 39(1) provides that an invention belongs to the employer if it was made in the course of normal duties or was specifically assigned to the employee and an invention might reasonably be expected to result from the carrying out of his duties; the employee may be compensated s 40, see LIFFE Administration and Management v Pinkava [2007] ICR 1489; Helmet Integrated Systems Ltd v Tunnard [2007] IRLR 126 (salesman designed safety helmet). But it may be inappropriate to imply this term to the special and unique relationship between a researcher and the employing university, University of Western Australia v Gray (2009) 179 FCR 346 at [177]-[193]; it may have been different if there were a positive duty to invent (at [194]-[205]). See also Pila, “Who Owns Intellectual Property Rights in Academic Work?” [2010] Euro IP Rev 609-613. Triplex Safety Glass Co v Scorah [1938] Ch 211; Victoria University of Technology v Wilson (2004) 60 IPR 392; University of Western Australia v Gray (2009) 179 FCR 346 at [150]; EdSonic Pty Ltd v Cassidy [2010] FCA 1008. Where employees are let out on a labour hire arrangement, the agreement with the client determines ownership, see Oates v Consolidated Capital Services Ltd [2009] NSWCA 183 at [154].

Employee’s Implied Duties

employer.618 Similarly an invention made by the employee after leaving the employment even if it relies on non-confidential knowledge or experience gained in the former employment belongs to the employee.619 More difficult is the case where a person is employed in a technical capacity and makes some invention or improvement in the area in respect of which the person is employed and in the area of the worker’s capacity.620 A clear case where the employer would not be entitled to the benefit of an invention is, for example, where a storeworker makes some improvement with respect to the employer’s product in the employee’s own time using their own materials and resources, then the employee will not hold the invention on behalf of the employer but will be entitled to the fruits of her or his inventiveness personally.621 It is not sufficient that the employee uses the employer’s resources in breach of contractual obligations not to use the employer’s resources for private purposes.622 The full Federal Court in the University of Western Australia v Gray623 required a specific duty to invent before the employer was entitled to the benefit of the invention: [I]f (a) the employee was not engaged to use his or her inventive capacity at all… or (b) was so engaged only by way of additional duties to use his or her inventive capacity as and when asked …or only for an agreed purpose, the employer would have in case (a) no claim on the employee’s invention at all and in case (b) such a claim only if the invention resulted from a task the employee was asked to perform by way of additional duty or if the invention was related to the effectuation of the agreed purpose.

[5.790] Such an approach suggests a growing reluctance to hold that the employer

owns an invention unless the employee is being paid to do that type of work.624 So, for example, where the duties of the head of the hospital virology department were to identify “potential areas of improvement in the diagnostic service”, a patent relating to that improvement was held on behalf of the employer; but not so in relation to a patent which involved theoretical research which was not supported or funded by the hospital.625 But the nature of the work should not be too narrowly described. If a researcher working for 10 years in cancer research discovers during the research a cure for arthritis, this would be regarded as part of the employment.626 Fiduciaries may be in a special position with a duty not to appropriate opportunities for their own benefit 618

619 620

621 622

623

624 625 626

Spencer Industries Pty Ltd v Collins (2002) 54 IPR 434 at [83]. Nor is a hospital registrar employed to devise a new method of treatment: Greater Glasgow Health Board’s Application [1996] RPC 207 (Ch). Yeda Research and Development Co Ltd v Rhône-Poulenc Rorer International Holdings Inc [2008] 1 All ER 425 (HL). Finding for the employer where the employee was not positively asked to make the invention and in a case where it was not a particular problem on which the employee was at the time asked to advise, see British Syphon Co Ltd v Homewood [1956] 1 WLR 1190 (cited in University of Western Australia v Gray (2009) 179 FCR 346 at [155] as a case where there was a fiduciary duty to give the benefit of the invention to the employer). Electrolux Ltd v Hudson [1977] Fleet Street Patent Law Reports 312. Victoria University of Technology v Wilson (2004) 60 IPR 392 at [106] (later proceedings Victoria University of Technology v Wilson [2006] VSC 186) – this may give rise to an action for breach of contract against the employee. In relation to the breach of fiduciary duty in accounting for profits a just allowance is to be made for the skill, contribution by the employee, ibid provided there is adequate evidence, EagleBurgmann Australia Pty Ltd v Leabeater [2012] NSWSC 573. University of Western Australia v Gray (2009) 179 FCR 346 at [154]. It was accepted that the duties may change over time and this may alter the position (at [155]) and see Liffe Administration and Management v Pinkava [2007] EWCA 217 at [58]. For a critical analysis see, Dent, Fenwick and Newitt, “Legal Incentives to Promote Innovation at Work: A Critical Analysis” (2010) 21(2) Economic and Labour Relations Review 27. Royal Children’s Hospital v Alexander [2011] APO 94 and see Adams, “Ownership of employee Intellectual Property” (2012) 17(9) Employment Law Bulletin 144. University of Western Australia v Gray (2009) 179 FCR 346 at [156] citing Jacob LJ in LIFFE Administration & Management v Pinkava [2007] 4 All ER 981 at [97].

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and to hold the benefit of the invention for the employer.627 This greater reluctance to find that the employer is entitled to the intellectual property reflects a tilt towards the employee in the trade-off between, the encouragement of innovation, the free flow of knowledge and employee mobility, and, alternately, the encouragement of investment in research, the development of new knowledge and employee training628 (university research being the paradigm example). The issue of ownership of intellectual property is likely these days to be the subject of express contractual provision629 in which the employer bears the risks and costs of innovation with the employee trading-off the potential benefits of the intellectual property for the security of paid employment630 and in some sectors, increasingly, a share in the enterprise. Attempts by employers to claw back intellectual property through enterprise agreements have generally not been approved because they fail the “Better Off Overall Test” and are not matters that pertain to employment.631 The ownership of intellectual property may be the subject of workplace policies incorporated into the contract of employment, see [4.480]. Whilst this may provide greater certainty and benefit to the employer, the use of contractual clauses giving employers property rights to employee inventions, other intellectual property or simply creative ideas short of patentable inventions,632 turns “human capital and intangibles of the mind – knowledge, experience, skill, creativity, and network-into property”.633 These clauses can purport to give the employer property in ideas that are not protectable as patents, copyright etc. Such clauses are clear disincentives to shared knowledge or creative ideas. To be human is to create…loss of creative fire is not only costly for individuals. In a world in which economic growth depends on innovation, we simply cannot afford such limitations on creativity.634

The clauses may also provide that inventions etc within a defined period after the employment are assigned to the former employer making it risky for a competitor to hire that employee in a similar capacity as the prior employment. “The perverse result is that the most productive and experienced employees, who are already engaged in

627

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631 632

633 634

University of Western Australia v Gray (2009) 179 FCR 346 at [93], [155], [173], [214]; Victoria University of Technology v Wilson (2004) 60 IPR 392 (see [150] et seq) (fiduciary misappropriating opportunities). Lobel, “Intellectual Property and Restrictive Covenants” (University of San Diego Research Paper Series, Research Paper 08/059, Aug 2008), at SSRN Electronic Paper Collection: http://www.ssrn.com/ abstract=1226463. This may extend for periods following employment to avoid employee resignation to exploit a patentable product. Incentives for employees may also be provided by contractual profit sharing. IP Policies even if incorporated into the employment contract do not change the outcome as they can only deal with inventions “in the course of employment”, Royal Children’s Hospital v Alexander [2011] APO 94. See, surveying the literature, Lobel, “Intellectual Property and Restrictive Covenants” (University of San Diego Research Paper Series, Research Paper 08/059, Aug 2008), at SSRN Electronic Paper Collection: http://www.ssrn.com/abstract=1226463 at 14. Howe and Newman, “Collective Bargaining and the Ownership of Employee Creation” (2013) 26 AJLL 273. As to pre-innovation assignment and clauses giving rights for a defined period after employment, see Lobel, “The New Cognitive Property: Human Capital Law and the Reach of Intellectual Property” (2015) 93 Tex LR 789 at 797-298. See the compelling article by Lobel, “The New Cognitive Property: Human Capital Law and the Reach of Intellectual Property” (2015) 93 Tex LR 789. The New York Times (April 14, 2014), Opinion and Editorial, O Lobel, “My Ideas, My Boss’s Property”.

Employee’s Implied Duties

inventive activities in their industry, become untouchables … the more experienced an employee, the less employable they become.”635

Exclusive service [5.800] There is no general rule that employees cannot engage in gainful employment

in their spare time.636 A person employed specifically as a salesman was not in breach of his duty of fidelity when he designed a new safety helmet in his spare time and made preliminary steps to set up a new business in competition with his employer.637 It would, however, be a breach of good faith if in so doing employees disclosed or used confidential information belonging to the employer or the additional work hindered the performance of their primary employment638 or if the employee was a fiduciary who would be placed in conflict with her or his duties to the employer, [5.540]. Employees, particularly senior employees, may be expressly precluded from doing any other paid work outside their employment. This is often the case for government and semi-government employees who are regulated by statutory codes.639 Employees may be bound by work policies which prohibit outside employment unless permission is first obtained640 or restricted by exclusive service agreements not to undertake work outside the employment.641 Such express arrangements may be common in the theatrical or entertainment industries,642 and in relation to sports stars,643 technical staff and executives. Such agreements must meet the requirements of the law with respect to unreasonable restraint of trade, [4.420]. Exclusive service clauses are legitimate “provided the restraint on ‘other’ employment is confined to the specific field of business in which the employer is concerned and provided that the restraint is otherwise reasonable”.644 The issue can arise when an employee is working out a period of notice before finishing up the employment and may be on “garden leave”. The employee is still in the employment and still subject to the obligation of good faith and any express covenants.645 Long periods of “garden leave” are to be taken into account in deciding whether additional post-employment restraints are reasonably necessary to protect the employer.646 Where there is no exclusive service agreement, if employees set up, or are involved in, a business in direct competition with the employer in their spare time to the 635 636 637 638 639 640

641 642

643

644 645 646

Lobel, “The New Cognitive Property: Human Capital Law and the Reach of Intellectual Property” (2015) 93 Tex LR 789 at 822. As to the relevance of an employee’s out of hours conduct in the context of summary dismissal, see [8.340]. Helmet Integrated Systems Ltd v Tunnard [2007] IRLR 126 (salesman designed safety helmet in competition with employer, not a fiduciary). Hivac Ltd v Park Royal Scientific Instruments [1946] Ch 169. See, for example Lawrence v Attorney General’s Department [2004] NSWIRComm 59. Nottingham University v Fishel [2000] ICR 1462. Examples: Robert Lawrence and AttorneyGeneral’s Department [2004] NSWIRComm 59 (mistaken view that permission given); Plumbly v Beatthatquote.Com Ltd [2009] EWHC 321 (knowledge and no objection). Nottingham University v Fishel [2000] ICR 1462 (outside work with permission). Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337; Lumley v Wager (1852) 1 De G M & G 604 (a claim for inducing breach of an exclusive contract. For further illustrations of negative covenants applied to the entertainment industry and their enforcement, see [11.20]. See generally in relation to sports stars and restraint of trade issues, Dabscheck, “Sport, Human Rights and Industrial Relations” (2000) 6(2) AJHR 23; Thorpe, “The Restraint of Trade Doctrine in the Era of Digital Markets” (2015) 32 J Con L 244 at 249 (sponsorship clauses). Brooks, “The Limits of Competition: Restraint of Trade in the Context of Employment Contracts” (2001) UNSWLJ 27 at [93]. Sendo Holdings plc v Brogan [2005] EWHC 2040; Thomson Ecology Ltd v APEM Ltd [2013] EWHC 2875. See [4.400] and criticism by Brooks, “The Limits of Competition: Restraint of Trade in the Context of Employment Contracts” (2001) UNSWLJ 27.

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detriment of the employer, this may be in breach of the implied duty of good faith (see [5.600]). But it would not be a breach and there would be no detriment to the employer if an “odd job” employee worked for another competing business doing “odd jobs” in the employee’s spare time647 or a service engineer for a fire protection company installing a sprinkler system as a paid job over the weekend.648 In neither case did the spare time work seriously damage the primary employer’s business.649 Similarly, casual and part-time employees would be entitled to find other employment and, save in absolutely exceptional cases, it would not be a breach of the duty of fidelity to do so.650 The employer would, however, be entitled to protect its confidential information if it could be shown that the employee had disclosed or used confidential information or there was a serious risk that this might occur (see [5.650]). In Cementaid (NSW) Pty Ltd v Chambers,651 Spender J summarised the principles by suggesting that four questions are relevant when determining whether or not an employee is acting outside his or her duty to the primary employer by taking a second job: (a) Is the second activity incompatible with the fulfilment of the employee’s duty to [the] employer?652 (b) Does it involve an opposition or conflict between the employee’s interest and the duty to [the] employer?653 (c) Does it impede faithful performance of [his/her] obligations to [the] other employer? (d) Is it destructive of the necessary confidence between employer and employee? These tests are useful where employees without managerial responsibilities undertake work in their spare time such as a weekend job. But more extensive obligations may be owed where the employee is also a fiduciary [5.540] or the employee is bound by enforceable restraints against competing with the employer, [5.630]. Nowadays the issue is relevant to the question whether the employee has broken the implied duty of fidelity and good faith.

647 648

649

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651

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Nova Plastics Ltd v Froggatt [1982] IRLR 146. See also ABK Ltd v Foxwell [2002] EWHC 9 (Ch) at [67]-[72]. Hall Fire Protection Ltd v Buckley [1995] UKEAT 5-94-0606. It is a breach of fidelity where the employee is working for another firm during work time, Cusworth v Yorkshire Water Services [1994] UKEAT 366-93-2211; Westbridge Foods Ltd v Radovitz [2005] EWHC 3249. Nova Plastics v Froggatt [1982] IRLR 146. See also GlaxoSmithKline Australia Pty Ltd v Ritchie [2008] VSC 164 at [100] et seq (non binding direction relating to a project undertaken outside work hours). A covenant by a part time contractor to work exclusively for that employer in a particular industry was unreasonable and unenforceable especially when there was no guarantee of work, Capital Aircraft Service Pty Ltd v Brolin [2007] ACTCA 8. Cementaid (NSW) Pty Ltd v Chambers (unreported, Spender J, 29 March 1995). See also Robert Lawrence and Attorney-General’s Department [2004] NSWIRComm 59; Powerlan Ltd v Squires [2006] NSWIRComm 390. Australian Workers Union v Barminco Pty Ltd [2015] FWC 99 (no repudiation where mining employees on standby not required to attend work but encouraged to seek new employment obtained new employment prior to the formal termination of their employment); Adidem Pty Ltd v Suckling [2014] FWCFB 3611 (no conflict between private business and employment). In relation to workers compensation and total incapacity for work, see Vijioca v TNT Australia Pty Ltd [2014] FWC 4790 (working for another employer whilst on workers compensation and incapacitated for work); Visy Board v WorkCover [2011] SAWLRP 1 (cricket umpiring). See Goodchild Fuel Distributors Pty Ltd v Holman (1992) 59 SASR 454 (breach of duty by employee in exposing employer to union sanctions in secretly supplying goods and extending credit to family business).

Employee’s Implied Duties

Bribes and secret commissions [5.810] The employee who accepts a bribe or secret commission in respect of the employer’s business will almost certainly commit a criminal offence under either federal or State legislation.654 This legislation directed against secret commissions is not confined to those in an employer–employee relationship and extends to a large number of other situations. Quite apart from criminal liability, the taking of a bribe or secret commission655 will be a breach of the employee’s obligation of fidelity and good faith, and a breach which renders the employee liable to dismissal. This is made clear by the case of Boston Deep Sea Fishing & Ice Co v Ansell.656 In that case the employee had accepted secret commissions in allocating contracts on behalf of his employer. It was held that this action was a breach of contract which rendered him liable to dismissal. The employee is also liable in damages to the employer for the value of what was received.657 It also seems that the employer is entitled to retain any money which the employee has obtained by improper means.658

Duty to account for property [5.820] Employees must account for any property they receive in the course of

employment on behalf of the employer.659 The duty extends to property or money received in the course of duty or by way of secret commission660 as well as other property acquired by the employee in circumstances in which the employment provides the means and opportunity for the acquisition of the property. For example, if a bank attendant engaged to patrol the public areas of a bank and assist the public and generally keep the area in order finds a sum of money and the true owner of that money cannot be traced then the money will belong to the employer, the bank.661 If the same bank official found this sum of money, for example, in the street when not on duty then under the general common law the employee would have a good title to that money as against all but the true owner. 654

655

656 657

658

659 660 661

Criminal Code Act 1995 (Cth), Divs 139 – 142; Crimes Act 1900 (NSW), Pt 4A; Criminal Code (Qld), Ch 42A; Criminal Law Consolidation Act 1935 (SA), s 150; Criminal Code Act 1913 (WA), Ch XIII (public officers); Crimes Act 1958 (Vic), s 176; Criminal Code 2002 (ACT), s 356; Criminal Code Act (NT), s 88. Even if a “gift”, Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296 at [212]. Similarly if a benefit is obtained for a family member, Serventi v John Hollands GroupPty Ltd [2006] FCA 1049 (11 Aug 2006, Madgwick J) (company car for employee’s son). Boston Deep Sea Fishing & Ice Co v Ansell (1888) 39 Ch D 339. In the United Kingdom, in relation to fiduciaries in equity, any acquired property may be subject to a constructive trust in favour of the employer, see FHR European Ventures LLP v Cedar Capital Partners LLC [2014] UKSC 45; [2015] AC 250 and see Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296 at [569]-[584]. But see Campbell, “When and Why a Bribe is Held on a Constructive Trust: The Method of Reasoning Towards an Equitable Remedy” (2015) 39 Aust Bar Rev 320 doubting whether it would be followed as a universal rule in Australia. Reading v Attorney-General [1951] AC 507. Tips are not bribes but substantial gifts for past assistance that might influence future dealings might be, see Blythe v Northwood [2005] NSWCA 221 at [198]-[200]. Where there is a breach of a fiduciary duty, the fiduciary must account for any benefit received, see Warman International Ltd v Dwyer (1995) 182 CLR 544 at 557-558. Note also NAB Ltd v Rusu [2001] NSWSC 32 (money stolen by employee from bank, effect on third parties where fiduciary obligation). And see the significant liabilities imposed by the Bribery Act 2010 (UK). Boston Deep Sea Fishing & Ice Co v Ansell (1888) 39 Ch D 339. See also Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296 at [188]-[193]. Reading v Attorney-General [1951] AC 507 (bribes). Willey v Synan (1937) 57 CLR 200; London Corporation v Appleyard [1963] 1 WLR 982; cf Byrne v Hoare [1965] Qd R 135. Occupation gives rights of possession, see Flack v Chairperson, National Crime Authority [1997] FCA 1331.

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The duty to report derelictions and answer questions No general duty to report employee’s own misdeeds [5.830] It is clear that a prospective employee as distinct from an existing employee is

not obliged to volunteer information about past misdeeds.662 There may be exceptions in relation to particular professions, such as the legal profession, where there may be a statutory obligation to disclose prior criminal proceedings.663 If a prospective employee is asked questions by the employer and answers them dishonestly, this may lead to dismissal if the truth subsequently emerges, at any rate in the case where the dishonesty was material to the making of the contract.664 The employee would also be subject to dismissal if the dishonesty amounts to a breach of the implied warranty which employees give that they are competent to carry out the duties of the job for which they are applying. The latter might be called in aid when the past misdeeds are utterly inconsistent with carrying out the employment, for example, a security guard with extensive convictions for for theft. The general position of existing employees in relation to a duty to disclose is described by Stephenson LJ in Sybron Corporation v Rochem Ltd:665 [A] contract of employment, though often described as creating a relationship of trust between master and servant, is not a contract uberrmae fidei (utmost good faith) so as to require disclosure by the servant of his own misconduct, either before … employment … or during the course of … employment.

In the absence of a contractual duty, there is no general duty to volunteer information in relation to one’s own misdeeds,666 or that they are being headhunted by a competitor.667 There is, however, English authority suggesting that directors or senior staff as fiduciaries with management responsibilities may have such a duty. The exact scope of the duty to report one’s own breaches of fiduciary duties is unclear. Tesco Stores v Pook668 held that a senior manager had a duty to report his own misconduct, theft from the employer and bribes in breach of his fiduciary duties. A narrower basis 662

663 664 665 666

667 668

Bell v Lever Bros [1932] AC 161 at 227 per Lord Atkin; Concut Pty Ltd v Worrell (2000) 75 ALJR 312; Hollingsworth v Commissioner of Police (1999) 47 NSWLR 151 (failure to disclose prior work as sex worker); Burrett v Repatriation General Hospital (Daw Park) [2001] SAIRComm 24; Ashley v Statewide Autistic Services Inc [2005] AIRC 607 at [104]. There is similarly no duty on the employer, see BCCI v Ali [1999] IRLR 226 at 232, on appeal BCCI v Ali [2001] 2 WLR 735 (HL) on the effect of a release. The dissenting judgment of Lord Hoffmann at [68]-[69] holds that the principle in Bell might not extend to a general release. Could failure to disclose be misleading and deceptive conduct? Moss v Lowe Hunt [2010] FCA 1181. See Legal Profession Uniform Law (NSW) s 93. See also Chapter 4, “Formation of Contract”, [4.200]–[4.240]. Sybron Corporation v Rochem Ltd [1984] Ch 112. Concut v Worrell (2000) 75 ALJR 312 at [58]; Nottingham University v Fishel [2000] ICR 1462 (no duty to advise that undertaking other paid work without permission in breach of contract). There is a suggestion in Concut at [37] that a fiduciary relationship can give rise to such a duty or a duty to disclose arises under the Australian Consumer Law, s 18 (misleading or deceptive conduct)]. Note also legislation relating to spent convictions, see [4.210]. Note also Nationwide News Pty Ltd v Naidu [2007] NSWCA 377; (2007) 71 NSWLR 471 (torts claim, unrealistic to expect a senior employee to self report harassment, bullying and racial vilification), see Basten J at [423]; cf Spigelman J at [50]; Beazley J at [236]. Despite the inhibiting effect, a contractual duty to report approaches by competitors is not in restraint of trade, see Tullett Prebon PLC v BGC Brokers [2010] EWHC 484 at [67]. Tesco Stores v Pook [2004] IRLR 618 (timing was important because if Pook had reported these breaches he would have been dismissed prior to gaining entitlements to exercise share options). See also Berryland Books Ltd v Bk Books & Ors [2009] EWHC 1877 at [33]; Penwell Publishing (UK) Ltd v Ornstein [2007] EWHC 1570 at [61]-[65]. The duty to self report has also been held to apply to senior employees even if not fiduciaries, Kynixa Ltd v Hynes [2008] EWHC 1495 at [263], [283] (duty to report moving to competing company); ODL Securities Ltd v McGath [2013] EWHC 1865

Employee’s Implied Duties

was adopted in Item Software v Fassihi669 where a director had sought to divert custom away from his employer to his own company. The duty to confess was regarded as part of a director’s general duty to act in the interests of the company. In so far as there is a suggestion that there is a fiduciary duty to report one’s own misdeeds, those authorities might not be followed in Australia. This is because of the argument that fiduciary duties are concerned only with negative duties rather than positive duties670 so that fiduciaries have no duty to disclose their own misdeeds unless there is a contractual or statutory obligation to do so. The general principle in Bell v Lever Bros that there is no duty to disclose one’s own misconduct continues to apply.671

Duties to report the misdeeds of others [5.840] In relation to the misdeeds of others, an employee may be contractually bound672 or be so placed in the employer’s organisation as to be obliged to report without being asked the derelictions of other employees.673 In Sybron Corp v Rochem Ltd674 Stephenson LJ said: there is no general duty to report a fellow-servant’s misconduct or breach of contract; whether there is such a duty depends on the contract and on the terms of employment of the particular servant. He may be so placed in the hierarchy as to have a duty to report either the misconduct of his superior, … or the misconduct of his inferiors, as in this case.

This has been held to extend to a duty to report the possible defection and poaching of other senior staff to a competitor.675 The obligation to report is more likely to arise with respect to managerial or supervisory staff.676 Management and supervision can involve the duty to report as an inherent requirement of the functions those persons

669 670

671

672 673 674 675

676

(senior employee fiduciary effectively running the company); Thomson Ecology Ltd v APEM Ltd [2013] EWHC 2875 (operations manager with responsibility for running the business and with contractual duties of report); contrast Ranson v Customer Systems Plc [2012] EWCA Civ 841 (no contractual duty, not fiduciaries or directors). Item Software v Fassihi [2005] ICR 450 (CA). Compare Ranson v Customer Systems Plc [2012] EWCA Civ 841 (no contractual duty, not fiduciaries or directors, no duty to disclose). See Breen v Williams (1996) 186 CLR 71; Pilmer v Duke Group (2001) 207 CLR 165; P & V Industries Pty Ltd v Porto (2006) 14 VR 1; [2007] VSC 64. See also ASIC v Citigroup Global Markets Pty Ltd (No 4) (2007) 241 ALR 705 at [290], [375]; Wilden Pty Ltd v Green [2009] WASCA 38 at [106], [212]; Blackmagic Design Pty Ltd v Overliese [2010] FCA 13 at [96]; Groeneveld Australia Pty Ltd v Nolten (No 3) [2010] VSC 533; Hodgson v Amcor Ltd [2012] VSC 94; (2012) 264 FLR 1 at [1560]-[1574]. Bell v Lever Bros [1932] AC 161 at 227 per Lord Atkin. This is contrasted with the position of a fiduciary who wishes to embark on, for example, a business venture in conflict with their duty to their employer, if prior consent of the employer is obtained, there is no breach of fiduciary duty; disclosure is relevant because there is no liability if there is fully informed consent, see for example, Hodgson v Amcor Ltd [2012] VSC 94; (2012) 264 FLR 1 at [1425] at see [1560]-[1574], a fiduciary may be required to disclose conflict of interest which may cause harm to the employer in the future. Failure to do so may amount to misleading or deceptive conduct, Groeneveld Australia Pty Ltd v Nolten (No 3) [2010] VSC 533 at [66]. See, for example, QBE Management Services(UK) Ltd v Dymoke [2012] EWHC 80 (QB) at [30]. Concut Pty Ltd v Worrell (2000) 75 ALJR 312. Carter and Stewart, “The Effect of Formalising an Employment Contract: The High Court Misses an Opportunity” (2001) 17 JCL Lexis 5. Sybron Corp v Rochem Ltd [1984] Ch 112 at [126]. For example, British Midland Tool Ltd v Midland International Tooling Ltd [2003] EWHC 466 at [95]; Kynixa Ltd v Hynes [2008] EWHC 1495 at [274], [283]; Tullett Prebon PLC v BGC Brokers [2010] EWHC 484 at [67]-[69]; UBS Wealth Management (UK)Ltd v Vestra Wealth [2008] EWHC 1974 at [24]. The duty can extend to investigation, see RBG Resources plc v Rastogi [2002] EWHC 2782 at [47]-[49] (later proceedings RBG Resources plc v Rastogi [2004] EWHC 1089 (Ch). British Midland Tool Ltd v Midland International Tooling Ltd [2003] EWHC 466 at [95] and see previous note. Unlikely where employees can terminate their employment by giving one week’s notice or are salesmen: WA Fork Truck Distributors Pty Ltd v Jones [2003] WASC 102 at [62]-[65]. There

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have agreed to carry out.677 Bell v Lever Brothers678 suggests that, if the employer’s property is involved, all employees may be required to report any derelictions and to answer questions.679 A breach of duty would occur where a grocery manager did not inform the employer about a known planned robbery.680 A manager’s duty to report may extend to external bodies such as auditors but is not unlimited; the duty is likely to be limited to what is necessary in the circumstances.681 There is no authority which would imply a duty by an employee to act as a “whistleblower” even if the disclosure would be protected under whistleblower legislation.682 There may be statutory duties of disclosure, for example, in relation to child abuse (see [4.20]).

Duty to answer questions concerning the employment honestly [5.850] There is a difference between an absence of a duty to disclose misconduct and

the obligation to answer questions concerning the employment.683 An obligation to answer questions arises out of the contract of employment, either as an implied term or as a consequence of the duty to obey lawful and reasonable orders or more generally as an element of the duty of fidelity and good faith. But it is subject to modification by statute or express agreement. Does this mean that an employee has to answer questions even at the risk of self-incrimination?684 Generally speaking, individuals are not required to incriminate themselves.685 Thus although disciplinary “offences” under a public sector statute are not criminal offences, but can lead to penalties such as demotion and dismissal, it has been held that the privilege against self-incrimination can apply to questions in respect of them686 and so an employee may not be obliged to

677

678 679 680 681

682

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684

685 686

may be an express contractual duty, Swain v West (Butchers) Ltd [1936] 3 All ER 261 (duty to “promote, develop and extend” company interests requiring employee to disclose managing director’s misconduct); QBE Management Sercices (UK) Ltd v Dymoke [2012] EWHC 80 (express contractual duty of disclosure). Tullett Prebon PLC v BGC Brokers [2010] EWHC 484 at [67]-[69] (duty of desk head to report recruitment of team by outside employer); Thomson Ecology Ltd v APEM Ltd [2013] EWHC 2875 at [15] (senior manager duty to report threat of staff poaching). Cf Brandeaux Advisers (UK) Ltd v Chadwick [2010] EWHC 3241; Ranson v Customer Systems Plc [20120 EWCA Civ 841 (no duty of disclosure by Divisional Manager and others who were not obliged to disclose under their contracts and were not directors or fiduciaries). Bell v Lever Bros [1932] AC 161 at 227 per Lord Atkin. Hodgson v Amcor Ltd [2012] VSC 94; (2012) 264 FLR 1 at [1575] (persons in managerial positions). Barker v Woolworths (SA) Pty Ltd [1998] SAIRComm 49 (possible threats to the manager did not outweigh the duty to inform). RBG Resources plc v Rastogi [2002] EWHC 2782. Note the suggestion that employers should specify these obligations in employment contracts and have a detailed procedure for reporting; Lewis, “When do Employees have a Contractual Duty to Report Wrongdoing” (2004) 33 ILJ 278 and see generally Collings, “Implied Duty to Give Information During Performance of Contracts” (1992) 55 Mod LR 556. Lewis, “When do Employees have a Contractual Duty to Report Wrongdoing” (2004) 33 ILJ 278 at 280. Note the common law duty to report a felony has been abolished in some States, see NSW: Crimes Act 1900, s 341; SA: Criminal Law Consolidation Act 1935, Sch 11. Bell v Lever Bros [1932] AC 161 at 228 per Lord Atkin; Associated Dominions Assurance Society Pty Ltd v Andrew (1949) 49 SR (NSW) 351 at 357-358 per Herron J; Coulter v Woolworths (WA) Pty Ltd [2004] WAIRComm 11973; Streeter v Telstra Corporation [2008] AIRCFB 15 (duty of honesty not limited to workplace conduct but also to outside conduct affecting the workplace, in relation to an unfair dismissal claim). Sybron Corp v Rochem [1984] 1 Ch 112 at 126 per Stephenson LJ. See generally in relation to the privilege, R v Director of Serious Fraud Office; Ex parte Smith [1993] AC 1, 30-31 per Lord Mustill. But the privilege against self incrimination may be withdrawn by statute, see, for example in relation to breach of work safety requirements, model Work Health and Safety Act 2011 s 172; Occupational Health and Safety Act 2004, (Vic) s. 154 Reid v Howard (1995) 184 CLR 1 at 14: “There is simply no scope for an exception to the privilege, other than by statute.” Police Service Board v Morris and Martin (1985) 156 CLR 397 at 403 per Gibbs CJ; at 408 per Wilson and Dawson JJ; at 411 per Brennan J; Murphy J contra. Rich v Australian Securities &

Employee’s Implied Duties

answer such questions unless statute requires to the contrary. The New South Wales Industrial Commission held that an order requiring employees of the fire service to incriminate themselves would not be a lawful order.687 But the protection against self-incrimination can be excluded by statute or regulation.688 As with all interferences with fundamental rights, the statute must be unambiguous in removing the privilege against self-incrimination. A general statutory duty to obey lawful orders in relation to a particular statute may not be sufficient to abrogate the privilege.689 When so excluded, it can require an employee to answer even if to do so might expose the employee to disciplinary action under statutory provisions,690 or even to criminal sanctions.691 A failure to answer questions or the dishonest response to questions which an employee is properly required to answer could be so serious as to render the employee liable to dismissal. In Associated Dominions Assurance Society v Andrew,692 Herron J said that a duty lies upon an employee in general terms to give information to the employer that is: within the scope of his employment and which relates to the mutual interest of employer and employee. If an employee is requested at the proper time and in reasonable manner to state to his employer facts concerning the employee’s own actions performed as an employee … generally speaking [the employee is bound] to make such disclosure … Questions asked relating to the employee’s activities could be so reasonable and fair that to refuse the information may well be disobedience justifying dismissal.

But in relation to an employee’s own misconduct, should there be some qualification on the duty to respond? In judicial and quasi-judicial proceedings, there has long been the privilege against self-incrimination which allows the respondent to refuse to answer questions or provide material which would expose them to the risk of criminal prosecution. There is also the related “penalty privilege” under which a person can refuse to provide answers which would result in exposure to penalties such as the loss of a job, demotion or other disciplinary penalties. Although these rules have developed in the context of judicial and quasi-judicial proceedings,693 there is a strong argument

687

688 689

690

691 692

693

Investments Commission (2004) 220 CLR 129 at [127]; Borland v NSW Deputy State Coroner [2006] NSWSC 2002; Legal Services Commissioner v Spaulding (Legal Practice) [2015] VCAT 292. It also applies to documents which may self incriminate, Valantine v Technical and Further Education Commission [2007] NSWCA 208. Re Dispute – Board of Fire Commissioners; Re Reports [1971] AR (NSW) 615 at 618; Pieter Lips v Supercheap Auto Pty Ltd [2004] WAIRComm 12089; Gardiner v Bluescope Steel (Ais) Pty Ltd [2005] NSWIRComm 1034. Police Service Board v Morris and Martin (1985) 156 CLR 397. See Police Service Board v Morris and Martin (1985) 156 CLR 397 (based on a statutory duty to obey orders). See also Baff v NSW Commissioner of Police [2013] NSWSC 1205 (police officer, no statutory withdrawal of privilege). Police Service Board v Morris and Martin (1985) 156 CLR 397. compare Valantine v Technical and Further Education Commission [2007] NSWCA 208 (not excluded by Government and Related Employees Appeal Tribunal Act 1980) See for example the uniform Work Health and Safety Act (Cth), s 155 giving the regulator power to obtain information. Associated Dominions Assurance Society Ltd v Andrew (1949) 49 SR (NSW) 351 at 357-358; Telstra Corp Ltd v Streeter [2008] AIRCFB 15 at [12]-[20] (even if embarrassing and of a sexual nature provided it relates to the employment in relation to an unfair dismissal claim); Thompson v John Holland Group Pty Ltd [2012] FWA 10363 (misconduct where refusal to answer questions whether employee had taped conversations). An employee is required to answer honestly when asked whether they or other employees are planning to leave and join a competitor Kynixa Ltd v Hynes [2008] EWHC 1495 at [271]-[276]. Note Murray Irrigation Ltd v Balsdon (2006) 67 NSWLR 73 (special leave to appeal to the High Court dismissed) (contractual duty to answer questions which may have incriminated but dismissal for refusal to answer questions was harsh, unjust or unreasonable in breach of the applicable enterprise agreement). As to the history, see McColl JA in Rich v ASIC [2003] NSWCA 342, [195]-[257].

249

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that the employee’s duty to answer questions should not override fundamental rights unless the employee (or statute) has waived this right. There is an important difference between a refusal to answer and giving a dishonest answer. A refusal to answer can be justified when the answer puts the employee at risk of being disciplined, dismissed or exposed to criminal prosecution.694 But if an answer is given, there is a duty to respond honestly.695 An employee will be entitled to a reasonable time to refresh her or his memory before answering the employer’s questions, especially where they relate to matters which happened years before and where the questioning is carried out in a way which is a deliberate attempt to catch the employee off guard.696 It should not be a mere charade but a genuine attempt to elicit information relevant to the employment.697 An untrue statement made by an employee will not necessarily justify dismissal, such as where the employee is being called to answer vague allegations or serious but extravagantly inaccurate allegations about themselves.698 Work health and safety legislation may withdraw the privilege against selfincrimination despite the risk of penalty.699

694

695 696 697

698

699

Query whether there was no duty to answer because of a possible report to the police and risk of prosecution for an offence relating to the tape recordings made without consent, cf Thompson v John Holland Group Pty Ltd [2012] FWA 10363. Note also Murray Irrigation Ltd v Balsdon (2006) 67 NSWLR 73 (special leave to appeal to the High Court dismissed) (contractual duty to answer questions which may have incriminated but dismissal for refusal to answer questions was harsh, unjust or unreasonable in breach of the applicable enterprise agreement). This also applies to documents such things as medical certificates, Tokoda v Westpac Banking Corporation [2012] FWA 1262. Mullen v Nepean Shire Council (1946) 16 LGR (NSW) 88 at 92-93; Re Pettett [1956] AR 264 at 267 per Weir J. Patty v Commonwealth Bank of Australia [2000] FCA 1072 at [95]-[96] (employer’s obligation to solicit information by questions which are fair and reasonable and in relation to which the employee has the information to answer); Howard v Pilkington (Australia) Ltd [2008] VSC 491 at [139] (investigation a charade “designed to justify dismissal for failure to co-operate”); Carter v The Dennis Family Corporation [2010] VSC 406 at [484]-[488]. Scanes v Wilson (1974) 22 FLR 262; Murray Irrigation Ltd v Balsdon (2006) 67 NSWLR 73 (unfair dismissal); Garuccio v WP Corwhurst Pty Ltd t/as Solver Paints [2010] FWA 9595 at [142] (no intentional dishonesty); Ratnayake v Greenwood Manor Pty Ltd [2012] FMCA 350 at [105]-[107] (refusal to answer vague allegations of criminal conduct and bullying not misconduct); Ramsey v Annesley College [2013] SASC 72 (not intentionally misleading). Contrast McDonald v Parnell Laboratories (Aust) [2007] FCA 1903 at [55] (intentionally misleading answers regarding attendance at work). For example the model Work Health and Safety Act 2011 (NSW), s 172(1) abrogates the privilege but provides in s 2 that “the answer to a question or information or a document provided by an individual is not admissible as evidence against that individual in civil or criminal proceedings other than proceedings arising out of the false or misleading nature of the answer, information or document.” Contrast Vic Occupational Health and Safety Act 2004 (Vic), s 154.

6

Safety at Work [6.10] [6.20] [6.90] [6.100] [6.110] [6.120] [6.130] [6.150] [6.160] [6.170] [6.180] [6.190] [6.200] [6.210] [6.210] [6.220] [6.230] [6.240] [6.250] [6.260] [6.300] [6.310] [6.340] [6.340] [6.360] [6.450] [6.480] [6.550]

[6.560] [6.570] [6.600] [6.610] [6.620]

Introduction ..................................................................................................... 251 Employer’s liability for work injuries ....................................................... 252 Limitations on common law compensation claims ................................... 259 Employer’s Duty of Reasonable Care ............................................................ 260 General considerations .............................................................................. 261 Duty owed to each worker ......................................................................... 262 Reasonable care ......................................................................................... 263 Not a guarantee of safety ........................................................................... 264 Duty of reasonable care – common aspects .............................................. 265 Competent staff ........................................................................................... 265 Safe place of work ...................................................................................... 266 Safe plant and appliances .......................................................................... 266 Safe system of work .................................................................................... 267 Stress Claims – Psychiatric Injury ................................................................. 268 Introduction ................................................................................................ 268 Psychiatric injury ....................................................................................... 270 Forseeability of psychiatric injury ............................................................. 270 Reasonable response to foreseeable risk ................................................... 272 Koehler v Cerebos – the effect of contractual obligations ....................... 274 Bullying ....................................................................................................... 276 Excessive workloads ................................................................................... 281 Disciplinary and investigative proceedings ............................................... 281 Work Health and Safety .................................................................................. 283 Introduction ................................................................................................ 283 Key definitions and core concepts ............................................................. 286 General rules applying to duties ............................................................... 294 The primary duty of care: Model Act, s 19 .............................................. 297 Workplace: safety, access and exit – management or control of workplaces (s 20); management or control of fixtures, fittings or plant at workplaces (s 21) ........................................................................................................... 302 Design, supply, importation, installation and manufacture of plant, substances or structures (ss 22–26) .......................................................... 304 Duties of workers, company offıcers (including directors) and others .... 306 Unsafe working conditions – right to cease work .................................... 309 Right of entry .............................................................................................. 310 Compliance and enforcement ..................................................................... 312

Introduction [6.10] This chapter discusses safety at work focusing on the employer’s liability for work injuries. It first considers common law liability for work injuries and then gives a brief overview of liability under the work health and safety legislation.

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Of the Australians employed in the year June 2013-14, 4.3% experienced at least one work-related injury or illness.1 The occupations with the highest rates of work-related injury or illness were Machinery Operators and Drivers (88 per 1,000 employed people), Community and Personal Service Workers (73 per 1,000 employed people), Technicians and Trades Workers (72 per 1,000 employed people) and Labourers (66 per 1,000 employed people).2 Physical injury through sprains and strains, chronic joint or muscle conditions and, in relation to tradespersons cuts or wounds, were the most common types of injuries.3

Employer’s liability for work injuries [6.20] An employer’s liability for negligent conduct resulting in injury to employees can arise in different ways. An injured employee may initially claim workers compensation ([6.30]) and subsequently, subject to limitations on the right to sue (see [6.90)]) bring common law claims for damages for injuries. Independently of the right to claim compensation by the injured worker, the employer may be liable for breach of work health and safety legislation. The different bases for liability are: • Workers compensation ([6.30]) • Common law liability – Direct liability ([6.40]) – Non-delegable duties ([6.50]) – Vicarious liability ([6.60]) – Breach of statutory duty ([6.70]) • Work Health and Safety Acts ([6.80]).

Workers’ compensation [6.30] Workers’ compensation in each jurisdiction provides limited compensation to

workers who suffer injury or work related disease in the course of employment4 without the need for the employee to prove that the employer is negligent or is at fault. Compensation is available not only for employees but also for other workers who may be deemed to be employees for purposes of the legislation. This may include labour hire workers, see [3.30]. The compensation recoverable is usually more modest than damages recoverable at common law and unlike the common law provides standardised compensation for particular injuries. This can include medical and health costs, limited sums for death or permanent impairment and periodical payments during incapacity to work. Under workers’ compensation legislation,5 a “worker”6 (or if the worker dies, the worker’s dependants) may recover limited no fault compensation for injuries “arising out of or 1

2 3 4

5

ABS, Work-related Injuries Australia 2013-2014, cat 6324.0. But note that this may not capture all work related harm, see Johnstone, Bluff and Clayton, Work Health and Safety Law and Policy (3rd ed, Lawbook Co, 2012), pp 12-24. ABS, Work-related Injuries Australia 2013-2014, cat 6324.0. ABS, Work-related Injuries Australia 2013-20140, cat 6324.0. This usually required injury while at work (temporal connection) or caused by the work. But a causal connection to the employment is now required. The course of employment can cover remote workers in employer provided accommodation and employees working away from the workplace, see as recent illustrations relating to FIFO (Fly-in fly-out) employees in remote locations, Westrupp v BIS Industries Ltd [2015] FCAFC 173 per Buchanan, McKerracher and Katzmann JJ (assaulted by fellow employee between shifts, in the course of employment) and employees required to travel, Comcare v PVYW [2013] HCA 41 per French CJ, Hayne, Crennan, Kiefel, Bell and Gageler JJ (overnight stay in motel, injury during intimacy, not within course of employment). NSW: Workers Compensation Act 1987, Workplace Injury Management and Workers Compensation Act 1998; Vic: Workplace Injury Rehabilitation and Compensation Act 2013; Queensland: Workers’

Introduction

in the course of employment”, and work-related diseases. Recoverable compensation is not reduced if the employee has been contributorily negligent with the qualification that the right to compensation will be excluded where the worker is injured as a result of that worker’s own serious and wilful misconduct or intentional self-inflicted injury7 (see [5.470]). It is compulsory for employers to insure against their liability to pay workers’ compensation although authorised employers may act as self-insurers. The principal benefit of the workers’ compensation schemes is that the worker does not have to prove that the employer was in any way at fault. Workers’ compensation operated as a broadly based social insurance scheme which protected employees and their families against the potentially devastating economic effects of injury. The employee was, until fairly recent times, covered as they left home to go to work until they returned, door-to-door. It was also sufficient if in relation to work injuries,8 the employee was injured whilst at work without the need to show that work in any way contributed to the harm. But in the face of rising insurance costs and competitive pressures, workers’ compensation no longer operates as a general social insurance scheme for employees. It is now a very limited compensation scheme for work-related injury and disease. Legislative changes restrict compensation claims for psychiatric illness and compensation for injuries sustained during non-work-related journeys to and from the workplace.9 In some States, the employment must have a causal relationship to the injury.10

6 7

8

9

10

Compensation and Rehabilitation Act 2003; WA: Workers’ Compensation and Injury Management Act 1981; SA: Return to Work Act 2014 (effective from 1 July 2015); Tas: Workers Rehabilitation and Compensation Act 1988; NT: Return to Work Act; ACT: Workers Compensation Act 1951; Cth: Safety, Rehabilitation and Compensation Act 1988, Seafarers Rehabilitation and Compensation Act 1992 (Cth). Workers compensation is exempted under the Fair Work Act 2009 (Cth), s 27(2)(b). The term includes employees but can also deem certain categories of workers to be employees for purposes of the legislation, see [2.120]. This restriction does not apply in some States if the misconduct results in death or serious and permanent disablement, Safe Work Australia, Comparison of Workers’ Compensation Arrangements in Australia and New Zealand (July 2015), Table 3.13. A causal connection between the work and disease was and is required: Cth: Safety, Rehabilitation and Compensation Act 1988, s 5B(1)(3) (employment contributes “to a significant degree”); NSW: Workers Compensation Act 1987, s 4 “injury”, employment must be “the main contributing factor”; Qld: Workers’ Compensation and Rehabilitation Act 2003, s 32(3) employment a “significant contributing factor”; SA: Return to Work Act 2014, ss 4(1) “injury”, 7(1)(2)(a), 7(3)(a) (significant contributing cause); Tas: Workers Rehabilitation and Compensation Act 1988, ss 3(1) “injury”, 3(2A), 25(1)(b) (substantial degree) and in relation to heart disease s 25(2)(ba); Vic: Workplace Injury Rehabilitation and Compensation Act 2013, s 50 “materially contributes”, 50(1) and 50(2) (significantly greater risk from employment) and see s 40(2)(3) in relation to heart attack or stroke, employment must be a “significant contributing factor”, and see ss 3 definition “heart attack injury” and 50(3); WA: Workers’ Compensation and Injury Management Act 1981, s 5 definition “injury” ((c) and (d) disease), employment “contributed to a significant degree”; ACT: Workers Compensation Act 1951, ss 4, 31(2), and (3) (“substantially contributes”); NT: Return to Work Act, s 4(5), (6) and (6A) material contribution to disease. NSW: Workers Compensation Act 1987, s 10; Qld: Workers’ Compensation and Rehabilitation Act 2003, ss 35, 36; SA: Return to Work Act 2014, s 7(8); Tas: Workers Rehabilitation and Compensation Act 1988, s 25(6), (7); Vic: Workplace Injury Rehabilitation and Compensation Act 2013, s 46; WA: Workers’ Compensation and Injury Management Act 1981, s 19; ACT Workers Compensation Act 1951, s 36; NT: Return to Work Act, ss 4(1), (2) and (2A), and see “Summary”, Safe Work Australia, Comparison of Workers’ Compensation Arrangements in Australia and New Zealand (July 2015), Table 3.8. See NSW: Workers Compensation Act 1987, s 9A(1) (employment must be a “substantial contributing factor”; there are some limited exceptions); Qld: Workers’ Compensation and Rehabilitation Act 2003, s 32(1)(a) (employment a “significant contributing factor”) and see definition of “course of employment” at s 4; SA: Return to Work Act 2014, s 7(2)(a) (“significant contributing cause”); Tas: Workers Rehabilitation and Compensation Act 1988, but only in relation to disease including heart disease, see s 3(1) definition of “injury” and see s 25(1)(a), (b) and s 25(2)(ba); Vic: Workplace Injury Rehabilitation and Compensation Act 2013, s 40(2)(3) in relation to heart attack or stroke, employment must be a “significant contributing factor”, and see s 3 definition “heart attack injury”

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There are special provisions relating to compensation for psychiatric injury/mental harm. In most jurisdictions, the legislation restricts recovery of compensation for psychological injury where the injury was attributable to reasonable management action by the employer.11 This places the onus on employees who wish to sue the employer for damages for negligence to show that the psychiatric illness did not result from reasonable management action. In some jurisdictions the employment must also be shown to be the “main” or “major” contributing factor to the psychiatric illness.12 The same set of facts which give rise to liability for negligence at common law may at the same time confer on the employee a right to compensation under workers’ compensation legislation. If so, the legislation will normally prevent “double dipping”, that is, recovery both at common law and under the compensation statute. We note at [6.90] the general statutory restrictions on employees bringing common law claims for damages against their employers.13

Direct liability (common law) [6.40] The employer can be liable because the employer, itself, has failed to take reasonable care to ensure the safety of employees. For example, the employer may have failed to give adequate training to employees or may have put a junior employee in a position beyond that employee’s competence or failed to respond to a dangerous condition at the workplace.14 In these instances the employer is liable for its own negligence. An employer has a duty to take reasonable care to provide a safe place of work, safe plant and appliances, competent employees and to establish a safe system of work (discussed at [6.160]). These duties are non-delegable duties.

Non-delegable duties (common law) [6.50] The employer can be liable for a failure to take care to ensure the safety of employees where the employer delegates the duty to provide a safe workplace to

11

12

13

14

and s 50(3); WA: Workers’ Compensation and Injury Management Act 1981, s 5 definition “injury”, s 5(c) and (d) disease, employment “contributed to a significant degree”; ACT: Workers Compensation Act 1951, ss 4, 31(2), (3) (in relation to diseases including heart attack and stroke); NT: Return to Work Act (NT), s 3A “injury”, s 4(5), (6), (6A), (8) “materially contributes” to disease. See also Safe Work Australia, Comparison of Workers’ Compensation Arrangements in Australia and New Zealand (July 2015), Table 3.9. See [6.210] and NSW: Workers Compensation Act 1987, s 11A(1); Qld: Workers’ Compensation and Rehabilitation Act 2003 (Qld), s 32(5) and note work must be a major significant contributing factor, s 32(2), (3)(ba); SA: Return to Work Act 2014, s 7(2) – (4); Tas: Workers Rehabilitation and Compensation Act 1988; Vic: Workplace Injury Rehabilitation and Compensation Act 2013, s 40; WA: Workers’ Compensation and Injury Management Act 1981, “injury” in s 5(1), (4). The restrictions do not apply to claims against persons other than the employer. The provisions are set out in Table 3.14 in Comparison of Workers’ Compensation Arrangements in Australia and New Zealand (July 2015). In New South Wales, employment must be “a substantial contributing factor to the injury”, Workers Compensation Act 1987, s 9A(1). In Queensland, course of employment is defined in Workers’ Compensation and Rehabilitation Act 2003, s 4 and the employment must be a “major significant contributing factor” to psychological disorders, s 32(2), (3)(ba). In South Australia the employment must be at “significant contributing cause”, Return to Work Act 2014, s 7(2)(b). These restrictions only apply to claims against the employer (including persons for whom the employer is vicariously liable) with the consequence that injured employees often search for non-employer defendants, see Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254 (unsuccessful claim by employee against shopping centre for injury in car park); Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361. But note the Civil Liability legislation imposing restrictions on recovery apply to non-employer defendants, see ACT: Civil Liability Act 2002; NSW: Civil Liability Act 2002; NT: Personal Injuries (Liabilities and Damages) Act;; Qld: Civil Liability Act 2003; SA: Civil Liability Act 1936; Tas: Civil Liability Act 2002; Vic: Wrongs Act 1958; WA: Civil Liability Act 2002. Note also statutory claims against the employer by the third party, Shoalhaven City Council v Humphries [2013] NSWCA 390 (Workers Compensation Act 1987 (NSW), s 151Z claim). Jones v Manchester Corporation [1952] 2 QB 852.

Introduction

someone else: a non-delegable duty. So, for example, if the employer employs independent contractors to clean the workplace or a plant manager to supervise work and as a consequence of their negligence whilst carrying out that work an employee is injured, the employer is liable for that negligence.15 This effectively operates as an exception to the rule that an employer is only vicariously liable for the conduct of its own employees.16 As with all the obligations arising under the employment contract, the duty of care owed by an employer to an employee is personal and said to be non-delegable.17 This effectively means that the provision of a safe work environment is the employer’s responsibility that cannot be avoided by delegating the duty to someone else.18 The non-delegable duty can be traced back to the now abolished rule that an employee consents to the risk of injury arising from the conduct of a fellow employee known as the common employment rule. This meant that if an employee was injured by the negligence of a fellow employee, no claim could be made for compensation. This undesirable result was avoided by finding that the employer’s duty was non-delegable: the employer had a duty to see that care was taken to avoid injury to the employee. This had the advantage that the employer could be liable whether a fellow employee or an independent contractor’s negligence caused the employee’s injury.19 But under this principle the employer is not liable where the “delegate” has been guilty of an intentional wrongdoing.20 Labour hire companies have been held liable under this principle where their employees work at worksites controlled by the client (see [3.170]).

Vicarious liability (common law) [6.60] An employer may also be liable to pay compensation for a worker’s injuries if another employee within the course of employment negligently (or, exceptionally, intentionally) injures another.21 The employer will be vicariously liable22 if • the employee23

15

16 17

18

19 20 21

22

23

But see suggested qualifications to the non-delegable duty in Wormleaton v Thomas & Coffey Ltd (No 4) [2015] NSWSC 260 and Shoalhaven City Council v Humphries [2013] NSWCA 390 (contribution claim against employer of labour hire employee). Leichhardt Municipal Council v Montgomery (2007) 230 CLR 22 at [24] per Gleeson CJ. As to the foundation for non-delegable duties, see Murphy, “The Liability Bases for Common Law Non-Delegable duties – A Reply to Christian Witting” (2007) 30(1) UNSWLJ 86; Moran, “Liability for Independent Contractors in Contract and Tort: Duties to Ensure that Care is Taken” (2015) 74(1) Cam LJ 109. And see the previous edition, Sappideen et al, Macken’s Law of Employment (7th ed), at [13.70]. Compare Lipman Pty Ltd v McGregor [2004] NSWCA 6. Labour hire companies can be liable for unsafe conditions of work, see [3.170]. It extends to the provision of properly maintained and repaired plant and equipment Galea v Bagtrans Pty Ltd [2010] NSWCA 350 at [5], [6], and [66]. Wilsons and Clyde Coal Co Ltd v English [1938] AC 57; Kondis v State Transport Authority (1984) 154 CLR 672; Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520. New South Wales v Lepore (2003) 212 CLR 511. An employer can be vicariously liable to others at the workplace and others outside the workplace for damage or injury sustained as a consequence of the wrongdoing of the employee within the course of employment. For example, where an employee’s negligence causes a motor vehicle accident resulting in damage to another vehicle, or where a heavy handed bouncer ejecting patrons injures them. Statutory provisions, such as work health and safety legislation [6.350], [6.490] and antidiscrimination legislation [15.50] can also make an employer liable for the conduct of employees under that legislation. There is no general vicarious liability for the conduct of an independent contractor, Hollis v Vabu (2001) 207 CLR 21; Sweeney v Boylan Nominees (2006) 226 CLR 16. But note in the United Kingdom, extension of vicarious liability to those persons in a relationship “akin to employment”:

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• committed a tort24 and • the wrongdoing had a sufficient connection to the employment (in the course of employment). The traditional test for determining vicarious liability is to first ask what is the employee employed to do and then ask whether the employee’s conduct was a method, even if an unauthorised method, of carrying out the employment.25 This test is less useful where intentional and criminal wrongdoing is concerned as an employer would rarely be taken to have authorised that conduct. There is no single test for dealing with intentional and criminal wrongdoing, but one test which has gained greater currency in Australia is whether the conduct occurred in the intended performance of the employee’s job or pursuant to the employer’s actual or apparent (ostensible) authority.26 As the emphasis in this chapter is the duty of the employer, to the employee, to take reasonable care for the safety of its employees, this issue is not discussed in detail as it tends to have greater importance where an employee injures someone other than an employee. The first question is what is the employee employed to do. Where the employee who is employed in a particular capacity independently (or contrary to directions) undertakes work not within that capacity, the employer would not normally be liable. For example, an employer would not be liable for the conduct of a bus ticket collector who drives the bus.27 But there may be situations where there is implied authority, particularly where the employee acts to benefit the employer. An employer was held vicariously liable for the conduct of an employee cleaner who intervened to protect a fellow worker from being assaulted and injured another in the process even though it was no part of the cleaner’s job to be responsible for security or safety.28 Under this test, an employer is vicariously liable for the negligent performance of work even if in breach of workplace rules or directives. In the usual situation, there is a clear connection with the employment and the employer is vicariously liable where employees are negligent in carrying out their work. For example, if an employee operating dangerous equipment or driving vehicles such as forklifts at the workplace fails to watch out for employees in the vicinity, this is sufficiently connected to the employment to give rise to vicarious liability. An employer can be vicariously liable to

24

25

26

27 28

Catholic Child Welfare Society v Various Claimants [2012] UKSC 56; [2013] 2 AC 1; Cox v Ministry of Justice [2016] UKSC 10 (negligence by prisoners); JGE v The Trustees of the Portsmouth Roman Catholic Diocesan Trust [2012] EWCA Civ 938; Hickey v McGown [2014] IEHC 19 and in Canada, Blackwater v Plint [2005] 3 SCR 3; 2005 SCC 58. This is the “servant’s tort” theory, see Macken’s Law of Employment (7th ed), at [13.60]. In relation to labour hire situations, see [3.220]. An employer is not vicariously liable for the conduct of employees appointed as directors of another company, see ADC v White [2001] NSWCA 9. This is known as the Salmond test, first set out in the first edition (in 1907) and in subsequent editions of Salmond on Torts (currently in its ninth edition, last printed in 1936). In this test, an employer will be liable for an employee’s unauthorised acts if those acts are: “so connected with authorised acts as they may be regarded as modes – although improper modes – of doing them but the employer is not responsible if the unauthorised and wrongful act is not so connected with the authorised act as to be a mode of doing it, but is an independent act..” New South Wales v Lepore (2003) 212 CLR 511 at [594] per Gummow and Hayne JJ; or if the responsibilities involve the exercise of power and intimacy over vulnerable children or the like, there might be sufficient connection, per Gleeson CJ at [74]. In some situations, risks to vulnerable children might be an inherent risk such that it is just and reasonable that the employer should be vicariously liable, Kirby J at [324]. An employer might in some circumstances not be permitted to argue (estopped) that the conduct is outside the course of employment, Gaudron J at [131]. Beard v London General Omnibus Co [1900] 2 QB 530. Nor a legal practice manager who undertook legal work, Taylor v Gould & Ors [2011] QSC 203. Howl at the Moon Broadbeach Pty Ltd v Lamble [2014] QCA 74.

Introduction

an injured employee even if injury results from a fellow employee disobeying instructions29 or ignoring safety procedures provided the employee is carrying out work the employee is employed to do. In general an employer will not be vicariously liable for workplace pranks which are no part of what the employee is employed to do30 unless perhaps part of a circus act or comedy routine. Exceptionally an employer may be vicariously liable where an employee violently assaults or bullies another employee. Spigelman CJ commenting on the relentless, demeaning, physically threatening, racist and humiliating behaviour of a workplace supervisor (Chaloner) towards a labour hire employee (Naidu) said: 87 … [I]f Nationwide News was not directly liable for [the employee] Mr Chaloner’s acts then it was vicariously liable. Much, probably most, of his relevant conduct constituted a mode of asserting authority over Mr Naidu [labour hire employee] whose activities he was expressly required to control. Some aspects of his conduct could not be so classified, particularly the insistence that Mr Naidu perform work of a private nature for Mr Chaloner. Nevertheless, in my opinion, as in the case of a bouncer who uses excessive force, the exercise of a brutalised form of control was the performance of his actual tasks in an inappropriate manner.31

The issue is whether there is a sufficiently close connection to what the employee is employed to do.32 In relation to bullying, there will frequently be a sufficiently close connection to what the employee was employed to do where the bullying is carried out by a supervisor in the course of their duties. The employer will be liable even if the conduct of the supervisor is breach of a workplace code of conduct.33 In exceptional cases an employer might also be vicariously liable for child abuse committed by an employee.34 Often an employer may be liable for the same conduct both as a breach of its duty to take care (independent liability) and vicariously.35 For example, an employer fails to take measures to ensure that employees follow safety procedures for the safe usage of 29

30

31 32

33 34

35

Limpus v London General Omnibus Co (1962) 1 H & C 526 (drivers disobeyed the order not to obstruct or race rival buses in order to obtain customers); Rose v Plenty [1976] 1 WLR 141 (vicarious liability where milkmen prohibited from getting children to help deliver the milk). Blake v J Perry Nominees [2012] VSCA 122. The employer could be liable for its own negligence if the employer was aware that similar conduct happened in the past and could occur again and had not taken reasonable measures to deal with it. Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 at [87] and see Beazley JA at [260]. In the United Kingdom there appears to be greater willingness to find vicarious liability, see Mohamud v WM Morrison Supermarkets [2016] UKSC 11 (vicarious liability for racially motivated attack on customer by petrol station employee; attack was related to the employment as it was part of a sequence of events beginning with a customer inquiry, abuse, informing customer not to return and then assaulting the customer; attack not divisible from employee’s duties to serve customers, respond to inquiries etc). See also Weddall v Barchester; Wallbank v Wallbank Designs [2012] EWCA Civ 25. As was the case in Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47, see Beazley JA at [163] and [259]. A majority of the High Court were of this view in New South Wales v Lepore (2003) 212 CLR 511 (sexual abuse of school children). But claims based on vicarious liability are rarely successful: Withyman v New South Wales [2013] NSWCA 10 (sexual abuse no part of a teacher’s role); special leave to appeal to the HC dismissed [2013] HCASL 173. And see A,DC v Prince Alfred College Incorporated [2015] SASCFC 161 (employer liable for sexual abuse of 12 year old boarder by boarding master); JK v New South Wales [2014] NSWSC 1084 (no vicarious liability for sexual assault of student). But contrast a finding that the employer could be liable based on direct liability, Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 (bullying of labour hire employee by workplace supervisor), followed in Erlich v Leifer [2015] VSC 499 (principal with ultimate authority largely unsupervised guilty of child abuse, her conduct was attributed to the employer so as to constitute its conduct, but query whether this is a valid approach). Hamilton v Nuroof (WA) Pty Ltd (1956) 96 CLR 18 at 25.

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equipment (no safe system of work) and an employee disregards the procedures causing injury to another employee (employee’s negligence for which the employer is vicariously liable). It may sometimes be important to distinguish between vicarious liability (employer is liable to an employee because a fellow employee is guilty of wrongdoing) and cases where the employer is liable because of a breach of a non-delegable duty. In the case of non-delegable duties, the employer may be held liable for the negligence of a contractor or the employees of a contractor36 but not for intentional wrongdoing of contractors or non employees.37

Breach of statutory duty (common law) [6.70] Failure to meet the standard of care imposed by the common law may expose the employer to the risk of a damages action for breach of contract or for negligence. It may also amount to a breach by the employer of some duty imposed by a statute directed to ensuring workplace safety. For example, a statute which requires an employer to install fences enclosing dangerous machinery, which has been enacted for the safety of employees, can give rise to an action by an injured employee where failure to fence has caused the employee’s injuries. As a result, depending on the interpretation of the statute, there may be an independent cause of action in damages against the employer for breach of that statutory duty. The elements necessary to be proved in such a cause of action are different from those required to show breach of a contractual duty of care or negligence. In order to succeed in an action for breach of statutory duty, it must be shown: (1) parliament intended to give an action for damages for breach of a statutory duty imposed on the defendant; (2) the defendant must be in breach of that statutory duty; (3) the plaintiff is within the class of persons protected by the statute; (4) the injury or damage is within the scope of the statutory protection, and (5) the plaintiff’s injury was caused by the breach. Although parliament practically never states an intention to grant a private right of action for breach, courts, in general, have been able to find such an intention where the object of the statute is to secure workers’ safety. This action may be advantageous where liability for statutory breach does not depend upon proving that the employer was in any way negligent or at fault. But this is less likely under modern statutes where duties are qualified by the requirement that there were reasonably practicable measures that could have been taken to avoid the risk. A further limitation is that general performance duties to safeguard the health and safety of workers under the model Work Health and Safety Act 2011 (see [6.340]) cannot be the basis of a claim for breach of statutory duty.38 This does not exclude possible actions for breach of regulations. In those jurisdictions where an injured worker can still sue the employer for common law damages, it is common to proceed both in negligence and for breach of statutory duty, if available, because it may be possible to establish liability under one if not the other, although only one award of damages can be made. 36 37 38

Kondis v State Transport Authority (1984) 154 CLR 672. New South Wales v Lepore (2003) 212 CLR 511. The Model Work Health and Safety Act 2011, s 267. The Model Act has been adopted in all States excepting Victoria and Western Australia. The Victorian Act, Occupational Health and Safety Act 2004 (Vic), s 21(1) also excludes actions for breach of statutory duty in relation to general performance duties.

Introduction

Work Health and Safety Acts [6.80] An employer may be criminally liable for breach of work health and safety laws, discussed at [6.340]. The remedies available under the legislation do not include payment of compensation to the injured person,39 see [6.340]. It is important to note that the ability of injured workers to claim damages for injuries is restricted by statute in most jurisdictions.

Limitations on common law compensation claims [6.90] In most jurisdictions there are limitations on the rights of employees to bring common law actions against employers for damages for personal injuries. These restrictions generally only apply to claims against the employer (includes persons for whom the employer is vicariously liable) with the consequence that injured employees often search for non-employer defendants.40 In the Northern Territory41 an injured employee can no longer claim damages for negligence or breach of statutory duty against the employer where a claim for workers’ compensation can be made. In New South Wales,42 Victoria,43 Queensland,44 South Australia,45 Tasmania46 and Western Australia,47 and in relation to claims under the Competition and Consumer Act 2010 (Cth),48 there are restrictions on the ability to bring common law claims for damages and quantum of damages recoverable. Commonwealth employees’ rights to sue at common law have been, to a significant degree, abrogated by statute.49 The effect of these provisions is that most employees have limited access to common law actions for damages against their employer even if the employer (or employee within the course of employment) has been negligent.50 Their rights may be restricted to workers’ compensation payments. 39

40

41 42 43 44 45 46 47 48

49 50

It may also be the basis of an injured employee’s compensation claim based on an action for breach of statutory duty, see [6.70]. Breach of a safety statute can also be evidence that the employer has been negligent. See Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254 (unsuccessful claim by employee against shopping centre for injury in car park); Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361. But note Civil Liability legislation imposing restrictions on damages, assessment of negligence and defences now apply to these claims, see ACT: Civil Liability Act 2002; NSW: Civil Liability Act 2002; NT: Personal Injuries (Liabilities and Damages) Act;; Qld: Civil Liability Act 2003; SA: Civil Liability Act 1936; Tas: Civil Liability Act 2002; Vic: Wrongs Act 1958; WA: Civil Liability Act 2002. Note also statutory claims against the employer by the third party, Shoalhaven City Council v Humphries [2013] NSWCA 390 (Workers Compensation Act 1987 (NSW), s 151Z claim). Note the difficulties that occur in labour hire cases, see [3.150]. Return to Work Act (NT), s 52. Note also s 54. Workers’ Compensation Act 1987 (NSW), ss 151 – 151T. The restrictions apply to actions for breach of contract, s 151E. Note also the restrictions applying to psychological injury, see [6.210]. Workplace Injury Rehabilitation and Compensation Act 2013 (Vic), ss 318, 324, 326 – 328, 335. Workers Compensation and Rehabilitation Act 2003 (Qld), ss 237 – 239A. Return to Work Act 2014 (SA), ss 71 – 75. Workers Compensation and Rehabilitation Act 1988 (Tas), ss 132, 132A, 133, 136, 138AA, 138AB, 138AD. Workers’ Compensation and Injury Management Act 1981 (WA), ss 93A – 93S. Competition and Consumer Act 2010 (Cth), s 137C (preventing personal injury claims in relation to misleading and deceptive conduct [Part 2-1 of the Australian Consumer Law, ss 18, 19] and false and misleading representations [Pt 3-1 of the Australian Consumer Law, ss 29 – 38] and in relation to other provisions, restrictions on recovery of personal injury damages: Part VIB (formerly Trade Practices Act 1974 (Cth), Pt VIB). The principal Act is the Safety, Rehabilitation and Compensation Act 1988 (Cth), ss 42 – 52A (limited actions available for non-economic losses). A useful summary of the various provisions can be found in Safe Work Australia, Comparison of Workers’ Compensation Arrangements in Australia and New Zealand (July 2015), Table 4.6.

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In most jurisdictions there are also restrictions relating to common law damages claims for psychiatric injury/mental harm which results from reasonable management action, see [6.210].

Employer’s Duty of Reasonable Care [6.100] At common law an employer owes employees a duty to take reasonable care to protect employees against foreseeable injury arising out of the employment.51 This duty arises as an implied term in the contract of employment or as a separate tort duty52 or very occasionally as an express contractual term.53 In Australia, overall there are few differences between bringing a claim based on the contractual duty or on the tort duty. It will be the exceptional case where there is an advantage in suing in one rather than the other.54 In this section the focus will be on the duty of care owed by the employer to the employee whether in tort or contract.55 The rights of the employer to recover damages

51

52 53

54

55

The corresponding implied duty of the employee to take reasonable care may result in a counterclaim by the employer subject to an employer’s statutory duty to indemnify in some States: see Wylie v ANI Corp Ltd [2000] QCA 314 and [5.460]. Other persons may also owe a tort duty of care to the worker, see, for example, Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 (liability of authority to protect workers against foreseeable risks of injury arising out of exposure to asbestos). Matthews v Kuwait Bechtel Corporation [1959] 2 QB 57; Lister v Romford Ice and Cold Storage Co Ltd [1957] AC 555. Goldman Sachs JB Were Services Pty Ltd v Nikolich (2007) 163 FCR 62 (duty of care largely consistent with common law duty of reasonable care: Black CJ at [31]; duty to take every “practical step to provide and maintain a safe and healthy work environment” – “practicable” in that context meant reasonable (at [34]). An express contractual duty to protect the employee may succeed where an implied duty of care may fail, Riley, “Mental Health and Employment: Issues for Lawyers” [2007] UNSWLRS 38 (27 July 2007) at 7. Stubbe v Jensen [1997] 2 VR 439; Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 at [4] per Spigelman J; at [332] per Beazley J (no difference in a claim for psychiatric illness resulting from bullying and harassment); Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at [26] (claim for psychiatric illness as a result of overwork, no difference in tort or contract claim). Statutory amendments now provide that contributory negligence is a defence equally to an action for breach of the implied duty of care in contract or a duty of care in tort, see, for example, Law Reform (Miscellaneous Provisions) Act 1965 (NSW), s 8. There are some differences between an action based on contract for breach of a contractual duty to take reasonable care and a claim in the tort of negligence. These may include differences in assessing damages and rules for remoteness of damage; exemplary damages are recoverable in tort but not contract; statutory indemnity for employees may only apply to liability in tort, see [5.460]. An employer vicariously liable can be liable for exemplary damages at common law, see Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 at [268]-[276] per Beazley J (reversed in New South Wales by the Civil Liability Act 2002 (NSW), s 26X in relation to claims against third parties and in relation to actions against the employer by the Workers’ Compensation Act 1987 (NSW), s 151R). An express contractual duty of care might avoid some of the restrictions imposed in Koehler v Cerebos (Aust) Ltd (2005) 222 CLR 44; see Riley, “Mental Health and Employment: Issues for Lawyers” [2007] UNSWLRS 38 (27 July 2007). There may be differences in limitation periods as well, see Cornwell v Commonwealth of Australia [2005] ACTSC 14 at [88]-[96] (approved on appeal), Commonwealth of Australia v Cornwell (2007) 81 ALJR 933; [2007] HCA 16. Exemplary damages in tort may make a tort claim more advantageous, see Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 at [268]-[276] per Beazley J. But note exemplary damages in actions against the employer may be excluded, see Workers’ Compensation Act 1987 (NSW), s 151R. There is also potential criminal liability under work health and safety legislation (see [6.340]) and the separate action for breach of statutory duty (see [6.70]). As to liability under the Australian Consumer Law, s 18 (formerly Trade Practices Act 1974 (Cth), s 52), “misleading and deceptive conduct”) see [4.230].

Employer’s Duty of Reasonable Care

for loss of services of an employee will not be considered.56 The position of labour hire employees and the duties of the agency and the client are examined in Chapter 3. This section considers the employer’s duty of care to employees; the discussion is divided up as follows: first, it will examine general considerations relating to an employer’s duty of care to the employee. Secondly, it will examine claims for damages where the employee suffers physical injury not involving psychiatric illness. Thirdly, it discusses cases involving psychiatric injury to the employee resulting from bullying, excessive workloads and investigatory and disciplinary proceedings.

General considerations [6.110] The most important obligation of an employer toward an employee is directed to the safety of the employee. At common law an employer owes a duty of care to its employees and a failure to live up to the obligation may amount to both a breach of contract and an action for damages for negligence. It is the relationship of employer and employee that imposes a duty on the employer to take care of the safety of employees.57 All employers are under a duty: to take reasonable care for the safety of [the employee] by providing proper and adequate means of carrying out [the] work without unnecessary risk, by warning [the employee] of unusual or unexpected risks, or by instructing [the employee] in the performance of [the] work where instructions might reasonably be thought to be required to secure [the employee] from danger of injury … The standard of care for an employee’s safety is not a low one.58

The High Court in Czatyrko v Edith Cowan University59 said: An employer owes a non-delegable duty of care to its employees to take reasonable care to avoid exposing them to unnecessary risks of injury. If there is a real risk of an injury to an employee in the performance of a task in a workplace, the employer must take reasonable care to avoid the risk by devising a method of operation for the performance of the task that eliminates the risk, or by the provision of adequate safeguards. The employer must take into account the possibility of thoughtlessness, or inadvertence, or carelessness, particularly in a case of repetitive work (references omitted).

What is reasonable in the circumstances of the case is influenced by current community standards,60 consequently, what might have met community standards in the 1950s might not do so nowadays. The employer’s duty has long since gone beyond a duty not to inflict harm to a duty to take positive steps towards accident prevention.61 But in recent years, this momentum with its emphasis on compensation for injuries, has been limited, particularly in relation to claims for psychiatric injury for employees. Legislative restrictions on recovery of compensation have been imposed (see [6.30]) 56

57

58 59 60 61

See Barclay v Penberthy (2012) 246 CLR 258 (employer’s action for economic losses caused by the death of an employee); Petchell v Du Pradal [2015] QCA 132 and the seventh edition of Macken’s Law of Employment, p 489. Mihaljevic v Longyear (Aust) Pty Ltd (1985) 3 NSWLR 1 at 8-13 per Kirby J. The duty of care in negligence may extend beyond the immediate employer to a statutory authority charged with responsibilities towards employees: Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1. As to the position of holding companies, see CSR Ltd v Wren (1997) 44 NSWLR 463 and “one man” companies, see Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424 (director who was also employee entitled to recover). O’Connor v Commissioner for Government Transport (1959) 100 CLR 225 at 229; followed in Nicol v Allyacht Spars Pty Ltd (1987) 67 ALJR 640. Czatyrko v Edith Cowan University (2005) 79 ALJR 839 at [12] per Gleeson CJ, McHugh, Hayne, Callinan and Heydon JJ. Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 301 at 309. McLean v Tedman (1985) 155 CLR 306 at 313.

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and the Australian High Court in Koehler v Cerebos (Aust) Ltd62 severely limited an employee’s right to recover for psychiatric illness resulting from stress at work (see [6.250]). An employee’s damages may be reduced where the employee has negligently contributed to his or her own injury.63 In deciding whether the employee has been contributorily negligent,64 the courts have accepted that usually more is needed than “mere inadvertence” or “inattention”. Courts are reluctant to find contributory negligence where the employer has set up an unsafe system of work in which the employee is merely a passive participant.65 When appropriate training has been put in place, a failure to follow safety instructions which causes the injury, may result in a significant deduction from any damages awarded.66

Duty owed to each worker [6.120] The obligation is one which is owed by employers67 to each employee individually. The circumstances affecting the individual employee are relevant to whether due care has been taken.68 Thus, a higher standard of care will be required to protect the sight of a worker known to have one eye or an employee with known allergies.69 The standard of care required of an employer will not only vary with the susceptibilities of an employee, but will also vary according to the relative danger of the employment.70

62 63

64

65

66

67

68 69 70

Koehler v Cerebos (Aust) Ltd (2005) 222 CLR 44. Most States have amended legislation to provide that contributory negligence is a defence even if the claim is brought for breach of contract, see for example, NSW: Law Reform (Miscellaneous Provisions) Act 1965, s 8; Qld: Law Reform Act 1995, s 5 “wrong”; SA: Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001, ss 3(1), 4(1)(b); Tas: Wrongs Act 1954, s 2 “wrongful act”; Vic: Wrongs Act 1958, s 25 “wrong”; WA: Law Reform (Contributory Negligence and Tortfeasors’ Contribution) Act 1947, s 3A; ACT: Civil Law (Wrongs) Act 2002, s 101 “wrong”; NT: Law Reform (Miscellaneous Provisions) Act, s 15(1) “wrong”. There are statutory provisions in Queensland providing that a court may make a finding of contributory negligence in circumstances which include failure to use protective equipment etc, see Workers Compensation and Rehabilitation Act 2003 (Qld), s 305H; Kemp Meats Pty Ltd v Tompkins [2014] QCA 125; Kennedy v Queensland Alumina Ltd [2015] QSC 317. Note also the responsibilities under work health and safety legislation, see [6.580]. Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 310 at 310 per Mason, Wilson and Dawson JJ; Czatyrko v Edith Cowan University (2005) 79 ALJR 839; Carr v O’Donell Griffin [2013] NSWSC 840; Boaden v Trustee for Shade Unit Trust t/as Clevershade [2013] ACTSC 52 at [37]-[38]. See as illustrations, Kennedy v Queensland Alumina Ltd [2015] QSC 317 (non compliance with taught safety procedures 50% reduction), note the position in Queensland, Workers Compensation and Rehabilitation Act 2003 (Qld), s 305H; Liftronic Pty Ltd v Unver [2001] HCA 24 (employee ignored orders and adopted unsafe system of work, jury verdict of 60% contributory negligence upheld). But not directly by a director of a company to provide a safe system of work but potentially liable if assumed responsibility for safety and had sufficient control, see Regina v Moore [2015] NSWCCA 316 at [121] per Bathurst CJ; at [243] per Simpson AJA; per Bellew J at [259], [260]. Paris v Stepney Borough Council [1951] AC 367 at 375, 380. Cf Stoker v Adecco Gemvale Constructions Pty Ltd [2004] NSWCA 449 (employee with bad back). IIlawarra Area Health Service v Dell [2005] NSWCA 381. Woods v Durable Suites Ltd [1953] 1 WLR 857 at 862.

Employer’s Duty of Reasonable Care

Reasonable care Foreseeability [6.130] The duty of the employer is to take reasonable care to avoid foreseeable risks of injury arising out of the employment.71 Although the test requires some level of anticipation, the reality is that foreseeability is usually easily satisfied. Special requirements arise in relation to psychiatric injuries arising from workplace stress (see [6.230]). In the ordinary case of an accident causing physical harm, it is usually sufficient if the circumstances were such that injury to the employee was a possibility which would have occurred to a reasonable employer. It is foreseeable that an employee may be distracted from the task at hand, may disobey instructions and may use unsafe methods to carry out the work and suffer injury.72

Reasonable care [6.140] The duty of care binding an employer requires all employers to take reasonable care to avoid exposing an employee to unnecessary risk of injury including a risk that injury may occur because of some inattention or misjudgment by the employee in performing allotted tasks.73 It may require an employer to dismiss a violent employee rather than risk future injury to other employees.74 It may oblige the employer to take steps to ensure that employees, even skilled employees, use safety equipment and, even in cases of obvious risks, the employer is not necessarily absolved of the duty to warn.75 The factors relevant to determining whether the employer has been negligent are: whether the risk is foreseeable and if so what steps would a reasonable employer do to eliminate or reduce the risk. This is tested by the likelihood of the risk eventuating, the seriousness of the harm that could eventuate, the measures were available to reduce or eliminate that risk and the burden (including cost) of taking those measures. So if there is a simple, inexpensive remedy to avoid a serious accident with serious consequences, a reasonably prudent employer would take those steps. Conversely if there is a low risk of minor harm which would be very costly to avoid, a prudent employer might not be obligated to take measures to avoid that risk.76 71 72

73 74

75 76

It may not extend to a duty to control the after-hours activities of employees working away from home, Hardy v Mikropul Australia Pty Ltd [2010] VSC 42 (after-work drug and alcohol culture). Liftronic Pty Ltd v Unver [2001] HCA 24 (employee ignored orders and adopted unsafe system of work, jury verdict of 60% contributory negligence upheld); Kennedy v Queensland Alumina Ltd [2015] QSC 317 (employee taught safety procedures but did not comply with them, 50% reduction). Ferraloro v Preston Timber Pty Ltd (1982) 56 ALJR 872; Turner v South Australia (1982) 56 ALJR 839; Czatyrko v Edith Cowan University (2005) 79 ALJR 839; [2005] HCA 14. Gittani Stone Pty Ltd v Packovic [2007] NSWCA 355 (employer liable when employee shot by violent fellow employee as he left work). Dismissal for breaches of safety instructions, depending upon the seriousness of the breach may be justified, see Leonard v BlueScope Steel Ltd [2007] NSWIRComm 1023; Darvell v Australian Postal Corporation [2010] FWAFB 4082. The authorities are equivocal on the question whether is it negligence not to dismiss an employee where there are no reasonable measures that can be taken to avoid injury short of dismissal: Coxall v Goodyear Great Britain Ltd [2002] EWCA Civ 1010; Farmiloe v Lane Group plc [2004] All ER (D) 08, qualifying Withers v Perry Chain [1961] 1 WLR 1314 (trivial risks). Contrast Dugmore v Swansea NHS Trust [2002] EWCA Civ 189 (serious risk no duty to dismiss); Foufoulas v Strang (1970) 123 CLR 168; Stoker v Adecco Gemvale Constructions Pty Ltd [2004] NSWCA 449 at [90] (no duty not to employ at risk employee); Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 (employer entitled to assume employee can carry out contracted work in overwork stress cases). Note also issues of discrimination may also arise in relation to a person with a disability, see Guthrie and Westaway, “Emerging Legal Concerns with Chronic Diseases in the Australian Workplace: Pre-employment Medicals, Functional Capacity Evaluations, Workers’ Compensation and Disability Discrimination” (2009) 16 JLM 803 and Chapter 15. Subject to reduction of damages for contributory negligence. Wyong Shire Council v Shirt (1980) 146 CLR 40.

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Not a guarantee of safety [6.150] The standard of care is a standard of reasonable care and does not amount to a guarantee of the safety of the employee. “It is a matter of balancing the risk against the measures necessary to eliminate it.”77 The relationship between an employer and an employee is not “equivalent to that of a nurse and an imbecile child”.78 In Vincent v Woolworths Ltd,79 the NSW Court of Appeal approved the statement that: Simple uncomplicated operations such as the method of using his tools of trade by a tradesman could not reasonably require the provision of a system by the employer. Nor will there be much scope for alleging the necessity for a system in the case [of] casual or isolated tasks of a simple character which do not involve any real risk if ordinary care is exercised.80

The obligation is fulfilled by the exercise of due care and skill.81 The duty is one of reasonable care, “the courts continue to talk negligence but in practice apply increasingly more stringent standards of care which often come close to insurance of safety.”82 Thus an employer has been held liable in some cases where an employee, contrary to directions, adopted an unsafe method of working although the employee’s damages may be reduced for contributory negligence.83 In McLean v Tedman the employer was held liable despite arguments that alteration in work practices would not have been accepted by employees.84 In this instance the employer would have to bring direct evidence that it would not have been able to enforce compliance with the altered method of working.85 In McLean the High Court accepted that the employer’s obligation is not merely to provide a safe system of work. It is an obligation to establish, maintain and enforce such a system. Accident prevention is unquestionably one of the modern responsibilities of an employer … And in deciding

77

78

79 80

81

82

83

84 85

Latimer v AEC Ltd [1952] 2 QB 701 at 711 per Denning LJ. Might it require random drug testing of employees? See Nolan, “Employee Privacy in the Electronic Workplace Pt 2: Drug Testing Out of Hours Conduct & References” (2000) PLPR 61; Allen, Prichard and Griggs, “A Workplace Drug Testing Act for Australia” (2013) 32(2) Univ Qld LJ 219; Hardy v Mikropul Australia Pty Ltd [2010] VSC 42 (after-work drug and alcohol culture). In some industries this may be a statutory requirement, see for example, Passenger Transport (Drug and Alcohol) Testing Regulation 2010 (NSW). Smith v Austin Lifts Ltd [1959] 1 All ER 81 at 85. See, for example, Kelly’s (Coleambally) Pty Ltd v Malone [2001] NSWCA 146 (no duty to warn employee of dog that was often on the footpath outside the shop); Vincent v Woolworths Ltd [2016] NSWCA 40 (employee steps off small step into the path of a customer’s trolley, no negligence). Vincent v Woolworths Ltd [2016] NSWCA 40 at [49] per Macarlan JA, McColl and Ward JJA agreeing. From Glass, McHugh and Douglas, The Liability of Employers (2nd ed 1979, The Law Book Company Ltd), p 23. And see Deal v Kodakkathanath [2015] VSCA 191 (24 July 2015) (no breach for failure to give instructions relating to the ordinary everyday use of a small step ladder). An employer’s non-delegable duty is not fulfilled by entrusting its fulfilment to employees, even though selected with due care and skill: Wilsons and Clyde Coal Co Ltd v English [1938] AC 57 at 78 per Lord Wright. Fleming, Tort Liability for Work Injury, International Encyclopedia of Comparative Law, Vol 15, “Labour Law” 9-62. And see Bankstown Foundry Pty Ltd v Braistina (1986) 60 ALJR 362; and McLean’s Roylen Cruises Pty Ltd v McEwan (1984) 58 ALJR 423. Bankstown Foundry Pty Ltd v Braistina (1986) 60 ALJR 362; Liftronic Pty Ltd v Unver (2001) 75 ALJR 867 (employee ignored orders and adopted unsafe system of work); Kennedy v Queensland Alumina Ltd [2015] QSC 317 (non compliance with taught safety procedures 50% reduction, note the position in Queensland, Workers Compensation and Rehabilitation Act 2003, s 305H. McLean v Tedman (1984) 155 CLR 306. Safety changes after the accident are admissible, Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 at [94], contrast NSW: Civil Liability Act 2002, s 5C (does not apply to claims against employer).

Employer’s Duty of Reasonable Care

whether an employer has discharged his common law obligation to his employees the court must take account of the power of the employer to prescribe, warn, command and enforce obedience to his commands.86

In recent times the High Court, influenced by calls for personal responsibility, has become more cautious, warning against “too ready a judicial inclination to absolve people in the workplace from the duty that they have to look out for their own safety which will often depend more, or as much, upon their own prudence and compliance with directions, as upon any measures that a careful employer may introduce and seek to maintain”.87 This has been reflected most directly in claims for psychiatric injury resulting from work stress: see [6.300]

Duty of reasonable care – common aspects [6.160] The obligation is a single one, but the duty is frequently referred to under the following categories: “the provision of a competent staff … adequate material, and a proper system and effective supervision.”88

However, these are simply part of a single duty of reasonable care.89 Stephen J commented in Quigley v Commonwealth: The general tortious duty of care which an employer owes to an employee is frequently analysed in terms of discrete duties, one of which is a duty to provide a safe system of work. In Vozza v Tooth & Co Ltd [citation omitted], Windeyer J reminded us that to say this is to do no more than affirm the employer’s duty to take reasonable care for the safety of employees. To describe the duty as being concerned with the provision of safe system of work gives an air of continuity of content to the duty; and in a sense the duty at any particular time will depend upon the circumstances prevailing at that time. What is a breach on one day or at one hour may be no breach at other times, when different conditions prevail.90

Competent staff [6.170] It will be a breach of an employer’s duty of care to the employees if the employer does not ensure that the employees engaged are competent to perform the work for which they are employed. It is also the employer’s duty to ensure that employees are properly trained to do the jobs they are called upon to perform from time-to-time. Employees are expected to do their work in a fashion that is safe and it is the employer’s task to ensure that they are aware of dangers and that they are carrying out duties in a safe way. This may amount to an obligation on an employer to dismiss an employee who persistently refuses to carry out the job in a safe manner. Thus, an employer may be liable for a breach of the duty of care if the employer tolerates skylarking by employees while they are at work. It is always a question of degree. An unanticipated isolated instance of skylarking or dangerous practice91 may not require the employer to dismiss the employee but a persistent course of conduct may well do so. If the employer ought to have known of the risk and responded to it, a damages claim 86 87

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McLean v Tedman (1984) 155 CLR 306 at 313; W V Management Pty Ltd v Norvic Food Processing Pty Ltd [2009] VSC 570 (duty to insist that mask worn). Liftronic Pty Ltd v Unver (2001) 75 ALJR 867 at [60] per Gummow and Callinan JJ, at [99]-[100] per Kirby J remonstrating that this would “turn the clock back”. Note the more conservative approach to negligence claims for psychiatric illness caused by work stress in New South Wales v Fahy (2007) 232 CLR 486; Koehler v Cerebos (Aust) Ltd (2005) 222 CLR 44. Wilsons and Clyde Coal Co Ltd v English [1938] AC 57. Wilson v Tyneside Window Cleaning Co [1958] 2 QB 110 at 124. Quigley v Commonwealth (1981) 55 ALJR 579 at 581. Smith v Crossley Bros Ltd (1971) 95 Sol Jo 655.

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for negligence will be available. The obligation on an employer to select competent staff extends particularly to the engagement of staff who are employed to perform safety functions or to train employees in safety practices. It is also important that new employees, inexperienced employees, or employees who have language difficulties, are specifically trained to ensure that they can perform their work safely, notwithstanding their language difficulties or their inexperience.

Safe place of work [6.180] Precisely the same principle governs the employer’s obligation to provide employees with a safe place in which to work.92 As with all aspects of the duty of care required of an employer, it is a matter of balancing the risk against the measures necessary to eliminate it. Thus in Latimer v AEC Ltd it was said that although “the employers knew that the floor was slippery and that there was some risk in letting the men work on it; but, still, they could not reasonably be expected to shut down the whole works and send all the men home”.93 The expression “place of work” must be read as including all surrounding places into which an employee may be reasonably foreseen to be likely to go including canteens, toilets and access to sign-on and to public thoroughfares.94 It can also apply to premises where employees are required to attend, as part of their work, Christmas functions95 and accommodation where an employee is away on work.96 Consequently, the duty can extend to premises the employer does not control. In each case it must be shown that the employer had failed to take reasonable steps to avoid the harm. In some instances this might require the employer to undertake a site inspection prior to employees coming onto the site.97 But in other cases, little may be possible where, for example, an employee delivers goods to numerous customers over a wide area and the employer is not aware of any particular risk.98 Labour hire companies can be liable when their employees are injured whilst out on work placement (see [3.150]).

Safe plant and appliances [6.190] Just as an employer has the obligation to take such precautions as are reasonable to prevent mischief arising to employees from the place in which employees are required to work, so the employer also has an obligation to take the same precautions and apply the same standard of care with respect to the plant and appliances which employees are given to enable employees to perform their work. An employee may be asked to work with tools or appliances, the handling of which may 92

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In some States employers or third parties may be liable under occupiers liability legislation, see, for example, Occupiers Liability Act 1985 (WA) and see Hanna-Pauley v AMP Shopping Centres Pty Ltd [2007] WACA 174. Latimer v AEC Ltd [1952] 2 QB 701 at 711 per Denning LJ. It can extend to premises occupied by someone other than the employer: Wilson v Tyneside Window Cleaning [1958] 2 QB 110; Karatjas v Deakin University [2012] VSCA 53. Cf Keenan v Leighton Boral Amey Joint Venture [2015] FWC 3156 (unlawful dismissal, company Christmas function). Cf Comcare v PVYW [2013] HCA 41 (workers’ compensation claim for injury sustained in accommodation booked by employer for employee to attend regional meetings; the particular conduct (conjugal relations) caused a light bracket to fall causing injury). Held that the injuries were not sufficiently related to the employment to be compensable. See, for example, Carr v O’Donnell Griffin [2013] NSWSC 840. The occupier of the premises may also be liable; this will be relevant in determining the relevant apportionment of responsibility between defendants as in Carr v O’Donnell Griffin [2013] NSWSC 840 (employer 10%, occupier of premises – labour hire client 90%). See also Vincent v Woolworths Ltd [2016] NSWCA 40 at [50] per Marfarlan JA, McColl and Ward JJA agreeing (merchandiser working in Woolworths store); South Sydney Junior Rugby League Club Ltd v Gazis [2016] NSWCA 8 (9 February 2016). For as illustrations, DIB Group v Cole [2009] NSWCA 210; cf Pollard v Baulderstone Hornibrook Engineering Pty Ltd [2008] NSWCA 99.

Employer’s Duty of Reasonable Care

contain some element of danger, but an employer has the obligation to ensure so far as is practicable that any such danger is minimised. While this obligation may not extend to making an employer liable for hidden defects which cannot reasonably be foreseen in tools provided to an employee,99 it will require an employer to have a system of inspection capable of revealing hazardous factors which may be present when the plant and appliances provided to employees are in use.100

Safe system of work [6.200] The obligations on an employer to select competent staff and to provide them with proper plant and appliances and a safe place in which to work oblige an employer to co-ordinate each of these duties within a safe system of work. In cases where the work to be performed is regular and uniform, as in the ordinary factory or mine, provision of a safe system for the type or class of work and provision of a safe system for the individual job will in general be the same although a particular occurrence or emergency may call for special precautions, but in many kinds of work there is no regularity or uniformity, what is a safe system can only be determined in the light of the actual situation on the spot at the relevant time. A system of work may consist of a number of elements and what exactly it must include will, it seems to me, depend entirely on the facts of the particular case. For example, one element may be the sequence in which a particular job ought to be carried out, for example, in a combined job of demolition and excavation it may be dangerous to begin to excavate before a neighbouring structure is demolished. The decision as to which task is to be performed first appears to me to lie within the master’s province and to be a matter of system. It is part of the layout of the job which it is the master’s duty to decide, and, in doing so, [the employer] must pay proper regard to the conditions affecting the safety of [the employees].101

What a safe system of work requires will vary from enterprise to enterprise. Thus an employer might be obliged to devise a system to protect an employee against a foreseeable risk of violent assault.102 The obligation is not limited to physical safety but can also extend to providing a safe system of work to avoid bullying, harassment and racial vilification103 (discussed from [6.210]). Even if the employer has set up a safe system of work, this can be undermined by unsafe work practices that are tolerated or necessitated by the work environment.104

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See, for example, Davie v New Merton Board Mills [1959] AC 604. Pearce v Round Oak Steel Works Pty Ltd [1969] 3 All ER 680. See also Galea v Bagtrans Pty Ltd [2010] NSWCA 350 (labour hire, employer liable for faulty truck seat supplied by host company). Speed v Thomas Swift & Co Ltd [1943] KB 557 at 563-564 and see Raimondo v South Australia (1979) 23 ALR 513 and Commissioner for Railways v Ruprecht (1979) 142 CLR 563; Telfer v Berkeley Challenge Pty Ltd [2000] NSWCA 24. Chomentowski v Red Garter Restaurant Pty Ltd (1970) 92 WN (NSW) 1070 (employee robbed of takings late at night); English v Rogers [2005] NSWCA 327; Ogden v Bells Hotel Pty Ltd [2009] VSC 219; Gittani Stone Pty Ltd v Packovic [2007] NSWCA 355 (employer liable when employee shot by violent fellow employee as he left work); Karatjas v Deakin University [2012] VSCA 53 (assault in car park), cf Coca Cola Amatil (NSW) Pty Ltd v Pareezer [2006] NSWCA 45 (no recovery by contractor shot by a robber, no reasonable measures to reduce risk). See also Modbury Triangle Shopping Centre v Anzil (2000) 205 CLR 254 (shopping centre occupier not liable to video shop employee bashed in shopping centre car park). Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 at [339] per Beazley J. But not incidents of employment such as disciplinary procedures: New South Wales v Paige [2002] NSWCA 235 at [78] per Spigelman CJ. Metcash Trading Ltd v Scripcariu [2006] NSWCA 78 at [51] (instructional video on lifting undermined by work practices); Kenyon v Barry Bros Specialised Services Pty Ltd [2001] VSCA 3.

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Stress Claims – Psychiatric Injury Introduction [6.210] The workplace has become a very stressful environment for many employees.105 A variety of circumstances can operate as the trigger for psychiatric injury. These include psychiatric illness directly related to work injuries suffered by the employee,106 witnessing or being involved in a traumatic event at work,107 where the employee is subject to bullying, harassment or victimisation at work, where the employee has been overworked or as a consequence of unfair disciplinary or other investigative procedures. This section will first consider general matters relating to recovery of damages for psychiatric illness and then will specifically discuss bullying and other forms of harassment or victimisation, excess workload cases and unfair disciplinary and other procedures. This section examines claims for psychiatric injury arising out of the work situation. A claim for psychiatric injury can be made in both tort and contract.108 In order for an employee to be able to recover damages against the employer109 for psychiatric illness, the employee must show: (1) psychiatric illness: the employee must suffer a recognised psychiatric illness;110 (2) reasonable foreseeability: the employer could reasonably foresee that the individual employee would suffer psychiatric illness; and (3) failure to take reasonable measures (negligence): the employer failed to take reasonable steps to avoid or diminish those risks having regard to the nature of the contractual obligations, equity and statutory responsibilities and

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The latest available figures can be found in “Australian Workers Compensation Statistics 2012-2013” from Safe Work Australia, see http://www.safeworkaustralia.gov.au/sites/swa/about/publications/ pages/australian-workers-compensation-statistics-2012-13. Nearly 10% of serious claims for females were for mental disorders whereas it was 4% for male employees, see Table 6. Employees who sustain physical injury caused by the employer’s negligence may also suffer psychiatric illness linked to their injuries. Typical would be post traumatic stress or depression. Generally, in a common law claim for negligence, these would be recoverable along with damages for the physical injury. Holdups at the workplace: Faucett v St George Bank Ltd [2002] NSWCA 43; Ogden v Bells Hotel Pty Ltd [2009] VSC 219. If the employer’s negligence did not cause the traumatic event, it must be shown that there were steps which could be taken to ameliorate the risk of harm, see New South Wales v Burton [2006] NSWCA 12 (police officer shot at during siege developed post traumatic stress disorder, need to show that failure to provide counselling and treatment exacerbated the disorder). Psychiatric injury may be recoverable in an action for breach of contract, see Nikolich v Goldman Sachs JB Were Services Pty Ltd (2007) 163 FCR 62; Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 at [4], [322]. This may be either because of the employer’s own negligent failures or the negligent or intentional conduct of an employee within the course of employment (vicarious liability), see Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47. This may be linked to physical injury to the employee, see Anwar v Mondello Farms Pty Ltd [2015] SASVCFC 109 (10 August 2015).

Stress Claims – Psychiatric Injury

(4) employer’s negligence a proximate cause of psychiatric illness: the employer’s failure to take reasonable measures to avoid the risk must be a proximate cause111 of the employee’s psychiatric illness. The ability to bring workers compensation or common law claims112 for damages against the employer for psychiatric illness are not available if the illness results from reasonable management action.113 The standard provision, with some variations, is that: No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.114

There appear to be more claims for psychiatric illness against employers from Victoria115 with smaller numbers from Queensland116 and Western Australia.117 This reflects greater access to common law damages in those States.

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This denotes that the failure to take reasonable steps was a cause of the plaintiff’s psychiatric illness and that psychiatric illness was a foreseeable kind of damage, Mt Isa Mines v Pusey (1970) 125 CLR 383. In some States the restrictions applying to workers’ compensation claims such as exclusion for “reasonable management action” for psychiatric injury are expressly stated to apply to common law claims against the employer, SA: Return to Work Act 2014, s 84 (no claim unless a work injury, see s 7(2) – (4)). Other jurisdictions do not expressly state this but provisions relating to claims for common law damages refer to an “injury” or “compensable injury” which may be defined to exclude reasonable management action in relation to compensations claims for psychiatric injury, see NSW: Workers Compensation Act 1987, ss 11A and 151E (damages claims for “injury” to a worker); Qld: Workers’ Compensation and Rehabilitation Act 2003, ss 32(5) and 237; Tas: Workers Rehabilitation and Compensation Act 1988, ss 138AA and 25(1A); Vic: Workplace Injury Rehabilitation and Compensation Act 2013, ss 40(7), 318(1); WA: Workers’ Compensation and Injury Management Act 1981, ss 93K and 5(4); Cth: Safety, Rehabilitation and Compensation Act 1988, ss 5A(2) and 45(1)(a). But note that in some jurisdictions common law claims are not feasible because of significant restrictions on recovery see [6.90]. The term is defined in the statutes mentioned in the previous footnote to cover (with some variations): reasonable actions in a reasonable manner for employer to demote, discipline, counsel, retrench or dismiss or not renew or extend employment; decisions based on reasonable grounds relating to promotion, transfer or employment benefits; reasonable administrative action in relation to the employment; reasonable conduct in relation to workers compensation entitlements. NSW: Workers Compensation Act 1987, s 11A(1); Qld: Workers’ Compensation and Rehabilitation Act 2003 (Qld), s 32(5) and note work must be a major significant contributing factor, s 32(2), (3)(ba); SA: Return to Work Act 2014, s 7(2) – (4); Tas: Workers Rehabilitation and Compensation Act 1988; Vic: Workplace Injury Rehabilitation and Compensation Act 2013, s 40; WA: Workers’ Compensation and Injury Management Act 1981, “injury” in s 5(1), (4). The restrictions do not apply to claims against persons other than the employer. The provisions are set out in Table 3.14 in Comparison of Workers’ Compensation Arrangements in Australia and New Zealand (July 2015). The Workplace Injury Rehabilitation and Compensation Act 2013 (Vic) allows claims for both pain and suffering (non-economic loss) and economic loss, subject to a threshold of serious impairment (30%) or serious injury for pain and suffering (s 335) and a requirement of permanent loss of 40% of earning capacity for economic loss; pain and suffering is subject to a threshold ($56,280) and maximum amount $571,080, indexed (s 340), and in relation to economic loss the threshold is $58,250 (s 340) and maximum sum $1,311,690, indexed (s 340). Workers’ Compensation and Rehabilitation Act 2003 (Qld), Workers Compensation and Rehabilitation Act Regulation 2014 (Qld), Sch 12 Table 6, minimum impairment required of 5%; caps on pain and suffering and non-economic losses, $440,100 and loss of earnings s 306I (3x QOTE) (QOTE is full time Qld annual adult ordinary time earnings, see s 107). Workers’ Compensation and Injury Management Act 1981 (WA), damages for both pain and suffering and economic losses recoverable subject to 15% threshold of permanent impairment (s 93K(4)(d)); below 25% impairment maximum amount awardable is $447,260 (indexed) (s 93K).

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Psychiatric injury [6.220] First we consider what qualifies as psychiatric injury. In order to recover damages for stress-related disorders, the plaintiff will have to show that he or she suffered a recognised psychiatric illness, for example, post traumatic stress disorder. It is not sufficient that the employee is distressed or anxious.118 The fact that the employee has a known special susceptibility to psychiatric illness does not prevent recovery.119 The next step is for the employee to show foreseeability of psychiatric injury.

Forseeability of psychiatric injury [6.230] The duty which an employer owes is owed to each employee. The relevant duty of care is engaged if psychiatric injury to the particular employee is reasonably foreseeable … that invites attention to the nature and extent of the work being done by the particular employee and signs given by the employee concerned.120

Psychiatric illness is not foreseeable simply because the employment may be stressful: There is no such thing as a pressure free job. Every job brings its own set of tasks, responsibilities and day-to-day problems, and the pressures and demands these place on us are an unavoidable part of working life. We are, after all, paid to work and to work hard, and to accept the reasonable pressures which go with that.121

There is no general principle that employers must foresee that all employees risk psychiatric illness from stress at work.122 In situations involving a sudden traumatic event, foreseeability might be more easily shown. For example, where a bank teller is taken hostage in an armed hold-up123 or an employee witnesses a horrific accident at work which kills fellow employees.124 But where psychiatric illness builds up over a period of time as a consequence of stressful circumstances in the workplace, such as bullying, harassment or excessive workloads, more is required. The High Court in

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Mt Isa Mines v Pusey (1970) 125 CLR 383; Anwar v Mondello Farms Pty Ltd [2015] SASVCFC 109 (10 August 2015). As to whether mere distress is available in an action for breach of contract, see [10.260] et seq. Tame v New South Wales; Annetts v Australian Stations Pty Ltd (2002) 211 CLR 317. Where the risk is unavoidable, is the employer required to dismiss an especially susceptible employee to avoid further harm? See Coxall v Goodyear Great Britain Ltd [2002] EWCA Civ 1010; Farmiloe v Lane Group plc [2004] All ER (D) 08, qualifying Withers v Perry Chain [1961] 1 WLR 1314 (trivial risks). Contrast Dugmore v Swansea NHS Trust [2002] EWCA Civ 189 (serious risk no duty to dismiss); Foufoulas v Strang (1970) 123 CLR 168; Stoker v Adecco Gemvale Constructions Pty Ltd [2004] NSWCA 449 at [90] (no duty not to employ at risk employee); Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 (employer entitled to assume employee can carry out contracted work in overwork stress cases). Note issues of discrimination may also arise in relation to a person with a disability, see Guthrie and Westaway, “Emerging Legal Concerns with Chronic Diseases in the Australian Workplace: Preemployment Medicals, Functional Capacity Evaluations, Workers’ Compensation and Disability Discrimination” (2009) 16 JLM 803 and Chapter 15. Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at [35]. Hatton v Sutherland [2002] 2 All ER 1 at [9] citing Health and Safety Executive, Stress at Work (1995); Pecenka v Minister for Health [2012] WASCA 250 at [67]. Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at [34]. In the United Kingdom no occupation is regarded as at special risk of psychiatric injury in this regard: Hatton v Sutherland [2002] 2 All ER 1 at [24]. The employer is not liable where the stressors leading to the injury were not work-related, Lee v Queensland [2015] QDC 83. Faucett v St George Bank Ltd [2002] NSWCA 43. Mt Isa Mines v Pusey (1970) 125 CLR 383 (power station accident); Oram v BHP Mitsui Coal Pty Ltd [2014] QSC 230 (mining accident causing death of fellow workers, plaintiff not present). See also Patrick Stevedores (No 1) Pty Ltd v Vaughan [2002] NSWCA 422 (employees running gauntlet of a union picket line in a bitter industrial dispute).

Stress Claims – Psychiatric Injury

Koehler v Cerebos125 (an excessive workload case) said that there must be visible signs126 of psychiatric illness before foreseeability will be satisfied. [T]he employer engaging an employee to perform stated duties is entitled to assume, in the absence of evident signs warning of the possibility of psychiatric injury, that the employee considers that he or she is able to do the job.127

So in Koehler the employer had no reason to suspect that the employee was at risk of psychiatric injury. There was no suggestion that she was particularly vulnerable128 and although she had complained, there was no evidence that she was putting her health at risk.129 On the other hand it is quite understandable that employees do not want information about a predisposition to psychiatric illness to be known in the workplace because of the negative perceptions the information may create.130 An employee might not want to be known as a “complainer”, or someone who “can’t hack the job” or someone who is not reliable thus diminishing opportunities for promotion and further employment. The decision in Koehler places the onus on employees to advise the employer of risks to their health.131 There is the further risk for employees that failure to inform the employer may give rise to contributory negligence on their part in subsequent proceedings for negligence against the employer.132 It is not sufficient that the employee constantly complains of overwork, there must be signs of psychiatric illness.133 It might not even be sufficient that the employee looks tense, agitated and pale if the employee appears to interact normally whilst at work.134 But if the employee has a known vulnerability, and frequent or prolonged leave which is uncharacteristic, this may be a sign that the employee is at risk of psychiatric illness.135 Similarly if medical certificates provided to the employer indicate the employee is suffering from depression likely to be aggravated by ongoing issues 125

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130 131 132

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Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44; S v New South Wales [2009] NSWCA 164 (undercover police officer, known risk arising from work necessarily stressful and potentially traumatic). Cf Guorgi v Pipemakers Australia Pty Ltd [2013] QSC 198 (psychiatric illness not foreseeable where an Arabic employee was subject to, and participated in, continuing racial jokes at his expense which he regarded as “funny” and in relation to which he did not feel threatened. But query whether employees the butt of racial jokes may see that the only real alternative they have is to join in or leave the workplace). Would the same apply to cases where the employee had a heart attack as a result of stress? See, in the United Kingdom, Hone v Six Continents Retail Ltd [2006] IRLR 49; Hardin v The Pub Estate Company Ltd [2005] LL R 595. Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at [36]; Woolworths Ltd v Perrins [2015] QCA 207. Duties are not limited to those with “normal fortitude”, Tame v New South Wales; Annetts v Australian Stations Pty Ltd (2002) 211 CLR 317 at 384 per Gummow and Kirby JJ; Anwar v Mondello Farms Pty Ltd [2015] SASCFC 109 (10 August 2015). Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at [41]. See also O’Donovan v Western Australian Alcohol and Drug Authority [2014] WASCA 4 (not foreseeable that psychiatric illness would result from roster change, requirement to take excessive annual leave, disciplinary action on unauthorised drug use); Taylor v Haileybury [2013] VSC 58 at [139]-[141]. See, for example, Sayers v Cambridgeshire County Council [2007] IRLR 29. AZ v The Age [No 1] [2013] VSC 335 (no “alarm bells”). See Doherty v New South Wales [2010] NSWSC 450 at [255] et seq; Carangelo v New South Wales [2015] NSWSC 665 at [278] (failure to seek professional help for distress, 10% contributory negligence). Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at [41]; Taylor v Haileybury [2013] VSC 58 at [142]-[143]. Compare Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 (employee changed from a cheerful and confident person to a person who frequently cried and appeared depressed). Mackinnon v Bluescope Steel Ltd [2007] NSWSC 774; Pecenka v Minsiter for Health [2012] WASCA 250 at [67] (stress leave and complaints about another employee not sufficient); Woolworths Ltd v Perrins [2015] QCA 207. Cf an employee advising the employer that they are “at the end of their tether”, Dickins v O2plc [2008] All ER (D) 154. The United Kingdom guidelines accepted by the House of Lords in Barber v Somerset [2004] 1 WLR

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with a supervisor.136 A claim is unlikely where the employee suffers in silence, makes no complaint and has no previous history which suggests the risk of psychiatric illness:137 “[a]n employer is usually entitled to assume that an employee can withstand the normal pressures of the job unless [the employer] knows of some particular problem or vulnerability.”138 If psychiatric illness is foreseeable, it must be shown that the employer was negligent because it did not take reasonable measures in response to that foreseeable risk.139

Reasonable response to foreseeable risk [6.240] We now turn to examine what an employer is required to do in response to a foreseeable risk of psychiatric injury to the employee. If psychiatric illness to the particular employee is foreseeable, the employee must then show that the employer failed to take reasonable steps to minimise or avoid the foreseeable risk of harm.140 This is done by “looking forward to identify what a reasonable employer would have done, not backward to identify what would have avoided the injury”.141 Foreseeability alone is not sufficient.142 The court must take into account the contractual obligations, equitable duties and relevant statutory considerations. The latter could include industrial instruments and general statutory provisions such as anti-discrimination legislation.143 For example, in Fahy a police officer suffered foreseeable psychiatric illness144 when she was left with the medical practitioner to actively assist a very seriously injured stabbing victim. This involved trying to hold the wound together to stem the profuse bleeding, speaking with a very distressed victim who thought he was going to die and communicating with other personnel via radio. She argued that the employer was negligent in not ensuring that another police officer remained with her for support. The High Court held that although psychiatric illness was foreseeable, the employer had not been negligent. Gummow and Hayne JJ said that what constituted a safe system of work had to be

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140 141 142 143 144

1089 have not been adopted in Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at [24], but there is a similar requirement that there must be “signs” of psychiatric illness before it is foreseeable, see Sutherland v Hatton [2002] IRLR 263 at [27], [28]. Box Hill Institute of TAFE v Johnson [2015] VSCA 245 at [48]-[51]. See also Doulis v Victoria [2014] VSC 395 at [552]-[563]. Foreseeable where there had been previous complaints for aggressive and threatening behaviour leading to another female employee suffering depression and resigning, Wolters v University of the Sunshine Coast [2013] QCA 228 and Keegan v Sussan Corporation (Aust) Pty Ltd [2014] QSC 64 (bullying over 11 days, breaches of bullying and harassment policies, psychiatric illness foreseeable, compensation of $237,770 awarded). See also Bristol City Council v Deadman [2007] IRLR 888 at [22] vulnerability indicated in pre-employment medical screening (at [21]) but there will be no notice if the information was confidential and not conveyed to superiors: Hartman v South Essex Mental Health & Community Care [2005] ICR 782. Hegarty v Queensland Ambulance Service [2007] QCA 366 at [89], [90], [96] (ambulance officer). Contrast Carangelo v New South Wales [2015] NSWSC 655 at [243]-[245] (sufficient disclosure that employer put on notice that police officer exposed to stressful events at risk of psychiatric illness). Sutherland v Hatton [2002] IRLR 263 at [20]; Hardy v Mikropul Australia [2010] VSC 42; Larner v George Weston Foods Ltd [2014] VSCA 62; Taylor v Haileybury [2013] VSC 58. In Queensland, the tests related to breach of duty are provided by the Workers Compensation and Rehabilitation Act 2003 (Qld), s 305B and see Keegan v Sussan Corporation (Aust) Pty Ltd [2014] QSC 64 at [25] et seq. No breach where the employer twice withdrew an unsuitable employee from the management program, Woolworths Ltd v Perrins [2015] QCA 207. New South Wales v Fahy (2007) 232 CLR 486; [2007] HCA 20 at [57] per Gummow and Hayne JJ. Tame v New South Wales; Annetts v Australian Stations Pty Ltd (2002) 211 CLR 317 at [296] per Hayne J; Goldsmith v SPC Ardmona Operations Ltd [2009] VSC 445. Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at [21]. New South Wales v Fahy (2007) 232 CLR 486; [2007] HCA 20 at [60] per Gummow and Hayne JJ (reasonably foreseeable that a police officer rendering assistance to a seriously injured stab victim might suffer psychiatric injury).

Stress Claims – Psychiatric Injury

viewed in the light of the statutory purposes and functions of the police service.145 Police are required by statute to obey lawful orders and carry out lawful duties which will expose them to these traumatic situations and the risk of psychiatric illness. It was not reasonable to demand that the employer at all times require two police officers to be present to support each other146 as there may be conflicting responsibilities and statutory obligations which could not be qualified. An employer’s failure to comply with its own procedures following a complaint which would have averted the risk of psychiatric injury is evidence that the employer has failed to act reasonably in response to the risk of psychiatric illness.147 An employer will have failed to take appropriate steps to deal with the risk, where for example, the employer knows that continuing friction between a supervisor and employee had already caused depression and the condition was likely to be aggravated unless steps were taken.148 The steps required will vary with the individual case but it may be sufficient in some cases to provide counselling and mediation.149 But the mere fact that there is stress in the workplace is not sufficient to require the employer to take steps. Spigelman CJ observed:150 In any organisation, including employer/employee relationships, situations creating stress will arise. Indeed, some form of tension may be endemic in any form of hierarchy. The law of tort does not require every employer to have procedures to ensure that such relationships do not lead to psychological distress of its employees. There is no breach of duty unless a situation can be seen to arise which requires intervention on a test of reasonableness.

In determining what steps the employer should have taken in response to the risk, it is relevant that excessive monitoring of employees may be regarded by employees as intrusive and interferences with their privacy.151 Nor is an employer required to put in place measures which are unlikely to avoid or reduce the risk. As noted earlier in most jurisdictions, no claim is available for psychiatric illness where this results from reasonable management action, see [6.210]. It would not be unreasonable for an employer: to require the employee to follow instructions; undertake the required work or engage in performance appraisal. Nor is it unreasonable for an employer to investigate misconduct and where necessary institute disciplinary action.152 Even if stressful for the employee, it is not unreasonable or negligent for an employer to undertake these procedures.153 145

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New South Wales v Fahy (2007) (2007) 232 CLR 486; [2007] HCA 20 at [27], [71]-[77] per Gummow and Hayne JJ. Other members of the majority placed less emphasis on this issue; see Callinan and Heydon JJ at [212]. This conclusion might be different if there were other reasonable measures which could have reduced or minimised the risk and did not conflict with obligations as a police officer, see New South Wales v Seedsman (2000) 217 ALR 583 at [155] per Mason J (young police officer suffering psychiatric injury arising out of handling child abuse cases; negligent failure to provide debriefing and change of duties). Wolters v University of the Sunshine Coast [2013] QCA 228 (failure to discipline aggressive employee in relation to earlier complaints which could have removed the risk); Christos v Curtin University of Technology [No 2] [2015] WASC 72, summary at [679]; Keegan v Sussan Corporation (Aust) Pty Ltd [2014] QSC 64 at [123]-[125]; Bau v Victoria [2009] VSCA 107 per Neave J at [87], [113]-[123], Dodd Streeton JA at [141], Osborn AJA agreeing. Box Hill Institute of TAFE v Johnson [2015] VSCA 245 at [72]. Box Hill Institute of TAFE v Johnson [2015] VSCA 245 at [73]; and see Brown v Maurice Blackburn Cashman [2013] VSCA 122 at [205]-[208], [212] (reasonable response to risk); AZ v The Age [No 1] [2013] VSC 335 (no breach). In Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 471 at [20]. Hegarty v Queensland Ambulance Service [2007] QCA 366 at [43] per Keane J. Unless this constitutes adverse action against an employee exercising a workplace right under the Fair Work Act 2009 (Cth), see Bartolo v Doutta Galla Aged Services Ltd (No 2) [2015] FCCA 345 and discussion [13.240]. As an example, O’Donovan v Western Australian Alcohol and Drug Authority [2014] WASCA 4 (not

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The employer is required to take reasonable measures to respond to the foreseeable risk. So, for example, in relation to an employee who suffers skin allergies, this might mean moving them to another area of the workplace, and/or adopting strategies to reduce the risk.154 Different considerations apply to workloads which are excessive, see [6.300]. Assuming the hurdles imposed by the decision in Koehler (discussed [6.250]) do not prevent a claim, as with employees with physical injuries or a susceptibility to injury, the response to the risk may involve changing duties or re-location.155 In each instance, the question is what is reasonable.156 The offer of a confidential counselling service is one factor157 but may be of little value when what is needed is a specific response to the particular stressors. It must be shown that the employer’s failure to take reasonable measures caused the psychiatric illness.158 In determining whether the employer should have taken measures to avoid the risk of psychiatric illness, it is necessary to take into account the contractual obligations of the parties.

Koehler v Cerebos – the effect of contractual obligations [6.250] The content of the employer’s contractual and tort duty to take care must be construed in the light of the contractual obligations between the parties. This requires the court to have regard to the contract of employment, the nature and extent of the employee’s work and an assumption that the employee taking on the employment is capable of doing the job.159 The contractual obligations are fixed at the date of entry into the contract. The contractual obligations are not qualified by later information that the employee was vulnerable to psychiatric illness.160 This is subject to two qualifications: if the employer varies the duties to be performed, then the varied duties may be qualified by an employee’s known vulnerability.161 The second qualification is that the proper construction of the contract may give rise to an implied limitation or qualification to those duties arising out of the contract itself and against the relevant statutory framework.162 But the primary principle is:

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foreseeable that psychiatric illness would result from roster change, requirement to take excessive annual leave, disciplinary action on unauthorised drug use). See also Christos v Curtin University of Technology [No. 2] [2015] WASC 72, summary at [679]. Illawarra Area Health Service v Dell [2005] NSWCA 381 at [98]-[99]. Doulis v Victoria [2014] VSC 395 at [572]-[575] (teacher, breach of duty in not varying teaching allocations causing excessive stress, failure to provide monitoring and support for return to work). See Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at [21] and in the United Kingdom, practical considerations, Hatton v Sutherland [2002] 2 All ER 1 at [34] (no breach if only response is demotion or dismissal and employee wants to continue in the employment). The question of whether an employer can, in response to the risk, dismiss an employee and whether that can give rise to a claim of discrimination, see [15.260]. Note also Connor v Surrey County Council [2010] 3 All ER 905 (failure to exercise a statutory power to replace an antagonistic school governing body could amount to breach of duty to an employee who suffered psychiatric illness resulting from the conduct of members of the governing body). Best v Staffordshire University [2005] ICR 782; Hatton v Sutherland [2002] 2 All ER 1 at [17], [33]; Daw v Intel Corporation (2007) ICR 1318; Dickins v O2plc [2008] All ER (D) 154. See also Doherty v New South Wales [2010] NSWSC 450 (referral to psychologist and a GP insufficient). The employer who is aware of the risk does not avoid responsibility by arguing that the employee could have taken sick leave and attended a health service for assistance in dealing with the stress, Dickins v O2plc [2008] All ER (D) 154. Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at [24]-[26], [35]-[36]; Larner v George Weston Foods Ltd [2014] VSCA 62; Taylor v Haileybury [2013] VSC 58. Does this require a close dissection of duties? cf Mackinnon v Bluescope Steel Ltd [2007] NSWSC 774 (optional leadership course, not part of employment contract). Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at [36]. Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at [36]. Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at [36].

Stress Claims – Psychiatric Injury

An employer may not be liable for psychiatric injury to an employee brought about by the employee’s performance of the duties originally stipulated in the contract of employment … Insistence upon performance of a contract cannot be in breach of a duty of care.163

There are a number of difficulties with the decision: (1) The decision treats an employment contract as the same as any other commercial contract where parties bargain on an equal footing for the allocation of risk.164 This is rarely the case for all but the senior executives. It would be surprising if employees would regard themselves as taking on the risks of injury that arise out of the agreed responsibilities. (2) The decision allows employees to be exploited and provides them with no remedy if they suffer psychiatric illness. So in Koehler there seems to be intrinsic unfairness in a situation where a full time employee is made redundant and immediately offered a part time job which cannot be completed within the allotted work hours. The only response that is possible following Koehler is that the employee is forced to resign or put their health at risk. (3) The approach is inconsistent with work health and safety legislation165 which emphasises the importance of employers taking steps to recognise and reduce the risk of injury to health in the workplace.166 (4) Pushed to its logical limits, the Koehler decision seriously undermines the employer’s duty to take due care for the safety of employees. This may be illustrated by reference to decisions preceding Koehler. In a United Kingdom decision, Johnstone v Bloomsbury HA,167 a young doctor agreed to work a 40 hour week and could be required to work a further 48 hours overtime if required.168 The contractual right was held to be subject to a duty to take reasonable care for the health and safety of the employee. But Koehler suggests that since the additional overtime was agreed to, it could not be a breach of contract to require the employee to fulfil that duty. (5) Would Koehler reach so far as to negative liability where an employee takes on a job which necessarily brings them into contact with a substance which could cause allergies even if measures were available to limit exposure?169 Would it mean that a very junior police officer handling very distressing child abuse cases without adequate training or support would not be able to recover damages for psychological illness?170 It cannot be the case that an employer can sit back and do 163

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Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at [29]; Hardy v Mikropul Australia [2010] VSC 42 at [238]-[249]; Brown v Maurice Blackburn Cashman [2013] VSCA 122 at [168] (managing partner of Family Law department of law firm). Mitchell and Fetter, “Human Resource Management and Individualisation in Australian Labour Law” (2003) 45(3) JIR 292 at 298 point to limited evidence of bargained or negotiated outcomes with individual agreements with standard terms employment contracts the norm. Under the uniform Work, Health and Safety Act 2011 and regulations, duty holders (includes an employer) have a duty to identify, assess and eliminate or control risks which threaten health or safety in the workplace, see Work Health and Safety Regulation 2011, regs 33 – 38. Health explicitly extends to psychological health, see the s 4 definitions. But note in Koehler at [26], the High Court thought no different result would occur in relation to an action for breach of statutory duty under the Occupational Safety and Health Act 1984 (WA) (failure to provide a safe system of work). Johnstone v Bloomsbury Health Authority [1992] QB 333. See [6.300], Excessive workloads. Illawarra Area Health Service v Dell [2005] NSWCA 381 (health care worker allergic to latex gloves recovers damages). New South Wales v Seedsman [2000] NSWSCA 119 (recovered damages for psychiatric injury), or a

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nothing in response to a known risk where there were reasonable measures that could be taken to minimise or avoid the risk of injury.171 The decision in Koehler should be interpreted to avoid this result. It should be confined to a situation where there was nothing to alert the employer to the risk of psychiatric injury to an employee. (6) The Koehler decision may have differential operation depending on the type of conduct involved. Koehler could not recover because she had agreed to the job even if it was not humanly possible to do the job in the allotted time, whereas an employee who has been bullied, harassed and vilified can recover because it cannot be considered to be part of the job to be bullied and harassed.172

Bullying Introduction [6.260] Bullying in the workplace is a significant problem and a known risk factor for

depression.173 The 2012 Safe Work Australia report indicated that 7% of employees said that they have been bullied in the previous six months.174 The employer has a duty to provide a safe place of work. This extends to providing an environment that is free from bullying.175 Bullying may involve a wide range of behaviour including harassment, victimisation and racial vilification. The Safe Work Guide to bullying176 includes the following behaviour: • abusive, insulting, or offensive language or comments; • unjustified criticism or complaints; • deliberately excluding someone from workplace activities; • withholding information that is vital for effective work performance, • setting unreasonable timelines or constantly changing deadlines; • setting tasks that are unreasonably below or beyond a person’s skill level; • denying access to information, supervision, consultation or resources to the detriment of the worker; • spreading misinformation or malicious rumours; • changing work arrangements, such as roster and leave, to deliberately inconvenience a particular worker or workers.

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diplomat posted to Venezuela not given adequate preparation for difficult conditions there: Gillespie v Commonwealth of Australia (1991) 104 ACTR 1 (recovered); Sinnott v FJ Trousers Pty Ltd [2000] VSC 124 (overworked employee on sick leave because of breakdown returns to work where stressors continue, recovers damages). Illawarra Area Health Service v Dell [2005] NSWCA 381 and New South Wales v Mannall [2005] NSWCA 367 (workplace harassment) at [126] are consistent with this view. Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 per Spigelman CJ at [31]; Swan v Monash Law Book Co-operative [2013] VSC 326 at [163]. Butterworth, Leach and Kiely, “The Relationship Between Work Characteristics, Wellbeing, Depression and Workplace Bullying”, technical findings from a survey of 32-36 year old workers in Canberra and Queanbeyan (Safe Work Australia, Canberra, June 2013). Dollard et al, “The Australian Workplace Barometer: Report on Psychosocial Safety Climate and Worker Health in Australia”, Report (Safe Work Australia, Dec 2012), p 60. Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 at [339] per Beazley J. Bullying and harassment by a superior is not within the scope of employment, such that the employee is taken to consent to it, see Spigelman CJ at [31]. Safe Work Australia, Dealing with Workplace Bullying – A Workers Guide (Nov 2013), p 2.

Stress Claims – Psychiatric Injury

Bullying may involve management, fellow employees177 or even outsiders.178 It is usually concerned with a persistent pattern of conduct rather than isolated incidents179 which cumulatively can give rise to psychiatric illness.180 The definition adopted by the Fair Work Act 2009 anti-bullying provision (s 789FD(1)) is that bullying is conduct which is unreasonable, repeated and creates a risk to health and safety, see [13.370]. In this section the term will be used to include the types of conduct itemised above which are illustrative of a pattern of conduct which is likely to affect the health and safety of employees.181 Stress resulting from altercations and difficulties with interpersonal relationships in the workplace do not necessarily amount to bullying.182

Non compensatory remedies [6.270] There is a patchwork of remedies that are potentially possible for workplace bullying. Firstly, there are remedies which do not provide compensation to the employee complaining of bullying. These include criminal prosecutions for such things as breach of specific legislation relating to bullying as well as stalking, assaults etc,183 and proceedings under the Fair Work Act 2009 anti-bullying provisions for orders to prevent continuing bullying, see [13.370].184 Employers may also be liable under work health and safety legislation. Bullying of workers is a health and safety issue. The principal legislation governing safety for workers (including employees) is the model Work Health and Safety Act 2011. The Act requires a person conducting a business or undertaking to ensure (as far as is reasonably practicable) the health and safety of workers whilst they are at work.185 Workers also have duties to take reasonable care for their own health and safety and to ensure that their conduct does not affect the health and safety of other workers.186 These duties are discussed in detail at [6.480]. Codes of Practice relating to bullying and harassment may also be promulgated under work health and safety legislation.187 Unlike the common law claim against the employer for negligence, proceedings under the work, health and safety legislation do not provide compensation to the employee. Because of the 177

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The literature also identifies unreasonable work demands as bullying viewed from the perspective of the employee. It includes “unreasonable pressure to produce work, withholding necessary information, setting impossible deadlines”, see Butterworth, Leach and Kiely, “The Relationship Between Work Characteristics, Wellbeing, Depression and Workplace Bullying”, technical findings from a survey of 32-36 year old workers in Canberra and Queanbeyan (Safe Work Australia, Canberra June 2013), pp v,12. Such as the supervisor of a labour hire employee, see Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47. But no such limitation exists in relation to common law claims, see, for example, Wolters v The University of the Sunshine Coast [2013] QCA 228 (single instance). Two illustrations: Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 (five years of bullying); Green v DB Group Services [2006] IRLR 764 (“slow, systematic mental abuse” pursued relentlessly on a daily basis). In relation to claims for negligence, these types of conduct are relevant to whether psychiatric injury is reasonably foreseeable and are just indicative of a range of behaviour that may make psychiatric illness foreseeable. See, for example, Brown v Maurice Blackburn Cashman [2013] VSCA 122. Cth: Criminal Code, s 474.17 (cyberbullying using a carriage service); NSW: Crimes Act 1900, s 60E (assaults etc at schools); Vic: Crimes Act 2011, 1958, s 21A; Tas: see cyberbullying Criminal Code 1924 (Tas), s 192 and Tasmania Law Reform Institute, Bullying Issues Paper 21 (May 2015) Part 2 (Tas). Fair Work Act 2009 (Cth), s 789FF(1). The model Work Health and Safety Act 2011, s 19 and see [6.480]. Work Health and Safety Act 2011, s 28. In relation to Victoria, see Occupational Health and Safety Act 2004, s 21(1) and see Andrews v VWA [2013] VCC 1615 (Taft J, 15 Aug 2013) (bullying by corporate officer). Safe Work Australia, “Guide for Responding and Preventing Workplace Bullying” (27/11/2013).

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difficulty in proving bullying and the lack of prosecutions under work health and safety legislation, work health and safety legislation has yet to demonstrate its effectiveness in responding to workplace bullying.188

Compensation for bullying [6.280] In contrast, there are a number of possible actions which allow the bullied employee to recover compensation. (1) Breach of anti-discrimination statutes if the relevant discrimination occurs as part of the bullying.189 (2) Workplace complaints190 involving adverse action under the Fair Work Act 2009191 (see [13.240]). (3) Workers compensation claims:192 in most jurisdictions the legislation restricts recovery of workers compensation payments for psychological injury resulting from reasonable management action whether under the Act (workers’ compensation) or under a common law action against the employer (see [6.210]).193 (4) Common law claims for compensation: common law actions, where available, (see (3) above) generally provide more generous compensation than workers compensation payments. But in comparison to a workers’ compensation claim, a common law claim may take years to be resolved and, unlike the Fair Work Act 2009 provision, continues to be available194 after the employment has ended. As noted above, in order to claim compensation at common law for psychiatric injury resulting from bullying and harassment, it must be shown that the plaintiff suffered a recognised form of psychiatric illness which was foreseeable, and that the employer did not take reasonable measures in response to that risk, and this failure caused, or aggravated the plaintiff’s harm (see discussion at [6.210]).

Common law claims against the employer for bullying [6.290] Common law damages for bullying may be available: 188 189

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Tasmanian Law Reform Institute, Bullying Issues Paper 21 (May 2015), p 24. For example, bullying associated with sexual or racial discrimination, see discussion at [15.200], [15.260]. There may be an overlap between remedies available under anti-discrimination legislation and claims based on negligence in relation to claims based on sexual harassment or racial vilification. This was noted without comment by Basten JA in Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 at [378]-[380]. Compensation may mirror similar damages that might be received in a torts claim, see Chapter 15 at [15.230]. Evans v Trilab Pty Ltd [2014] FCCA 2464; Daw v Schneider Electric (2013) 280 FLR; [2013] FCCA at 369, 383-384 (FLR), [43], [115]-[119] (complaints related to bullying and breaches of work health and safety legislation, an exercise of a workplace right). Fair Work Act 2009 (Cth), s 342(1)(d) adverse action will occur where the employer “discriminates between the employee and another employee”. See discussion at [13.240]. A much broader range of remedies, including the imposition of penalties and payment of compensation is available for breach, see [13.310]. See also the discrimination provisions under Fair Work Act 2009 (Cth), s 351 and discussion at [15.250]. In relation to restrictions on compensation for psychological injuries under workers’ compensation legislation, see [6.30]; and Safe Work Australia, Comparison of Workers’ Compensation Arrangements in Australia and New Zealand (July 2015), Table 3.14. See [6.210]. The restrictions do not apply to claims against persons other than the employer. The provisions are summarised in Table 3.14 in Safe Work Australia, Comparison of Workers’ Compensation Arrangements in Australia and New Zealand (July 2015). In each jurisdiction there are statutes of limitations which restrict the time in which claims may be made. There are also restrictions under workers’ compensation legislation.

Stress Claims – Psychiatric Injury

(1) for breach of contract where anti bullying policies are incorporated into the contract of employment.195 It is common for workplaces to have Codes of Practice or workplace policies setting out practices and measures to reduce bullying, harassment or victimisation in the workplace. In some cases these may be formally incorporated into the contract of employment, so that bullying may give rise to a claim for breach of contract (see [10.140]),196 as well as the potential for a torts claim. Workplace policies may be relevant to whether the employer has taken reasonable care to protect employees against bullying.197 (2) actions in tort against individual employees for intentional harm. At common law, claims for compensation may also be brought directly against the perpetrator for intentional infliction of mental harm.198 (3) actions against an employer for failure to take reasonable care to prevent psychiatric injury to an employee; and, (4) vicarious liability of the employer for the wrongful conduct of an employee within the course of employment.199 An initial question concerns the potential overlap between claims for breach of the implied contractual duty to take reasonable care for the safety of employees200 and a claim in tort based on the employer’s negligence.201 The case, Naidu involved systematic bullying and racial vilification. The claim was for negligence against the employer both in contract and in tort.202 No distinction was drawn between the contractual claim and the negligence claim.203 Nor did the court see any need to find a

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As to limitations on the recovery of damages in contract claims, see [10.270]. Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120 (harassment and grievance procedures contained in an incorporated document did not give rise to contractual obligations), see Black CJ at [35]-[42], Marshall J at [158]-[162], and Jessup J at [179]-[207]. Bau v Victoria [2009] VSCA 107 at [87] per Neave J, Dodd Streeton JA at [141], Osborn AJA agreeing. See Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 at [67]-[83] per Spigelman CJ (conduct of the employee was calculated to cause the employee psychiatric injury within the principles enunciated in Wilkinson v Downton [1897] 2 QB 57); cf Basten J at [376]; New South Wales v Mannall [2005] NSWCA 367 at [131]-[137]; Green v DB Group Services (UK) Ltd [2006] IRLR 764 (individual employees have a duty of care to fellow employees not to engage in harassing conduct which will foreseeably cause psychiatric injury). Note also the exclusion of indemnities for serious and wilful misconduct, [5.470]. Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47. In exceptional cases there may be an express contractual duty to take reasonable care, see Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120. In the English jurisdiction, claims based on bullying and harassment may rely on the implied term of trust and confidence, see Brodie, “Deterring Harassment at Common Law” (2007) 36 ILJ 213. This would not preclude a claim in negligence, Brodie, “Health and Safety, Trust and Confidence and Barber v Somerset County Council: Some Further Questions” (2004) 33 ILJ 261. Note also Brodie’s view that the limitations applying to excessive workload cases should not apply to bullying and harassment style cases (at 265). The case involved a labour hire situation where a client’s employee bullied and intimidated a labour hire employee. Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 at [4] per Spigelman CJ; at [332] per Beazley J. Exemplary damages in tort may make a tort claim more advantageous, see Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 at [268]-[276] per Beazley J. But note exemplary damages in actions against the employer may be excluded, see Workers’ Compensation Act 1987 (NSW), s 151R; cf Workers Compensation and Rehabilitation Act 2003 (Qld), s 309; and see notes to [6.100] “Employer’s Duty of Reasonable Care” concerning the differences between tort and contract claims. Note Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120 involving an express contractual obligation of care.

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new implied term relating to bullying, intimidation and racial vilification. This conduct was sufficiently covered by the implied duty of care.204 An employer can be liable for bullying, harassment or victimisation either directly or vicariously (see [6.40], [6.60]). Most successful claims are based on the employer’s own failure to take reasonable steps to prevent the offensive conduct. The employer must know (or ought to know) that psychiatric injury to the employee was foreseeable ([6.230]) and the employer must fail to take reasonable measures in response to that risk.205 Where supervisors or management have been made aware of the circumstances, the employer will have sufficient knowledge.206 Unlike the claims related to overwork, a plaintiff does not “choose to work with a bully, or work in stressful conditions arising other than from the nature and extent of the tasks that [the employee] agreed to perform”.207 It is not a sufficient discharge of the duty of care for the employer to have in place policies relating to bullying and harassment.208 Bullying, harassment or victimisation frequently occurs out of sight of management. It might be difficult to find that the employer is directly liable because the employer failed to exercise reasonable care. Victims are often vulnerable employees who may be too frightened to complain fearing further retribution and loss of employment.209 The bullying conduct may be that of junior employees or even supervisors and managers.210 The employer can be vicariously liable for the tortious conduct of its employees committed within the course of employment.211 Vicarious liability is discussed at [6.60].

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207 208 209 210 211

Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 at [8] per Spigelman CJ; at [341] per Beazley J. Note also O’Neill v T D Williamson Aust Pty Ltd [2008] VSC 398. Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 at [20] per Spigelman CJ. Not sufficient that junior employees know but knowledge of supervisors could be sufficient if given sufficient information. But a perpetrator who managed security requirements and supervised the bullied employee could be regarded as the “mind and will” of the company making it directly liable, see Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 at [41]-[56], [63] per Spigelman CJ; at [236], [237] per Beazley J. Swan v Monash Law Book Co-operative [2013] VSC 326. Nationwide News Pty Ltd v Naidu [(2007) 71 NSWLR 47 at [259] per Beazley J. As in Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47. See, for example, Green v DB Group Services (UK) Ltd [2006] IRLR 764. Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 47 at [67]-[83] per Spigelman CJ (conduct of the employee was calculated to cause the employee psychiatric injury within the principles enunciated in Wilkinson v Downton [1897] 2 QB 57); cf Basten J at [376]; New South Wales v Mannall [2005] NSWCA 367 at [131]-[137]; Green v DB Group Services (UK) Ltd [2006] IRLR 764 (individual employees have a duty of care to fellow employees not to engage in harassing conduct which will foreseeably cause psychiatric injury). See comment by Brodie, “Deterring Harassment at Common Law” (2007) 36 ILJ 213, Butler, “Psychiatric Injury in the Workplace: Directions for Cases Involving Stress or Bullying” (2006) 14(2) Torts LJ 124.

Stress Claims – Psychiatric Injury

Excessive workloads [6.300] Employees may claim that the excessive workload212 has caused them psychiatric illness. The cases demonstrate reluctance by courts to allow recovery for psychiatric illness arising out of work-related stress.213 In Koehler, a full time employee had been made redundant. She was immediately offered a part time job for three days a week. When she commenced work she immediately complained that she would not be able to service the stores within her work area within the time available. She subsequently suffered a stress-related psychiatric illness. Evidence was available from industry that her workload exceeded industry practice. Although she complained about her workload, the employer was not aware that this was damaging to her health (see discussion of foreseeability at [6.250]). Her claim for psychiatric illness was rejected. The High Court said that it could not be a breach of the employer’s duty of care to insist upon the employee carrying out her contractual duties that she had agreed to. It was irrelevant that her workload may have exceeded the industry standard. An employee might decide to work longer hours but be rewarded appropriately for that additional work; the common law should not inhibit such agreements.214 This approach differs from the English cases which refer to the industry standard in determining whether the employee has been required to work excessive hours.215 It also ignores the relationship between excessive work hours and ill health. We have already noted the difficulties with this approach. An ordinary person in the street would be inclined to ask: “What is unforeseeable about illness if you are working 90 hours per week without paid overtime in order to get the job done and the employer won’t give you the help you need?”

Disciplinary and investigative proceedings [6.310] Another area where claims for psychiatric illness have been made involves unfair or defective disciplinary and investigative procedures. As noted at [6.210], no claim is available for psychiatric illness arising out of “reasonable management action”; this will usually include action or proposed action in relation to performance, appraisal, discipline, retrenchment or dismissal (see [6.210]). But even where it can be shown that the employer’s conduct or proposed conduct is unreasonable, recovery of damages for psychiatric illness arising from unreasonable management action is particularly difficult. 212

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Maximum hours are set under the Fair Work Act 2009 (Cth), ss 62 – 64 National Employment Standards, see [12.170]. See also Safe Work Australia, “Guide for Managing the Risk of Fatigue at Work” (Nov 2013). A modern award is required to state the “ordinary hours of work”, Fair Work Act 2009 (Cth), s 147. As to some of the difficulties with determining working hours, see Rodgers, “The Notion of Working Time” (2009) 38(1) Ind LJ 80 and the issue of what is “excessive”, Larner v George Weston Foods Ltd [2014] VSCA 62 at [219]-[224] (no standard for judging what is excessive, but query whether it is required by Koehler v Cerebos (2005) 222 CLR 44 at [29]-[31]). And see Doulis v Victoria [2014] VSC 395 at [569] (no external standard required to decide whether workload excessive if a risk of psychiatric illness). Working hours are limited for surgical trainees (residents) both in the United States (16 hours 2011) and the United Kingdom. In the United Kingdom breach of regulation relating to work hours did not give rise to an action for breach of statutory duty, Sayers v Cambridgeshire CC [2007] IRLR 29. It is a work health and safety issue, see discussion below and Work Safe Australia “Managing the Risks of Fatigue in General Practice” and see Australian Medical Association, safe hours audit and code of practice. The United Kingdom guidelines established by Hale LJ in Sutherland v Hatton [2002] 2 All ER 1 and endorsed by Barber v Somerset [2004] 1 WLR 1089 may be relevant but have not been adopted in Australia; Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at [24]. Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 at [29], [31]. Hone v Six Continents Retail Ltd [2006] IRLR 49 (hotel manager, 90 hour week, no paid overtime, refusal to sign form consenting to excess hours, heart attack, held entitled to recover); cf Hardin v The Pub Estate Company Ltd [2005] LL R 595. And in relation to work health and safety see Safe Work Australia, “Guide for Managing the Risk of Fatigue at Work” (Nov 2013).

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Disciplinary procedures under statutory regimes [6.320] Where these processes have been carried out under a statutory regime, a duty of care will not be owed to carry out those processes in such a way as to avoid psychiatric illness.216 Statutory duties may be inconsistent with a duty of care being owed to the employee in relation to disciplinary and investigative procedures.217 Additionally, a tort remedy may not be suitable when administrative law processes are available to remedy any procedural error:218 Proposals for the development of an administrative tort have been made from time to time, so far without success. The intrusion of the tort of negligence into the area of procedural irregularities in administrative decision-making could well overwhelm the traditional remedies of administrative law.

Defects in processes leading to dismissal [6.330] If an employee has no contractual right to a fair hearing, an employer has no common law duty to provide a hearing or accord natural justice to an employee accused of misconduct or wrongdoing, see [5.260]. In New South Wales v Paige219 the NSW Court of Appeal said that a duty to provide a safe system of work does not extend to the “incidents of the contract of employment such as … disciplinary procedures”220 and consistently with the later High Court decision in Barker,221 the unfair dismissal legislation is taken to express the appropriate balance between employees and employers rights. In any event, even if a claim could be brought, if the relevant negligence is that the employer failed to properly conduct investigatory and disciplinary processes, then it must be shown that defects in the process caused the psychiatric illness.222 There may be express terms in the contract requiring the employer to follow disciplinary procedures prior to dismissal. Whether an employee can recover damages for psychiatric illness resulting from breach of express contractual terms entitling the employee to a fair hearing is discussed in detail in Chapter 10, see [10.180], [10.260] – [10.330].

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New South Wales v Paige [2002] NSWCA 235; Heptonstall v Gaskin [2004] NSWSC 80. New South Wales v Paige [2002] NSWCA 235 at [101], [121] per Spigelman CJ (possible conflict between the responsibilities imposed upon educational authorities, their duties to students, the public and the school and the State education system and the duty to provide a “safe disciplinary process”) and see Mason JA at [330]; Giles JA at [358]-[359]. See also Heptonstall v Gaskin [2004] NSWSC 80; NSW v Rogerson [2007] NSWCA 346; Calverley v Chief Constable of Merseyside Police [1989] 1 AC 1228; French v Chief Constable of Sussex Police [2006] EWCA Civ 312. Cf Reeves v New South Wales [2010] NSWSC 611. New South Wales v Paige [2002] NSWCA 235 at [176] per Spigelman CJ and see Mason JA at [330]; Giles JA at [358]-[359]. Note also no tort duty to act in good faith: CGU Workers Compensation (NSW) Ltd v Garcia [2007] NSWCA 193 at [57] et seq New South Wales v Paige [2002] NSWCA 235. New South Wales v Paige [2002] NSWCA 235 at [78] per Spigelman CJ. Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 and see [5.160]. New South Wales v Paige [2002] NSWCA 235 per Spigelman CJ at [251]-[253], Mason P and Giles JA agreeing. But what if it would have led to a different decision? A minor breach of procedure would not be sufficient, Bristol City Council v Deadman [2007] IRLR 888 (panel comprised two rather than the three members, letter confirming that a new panel would be appointed was left on the employee’s desk). See also Tame v New South Wales; Annetts v Australian Stations Pty Ltd (2002) 211 CLR 317.

Work Health and Safety

Work Health and Safety Introduction [6.340] The balance of this chapter reviews the responsibilities for the health and safety of workers under the work health and safety legislation.223 No longer is workplace safety limited to imposing statutory duties on an employer to ensure the safety of employees. Duties are imposed on persons conducting a business or undertaking and also on those who have a level of management and control at the workplace, [6.550]. Duties are also imposed on those who undertake to supervise the work, workers themselves, contractors and their employees and officers of the company, [6.520]. The legislation acknowledges that workplace safety involves not just those at the coal face but designers, constructors, installers, demolishers and manufacturers of plant and equipment, the “cradle to grave” approach [6.560].224 Duties are owed not just to employees but to contractors and their employees, labour hire workers and others who are put at risk by workplace activities (see [6.520]). The focus is not just the immediate cause of work accidents but the antecedents such as the failure to provide appropriate instruction and training, supervision, risk assessment, planning and continuous monitoring of the workplace and the health of workers. The goal is to eliminate risk as far as is reasonably practicable and if elimination is not possible, to minimise risks. The reduction in the incident rate for serious claims by 20% in 2013-2014 (from the 2009-2012 rate) is testimony that commitment to safety at the workplace will reduce workplace injury.225 Breach of duties under work health and safety laws is a criminal offence.226 The following discussion does not separately consider criminal responsibility under the general criminal law which continues to apply.227 Under the general criminal law, an employer may be guilty of criminal manslaughter for the death of a worker where there is gross negligence involving the most serious failures to take reasonable care for the safety of others. The principal legislation governing safety for workers (including employees) is the model Work Health and Safety Act 2011.228 Only Victoria and Western Australia have not adopted the legislation in the standard form. Further detailed requirements are set 223

224 225

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See generally as to the history of work health and safety laws, R Johnstone, “History of Work Health and Safety Laws”, in Dunn and Thakorlal (eds), Australian Master Work Health and Safety Guide (2nd ed, Wolters Kluwer CCH, 2014), ch 4. See Johnstone, Bluff and Clayton, Work Health and Safety Law and Policy (3rd ed, Lawbook Co, 2012), at [5.80]. These are the latest available figures, see Safe Work Australia, “Comparative Performance Monitoring Report, Comparison of Work Health and Safety and Workers’ Compensation Schemes in Australia and New Zealand” (17th ed, October 2015), p 1. The Act does not provide compensation to injured persons. In all but exceptional cases breach of a statute which imposes criminal liability does not give rise to a claim for compensation by a person injured as a consequence of the statutory breach. But in relation to work safety statutes, in some instances an employee can bring a claim for damages for breach of statutory duty; this is a separate torts claim for damages, see above [6.70]. As to the interaction between the general criminal law and work health and safety legislation, see Regina v Moore [2015] NSWCCA 316 (breach of Occupational Health and Safety Act 2000 (NSW), s 20 not intended to give rise to liability for manslaughter which would allow prosecution for criminal manslaughter for breach of s 20 where an employee died from the collapse of an unsupported wall. See also discussion, National Review into Model Occupational Health and Safety Laws, First Report to the Workplace Relations Ministers’ Council, (Canberra, October 2008), ch 11, “Types of Offences”. Work, Health and Safety Act 2011 (Cth) (ACT; NSW; NT; Qld (2012); SA (2012); Tas (2012)) and see Vic: Occupational Health and Safety Act 2004; WA: Occupational Health and Safety Act 1984. See

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out in the model regulation, Work Health and Safety Regulation 2011.229 In addition there are Interpretive Guidelines and Approved Codes of Practice.230 Interpretive Guidelines are statements by the regulator which provide guidance as to the operation of the Act and the approach taken by the regulator in enforcing the Act and Regulations.231 The Regulator is required to publish Guidelines relating to prosecutions and work health and safety undertakings, model Act, s 230(4) (see [6.620]). Although Approved Codes of Practice are not legally binding, breach of an Approved Code is not an offence but is evidence as to whether there has been a breach of the duties imposed by the legislation; it can also be relevant to knowledge of hazards or risks, assessment and control of risks and what is reasonably practicable.232 [6.350] The model work health and safety legislation233 mirrors the philosophy of the influential 1972 Robens Committee Report234 that health and safety “is a continuous legal and social responsibility of all those who have control over the conditions and circumstances under which work is performed. … this is an all-embracing responsibility, covering all work people and working circumstances.”235 The model Work Health and Safety Act 2011 recognises its primary purpose is to protect “the health and safety of workers and other people by eliminating or minimising risks arising from work or workplaces” as well as the importance of education and training, the constructive roles of unions and employer organisations in promoting safety, the need for effective compliance and enforcement and continuous improvements in achieving health and safety.236 Safety should be the concern of everyone at the workplace not just employers. The Robens Committee recommended, and the model Act implements, a statutory duty to consult employees237 recognising that employees play an important role in achieving a safe and healthy workplace.238

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also Work, Health and Safety Act 2011 (Cth) and Johnstone, “Harmonising Occupational Health and Safety Regulation in Australia: The First Report of the National LHS Review” [2008] J of Applied L & Pol’y 36. State occupational health and safety legislation is not excluded by the Fair Work Act 2009 (Cth), s 27(2). Work, Health and Safety Regulation 2011 (Cth) (ACT; NSW; ; Qld (2012); SA (2012); Tas (2012)), and see Vic: Occupational Health and Safety Regulations 2007; WA: Occupational Safety and Health Regulations 1996. There are a significant number of approved codes of practice extending to: confined spaces, hazardous manual tasks, manage and control of asbestos in the workplace; managing work health and safety risks; safe removal of asbestos; labelling of hazardous chemicals, noise and hearing loss; risk of falls; work environment and facilities; safety data sheets for hazardous chemicals, consultation, cooperation and co-ordination. The regulator’s website in each State or Territory should be checked to determine whether a code of practice has been adopted in that jurisdiction. In relation to Victoria, see Occupational Health and Safety Act 2004, s 149 (approved compliance codes); WA: Occupational Safety and Health Act 1984, s 57. And see the more general approved code, Safe Work Australia How to Manage Work Health and Safety Risks, Code of Practice (7 December 2011). See Safe Work Australia, “Guide to the Model Work Health and Safety Act” (Oct 2012), p 3. Interpretive Guidelines are available at: http://www.safeworkaustralia.gov.au/sites/swa/model-whslaws/model-whs-act/interpretive-guidelines/pages/interpretive-guidelines Model Work, Health and Safety Act 2011, s 275 and see Occupational Safety and Health Act 1984 (WA), s 57(8); Occupational Health and Safety Act 2004 (Vic), Ss. 150, 152 (failure to comply with compliance code not give rise to civil or criminal liability but a person who complies with the code is taken to have complied with the Act). Model Work, Health and Safety Act 2011, s 3; Vic: Occupational Health and Safety Act 2004 (Vic), s 2; WA: Occupational Safety and Health Act 1984 (WA), s 5. National Review into Model Occupational Health and Safety Laws, First Report to the Workplace Relations Ministers’ Council (Canberra, October 2008), p 2. Robens, Report of the Committee on Safety and Health at Work (HMSO, Cmnd 5034 London 1972), at #130, p 41. Model Work, Health and Safety Act 2011, s 3 “purposes” But Robens did not recommend that this be legally enforceable, Robens Report of the Committee on

Work Health and Safety

The Robens Committee recommended greater emphasis on self regulation through voluntary standards and codes of practice rather than increasingly detailed statutory regulation; legislation should set broad general performance standards with detailed regulations only where absolutely essential to ensure safety.239 Codes or voluntary standards were to be preferred because of their capacity to allow flexibility and rapid change as well as encouraging innovation, further development and the engagement of industry.240 This approach is acknowledged in the model Work Health and Safety Act 2011 which sets out general performance standards (s 19) supplemented by more specific duties. The model Act accepts that industry should be given flexibility to develop its own practices to achieve safety in the workplace. The model Act provides that a person prosecuted for an offence under the Act can demonstrate compliance by adopting different measures that are “equivalent to or higher than the standard required in the code”.241 The Robens committee recommended that prosecution be limited to the most serious breaches of workplace health and safety. For lesser breaches, it recommended the use of administrative sanctions,242 with greater use of improvement notices and in serious cases, prohibition notices243 requiring remedial action. This approach has been adopted in the model legislation, see [6.630]. The model Act imposes strict liability.244 This means it is not necessary for the prosecutor to prove that the breach was committed with guilty intent (mens rea).245 The Victorian Court of Appeal in relation to a general duty imposed under the Victorian Act approved the following statement: The duty under each section is broken if the specified consequences occur, but only if “so far as is reasonable practicable” they have not been guarded against. So the company is in breach of duty unless all reasonable precautions have been taken, and we could interpret this as meaning “taken by the company or on its behalf”. In other words, the breach of duty and liability under the section do not depend upon any failure by the company itself, meaning those persons who embody the company, to take all reasonable precautions.

238 239

240 241 242

243 244

245

Safety and Health at Work (HMSO, Cmnd 5034, London 1972), at [69]-[71] and see Model Work, Health and Safety Act 2011, ss 47 – 49; Vic: Occupational Health and Safety Act 2004, ss 35, 36; WA: Occupational Safety and Health Act 1984, ss 19(1)(c); 35(1)(c). Robens, Report of the Committee on Safety and Health at Work (HMSO, Cmnd 5034 London 1972), at [59]-[71]. There may be special provision for mining and petroleum, see for example, Work Health and Safety (Mines and Petroleum Sites) Act 2013 (NSW) and Occupational Safety and Health Act 1984 (WA), s 4(2). Robens, Report of the Committee on Safety and Health at Work (HMSO, Cmnd 5034 London 1972), at [142]-[160]. Model Work, Health and Safety Act 2011, s 275(4). See also WA: Occupational Safety and Health Act 1984, s 57(7), (8). Robens, Report of the Committee on Safety and Health at Work (HMSO, Cmnd 5034, London 1972) at [265]-[279] and see Model Work Health and Safety Act 2011, s 216 and in relation to each regulator, “Guidelines Relating to Work Health and Safety Undertakings”, NSW Government, Work Cover, Enforceable Undertakings; Guidelines for Proposing an Enforceable Undertaking. See [6.650]. Model Work Health and Safety Act 2011, s 12A provides that “strict liability applies to each physical element of each offence under this Act unless otherwise stated in the section containing the offence”, see also Model Work Health and Safety Act 2011, s 244(3). As to the position in Victoria where there is no equivalent to s 12A of the Model Work, Health and Safety Act 2011 (Cth) and no defence of honest and reasonable mistake, see ABC Developmental Learning Centres Pty Ltd v Wallace [2007] VSCA 138 at [14]; R v Commercial Industrial Construction Group Pty Ltd [2006] VSCA 181; (2006) 14 VR 321. It can be relevant to the imposition of penalties, see [6.670]. Tooma says this allows a defence of honest and reasonable mistake of fact and see s 244(3) (sufficient if mistake of fact by an employee agent or officer within scope of employment or with actual or apparent authority), Tooma’s Annotated Work Health and Safety Act 2011 (Lawbook Co, 2012), p 29 at [12A.10].

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Rather, the company is liable in the event that there is a failure to ensure the safety etc of any employee, unless all reasonable precautions have been taken – as we would add, by the company or on its behalf … Secondly, if the test is whether all reasonable precautions have been taken by the company or on its behalf, then it would not seem to be material to consider whether the individual concerned, who acted or was authorised to act on behalf of the company, was a senior or a junior employee.246

The conduct of an employee, agent or officer of the company “acting within the actual or apparent scope of his or her employment, or within his or her actual or apparent authority”, is treated as conduct of the company and similarly where knowledge, intention or recklessness is required, that will be similarly be satisfied if an employee, agent or officer of the company had that knowledge, intention or recklessness.247 The legislation imposes duties on persons conducting a business or undertaking to ensure safety of workers undertaking work at the workplace where it is reasonably practicable to do so. The next section commences by defining these key concepts. The discussion frequently refers to judicial authority preceding the model Act and to authority in Victoria and Western Australia that have not adopted the model legislation. These decisions provide guidance in interpreting the model Act until such time there is a corpus of decisions on the model legislation. Consequently some caution needs to be exercised in relying on authorities dealing with earlier legislation which differs from the model Act.

Key definitions and core concepts [6.360] The legislation defines the key concepts of “business or undertaking”, “worker”, “workplace”, and “reasonably practicable” which are discussed in turn in the following text. Interpretive Guidelines also provide guidance as to the meaning of key terms used by the model Act.248

Persons Conducting a Business or Undertaking (PCBU) [6.370] Persons conducting a business or undertaking (PCBUs) have a general duty to ensure the health and safety of workers and not to put at risk others (s 19).249 More specific duties are owed by a PCBU and others that have; management or control of the workplace (s 20),250 management or control of workplace fixtures, fittings or plant (s 21); the design, manufacture, import or supply of workplace plant, structures or substances (ss 22 – 25) and the installation, construction or commission of workplace plant or structures (s 26).251 A PCBU has a duty to notify the regulator of serious injury, illness or death or a dangerous incident at the workplace (s 38).

246 247 248 249 250 251

R v Commercial Industrial Construction Group Pty Ltd [2006] VSCA 181 at [27]. Model Work, Health and Safety Act 2011, s 244; compare the Victorian provision, Occupational Health and Safety Act 1985, s 143 (attributing conduct). Available at http://www.safeworkaustralia.gov.au/sites/swa/model-whs-laws/model-whs-act/ interpretive-guidelines/pages/interpretive-guidelines. Compare Occupational Health and Safety Act 1985 (Vic), ss 20, 21; Occupational Safety and Health Act 1984 (WA), s 19. Occupational Health and Safety Act 1985 (Vic), s 26; Occupational Safety and Health Act 1984 (WA), s 22. Compare Occupational Health and Safety Act 1985 (Vic), ss 207 – 203; WA: Occupational Safety and Health Act 1984 (WA) s 23.

Work Health and Safety

There may be one or more PCBUs with obligations in relation to the same workplace. This is common on buildings sites where there may be multiple PCBUs: the head building contractor and a series of subcontractors and even the client who engaged the head contractor.252 A “Person Conducting a Business or Undertaking” (a PCBU), is defined in s 5 of the Act. It defines the term broadly and then sets out specific exclusions. The Act applies even if the business is not for profit,253 is operated jointly with others (s 5(1)),254 is a partnership,255 or an unincorporated association (s 5(2)).256 This is further amplified by the Safe Work Australia Interpretative Guidance and Regulations excluding certain persons from the definition.257 Individuals can qualify if they are operating their own businesses but not if they are a worker or officer of the business (s 5(4)). It also includes the Crown if conducting a business or undertaking.258 There are some limited exceptions applying to volunteer organisations, strata title corporations and associations.259 The model Act excludes certain groups from the definition of a PCBU. Workers (including employees) and officers (such as director or an executive manager) do not qualify (s 5(4)) unless they are engaged in activities in a different capacity.260 There are separate provisions dealing with the responsibilities of workers (including employees) and corporate officers, see [6.570]. The PCBU must be conducting a business or undertaking. The terms “business” or “undertaking” are not defined in the Act261 but are fleshed out in the Interpretive Guidelines promulgated under the Act. Although the Guidelines do not have statutory status, they indicate the approaches adopted by the regulator in administering the legislation. The Guideline sets out the usual meaning of the terms:262 252 253

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255 256 257

258 259 260

261

262

See Interpretive Guideline, “The Model Work Health and Safety Act”, meaning of Person conducting a business or undertaking. It also does not apply to “volunteer associations” where no person is employed to carry out the work, s 5(7), (8), and see Model Work, Health and Safety Regulation 2011reg 7(3) in relation to incorporated volunteer associations provided no person is employed to carry out the work. But volunteers working with PCBUs may be owed a duty of care as a “worker”, s 7(1) and as a “worker” are required to exercise care and co-operate, s 28. Under s 16 both have responsibility and there is a duty, as far as is practicable, to consult, co-operate and co-ordinate, s 46. See also Safe Work Australia, Work Health and Safety Consultation, Co-operation and Co-ordination, Code of Practice (6 Dec 2011). The Act applies to each individual partner, Model Work Health and Safety Act 2011, s 5(3) unless it is an incorporated partnership. It does not include a person working in the business solely as a worker or an officer Model Work Health and Safety Act 2011, s 5(4) nor as an elected member of a local authority, s 5(5). Model Work Health and Safety Act 2011, s 5(6), and Model Work, Health and Safety Regulation 2011, reg 7(1), (2) excluding a strata title body corporate in relation to common areas used for residential purposes only but not if the body corporate hires any worker as an employee. Section 10 and see discussion in Johnstone, Bluff and Clayton, Work Health and Safety Law and Policy (3rd ed, Lawbook Co, 2012), pp 157-163. In relation to volunteer associations, see Model Work Health and Safety Act 2011, s 5(7), (8) and strata titles, Model Work, Health and Safety Regulation 2011, reg 5(7). Other exclusions are elected members of local authorities operating only in that capacity (s 5(5), volunteer associations provided they do not have employees, s 5(8) The model Regulations exclude strata title bodies who do not engage any workers as an employee (reg 7) and the Interpretive Guideline (Model Work Health and Safety Act – Person Conducting a Business or Undertaking) excludes work undertaken for private or domestic purposes such as a plumber engaged to fix a domestic hot water system. Although it was recommended by the National Review Second Report that it should, see National Review into Model Occupational Health and Safety Laws, Second Report to the Workplace Relations Ministers (Canberra 2009), at [23.54]. “Interpretive Guideline – Model Work Health and Safety Act: The Meaning of “Person conducting a

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Businesses: enterprises usually conducted with a view to making a profit and have a degree of organisation, system and continuity Undertakings may have elements of organisation, systems, and possibly continuity, but are usually not profit-making or commercial in nature.

The carrying on of a business or undertaking requires: “some form of commercial enterprise, systematically and regularly, with a view to profit” so that a distinction can be drawn between “a person who on spasmodic or isolated occasions may do dressmaking” at their own home and occasionally be paid and a person who does dressmaking as part of a business.263 A PCBU would include retailers, wholesale and manufacturing businesses, importers onselling imported goods, owner-drivers of transport or courier services, fast food franchisors and franchisees, self employed persons running their own businesses, local councils, schools, builders, clothing manufacturers employing outworkers and not–forprofit bodies that hire and pay administrative staff.264 [6.380] A person may conduct a “business or undertaking” even though work is being undertaken by contractors and the contractor’s employees.265 In R v Associated Octel Co Ltd266 in relation to a similar provision in the United Kingdom, Lord Hoffman delivering the House of Lords judgment said: Octel’s undertaking was running a chemical plant at Ellesmere Port. Anything which constituted running the plant was part of the conduct of its undertaking … the question of whether an employer may leave an independent contractor to do the work as he thinks fit depends on whether having the work done forms part of the employer’s conduct of his undertaking. If it does, he owes a duty … to ensure that it is done without risk – subject … to reasonable practicability which may limit the extent to which the employer can supervise the activities of a specialist independent contractor.

In that case during the annual close down for maintenance, a contractor was engaged to do repairs to a tank used as part of the chlorine plant. One of the contractor’s employees was injured whilst carrying out the repairs. It was held that the maintenance was part of the undertaking and the operator of the chemical plant was liable for the breach. Similarly the House of Lords thought that the cleaning of the factory floor by contract cleaners outside work hours during the weekend would qualify:267 It is part of the conduct of the undertaking, not merely to clean the factory, but also to “have the factory cleaned” by contractors. [This requires] reasonably practical steps to avoid risk to the contractors’ servants which arise, not merely from the physical state of the premises … but also from the inadequacy of the arrangements which the employer makes with the contractors for how they will do the work.

A business or undertaking is not limited to a single location. It may conduct its operations, perform work or provide services “at one or more places, permanent or

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business or undertaking””, http://www.safeworkaustralia.gov.au/sites/swa/about/publications/pages/ interpretive%20-guideline-pcbu. Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd; Carelli v FS Architects Pty Ltd [2008] NSWCA 39 at [65]-[66] per Campbell JA, Handley and McColl JJA agreeing) approving definitions from earlier authorities not involving work health and safety legislation. This list is taken from the “Interpretive Guideline – Model Work Health and Safety Act: The Meaning of “Person conducting a business or undertaking””. Workcover Authority of NSW v Techniskil -Namutoni Pty Ltd [1995] NSWIRComm 282; [1995] NSWIRC 127 (Cahill ACJ, 10 July 1995) (work being carried out by sub-contractor and its employees). R v Associated Octel Co Ltd [1996] 1 WLR 1543 at 1547-1549 per Lord Hoffman. See also DPP v Vibro-Pile (Aust) Pty Ltd [2016] VSCA 55 (24 March 2016, Maxwell P, Redlich and Whelan JJA) (drilling work performed at different sites, an undertaking). R v Associated Octel Co Ltd [1996] 1 WLR 1543 at 1547-1549 citing with approval Reg v Mara [1987] 1 WLR 87 at 90-91 per Parker J.

Work Health and Safety

temporary and whether or not possessing a defined physical boundary”; undertaking should not be read as synonymous with “workplace”, see [6.410].268

Worker [6.390] The duties to ensure workplace health and safety are not just owed to employees. The model Act defines a wide range of persons as “workers” for the purposes of the Act. The Victorian and Western Australian legislation applies to employees but the reach of the Acts is extended to contractors and labour hire arrangements.269 The legislation recognises the changing nature of work relationships discussed in Chapters 2 and 3 of this book and the importance of protecting these broader categories of workers whilst at work.270 For purposes of the model Act, s 7(1), a person is a “worker” “if the person carries out work in any capacity for a person conducting a business or undertaking”. Employees, contractors and subcontractors (and their employees), employees of a labour hire company, outworkers, apprentices or trainees, students in work experience, volunteers or persons from a prescribed class (s 7(1)) and police officers whilst they are lawfully acting in that capacity (s 7(2)) are all deemed “workers”. The definition also includes persons working for their own businesses (s 7(3)). These examples are only illustrative and the section can extend to other groups such as taxi drivers and students on clinical placements.271 Workers also have duties under the legislation which are set out at [6.580].

Work [6.400] The legislation does not define what is “work” for the purposes of the Act but

the Interpretative Guideline272 sets out criteria for assisting the determination as to whether the activity is “work”; not all criteria need to be satisfied. Under the criteria the activity will constitute “work” if it: (1) involves physical or mental effort or the application of particular skills, it does not need to be for profit or payment; (2) would be considered to be work for which the person undertaking the activity would normally be paid; (3) where it is part of an ongoing process or project where only some of the activities are remunerated; (4) where control is exercised over the person engaged in the activity; (5) is a formal, structured or complex arrangement rather than ad hoc or unorganised activities.

It does not cover activities which are “purely domestic, recreational or (of a) social nature”.273 Under the Interpretive Guideline, the following would not be considered as 268 269

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271 272 273

Whittacker v Delmina Pty Ltd [1998] VSC 175 at [47] per Hansen J (18 December 1998) in relation to Occupational Health and Safety Act 1985 (Vic), s 22. The Victorian Act imposes duties for the benefit of employees but extends the duties to independent contractors (and their employees) engaged by the employer, Occupational Health and Safety Act 2004 (Vic), ss 21(3), 35(2) and Occupational Health and Safety Regulations 2007 (Vic), reg 1.1.8; R v A C R Roofing Pty Ltd [2004] VSCA 215 (1 December 2004), Ormiston, Vincent and Nettle JJA; and see in Western Australia, Occupational Safety and Health Act1984 (WA), ss 23C – 23F. This is important not just in relation to safety but also in relation to consultation, safety committees and disputes, see Model Work Health and Safety Act 2011, consultation with workers ss 47 – 49 and work groups ss 50 – 59, 68 – 69. Explanatory Memorandum - Model Work Health and Safety Bill, at [39]. Safe Work Australia, “Interpretative Guideline – Model Work Health and Safety Act, The Meaning of ’Person conducting a business or undertaking’”. Safe Work Australia, “Interpretative Guideline – Model Work Health and Safety Act, The Meaning of ’Person conducting a business or undertaking’”.

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conducting an undertaking: “individual householders who organise one-off events such as dinner parties, garage sales, lemonade stalls etc.”274

Workplace [6.410] The workplace is broadly defined under the Act in s 8(1) as meaning “where work is carried out for a business or undertaking and includes any place where a worker goes, or is likely to be, while at work”.275 It clearly includes the workplace itself, the factory floor, workroom or office and even a Telstra pit and pit cover on the footpath.276 A workplace can be temporary and transient, such as where an electricity linesmen or road construction workers move from place to place to undertake repairs or road construction. It can include a client’s business premises where a worker is undertaking repairs.277 Even a truck may be a workplace for a truck driver.278 It can also include locations where workers are “teleworking”. It extends to places where the worker “is likely to be” and includes such facilities as lifts, lunch rooms, showering facilities and presumably the workplace car park.279 Obligations relating to safety at the workplace extend to places which are necessary to access the location for the actual work, see [6.550]. So it could include scaffolding which was necessary in order to gain access to an area where work was to be performed. The legislation does not require that work is actually being performed at that place at that time in order to qualify as a workplace. The Explanatory Memorandum280 cited the decision in Telstra v Smith where the court explained: 49 There is no need to give workplace a meaning which requires a temporal connection between the place or premises and the work to be performed. … There is no reason to limit a workplace to a place where work is being performed at any particular time. A workplace is a place where work is performed from time to time. 50 Thus, a shearing shed, used for shearing only during the few weeks of the shearing season, does not cease to be a workplace outside of the shearing season, and a department store does not cease to be a workplace when it is closed overnight.

Where a worker’s job involves moving around from premises to premises or to various locations, these can all be workplaces for purposes of the Act as they are places where “a worker goes … while at work”. It is not limited to premises but can include mobile structures used for work such as vehicles, vessels, aircraft etc.281 It also extends to waters, so could include a boat, a submersible, oil platform etc and temporary structures such as demountables. Domestic premises will rarely qualify as the work is not carried out for “a business or undertaking”, see the definition of “Persons conducting a business or undertaking” (PCBU) (see [6.370]). 274 275

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278 279 280 281

Safe Work Australia, “Interpretative Guideline – Model Work Health and Safety Act, The Meaning of ’Person conducting a business or undertaking’”. It includes a vehicle, vessel, aircraft or other mobile structure, waters, installations on land or water (s 8(2)). And see in Victoria Occupational Health and Safety Act 2004, s 5(1) definition “place” includes a car, truck, ship, boat, airplane and any other vehicle and “‘workplace’ means a place, whether or not in a building or structure, where employees or self-employed persons work.” Telstra Corporation v Smith [2009] FCR 577; [2009] FCAFC 103. WorkCover Authority of NSW (Inspector Wilson) v Chubb Security Australia Pty Ltd [2005] NSWIRComm 263; Workcover Authority of NSW v Techniskil-Namutoni Pty Ltd [1995] NSWIRComm 282; [1995] NSWIRC 127 (10 July 1995). WorkCover Authority of NSW (Inspector Campbell) v James Gordon Hitchcock [2004] NSWIRComm 87. Inspector Morgenthal v Vizy Paper Pty Ltd [2008]NSWIRComm 211 per Boland J. What constitutes a “workplace” is also relevant to inspector’s powers under Pts 9 and 10 of the Act. Explanatory memorandum – Model Work Health and Safety Bill, at [49], [50]. Model Work, Health and Safety Act 2011, s 8(2).

Work Health and Safety

Reasonably practicable: s 18 [6.420] The duties owed are subject to the qualification that it must be “reasonably practicable” to take measures to avoid the risk of harm.282 The term, “reasonably practicable” is defined in s 18:

“reasonably practicable”, in relation to a duty to ensure health and safety, means that which is, or was at a particular time, reasonably able to be done in relation to ensuring health and safety, taking into account and weighing up all relevant matters including:

(a) the likelihood of the hazard or the risk concerned occurring,283 and (b) the degree of harm that might result from the hazard or the risk,284 and (c) what the person concerned knows, or ought reasonably to know, about: (i) the hazard or the risk, and (ii) ways of eliminating or minimising the risk,285 and (d) the availability and suitability of ways to eliminate or minimise the risk, and (e) after assessing the extent of the risk and the available ways of eliminating or minimising the risk, the cost associated with available ways of eliminating or minimising the risk, including whether the cost is grossly disproportionate to the risk. The High Court in Kirk286 commented: What measures are necessary to be taken [by an employer] will depend upon the particular circumstances prevailing at the workplace, what activities are there conducted, what machinery, plant or substances are involved, the tasks undertaken by the employees and the skills of the employees, to mention but a few factors. What the terms of [the section] make plain is that an employer must identify risks to health safety and welfare of employees at the workplace and take steps to obviate those risks.

Under the model Act, cost considerations are the last step in deciding what is reasonably practicable. Although these factors reflect common law considerations in determining whether an employer has been guilty of negligence towards its employee, there are important differences.287 First, the duties imposed under the model Act extend beyond employees to “workers” and others (see [6.390]). Secondly the duties are not limited to employers but apply also to persons carrying on a business or undertaking, [6.370]. Thirdly, unlike the common law duty of care, there is no requirement that there be foreseeability of injury (and actual injury) to a particular employee. Under the model Act it is not necessary to show that anyone was injured; it is sufficient for breach 282

283 284 285

286

287

Neither the Victorian nor the Western Australian provisions are identical, see Occupational Health and Safety Act 2004 (Vic), s 20 (is similar but does not require that cost be considered after considering other factors); Occupational Safety and Health Act 1984 (WA), s 3 “practicable”. Approved code of practice, Safe Work Australia, How to Manage Work Health and Safety Risks, Code of Practice (7 Dec 2011), at 3.2. Approved code of practice, Safe Work Australia, How to Manage Work Health and Safety Risks, Code of Practice (7 Dec 2011), at 3.2. Sources of information for hazards can include; workers, manufacturers, suppliers and others in the industry, undertaking risk assessments, analysing previous incidents, considering Codes of Practice, regulations and other sources of information from inspectors, referring to technical standards, technical and scientific literature and industry publications, Approved code of practice, Safe Work Australia, How to Manage Work Health and Safety Risks, Code of Practice (7 Dec 2011), at 2.1. Kirk v Industrial Relations Commission; Kirk Group Holdings Pty Ltd v WorkCover Authority of New South Wales (Inspector Childs) (2010) 239 CLR 531 at [11] referring to the earlier Occupational Health and Safety Act 1983 (NSW), s 15(2). See Johnstone, Bluff and Clayton, Work Health and Safety Law and Policy (3rd ed, Lawbook Co, 2012), at [4.380] p 285.

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that there is a risk of harm.288 Fourthly, cost considerations are only to be considered after other factors are determined. Fifthly, there is the further important distinction that common law negligence need only be proven on the balance of probabilities. Under work health and safety legislation, since breaches give rise to criminal responsibility, the prosecution must prove breach on the criminal standard, beyond reasonable doubt. But like the common law, the model Act requires the prosecutor to demonstrate what reasonably practicable measures would have avoided or reduced the risk.289 So if there is a low risk of very serious harm which can be avoided by relatively inexpensive measures, then it may be reasonably practicable to take steps to avoid that risk. Conversely if there is a small risk with only a slight risk of minor harm and the only available measures to avoid or reduce that risk are grossly disproportionate, then it may not be reasonably practicable to take those measures. As the model Act adopts a statutory definition of what is “reasonably practicable”, the decisions in jurisdictions which do not have the same statutory definitions, such as Victoria,290 may nevertheless be informative in the absence of decisions on what is “reasonably practicable” under the model Act. In relation to other legislation, a number of principles have emerged which are likely to be followed in interpreting the meaning of “reasonably practicable”.

[6.430] What is reasonably practicable is assessed in the light of the state of knowledge. It is an objective test; knowledge “is that possessed by persons generally who are engaged in the relevant field of activity and not merely the actual knowledge in fact possessed by a specific employer in the particular circumstances.”291 It must take into account in determining what measures are necessary to avoid the risk that workers may be careless in relation to their own safety and of the safety of others.292 Harper J’s comments in Holmes v RE Spence and Co Pty Ltd,293 in relation to the Victorian legislation, are frequently cited on this issue: The Act does not require employers to ensure that accidents never happen. It requires them to take such steps as are practicable to provide and maintain a safe working environment. The courts will best assist the attainment of this end by looking at the facts of each case as practical people would look at them: not with the benefit of hindsight, nor with the wisdom of Solomon, but nevertheless remembering that one of the chief responsibilities of all employers is the safety of those who work for them. Remembering also that, in the main, such a responsibility can only be discharged by taking an active, imaginative and flexible approach to potential dangers in the knowledge that human frailty is an ever present reality. …One must then weigh the chances of spontaneous stupidity, or a fall, or the like, against the practicability of guarding the machine so as to maintain its function while preventing the human factor from resulting in injury. If the danger is slight and the installation of a guard would be impossibly expensive, or render the machine unduly difficult to operate, then it maybe that the installation of that guard is properly to be regarded as impracticable. Each case must be decided on its own facts.

288 289 290 291 292 293

In relation to the earlier Victorian Act, Occupational Health and Safety Act 1985 (Vic), R v Australian Char Pty Ltd [1995] VSC168 (Phillips CJ, Smith and Ashley JJ, 30 June 1995) at [57]. It follows the approach adopted in the Victorian legislation, Occupational Health and Safety Act 2004 (Vic), s 21(1)). And see Baiada Poultry Pty Ltd v The Queen [2012] HCA 14; (2012) 246 CLR 92. Under the Occupational Health and Safety Act 1985 (Vic), s 4 defined “practicable” and in the current Victorian Act, Occupational Health and Safety Act 2004 (Vic), s 20 defines “reasonably practicable”. Laing O’Rourke (BMC) Pty Ltd v Kirwin [2011] WASCA 117 at [33] per Murphy J. In relation to the earlier Victorian Act, Occupational Health and Safety Act 1985 (Vic), s 21; see R v Australian Char Pty Ltd [1995] VSC 168 (Phillips CJ, Smith and Ashley JJ, 30 June 1995). Holmes v RE Spence and Co Pty Ltd (1992) 5 VIR 19 at 123-124.

Work Health and Safety

The issue of what is “reasonably practicable” was raised, in relation to the Victorian legislation, in the High Court in Baiada Poultry Pty Ltd v The Queen.294 There steel pallets containing chickens were being moved by a forklift and loaded onto the truck for transport to the Baiada factory. As the pallet was being moved by the forklift, it fell on a worker employed by the transport subcontractor. Baiada was not the owner of the transport or forklift and was not the employer of the drivers of the forklift or the truck. Was it reasonably practicable for Baiada to give instructions to the forklift driver who was employed by another contractor? The High Court said that a legal right to issue instructions by itself is not sufficient to impose liability on Baiada: The steps that are to be taken … are those that are reasonably practicable for the employer to take to achieve the identified end of providing and maintaining a safe working environment. Bare demonstration that a step could have been taken and that, if taken, it might have had some effect on the safety of a working environment does not, without more, demonstrate that the employer has broken the duty.295 … Showing that Baiada had the legal right to issue instructions showed only that it was possible for Baiada to take that step. It did not show that this was a step that was reasonably practicable to achieve the relevant result of providing and maintaining a safe working environment. That question required consideration not only of what steps Baiada could have taken to secure compliance but also, and critically, whether Baiada’s obligation “so far as is reasonably practicable” to provide and maintain a safe working environment obliged it: (a) to give safety instructions to its (apparently skilled and experienced) subcontractors; (b) to check whether its instructions were followed; (c) to take some step to require compliance with its instructions; or (to do some combination of these things or even something altogether different.296

[6.440] Where safety at the workplace depends, in part, on the work of specialist contractors, sometimes the careful selection and monitoring of these contractors may be all that is reasonably practicable to secure health and safety: If [the duty to provide a safe workplace so far as is practicable] requires the employer to call upon expertise which it does not itself have there is no reason why it should not do so … If the task undertaken by the independent contractor is one which demonstrably falls within the contractor’s area of expertise and outside that of the employer and if the task reasonably appears to the employer … to have been carefully and safely performed by the independent contractor then it would ordinarily be difficult to conclude that the employer had breached the duty put upon it by the Act. It would not, in circumstances of that kind, ordinarily have been practicable for it to have done more.297

But there may be no reasonably practicable measures to avoid or minimise the risk where a PCBU has put in place appropriate measures and safety protocols and a subcontractor unforeseeably and inexplicably, without notice to the PCBU or the

294

295 296 297

Baiada Poultry Pty Ltd v The Queen [2012] HCA 14; (2012) 246 CLR 92 in relation to the Occupational Health and Safety Act 2004 (Vic), s 21(1); the Victorian Act, unlike the Model Work, Health and Safety Act 2011, defined “reasonably practicable” but with some minor variations from the model Act. Baiada Poultry Pty Ltd v The Queen [2012] HCA 14; (2012) 246 CLR 92 at [15] per French CJ, Gummow, Hayne and Crennan JJ. Baiada Poultry Pty Ltd v The Queen [2012] HCA 14; (2012) 246 CLR 92 at [33] per French CJ, Gummow, Hayne and Crennan JJ. Reilly v Devcon [2008] WASCA 84 at [20] per Steytler J cited with approval in Laing O’Rourke (BMC) Pty Ltd v Kirwin [2011] WASCA 117 at [36]; Kirwin v Pilbara Infrastructure Pty Ltd [2012] WASC 99 (cyclone destroys buildings; employer entitled to rely on builder’s expertise in erecting worker accommodation), in relation to the earlier WA legislation.

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required permit from WorkCover and in breach of agreed protocols undertakes a major demolition without the appropriate safety procedures.298 Where there is a prosecution for breach of duty, the prosecutor must show that there were reasonably practicable measures which could have avoided the risk of harm.299 The benefit of this approach, according to the High Court in Chugg v Pacific Dunlop Ltd,300 is that inspectors are likely to have superior or wider knowledge than the employer on the issue of practicability. The High Court also observed that frequently the identification of the hazard or risk also indicates what is needed to avoid that risk.301 Moreover if the onus was on the defendant it would “entail the additional burden of anticipating and negating the practicability of every possible means of avoiding or mitigating a risk or accident that might be raised in the course of cross-examination”.302 The model Act sets out general rules applying to duties imposed by the legislation.

General rules applying to duties Duty – non-delegable and may be jointly owed [6.450] Where the Act imposes a duty to take measures to ensure the safety of workers and others, this responsibility cannot be transferred to a third party or entity; the duty is non-delegable (s 14). More than one person may have this responsibility (s 16) and be guilty of offences for breach of duty. Where more than one person has a duty, there is a duty to consult, co-operate and co-ordinate activities, s 46.303 This will typically be the case with labour hire workers where both the agency and the client have joint responsibility, see [3.160]-[3.210].304 This may also be the case in relation to related companies305 and particularly worksites where there are multiple contractors and their workers.306 Under s 16(3), each person upon whom a duty is imposed is required to discharge the duty “to the extent to which the person has the capacity to influence and control the matter or would have had that capacity but for an agreement or arrangement purporting to limit or remove that capacity”. So an agreement whereby a client using workers under a labour hire agreement agrees to be solely responsible for safety at the workplace does not absolve the agency of its duties under the Act.307 But if there is limited capacity to influence or control safety, this is relevant to whether there are reasonably practicable measures that can be taken by that person.308 298 299 300 301 302 303 304

305 306 307 308

Inspector Dall v Brambles Australia Ltd [2006] NSWIRComm 213 at [168]-[174] (7 July 2006, Kavanagh J). Baiada Poulty Pty Ltd v the Queen (2012) 246 CLR 92; [2012] HCA 14. Chugg v Pacific Dunlop Ltd (1990) 170 CLR 249. Chugg v Pacific Dunlop Ltd (1990) 170 CLR 249 at 260 per Dawson, Toohey and Gaudron JJ Chugg v Pacific Dunlop Ltd (1990) 170 CLR 249 at 262-263 per Dawson, Toohey and Gaudron JJ. Safe Work Australia, Work Health and Safety Consultation, Co-operation and Co-ordination, Code of Practice (6 Dec 2011). And see Safe Work Australia, “Labour Hire: Duties of Persons Conducting a Business or Undertaking”, Legislative Fact Sheet series available at: http://www.safeworkaustralia.gov.au/sites/SWA/about/ Publications/Documents/656/Labour_hire-Duties_of_PCBU.pdf. WorkCover Authority (NSW) (Inspector Green) v Big River Timbers Pty Ltd [2006] NSWIRComm 279; (2006) 156 IR 341; Inspector Shepherd v Vinsente Pty Ltd [2013] NSWIRComm 8. Nash v Daracon Mining Pty Ltd [2015] NSWIC 14 Walton P (19 October 2015). Contractual terms which seek to contract out of the statutory obligations are void, Model Work Health and Safety Act 2011, s 272. Explanatory Memorandum to the Model Work Health and Safety Bill, at [66].

Work Health and Safety

Risk management: model Act, s 17 [6.460] All duties relating to health and safety involve risk management. Section 17 of the model Act provides: A duty imposed on a person to ensure health and safety requires the person:

(a) to eliminate risks to health and safety, so far as is reasonably practicable, and (b) if it is not reasonably practicable to eliminate risks to health and safety, to minimise those risks so far as is reasonably practicable. Risk management involves four steps which are commonly depicted as a cycle.309

It is not sufficient to just put measures in place and then forget about them. There is a duty to both maintain these control measures and undertake periodic review and monitoring. Monitoring may indicate that the measures adopted are not adequate to minimise or eliminate the hazard. If there is a death or serious injury/illness or a dangerous incident at the workplace (s 35), in addition to this being notified to the regulator,310 safety measures must be reviewed to minimise or eliminate the risk. A PCBU must be proactive in avoiding risks to health and safety. Consequently, review of

309

310

Approved Code of Practice, Safe Work Australia, How to Manage Work Health and Safety Risks (7 December 2011) Fig 1 and see National Review into Model Occupational Health and Safety Laws Second Report to the Workplace Relations Ministers (Canberra, 2009), at [30.17]. Risk management tools such as Job Safety Analysis (JSA) and “Take 5” tools are common, see in Victoria: https://www.worksafe.vic.gov.au/safety-and-prevention/health-and-safety-topics/job-safety-analysis; R v Commercial Industrial Construction Group Pty Ltd [2006] VSCA 181 (8 Sept 2006, Maxwell, Buchanan and Redlich JJ; and in other States, see Nash v Glennies Creek Coal Management Pty Ltd; Nash v Integra Coal Operations Pty Ltd (No 9) [2015] NSWSC 15; Transfield Pty Ltd v Maccarron [2004] WASCA 78 (Hasluck J). See Model Work, Health and Safety Act 2011, ss 35 – 38 (duty to notify incidents where there is death, serious injury or illness or a dangerous incident) and [6.640].

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safety procedures must take place before changes are made at the workplace311 which are likely to give rise to new or different risks not controlled by existing measures. Similarly there is a duty to review procedures if new hazards or risks are identified.312

[6.470] Regulations require PCBUs to take specific steps in the management of risks.313 The required steps are: (1) identify reasonably foreseeable hazards: reg 34. This will include the possibility that workers may be distracted from the tasks to be undertaken, and in some cases may act foolishly or even deliberately fail to comply with required safety standards.314 (2) respond to those risks by eliminating those risks so far as is reasonable practicable and if not reasonably practicable, to minimise those risks so far as is reasonably practicable: reg 35. The elimination of the risk is commonly known as a level 1 control measure. The best solution is to eliminate the risk of harm; good design can, in some cases, eliminate risk or quite simple measures can eliminate risk, such as removing tripping hazards or undertaking the disposal of chemicals that are no longer needed.315 (3) If it is not reasonably practicable to eliminate the risk, the duty holder in minimising risks is required to implement risk control measures (reg 36(1)) by: (a) substituting an alternative with a lower risk; (b) isolating the hazard or (c) implementing engineering controls. Level 2 control measures attempt to minimise the hazard and attendant risks by substituting safer alternatives such as the substitution of a less harmful chemical in the manufacturing process, isolating the hazard by erecting barriers, guard rails or engineering control by using mechanical assistance to lift loads etc.316 (4) If the risk remains after implementing those measures, subject to it being reasonably practicable, the risk should be reduced by administrative controls or as a final measure “ensuring the provision and use of suitable personal protecting equipment”,317 reg 36(5). These are level 3 last resort control measures which can include limiting exposure to the hazard, use of warning signs and like measures.318 This following figure depicts the hierarchy of control: 311

312 313

314

315 316 317

318

Regulation 38(3), it may be a change to the workplace or work environment or changes to the system or work, processes or procedures. These include starting a new business or purchasing an existing business, changing work practices, procedures or the work environment, purchasing new or used equipment or using new substances. See the more detailed information contained in Safe Work Australia, How to Manage Work Health and Safety Risks: Code of Practice (7 December 2011). Provisions relating to risk management are contained in the Regulations and under a Code of Practice, see How to Manage Work Health and Safety Risks: Code of Practice which sets out the same processes as those in , regs 34 – 36. R v Commercial Industrial Construction Group Pty Ltd [2006] VSCA 181 at [49] (Maxwell P, Buchanan and Redlich JJA and in relation to the earlier Queensland legislation, Parry v Woolworths [2008] QCA 26 per McMurdo P, Fraser JA, and White AJA). Safe Work Australia, How to Manage Work Health and Safety Risks: Code of Practice (7 December 2011), p 16. Safe Work Australia, How to Manage Work Health and Safety Risks: Code of Practice (7 December 2011), p 16. Work Health and Safety Regulation 2011, reg 44 sets out more detailed requirements relating to the provision and use of personal protective equipment, its suitability, as well as information, training and instruction on use, storage and maintenance. Safe Work Australia, How to Manage Work Health and Safety Risks: Code of Practice (7 December 2011), p 16.

Work Health and Safety

[Source: Safe Work Australia: How to Manage Work Health and Safety Risks: Code of Practice, p 13.] Under the model regulations, a formal documented risk assessment is required to be undertaken by a competent person in relation to high risk activities such as diving (regs 176, 178, 182), live electrical work (regs 158, 161), working close to power lines (reg 166), entry into confined spaces (regs 66, 77) or in relation to “plant” used for tree lopping (reg 221). But a formal risk assessment is not required under the model regulations where the legislation is specific as to what is required for compliance or where there is a relevant code of practice or guidance that is followed or there are relevant common and well-known industry standards and measures in use and all that is required is implementation.319 In Victoria, a Job Safety Analysis is usual.320 The key provision in the legislation is the imposition of a primary duty of care.

The primary duty of care: Model Act, s 19 [6.480] Section 19 sets out the primary duty of care owed to workers and other

persons arising out of the conduct of a business or undertaking.321 (1) A person conducting a business or undertaking must ensure, so far as is reasonably practicable, the health and safety of: (a) workers engaged, or caused to be engaged by the person, and

319

320 321

Safe Work Australia, How to Manage Work Health and Safety Risks: Code of Practice (7 December 2011), p 9 at 3.1. But risk analysis may be commonly employed in industry, see Nash v Daracon Mining Pty Ltd [2015] NSWIC 14. See http://www.worksafe.vic.gov.au/safety-and-prevention/health-and-safety-topics/job-safetyanalysis. The Victorian Act is worded differently, Occupational Health and Safety Act 2004 (Vic), s 21.

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(b) workers whose activities in carrying out work are influenced or directed by the person, while the workers are at work in the business or undertaking. (2) A person conducting a business or undertaking must ensure, so far as is reasonably practicable, that the health and safety of other persons is not put at risk from work carried out as part of the conduct of the business or undertaking.322 Section 19(3) elaborates in more detail the duty of care but these more specific provisions do not limit the operation of the general duties set out in s 19(1) and s 19(2). Section 19(3) provides that a person conducting a business or undertaking must ensure, so far as is reasonably practicable, the safety of the work environment,323 plant and structures, systems of work, use, handling and storage of plant, structures and substances. A PCBU will be in breach of the section if it fails to give workers sufficient information, instruction or training or if procedures that are in place are inadequate to avoid a foreseeable risk of injury.324 The duty under s 19(3) is not limited to what is required for work but also requires “adequate facilities for the welfare at work of workers in carrying out work for the business or undertaking, including ensuring access to those facilities”.325 Workers health and workplace conditions must also be monitored to prevent illness or injury. Where accommodation is owned, managed or controlled by the PCBU, other accommodation not being reasonably available, then the duties also extend to that accommodation, (s 19(4)).326 In relation to self-employed persons who are engaged in a business or undertaking, they must also, as far as is reasonably practicable, ensure health and safety while at work, s 19(5).327 Proactive measures must be taken to avoid injury to workers. PCBUs may need to establish equipment inspection and maintenance protocols and procedures and to ensure that they are followed. It is not sufficient to just establish safety protocols, provide safety equipment etc, if the PCBU does not take reasonably practicable measures to enforce compliance. The Victorian Court of Appeal observed, in relation to the general duties imposed under the Victorian legislation, that: The employer’s duty will not be discharged simply by creating a safe system of work. The obligation requires the employer to ensure “that procedures and instructions are actively and positively complied with by employees”. Not only must employees be appropriately trained but there must be ongoing supervision and compliance audits, to ensure that the system is being applied in practice. Employee compliance with the safe system of work must be constantly monitored by the employer. An employer should recognise that it is common experience that human error will be encountered in the workplace. Error can range from inadvertence, in attention or haste 322 323

324

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326 327

The general duty in the Western Australian legislation is not identical, Occupational Safety and Health Act 1984 (WA), s 19. Further detailed requirements are set out in the Work Health and Safety Regulation 2011, reg 40 in relation to layout, entry and exit, work areas, floor and other surfaces, lighting, ventilation, where there are extremes of heat and cold etc. See Work Health and Safety Regulation 2011, reg 39 setting out duties in relation to information, training and instruction; Nash v Glennies Greek Coal Management Pty Ltd; Nash v Integra Coal Operations Pty Ltd (No 9) [2015] NSWCIC 15 at [70] per Schmidt J. Work Health and Safety Regulation 2011, reg 41 sets out further detailed requirements in relation to the provision of toilets, drinking water, washing facilities and eating facilities which must be kept in good working order, clean, safe and accessible. The duty applies also to workers who are required to travel to the extent it is reasonably practicable. See also Safe Work Australia, Code of Practice: Managing the Work Environment and Facilities (December 2011). Cf Western Australia, Occupational Safety and Health Act 1984 (WA), s 23G. The statutory note to Model Work, Health and Safety Act 2011, s 19 provides that the self-employed person is also a person conducting a business or undertaking for these purposes.

Work Health and Safety

through foolish disregard of personal safety to deliberate non-compliance with the prescribed safe system of work … an employer’s responsibility … will not be discharged unless the employer takes “an active imaginative and flexible approach to potential dangers in the knowledge that human frailty is an ever-present reality” (citations omitted).328

[6.490] So even if the employer has set up systems and taken measures to ensure safety at the workplace, this does not prevent liability. Haylen J in Newman (Inspector Peter Newman) v Mainland Civil Pty Ltd329 commented: “[I]t is not infrequent that otherwise diligent employers with a quite specific system of work nevertheless overlook simple and straightforward methods to ensure the safety of workers”. In that case, the employer had identified the risk of injury from working near earthmoving machinery and instructed workers to wear coloured vests to keep clear of the machinery and alert the operator to their presence. But other measures were possible such as requiring the grader to be stopped whilst particular work was to be carried out, requiring two people to do the task and requiring each employee to “spot” (check safety) for the other. Nor is the employer relieved of liability where employees do not comply with established safety protocols; the employer must also implement and enforce these protocols and provide appropriate supervision where this would have avoided the risk.330 In relation to earlier New South Wales occupational health and safety legislation, Marks J commented on the general statutory duties imposed on employers, observing that “[a]ll tasks must be assessed to ensure the system of work allows no risk of injury. … [T]he employer [cannot] leave the responsibility for carrying out this task safely to be assessed by workers carrying out the task on the spot.”331 The duty extends to taking measures to ensure the safety of workers at risk from criminal conduct. So in relation to police officers: although the defendant may not be able to “control”, or otherwise affect the conduct of persons … who confront police officers … in the performance of their duties, the defendant is able to directly control and dictate the measures which should properly be made in preparing and equipping police officers to perform operational duties.332

Similarly in relation to workers in service stations, banks,333 taxis and workers making cash deliveries or in relation to police officers where there is a risk of criminal assault, there is a duty to take steps to minimise or eliminate the risk.334 The Department of Community Services was fined $20,000 when it failed to take measures to protect a staff member who was stabbed by a client on an access visit under supervision.335 The State of New South Wales was fined $100,000 for failing to properly equip riot police

328 329 330 331 332 333 334

335

R v Commercial Industrial Construction Group Pty Ltd [2006] VSCA 181 at [48[-[49]. Newman (Inspector Peter Newman) v Mainland Civil Pty Ltd [2003] NSWIRComm 288. R v Canberra Contractors Pty Ltd [2016] ACTSC 13 (worker injured by reversing grader). WorkCover Authority of NSW (Inspector Robinson) v Milltech Pty Ltd [2001] NSWIRC 51 at [21] (Marks J, 29 March 2001). WorkCover Authority (NSW) v NSW Police Service (No 2) (2001) 104 IR 268 at 290-291 per Hungerford J. Bank holdup: Financial Sector Union NSW Branch (Geoff Derrick) v Westpac Banking Corporation [2006] NSWIRComm 76 at [24]-[33] (Staunton J, 30 March 2006). WorkCover Authority (NSW) v NSW Police Service (No 2) (2001) 104 IR 268 at 290-291 per Hungerford J and see Safe Work Australia, Guide for Managing Cash-in-Transit Security Risks, at http://www.safeworkaustralia.gov.au/sites/swa/about/publications/pages/guidance-cash-in-transit. Cahill v New South Wales (Department of Community Services) (No 3) [2008] NSWIRComm 123 and penalty hearing (at [2008] NSWComm 201).

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with personal protective equipment that was sufficient and appropriately maintained as well as providing sufficient instruction, information and training in the use of the equipment and for dealing with a riot.336 Workers and corporate officers are not subject to these primary duties to ensure health and safety but are subject to specific duties discussed at [6.570] – [6.590]. The following paragraphs deal with some specific issues arising out of s 19.

Health and safety [6.500] Health is defined to mean “physical and psychological health”337 so that an employer may be liable under the Act if it does not take reasonably practicable measures to deal with stress, fatigue or bullying causing psychiatric illness.338 Under s 19(3)(g) there is a duty to monitor the health of workers in order to prevent illness or injury arising from the conduct of the undertaking. Industrial issues have arisen on the extent of this duty in relation to drug and alcohol testing in the workplace339 and also in relation to health monitoring. What is “reasonable and practicable” needs to be viewed in the broader context of contractual obligations. For example, although an employer may wish to reduce risks to the health of its workforce, it is not a lawful and reasonable order to direct its workforce to attend a compulsory health assessment where it was not reasonably necessary for workers health and safety.340 But it may be reasonable to ban smoking at the workplace.341

Ensure [6.510] The PCBU is required to “ensure” the health and safety of workers and non-workers, subject to reasonable practicability. The word “ensure” carries the connation of guaranteeing, securing or making certain the health and safety or workers and others.342 But this is tempered by the requirement that in order for the PCBU to be liable for the breach, the prosecution must show that there were reasonably practicable measures which could have minimised or eliminated this risk,343 see [6.420].

Risks to health and safety [6.520] Section 19(1) (see [6.480]), in setting out the primary duty does not expressly refer to the risk of harm,344 but it is clear that primary duties require the PCBU to take 336 337 338

339

340 341 342

343 344

Inspector Jennifer Short v The Crown in the Right of the New South Wales (NSW Police) [2007] NSWIRComm 138 (Redfern Riot 2004). “Dictionary”, Schedule 5. The Occupational Health and Safety Act 2004 (Vic), s 5(1) defines “health” as including psychological health. Explanatory Memorandum to the Model Work Health and Safety Bill, at [10]; in relation to the Victorian Occupational Health and Safety Act 2004 (Vic), s 21(1) and see Andrews v VWA [2013] VCC 1615. Maritime Union of Australia, The v DP World Brisbane Pty Ltd [2014] FWC 1523 (10 March 2014); Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2012] FWAFB 4998 (14 August 2012). Transport Workers’ Union of Australia v Cement Australia Pty Ltd [2015] FWC 158. CFMEU v Glencore Mt Owen Pty Ltd [2015] FWC 7752 (direction to ban smoking lawful and reasonable). In relation to the earlier New South Wales Act where reasonable practicability was a defence: Carrington Slipways Pty Ltd v Callaghan (1985) 11 IR 467 at 470 per Watson J. Under the model Act, the prosecution must demonstrate that there were reasonably practicable measures which could have reduced or minimised these risks, see [6.420]. And see “Introduction” regarding s 12A of the Model Work, Health and Safety Act 2011 at [6.350]. Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 (11 March 2016) in relation to the earlier NSW Occupational Health and Safety Act 2000 (NSW), s 8(1). The Victorian provisions, Occupational Health and Safety Act 2004 (Vic), s 21(1) explicitly refers to risk and imposes a duty to provide “a working environment that is safe and without risks to health”.

Work Health and Safety

steps to avoid hazards and risks of harm to workers. This is made clear in s 17 (set out at [6.460]) which applies to all duties and refers to the duty to eliminate risks to health and safety. In relation to s 19(1), a breach occurs where there is a risk to the health and safety of workers345 without the need to show that an accident or injury has actually occurred or was caused by the breach; it is sufficient that there is a risk or a possibility of danger.346 So, for example, there is a breach if there has been a failure to guard dangerous machinery which poses a risk to the safety of workers even if no one has been injured.347 The effect is that: the prosecution does not need to prove that the employer’s breach “caused” the accident, or that the taking of particular safety measures would have changed the course of events on the day in question. Put another way, the prosecution does not need to establish that the defendant employer should have anticipated the risk of events unfolding precisely as they did on the day of the fatal accident.348

If a worker is injured, the accident provides evidence of the risk, its likelihood and the gravity of harm that could ensue.349 Section 19(2) relating to non workers is more restricted; it requires that non workers not be “put at risk” which suggests that the risk must be more than just a theoretical risk, there must be an actual risk to non workers even if no harm actually eventuates.350 345

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Model Work, Health and Safety Act 2011, s 19(3)(a) elaborates upon the general duty by requiring “the provision and maintenance of a work environment without risks to health and safety” and similarly under s 19(3)(f) in relation to training and supervision. Thiess Pty Ltd v Industrial Court of NSW (2010) 78 NSWLR 94; [2010] NSWCA 252 at [63]-[70] per Spigelman CJ, Bealey and Basten JJA agreeing, (sufficient that contractor’s employee exposed to the risk of falling or slipping into pond) based on the earlier New South Wales, Occupational Health and Safety Act 2000 (NSW), s 8(2) which required a person to ensure that persons other than employees were “not exposed to risks to their health or safety”. See also Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 (11 March 2016). In relation to the Victorian Act, Occupational Health and Safety Act 1985 (Vic), s 21, R v Australian Char Pty Ltd [1995] VSC 168 (Phillips CJ, Smith and Ashley JJ, 30 June 1995) at [57]. Cf the slightly different United Kingdom phrase “not exposed to a risk to their health and safety” and R v Board of Trustees of the Science Museum [1993] ICR 876 (breach where inspection of air conditioning system containing bacteria which could cause Legionnaires’ disease to members of the public outside the museum but no evidence that bacterium had escaped or had been inhaled). See also R v Commercial Industrial Construction Group Pty Ltd [2006] VSCA 181; (2006) 14 VR 321 (breach even though no injury). Kirk Group v Industrial Relations Commission of NSW [2010] HCA 1; (2010) 239 CLR 531 at 553 in relation to the previous New South Wales, Occupational Health and Safety Act 1983 (NSW), ss 15 and 16 corresponding to s 19(1), (2) of the Model Work, Health and Safety Act 2011. In relation to the Victorian Occupational Health and Safety Act 2004 (Vic), see DPP v Vibro-Pile (Aust) Pty Ltd [2016] VSCA 55 at [5] (24th March 2016, Maxwell P, Redlich and Whelan JJA). Note in the Vibro-Pile case the divergence of views on whether it is necessary to show that the employer’s omissions were causally significant or substantial rather than whether there were reasonably practicable measures, contrast the New South Wales decision, Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 at [130] per Bathurst CJ, Hidden, Davies JJ (11 March 2016) (in relation to the earlier New South Wales Occupational Health and Safety Act 2000 (NSW), s 8(1)) and Simpson Design Associates Pty Ltd v Industrial Court of NSW [2011] NSWCA 316. In relation to the Victorian Occupational Health and Safety Act 2004 (Vic), see DPP v Vibro-Pile (Aust) Pty Ltd [2016] VSCA 55 at [91] (24 March 2016, Maxwell P, Redlich and Whelan JJA). Unlike the duty to workers, the duty is a negative duty that others not be put at risk, Explanatory Memorandum to the Model Work Health and Safety Bill at [81]. Compare the earlier provisions which required that the non-worker be “exposed” to risk, and see Thiess Pty Ltd v Industrial Court of NSW [2010] NSWCA 252 at [63-[70] per Spigelman CJ, Beazley and Basten JJA agreeing. See also in relation to the Victorian Act, DPP v Frewstal Pty Ltd [2015] VSCA 266 (24 September 2015, Maxwell P, Priest and Kaye JJA) and in relation to earlier legislation, Whittacker v Delmina Pty Ltd [1998] VSC 175 (Hansen J, 18 December 1998) in relation to Occupational Health and Safety Act 1985 (Vic), s 22.

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“At work in the business or undertaking”: s 19(1) [6.530] This does not mean that the duty is limited to situations where the employee is actually working. Were it otherwise an inspector would have no authority to take proceedings for breach of duty where the workplace was in temporary shut down or workers were at lunch. The better view is that the phrase “should be interpreted to mean the continuous period when workers are engaged to work in the business or undertaking, but not the period before or after their engagement”.351

Work environment: s 19(3)(a) [6.540] The general duty to provide and maintain a safe work environment extends beyond physical processes and structures. It may include aspects of work which influence safety at work but are not specifically identified in subs (3), such as: • remuneration structures (performance based remuneration may drive unsafe behaviour); • organisational structures and accountabilities (which may positively or adversely impact the effectiveness of safety measures, or may impact the ability of individuals to affect health and safety); • employment and business processes (which may give rise to or lessen the prospect of psychological harm); and • third party arrangements (contracts with suppliers or contractors may impact the ability to take measures to control health and safety risks).352 This may require pre-emptive measures to protect workers (including employees) against harm including psychological harm in carrying out disciplinary procedures, investigations, performance appraisals and the like but subject to the requirement of reasonable practicability. Employers are entitled to require employees to undertake performance appraisals and to instigate disciplinary proceedings leading to dismissal for misconduct particularly where the safety of others at the workplace is put at risk.353 But this must be done so as to minimise the risk of injury to the worker. Many of the situations which at common law did not give rise to a claim for damages354 might be subject to liability (but no compensation) for breach of the primary duty of care. Under the legislation (but not at common law) it is sufficient for breach of a general duty if the worker is put at risk without the need to show actual injury, see [6.520].

Workplace: safety, access and exit – management or control of workplaces (s 20); management or control of fixtures, fittings or plant at workplaces (s 21) [6.550] A person with management or control of a workplace355 must “ensure, as far as is reasonably practicable, that the workplace, the means of entering and exiting the 351 352

353 354 355

Johnstone, Bluff and Clayton, Work Health and Safety Law and Policy (3rd ed, Lawbook Co, 2012), p 228 at [4.155]. The National Review making recommendations in relation to the proposed model Act, indicated that these matters came within the general duties “National Review into Model Occupational Health and Safety Laws, First Report to the Workplace Relations Ministers’ Council” (Canberra, October 2008), at [6.111], [6.112]. It is a factor relevant to whether dismissal was harsh in unfair dismissal claims under the Fair Work Act 2009 (Cth), s 387(a). Compare overwork cases such as Koehler v Cerebos (Aust) Ltd (2005) 222 CLR 44 (excessive workload causing psychiatric illness) and [6.520]. It does not include a prescribed person or the occupier of a residence unless it is used, even partially, for the purposes of a business or undertaking, Model Work, Health and Safety Act 2011, s 20(2).

Work Health and Safety

workplace and anything arising from the workplace are without risks to the health and safety of any person”.356 This obliges the person having management or control to take measures to protect employees, contractors, contractors’ employees and others from risks. This could include a risk that persons working late at night might be attacked on the way to designated parking.357 Similarly under the model Act, s 21, the person with management or control of fixtures, fittings or plant at a workplace “must ensure as far as is reasonably practicable, that the fixtures, fittings and plant are without risks to the health and safety of any person.”358 “Plant” is broadly defined in s 4 as including: (a) any machinery, equipment, appliance, container, implement and tool, and (b) any component of any of those things, and (c) anything fitted or connected to any of those things.359 Management or control is relevant to duties relating to fixtures, fittings or plant (s 21) and in relation to the workplace (s 20). The Act does not define management or control360 but its meaning has been elaborated in decisions based on earlier legislation. In relation to the earlier New South Wales Act which differs in some details from the model Act, control was interpreted as meaning “directing action” or “command” – “the ability of a person to compel corrective action to secure safety”.361 It was not considered sufficient that the relevant person exercised “sway”, “checking”, or “restraint”.362 A contractor who has subcontracted out work could still have relevant control having reserved rights in relation to workplace safety in the contract and because it in fact exercised significant control over safety at the workplace.363 But an owner of premises where a building is being constructed by contractors does not have control where the owner has no rights under the contract to give directions and “no capacity to oversee or effectively manage the building works” where responsibility for the work site had been transferred to the contractor.364 Relevant, but not conclusive, is whether there is a legal right of direction in relation to the work365 or even if there is no 356

357 358 359 360 361

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365

There are slight differences in the wording of the Victorian provision, see Occupational Health and Safety Act 2004 (Vic), s 26 and Karatjas v Deakin University [2012] VSCA 53 at [50] (injury to contractor’s employee whilst walking to University car park). Karatjas v Deakin University [2012] VSCA 53. See also R v ACR Roofing Pty Ltd (2005) 11 VR 187; [2004] VSCA 215 (Ormiston, Vincent and Nettle JJA, 1 December 2004). Occupational Safety and Health Act 1984 (WA), s 22. There are similar definitions in Victoria and Western Australia: Occupational Health and Safety Act 2004 (Vic), s 5(1); Occupational Safety and Health Act 1984 (WA), s 3. “National Review into Model Occupational Health and Safety Laws, First Report to the Workplace Relations Ministers’ Council” (Canberra, October 2008), at [7.30]-[7.31]. See, for example, WorkCover Authority of NSW (Inspector Page) v Woolworths Ltd [1994] NSWIRComm 207 (shopping centre management had control because of the right to refuse the tenant Woolworths the use of columns used for gardening sales area). McMillan Britton & Kell Pty Ltd v Work Cover Authority (Inspector Blake) (1999) 89 IR 464 at 480-481. Applied in Inspector Dall v Brambles Australia Ltd [2006] NSWIRComm 214, (July 7, 2006, Kavanagh J) at [96-[98]. In relation to the earlier and different New South Wales Occupational Health and Safety Act 2000 (NSW), see McMillan Britton & Kell Pty Ltd v Work Cover Authority (1999) 89 IR 464 at 480-481. Applied in Inspector Dall v Brambles Australia Ltd [2006] NSWIRComm 214 (July 7, 2006, Kavanagh J) at [96-[98]. Contrast Inspector Nicholson v Pymble No 1 Pty Ltd and Molinara (No 4) [2011] NSWIRComm 96; (2011) 208 IR 111 (Boland, Walton and Staff JJ, 26 July 2011) (in relation to the Occupational Health and Safety Act 2000 (NSW), s 10(1) – owner of premises with no expertise or power to control building work). Inspector Nicholson v Pymble No 1 Pty Ltd & Molinara (No 4) [2011] NSWIR Comm 96 (Boland, Walton and Staff JJ, 26 July 2011); WorkCover Authority of New South Wales (Inspector Callaghan) v Rowson [1994] NSWIRComm 199 (no control where chicken farmer contracted a builder to replaced insulation in chicken sheds). Baiada Poultry Pty Ltd v The Queen [2012] HCA 14; (2012) 246 CLR 92, see [6.430]. And see Inspector Nicholson v Pymble No 1 Pty Ltd & Molinara (No 4) [2011] NSWIRComm 96 (Boland,

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legal right to give directions, if the person giving directions “saw it as within its area of authority to give such a direction and importantly, the worker would accept it and act upon it”.366 More than one person can have control for these purposes. In relation to the Western Australian provision, Heenan J said that whilst control might require “knowledge, skill and experience and the ability to recognise the need for corrective action and the power to enforce it”, this did not mean that only one person could have the requisite control.367 Hennan J added: this does not exclude the possibility that someone else may also have control, even if it be of broader scope or at a higher level of responsibility. For example, a power to order a subcontractor to cease work or to leave the site or to suspend operations, possessed by a supervisor or…by the builder, would be to have control of the workplace because, through the exercise of that power, the conduct – or at least the non-conforming conduct – of the contractor or its workers can be controlled.368

Design, supply, importation, installation and manufacture of plant, substances or structures (ss 22–26) [6.560] The model Act imposes duties in relation to the whole lifecycle of plant, substances or structures from design to supply, installation, dismantling and disposal. Duties are imposed on “upstream duty holders” such as designers (s 22), manufacturers (s 23), importers (s 24), suppliers (s 25), and installers of plants or structures (s 26).369 Underpinning these provisions is the objective of ensuring safety by eliminating “hazards and risks during the design of new plant, structures, substances and technology and of jobs, processes and systems. This design process needs to take into account hazards and risks that may be present at all stages of the lifecycle of structures, plant, products and substances.”370 Designers, manufacturers, suppliers and importers of plant, substances or structures or installers of plant or structures that are “used or could reasonably be expected to be used”371 at a workplace must ensure, so far as is reasonably practicable that the designed, manufactured, supplied or imported plant, substances or structures are without risk to the health and safety of persons.372 A designer was held liable (under the earlier New South Wales legislation) for the defective design of a gate despite the

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Walton and Staff JJ, 26 July 2011), (owner no expertise, control completely delegated to contractor undertaking building works), contrast Inspector Dall v Brambles Australia [2006] NSWIRComm 212 per Kavanagh J (sufficient control where exercise of considerable control by head contractor over site and building works undertaken by a subcontractor); Stratton v Van Driel Ltd [1998] VSC 75 (Byrne J, 25 September 1998) at [19], [26] in relation to the Occupational Health and Safety Act 1985 (Vic), s 21. Stratton v Van Driel Ltd [1998] VSC 75 (Byrne J, 25 September 1998) at [19], [26] in relation to the Occupational Health and Safety Act 1985 (Vic), s 21 (sufficient control where work subcontracted out but evidence that contractor could have issued directions regarding safety which would have been complied with). Occupational Safety and Health Act 1984 (WA), s 22 and see Reilly v Tobiassen [2008] WASC 6; (2008) 170 IR 294 at [91]; this view was approved on appeal Tobiassen v Reilly [2009] WASCA 26; (2009) 178 IR 213 at [93]-[96]. Reilly v Tobiassen [2008] WASC 6; (2008) 170 IR 294 at [91]; this view was approved on appeal Tobiassen v Reilly [2009] WASCA 26; (2009) 178 IR 213 at [93]-[96]. Victoria: Occupational Health and Safety Act 2004 (Vic), ss 27 – 31, 162; Western Australia: Occupational Safety and Health Act 1984 (WA), s 23. Safe Work Australia, Australian Work Health and Safety Strategy 2012-2022, p 7. Subsection 1 of ss 22 – 26; note in relation to substances it is sufficient that it is used or could reasonably be expected to be used at a workplace, subs (1)(b) of ss 22 – 25 of the Model Work, Health and Safety Act 2011. See in relation to designers under the earlier but differently worded, Occupational Health, Safety and Welfare Act 1986 (SA), ss 23, 24 and Slivak v Lurgi (Australia) Pty Ltd [2001] HCA 6; 205 CLR 304.

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ineffective intervention of a third party to remedy the problem. Sackville JA (other members of the New South Wales Court of Appeal agreeing) said:373 [the] design omission created the risk that, if the gate was designed in accordance with [the] specifications (as it was), it would present a risk to health and safety. This is not a case where a design failure created a negligible risk or a risk of minor injury and then being converted by the deliberate act by a third party into a much more serious risk. Nor is it a case where a design omission created an opportunity for a third party to create quite a different risk to health and safety. The risk to health and safety that existed … was precisely the risk that was created by [the] design failure. The fact that a third party had an opportunity to eliminate that risk but did not do so successfully means that someone else also contributed to the existence of the risk. That does not mean that the Industrial Court was precluded from finding that [the] design failure substantially contributed to the risk.

A duty is also owed by PCBUs who install, construct or commission plant or structures.374 The duty is owed to persons at the workplace and persons in the vicinity of the workplace,375 whose health and safety may be at risk in relation to the: • use of plant, substances or structures for the purpose for which it was designed or manufactured;376 • handling of a substance;377 • storage of plant or substances;378 • construction of the structure;379 or • in relation to any reasonably foreseeable activity in relation to plant, structures or substances. This extends to the assembly or use of structures and plant for the purposes for which they were designed or manufactured;380 the storage, proper handling and disposal of substances381, the decommissioning (demolition), dismantling or disposal of plant or structures.382 These obligations apply to the inspection, operation, cleaning, maintenance or repair of plant.383 The aim of these provisions is to impose duties on the whole chain from design,384 manufacture, installation, use, maintenance, storage, disposal or demolition.

373 374 375 376 377 378 379 380 381 382 383 384

Simpson Design Associates Pty Ltd v Industrial Court of New South Wales [2011] NSWCA 316 (30 September 2011) at [117]. Model Work, Health and Safety Act 2011, s 26. Model Work, Health and Safety Act 2011, cl 2(f) of ss 22 – 25, and s 26(2)(d). Model Work, Health and Safety Act 2011, cl 2(a) of ss 22 – 25. And see Johnstone, Bluff and Clayton, Work Health and Safety Law and Policy (3 ed, Lawbook Co, 2012), at [5.90] et seq. Model Work, Health and Safety Act 2011, cl 2(b) of ss 22 – 25 Model Work, Health and Safety Act 2011, cl 2(c) of ss 22 – 25. Model Work, Health and Safety Act 2011, cl 2(d) of ss 22 – 25 and s 26 Model Work, Health and Safety Act 2011, cl (2)(e)(i), (iii) of ss 22 – 25. In relation to designers, this extends to the manufacture as well, s 22(2)(e)(i). Model Work, Health and Safety Act 2011, cl 2(e)(ii) of ss 22 – 25. For designers this also extends to manufacture, s 22(2)(e). Model Work, Health and Safety Act 2011, cl 2(e)(i), (iii) of ss 22 – 25 and s 26(c). Statutory example. In relation to designers, it is sufficient if the inadequate design is a substantial cause of harm, Simpson Design Associates Pty Ltd v Industrial Court of NSW [2011] NSWCA 316 (liability not avoided by defective installation, decision under previous Occupational Health and Safety Act 2000 (NSW), s 11(1)). But contrast DPP v Vibro-Pile (Aust) Pty Ltd [2016] VSCA 55 (24 March 2016, Maxwell P, Redlich and Whelan JJA) on whether it is necessary to show that the employer’s omissions were causally significant or substantial rather than whether there were reasonably practicable measure in relation to the Victorian Occupational Health and Safety Act 2004 (Vic).

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Duties of workers, company officers (including directors) and others [6.570] Safety at the workplace depends not only persons operating a business or undertaking at the workplace but also upon many others whose conduct affects safety at the workplace. These include workers (s 28), contractors and subcontractors and their employees and officers of a company (s 27) and others (s 29) such as volunteers ( s 34).

Duties of workers [6.580] Workers (including employees) have duties in relation to work health and safety.385 The model Act, s 28 provides: While at work, a worker must:

(a) take reasonable care for his or her own health and safety, and (b) take reasonable care that his or her acts or omissions do not adversely affect the health and safety of other persons, and (c) comply, so far as the worker is reasonably able, with any reasonable instruction that is given by the person conducting the business or undertaking to allow the person to comply with this Act, and (d) co-operate with any reasonable policy or procedure of the person conducting the business or undertaking relating to health.386 It is to be noticed that the duties owed by workers are not as stringent as those owned by PCBUs. This is because workers often have a limited capacity to control or influence what occurs at the workplace beyond their own conduct.387 The duty owed by workers is not a duty to “ensure” workplace safety but rather a duty of reasonable care. There is no absolute duty to comply but a duty “so far as the worker is reasonably able”; instructions must be reasonable and there is a duty to co-operate with reasonable policies and procedures. The explanation is suggested by the 1984 South Australian report:388 The danger in imposing a statutory duty on workers to behave responsibly … is that … workers [may be] prosecuted for unsafe acts which may have been imposed on them through direct or indirect pressures. For example, a worker may be prosecuted for operating a machine without safety guards, even though they have been supplied by the employer. At first sight it may appear … stupid. But [the worker] may have been working to a deadline or a quota which could only have been reached by removing the guards- and the worker may have removed them in full knowledge of the risk being run, but balancing this risk of injury … against the loss of wages or possible dismissal involved in not reaching the quota. … the employer may well be aware that the quota demands removal of the 385

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387 388

Additional duties may be owed if the worker is, for example, an officer, Model Work, Health and Safety Act 2011, s 27 and see [6.590]. And in relation to employees in Western Australaia, see Occupational Safety and Health Act 1984 (WA), s 20 and self employed persons s 21. Note also the similar duties owed by other persons at the workplace, Model Work, Health and Safety Act 2011, s 29. The Victorian Act, Occupational Health and Safety Act 2004 (Vic), s 25(1) is similar except for cll (c) and (d). There are additional provisions in s 25 not included in the model Act and see R v Irvine; DPP v Dynamic Industries Pty Ltd; DPP v Irvine [2009] VSCA 239 (23 October 2009, Nettle, Neave JJA and Lasry AJA (failure to wear tethered safety harnesses)); Western Australia: Occupational Safety and Health Act 1984 (WA), s 20 (not identical with model Act). “National Review into Model Occupational Health and Safety Laws, First Report to the Workplace Relations Ministers’ Council” (Canberra 2008), at [9.18]-[9.19]. Occupational Safety, Health and Welfare Steering Committee, The Protection of Workers’ Health and Safety (Adelaide, 1984), Vol 1. This is extracted in Johnstone, Bluff and Clayton, Work Health and Safety Law and Policy (3 ed, Lawbook Co, 2012), p 394 at [5.260].

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safety guards, and may simply turn a blind eye to the worker’s situation – and argue in court that he or she had met the obligation to provide machine guards and that the workers were at fault for not using them. Another danger … is … the prosecution of supervisors for issuing unsafe instructions to workers – and yet again it may be that the supervisor is under direct or indirect pressure from higher management to reach a certain level of production. In such a case, it would be important to sheet home the responsibility for the workers’ lack of safety where it really belongs – and not allow the supervisor to be used as a scapegoat.

The test of whether the worker has taken reasonable care is objective so that the employee’s subjective intention that there was no intention to harm is not relevant. But in deciding whether the employee has taken reasonable care, “the employee’s state of knowledge, qualifications, expertise, experience and status as foreman, site supervisor or manager” can be relevant.389 Bullying a fellow worker,390 a practical joke which injures a fellow employee,391 and a supervisor’s failure to take steps to stop a worker using a truck with a defective handbrake392 or to stop workers from working on a dangerous roof without the safety harness being tethered,393 are breaches of duty.394 The issue may be raised in the context of an unfair dismissal claim where the employer claims that the employee has breached his or her duties under the legislation and that dismissal was justified.395 Workers also have duties in relation to the use of personal protective equipment. The model Regulation, reg 46, requires a worker: “so far as the worker is reasonably able, use or wear the equipment in accordance with any information, training or reasonable instruction”.396 A worker must not intentionally misuse or damage equipment and must inform the relevant persons if the equipment is defective, and requires maintenance or cleaning when workers become aware of the problem, reg 46(4). Workers are entitled to raise safety concerns and in some cases are entitled to refuse to continue work where the workplace is unsafe, see [6.600].

Duties of directors and officers of a company [6.590] The model Work Health and Safety Act 2011, s 27 imposes duties on an officer of a PCBU to exercise “due diligence” to ensure compliance by the company. The Victorian and Western Australian provisions are not identical.397 An “officer” is defined in the model Act, s 4 to mean an “officer” under the Corporations Act 2001 389

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In relation to earlier New South Wales legislation, WorkCover Authority of New South Wales (Inspector Gordon) v Gregory Ronald Wallis (Full Court, Industrial Court NSW, unreported, matter no CT 1011 of 1995, 14 August 1996, Fisher P, Glynn and Hill JJ) at 7-8. Andrews v VWA [2013] VCC 1615. Inspector Estreich v Zaccardelli [2012] NSWIRComm 47 (Boland J, 31 May 2012). Inspector Martin v Russell Larkham [2003] NSWIRComm 31 at [12]-[14] per Boland J(18 February 2003). R v Irvine; DPPP v Dynamic Industries Pty Ltd [2009] VSCA 239 (Nettle, Neave JJA and Lasry AJA, 23 October 2009). Maritime Union of Australia v DP World Melbourne Ltd [2014] FCA 1321. See, for example, Ingham v Metro Quarry Group Pty Ltd [2015] FWC 6472 (29 September 2015); Craven v Best Bar Pty Ltd 2013 FWC 206; Wardle v Hamersley Iron Pty Ltd 2013 FWC 1812, cf Perri v Anglo Italian 2013 FWC 10 Model Work, Health and Safety Regulation 2011, reg 46. The maximum penalty is $3,600 for an individual and $18,000 for a body corporate. The Victorian and Western Australian provisions operate differently, see Occupational Health and Safety Act 2004 (Vic), ss 144, 145; Occupational Safety and Health Act 1984 (WA), s 55. As an illustration of penalties imposed in Victoria on a director, see Orbit Drilling Pty Ltd v The Queen; Smith v The Queen [2012] VSCA 82 (Maxwell P, Bongiorno JA and Kyrou AJA, 3 May 2012).

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(Cth), s 9398 other than a partnership. Under the model Act, “officer” it also includes an officer of the Crown (s 247) or public authority (s 252) but does not include an elected official of a Council (s 4 “officer” ). The model legislation imposes very significant positive duties on company officers in relation to all aspects of workplace safety.399 This means “they need to be able to sign off, on an informed basis, on safety initiatives and robustly interrogate their executives about safety – in much the same way that they must be financially literate in order to sign off on financial matters”.400 The National Review recommended that the model Act impose a positive duty on officers. The provision creates a positive duty which … (applies) immediately, rather than accountability … after a contravention … The duty would make clear that the officer must be proactive in taking steps to ensure compliance … The standard of “due diligence” is well known by those who would be sufficiently directing or influencing the decisions of the company as to be defined as “officers”.401

The liability of company officers is independent of any liability of the corporation (s 27(4)). An officer of a PCBU must exercise due diligence to ensure compliance. Section 27(5) sets out what is required by “due diligence”. It includes “taking reasonable steps” to ensure: • up-to-date knowledge of work health and safety matters; • an understanding of the business or undertaking and associated hazards and risks of the operation; • appropriate resources and procedures to eliminate or minimise risks to health and safety; • the PCBU has appropriate processes for obtaining and considering information relating to incidents, hazards and risks and responding in a timely fashion; • the PCBU both has, and implements, processes for complying with the legislative requirements. This includes the reporting of notifiable incidents, consultation with workers, compliance with statutory notices, work health and safety training for workers and health and safety representatives;402 • verifying the provision and use of the resources and processes referred to above. The Explanatory memorandum to the Act indicates that what is required of an officer 398

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400 401 402

Corporations Act 2001 (Cth), s 9 provides that an “officer” of a corporation means: (a) a director or secretary of the corporation; or (b) a person (i) who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or (ii) who has the capacity to affect significantly the corporation’s financial standing; or (iii) in accordance with whose instructions or wishes the directors of the corporation are accustomed to act (excluding advice given by the person in the proper performance of functions attaching to the person’s professional capacity or their business relationship with the directors or the corporation). It goes on to provide that receivers, administrators, liquidators, trustees administering a compromise or arrangement also qualify (c)-(g). Note also the definition of “officer” in relation to entities that are not individuals or a corporation such as a partnership, office holder of an unincorporated association etc s 4. See also Corporations Act 2001 (Cth), s 201B in relation to who is a “director”. See the discussion of the different approaches adopted prior to the model Act, see “National Review into Model Occupational Health and Safety Laws, First Report to the Workplace Relations Ministers’ Council” (Canberra, October, 2008), ch 8 “Officers”. See Corrs Chamber Westgarth, “Across the Ditch – Resignations from Director/Offices Roles in Response to New WHS Laws” (22 January 2016), available at lexology, http://www.lexology.com. “National Review into Model Occupational Health and Safety Laws, First Report to the Workplace Relations Ministers’ Council” (Canberra, October 2008), at 8.29. See statutory notes to the Model Work, Health and Safety Act 2011, s 27(5) which form part of the Act, s 9.

Work Health and Safety

should be directly related to the influential nature of the position. This is because the officer governs the PCBU and makes decisions for management. A high standard requires persistent examination and care, to ensure that the sources and systems … are adequate to comply … This also requires ensuring that they are performing effectively. Where the officer relies on the expertise of a manager or other person, that expertise must be certified and the reliance must be reasonable.403

The definition of officer under the Corporations Act 2001 (Cth), s 9 refers to a person “participating in making decisions” affecting the whole or a substantial part of the corporation’s business. The Interpretive Guideline404 comments that the person may be an officer for the purposes of s 27 even if the person does not make decisions nor has the authority to do so; it is sufficient if they participate. The participation must relate to the whole or a substantial part of the corporation’s business.405 Naturally what is required will vary according to the nature of the PCBU. The Interpretive Guideline recognises that officers may meet their due diligence requirements in some respects by relying on information from others more directly involved in safety management. The officer must be able to show that it was reasonable to rely on that advice. An officer does not necessarily have to be involved directly with implementing safety measures but “they must make decisions that allow for the appropriate measures by the PCBU and take reasonable steps to ensure that they are taken”.406 What would be required of a director of a “one-man” company who is involved in the day-to-day running of the business is rather different to that of a director of a huge multi-national company.

Unsafe working conditions – right to cease work [6.600] Under the ss 84 and 85 of the model Act,407 a health and safety representative may direct that unsafe work cease408 and a worker may cease work409 or refuse to carry out work if the worker “has a reasonable concern” that to undertake or continue the work “would be a serious risk” to their health and safety from “an immediate or imminent exposure or hazard”.410 Similarly, employees under the Fair Work Act 2009, s 19(2) are not engaged in “industrial action” if the employees refuse to work because of their concern about an “imminent risk” to their own health and safety and the employees did not unreasonably fail to comply with directions to perform other available work that is safe and appropriate for the particular employees.411

403 404 405

406 407 408 409 410

411

Explanatory Memorandum to the Model Work Health and Safety Bill, at [127]. Safe Work Australia, Interpretive Guideline – Model Work Health and Safety Act, “The health and safety duty of an officer under s 27” (26 September 2011). The Interpretive Guideline sets out the criteria for assessing this, see Safe Work Australia, Interpretive Guideline – Model Work Health and Safety Act, “The health and safety duty of an officer under s 27” (26 September 2011). Safe Work Australia, Interpretive Guideline – Model Work Health and Safety Act, “The health and safety duty of an officer under s 27” (26 September 2011). Occupational Safety and Health Act 1984 (WA), ss 26 – 28A. Subject to limitations set out in the Model Work, Health and Safety Act 2011, s 85, including required occupational health and safety training. Note Model Work, Health and Safety Act 2011, s 88 (treated as continuity of engagement for prescribed purposes). This is subject to the duty to notify the PCBU that the worker has ceased work and that the worker continues to be available to carry out suitable alternative work, Model Work, Health and Safety Act 2011, ss 85(5), 86. Note also under Fair Work Act 2009 (Cth), ss 340 – 342, protections where adverse action and see, Burke v Serco Pty Ltd [2012] FMCA 1134 (Jarrett FM) (dismissal for a health and safety complaint). And see [14.70].

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Where a worker raises legitimate safety concerns, it is an offence under the model Act, and in Victoria and Western Australia,412 to discriminate against that worker such as dismissing or altering the position of the worker to the worker’s detriment.413 It may also be adverse action in relation to a workplace law under the Fair Work Act 2009.414 The discrimination can include, demotion, allocation of work below skill level, discrimination in relation to flexible work hours, shifts, rosters, overtime or overtime earnings, shift changes, lower earnings, reduced allowances, access to training and so on.415

Right of entry [6.610] The Fair Work Act 2009, ss 480 – 500 allows permit holders to enter worksites but in relation to work health and safety matters, the permit holder must also hold a permit under the relevant State or Territory work health and safety laws.416 The model Act authorises a union official417 who holds an entry permit under the model Act and a Fair Work Permit under the Fair Work Act 2009418 to enter a workplace419 to: • inquire into suspected work health and safety breaches that affect or relate to relevant workers.420 The union official is required to have a reasonable suspicion prior to entry that there has been a breach or that a breach is occurring.421 Prior notice is not required but there is a duty after entry to give written notice of entry to the PCBU or the person with management or control of the workplace except where there is some urgency in warning workers of 412

413

414

415 416 417

418 419

420

421

Occupational Health and Safety Act 2004 (Vic), ss 76, 77 and see Patrick Stevedoring Pty Ltd v Chasser (Victorian Work Cover Authority) [2011] VSC 597 (Osborn J, 23 November 2011) (sufficient if stand down without pay even if subsequently paid); Occupational Safety and Health Act 1984 (WA), ss 35A – 35D, 56. Model Work, Health and Safety Act 2011, ss 104, 105; Safe Work Australia, Interpretive Guideline – Model Work Health and Safety Act, “Discriminatory, Coercive or Misleading Conduct” (1 March 2012). Note workplace rights under the Fair Work Act 2009 (Cth), s 341(1); the definition of a “workplace law” includes State and Territory occupational health and safety laws, Fair Work Act 2009 (Cth), s 12, see Ermel v Duluxgroup (Australia) Pty Ltd (No 2) [2015] FCA 17 (Bromberg J, 28 Jan 2015) and discussion at [13.260]. In relation to adverse action under the Fair Work Act 2009 (Cth), ss 340(1), 342, see [13.240]. And see Safe Work Australia, Interpretive Guideline – Model Work Health and Safety Act, “Discriminatory, Coercive or Misleading Conduct” (1 March 2012). Fair Work Act 2009 (Cth), s 494. Model Work, Health and Safety Act 2011, s 116; Safe Work Australia, Interpretive Guideline – Model Work Health and Safety Act, “Workplace Entry by Work Health and Safety – Entry Permit Holders” (30 October 2012). As to the obligations of the permit holder in the workplace and the requirement that they comply with any reasonable request by the relevant PCBU to comply with, for example, safety inductions, supervision requirements, or security screening in relation to aviation, see Model Work, Health and Safety Act 2011, s 128; Fair Work Act 2009 (Cth), s 499 and where there is a dispute, Fair Work Act 2009 (Cth), s 505(1); Model Work, Health and Safety Act 2011, s 142; and see Darlaston v Parker [2010] FCA 771 (induction training); CFMEU v Foster Wheeler Worley Parsons (Pluto) Joint Venture [2010] FWA 2341 (appropriate that permit holder and all visitors be escorted and monitored on site but not so as to interfere with discussions). Model Work, Health and Safety Act 2011, s 124. As to the rights associated with the entry, see Model Work, Health and Safety Act 2011, ss 117, 118 (rights to consult relevant workers and relevant persons conducting the business in relation to a suspected contravention, right to inspect and make copies of relevant documents and warn of imminent serious risks). Model Work, Health and Safety Act 2011, s 116 defines a relevant worker as a worker (a) who is a member, or eligible to be a member, of a relevant union and (b) whose industrial interests the relevant union is entitled to represent, and (c) who works at that workplace. Model Work, Health and Safety Act 2011, s 117; Safe Work Australia Interpretive Guideline – Model Work Health and Safety Act, “Workplace Entry by Work Health and Safety – Entry Permit Holders” (30 October 2012).

Work Health and Safety

hazards or there is a risk of destruction of evidence.422 The right of entry may only be exercised during working hours423 and only in relation to those areas where relevant workers work or work areas related to the health and safety of those workers.424 • inspect employee records425 or other relevant documents. • consult and advise relevant workers on work health and safety matters where the workers agree.426 This does not permit entry for the purposes of general discussions427 as the right of entry is restricted to the particular statutory purposes.428 The entry permit holder may warn any person of a serious risk to health and safety from an immediate or imminent exposure to a hazard.429 The rights to inspect employee records and consult with workers are subject to the requirements that: a minimum 24 hours notice is given prior to entry;430 the notice is given during usual working hours;431 and, entry is limited to usual work hours.432 It is a breach to unreasonably refuse, hinder or obstruct entry by the permit holder.433 Conversely the permit holder must not delay, hinder or obstruct or disrupt work.434 In either situation civil penalties apply for breach rather than criminal prosecutions.435

422

423

424

425 426 427 428 429 430 431 432 433

434

435

Model Work, Health and Safety Act 2011, s 119; Safe Work Australia Interpretive Guideline – Model Work Health and Safety Act, “Workplace Entry by Work Health and Safety – Entry Permit Holders” (30 October 2012). Fair Work Act 2009 (Cth), s 498; Model Work, Health and Safety Act 2011, s 126 and see the Interpretive Guideline in relation to the interaction between the Fair Work Act rights of entry and entry under the Work Health and Safety model Act, see Safe Work Australia, Interpretive Guideline – Model Work Health and Safety Act, “Workplace Entry by Work Health and Safety – Entry Permit Holders” (30 October 2012). Model Work, Health and Safety Act 2011, s 127 and see the interpretive guideline in relation to the interaction between the Fair Work Act rights of entry and entry under the Work Health and Safety model Act, see Safe Work Australia, Interpretive Guideline – Model Work Health and Safety Act, “Workplace Entry by Work Health and Safety – Entry Permit Holders” (30 October 2012). See also the issues that arise in relation to rights of entry and frequency of visits, see Explanatory Memorandum to the Fair Work Amendment Bill 2014 at p xx and CFMEU v Foster Wheeler Worley Parsons (Pluto) Junior Venture [2010] FWA 2341 (evidence that in 2009 there were 217 entry requests in four months in relation to a workplace with 3,300 employees). See Privacy Act 1988 (Cth), s 6 definition of employee record. Model Work, Health and Safety Act 2011, s 121. Safe Work Australia, Interpretive Guideline – Model Work Health and Safety Act, “Workplace Entry by Work Health and Safety – Entry Permit Holders” (30 October 2012). Australasian Meat Industry Employees’ Union v Fair Work Australia [2012] FCAFC 85 (8 June 2012). Model Work, Health and Safety Act 2011, s 121(2). Model Work, Health and Safety Act 2011, s 120(5) (employee records & other documents), s 122 (entry to consult and advise workers) and also under the Fair Work Act 2009 (Cth), s 495. Model Work, Health and Safety Act 2011, s 122. Model Work, Health and Safety Act 2011, s 126, Fair Work Act 2009 (Cth), s 498. Model Work, Health and Safety Act 2011, ss 144 and 145 and see discussion at Safe Work Australia, Interpretive Guideline – Model Work Health and Safety Act, “Workplace Entry by Work Health and Safety – Entry Permit Holders” (30 October 2012). Model Work, Health and Safety Act 2011, s 146 and see Director of Fair Work Building Industry Inspectorate v Bragdon [2015] FCA 66 (Flick J, 3 July 2015); ABCC v Mitchell & Ors [2011] FMCA 622 (16 August 2011). Fair Work Act 2009 (Cth), Pt 4.1; Model Work, Health and Safety Act 2011, s 254.

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Compliance and enforcement [6.620] Breach of the statutory duties gives rise to a criminal offence.436 This reflects the community view that if another person’s health and safety is put at risk, this should be regarded as criminal conduct.437 Under the model Act, there are extensive powers to monitor and enforce compliance as well as powers of investigation, the power to require the production of documents and the power to require the provision of information under ss 155 and 171.438

Policy approaches to enforcement [6.630] There is a uniform national compliance and enforcement policy. Safe Work Australia is the designated Australian agency which has the responsibility of monitoring and improving the safety and health of Australian workers. Each State, Territory and the Commonwealth have a separate statutory regulator for workplace health and safety. Under the uniform national policy, the approach adopted by regulators is frequently illustrated by reference to an enforcement pyramid, see figure below. The goal is to achieve compliance without prosecution so that only in exceptional cases involving very serious breaches are offenders prosecuted. The compliance measures are required to be proportionate to the seriousness of the conduct and steps taken must be responsive to the individual circumstances of the particular defendant or workplace. The areas of focus should be those with the highest risk to health and safety.439

436 437

438

439

Except for rights of entry which give rise to a civil penalty, see Model Work, Health and Safety Act 2011, ss 254 – 266. Explanatory Memorandum to the Model Work Health and Safety Bill, at [137]. Note the limited protection given to volunteers and unincorporated associations at Model Work, Health and Safety Act 2011, s 34(1), (2). See Perilya Ltd v Nash [2015] NSWSC 706 (Hall J, 5 June 2015); Hunter Quarries Pty Ltd v New South Wales [2014] NSWSC 1580 (Schmidt J, 12 Nov 2014). Note the provisions relating to confidentiality, Model Work, Health and Safety Act 2011, ss 148, 271. Safe Work Australia, “National Compliance and Enforcement Policy” (26 September 2011) and see “Inter-Governmental Agreement for Regulatory and Operational Reform in Occupational Health and Safety” (3 July 2008).

Work Health and Safety

The model Act provides a range of alternatives to promote compliance. Following the Robens recommendations, (see [6.350]) prosecutions are to be used only in the most serious cases. At the base of the enforcement pyramid, compliance is encouraged through advice, guidance, education and by assisting parties to resolve health and safety disputes. At the next level, compliance is enforced though prohibition, improvement or infringement notices. The regulator can, as an alternative to prosecution through the courts, accept an enforceable undertaking in cases not involving the risk of serious harm or death, see [6.660].440 An important aspect of compliance is the information available to the regulator. A key mechanism is the duty to notify the regulator of serious incidents.

Incident notification [6.640] Under the model Act, s 38, a PCBU441 has a duty to expeditiously notify the regulator where a person dies, or there is serious injury or illness (defined s 36) or a 440

441

Model Work, Health and Safety Act 2011, s 216(2). Serious injury is not defined in the Act but is defined in the Guidelines in relation to enforceable undertakings. NSW Government, Work Cover, Enforceable Undertakings; “Guidelines for Proposing an Enforceable Undertaking”. The Guideline sets out the required content for a proposal for an enforceable undertaking, at [3.3.1]; and see Occupational Health and Safety Act 2004 (Vic), ss 37 – 39. In Victoria and Western Australia, an employer or self employed person has this duty, Occupational

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dangerous incident (defined s 37) at the workplace.442 There are significant penalties for failure to notify. There is also a duty to preserve the incident site (s 39).443 The notification is important as it allows the regulator to quickly respond to dangers at the workplace by conducting an inspection of the workplace and if necessary a formal investigation.444 It also provides the regulator with data for assessing risks and trends that may be emerging and where there are needs for education and compliance measures. Hazard alerts may be circulated to inform industry of particular risks.445

Prohibition and improvement notices [6.650] The model Act gives wide ranging powers to monitor and enforce

compliance.446 This includes the use of improvement and prohibition notices as pre-emptive measures to prevent accidents and injuries at the workplace. Inspectors can issue improvement notices447 if they reasonably believe that a person is in breach of the legislation, or has contravened the act where it is likely that the contravention will continue or be repeated (s 191(1)). The notice can require the person to remedy the breach, prevent a contravention from occurring or remedy the causes of the breach or potential breach, within a specified time (s 191(2)). There are penalties for failure to comply with the improvement notice: s 193. Where an inspector reasonably believes that there is an immediate or imminent exposure to a hazard that poses a serious risk to health and safety, or that this may occur, an inspector may issue a prohibition notice. The prohibition notice prohibits the relevant activity (or a specified way of carrying out the activity) until the danger has been remedied (s 195).448 There are penalties for non compliance: s 197.

Enforceable undertakings [6.660] In keeping with the ethos of the Robens Report (see [6.350]) that formal sanctions should be the last resort for the most serious infringements, the relevant regulator may instead of proceeding with a prosecution449 accept an enforceable undertaking.450 The regulator may issue guidelines relating to enforceable undertakings.451 The guidelines set out the content and required terms for any proposal for an enforceable undertaking. The proposal must include important information

442

443 444 445 446 447 448 449 450

451

Health and Safety Act 2004 (Vic), s 38; Occupational Safety and Health Act 1984 (WA), s 23I, note also under the Western Australian Act duties to notify a person having control of the workplace, s 23L and a duty imposed on employees to report to the employer risks, s 20(2)(d). Model Work, Health and Safety Act 2011, s 35 “notifiable incident”; Safe Work New South Wales v Waycon Bulk Pty Ltd [2015] NSWDC 254 (Judge AC Scotting, 10 September 2015) and see Smith, McCartne6y and Lawler, “Serious Safety Incident Response: Tips and Tricks for Safety Practitioners and In-House Counsel” (June 2015) Employment Law Bulletin 52. Occupational Health and Safety Act 2004 (Vic), s 39. And see Occupational Safety and Health Act 1984 (WA), ss 23I – 23L. See Dunn and Thakorlal (eds), Australian Master Work Health and Safety Guide (2nd ed, Wolters Kluwer CCH, 2014), ch 7 (Dunn, Witton, Fernandes), pp 158-159. See National Review into Model Occupational Health and Safety Laws, second report to the Workplace Relations Ministers’ Council (January 2009), at [33.1]-[33.9]. And see Occupational Safety and Health Act 1984 (WA), Pt VI, “Improvement and prohibition notices”. As to the content of improvement notices, see Model Work, Health and Safety Act 2011, s 192. As to the contents of the prohibition notice, see Model Work, Health and Safety Act 2011, s 196. Model Work, Health and Safety Act 2011, s 222. Vic: Occupational Health and Safety Act 2004, ss 16, 17, 137; WA: Occupational Safety and Health Act 1984 (WA), Div 3 and see s 55I: an enforceable undertaking is an alternative to paying a fine and follows conviction, provided there is no physical harm to any persons.. In New South Wales there seems to be relatively small numbers of enforceable undertakings (16 in the period 2013 – 1 April 2016), see http://www.safework.nsw.gov.au/law-and-policy/enforceablement/ enforceableundertakings.

Work Health and Safety

about the support provided to an injured person, the existing management system for health and safety, safety auditing, consultation within the workplace regarding the undertaking, a statement of regret,452 and any rectification made following the breach.453 Enforceable terms include a commitment that the behaviour that resulted in the breach has ceased and will not happen again as well as a commitment to “ongoing effective management” of work health and safety risks including responsibilities of officers of the PCBU. It also requires dissemination of information about the undertaking to workers, health and safety representatives, and others as required. The PCBU must also undertake to participate constructively in compliance monitoring. The undertaking must indicate the benefits to workers, the industry and community from the strategies to be adopted within a stipulated time frame.454 There is provision for enforcement of the undertaking if there is a contravention.455 The New South Wales regulator provides, as an example, incidences of safety breaches at a construction site where a worker has fallen from scaffolding and was injured. Rather than facing prosecution through the courts, we agree with the business that they will carry out substantial activities so that the incident does not happen again and to improve its overall safety performance.

These can include activities which look holistically at the safety culture within the workplace rather than simply focussing on the immediate cause of the accident or injury or risk. The undertaking could require matters such as online induction training, “toolbox”456 talk sessions on safety rules, safety leadership training, providing additional resources for supervisors, due diligence programs, lessons learnt sessions from safety incidents, forums on safety improvements, funding a work placement for a student, sharing safety knowledge and safety awareness through various business and community education programs, and undertaking safety audits.457 For example, undertakings were accepted where there had been a breach of the general duty of care under s 19(1) (see [6.480]) with the consequence that workers suffered burns from an LPG (liquefied petroleum gas) flash fire. The PCBU was required to: • provide leadership development presentations and programs for the LPG Leadership team and senior leaders and for terminal and driver supervisors; • produce safety videos relating to the safe usage of LPG; • work with the Burns Unit of a major hospital, and • install specific equipment.458 Failing these alternative measures, the offender may be prosecuted for breaches. In addition to fines, and in relation to the most serious offences, imprisonment, the court may make adverse publicity orders (generally or in relation to a specified person or class of persons) requiring the publication of details, relating to the offence, its 452 453 454

455 456 457 458

Model Work, Health and Safety Act 2011, s 216(3). NSW Government, Work Cover, Enforceable Undertakings; “Guidelines for Proposing an Enforceable Undertaking”, at [3.3.1]. The regulator may also require other undertakings where appropriate, for example, establish and maintain an Occupational Health and Safety Management System, the auditing of that system by third party auditors and a commitment to implement recommendations from audits etc, see NSW Government, Work Cover, Enforceable Undertakings; “Guidelines for Proposing an Enforceable Undertaking”. Model Work, Health and Safety Act 2011, s 220. Very short meetings (10-15 minutes) around the “toolbox” to discuss safety issues. NSW Safe Work, see http://www.safework.nsw.gov.au/law-and-policy/enforcement/emforceableundertakings. NSW Safe Work, undertaking by Origin Energy Ltd (18 March 2016), the cost of the undertakings was estimated at $340,500, see http://www.safework.nsw.gov.au/law-and-policy/enforcement/ emforceable-undertakings.

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consequences, the penalty etc.459 The court may also require the offender to undertake specific projects to improve work health and safety.460

Prosecutions: category 1, 2 and 3 offences [6.670] Offences under the Act are divided into three categories.461 The most serious, category 1, involves reckless conduct and is subject to the highest penalties. Penalties are intended to have a deterrent effect, reflect the seriousness of the offence and the culpability of the offender. The criminal standard of proof, beyond reasonable doubt, applies to prosecutions for breach of work health and safety legislation.462 This first category (s 31) requires a particular type of fault (recklessness) and exposure of an individual to the risk of death or serious injury/illness without reasonable excuse.463 Whilst a person can be strictly liable for breach without the need to show intention or carelessness, the culpability of the defendant is relevant to the level of penalty. The prosecution must prove that: (a) the person has a health and safety duty, and (b) the person, “without reasonable excuse, engages in conduct that exposed an individual to whom that duty is owed to a risk of death or serious injury or illness”, and (c) the person is reckless as to the risk to an individual of death or serious injury or illness. The prosecution must prove that there was no reasonable excuse (s 31(2)). For example, it would be reckless to allow a Mack truck to be driven by a new driver on steep slopes without experience or training when it was known that the brakes were defective, resulting in the death of the driver.464 The maximum penalties for breach of a health and safety duty are: individuals – five years imprisonment or $300,000 fine or both; an individual conducting a PCBU – $600,000 or five years imprisonment or both; a body corporate – a maximum fine $3,000,000.465 Category 2 and 3 offences do not require proof of recklessness, model Act, ss 32, 33. For offences in categories 2 and 3, it must first be shown that the person has a duty under the Act and secondly there is a failure to comply with that duty. In relation to category 2 offences, the breach must have exposed a person to a risk of death, serious injury or serious illness. There is no similar requirement for a category 3 offence. The model Act sets out maximum penalties for offences under categories 2 and 3. Category 3 maximum penalties (shown in brackets) are one third of category 2 maximum penalties. The maximum penalties are: individuals (not PCBUs or officers) –

459 460

461 462 463

464 465

Model Work, Health and Safety Act 2011, s 236; Occupational Health and Safety Act 2004 (Vic), s 135 Model Work, Health and Safety Act 2011, s 238; Vic: Occupational Health and Safety Act 2004 (Vic), s 136. The Model Work, Health and Safety Act 2011, s 237 also gives a court authority to require an offender to take specific steps to remedy the matters giving rise to the offence. In relation to Western Australia, there is usually a penalty provision related to each specific duties, see Occupational Safety and Health Act 1984 (WA), s 3A, and as illustrations, ss 19A, 20A, 21A. Baida Poultry Pty Ltd v The Queen [2012] HCA 14; (2012) 246 CLR 92. See also, in relation to Victoria and what is required to be specified, see Baiada Poultry v VWA [2015] VSCA 344. Occupational Health and Safety Act 2004 (Vic), s 32. Undertakings are not available in relation to category 1 offences, Model Work, Health and Safety Act 2011, s 216(2); and see Occupational Health and Safety Act 2004 (Vic), s 32. Orbit Drilling Pty Ltd v The Queen; Smith v The Queen [2012] VSCA 82 (Maxwell P, Bongiorno JA and Kyrou AJA, 3 May 2012). Notes to Model Work, Health and Safety Act 2011, s 31. See also discussion, “National Review into Model Occupational Health and Safety Laws, First Report to the Workplace Relations Ministers’ Council” (Canberra, October 2008), Ch 11, “Types of Offences”.

Work Health and Safety

$150,000 fine ($50,000); an individual conducting a PCBU or an officer – $300,000 ($100,000); a body corporate – maximum fine $1,500,000 ($500,000).466 In relation to category 2 and 3 offences, the regulator may accept an enforceable undertaking, see [6.660].

Penalties and mitigation [6.680] The factors relevant to the severity of penalties include the seriousness of the breach. This is not tested exclusively by the consequences of the breach: it is long settled that the gravity of the consequences of an accident does not, of itself, dictate the seriousness of a particular offence. It is rather the gravity, or otherwise of the potential risk to safety flowing from a breach of the obligations imposed by the OHS Act, which is relevant to the assessment of the gravity of the offence and the culpability of the offender.467

Relevant to determining whether the breach is serious is foreseeability of the risk,468 the gravity of outcomes particularly where a person has died or suffered serious harm, whether simple measures were available to avoid the risk,469 the maximum penalty available and general and specific deterrence (referred to below).470 The breach is not less serious if it occurs as a result of employees acting foolishly, taking short cuts and breaching safety standards.471 Higher penalties are likely where there has been a systemic failure to have in place systems and measures to avoid the risk or where there are prior convictions for breaches. Also relevant to the setting of penalties is deterrence both generally and in relation to the specific case.472 In relation to general deterrence, one of the purposes for penalties is to ensure “a level of penalty for a breach as will compel attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety at the workplace.”473 This is reflected in the Victorian Court of Appeal judgment in R v Irvine474 which recognises that: Workplace safety requires employers to take the obligations imposed by the Act very seriously. The community is entitled to expect that both small and large employers will comply with safety requirements. General deterrence is therefore a significant factor when safety obligations are breached. 466 467

468 469

470 471

472

473 474

Model Work, Health and Safety Act 2011, ss 32, 33. Nash v Glennies Greek Coal Management Pty Ltd: Nash v Integra Coal Operations Pty Ltd (No 9) [2015] NSWCIC 15 at [65] per Schmidt J (in relation to the earlier Act); DPP v Amcor Packaging Pty Ltd [2005] 11 VR 557 at 565; R v Irvine; DPP v Dynamic Industries Pty Ltd; DPP v Irvine [2009] VSCA 239 (Nettle, Neave JJA and Lasry AJA, 23 October 2009); Dotmar Epp Pty Ltd v The Queen [2015] VSCA 241 (Maxwell, P, Priest and Kaye JJA, 9 September 2015). Capral Aluminium Ltd v Workcover Authority of NSW [2000] NSWIRComm 71; (2000) 49 NSWLR 610, (Wright P, Walton J, Kavanagh VP, 21 July 2000) at [81]-[82]. WorkCover Authority (NSW) (Inspector Howard) v Baulderstone Hornibrook Pty Ltd [2009] NSWIRComm 92; (2009) 186 IR 125 per Walton J; Inspector Walker v Earthquake Promotions Pty Ltd (No 2) [2014] NSWIRComm 5 (Boland J, 20 Feb 2014) at [15]. Inspector Walker v Earthquake Promotions Pty Ltd (No 2) [2014] NSWIRComm 5 (Boland J, 20 February 2014) at [15]. R v Commercial Industrial Construction Group Pty Ltd [2006] VSCA 181 at [48] (Maxwell P, Buchanan and Redlich, JJA, 8 September 2006); R v Irvine; DPP v Dynamic Industries Pty Ltd; DPP v Irvine [2009] VSCA 239 (Nettle, Neave JJA and Lasry AJA, 23 Oct 2009) at [46], [48]. Reduced opportunities where, for example, The mine no is longer operational but remains in care and maintenance mode, Nash v Glennies Greek Coal Management Pty Ltd; Nash v Integra Coal Operations Pty Ltd (No 9) [2015] NSWIC 15 at [121] –[123] per Schmidt J. And see Johnstone, Bluff and Clayton, Work Health and Safety Law and Policy (3rd ed, Lawbook Co, 2012), ch 8. Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 at 388 per Hungerford J. R v Irvine; DPP v Dynamic Industries Pty Ltd; DPP v Irvine [2009] VSCA 239 (Nettle, Neave JJA and Lasry AJA, 23 October 2009), at [52].

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Factors such as the defendant’s good character, commitment to rehabilitation, and steps taken to improve safety are not relevant to the general deterrence element in assessing penalties. But they are relevant in assessing factors specific to the particular defendant (specific deterrence) which is an element (although a less significant element) in assessing penalties. Specific deterrence is concerned with deterring the particular defendant from re-offending; if there is a low risk of re-offending, such as where the defendant is of good character, has an unblemished record and has responded appropriately to the injuries, reduced, or in very exceptional cases no weight, should be given to this factor.475 A strong record of safety and training is also relevant. In R v FRH Victoria Pty Ltd,476 for example, it was relevant that: the company has been in business for 46 years without prior conviction. It spends considerable funds on safety and training programs for its employees. It has ISO certification … It has won an award for safety. It has a good reputation within the industry, both as a corporate citizen and for safety. Following the incident it provided support for the family and launched a safety audit. It reinforces its safety structures and procedures by its remuneration arrangements for its senior executives. It gives safety a high priority at a corporate level and its lost time injury rate is tracking down. Its WorkCover premium rate is below the industry average. It was submitted that the court could sentence on the basis that it was unlikely that there would be repeated failures in the future.

As the offences are criminal offences, there are a range of factors relevant to mitigation of penalties. These may be set out in sentencing guidelines or legislation applying to criminal penalties more generally.477 These factors include: whether offenders have shown contrition or remorse;478 and accepted responsibility for their actions and sought to make reparation by providing support and assistance to the injured person or family.479 An early plea of guilty480 to an offence as well as co-operating with the investigation may also reduce penalties.481

475

476 477

478

479

480

481

Capral Aluminium Ltd v Workcover Authority of NSW [2000] NSWIRComm 71 (Wright P, Walton J, VP Kavanagh, 21 July 2000) at [75]-[77]; Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 (Bathurst CJ, Hidden and Davies JJ, 11 March 2016) at [183], [202]; Inspector Walker v Earthquake Promotions Pty Ltd (No 2) [2014] NSWIRComm 5 (Boland J, 20 Feb 2014) at [42]-[45]. R v FRH Victoria Pty Ltd [2010] VSCA 18 (23 February 2010) In New South Wales, these are set out in the Crimes (Sentencing Procedure) Act 1999 (NSW), s 21A. As to the capacity to pay, see Inspector Walker v Earthquake Promotions Pty Ltd (No 2) [2014] NSWIRComm 5 (Boland J, 20 Feb 2014) at [53]-[66]. In relation to Western Australia, see BHP Billiton Iron Ore Pty Ltd v Capon [2014] WASC 267 (McKechnie J, 6 Aug 2014) at [7]. Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 at [191] (Bathurst CJ, Hidden and Davies JJ, 11 March 2016) in relation to Crimes (Sentencing Procedure) Act 1999 (NSW), s 21A(3); South Australia: Hillman v Ferro Con (S) Pty Ltd (in liq) [2013] SAIRC 22. R v Canberra Contractors Pty Ltd [2016] ACTSC 13. As to the relevance of victim impact statements in New South Wales, see Nash v Glennies Greek Coal Management Pty Ltd; Nash v Integra Coal Operations Pty Ltd (No 9) [2015] NSWIC 15 at [158]-[163] per Schmidt J. As to discount for early guilty pleas, see in relation to New South Wales, R v Borkowski [2009] NSWCCA 102 (McClellan CJ at CL; Simpson & Howie JJ, 15 April 2009); South Australia: Dinko Tuna Farmers Pty Ltd v Markos (2007) 98 SASR 96; [2007] SASC 166 usual discount 25% for early guilty plea. Inspector Walker v Earthquake Promotions Pty Ltd (No 2) [2014] NSWIRComm 5 (Boland J, 20 Feb 2014) at [52].

7

Suspension and Stand Down [7.10] [7.20] [7.30] [7.40] [7.50] [7.90] [7.90] [7.100] [7.130]

Introduction ..................................................................................................... 319 Suspension ....................................................................................................... 320 What constitutes suspension? ..................................................................... 321 Effect of lawful suspension ......................................................................... 322 Unlawful suspension ................................................................................... 322 Stand Down ..................................................................................................... 324 No common law right to stand down employees ...................................... 324 Stand down under statute ........................................................................... 325 Remedies for unlawful stand down ............................................................ 328

Introduction [7.10] At common law the employer has no right to suspend an employee without

pay1 as a disciplinary measure even if there is misconduct justifying instant dismissal.2 Similarly, at common law an employer has no right to stand down employees during periods in which they cannot be usefully employed.3 The common law rejects any notion that there can be a suspension of contractual rights and duties save by express or implied agreement. The employer is in an “all or nothing” situation. Faced with serious misconduct an employer must either dismiss the employee or retain the employee without loss of contractual rights.4 Although the employer may theoretically have an action against the employee guilty of misconduct for damages for breach of contract, this is rarely a practical option: see [8.90], [10.120]. The “all or nothing” rule has similar application in cases where the employer seeks to stand down employees where there is no available work. The employer must either dismiss the employees by giving appropriate notice or retain them without reduction of contractual rights. Historically, this “all or nothing” rule has been modified by industrial awards. As with many matters which have originated from standards developed in industrial awards, stand down is now governed by the Fair Work Act 2009 (Cth) (ss 523 to 525). The statutory provision is largely based on that award history. 1

2

3

4

Re Building Workers Industrial Union of Australia (1979) 41 FLR 192 at 194; Bond v Cav Ltd [1983] IRLR 360; Gregory v Philip Morris Ltd (1987) 19 IR 258 at 279; and on appeal (1988) 80 ALR 455; State Transit Authority of NSW v Seamen’s Union of Australia (NSW Branch) (1994) 53 IR 349 at 353. Hanley v Pease & Partners Ltd [1915] 1 KB 698; Re a Dispute at Metal Manufacturers Ltd; Re Hutchinson [1948] AR (NSW) 818; Scharmann v Apia Club Ltd (1983) 6 IR 157 at 165; Gregory v Philip Morris Ltd (1988) 80 ALR 455 at 472. Hanley v Pease & Partners Ltd [1915] 1 KB 698; Re Building Workers Industrial Union of Australia (1979) 41 FLR 192 at 194; Devonald v Rosser [1906] 2 KB 728; Bond v Cav Ltd [1983] IRLR 360 at 366. There is no right to impose penalties, pecuniary or otherwise, unless authorised by contract, statute or award. Contractual rights may be affected by the “no work no pay” rule: see [5.30].

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Statutes governing public sector employment frequently confer a power on the employing body to suspend as part of a disciplinary process.5 In the industrial context, a dismissal may be regarded as “unfair” if an employer fails to consider possible alternatives, such as a variation of the contract to allow suspension rather than dismissal.6 We first look at the common law position relating to suspension.

Suspension [7.20] An employer has no common law right to suspend an employee without pay7 for misconduct even if that misconduct would justify immediate dismissal.8 Such a right may, however, be granted by contract, statute or award. Employees at common law likewise have no right to suspend the contract.9 In the case of the Crown, it has by virtue of the Royal prerogative a right to suspend an employee in its service from office. Suspension when exercised by the Crown does not necessarily have the effect of temporarily vacating the office and does not necessarily deprive the employee of rights to salary.10 The Crown’s common law right to suspend will almost invariably be qualified by detailed statutory provisions relating to suspension.11

5 6

7

8

9

10 11

See, for example, Quinn v Overland (2010) 199 IR 40 at [59]-[62]. See generally, McCarry, Aspects of Public Sector Employment Law (Law Book Company, 1988), pp 135-140. In Gregory v Philip Morris Ltd (1988) 80 ALR 455 at 472 it was suggested that in some cases it might be preferable to dismissal for the employer to canvass the possibility of the employees agreeing to suspension without pay. This view has been criticised by McCallum, “Exploring the Common Law: Lay Off, Suspension and the Contract of Employment” (1989) 2 AJLL 211 at 228-230 on the ground that an employee will almost always agree to a suspension without pay as an alternative to dismissal but it is an agreement that is brought about by economic duress. Statutory provisions which require the employer to afford procedural fairness in terminating an employee’s employment may leave the employer at risk if it immediately dismisses an employee. In a similar context, see LHMWU v Arnotts Biscuits Ltd (2010) 188 FCR 221 at [56]-[57]. Re Building Workers’ Industrial Union of Australia (1979) 41 FLR 192 at 194; Gregory v Philip Morris Ltd (1987) 77 ALR 79 at 100; and on appeal (1988) 80 ALR 455; State Transit Authority of NSW v Seamen’s Union of Australia (NSW Branch) (1994) 53 IR 349 at 353; APESMA v Skilled Engineering Pty Ltd (1994) 122 ALR 471 at 480. See generally McCallum, “Exploring the Common Law: Lay Off, Suspension and the Contract of Employment” (1989) 2 AJLL 211 at 222-231. Hanley v Pease & Partners Ltd [1915] 1 KB 698; Re a Dispute at Metal Manufacturers Ltd; Re Hutchinson [1948] AR (NSW) 818; Scharmann v Apia Club Ltd (1983) 6 IR 157 at 165. In the United Kingdom, the suspension of an employee capriciously or without foundation has been held to constitute a breach of the implied term as to trust and confidence: Gogay v Hertfordshire County Council [2000] IRLR 703; Eastwood v Magnox Electric plc [2005] 1 AC 503. In some circumstances, the law recognises the implication of a duty to provide work. See [5.310]. However, the law is more receptive to suspension on full pay pending an investigation into the employee’s conduct: Downe v Sydney West Area Health Service (No 2) (2008) 71 NSWLR 633 at [414]. Strike action will not operate to suspend the contract: see Simmons v Hoover Ltd [1977] QB 284. But see Latham v Singleton [1981] 2 NSWLR 843 at 861-862, Nagle CJ following Morgan v Fry [1968] 2 QB 710 at 725 in assuming that there would be no breach of contract if the strike notice is at least as long as notice required to terminate the contract was given. Nagle CJ does not address the question whether this necessarily means that if the contract is not terminated it is suspended. Hunkin v Siebert (1934) 51 CLR 538 at 542. See also the review of the case law in Menner v Commissioner of Police (1997) 74 IR 472 and Quinn v Overland (2010) 199 IR 40. See Bennett v Commonwealth [1980] 1 NSWLR 581; Welbourn v Australian Postal Commission [1984] VR 257; State Transit Authority of NSW v Seamen’s Union of Australia (NSW Branch) (1994) 53 IR 349, and McCarry, Aspects of Public Sector Employment Law (Law Book Company, 1988), p 135. Such statutory rights often carry with them obligations to afford procedural fairness: see, for example, Quinn v Overland (2010) 199 IR 40.

Suspension

What constitutes suspension? [7.30] Exclusion of employees12 from the workplace as a disciplinary measure in the

absence of authorisation by the contract,13 statute14 or award would constitute an unlawful suspension.15 This is the case even if the employer is acting defensively to a threatened campaign of disruption or where employees have refused to perform a full range of duties.16 In Bennett v Commonwealth17 employees were held to have been suspended where the employer, in response to a refusal to perform the whole range of duties informed the employees that they were to be taken off pay, they were not to undertake any other duties and were to leave the workplace and not to report for duty until they were prepared to carry out the full range of duties. There is a conflict of authorities on the question whether suspension can occur when employees have not been refused entry or required to leave the workplace.18 The authorities suggest that there will be a suspension where employees, who are subject to a “no work as directed, no pay” directive by the employer, continue to work in defiance of the employer’s direction to perform particular tasks and not to carry out any other duties until the directed work is performed.19 In Welbourn v Australian Postal Commission Fullagar J stated: [t]here is no via media between suspension and permission to work, such as the employee being merely “not authorised” to perform any normal duties of the office held, pending performance of the banned work.20

But it seems from Welbourn’s case that if employees continue to work, such work constituting a substantial performance of the contract, and the employer accepts such work even if it does not constitute the full range of duties, there is no suspension.21 The employer in this case remains liable for full wages (see [5.70]) but is entitled to sue employees for breach of contract for failure to perform the full range of duties.22 The 12 13 14

15

16

17 18

19

20 21 22

As to whether employees who refuse to leave the workplace are guilty of a criminal offence, see Highway v Cunningham (1982) ACLD DT 610. Warburton v Taff Vale Railway (1902) 18 TLR 420; Marshall v English Electric Co Ltd [1945] 1 All ER 653. Browne v Commissioner of Railways (1935) 36 SR (NSW) 21. For example, the Fair Work Act 2009 (Cth), s 411 permits employers to engage in industrial action in response to employee industrial action during the negotiation of an enterprise agreement. Hanley v Pease & Partners Ltd [1915] 1 KB 698; Re a Dispute at Metal Manufacturers Ltd; Re Hutchinson [1948] AR (NSW) 818; Gorse v Durham County Council [1971] 2 All ER 666; but see Cresswell v Board of Inland Revenue [1984] 2 All ER 713 at 725; Macpherson v London Borough of Lambeth [1988] IRLR 470 (Ch D). Compare the situation where the employer suspends the employee on full pay whilst investigating the employee’s conduct, which seems to be permitted, even in the absence of an express right to do so: Downe v Sydney West Area Health Service (No. 2) (2008) 71 NSWLR 633 at [414]. Industrial tribunals have accepted such a process as appropriate: see ([7.10]). Re a Dispute at Metal Manufacturers Ltd; Re Hutchinson (1948) AR (NSW) 818; Gorse v Durham County Council [1971] 2 All ER 666. But see Cresswell v Board of Inland Revenue [1984] 2 All ER 713. In Australian National Airlines Commission v Robinson [1977] VR 87; suspension was not in issue. Compare Welbourn v Australian Postal Commission [1984] VR 257 at 275 per Fullagar J where the case was characterised as a suspension. See now ss 408 and 411 of the Fair Work Act 2009 (Cth). Bennett v Commonwealth [1980] 1 NSWLR 581. For a critical review of the authorities see Shaw, “Selective Work Bans: “No Work, No Pay” Revisited” (1986) 2 Aust Bar Rev 250; McCarry, “No Work No Pay: A Replication to Shaw QC and McClelland” (1987) 3 Aust Bar Rev 174. See also AWU v Stegbar Australia Pty Ltd [2001] FCA 367 (Finkelstein J, 5 April 2001) at [24]-[25]. Welbourn v Australian Postal Commission [1984] VR 257; Csomore v Public Service Board of NSW (1986) 17 IR 275; (1987) 10 NSWLR 587; contra Briers v Australian Telecommunications Commission (1979) 29 ALR 569; NSW Teachers’ Federation v Dept of Education (NSW) [1980] AR (NSW) 860. See also Electricity Commission of NSW v FEDFA [1975] AR (NSW) 504. Welbourn v Australian Postal Commission [1984] VR 257 at 267. Welbourn v Australian Postal Commission [1984] VR 257 at 275. However, if the conduct of the employee constitutes “protected industrial action” as defined in s 408

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employer’s remedy is for all practical purposes ineffective. It requires court proceedings against individual employees.23 In addition it may be difficult, if not impossible, for the employer to prove financial loss flowing from individual breaches of contract where the employment has been substantially performed.

Effect of lawful suspension [7.40] Where the contract, or a relevant statute or award, gives an employer a right to suspend an employee, during the period of suspension the employee has no duty to work and the employer no corresponding duty to pay wages.24 The terms of the relevant contract, award or statute may import a requirement that the employer must act reasonably when suspending an employee.25 Although the primary duties under the contract are suspended, some rights may continue to be exercisable during the period of suspension. It may be that the employer can continue to exercise the right to dismiss and the employee the right to resign.26 Contractual obligations such as a duty by the employee not to compete with the employer may still be operative.27 Unless otherwise specified the period of suspension will not normally count as a period of service for the purpose of leave and other entitlements.28

Unlawful suspension No common law right to suspend for misconduct [7.50] As already mentioned, there is no right at common law for an employer to suspend an employee for misconduct even if the misconduct is sufficiently serious to justify instant dismissal. However, there is nothing to prevent the parties from reaching agreement on a period of suspension without pay rather than termination in the face of

23

24

25

26 27 28

of the Fair Work Act 2009 (Cth), the employer is prevented by s 470 from paying the employee for the period of the industrial action, unless the action is by way of partial work bans, in which case ss 471 and 472 apply. If the conduct constitutes “industrial action” as defined in s 19 of the Fair Work Act 2009 (Cth), which is not protected industrial action, the employer is prevented by s 474 from paying the employee for the period, or if the period is less than four hours, the employer must deduct pay for four hours of the day on which the industrial action occurred. Sections 473 and 475 prohibit an employee from accepting payment for any such period of industrial action: see [14.70]. Query whether an employer who refused to pay wages could argue the damages claim as a set-off to an action for wages as a debt or in an action for breach of contract. Note also in this context the argument that there may be available an equitable set-off: Sim v Rotherham Metropolitan Borough Council [1986] ICR 897, and see discussion at [10.120]. Wallwork v Fielding [1922] 2 KB 66 at 71-72, 74-75; Bird v British Celanese Ltd [1945] 1 KB 336; Reid v Australian Institute of Marine and Power Engineers (1990) 33 IR 463 at 465; McLory v Post Office [1992] ICR 758. As to the position of Crown employees see McCarry, Aspects of Public Sector Employment Law (Law Book Co, 1988), p 29. In McLory v Post Office [1992] ICR 758, the relevant clause was construed such that the employer could not act unreasonably in suspending an employee and could only continue the suspension whilst there were reasonable grounds for doing so. However, the court rejected an argument that there was an implied term that the employer must act fairly in relation to the suspension, such that the suspension would only take place after the employee was fully informed as to the reason for the suspension and given an opportunity to make representations: at 766-767. See discussion in Simmons v Hoover Ltd [1977] QB 284. See, for example, Zinc Corp Ltd v Hirsch [1916] 1 KB 541 at 554-556, 563. Cresswell v Board of Inland Revenue [1984] 2 All ER 713 at 725; Reid v Australian Institute of Marine and Power Engineers (1990) 33 IR 463 at 465. Query whether benefits, not dependent on performance of service but dependent upon continuance of the contract, will still be available. Section 22(1) of the Fair Work Act 2009 (Cth) provides that a period of service by a national system employee with a national system employer is a period during which the employee is employed by the employer, but (amongst other things) does not include any period of unauthorised absence. Given that the suspension is at the initiative of the employer, one would expect that the period of absence would be taken to be authorised and therefore not so excluded: see s 22(2)(a).

Suspension

misconduct warranting dismissal.29 The result may constitute a variation to the contract: see [9.340]. Misconduct warranting dismissal gives the employer an election whether to treat the contract as continuing and claim damages from the employee for any loss sustained or terminate the contract by dismissal.30 In Hanley v Pease & Partners Ltd it was said: after declining to dismiss the workman – after electing to treat the contract as a continuing one – the employers took upon themselves to suspend him for one day; in other words to deprive the workman of his wages for one day, thereby assessing their own damages for the servant’s misconduct at the sum which would be represented by one day’s wages. They have no possible right to do that. Having elected to treat the contract as continuing it was continuing. They might have had a right to claim damages against their servant, but they could not justify their act in suspending the workman for the one day and refusing to let him work and earn wages.31

Unlawful suspension will also occur if a power to suspend is improperly exercised, as where conditions or procedures required for a valid suspension have not been satisfied or where there is some public element in the employment requiring the employer to comply with the rules of natural justice and this has not been done.32

Effect of unlawful suspension [7.60] If there has been an unlawful suspension it does not necessarily mean that a suspended employee is entitled to be paid wages during the period of unlawful suspension. To illustrate, in Hutchinson v Metal Manufacturers Ltd33 employees were guilty of misconduct justifying dismissal. The employer, however, in accordance with its usual practice suspended the employees. Wages were not paid for the period of the suspension and employees suspended indicated that they were not ready and willing to work in an orderly and proper manner. The New South Wales Industrial Commission reaffirmed the principle that there was no right at common law to suspend for misconduct and rejected the argument that suspension was an accepted practice at the workplace. The employer had on a number of occasions in the past suspended employees for misconduct rather than dismiss them. The Commission was of the view that the acceptance of this action by individual employees or even by their union in the past did not establish a usage or practice of general application so as to give a right of suspension not provided for by the award.34 Despite this, the employees were not entitled to be paid during the period in which they were suspended, the Commission 29

30

31 32

33 34

Any mercy shown by the employer in this regard may not constitute “adverse action” for the purposes of s 342 of the Fair Work Act 2009 (Cth) which is central to the operation of the general protections in Pt 3-1: see LHMWU v Arnotts Biscuits Ltd (2010) 188 FCR 221 at [56]-[57]. There may be some limits on this election, see Clea Shipping Corp v Bulk Oil International; The Alaskan Trader [1984] 1 All ER 129 holding that a court in the exercise of its equitable jurisdiction may refuse to allow the innocent party to continue the contract if there is no legitimate interest in performing the contract rather than claiming damages. Hanley v Pease & Partners Ltd [1915] 1 KB 698 at 705. Jones v Lee [1980] ICR 310; Bennett v Commonwealth [1980] 1 NSWLR 581; Welbourn v Australian Postal Commission [1984] VR 257 at 275; McLory v Post Office [1992] ICR 758; State Transit Authority of NSW v Seamen’s Union of Australia (NSW Branch) (1994) 53 IR 349. In the United Kingdom, the suspension of an employee capriciously or without foundation has been held to constitute conduct in breach of the implied term as to trust and confidence: Gogay v Hertfordshire County Council [2000] IRLR 703; Eastwood v Magnox Electric plc [2005] 1 AC 503 at [29] (Lord Nicholls), although note the potential for unusual results at [32], [40] (Lord Steyn) and recognised in Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2012] 2 AC 22 at [50]-[52] (Lord Dyson JSC, with whom Lord Walker of Gestingthorpe JSC agreed), [119] (Baroness Hale of Richmond JSC in dissent). See above [5.140]. Hutchinson v Metal Manufacturers Ltd [1948] AR (NSW) 818. Hutchinson v Metal Manufacturers Ltd [1948] AR (NSW) 818 at 824.

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holding that the right to wages required both at common law and under the award a willingness to work in an orderly and proper manner. Employees suspended indicated that they were not so willing.35 Union work bans have provided the focus for continuing debate on the two issues raised in Hutchinson v Metal Manufacturers Ltd; whether there has been an unlawful suspension and, if so, whether the employee is entitled to wages and other benefits of the employment during the period of suspension. For a detailed discussion of whether damages or wages are recoverable, see [5.30], [5.90].

Remedies for unlawful suspension [7.70] If an employee has been unlawfully suspended, what remedies are available to that employee? Unlawful suspension will almost invariably constitute a breach of contract sufficient to allow the employee to terminate the contract and, in cases where the employment is governed by award, may constitute a breach of that award. The employee may also have a claim under the relevant award for payment for the period of the unlawful suspension, which can be enforced under Pt 4-1. The suspension may also amount to “adverse action” for the purposes of the general protections in Pt 3-1 of the Fair Work Act 2009 (Cth).36 In addition to possible remedies for breach of an applicable award (see [10.50]), an employee unlawfully suspended may have common law actions to recover an amount equivalent to wages for the period of suspension (see [10.20]) or damages for breach of contract: see [10.60]. Injunctive and declaratory relief may be available, and in the case of employment having a public element, public law remedies may be available. These remedies are dealt with in Chapter 11. Common law actions for wages or damages [7.80] Damages37 will usually be equivalent to the amount of unpaid wages payable during the period of suspension.38 However, in some cases where an employee has been suspended with pay the employee may, in exceptional circumstances, be able to claim for breach of an implied term that the employer provide work.39 These remedies are unlikely to be available to employees engaged in industrial action either on the ground of the “no work no pay” principle (see [5.30]) or on the ground that an action for damages will only be available if the employee is ready, willing and able to perform the employment: see [5.50].

Stand Down No common law right to stand down employees [7.90] At common law an employer does not have the right to stand down employees

without pay during periods in which they cannot be usefully employed.40 The employer must either dismiss the employee or pay wages during the period unless there is an 35 36 37 38 39 40

Hutchinson v Metal Manufacturers Ltd [1948] AR (NSW) 818 at 827-828. For further authorities dealing with this issue in the context of the “no work no pay” principle, see [5.30]. LHMWU v Arnotts Biscuits Limited (2010) 188 FCR 221 at [56]. As to the differing requirements for actions for damages and actions for wages, see [5.50]. Hanley v Pease & Partners Ltd [1915] 1 KB 698 at 705-706. Langston v Amalgamated Union of Engineering Workers [1974] 1 WLR 185 at 192; Mann v Capital Territory Health Commission (1981) 54 FLR 23 and on appeal (1982) 148 CLR 97; see [5.310]. Hanley v Pease & Partners Ltd [1915] 1 KB 698; Re Application by Building Workers Industrial Union of Australia (1979) 41 FLR 192 at 194. As to the position of piece workers see Devonald v Rosser [1906] 2 KB 728; Bond v Cav Ltd [1983] IRLR 360 at 366. See generally McCallum, “Exploring the Common Law: Lay Off, Suspension and the Contract of Employment” (1989) 2 AJLL 211 at 213-222 and the review of authorities in Coal and Allied Mining Services Pty Ltd v MacPherson (2010) 185 FCR 383 at [65]-[73] (Buchanan J).

Stand Down

express or implied term in the contract permitting the standing down.41 In Browning v Crumlin Valley Collieries Ltd42 it was held that there was an implied term in the contracts of employment that the employer, the owner of the colliery, could stand down an employee without pay when the mine was closed to effect necessary repairs; the dangerous condition necessitating repairs did not result from any default on the part of the employer. This decision has been severely criticised43 and has not been followed in the United Kingdom.44 There are no Australian cases supporting such an approach. The position is then, at common law the employer bears the financial risks associated with the breakdown of machinery and stoppage of work.45 Since the employer remains liable to pay wages (or the equivalent in damages if it refuses to pay) as long as the employee is ready and willing to perform the employment and stand down is not a valid option, the employer’s only alternative is lawful dismissal. But this is not necessarily the best solution because the employer loses its workforce and the employees their jobs. As mentioned at [7.10], this was initially overcome by provision in awards allowing stand down and, now, by statutory provision allowing stand down.46

Stand down under statute [7.100] The typical award clause allowing stand down provided that an employer may deduct payment for any day an employee cannot be usefully employed because of any strike or through any breakdown in machinery or any stoppage of work by any cause for which the employer cannot reasonably be held responsible.47

41

42 43 44 45 46

47

Would a contractual term permitting stand down be effective if there was no stand down clause (or such a clause was refused) in the relevant award? See Arup, “The Power of the Employer to Stand-down: Latitude and Constraints” (1978) JIR 463 at 464. Browning v Crumlin Valley Collieries Ltd [1926] 1 KB 522. Freedland, The Contract of Employment (Clarendon Press, 1976), pp 89-90. Freedland, The Personal Contract of Employment (OUP, 2003), pp 476-477. Johnson v Cross [1977] ICR 872; Bond v Cav Ltd [1983] IRLR 360 at 366, 366-367. See the discussion in Freedland, The Personal Contract of Employment (OUP, 2003), pp 474-479. See, for example, Essential Services Act 1988 (NSW), s 16 which provides that where there is a proclamation or order relating to an essential service in force an employer who is adversely affected by the disruption to the essential service has the right to stand down an employee from duty for any period (including a day or part of a day). There is no right to salary or remuneration during the period of stand down but the period of stand down will be counted as service for purposes of calculating leave and superannuation entitlements. Stand down is not a matter which can be provided for in a modern award: Fair Work Act 2009 (Cth), s 139. Stand down was an allowable award matter under the Workplace Relations Act 1996 (Cth), s 513(1)(l). See Re Award Simplification Decision (1997) 75 IR 272, and as examples Pickard v John Hein & Son Ltd (1924) 35 CLR 1; Re Carpenters and Joiners Award (1971) 17 FLR 330; Kidd v Savage River Mines (1984) 9 IR 362; Re Australian Public Service Determinations as to Stand Downs (1984) 10 IR 457; Arup, “The Power of the Employer to Stand Down: Latitude and Constraints” (1978) JIR 463. The limitation of the exercise of the award-making powers by the Australian Industrial Relations Commission by s 513 of the Workplace Relations Act 1996 (Cth) left no room for stand down provisions to operate within a disciplinary process because the disciplinary process was not an allowable award matter: Re Section 109 Review Decision (1999) 90 IR 123. Prior to this, occasionally a clause provided for “disciplinary stand down”. For example, in Re Australian Public Service Determinations as to Stand Downs (1984) 10 IR 457, a Full Bench of the Conciliation and Arbitration Commission permitted the variation of an award to allow stand down of any officer or employee during the period in which such officer or employee engaged in industrial action by refusing to perform the whole or any part of her or his duties. The award as varied further provided that any officer or employee stood down was not to be entitled to receive any salary, wages, other remuneration or allowance in respect of the period of stand down. See also the unique circumstances in Re application by MTIA to vary the Rubber, Plastic and Cable Making Industry – General – Award 1996 (17 June 1998, AIRC, Lewin C, Print Q2003).

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Section 524(1) of the Fair Work Act 2009 (Cth) now permits a national system employer to stand down a national system employee, without pay,48 during a period in which the employee cannot usefully be employed because of: a) industrial action (other than industrial action organised or engaged in by the employer); b) a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown; c) a stoppage of work for any cause for which the employer cannot reasonably be held responsible. Parliament intended that the body of industrial principle which developed around the standard award provision will continue to apply.49 It does not extend to the situation where the employer refuses to pay the employee in response to the employee’s refusal to work in accordance with the contract of employment.50 It is an essential ingredient of a stand down that it is a unilateral decision taken by an employer to withhold work and payment even when the employee is prepared to perform all duties as directed.51 Section 524(2) provides that an employer may not stand down an employee under s 524(1) during a period in which the employee cannot usefully be employed because of one of the circumstances identified in s 524(1) if a relevant enterprise agreement or contract of employment makes provision for stand down in that circumstance. An employee is taken by s 525 not to be stood down during a period when the employee is taking authorised leave (paid or unpaid) or is otherwise authorised to be absent from the employment. The Fair Work Commission is conferred with jurisdiction to arbitrate disputes over the operation of ss 524 and 525. Any conduct in contravention of an order of the Fair Work Commission leaves the contravenor exposed to civil remedy proceedings under Pt 4-1 of the Fair Work Act 2009 (Cth). The conduct of an employer in standing down an employee under s 524 cannot constitute “adverse action” for the purposes of Pt 3-1 of the Fair Work Act 2009 (Cth).52 The central phrase in s 524(1), “cannot be usefully employed”, has been considered by industrial tribunals when dealing with award provisions on the issue.

Usefully employed [7.110] Clauses of this kind have been interpreted as requiring the employer to prove that the particular employee stood down could not be usefully employed. Re Carpenters and Joiners Award53 established the basic principles relating to interpretation of these clauses in awards. First, there will be no right to stand down if there is useful work available which is within the terms of the employee’s contract of employment. It need not be the work the employee normally carries out.54 48

49 50 51 52 53 54

Fair Work Act 2009 (Cth), s 524(3), but by the operation of s 22(2)(b)(ii) the stand down period is counted as service and does not break continuity of service for the purposes of accrual of entitlements such as annual leave, long service leave, sick leave, parental leave and the like. Explanatory Memorandum to the Fair Work Bill 2009 (Cth), at [2076]-[2079]. Coal and Allied Mining Services Pty Ltd v MacPherson (2010) 185 FCR 383 at [22]-[32] (Marshall and Cowdroy JJ). Coal and Allied Mining Services Pty Ltd v MacPherson (2010) 185 FCR 383 at [103] (Buchanan J). Fair Work Act 2009 (Cth), s 342(3) and (4). Compare the suspension in LHMWU v Arnotts Biscuits Ltd (2010) 188 FCR 221. Re Carpenters and Joiners Award (1971) 17 FLR 330. Kidd v Savage River Mines (1984) 6 FCR 398 (maintenance work available for some employees).

Stand Down

Secondly, if there is work for some employees there will be no right to stand down all employees. Only those employees who cannot be usefully employed may be stood down. Thirdly, if selection of particular employees to carry out available work would cause an industrial dispute55 and cause substantial disruption to the employer’s business then all the employees will be regarded as not being able to be usefully employed: The expression “usefully employed” necessarily connotes that by the employment in contemplation there will be a net benefit to the employer’s business by reason of the performance of the particular work done. If the performance of the work done will prejudice the conduct of the employer’s business then it is not useful to him although the work in itself would probably, to some extent, contribute to production.56

Fourthly, the standard clause refers to deductions for “any day upon which” the employee cannot be usefully employed. It relieves the employer of any duty to provide work for part of a day.57 Lastly, the fact that work on which an employee can be employed will reduce work available when work is resumed after the stoppage does not mean that that employee cannot usefully be employed.58 It is a question of fact in any particular case whether, on a particular day, an employee can be usefully employed. The question is determined by reference to the circumstances of the employer’s business at the time, including the probable extent or duration of the possible stand down. The right to stand down must be exercised with caution and diligence.59 The onus is on the employer to show that the employees could not be usefully employed. A right to stand down employees will not exist simply because it is in the employer’s financial interest to do so and this is so, for example, even if the employer is suffering a loss of all or virtually all of its revenue.60 Stand down will not generally affect the continuity of employment for the purposes of accrued leave entitlements.61

Circumstances where stand down permitted [7.120] Strikes,62 breakdown of machinery and stoppage of work by any cause for which the employer cannot reasonably be held responsible are the usual grounds specified in an award to justify stand down of employees. Although the stand down clause can apply in a variety of situations it can operate to have a disciplinary effect on

55

56 57 58 59 60 61 62

Strong evidence of this will be required before stand down of all employees will be permitted on this ground: see Kidd v Savage River Mines (1984) 6 FCR 398 at 404. Compare Niceski v Dowell Australia Ltd (1981) 52 FLR 371 at 378: “The fact that the employment of a particular employee might, because of personal attributes of that employee, namely for instance, that he is a member of a particular religion, race, colour, political party or union, or unpopular for some other reason, is likely to involve the employer in all sorts of trouble is, for the purposes of cl 6(e)(i), irrelevant.” Re Carpenters and Joiners Award (1971) 17 FLR 330 at 334. Compare Metal Trades Awards; Re James Mullan Pty Ltd (1942) 47 CAR 615 at 617 (the right to deduct exists only in respect of “any day” not part of a day). “Usefully employed” does not mean “gainfully employed”: Jarrad v Melbourne and Metropolitan Tramways Board [1978] AILR 244. See Re Distilleries Award (1976) 180 CAR 786. Re Technical Staff (TAA) Award 1974 [1978] AILR 106 per Keely J. Sheet Metal Workers v Metters Ltd (1948) 60 CAR 972. As to whether a complete stoppage of work is required see Kidd v Savage River Mines (1984) 6 FCR 398; cf Niceski v Dowell Australia Ltd (1981) 52 FLR 371 at 376-377. The threat of strike action which may or may not eventuate will not suffice: Niceski v Dowell Australia Ltd (1981) 52 FLR 371 at 377.

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unions involved in industrial action. Non-striking union members may be stood down as a result of unavailability of work caused by strikers.63

Remedies for unlawful stand down [7.130] If, purportedly relying on s 524 of the Fair Work Act 2009 (Cth), an employer stands down employees when there is no power to do so, the employees may apply to the Fair Work Commission to arbitrate over any dispute over payment for the period.64 If an employer stands down employees when there is no power to do so or in breach of the terms of a stand down clause in a contract or enterprise agreement, it has been held that employees will be entitled to recover wages they would have earned during stand down.65 Proceedings brought may be either an action for breach of contract for damages66 (see [10.130]) or proceedings for breach of the enterprise agreement (see [10.50]). Declaratory and injunctive remedies might also be available: see below, Chapter 11.

63

64 65 66

See, for example, Re Metalliferous Mining (Broken Hill) Stand Down Award (1986) 15 IR 362. However, where the reason for the stoppage of work is independent of the employee and employer, the assessment will be made on the basis of who should bear the financial burden of the supervening event. See, for example, Campbell’s Soups Australia v AFMEPKIU (18 June 1998, AIRC, Williams SDP, Print Q2121); compare the result in Re application by AIG to vary the Liquor and Accommodation Industry – Liquor Industries – Maltsters Award 1998 (8 October 1998, AIRC, Whelan C, Print Q7368) arising in similar circumstances following a gas explosion resulting in the cutting off of gas supplies. Fair Work Act 2009 (Cth), s 526(3)(a). Kidd v Savage River Mines (1984) 6 FCR 398. A common law action for wages as a debt will not be available on the basis of the “no work no pay” principle, see discussion at [5.30].

8

Terminating the Contract of Employment for Breach “Unless an employee has a job as a mattress tester or a similar occupation, sleeping on duty is neglect of duty.” [Avins, Employee’s Misconduct (1968), p 70.1]

[8.10] [8.20] [8.20] [8.30] [8.40] [8.60] [8.70] [8.80] [8.100] [8.110] [8.130] [8.140] [8.370]

Introduction ..................................................................................................... 329 Repudiation ...................................................................................................... 330 Definition .................................................................................................... 330 Effect of repudiation ................................................................................... 332 Repudiation – practical considerations ..................................................... 334 Employer’s options ..................................................................................... 337 Termination by the Employee ......................................................................... 337 Constructive dismissal ................................................................................ 337 Summary Dismissal ........................................................................................ 341 Requirements for summary dismissal ........................................................ 342 After acquired knowledge .......................................................................... 346 Grounds for summary dismissal ................................................................ 346 Condonation and waiver ............................................................................ 364

Introduction [8.10] These next two chapters deal with termination. It will normally be fairly obvious when a contract of employment has come to an end. Through some set of circumstances, amicable or otherwise, the employee will have ceased permanently to work for the employer and the employer will be content with that situation. But if put to it, the parties to the contract might be hard pressed to say exactly when the contract came to an end, and might have even greater difficulty in identifying the legal principles underlying the termination. The answers to such questions are not always easy, but neither are they purely academic. Exactly when the employment ends may carry significant consequences for the parties.2 Statutory rights and remedies aside, a party may lawfully terminate the employment in one of two ways.3 First, a party may terminate the employment by giving the other party proper notice of termination in accordance with the terms of the contract of employment.4 Secondly, either party has the right to terminate the contract in response 1 2 3

4

See also Ayub v Vauxhall Motors Ltd [1978] IRLR 428. See, for example, Melbourne Stadiums Ltd v Sautner (2015) 317 ALR 665; Geys v Société Générale, London Branch [2013] 1 AC 523. One needs to consider the express terms of the specific contract as well. On occasions the contract itself may provide alternative bases upon which it may be terminated by either party. See, for example, Bartlett v Australia and New Zealand Banking Group Ltd [2016] NSWCA 30 (7 March 2016, Macfarlan, Meagher and Simpson JJA). Generally without cause unless some limitation is placed upon the circumstances in which notice is

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to conduct of the other in breach of the contract: which is of sufficient gravity to constitute a repudiation of the contract; or, in response to conduct which manifests an intention no longer to be bound by one or more of the essential terms of the contract. That is, in the face of a breach of sufficient gravity by the employer, or such manifest intent, the employee may resign forthwith by notifying the employer that she or he accepts the employer’s breach as bringing the contract to an end, often called “constructive dismissal” (see [8.80]). Similarly, the employer may terminate the contract of employment forthwith where grounds for “summary dismissal” exist (see [8.100]). However, as Chapter 1 shows, statute intervenes to moderate the exercise of those rights by setting minimum periods of notice to be given by either party5 (see [12.240]) and to provide an avenue of redress for employees who are dismissed unfairly (see [13.50]) or where the reasons for the termination include a reason which is proscribed by Pt 3-1 (general protections) or Pt 6-4 (additional provisions in relation to termination of employment) of the Fair Work Act 2009 (Cth) (see [13.230] and [13.330]). Statutes also protect against discrimination in employment (see Chapter 15). This chapter addresses the right of either party to terminate the contract in response to the repudiatory conduct of the other. It commences with a brief account of the basic principles in relation to repudiation and the practical consequences of one party engaging in conduct which constitutes a repudiation of the contract of employment. It then considers in more detail the application of those principles to the situation where the employer is in breach (constructive dismissal) and where the employee is in breach (summary dismissal). If, in full knowledge of the breach by the other side, the innocent party does not elect to terminate the contract forthwith, it may be said that there has been a waiver of the right to terminate the contract. On the other hand, if the innocent party elects to terminate the contract forthwith, and it is later found that the breach was not of sufficient gravity to justify the decision to do so, that party may be said to have repudiated the contract by failing to give appropriate notice. Chapter 9 addresses other modes of termination, such as the exercise by either party of the contractual right to terminate on notice. The employer may also have a contractual right to terminate by payment in lieu of notice. Particular attention is given to circumstances in which the employer seeks to terminate the employment because the employee’s position has become redundant. It then addresses the circumstances in which the contract of employment is brought to an end in accordance with the wishes of the parties (by agreement or by the effluxion of time) or independently of the wishes of the parties due to some intervening event (such as frustration or bankruptcy).

Repudiation Definition [8.20] As to what constitutes repudiation, the High Court has said: The term repudiation is used in different senses. First, it may refer to conduct which evinces an unwillingness or an inability to render substantial performance of the contract. This is sometimes described as conduct of a party which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party’s obligations. It may be termed renunciation. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party,

5

given: New South Wales Cancer Council v Sarfaty (1992) 28 NSWLR 68 at 74; or there is a minimum term of employment agreed to before the right to terminate the employment on notice can be exercised: Walker v Citigroup Global Markets Australia Pty Limited (2006) 233 ALR 687 at [78], and [82]-[84]. See Freedland, The Personal Contract of Employment (2003), pp 305-318, 329-347. Fair Work Act 2009 (Cth), s 117.

Repudiation

renunciation either of the contract as a whole or of a fundamental obligation under it … Secondly, it may refer to any breach of contract which justifies termination by the other party … There may be cases where a failure to perform, even if not a breach of an essential term … manifests unwillingness or inability to perform in such circumstances that the other party is entitled to conclude that the contract will not be performed substantially according to its requirements. This overlapping between renunciation and failure of performance may appear conceptually untidy, but unwillingness or inability to perform a contract often is manifested most clearly by the conduct of a party when the time for performance arises. In contractual renunciation, actions may speak louder than words. In the past, some judges have used the word “repudiation” to mean termination, applying it not to the conduct of the party in default, but to the conduct of the party relying upon such default. It would be better if this were avoided. … For present purposes, there are two relevant circumstances in which a breach of contract by one party may entitle the other to terminate. The first is where the obligation with which there has been failure to comply has been agreed by the contracting parties to be essential. Such an obligation is sometimes described as a condition. … It is the common intention of the parties expressed in the language of their contract, understood in the context of the relationship established by that contract and (in a case such as the present) the commercial purpose it served, that determines whether a term is “essential”, so that any breach will justify termination. The second relevant circumstance is where there has been a sufficiently serious breach of a non-essential term.6

The test is objective. It is not necessary to prove a subjective intention to repudiate.7 Whether there has been a repudiation of the contract in the individual case is not a question of law but a question of fact.8 It is not to be inferred lightly. A refusal to perform contractual obligations, if sufficiently serious, will suffice.9 Similarly, misconduct of a serious nature inconsistent with the fulfilment of express or implied conditions of service will constitute repudiation.10 Repudiation will exist, for example, where there has been a wrongful dismissal of an employee11 or an employee leaves the 6

7

8 9

10 11

Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 at [44]-[49] (Gleeson CJ, Gummow, Hayden and Crennan JJ); see also Fishlock v The Campaign Palace Pty Ltd (2013) 234 IR 1 at [116]-[130]. See Laurinda Pty Ltd v Capalba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 at 647-648 (Brennan J). See the useful summary of principles in Whittaker v Unisys Australia Pty Ltd (2010) 192 IR 311 at [32]-[41], adopted in Earney v Australian Property Investment Strategic Pty Ltd [2010] VSC 621 (22 December 2010, Hargrave J) at [77], Cameron v Asciano Services Pty Limited [2011] VSC 36 (21 February 2011, Beach J) at [44]-[46] and Fishlock v The Campaign Palace Pty Ltd (2013) 234 IR 1 at [126]. Woods v W M Car Services (Peterborough) Ltd [1982] ICR 693 at 698, 699-700, 701-702. Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 1 WLR 698. Note, however, the confusion in many cases between discharge for breach of condition and discharge resulting from repudiation: see Freedland, The Contract of Employment (OUP, 1976), pp 212-219. In Bruce v AWB Ltd (2000) 100 IR 129, an express refusal to comply with a proposed change in reporting structures was found not to be sufficiently serious as to amount to a repudiation because there was a respectable, though erroneous, view on the part of the employee that the proposed change was outside the scope of the contract. North v Television Corp Ltd (1976) 11 ALR 599 at 608-609. Turner v Australasian Coal and Shale Employees Federation (1984) 6 FCR 177; 55 ALR 635 (withdrawal of offer of employment after acceptance); Courtaulds Northern Spinning Ltd v Sibson [1987] ICR 329 (employee required to retain union membership in face of threatened industrial action; on employee’s refusal employer proposed to transfer employee; proposed transfer held to be a breach of contract and repudiation of contract, but reversed on appeal [1988] ICR 451).

331

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job without notice or with insufficient notice,12 or where an employee has accepted an offer of employment which is then withdrawn by the employer before commencement of the employment,13 or where an employer reduces the wages of an employee without that employee’s consent,14 or a serious non-consensual intrusion on the nature of the employee’s status and responsibilities in a way which is not permitted by the contract.15 That is, if the employer seeks to bring about a change in the employee’s duties or place of work which is not within the scope of the express16 or implied terms17 of the contract, it may evince an intention to no longer be bound by those terms. If the employee does not agree to the change (so as to amount to a variation of the contract), he or she may claim to have been constructively dismissed. In some circumstances this may give rise to a claim for severance pay if termination arises from the employee’s position becoming redundant (see [9.180]). Since the question of repudiation is in each case a question of fact, individual circumstances will be important in determining whether a repudiation exists.

Effect of repudiation [8.30] What is the effect of a repudiation of contract by one of the parties? In the English courts there has been substantial disagreement on the question whether the ordinary contract rules relating to repudiation apply to the contract of employment.18 The normal contract rule is that repudiation by one party to the contract gives the party not in breach, the innocent party, the option to decide whether to continue (affirm) the contract or to treat the contract as at an end by accepting the repudiation. It was suggested in the past that, unlike ordinary contracts, employment contracts automatically terminate on repudiation by one party.19 The “automatic termination” rule would have the effect that an employer need not take formal steps to dismiss an employee who had repudiated the contract, for example, by misconduct or by leaving the employment.20 12

13 14

15

16 17 18

19

20

Thomas Marshall (Exports) Ltd v Guinle [1979] 1 Ch 227; Evening Standard Co Ltd v Henderson [1987] ICR 588 (Court of Appeal); Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414 at [24]. Hochster v De la Tour (1853) 2 El & Bl 678; 118 ER 922; Turner v Australasian Coal and Shale Employees Federation (1984) 55 ALR 635. Rigby v Ferodo Ltd [1988] ICR 29; Brookton Holdings No V Pty Ltd v Kara Kar Holdings Pty Ltd (1994) 57 IR 288. Consent is not to be assumed merely because the worker continues to work at the reduced rate for a time: Metropolitan Health Service Board v Australian Nursing Federation (2000) 99 FCR 95. See also Cantor Fitzgerald International v Callaghan [1999] 2 All ER 411; Tokyo Network Computing Pty Ltd v Tanaka [2004] NSWCA 263 (2 August 2004, Mason P, Handley and Tobias JJA). The assessment of whether there has been such an intrusion as to amount to a repudiation will turn on an objective comparison of the two roles against the background of changes permitted by the express terms of the contract: Whittaker v Unisys Australia Pty Ltd (2010) 192 IR 311 at [41]-[46], [68]; Earney v Australian Property Investment Strategic Pty Ltd [2010] VSC 621 (22 December 2010, Hargrave J) at [77]; Fishlock v The Campaign Palace Pty Limited (2013) 234 IR 1 at [126]. The employer may be given scope through its policies to introduce change in the workplace: see [4.480]). See [5.510]. Freedland, The Personal Contract of Employment (OUP, 2003), pp 376-384, D Cabrelli and R Zahn, “The Elective and Automatic Theories of Termination at Common Law: Resolving the Conundrum” (2012) 41 ILJ 346. Denmark Productions Ltd v Boscobel Productions Ltd [1969] 1 QB 699; Sanders v Neale Ltd [1974] ICR 565; IPC Business Press Ltd v Gray [1977] ICR 858; Gunton v Richmond-upon-Thames LBC [1981] Ch 448 at 460 per Shaw LJ; London Transport Executive v Clarke [1981] ICR 355 at 362-365 per Lord Denning MR. For a discussion of the two theories, see McMullen, “A Synthesis of the Mode of Termination of

Repudiation

In Australia the position is settled. The High Court said in Automatic Fire Sprinklers v Watson21 that the “elective” and not the “automatic” theory applies, a position necessarily followed in subsequent cases22 and confirmed by a majority of the High Court in Byrne v Australian Airlines Ltd23 and Visscher v Giudice.24 The English authorities now confirm the application of the traditional (elective) rule.25 The view that repudiation “might be easily inferred”26 seems to no longer prevail.27 Either way, an employer or employee wishing to keep the contract on foot would do well to make the election manifest. The employer may wish to keep the contract on foot to enable it to retain some control over the activities of the employee.28 Once an election is made, either to continue the contract or to accept the repudiation, it will generally be final.29 This does not prevent, however, a party in breach from retracting or curing that breach prior to acceptance by the innocent party of the right to terminate the contract.30

21 22 23

24 25

26

27

28

29

Contracts of Employment” (1982) 41(1) Cam LJ 110, Forsyth, “Automatic v Elective Termination Theory Revisited” (1994) 7 AJLL 246 and D Cabrelli and R Zahn, “The Elective and Automatic Theories of Termination at Common Law: Resolving the Conundrum” (2012) 41 ILJ 346. Automatic Fire Sprinklers v Watson (1946) 72 CLR 435 at 450-453, 461-463, 465-467. For example, Consolidated Press v Thompson (1952) 52 SR (NSW) 75. Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 427-428 (per Brennan CJ, Dawson and Toohey JJ). See also Forsyth, “Automatic v Elective Termination Theory Revisited” (1994) 7 AJLL 246. Visscher v Giudice (2009) 239 CLR 361 at [53]-[55] (Heydon, Crennan, Kiefel and Bell JJ). Geys v Société Générale, London Branch [2013] 1 AC 523. See D Cabrelli and R Zahn, “The Elective and Automatic Theories of Termination at Common Law: Resolving the Conundrum” (2012) 41 ILJ 346. Gunton v Richmond-upon-Thames LBC [1981] Ch 448 at 467-468 (Buckley LJ). It may be inferred by returning keys, taking personal belongings and leaving the premises upon request without protest (Northern Tableland Insurance Brokers Pty Ltd v Howell (2009) 184 IR 307 at [32]-[33]), accepting new employment (Gunton v Richmond-upon-Thames LBC [1981] Ch 448 at 467-468 per Buckley LJ; Dietman v Brent London Borough Council [1987] ICR 737 at 755) or perhaps by replacing employees who have left: Australian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1985) 9 FCR 425 at 434. Compare Rigby v Ferodo Ltd [1988] ICR 29 at 34 (repudiation not accepted where employees continue in employment under protest after unilateral wage reduction by employer); Martin v South Australia (1982) 49 SAIR 269 at 284 (an employer’s delay and failure to investigate known misconduct operates as an election to continue the contract and as a waiver). Geys v Société Générale, London Branch [2013] 1 AC 523 at [17] endorsing the criticism in Boyo v Lambeth London Borough Council [1994] ICR 727 at 743 (Ralph Gibson LJ) of the comment of Buckley LJ in Gunton v Richmond-upon-Thames LBC [1981] Ch 448 at 467-468. For example, by directing the employee to attend work despite the employee having repudiated the contract by resigning part way through a fixed term contract: Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414 at [24]; Visscher v Giudice (2009) 239 CLR 361 at [59] (Heydon, Crennan, Kiefel and Bell JJ). Acceptance of an offer to return to work would reinstate the employment relationship under the existing contract: Purcell v Tullett Prebon (Australia) Pty Ltd [2010] NSWCA 150 (28 September 2010, Allsop P, Basten JA and Handley AJA) at [26]. A refusal to abide by a direction to return to work would constitute a separate repudiation allowing the employer a further opportunity to accept the repudiation as bringing the contract to an end: Purcell v Tullett Prebon (Australia) Pty Ltd [2010] NSWCA 150 (28 September 2010, Allsop P, Basten JA and Handley AJA) at [33] (in that case, giving rise to a claim for liquidated damages). Alternatively, an employer may elect to keep the contract on foot to enforce a restraint clause: Metcash Limited v Jardim (No 3) [2010] NSWSC 1096; (2010) 273 ALR 407 at [43] and on appeal Jardin v Metcash Ltd (2011) 285 ALR 677 at [84]-[86] (Meagher JA) (compare Northern Tableland Insurance Brokers Pty Ltd v Howell (2009) 184 IR 307 where the contract was discharged upon acceptance of the employer’s repudiation, leaving the employer without a basis upon which to enforce a post-employment restraint), or to offer a return to work after a period of maternity leave: Rogan-Gardiner v Woolworths Ltd (No 2) [2010] WASC 290 (22 October 2010, Hall J) at [148]-[155] (issue not dealt with on appeal Rogan-Gardiner v Woolworths Ltd (2012) 218 IR 417). See, for example, Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014,

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Repudiation – practical considerations [8.40] The innocent party’s acceptance must be unequivocal to bring the contract to an end.31 The use of the phrase “without prejudice” in correspondence will usually mean that there is not an unequivocal acceptance; rather it will suggest the commencement of a process of negotiation or compromise.32 Upon acceptance of the repudiation bringing the contract to an end, the contract terminates upon the acceptance, it is not rendered void from the outset.33 Much will depend on the circumstances before an employer is prepared to elect to affirm a contract which is wrongfully repudiated by the employee. For example, in the face of inadequate (or no) notice being given by the employee, it may be in the employer’s interests to affirm the contract to prevent the employee from working for a competitor during the notice period.34 However, in circumstances where the employee has engaged in misconduct justifying summary dismissal, it is unlikely to be in the employer’s interests to allow the employee to continue in the employment giving rise to a risk to serious damage to the employer’s business and reputation. In the converse case where the employer has wrongfully repudiated the contract, the employee can refuse to accept the repudiation and treat the contract as continuing.35 In most cases there is little advantage in an employee’s refusing to accept repudiation because such a refusal does not give the employee a right to sue for unearned wages.36 However, as the Federal Court explained in Turner v Australasian Coal and Shale Employees Federation,37 there may sometimes be other reasons for wanting to keep the contract alive: In these days, however, there may be many reasons other than the seeking of remuneration why either party may wish to keep a contract of employment alive. From the employer’s point of view, there may be a desire to restrain the employee from accepting employment

30

31

32 33 34 35

36

37

Griffith J) at [1256]-[1266] and on appeal in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [290]-[309] (Buchanan J). This position is subject to any remedy of reinstatement or re-employment that may be available to an employee under unfair dismissal legislation. The relevant industrial tribunal will consider whether it was fair for the employer to rely on the employee’s repudiation to elect to terminate the employee’s employment. Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414 at [26]; Whittaker v Unisys Australia Pty Ltd (2010) 192 IR 311 at [39]. The position in the United Kingdom does not appear to be as certain: Bournemouth University Higher Education Corporation v Buckland [2010] ICR 908 at [36]-[44]. Query whether up to the time of the acceptance, the innocent party must be ready, willing and able to perform the contract: Bearingpoint Australasia Pty Ltd v Hillard [2008] VSC 115 (18 April 2008, Habersberger J) at [133]-[134]. See also Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014, Griffith J) at [1256]-[1266] and on appeal in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [290]-[309] (Buchanan J). Norwest Holst Group Administration Ltd v Harrison [1985] ICR 668 at 679. Richmond v Moore Stephens Adelaide Pty Ltd [2015] SASCFC 147 (29 September 2015, Kourakis CJ, Blue and Stanley JJ) at [193]-[209]. Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414 at [24]. As to what will constitute acceptance of the repudiation, see Norwest Holst Group Administration Ltd v Harrison [1985] ICR 668 (Court of Appeal); Bliss v South East Thames Regional Health Authority [1987] ICR 700 (Court of Appeal); compare Boyo v Lambeth London Borough Council [1994] ICR 727 at 743 per Ralph Gibson LJ. Visscher v Giudice (2009) 239 CLR 361 at [54]-[55] per Heydon, Crennan, Kiefel and Bell JJ citing Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435. Compare Rigby v Ferodo Ltd [1988] ICR 29 where the employer reduced wages without agreement of employees. Employees who continued to work were held entitled to recover the deficit over the entire period they worked. Turner v Australasian Coal and Shale Employees Federation (1984) 55 ALR 635 at 648.

Repudiation

which would be in breach of a restraint of trade clause,38 or from acting contrary to some term of the contract which restricts the employee in his or her activities after the end of the employment. From the employee’s point of view, there may be entitlements to annual leave or long service leave or superannuation which depend upon the continuance of employment. As Dixon J said in Watson’s case,39 the employer may be persuaded to take back the employee, in which case the period of employment will be unbroken. An example of a case in which the preservation of the contract of employment was regarded as desirable is Hill v C A Parsons Ltd, above. In that case, the giving of proper notice would have resulted in statutory protection for the employee under an Act of parliament which was proclaimed to come into operation on a date before the expiration of such notice. A court can no longer be concerned simply with the question of whether a wrongfully dismissed employee can recover wages or only damages.

It is clear that the court in Turner endorsed the view taken by Dixon J in Automatic Fire Sprinklers Pty Ltd v Watson40 that an employee cannot refuse to accept the repudiation and claim for unearned wages until such time as the contract is lawfully terminated. The employee’s principle remedy is for damages for wrongful dismissal. Dixon J said: The common understanding of a contract of employment at wages or salary periodically payable is that it is the service that earns the remuneration and even a wrongful discharge from the service means that wages or salary cannot be earned however ready and willing the employee may be to serve and however much he stand by his contract and decline to treat it as discharged by breach.41

[8.50] Where there is a repudiation by the employer after which no service is performed, a right to wages can only exist where salary is, under the terms of the contract of service, independent of any duty to render service. In the ordinary case payment of wages is dependent upon the rendering of service.42 Where the employment is governed by statute or award the application of the common law rule that the right to wages depends upon performance of services may be altered, depending on the proper interpretation of the statute or award.43 As it happened, in Watson the High Court held by majority that the Manpower Regulations, which applied to the contract of employment before the court, had the effect that the employee was entitled to wages until the contract of employment could be terminated properly, even though the employee had not performed any service.44 One suggested reason why an employee wrongly dismissed cannot claim wages after dismissal is that, although the contract between the parties continues until acceptance of the repudiation, the master–servant relationship does not survive.45 Latham CJ in 38 39 40 41 42

43 44 45

See, for example, Thomas Marshall (Exports) Ltd v Guinle [1979] 1 Ch 227; Evening Standard Co Ltd v Henderson [1987] ICR 588 (Court of Appeal). Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 466-467. Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 465; see also at 450-452, 461-462, 476. Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 465; see also Gregory v Philip Morris Ltd (1988) 80 ALR 455. Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 465 per Dixon J; compare Gapes v Commercial Bank of Australia Ltd (1980) 41 FLR 27 criticised in (1980) 54 ALJ 421. For a more detailed discussion, see Chapter 5. See [5.30]. Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435; see at 472 per Dixon J, at 473 per McTiernan J, at 478 per Williams J, contrast at 458-459 per Latham CJ. Gray J has questioned whether a distinction between the employment relationship and the contract of employment can be maintained, or if it has ever existed: Gregory v Philip Morris (1987) 19 IR 258 at 276-278; APESMA v Skilled Engineering Pty Ltd (1994) 54 IR 236 at 242-243. However, the High Court has more recently recognised the existence of the distinction; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 428 per Brennan CJ, Dawson and Toohey JJ; Visscher v Giudice (2009) 239 CLR 361 at [53]-[55] per Heydon, Crennan, Kiefel and Bell JJ. See also Conway-Cook v Town of

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Watson46 and Brightman LJ in Gunton v Richmond-upon-Thames LBC47 took this view. Thus an employee wrongly dismissed does not retain the status of servant and cannot sue in debt for wages the employee has been wrongfully prevented from earning, nor for other benefits, such as a right to occupy a house which was part of the remuneration.48 Obligations not dependent on the existence of the master–servant relationship may survive.49 A simpler explanation of the reason why wages cannot be recovered in the situation under consideration is that the obligation to pay and the obligation to serve are interdependent promises. On this view, because the employee is not required by the employer to carry out the work, the employee cannot claim for wages under the contract. However, the contract itself remains on foot and all other obligations not dependent upon work or payment for services continue. Even on this view, the question arises whether the employer has a statutory obligation to pay the employee award wages (where wages are governed by an award and are not dependent upon the employee performing the work). Essentially, such a view does not rely on the existence of an employment relationship as distinct from the contract of employment. Instead it rests on the continued existence of the contract of employment without the wages and work obligations. The wages–work bargain is discussed in more detail in Chapter 5. In Turner v Australasian Coal and Shale Employees Federation,50 the Federal Court pointed out in the passage quoted above that continuance of the employment contract may be important in determining rights such as annual leave, long service leave and superannuation. Will an employee faced with wrongful dismissal or other repudiation of the contract be in any better position by refusing to accept repudiation? If benefits such as annual and long service leave, superannuation and the like depend on actual service then an employee wrongfully prevented from performing her or his employment will not obtain any advantage by refusing to accept repudiation. In each case this will depend upon the terms of the contract, or the relevant statute or award. For example, under most legislation now governing long service leave, eligibility for the leave is determined by reference to continuous service.51 In the case of superannuation, entitlements will turn on the qualifications set out under the trust deed or the relevant legislation.52 If entitlements depend upon actual service, an employee locked out of the employment will not derive any benefit from refusing to accept repudiation.53 If the employee’s rights depend upon actual service it is only in the exceptional case where equitable remedies are available which allow the employee to return to work54 that refusal to accept the repudiation will be to the employee’s advantage. The injunctive remedy is only available to restrain a continuing breach where the contract of

46 47 48 49 50 51

52 53 54

Kwinana (2001) 108 IR 421 at [29]-[36] as has the Full Court of the Industrial Relations Court of Australia; Capay Holdings Pty Ltd v Slattery (unreported, Wilcox CJ, Moore and Marshall JJ, 11 December 1996); see also Strachan v Liquorland (Aust) Pty Ltd (unreported, Industrial Relations Court of Australia, Moore J, 6 February 1996); Rheinberger v Huxley Marketing Pty Ltd (1996) 67 IR 154 at 161; Metcash Limited v Jardim (No 3) (2010) 273 ALR 407 at [43] and on appeal Jardin v Metcash Ltd (2011) 285 ALR 677 at [84]-[86] (Meagher JA). Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 450-451. Gunton v Richmond-upon-Thames LBC [1981] Ch 448 at 474-475. Ivory v Palmer [1975] ICR 340. Thomas Marshall (Exports) Ltd v Guinle [1979] 1 Ch 227. Turner v Australasian Coal and Shale Employees Federation (1984) 55 ALR 635. There may be room for debate about what is meant by continuous service. Some breaks may be permissible without taking away an entitlement. The matter will be one of interpretation: see, for example, Eyles v Cook (1967) 13 FLR 42. Generally the obligation to make superannuation contributions depends upon the payment of wages. As to how far rights to superannuation and other benefits which have not accrued can be recovered in an action for wrongful dismissal, see Chapter 10. See Chapter 11 for a consideration of injunctions and declarations in the employment context.

Termination by the Employee

employment is continuing. The refusal to accept a repudiation may assist when the employee is seeking a statutory remedy of reinstatement. Where rights do not depend upon rendering of service, but rather on the continued existence of the contract, an employee will usually be better advised (at least initially) to refuse to accept repudiation of the contract. This may give only a temporary advantage as the employer may immediately set about terminating the contract lawfully. An employee who has accepted the repudiation may sue for damages for wrongful dismissal.55 Damages will usually be measured primarily by reference to a period of notice required to lawfully terminate the contract (see [10.100]. Turner gives a striking example of the advantage which flowed to the worker by keeping the contract on foot, even though there was nothing that could be called an employer–employee relationship in existence. The jurisdiction of the Federal Court to entertain Turner’s application to compel the union to accept him as a member depended on the existence of a contract of employment at the time proceedings were instituted.

Employer’s options [8.60] An employer faced with the situation where an employee refuses to accept repudiation can, in cases where there is no wish to retain the services of the employee, set in train procedures necessary to terminate the employment lawfully. This will not fully protect the employer if a claim for reinstatement or unfair dismissal can be made before an industrial tribunal (see [13.50]) or if the employee alleges that the termination was because he or she sought to exercise a workplace right for the purposes of Pt 3-1 of the Fair Work Act 2009 (Cth): see [13.230].

Termination by the Employee [8.70] Just as the employer can lawfully terminate the contract of employment either by the giving of proper notice or without notice by summary termination (where sufficient grounds exist), so too can the employee. The employee may resign by giving notice in accordance with the contract.56 Alternatively, the employee may, in certain circumstances, treat herself or himself as discharged from further performance of the contract, and leave the employment without giving the requisite notice. This course will be justified where the conduct of the employer amounts to a repudiation of the contract, that is, the employer’s breach or proposed breach57 is sufficiently serious to allow the employee to regard herself or himself as discharged from further performance of the contract.

Constructive dismissal [8.80] The phrase “constructive dismissal” is often used to describe the situation in which the acts of an employer bring about the termination of employment even though the final act is the resignation of the employee.58 The resignation must be in response to the repudiation by the employer. If the employee was going to resign in any event, she 55 56

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An employee who does so may be released from obligations under restrictive covenants in the contract: Rock Refrigeration Ltd v Jones [1997] 1 All ER 1. As to termination on notice, see [9.20]. Industrial awards often set out the period of notice an employee is required to give on resignation. If such notice is not given by the employee, the employer may be entitled to withhold money equivalent to the employee’s wages for the notice period: see Australian Workers’ Union v Mason and Cox Foundries (1996) 66 IR 27. Indicating an intention on the part of the employer no longer to be bound by one of the essential terms of the contract: Pawel v Australian Industrial Relations Commission (1999) 94 FCR 231. See recent commentary in P Thai, “Constructive Dismissal: A Re-examination” (2014) 27 AJLL 137. See, for example, Brookton Holdings No V Pty Ltd v Kara Kar Holdings Pty Ltd (1994) 57 IR 288 at 289 where Young J, comparing an employee’s acceptance of a repudiation and constructive dismissal,

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or he cannot claim to have been constructively dismissed.59 The phrase is not a creature of the common law.60 It is one which has its origins in the statutory unfair dismissal jurisdiction in the United Kingdom in which the statutory standard of “dismissal” is taken to include circumstances where the employee is justified in terminating the employment because of the conduct of the employer.61 It has been generally accepted by industrial tribunals that a constructive dismissal is a “dismissal” or a termination at the initiative of the employer for the purposes of their unfair dismissal jurisdiction: see [13.110]. The unfair dismissal provisions in the Fair Work Act 2009 (Cth) contain a more detailed prescription of what constitutes a “dismissal”.62 At common law, the real question is whether the conduct of the employer is such as to repudiate the contract, giving rise to a right in the employee to accept the repudiation as bringing the contract to an end.63 In these circumstances, the constructive dismissal entitles the employee to claim damages for wrongful dismissal: see [10.190]. In Western Excavating (ECC) Ltd v Sharp,64 Lord Denning MR described the basis of constructive dismissal as follows: If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer’s conduct. He is constructively dismissed. The employee is entitled in those circumstances to leave at the instant without giving any notice at all or … he may give notice and say he is leaving at the end of the notice. But the conduct must in either case be sufficiently serious to entitle him to leave at once. Moreover, he must make up his mind soon after the conduct of which he complains: for, if he continues for any length of time without leaving, he will lose his right to treat himself as discharged. He will be regarded as having elected to affirm the contract.

[8.90] This approach has generally been accepted in Australia.65 An employee would be entitled to leave the employment without giving requisite notice where, for example,

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said “I really do not think there is any real difference between those two situations”; compare McCarry, “Constructive Dismissal of Employees in Australia” (1994) 68 ALJ 494; who questions whether such a termination is a dismissal in the normal sense. Ardelle v Spastic Society of Victoria Ltd [2000] FCA 1429 (20 October 2000, Marshall J) at [27]. Cook v CFP Management Pty Ltd (2006) 152 IR 358 at [17]; compare Thomson v Orica Australia Pty Ltd (2002) 116 IR 186 at [141]; Hem v Cant (2007) 159 IR 113 at [20]. The implication of the term as to trust and confidence has its origins in the unfair dismissal jurisdiction in the United Kingdom: see [5.150]. It provided a means by which the industrial tribunals could conclude that there was a dismissal or termination of employment by the employer in circumstances where the employee had been “squeezed out” as a consequence of the conduct of the employer. See Freedland, The Personal Contract of Employment (OUP, 2003), pp 154-168 and the review of cases in Godfrey, “Contracts of Employment: Renaissance of the Implied Term of Trust and Confidence” (2003) 77 ALJ 764 at 764-768 and McCarry, “Damages for Breach of the Employer’s Implied Duty of Trust and Confidence” (1998) 26 ABLR 141 at 143. See [13.100]. Subsection 386(1) provides that a person is dismissed if the employment has been terminated at the employer’s initiative (seeking to preserve the position under the Workplace Relations Act 1996 (Cth) provisions, see Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200) or where the person has resigned, but was forced to because of conduct or a course of conduct engaged in by the employer. The requirement that the termination be at the “initiative of the employer” would seem to encompass a range of circumstances in which the employee resigns that is broader than in response to conduct of the employer which amounts to a repudiation at common law: see [13.110]. Spencer v Dowling (1997) 2 VR 127 at 160 per Hayne JA. Western Excavating (ECC) Ltd v Sharp [1978] QB 761 at 769. See also Pedersen v Camden LBC [1981] ICR 674; Robinson v Crompton Parkinson Ltd [1978] IRLR 61; Woods v WM Car Services (Peterborough) Ltd [1982] ICR 693 at 698-699; Pepper and Hope v Daish [1980] IRLR 13; Sothern v Franks Charlesly and Co [1981] IRLR 278 at 280 where Stephenson LJ put the position succinctly, “Did he trip or was he pushed? Was it murder or was it suicide?” See, for example, Qui v Steyi Nursing Home (1993) 5 VIR 237 at 239; Slifka v J W Sanders Pty Ltd

Termination by the Employee

the employee was ordered to carry out work or employment causing a serious risk of harm,66 or if the employee has been unreasonably and unnecessarily punished,67 or if there has been a fundamental change in the employee’s duties or location of work68 in breach of contract,69 or where there is repeated attempts by the employer to unilaterally vary the terms of employment,70 or the employer fails to pay wages at the relevant statutory minimum,71 or if the employer fails to allow an employee to withdraw a resignation given in a state of emotional upset.72 In the United Kingdom, conduct which strikes at the mutual trust and confidence between employer and employee may be sufficient.73 Thus a false accusation of theft,74 warnings intended to drive out an employee,75 persistent and unwanted amorous advances by an employer to a member of the staff,76 perhaps even abusive language77 may amount to repudiation of the contract by the employer and entitle the employee to leave without notice: see [5.150]. A similar view prevailed in Australia until the High Court in Commonwealth Bank of Australia v Barker concluded that the trust and confidence term is not part of the law in Australia.78 Similar conduct may be caught by other terms implied into the contract of employment, such as the employer’s duty of care (see [6.100]) or the duty to co-operate (see [5.190]).79

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68 69

70 71 72

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74 75 76 77 78 79

(1995) 67 IR 316 at 332; Pawel v Australian Industrial Relations Commission (1999) 94 FCR 231; Easling v Mahoney Insurance Brokers (2001) 78 SASR 489; McDonald v South Australia (2008) 172 IR 256 at [407]-[423] and on appeal South Australia v McDonald (2009) 185 IR 45 at [279]ff; Lennon v South Australia [2010] SASC 272 (2 September 2010, Layton J) at [359]-[367]. Ottoman Bank v Chakarian [1930] AC 277; O’Neil v Armstrong Mitchell & Co [1895] 2 QB 418; Winter v Australian National Hotels Ltd (1995) 60 IR 316. See also Lam v Sancy Fashions Pty Ltd (unreported, Industrial Relations Court of Australia, Ryan J, 19 December 1996) (imposition of a condition that the employee could not meet, although it was held that the condition was reasonable in the circumstances). Edward v Tevelick (1854) 4 E & B 59; 119 ER 23 (employee flogged without reason). See also BBC v Beckett [1983] IRLR 43 (discipline disproportionate to conduct); compare Theedom v British Railways Board [1976] IRLR 250. Hawker Siddely Power Engineering Ltd v Rump [1979] IRLR 425; United Bank Ltd v Akhtar [1989] IRLR 507. Pedersen v Camden LBC [1981] ICR 674 (Court of Appeal); Ford v Milthorn Toleman Ltd [1980] IRLR 249 (Court of Appeal); Brookton Holdings Pty Ltd No V v Kara Kar Holdings Pty Ltd (1994) 57 IR 288; St John of God (Care Services) Ltd v Brooks [1992] ICR 715; Russian v Woolworths (SA) Pty Ltd (1995) 64 IR 169 (and on appeal, Woolworths (SA) Pty Ltd v Russian (1996) 66 IR 13); compare Zubrinich v Pasminco Metals – BHAS Pty Ltd (1994) 61 SAIR 154; Strachan v Liquorland (Australia) Pty Ltd (unreported, Industrial Relations Court of Australia, Moore J, 6 February 1996); Westen v Union Des Assurances de Paris (1996) 88 IR 268. Woods v WM Car Services (Peterborough) Ltd [1981] ICR 666; [1982] ICR 693; Pickering v JRA Ltd (Scheme Administrators Appointed) trading as Austral Denning (1995) 151 QGIG 466 at 471. Reid v Campbell Engravers [1990] ICR 435. Achal v Electrolux Pty Ltd (1993) 50 IR 236 at 239; Kwik-Fit (GB) Ltd v Lineham [1992] ICR 183; Minato v Palmer Corporation Ltd (1995) 63 IR 357; Claric 218 Pty Ltd t/as Sanity Music v Meldrum (1998) 91 IR 296 at 300. To access statutory unfair dismissal rights, an employee who is “squeezed out” by conduct of the employer over a period of time could claim to have been constructively dismissed: Post Office v Roberts [1980] IRLR 347; Woods v WM Car Services (Peterborough) Ltd [1982] ICR 693; Omilaju v Waltham Forest London Borough Council [2005] ICR 481; Linkstaff International Pty Ltd v Roberts (1996) 67 IR 381 at 392; Carrigan v Darwin City Council [1997] IRCA 1 (20 March 1997, von Doussa J); Easling v Mahoney Insurance Brokers (2001) 78 SASR 489. Hem v Cant (2007) 154 IR 113 at [20]; Robinson v Crompton Parkinson Ltd [1978] ICR 401. Walker v Josiah Wedgewood & Sons [1978] ICR 744 at 754; Walker v Northumberland County Council [1995] IRLR 35. Western Excavating (ECC) Ltd v Sharp [1978] ICR 221 at 229 per Lawton LJ. Palmanor Ltd v Cedron [1978] ICR 1008. Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 at [41] per French CJ, Bell and Keane JJ, [109] (Kiefel J) and [115] (Gaegler J). Compare P Thai, “Constructive Dismissal: A Re-examination” (2014) 27 AJLL 137 at 148.

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It is also a constructive dismissal where the employee involuntarily resigns in circumstances where the employer’s request for a resignation is implicitly offered as an alternative to dismissal,80 or an alternative to calling the police in to investigate the employee’s conduct.81 In such cases, the demand for the resignation may amount to termination of the contract of employment by the employer, a termination which requires notice in accordance with the contract. Some Australian cases have been prepared to go so far as to say that where the employee does not freely consent to the termination, the termination is in substance equivalent to a dismissal by the employer.82 However, each case turns on its own facts.83 For example, the resignation may arise as a result of genuine negotiations between the employee and the employer, the result of which is acceptable to the employee.84 There is United Kingdom authority to support the view that the cumulative effect of an employer’s conduct over time may constitute a repudiatory breach, by undermining the necessary trust and confidence in the relationship. Whilst each individual incident, or even the last action in the chain, may not constitute a breach of the implied term, the cumulative series of acts taken together constitutes the repudiatory breach. This has been labelled the “last straw” principle.85 Australian decisions under statutory unfair dismissal provisions seem to recognise the principle, but not necessarily in the same terms.86 Equally, Australian courts have been prepared to consider that a combination of events over time may cumulatively amount to conduct inimical to the continuation of the employment contract.87 80

81 82

83 84 85

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Sheffield v Oxford Controls Co Ltd [1979] ICR 396 at 402; Jones v Mid-Glamorgan County Council [1997] ICR 815; Sandhu v Jan de Rijk Transport Ltd [2007] ICR 1137; Hiser v Hardex Co-operative Ltd (unreported, Supreme Court of New South Wales, Santow J, 14 December 1994); AttorneyGeneral v Western Australian Prison Officers’ Union of Workers (1995) 62 IR 225. See also the useful discussion in Blaikie v SA Superannuation Board (1996) 64 IR 145 at 163-165; Linkstaff International Pty Ltd v Roberts (1996) 67 IR 381 at 388-391; Hem v Cant (2007) 154 IR 113 at [19]; Barghouti v Transfield Pty Ltd (2002) 122 FCR 19 at [16]; compare Spillane v Commonwealth Bank of Australia [2002] QSC 367 (13 November 2002, Atkinson J) at [66]. Allison v Bega Valley Council (1995) 63 IR 68; Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200. Re Michaelis Bayley Trading Co Re Dismissal [1979] AR (NSW) 392 at 393; Smith v DirectorGeneral of School Education (1993) 1 NSWLR 349 at 366; Hiser v Hardex Co-op Ltd (unreported, Supreme Court of New South Wales, Santow J, 14 December 1994). See, for example, the warning issued in Allison v Bega Valley Council (1995) 63 IR 68. Allison v Bega Valley Council (1995) 63 IR 68 at 72-73; Blaikie v SA Superannuation Board (1995) 64 IR 145 at 167. Omilaju v Waltham Forest London Borough Council [2005] ICR 481 at 488-489. See also Royle v Greater Manchester Police Authority [2007] ICR 281. The final act of the employer which brings about the resignation need not have the same quality as the previous acts relied upon as cumulatively amounting to a breach of the implied term as to trust and confidence. However, when taken in conjunction with the earlier conduct, it must contribute something to the breach which is more than trivial: Omilaju v Waltham Forest London Borough Council [2005] ICR 481; GAB Robins (UK) Ltd v Triggs [2007] ICR 1424 at [32] (issue not raised on appeal in GAB Robins (UK) Ltd v Triggs [2008] ICR 529); compare Gibson v Hughes [2006] UKEAT 0371 06 (13 September 2006, McMullin J, Messrs Bleiman and Stanworth) at [19]. There seems to be a reluctance to adopt the “last straw” principle in circumstances where the chain of conduct is that of the employee rather than the employer: Connor v Grundy Television Pty Ltd [2005] VSC 466 at [54]-[59]. Linkstaff International Pty Ltd v Roberts (1996) 67 IR 381 at 392; Carrigan v Darwin City Council [1997] IRCA 1 (20 March 1997, von Doussa J); Easling v Mahoney Insurance Brokers (2001) 78 SASR 489 (see [13.120]). The statutory definition of “dismissal” in the Fair Work Act 2009 (Cth) now specifically includes a forced resignation because of a course of conduct by the employer, see [13.110]. McDonald v South Australia (2008) 172 IR 256 at [407]-[423] and on appeal South Australia v McDonald (2009) 185 IR 45 at [380]-[381], [387]; Lennon v South Australia [2010] SASC 272 (2 September 2010, Layton J) at [629]-[633].

Summary Dismissal

The cases caution against applying authorities without qualification in this area. It should not be assumed that a result achieved under a particular statutory formula can have general application either at common law or under some other statutory regime.88

Summary Dismissal [8.100] Summary dismissal, as its title indicates, is a swift and effective common law remedy available to the employer. It overrides all considerations of due notice and pay in lieu of notice.89 Unless there is a duty imposed by contract,90 statute, award or under public law,91 the employee threatened with summary dismissal has no right to be warned92 that her or his work or conduct is unsatisfactory and may result in dismissal, no right to a hearing prior to dismissal and no right at common law to be given reasons for the dismissal.93 There is, however, some support for the view that the incorporation of a code of disciplinary practice into the contract of employment may be sufficient to impose upon the employer a duty to comply with the rules of natural justice.94 The minimum requirement of these rules is to afford the employee a fair hearing prior to 88 89

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92

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Freedland, The Personal Contract of Employment (OUP, 2003), pp 154-170. For an illustration as to the effect of summary dismissal on other employment benefits such as annual leave, long service leave and severance pay on redundancy, see Maitland Abattoir Pty Ltd v Adams (1987) 23 IR 49; (issue not considered on appeal, see (1988) 26 IR 374). See, for example, Gunton v Richmond-upon-Thames LBC [1981] Ch 448; Tomlinson v London, Midland and Scottish Ry Co [1944] 1 All ER 537; Jones v Lee [1980] ICR 310; West Midlands Cooperative Society Ltd v Tipton [1986] 2 WLR 306 at 308; Tucker v Pipeline Authority (1981) 3 IR 120. Compare the situation where the conduct of the employee is said to have repudiated the contract. Arguably, the employer would not be required to adhere to procedures expressly provided for, or the giving of a period of notice in which the employee is to respond to the allegation: Bednall v Wesley College [2005] WASC 101 (24 May 2005, Newnes M) at [23]-[27], [31]. Any such duty would need to be expressly stated: Waddell v Mathematics.com.au Pty Ltd [2013] NSWSC 142 (1 March 2013, Rothman J) at [92]. Re Railway Appeal Board: Ex parte Western Australian Government Railways Commission (1999) 92 IR 70; Jarratt v Commissioner of Police for New South Wales (2005) 224 CLR 45. See Carabetta, “Going, Going … Gone? The Demise of the Dismissal at Pleasure Doctrine in Public Sector Employment” (2006) 19 AJLL 283. Contrast the position in New Zealand discussed in Hughes, “The Duty to Warn” [1986] NZLJ 366. The recognition in the United Kingdom of an implied term which requires the employer not to act in a manner which is calculated or likely to destroy or seriously damage the relationship of trust and confidence between the employer and employee does not provide a basis to conclude that such a warning should be given (see [5.150]); it would seem not: Johnson (AP) v Unisys Ltd [2003] 1 AC 518; Aldersea v Public Transport Corporation (2001) 183 ALR 545. Ridge v Baldwin [1964] AC 40 at 65 per Lord Reid; McLory v Post Office [1992] ICR 758; R v East Berkshire Health Authority; Ex parte Walsh [1984] 3 WLR 818; Thorpe v South Australian National Football League (1974) 10 SASR 17 at 35; Brophy v Mapstone (1984) 56 ALR 135; Spillane v Commonwealth Bank of Australia [2002] QSC 367 (13 November 2002, Atkinson J); Intico (Vic) Pty Ltd v Walmsley [2004] VSCA 90 (21 May 2004, Ormiston, Buchanan and Eames JJA) and see Freedland, The Contract of Employment (OUP, 1976), pp 219-227. But see Tullner v Alston (1987) 22 IR 326 at 330, a case where the employment was terminated by sale of the business, where Fox J said that there may be a duty to give an employee an opportunity to explain alleged misconduct when the right to superannuation was in jeopardy. See Stevenson v United Road Transport Union [1977] ICR 893 at 902; R v British Broadcasting Corp; Ex parte Lavelle [1983] 1 WLR 23; Tullner v Alston (1987) 22 IR 326 at 330 per Fox J; Australasian Transport Officers Association v Department of Motor Transport (1988) 25 IR 235 at 242; compare Gunton v Richmond-upon-Thames LBC [1981] Ch 448; R v East Berkshire Health Authority; Ex parte Walsh [1984] 3 WLR 818; R v Secretary of State for the Home Department; Ex parte Benwell [1984] 3 WLR 843, commented upon in (1985) 44 CLJ 177; Ewing and Grubb, “The Emergence of A New Labour Injunction” (1987) 16 ILJ 145. If the power to dismiss is unconditional there will be no right to be afforded a hearing prior to dismissal: Brophy v Mapstone (1984) 56 ALR 135 distinguishing Stevenson v United Road Transport Union [1977] 2 All ER 941. A failure to comply with the rules imposed by the contract leaves the employer exposed to the possibility of injunctive relief to prevent a dismissal proceeding in the face of the shortfall in procedure: Paras v Public Service

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dismissal.95 There is no clear authority in Australia following this extension of what have been considered public law duties to the ordinary contract of employment.96 In fact, authority, at the highest level, suggests the contrary.97 Following the House of Lords decision in Johnson (AP) v Unisys Ltd,98 it would seem that, even as recognised in the United Kingdom, the implied term as to trust and confidence does not assist.99 Following the High Court decision in Commonwealth Bank of Australia v Barker,100 it remains to be resolved as to whether a general obligation of good faith or the general duty of co-operation may be relied upon to support any such obligation. Such a conclusion is unlikely.101 See [5.170], [5.190]. As will be seen in Chapter 13 a failure to warn, afford a hearing prior to dismissal, or give reasons for dismissal may provide the basis of a claim for reinstatement before industrial tribunals on the basis that such omissions, although lawful, are “unfair”, or may be contrary to legislation.102

Requirements for summary dismissal [8.110] At common law the critical elements necessary for the exercise of the remedy of summary dismissal were summed up by Smithers and Evatt JJ in their joint judgment in North v Television Corp Ltd103 as follows: For purposes of the application of the common law principles to the facts of this case, the remarks of the Master of the Rolls in Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285 at 287 and 289 are in point. He said: “… since a contract of service is but an example of contracts in general, so that the general law of contract will be applicable, it follows that, if summary dismissal is claimed to be justifiable, the question must be whether the conduct complained of is

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Body Head of the Department of Infrastructure (2006) 152 IR 75 at [36]-[40]; McAleer v The University of Western Australia (2007) 159 IR 96. A contractual provision allowing the employer to dismiss an employee if, in the “reasonable opinion” of the Board, the employee is guilty of misconduct or dishonesty, may import an obligation to afford natural justice: EFG Australia Ltd v Kennedy [1999] NSWSC 922 (9 September 1999, Hodgson CJ in Eq) at [57]. Alternatively, it may require that the opinion be reasonably held: Bartlett v Australia and New Zealand Banking Group Ltd [2016] NSWCA 30 (7 March 2016, Macfarlan, Meagher and Simpson JJA) at [39]-[49] (Macfarlan JA), [98] (Meagher JA, agreeing) and [108] (Simpson JA agreeing); compare the decision at first instance: Bartlett v ANZ Banking Group Limited [2014] NSWSC 1662; (2014) 246 IR 190 at [138]-[143]. The existence of an internal right of appeal would go some way towards satisfying any such requirement: Baker v University of Ballarat (2005) 225 ALR 218 at [22]-[24]. But see Tullner v Alston (1987) 22 IR 326 at 330 per Fox J, requiring an employer to afford a hearing to the employee, the manageress of a tourist resort, before terminating the contract. Fox J said: “Such a requirement is not common in employer–employee situations and there may be doubt whether it is contractual in nature, or one of positive law.” Note also, Australasian Transport Officers Association v Department of Motor Transport (1988) 25 IR 235 at 242 per Macken J (Industrial Court of NSW). Sanders v Snell (1998) 196 CLR 329 at [54]-[58] per Callinan J (and whilst not expressly dealt with, it is implicit from [16]-[19] that the majority judges were not prepared to consider the importation of such term); see also Smith v The Christchurch Press Co Ltd [2001] 1 NZLR 407 at [29]; Board of Trustees of Marlborough Girls’ College v Sutherland [1999] 2 ERNZ 611 at [13]-[14]. Johnson (AP) v Unisys Ltd [2003] 1 AC 518. See [5.150]. Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 at [41] per French CJ, Bell and Keane JJ, [109] (Kiefel J) and [115] (Gaegler J). Aldersea v Public Transport Corporation (2001) 183 ALR 545 at [77]-[90] per Ashley J; Gramotnev v Queensland University of Technology [2015] QCA 127 (10 July 2015, McMurdo P, Holmes JA and Jackson J) at [157]-[172]. For example, under the Fair Work Act 2009 (Cth), s 387(b), (c) a dismissal may be harsh, unjust or unreasonable if the employer terminates an employee’s employment without first notifying the employee of the reason and, if the reason is related to the capacity or conduct of the employee, without giving the employee an opportunity to respond to the reason. North v Television Corp Ltd (1976) 11 ALR 599 at 609.

Summary Dismissal

such as to show the servant to have disregarded the essential conditions of the contract of service … I … think … that one act of disobedience or misconduct can justify dismissal only if it is of a nature which goes to show (in effect) that the servant is repudiating the contract, or one of its essential conditions; and … therefore … the disobedience must at least have the quality that it is ‘wilful’; it does (in other words) connote a deliberate flouting of the essential contractual conditions.” “… Until the terms of the contract are known and identified it is impossible to say whether or not any particular conduct is in breach thereof or is a breach of such gravity or importance as to indicate a rejection or repudiation of the contract.” “One cannot begin the inquiry without ascertaining what work … the employee was employed and had undertaken to perform. It is also necessary to ascertain what particular obligations the parties had agreed upon as important or even vital.”

Freedland points out in The Contract of Employment104 that this statement of principle combines two independent grounds allowed for terminating a contract: The right to rescind a contract for breach of condition arises by reason of a failure of performance which has occurred in the past, provided that the failure is of sufficient gravity or relates to a sufficiently major term of the contract. The right to rescind a contract in response to repudiation arises, not so much by reason of a failure of performance in the past, as by reason of the manifesting of an intention not to perform contractual obligations in the future.105 (Emphasis added.)

Simply stated, the lawful exercise of the power to summarily dismiss depends upon first, determining whether there has been a breach by the employee of the express or implied terms of the contract or a demonstrated intention not to be bound by those terms and, secondly, an assessment of whether the breach is sufficiently serious to allow summary termination of the contract.106 This type of combined approach is also to be found in the test adopted in Blyth Chemicals v Bushnell,107 where it was said: Conduct which in respect of important matters is incompatible with the fulfilment of an employee’s duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal … But the conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not sufficient that ground for uneasiness as to its future conduct arises.108

Freedland says of this test: “it enables the courts to consider the importance of the breach of contract in the context of the relationship as a whole.”109 104 105

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Freedland, The Contract of Employment (OUP, 1976), p 217. Freedland, The Contract of Employment (OUP, 1976), p 208. A submission to the effect that the right to terminate for misconduct was confined only to the situation in which the employee’s conduct manifested an intention not to perform contractual obligations in the future (the second of the two grounds to which Freedland refers) was rejected by Gillard J in the Supreme Court of Victoria in Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [251]-[253]. Bruce v AWB Ltd (2000) 100 IR 129 at [15]. Blyth Chemicals v Bushnell (1933) 49 CLR 66. See also North v Television Corp Ltd (1976) 11 ALR 599 at 608-609. Recent examples of the application of the test can be found in Randall v Aristocrat Leisure Ltd [2004] NSWSC 411 (8 June 2004, Einstein J) at [443]-[452]; Connor v Grundy Television Limited [2005] VSC 466 (30 November 2005, Osborn J); Taske v Occupational and Medical Innovations Ltd (2007) 167 IR 298 at [52]-[56]. Blyth Chemicals v Bushnell (1933) 49 CLR 66 at 81-82 per Dixon and McTiernan JJ. Freedland, The Contract of Employment (1976), pp 215-216. As to the quality of the relevant conduct, see Freedland, The Personal Contract of Employment (2003), pp 322-329.

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Although readers will frequently discern this combined approach in the cases, the distinction between a right to bring the contract to an end because of breach of a condition in the past, and a right to terminate by reason of a repudiation of the contract will rarely be significant. A sufficiently serious breach of the contract may at the same time indicate an intention not to be bound by the contract in the future, for example, where there is a refusal to perform contractual obligations.110

[8.120] Query whether there is an alternative basis upon which an employee may be dismissed summarily from the employment, other than for having engaged in conduct which constitutes a breach of the requisite gravity, or conduct which evinces an intention no longer to be bound by the contract. In Commonwealth Bank of Australia v Barker,111 Justice Kiefel distinguished the trust and confidence referred to in the above passage from Blyth Chemicals, and that which was said to be the subject of the implied term before the court for determination (see [5.160]). Her Honour continued (referring to Blyth Chemicals): The duty of trust and confidence of which these cases speak is not some abstract concept. It refers to conduct, on the part of an employee, which is contrary to the interests of the employer and serious enough to have the effect that the employer could not reasonably be expected to have confidence in the employee. The duty reflects an essential aspect of the relationship between employer and employee. While trust and confidence is maintained, the relationship endures. In that sense, the employee’s duty may be said to be directed to the maintenance of the relationship. Yet the law recognises that, where a point of no confidence is reached, it would be intolerable for the employer to continue with the relationship. In such a circumstance, termination of the employment is justified.112

One suspects that her Honour did not intend to establish a ground for summary dismissal, short of having engaged in conduct which constitutes a breach of the requisite gravity, or conduct which evinces an intention no longer to be bound by the contract. Rather, it was merely being emphasised that it is sufficient if, by reason of such conduct, the employer loses all trust and confidence in the employee. However, given the importance of the High Court decision in Commonwealth Bank of Australia v Barker, the question of whether there is room for the development of an independent ground justifying summary dismissal based upon the employer’s loss of trust and confidence in the employee awaits further judicial determination.113 Putting any such development of the law to one side, whilst the principle may be simply stated, no rule of law defines the degree of misconduct which would justify 110 111 112 113

See Turner v Australasian Coal and Shale Employees Federation (1984) 6 FCR 177; 55 ALR 635 for a clear illustration of repudiation – employer withdraws employment offer before commencement. Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 at [41] per French CJ, Bell and Keane JJ, [109] (Kiefel J) and [115] (Gaegler J). Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 at [66] (Kiefel J). See, for example, Melbourne Stadiums Ltd v Sautner (2015) 317 ALR 665 at [43], [62], [87] per Tracey, Gilmour, Jagot and Beach JJ; Hansen v Mt Martha Community Learning Centre Inc [2015] FCA 1099 (15 October 2015, Jessup J) at [125]-[127]. In Bartlett v ANZ Banking Group Ltd [2014] NSWSC 1662; (2014) 246 IR 190, the employer was conferred with the express right to terminate the employment upon reaching the opinion that the employee had engaged in serious misconduct, serious neglect of duty or serious breach of any of the terms of the contract: at [131]-[137]. At first instance, the exercise of that right was found not to be qualified by a requirement that the opinion be reasonably held, correct, formed in good faith or with proper regard for the employee’s interests and not in a way which was capricious, arbitrary or unreasonable: at [138]-[143]. On appeal, the exercise of the right was found to be qualified by a requirement that the opinion be reasonably held in the Wednesbury Corporation sense: Bartlett v Australia and New Zealand Banking Group Ltd [2016] NSWCA 30 (7 March 2016, Macfarlan, Meagher and Simpson JJA) at [39]-[49] (Macfarlan JA), [98] (Meagher JA, agreeing) and [108] (Simpson JA agreeing). As to the meaning of Wednesbury Corporation reasonableness, see Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 229-230.

Summary Dismissal

summary dismissal without notice.114 This is a matter which turns on the facts and circumstances of each case. Suffice to say, a very high threshold must be reached. The inquiry focuses on the nature of the conduct, not what ought to have been done to ensure that the employer could summarily dismiss the employee, or whether it was open to the employer to take some other action short of dismissal.115 In Concut Pty Ltd v Worrell,116 Kirby J said follows: It is, however, only in exceptional circumstances that an ordinary employer is entitled at common law to dismiss an employee summarily. Whatever the position may be in relation to isolated acts of negligence, incompetence or unsuitability, it cannot be disputed (statute or express contractual provision aside) that acts of dishonesty or similar conduct destructive of the mutual trust between the employer and employee once discovered, ordinarily fall within the class of conduct which, without more, authorises summary dismissal. Exceptions to this general position may exist for typical breaches of the express or implied terms of the contract of employment. Other exceptions may arise where the breaches are ancient in time and where they may have been waived in the past, although known to the employer … the establishment of important, relevant instances of misconduct, such as dishonesty on the part of an employee … will normally afford legal justification for summary dismissal. Such a case will be classified as amounting to a relevant repudiation or renunciation by the employee of the employment contract, thus warranting summary dismissal.

However, in Rankin v Marine Power International Pty Ltd,117 Gillard J suggests that the authorities (in particular Blyth Chemicals Ltd v Bushnell118) do not support the proposition that summary dismissal is available only in exceptional circumstances. His Honour recognised that summary dismissal will have a detrimental effect on the employee’s reputation and may be a very traumatic event, referring to Johnson (AP) v Unisys Ltd.119 His Honour then goes on to summarise the law as follows: The authorities do establish that the employee’s breach of contract of employment must be of a serious nature, involving a repudiation of the essential obligations under the contract or actual conduct which is repugnant to the relationship of employer employee, before an employer may terminate the contract summarily. Isolated conduct usually would not suffice. Each case must be considered in the light of its particular circumstances, but nevertheless, the seriousness of the act of termination and the effect of summary dismissal are factors which place a heavy burden on the employer to justify dismissal without notice. The circumstances do not have to be exceptional, but nevertheless, must establish that the breach was of a serious nature.120

The onus of proof rests upon the employer to establish that it had the right to terminate the employment without proper notice.121 114

115 116 117 118 119 120 121

Clouston & Co v Corry [1906] AC 122 at 129; North v Television Corp Ltd (1976) 11 ALR 599 at 608-609 (such that by standards of fairness and justice, the employer should not be bound to continue the employment); Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [240]. Melbourne Stadiums Ltd v Sautner (2015) 317 ALR 665 at [19] per Tracey, Gilmour, Jagot and Beach JJ. Concut Pty Ltd v Worrell (2000) 75 ALJR 312 at [51]. Rankin v Marine Power International Pty Ltd (2001) 107 IR 117. Blyth ChemicalsLtd v Bushnell (1933) 49 CLR 66. Johnson (AP) v Unisys Ltd [2003] 1 AC 518 at [77] per Lord Millett. Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [250]. Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 67 at 83; Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [243]; Bartlett v Australia and New Zealand Banking Group Ltd [2016] NSWCA 30 (7 March 2016, Macfarlan, Meagher and Simpson JJA) at [39]-[49] (Macfarlan JA), [98] (Meagher JA, agreeing) and [108] (Simpson JA agreeing) (compare the decision at first instance: Bartlett v ANZ Banking Group Limited [2014] NSWSC 1662; (2014) 246 IR 190 at [138]-[143]); CFMEU v Anglo Coal (Dawson Services) Pty Ltd [2015] FCAFC 157 (5 November 2015, Jessup,

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After acquired knowledge [8.130] It is a well-established principle of contract law that a party who fails to observe the terms of the contract is able to rely upon an earlier breach by the other party to excuse it from performance as from the time of the other side’s breach, whether it was aware of the breach or not when it failed to observe the terms of the contract itself.122 Thus an employer can justify a dismissal at common law by reference to any ground that was valid at the time of the dismissal, even though the ground actually relied on at the time is later found to be without substance.123 The principle does not operate to permit an employer to rely upon such conduct to justify dismissal, if the contract has been terminated lawfully beforehand.124 This means that an employer cannot avoid the consequences of a lawful termination of the contract by seeking to rely upon conduct unknown at the time of the lawful termination. This will be important, for example, where the employer lawfully terminates the employment by making a payment in lieu of notice and later discovers that, unbeknown to it, there were grounds available to it to summarily dismiss the employee without making the payment in lieu of notice. The principle does not operate to permit it to recover the payment it has made.125 However, the situation will be different if the employer terminates the employment without giving notice or pay in lieu in accordance with the contract, and while negotiating agreement on a payment discovers that there were grounds for summary dismissal which, unknown to it, existed at the time it terminated the contract.126

Grounds for summary dismissal [8.140] Misconduct is the usual (but not exclusive) ground for summary dismissal. Misconduct connotes positive and intentional wrongdoing whereas other grounds for dismissal, such as incompetence and neglect, do not involve intentional misconduct. Wilful refusal to comply with lawful orders has been regarded as establishing an independent ground for dismissal on the basis that misconduct concerns positive actions rather than a refusal to carry out duties. No importance attaches to any distinction between various types of misconduct as in each instance summary dismissal

122 123

124 125

126

Buchanan and Rangiah JJ) at [41] per Jessup J. As to the required level of satisfaction that the conduct justified dismissal, see Connor v Grundy Television Limited [2005] VSC 466 (30 November 2005, Osborn J) at [63]-[64]. See also Randall v Aristocrat Leisure Ltd [2004] NSWSC 411 (8 June 2004, Einstein J) at [451]; Taske v Occupational and Medical Innovations Ltd (2007) 167 IR 298 at [53]. The seriousness of the allegation warrants satisfaction by evidence of sufficient weight in the sense identified in Briginshaw v Briginshaw (1938) 60 CLR 336: Connor v Grundy Television Limited [2005] VSC 466 (30 November 2005, Osborn J) at [63]; Serventi v John Holland Group Pty Ltd [2006] FCA 1049 (11 August 2006, Madgwick J) at [9]; Carter v The Dennis Family Corporation [2010] VSC 406 (9 September 2010, Habersberger J) at [44]-[47]. Shepherd v Felt and Textiles Australia Pty Ltd (1931) 45 CLR 359 at 377-378 (Dixon J). Boston Deep Sea Fishing & Ice Co v Ansell (1888) 39 Ch D 339; Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359; Sunbird Plaza v Maloney (1988) 166 CLR 245 at 262 per Mason CJ, 278-280 (Gaudron J); Lane v Arrowcrest Group Pty Ltd (1990) 27 FCR 427; Lane v Fasciale (1995) 5 VIR 508; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 430 per Brennan CJ, Deane and Dawson JJ, and 467 per McHugh and Gummow JJ; Concut Pty Ltd v Worrell (2000) 75 ALJR 312 at [27]-[29] per Gleeson CJ, Gaudron and Gummow J and [51] (Kirby J). Melbourne Stadiums Ltd v Sautner (2015) 317 ALR 665 at [97], [116] per Tracey, Gilmour, Jagot and Beach JJ. Cavenagh v William Evans Ltd [2013] 1 WLR 238 at [39] per Mummery LJ; Hodgson v Amcor (2012) 264 FLR 1 at [1612]-[1617]; compare the outcome in Melbourne Stadiums Ltd v Sautner (2015) 317 ALR 665 at [132], [135] per Tracey, Gilmour, Jagot and Beach JJ, where it was found that, on the terms of the contract under consideration, the termination did not take effect until the actual payment in lieu was made. The employer was able to rely upon the conduct unknown at the time of the termination, but which became known before the payment was made. Because the payment had not been made, the contract had not yet terminated. Melbourne Stadiums Ltd v Sautner (2015) 317 ALR 665 at [197] (White J).

Summary Dismissal

will only be justified if it is a sufficiently serious breach of contract or such as to indicate that the employee no longer intends to be bound by the contract.

Incompetence [8.150] Incompetence of an employee may be sufficient justification for the exercise of the right of summary dismissal: supposing that, when the skill and competency of the party employed are tested by the employment, he is found to be utterly incompetent, is the employer bound nevertheless to go on employing him to the end of the term for which he is engaged notwithstanding his incompetency? … it seems very unreasonable that an employer should be compelled to go on employing a man who, having represented himself competent, turns out to be incompetent … Misconduct in a servant is, according to every day’s experience, a justification of a discharge. The failure to afford the requisite skill which had been expressly or impliedly promised, is a breach of legal duty, and therefore misconduct.127

In each instance the basis upon which the employer is entitled to summarily dismiss an employee is twofold – an express or implied representation by the employee of competence to do the job and, secondly, actual incompetence. Representation of competence [8.160] The employee must represent either expressly or by implication that she or he has the requisite skills. A representation may be implied from the fact that an employee applies for employment in answer to an advertisement setting out the required skills. An employee has the onus of ascertaining the skills required for the job for which application is made. Acceptance of employment will, unless there is evidence to the contrary, amount to an implied representation the employee has the necessary skills: When a skilled labourer, artisan or artist is employed, there is on his part an implied warranty that he is of skill reasonably competent to the task he undertakes … The public profession of an art is representation and undertaking to all the world that the professor possesses the requisite skill and ability.128

There will be no misrepresentation where the employer knows that the employee does not possess the requisite skills. This may be evidenced by statements made by the employee at the time of application, or where the employment record reveals that the employee is not appropriately qualified, or where the employer has transferred an employee from a position in which the employee is skilled into one in which she or he is not, or by the employer’s personnel officer failing to ascertain accurately the exact qualifications required for the position. Illustrative is the case Printing Industry Employees Union of Australia v Jackson and O’Sullivan Pty Ltd.129 An employee applying for a job told the employer that by trade he was a lithographic plate maker. He was asked whether he had ever done any etching and he replied that he had done a little but it was some time ago. The personnel officer then asked the employee, Jones, whether he would “give it a go”. Jones agreed and was employed as dot etcher. Jones did not have sufficient skill to carry out competently that job and was summarily dismissed. The Commonwealth Industrial Court held that Jones had been wrongfully dismissed, that upon the evidence “a warranty that he had 127 128 129

Harmer v Cornelius (1858) 5 CB (NS) 236; 141 ER 94 at 246-247 CB (NS), 98 ER. Harmer v Cornelius (1858) 5 CB (NS) 236; 141 ER 94 at 246 CB (NS), 98 ER. Printing Industry Employees Union of Australia v Jackson and O’Sullivan Pty Ltd (1957) 1 FLR 175; see also, eg, Geros v Mitcham Automatics Vic Pty Ltd (unreported, Industrial Relations Court of Australia, Millane JR, 10 November 1995); compare Kiel v Curwen-Walker (unreported, Industrial Relations Court of Australia, Millane JR, 27 October 1994); and Lee v Goldsmith (unreported, Industrial Relations Court of Australia, Ryan JR, 22 December 1994) (representation as to ability and willingness to obtain a car and a driver’s licence).

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requisite skill and ability should not be implied … It must have been apparent that there was some risk that he might prove to be without the necessary skill and ability. This was a risk the employer was prepared to take and did take.”130 Dunphy J added that: It would seem that the employer’s right of summary dismissal for inefficiency arises: (a) If an employee possessing a particular skill fails or neglects to exercise it; (b) If an employee holds himself out as possessing a particular skill which he does not in fact possess … Jones was not and never pretended to be a skilled worker qua dot etcher, nor does he appear to have sought employment as such … The fact that Jones was a skilled tradesman qua lithographic plate maker does not make him an employee possessing a particular skill under heading (a) above. He could only have been summarily dismissed thereunder if he was in fact a dot etcher and had been employed as such and had failed or neglected to exercise the skill required of a competent tradesman … In the state of the evidence this is not a case of a person who expressly or impliedly represents himself as possessing a particular skill. On the contrary Jones on his own testimony appears to have made a full disclosure of his lack of competence and despite this frankness he was not only engaged as a dot etcher but was continued in this employment for seven weeks despite numerous errors and comparatively costly mistakes and was sent by his employer to the premises of a competitor in the trade to continue working as a dot etcher. In these circumstances the respondent employer was not at any time under any misapprehension as to the lack of capacity of the employee and certainly not induced to enter into the contract as a result of any express or implied “holding out” on the part of the employee. In the Cromwellian phrase the employer took the employee into his service “warts and all” and took more than seven weeks to finally determine that he had made a bad bargain.131

Unskilled employees

[8.170] The unskilled employee by the very nature of the employment does not represent that she or he is skilled; it is therefore difficult to show incompetence sufficient to ground summary dismissal, thus: If there is no general and no particular representation of ability and skill, the workman undertakes no responsibility. If a gentleman, for example, should employ a man who is known to have never done anything but sweep a crossing, to clean or mend his watch, the employer probably would be held to have incurred all risks himself.132

But even the unskilled employee has a duty to act carefully in carrying out the employment.133 Although failure to act with due care might not justify summary dismissal, it may lead to liability in tort to pay compensation to the employer for damage to the employer’s property134 or to a person injured as a result of the employee’s incompetence. Standard of skill

[8.180] Where there is an express or implied representation as to skill, then the employee must live up to the standard of skill represented. “If a person deliberately agrees to allow a blacksmith to mend his watch, it may well be said that he agrees to 130 131 132 133 134

Printing Industry Employees Union of Australia v Jackson and O’Sullivan Pty Ltd (1957) 1 FLR 175 at 178 per Spicer CJ. Printing Industry Employees Union of Australia v Jackson and O’Sullivan Pty Ltd (1957) 1 FLR 175 at 180-181 per Dunphy J. Harmer v Cornelius (1858) 5 CB (NS) 236; 141 ER 94 at 246 CB (NS), 98 ER. Lister v Romford Ice & Cold Storage Co [1957] AC 555. Janata Bank v Ahmed [1981] ICR 791 (CA); Rowell v Alexander Mackie College of Advanced Education (1988) 25 IR 87 (CA, NSW); as to statutory modifications to these rules and rights of indemnity, see [5.350], [5.460].

Summary Dismissal

accept a low standard of skill. But even in such a case, the blacksmith is bound to act sensibly, though he is not subject to the responsibilities of a skilled watchmaker.”135 Where there are no special circumstances the standard of care and skill warranted by the employee is determined by reference to the reasonably skilled member of that trade. Incompetence will generally be established by demonstrating that the employee does not have the degree of skill required for the job in respect of which she or he is employed. A single act of inefficiency is unlikely to establish incompetency136 unless it poses a grave threat to the safety of others137 or is gross.138

Wilful disobedience of lawful orders [8.190] Wilful disobedience of lawful orders may constitute grounds for summary

dismissal.139 The disobedience must strike at the essence of the contract of employment; it must be inconsistent with the continuing relationship of master and servant: it is necessary to determine having ascertained what the contract was between the parties, (1) whether the order disobeyed by the employee was one within the terms or scope of the contract, and, if so, (2) whether, applying the principles laid down in the cases … “the conduct of the party who has broken the contract is such that the other party is entitled to conclude that the party breaking the contract no longer intends to be bound by its provisions”, or … “whether his conduct was inconsistent with the maintenance of the relation created”.140

Lawfulness of the order [8.200] Whether the order is within the scope of the contract is determined by reference to the nature of the work the employee was engaged to do, the express and implied terms of the contract and the customs of the industry. Summary dismissal of a skilled employee for refusal to carry out non-skilled tasks would not normally be justified. In Price v Mouat,141 an employee engaged as a lace buyer was held entitled to refuse to wind lace on cards; an employee engaged as sub-editor of a newspaper cannot be required to do work at a lower grade.142 Evidence of custom may be adduced to show that a particular task is or is not customarily performed by an employee in a particular category. For example, in Queensland in the 1880s there was no custom that a cook should do dairy work.143 Refusal to obey a lawful order may be a preliminary step to industrial or strike action by employees or summary or constructive dismissal by the employer. Refusal to obey lawful orders often forms that critical first step upon which the validity of subsequent conduct clearly depends. For example, if employees fail to work as directed and the employer refuses to allow work to continue, the employees’ rights to remuneration depend on determining whether the initial direction was lawful: see [5.410]. A claim of constructive dismissal (see [8.80]) may depend upon whether an employer could lawfully direct an employee to work at another depot: see [5.500] and 135 136 137 138 139 140

141 142 143

Insurance Commissioner v Joyce (1949) 77 CLR 39 at 46. Williams v Printers Trade Services (1984) 7 IR 82 (proceedings for dismissal in breach of an award). Federated Engine Drivers and Firemen’s Association v BHP Co Ltd (1967) AILR 109. Baster v London and County Printing Works [1899] 1 QB 901. Adami v Maison De Luxe Ltd (1924) 35 CLR 143. Hacksall’s Ltd v McDowell [1930] AR (NSW) 620 at 629 per Cantor J; see also Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 1 WLR 698 at 700 per Lord Evershed MR; or Pastry Cooks Employees, Biscuit Makers Employees and Flour and Sugar Goods Workers Union (NSW) v Gartrell White (No 3) (1990) 35 IR 70 at 74. Price v Mouat (1862) 11 CB (NS) 508; 142 ER 895. McCarthy v Windeyer (1925) 26 SR (NSW) 29. Mackie v Wienholt (1880) 5 Qld SCR 211, and see also, Hacksall’s Ltd v McDowell [1930] AR (NSW) 620.

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[9.360]. The introduction of new technology in the workplace also raises the issue of how far an employer is entitled to insist that employees adapt existing work practices to accommodate these changes. The courts have generally adopted a technical approach to these issues by asking whether at the outset it was contemplated by the parties under the contract that there may be changes relating to how the work was to be performed. It is then an easy step to say that such changes to work functions form an implied term in the contract.144 A much more pragmatic approach was adopted in Cresswell v Board of Inland Revenue.145 There the Board of Inland Revenue required staff to operate a new computer system to facilitate work. The plaintiffs refused to operate the new equipment arguing that it constituted a breach of their employment contracts to introduce the new system without their agreement. Walton J held that employees are not entitled to preserve their working obligations completely unchanged from the time they first started work. Provided that the nature of the job has not fundamentally changed the employee cannot object if instead of using paper and pens she or he is now required to use a computer. Walton J said: there can really be no doubt … that an employee is expected to adapt himself to new methods and techniques introduced in the course of his employment … Of course, in a proper case the employer must provide any necessary training or retraining … it will, in all cases, be a question of pure fact whether the retraining involved the acquisition of such esoteric skills that it would not be reasonable to expect the employee to acquire them.146

Walton J concluded by answering in the negative the following question: “is it possible to maintain that the job of clerical assistant and tax officer remains the same, or have those jobs suffered a sea of change into something rich and strange?”147 Dismissal for refusal to obey a lawful order will only be justified if the refusal repudiates the contract or is a sufficiently serious breach of contract to allow the employer to discharge the contract by summarily dismissing the employee. Reasonableness of the order

[8.210] In Australia the order given must not only be lawful, but it must also be

reasonable.148 Caution should be exercised in citing older authorities for anything more than matters of principle. The assessment of what might be reasonable will be influenced by the prevailing standards at the time and the circumstances of the particular case. The Full Court of the Federal Court held that a direction to a Telecom employee not to wear a caftan whilst on duty was both lawful and reasonable.149 A direction that there be staggered smoko and meal breaks was similarly held to be a lawful and reasonable order.150 In Lane v Fasciale a direction to a school principal not to publicly speak out against a decision to close the school was held to be a lawful and reasonable order.151 In Australian Tramways’ Employees Association v Brisbane Tramways Co 144

145 146 147 148

149 150 151

See [5.510] and [9.370]. Note the criticism by Davies and Freedland, Labour Law, Text and Materials (2nd ed, OUP, 1984), pp 298-299 that this strict legal approach does not acknowledge the dynamic, evolving nature of employment practice and that greater flexibility is required to deal with the issues effectively. Cresswell v Board of Inland Revenue [1984] 2 All ER 713. Cresswell v Board of Inland Revenue [1984] 2 All ER 713 at 721. Cresswell v Board of Inland Revenue [1984] 2 All ER 713 at 721. R v Darling Island Stevedoring & Lighterage Co Ltd; Ex parte Halliday and Sullivan (1938) 60 CLR 601 at 621-622; AWU (NSW Branch) v Grain Handling Authority of NSW (1988) 22 IR 447; Izdes v L G Bennett & Co Pty Ltd (1995) 61 IR 439; McManus v Scott-Charlton (1996) 70 FCR 16. Australian Telecommunications Commission v Hart (1982) 65 FLR 41. AWU (NSW Branch) v Grain Handling Authority of NSW (1988) 22 IR 447. Lane v Fasciale (1993) 5 VIR 508. This is despite the recognition that “freedom of speech is jealously guarded by the common law”.

Summary Dismissal

Ltd152 an order to tramway employees not to wear union badges was held to be an unreasonable order, disobedience of which would not justify summary dismissal. It is arguable that in the Tramways’ case the order was not lawful as the employer had no right under the contract to give such an order unless it bore some direct relationship to the employment. Older authorities suggested that an order will not be unlawful or unreasonable simply because of an employee’s moral obligation to absent herself or himself from work. Turner v Mason153 held that the employer justifiably dismissed the housemaid who, in defiance of an order, left the house to be with her dying mother.154 Alderson B was of the view: We are to decide according to the legal obligations of parties. Where is a decision founded upon mere moral obligation to stop? What degree of sickness, what closeness of relationship, is to be sufficient? It is the safest way, therefore, to adhere to the legal obligations arising out of the contract between the parties. There may undoubtedly, be cases justifying a wilful disobedience of such an order; as where the servant apprehends danger to her life, or violence to her person, from the master; or where, from an infectious disorder raging in the house, she must go out for the preservation of her life. But the general rule is obedience, and wilful disobedience is a sufficient ground for dismissal.

Rolfe B added that the illustrations referred to by Alderson B were cases in which the orders were unlawful: “It is an unlawful order to direct a servant to continue where she is in danger of violence to her person, or of infectious disease.”155 In Bouzourou v Ottoman Bank,156 the Privy Council affirmed the view that an order to remain in a danger zone will be unlawful if there is an immediately threatening danger by violence or disease to the employee. Inability to speak the language and hostility by civil authorities of the country to which the employee is directed to go is not sufficient.157 Claims of justified disobedience have been refused in a variety of situations including refusal to obey the employer where there were conflicting orders by a trade union official158 and when a fellow employee received an order in breach of contract.159 The position of the older authorities seems to continue to prevail in the United Kingdom, where it seems that the courts do not require the order to also be reasonable. However, in the United Kingdom, the preparedness to see the implied term as to trust and confidence moderate the employer’s exercise of its lawful rights under the contract achieves a similar result. A lawful, yet unreasonable, order is likely to be contrary to the implied term as to trust and confidence such that insistence on performance by the employer could be repudiatory.160 152 153

154 155 156 157 158

159 160

Australian Tramways’ Employees Association v Brisbane Tramways Co Ltd (1912) 6 CAR 35. Turner v Mason (1845) 14 M & W 112; 153 ER 411 at 117-118 (M & W), 414 (ER). No doubt today statutory provisions concerning leave entitlements and protection of employees from discrimination would see a different attitude prevail. It should be noted that now such an employee would have an entitlement to carer’s leave under the National Employment Standards. See [12.200]. Turner v Mason (1845) 14 M & W 112; 153 ER 411 at 117-118 (M & W), 413-414 (ER). See also Re Dismissal of Fitters by BHP [1969] AR (NSW) 399. Bouzourou v Ottoman Bank [1930] AC 271. Bouzourou v Ottoman Bank [1930] AC 271 at 276. See also Ottoman Bank v Chakarian [1930] AC 277. Maher v Australian Stevedoring Industrial Board (1953) 77 CAR 24 at 25. See also Federated Liquor and Allied Industries Employees’ Union (NSW Branch) v North Bondi RSL Club Ltd (1980) 22 AILR 206 (reinstatement of club employees dismissed on refusal to handle beer which had been black banned by the union). Plumb (Australia) Pty Ltd v Stone (1945) 55 CAR 535. See [5.150]. United Bank v Akhtar [1989] IRLR 507; Johnstone v Bloomsbury Health Authority [1992] 1 QB 333; see also Brodie, “The Heart of The Matter: Mutual Trust and Confidence” (1996) 25 ILJ 121 at 126-127.

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Refusal must be a repudiation of contract [8.220] To justify summary dismissal the disobedience of the employee must be such as to amount to a repudiation, or sufficiently serious to allow discharge of the contract of employment. The judgments of Gavan Duffy and Starke JJ in the High Court decision of Adami v Maison De Luxe Ltd161 posed the test in these terms: Was the plaintiff’s conduct such as justified the company in determining, and treating as an end, his contract of service with it? “If there is a distinct refusal by one party to be bound by the terms of a contract in the future, the other party may … treat the contract as at an end … Short of such refusal, … the true principle to be deduced from all the cases is that you must ascertain whether the conduct of the party who has broken the contract is such that the other party is entitled to conclude that the party breaking the contract no longer intends to be bound by its provisions. This part of the rule was laid down by Lord Blackburn” in Mersey Steel and Iron Co v Naylor, Benzon & Co, “where he says the rule of law is that where there is a contract between two parties, each side having to do something”, “if you see that the failure to perform one part of it goes … to the foundation of the whole, it is a good defence to say”, “I am not going to perform my part of it when that which is the root of the whole and the substantial consideration for my performance is defeated by your misconduct” (Rhymney Railway v Brecon etc Railway).162

In Adami v Maison De Luxe Ltd, the employee, who was employed as hall manager for three years, was asked by his employer, a proprietor of a dance hall, to be present on Saturday afternoons when dances were to be held. The employee, who worked as a bookmaker on Saturday afternoons, refused to attend in the honest belief that his contract did not require him to do so. He was then summarily dismissed. The High Court held that the dismissal was justified. Isaacs ACJ, in holding that the employee’s refusal was not wilful but that the employer was entitled to summarily dismiss him because of his refusal to perform his duties, points up two different aspects of the claim that summary dismissal was justified by reason of wilful disobedience of lawful and reasonable orders. The first is the aspect of deliberate insubordination, and the second, refusal to perform duties. In respect of the former his Honour was of the view that: an order that is not so clearly implied or expressed to be free from doubt has been left so by the act of both parties. A refusal to comply with it, if the employee, regarded as a reasonable man with knowledge of all the circumstances, may reasonably and does honestly contest it, is not, if respectfully communicated, a wilful disobedience of a lawful order, which by reason only of “wilfulness” entitles the employer to penalise the employee. The employee is there, to the knowledge of his employer, only acting in defence of his supposed rights – that is his only intention and purpose. He is not wilfully insubordinate.163

His Honour continued that refusal to perform duties even though not “wilful” may be sufficient: It is incontestable that any conduct of an employee which is not merely inconsistent with some particular obligation involved, and possibly not striking at the root of the matter, but which is inconsistent with the relation established, is a just cause for the employer’s termination of that relation. Habitual neglect or a definite refusal of a general kind to pursue the employer’s lawful policy of business would afford such justification. That is what happened here. The direction as to Saturday afternoons was not an isolated order but was part of a business policy. The nature of the business was such that it was clearly within the contemplated scope of the employer’s rights to select Saturday afternoons as a means of popularising or extending the business. The refusal of the appellant to give his personal services and his determination to substitute another to take his place was an important and 161 162 163

Adami v Maison De Luxe Ltd (1924) 35 CLR 143. Adami v Maison De Luxe Ltd (1924) 35 CLR 143 at 155. Adami v Maison De Luxe Ltd (1924) 35 CLR 143 at 152-153.

Summary Dismissal

a definite and constant refusal to carry out duties which, on the considered construction of the contract and circumstances, were … personally undertaken by the appellant … A general and total refusal of these duties after their specification was, whether the appellant was insubordinate or not, and whether “wilful” or not, a refusal which, by reason of the importance of the duties involved and the extent of the refusal, amounted in law to a renunciation entitling the employer to terminate the contract … the legal effect of the refusal is to control the business, and that, in the absence of some provision in the law of contract, is inconsistent with the general relation of employer and employed.164

A refusal to obey by reason of a mistaken view of the terms of the contract, in the High Court’s view, will not prevent summary dismissal for disobedience. If, however, an employee refuses to obey an order on a single occasion in the bona fide belief that the contract did not so require this will not usually amount to a repudiation.165 [8.230] A single act of disobedience will rarely justify summary dismissal. In Laws v London Chronicle (Indicator Newspapers) Ltd,166 Lord Evershed MR thought that a single act of disobedience or misconduct can justify dismissal only if it is of a nature “which goes to show (in effect) that the servant is repudiating the contract, or one of its essential conditions; and for that reason, therefore, I think that … the disobedience must at least have the quality that it is ‘wilful’: it does (in other words) connote a deliberate flouting of the essential contractual conditions”.167 It was held on the facts of the case that the conduct of an employee, in leaving a meeting against the orders of the managing director but at the request of her immediate superior, did not show an intention no longer to be bound by the contract of employment and the summary dismissal was therefore wrongful. Isaacs ACJ’s judgment, in the High Court decision of Adami v Maison De Luxe Ltd,168 endorses this view: It was contended that in all cases of employer and employee, irrespective of the nature of the employment … the phrase “wilful disobedience of a lawful order” means simply conscious disobedience of an order obedience to which is found after litigation to be in fact and in law within the range of duties. The proposition asserts that, provided ultimately the order is found to be within the scope of the contract, it matters not how isolated and trivial the occasion may have been, how unimportant the disobedience in relation to the employer’s affairs, how doubtful in fact or law the legality of the order may have been, how bona fide and reasonable may have been the contention of the employee or how clearly his action was intended and explained at the time as defence only and not in any way as defiance … That is a proposition … impossible to accept.

If, however, there is a calculated and persistent course of disobedience, this will not be regarded as trivial and the wilful nature of the persistent refusal will justify summary dismissal.169 In determining whether the disobedience is sufficiently serious to justify summary dismissal the consequences resulting from the refusal to obey orders will be relevant, along with the circumstances in which the order was given and the consequences of refusal to obey the order.170 Thus, if disobedience is likely to result in 164

165

166 167 168 169 170

Adami v Maison De Luxe Ltd (1924) 35 CLR 143 at 153-154; see also Gibson v Bosmac Pty Ltd (1995) 130 ALR 245 at 253 and Lawrence v Hobart Coaches Pty Ltd (1994) 1 IRCR 92; 57 IR 218 (refusal to work reasonable overtime). Scharmann v APIA Club Ltd (1983) 6 IR 157; DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 431-432; Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20. See also Bruce v AWB Ltd (2000) 100 IR 129 at [16]-[17] where the employee’s adherence to a respectable, but erroneous, argument that the employer did not have the power to alter the reporting responsibilities of the employee, was not sufficient to justify summary dismissal. Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 1 WLR 698. Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 1 WLR 698 at 701. Adami v Maison De Luxe Ltd (1924) 35 CLR 143 at 148-149. Re Barrett and Women’s Hospital Crown Street [1947] AR (NSW) 565 at 571. Izdes v L G Bennett & Co Pty Ltd (1995) 61 IR 439.

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injury to fellow employees or extensive damage to the employer’s property and this is known to the employee, summary dismissal would ordinarily be justified.171 Rarely will wilful disobedience to a lawful command be the sole ground for dismissal. Very often disobedience will be coupled with various acts of misconduct including absence from work. These will be dealt with generally under misconduct.

Neglect [8.240] It is an implied term in every contract of employment that the employee will take reasonable care in the performance of contractual duties.172 But not every act of neglect will entitle an employer to summarily dismiss an employee. Baster v London and Country Printing Works173 has sometimes been characterised as setting down the test of neglect justifying dismissal as relating to the extent of damage caused by the negligent conduct. Darling J in the course of his judgment stated that: Some trivial acts of forgetfulness might not even justify a complaint or remark; but to forget to do a thing which, if not done, may cause considerable damage to the master, or to his property, or to fellow-servants, may be a serious neglect of duty … It was argued that forgetfulness is not neglect unless it is habitual; but how can any rule be laid down as to how many times – once, twice, or more – a man may forget before his conduct amounts to neglect justifying dismissal? The line cannot be drawn; the question must depend upon the particular circumstances of each case … It was said that complicated machinery had been introduced in modern times, and that forgetfulness by workmen in charge of it ought to be treated leniently. It is easy to see how dangerous that argument is to workmen themselves. The lives of hundreds of them may be sacrificed because of something done, or not done, in a moment of forgetfulness by a man in charge of machinery.174

Generally, summary dismissal will only be justified if there has been a course of negligent conduct although in some circumstances a single negligent act may be sufficiently serious to warrant dismissal.175 “In determining the seriousness of an act of negligence regard must be had, not to the consequences of the act, but to its nature.”176 Naturally the seriousness of consequences likely to result from an act of neglect has a bearing on the characterisation of the neglect as trivial or substantial.177 Conduct likely to seriously endanger the lives of others or cause very extensive damage to property will, it is submitted, rarely be trivial. It is suggested that

171 172 173 174 175

176 177

Reinstatement in the circumstances would be unlikely, see Reschs Waverley Brewery v Federated Liquor and Allied Industries Employees’ Union (1976) 18 AILR 193. Lister v Romford Ice & Cold Storage Co [1957] AC 555; Janata Bank v Ahmed [1981] ICR 791; Rowell v Alexander Mackie College of Advanced Education (1988) 25 IR 87. Baster v London and Country Printing Works [1899] 1 QB 901. Baster v London and Country Printing Works [1899] 1 QB 901 at 903. Bell Bros Pty Ltd v Transport Workers’ Union of Australia, Industrial Union of Workers (WA Branch) (1949) 46 WAIG 1116 (driver overturning truck on a bend); Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [329]-[334]; Eshak v Public Transport Corporation (unreported, Industrial Relations Court of Australia, Ryan JR, 4 January 1996) (tram driver ran into a stationary tram because he was travelling too quickly and was unable to stop); the validity of the reason for termination was not challenged on appeal; see Eshak v Public Transport Corp (unreported, Industrial Relations Court of Australia, Marshall J, 30 August 1996); compare Sprigg v Arthur J Purslowe & Co Pty Ltd (unreported, Industrial Relations Court of Australia, Tomlinson JR, 5 May 1995) (mix up of bodies in a funeral parlour). Savage v British India Steam Navigation Co Ltd (1930) 46 TLR 294 at 295. Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [336]-[339]; Wilson v Racher [1974] ICR 428 at 432-433.

Summary Dismissal

the relevant inquiry in the employment context is not “what damage actually occurred” but “what were the likely results of the act of neglect known to the employee at the time the neglect took place”.178 Forgetfulness may amount to neglect179 but a mere error of judgment which a reasonable man considering the facts would have arrived at will not.180 An occasional mistake made under pressure of work will not normally constitute neglect warranting dismissal but constant mistakes and errors amounting to incompetency will justify dismissal. Laziness, lack of interest in the job, and occasional neglect of duties must be serious before summary dismissal will be justified.181

Misconduct [8.250] Invariably the starting point for discussion of misconduct has been the

statement by Lord James of Hereford in Clouston & Co v Corry,182 that “there is no fixed rule of law defining the degree of misconduct which will justify dismissal”. Nor is there any rule of law defining what constitutes misconduct for this purpose. In North v Television Corp Ltd,183 the relevant quality required of the misconduct was said to be “breach of the contract that by standards of fairness and justice the employer should not be bound to continue the employment”. That is, there is a breach of contract by the employee and that breach is sufficiently serious to warrant the employer dismissing the employee or the conduct of the employee demonstrates an intention no longer to be bound by the contract.184 The issue as to whether the conduct is in breach of contract will necessarily involve the determination of what are the express and implied terms of the contract. The extent and nature of express and implied terms of the contract of employment have been addressed in earlier chapters in this book. In this section illustrations will be given as to how the courts have applied these contractual tests in determining whether the employer is entitled to dismiss the employee without notice. The general tests for determining whether the conduct is sufficiently serious to justify summary dismissal have been applied in a wide variety of situations. Some of the most common situations will be referred to in the paragraphs following. In determining whether summary dismissal is justified the employer is entitled to rely on evidence of misconduct during the employment that comes to light after dismissal: see [8.130]. Lord Evershed MR in Laws v London Chronicle (Indicator Newspapers) Ltd185 (in a passage referred to at [8.110]) said the employer is entitled to dismiss the employee summarily if the conduct complained of is such as to show the servant has disregarded an essential condition of the contract of service. It was said that a single act of misconduct would justify dismissal only if it was of such a nature as shows that the 178

179 180 181 182 183 184

185

Alidair Ltd v Taylor [1977] ICR 446 (faulty landing by commercial pilot); see also Bell Bros Pty Ltd v Transport Workers Union (1966) 8 AILR 352; State Dockyard v Electrical Trades Union (1972) 14 AILR 133 (refusal to reinstate where gross carelessness). Baster v London Printing Works [1899] 1 QB 901. Re Scott and Pioneer Tourist Coaches Pty Ltd [1956] AR (NSW) 827. McCasker v Darling Downs (1988) 25 IR 107. Clouston & Co v Corry [1906] AC 122 at 129. North v Television Corp Ltd (1976) 11 ALR 599 at 608-609. Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [250]; Randall v Aristocrat Leisure Ltd [2004] NSWSC 411 (8 June 2004, Einstein J) at [448]-[449]; Connor v Grundy Television Limited [2005] VSC 466 (30 November 2005, Osborn J) at [40]-[44]; Carter v The Dennis Family Corporation [2010] VSC 406 (9 September 2010, Habersberger J) at [36]-[43]. An earlier breach justifying dismissal which the employer elects to accept without dismissing the employee may still remain relevant as background to the assessment of the cumulative significance of subsequent less serious conduct: McCasker v Darling Downs (1988) 25 IR 107 at 114; Connor v Grundy Television Ltd [2005] VSC 466 (30 November 2005, Osborn J) at [50]-[59]. Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 1 WLR 698 at 700.

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employee “is repudiating the contract, or one of its essential conditions”.186 The gravity of the alleged conduct will determine whether a single act constitutes the requisite misconduct for dismissal. In Jupiter General Insurance Co Ltd v Andeshire Bomanji Shroff,187 the plaintiff was employed as manager of a life insurance department of the defendant insurance company. The managing governor had personally refused to accept a proposal for life insurance. The plaintiff knew of the reasons for the refusal and knew that the risk was of an exceptional character, despite which he recommended the issue of a life insurance policy. This single act of misconduct was held to warrant summary dismissal. The Privy Council said: the test to be applied must vary with the nature of the business and the position held by the employee, and decisions in other cases are of little value. We have here to deal with the business of life insurance. A mistake in accepting a risk may lead to a very considerable loss, and repetition of such mistakes may lead to disaster. The undertaking is one in which the undertaking of each individual risk is necessarily hazardous, and it is only by unremitting care and prudence that the business can profitably be carried on. If an officer of a life insurance company, whatever his motive may be, withholds from his superiors information which will in all probability lead them to refuse a risk, and a fortiori if it is one of exceptional character and magnitude, it would seem to be very difficult for his superiors to be confident that he will, in the future, properly carry out important duties entrusted to him. In other words, if a person in charge of the life assurance department, subject to the suspension of superior officers, shows by his conduct or his negligence that he can no longer command their confidence, and if, when an explanation is called for, he refuses apology or amendment, it seems to their Lordships that his immediate dismissal is justifiable.188

Failure or refusal to attend or perform work

[8.260] The rights and responsibilities of employers and employees in respect of industrial action are heavily regulated by statute. In Chapter 14, we consider in detail the statutory immunity provided in respect of protected industrial action and action available under the common law torts in respect of industrial action which is unprotected and does not attract the immunity or does not otherwise attract protection under Pt 3-1 of the Fair Work Act 2009 (Cth).189 In addition to those protections, employees would most likely have rights under Pt 3-2 of the Fair Work Act 2009 which provides unfair dismissal protection available to dismissed employees (see Chapter 13). There is also a statutory regime which regulates the entitlements of employees to pay for any period during which they participate in industrial action: see [14.70]. This leaves little practical operation of the common law relating to summary dismissal or the entitlement to withhold payment for periods of industrial action. Unprotected strike action, in breach of contract, if sufficiently serious may qualify as misconduct justifying summary dismissal.190 Similarly, unprotected industrial action in 186 187 188

189

190

Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 1 WLR 698 at 701; Re Homebush Abattoir [1966] AR (NSW) 371 at 374; Elcom v Electrical Trades Union of Australia (1983) 5 IR 267. Jupiter General Insurance Co Ltd v Andeshire Bomanji Shroff [1937] 3 All ER 67. Jupiter General Insurance Co Ltd v Andeshire Bomanji Shroff [1937] 3 All ER 67 at 73-74. In Sheldrick v WT Partnership (Aust) Pty Ltd (1998) 89 IR 206 at [235], Einfeld J said that whilst the behaviour of the employee was thoughtless, immature and unwise, it was certainly not grounds for summary dismissal of a dedicated loyal and long-standing employee who had proved his commitment to his employer (issue not dealt with on appeal – WT Partnership (Aust) Pty Ltd v Sheldrick (2000) 96 IR 202). The Fair Work Act 2009, ss 340(1)(a), 341(1)(b) and 341(2)(c), has the effect of providing protection for an employee who is participating in protected industrial action for the purposes of negotiating a enterprise agreement. See [13.280]. Hall v General Motors-Holden Ltd (1979) 45 FLR 272; Simmons v Hoover Ltd [1977] QB 284 at 294-300; Sandilands v Australian Newsprint Mills Ltd (1982) 3 IR 386; Niceski v Dowell Australia

Summary Dismissal

the form of work to rule campaigns191 and selective work bans involving a wilful refusal to carry out the full range of duties, if sufficiently serious, may amount to a repudiation allowing the employer to bring the contract to an end by dismissing the employees.192 Historically, a defensive strike caused by what union members say are unsafe work conditions,193 has not been regarded as repudiatory.194 In fact it is probably more correct not to regard it as a strike at all;195 a refusal to work under unsafe conditions which have not been lawfully contracted for is simply a refusal to obey a direction which the employees are not obliged to obey. That is, it is neither a breach of contract nor a strike. The Fair Work Act 2009 definition of “industrial action” excludes action by an employee based on a reasonable concern about an imminent risk to her or his health and safety and the employee has not unreasonably failed to comply with a direction to perform other available work that is safe and appropriate for the employee to perform.196 Traditionally, in the case of a strike or industrial action, whilst the employer may technically have an option to end the employment of striking employees, this option was not often exercised and was regarded by some as rarely feasible, at least industrially.197 Employers generally do not wish to get rid of their workforce (and leave themselves exposed to unfair dismissal proceedings). Although employers would generally not accept repudiation of contract by employees engaged in industrial action,198 common law rules have historically had a role to play in determining whether those employees are entitled to wages during the period of industrial action. Now, the issue is regulated by statute.199

191 192

193 194

195 196 197

198

199

Ltd (1981) 52 FLR 371 at 381; Australian National Airlines Commission v Robinson [1977] VR 87; Chappell v Times Newspapers Ltd [1975] 1 WLR 482, see especially at 499 Lord Denning MR. Contrast Re Federated Storemen and Packers Union of Australia, New South Wales Branch (1987) 22 IR 198. Note also Latham v Singleton [1981] 2 NSWLR 843 at 861-862, Nagle CJ following Morgan v Fry [1968] 2 QB 710 at 725 (Lord Denning MR) in assuming that there would be no breach of contract if strike notice at least as long as notice required to terminate the contract was given; see Ewing, “The Right to Strike in Australia” (1989) 2 AJLL 18. Secretary of State for Employment v Associated Society of Locomotive Engineers and Firemen [1972] 2 QB 455. See as illustrations Welbourn v Australian Postal Commission [1984] VR 257 at 268 at 270; Gorse v Durham County Council [1971] 2 All ER 666 at 672; General Engineering Services Ltd v Kingston and St Andrew Corp [1989] 1 WLR 69 at 72 (PC). Ottoman Bank v Chakarian [1930] AC 277; Winter v Australian National Hotels Ltd (1995) 60 IR 316. Sandilands v Australian Newsprint Mills Ltd (1982) 3 IR 386; Hall v General Motors-Holden Ltd (1979) 45 FLR 272 at 278-279 per Keely J; see McCallum, “A Point of Trite Law: Lay-Off, Suspension and the Employment Contract” (AULSA 43rd Annual Conference, 30 August 1988) for the view that a collective refusal by employees to perform work might not be a breach of contract if, for example, an employer in total disregard of safety and health requirements endangered employees; their refusal would be justified. Attorney-General v Whiteman (1912) 11 AR (NSW) 137 at 147. Fair Work Act 2009 (Cth), s 19. But see suggestion by Smithers J in Niceski v Dowell Australia Ltd (1981) 52 FLR 371 at 381 that this would have been the sensible approach by an employer caught up in industrial action resulting from a demarcation dispute. Even if the employer accepts the repudiation by summarily dismissing workers, under a system of conciliation and arbitration, the employer may still be prevailed upon to reverse its decision and to reinstate dismissed employees. See [14.70]. Sections 470 and 474 of the Fair Work Act 2009 (Cth) now prohibit an employer from paying employees, and ss 473(1) and 475(1) prohibit an employee from accepting payment from an employer, in respect of a period of industrial action. Sections 473(2) and 475(2) prevent registered organisations from claiming pay on behalf of their members in respect of the period of industrial action. There are exceptions in circumstances where the industrial action is protected action and takes the form of partial work bans: ss 472 and 473.

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In Hall v General Motors-Holden Ltd,200 Keely J, when dealing with the question whether strike action amounted to repudiation of the contract giving the employer a right to summarily dismiss striking employees, explained the law in a way which readily identifies with the failure or refusal of an employee to attend or perform work more generally: I should perhaps make it clear that I am not expressing the view that any failure to work for a few minutes, eg because of a late arrival at work, would normally result in the employer having the right to summarily dismiss the employee. It would be necessary to consider all of the surrounding circumstances, possibly including preceding events and any previous warnings given to the employee, in order to determine whether in such a case the employer had the right to summarily dismiss. Nor am I expressing the opinion that a deliberate refraining from working will necessarily and in all circumstances result in the employer being entitled to summarily dismiss the employee. Factors may exist of such a nature that in all the circumstances the right to summarily dismiss does not arise, eg a bona fide belief in danger to life arising from the proposed work. Nor am I expressing any opinion as to whether an employer has the right to summarily dismiss employees who are on strike for a very short time (a period of one hour or half an hour was discussed in argument) where that period is specified in advance to the employer. It may be that the right to summarily dismiss would exist in such a case, but it is unnecessary for me to express an opinion on that question.201

Insulting or objectionable language

[8.270] The use of insulting and objectionable language may constitute misconduct. The standard is not that of the dainty and genteel but the standard applying in the “give and take atmosphere” of the modern workplace.202 Once again, caution should be exercised in citing any somewhat dated authorities when considering the nature of the particular conduct. If abusive language is common at the workplace its use by an employee would not normally be regarded as sufficiently serious to warrant dismissal203 unless it is directed to challenging the authority of a supervisor.204 Insult is very often coupled with disobedience and insolence and rarely is there a single act, instead, usually there is a course of conduct culminating in a final showdown. Illustrative is the case of Pepper v Webb,205 where the plaintiff was employed as gardener. Over a period of three months, his work deteriorated and he became inefficient. On the day of dismissal he was directed to put in some plants, which he refused to do retorting “I couldn’t care less about your bloody greenhouse and your 200

201

202

203 204 205

Hall v General Motors-Holden Ltd (1979) 45 FLR 272 at 278-279. As to whether collective industrial action amounts to misconduct on the part of an individual employee see Maitland Abattoir Pty Ltd v Adams (1987) 23 IR 49 at 56 (leave to appeal was refused, see (1988) 26 IR 374). Contrast the more pragmatic approach of Macken J dealing with a claim for reinstatement in Re Maitland Abattoir Pty Ltd (unreported, 26 March 1986) cited in Maitland Abattoir Pty Ltd v Adams (1987) 23 IR 49 that normally industrial disputation involving strike or other conduct would not constitute misconduct unless the demands were industrially unreasonable such as would occur if the purpose of the action was to frustrate the employer’s operations rather than to achieve some reasonable industrial demand. See discussion, Ewing, “The Right to Strike in Australia” (1989) 2 AJLL 18. Drury v BHP Refractories Pty Ltd (1995) 62 IR 467 at 473 (standard of language in the building industry); Jupiter General Insurance Co Ltd v Ardeshir Bomanji Shroff [1937] 3 All ER 67 at 74. See also Bondi Bowling Club Ltd v Federated Liquor and Allied Industries Employees Union (1972) 14 AILR 132. (Reinstatement granted after dismissal for abusive language. A superior could not object to abuse after encouraging the employee to speak “person to person” to him in private.) Boilermakers and Blacksmiths Society of Australia v BHP Co Ltd; Re Dowling noted (1968) 10 AILR 37 (claim for reinstatement upheld). Compare Farley v Lums (1917) 19 WALR 117. John Lysaght (Australia) Pty Ltd v Federated Ironworkers Association (1973) 15 AILR 323; Byrnes v Treloar (1997) 77 IR 332. Pepper v Webb [1969] 1 WLR 514; compare Wilson v Racher [1974] ICR 428 (Court of Appeal).

Summary Dismissal

sodding garden”. Although viewed singly his conduct would not have justified dismissal, the course of misconduct was held to be sufficiently serious to justify immediate dismissal. Drunkenness and drug taking

[8.280] Drunkenness or drug taking by an employee may constitute the degree of misconduct necessary to justify dismissal. The drunkenness or drug taking must have some impact on the employee’s ability to carry out the employment or it must have some impact on the employer’s business.206 In Meyrick v Stirling Bros Ltd,207 acts of drunkenness were viewed “as leading up to such a condition of the plaintiff that he was not able to perform his duty” and “that a man who had for several months been constantly under the influence of liquor must necessarily have lessened his power of doing his duty”. It may also give rise to concerns for the safety of fellow employees and others, leaving the employer and the employee exposed to breaches of work health and safety legislation: see [6.340]. The general principles applicable were stated in Clouston & Co Ltd v Corry: There is no fixed rule of law defining the degree of misconduct which will justify dismissal. Of course there may be misconduct in a servant which will not justify the determination of the contract of service by one of the parties to it against the will of the other. On the other hand, misconduct inconsistent with the fulfilment of the express or implied conditions of service will justify dismissal. Certainly when the alleged misconduct consists of drunkenness there must be considerable difficulty in determining the extent or conditions of intoxication which will establish a justification for dismissal. The intoxication may be habitual and gross, and directly interfere with the business of the employer or with the ability of the servant to render due service. But it may be an isolated act committed under circumstances of festivity and in no way connected with or affecting the employer’s business. In such a case the question whether the misconduct proved establishes the right to dismiss the servant must depend upon facts – and is a question of fact. If this be so, the question raised in the present case had to be tried by the jury.208

The dismissal of a company manager after conviction for drunkenness and disorderly conduct and for using coarse language in ladies’ hearing was upheld. Immorality

[8.290] Variations in the nature of misconduct are endless. Immorality, in some

circumstances may be sufficient. In Orr v University of Tasmania,209 a university professor had an affair with one of his female students. The Supreme Court of Tasmania held that his immorality was totally inconsistent with the proper performance of his duties within the university and summary dismissal was justified.210 The employee’s conduct was inconsistent with his duties to teach and examine with a detached and dispassionate attitude towards his students. This objectivity could not be maintained by a professor towards one who had been his mistress. The circumstances in the Orr case were quite exceptional and there is no general principle that immorality of an employee will justify dismissal. Even in the more liberal society of the 1970s and 1980s there were a number of instances where employees have been held justifiably dismissed for being involved in sexual relationships which affected the authority of 206 207 208

209 210

Willis Australia Group Services Pty Ltd v Mitchell-Innes [2015] NSWCA 381 (2 December 2015, Macfarlan, Ward and Leeming JJA) at [103]. Meyrick v Stirling Bros Ltd [1892] 1 WALR 51. Clouston & Co Ltd v Corry [1906] AC 122 at 129. See also Vallette v Graincorp Operations Ltd (8 March 2001, AIRC, Marsh SDP, Harrison SDP and Cargill C, Print PR902074); compare Robins v Sir Charles Gairdner Hospital (1999) 95 IR 27. Orr v University of Tasmania [1956] Tas SR 155 (affirmed on appeal, see (1957) 100 CLR 526). Compare Chambers v James Cook University of North Queensland (No 1) (1995) 61 IR 121.

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management or conduct of work in the workplace.211 It is the effect on the performance of work, rather than immorality as such, that is the critical factor. Sexual harassment of a co-employee will generally provide sufficient grounds for summary dismissal.212 Dishonesty

[8.300] Dishonesty in the course of employment provides but another example of misconduct. The receipt by a servant of a secret commission or profit will constitute misconduct.213 For “there can be no question that an agent employed by a principal or master to do business with another, who, unknown to the principal or master, takes from that other person a profit arising out of the business which he is employed to transact, is doing a wrongful act inconsistent with his duty towards his master, and the continuance of the confidence between them”.214 As with other forms of misconduct if the dishonesty is sufficiently serious a single act will justify dismissal: There may be cases where the breach of confidence and good faith towards the master would not arise from a simple isolated act, but would be founded on the accumulation and repetition of such acts, but those classes of cases are not cases of fraud at all, they are cases of isolated acts which, if they occurred singly, would not, in themselves, amount to a violation of the confidential relation or breach of the faithful service which the servant is bound to render. In that class of cases it is perfectly proper to consider whether on the whole the conduct of the servant has been such as to amount to a breach of confidence, and if it has not, then the master will not be justified in the dismissal. In such cases you might leave to the jury to consider whether there had been such an accumulation, or such a repetition of the acts, as to give a ground for the determination of service; but in cases where the character of the isolated act is such as of itself to be beyond all dispute a violation of the confidential relation, and a breach of faith towards the master, the rights of the master do not depend on the caprice of the jury, or of the tribunal which tries the question. Once the tribunal has found the fact – has found that there is a fraud and breach of faith – then the rights of the master to determine the contract follow as a matter of law.215

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213

214 215

For other illustrations see Whitlow v Alkanet Construction [1975] IRLR 321; Spiller v F J Wallis [1975] IRLR 362; Newman v Alarmco [1976] IRLR 45; Wall v Westcott (1982) 1 IR 252 at 256; compare Moreton Bay College v Teys [2008] QCA 422 (10 November 2008, McMurdo P, Holmes JA, Fryberg J) (an adulterous relationship between a school principal and the parent of a student). Thomas v Westpac Banking Corporation (1995) 62 IR 28; Puccio v Catholic Education Office (1996) 68 IR 407 (teacher’s inappropriate physical contact with a student). As will racial vilification: Sandman v Visyboard, Coolaroo (20 November 2000, AIRC, Polites SDP, Williams SDP and Hingley C, Print T3495). See also Kalouche v Legion Cabs (Trading) Co-operative Society Ltd (1998) 81 IR 415 (sexual harassment of a job applicant). This includes an illegitimate benefit secured for a family member: Serventi v John Holland Group Pty Ltd [2006] FCA 1049 (11 August 2006, Madgwick J) (securing a company car for use of the employee’s son). Boston Deep Sea Fishing & Ice Co v Ansell (1888) 39 Ch D 339 at 363 per Bowen LJ. Boston Deep Sea Fishing & Ice Co v Ansell (1888) 39 Ch D 339 at 363. Examples of acts of dishonesty can be found in Hendrie v Commonwealth Industrial Gases Ltd (unreported, Industrial Relations Court of Australia, Murphy JR, 25 January 1995) (purchasing personal items using company petty cash); Australian Rail Tram and Bus Industry Union (WA Branch) and Kirkpatrick v Metropolitan (Perth) Passenger Transport Trust (unreported, Industrial Relations Court of Australia, Linkenbagh JR, 11 October 1994) (withholding money received in payment for fares); Davis v Portseal Pty Ltd (unreported, Industrial Relations Court of Australia, Moore J, 26 November 1996) (lying to a managing director); Kagiyama v Southern Cross Limousines Pty Ltd (unreported, Industrial Relations Court of Australia, Marshall J, 6 January 1997); Woodman v The Hoyts Corporation Pty Ltd (2001) 107 IR 172; Kerr v Goulburn Valley Region Water Authority (unreported, County Court of Victoria, Morrow J, 20 August 1999) (lying to the employer); Lifesavers (Australasia) Pty Ltd v Dugan (1986) 53 SAIR 525 (falsification of daily report sheet); compare Venning v Wormald (Australia) Pty Ltd (1991) 41 IR 85 (falsifying time sheets).

Summary Dismissal

Bribery

[8.310] Similarly, the acceptance of a bribe relating to performance of the employment

will be misconduct.216 The essence of the matter is that it involves a conflict of interests, which will almost certainly be contrary to the implied duty of fidelity and loyalty: see [5.520]. The employee cannot diligently pursue the interests of the employer and at the same time accept bribes and commissions for favours to clients or third parties. The employee is liable not only to dismissal but to action to recover the bribe, and, possibly to criminal prosecution. Criminal offences

[8.320] Criminal offences committed whilst at work, if sufficiently serious, will justify

summary dismissal. For example, theft from the employer217 or fraud will usually justify summary dismissal. Fraud committed on a third party during working hours may suffice as in the case where a bank employee obtained the indorsement of a cheque in his favour so defrauding a third party.218 It is the seriousness of the conduct itself that justifies the dismissal, not the fact that it constitutes a criminal offence. Unjustified assaults upon fellow workers219 come within the category of misconduct. If extenuating circumstances exist, the assault may not justify dismissal. Such circumstances may include whether the employee was provoked and whether she or he was acting in self-defence.220 An assault upon a superior would be misconduct. Conduct on social media

[8.330] Technology has become an essential part of business and is now central to the efficient and effective operation of any workplace. From such technology, as part of their day-to-day duties, employees are required to access email, the internet and a vast array of other online platforms. Social media is fast becoming a tool of trade for business.221 A broad range of issues may arise from employee misuse of technology including “cyber-loafing” or “cyber-bludging”, “cyber-bullying”, harassment and discrimination, accessing, storage or transmission of inappropriate content and removal or disclosure of the employer’s trade secrets or sensitive information. Whilst these issues are thrust upon the workplace participants by new technologies, traditional legal principles apply. Does the conduct of the employee constitute a breach of sufficient gravity to warrant summary dismissal? Such conduct may be in breach of express terms of the contract (perhaps incorporated from policies governing employee use of social media in the workplace: see [4.480] in relation to incorporation of policies) or implied terms, such as the employee’s duty of care to the employer and other employees, the duty of good faith and fidelity, the duty to co-operate or any fiduciary duty (see Chapter 5). Social media usage may be an area for the potential development of the law concerning conduct, on the part of an employee, which is contrary to the interests of 216 217

218 219 220 221

Alexander v Webber [1922] 1 KB 642 at 644. See also Sybron Corp v Rochen Ltd [1984] 1 Ch 112 as to whether there is a duty to disclose misconduct by fellow employees, see [5.840]. W D and H O Wills Ltd v Jamieson [1957] AR (NSW) 547; query whether there can be degrees of theft; see Lupoi v Phillips Fox (unreported, Industrial Relations Court of Australia, Ritter JR, 3 October 1996); McIndoe v BHP Coal Pty Ltd (2 March 2001, AIRC, Giudice P, Williams SDP and Bacon C, Print PR901846); Woodman v Hoyts Corporation Pty Ltd (2001) 107 IR 172. Griffin v London Bank of Australia Ltd (1919) 19 SR (NSW) 154. Quinn v Australian Stevedoring Industrial Authority (1960) 94 CAR 800; Atkin v Acton (1830) 4 Car & P 208; 172 ER 673. The AWU-FIME Amalgamated Union v Queensland Aluminia Ltd (1995) 62 IR 385 at 393; Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201. See L Thornthwaite, “Social Media, Unfair Dismissal and the Regulation of Employees’ Conduct Outside Work” (2013) 26 AJLL 164, for a review of unfair dismissal decisions on the issue.

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the employer and serious enough to have the effect that the employer could not reasonably be expected to have confidence in the employee (see [8.120]). Also relevant will be whether disclosure of information relating to the employer or its business by an employee through the use of social media platforms might be said to be in the public interest222 (see [5.710], [5.770]). Out of hours conduct

[8.340] Misconduct after hours on work premises or in accommodation provided by the employer may, if sufficiently serious, justify summary dismissal.223

Misconduct which is not directly related to the employer may justify summary dismissal if the conduct has a relevant connection to the employment.224 In Hussein v Westpac Banking Corporation,225 the employee was convicted of credit card fraud in relation to activities outside his work. He was employed at Westpac as a migrant liaison officer, in particular, giving advice to members of the Turkish community. The court held that there was a sufficient connection between his work with Westpac and the conviction for credit card fraud on another bank. He was in a position of responsibility, honesty and trust. In those circumstances, his conduct was sufficient to justify the dismissal. It has been held that assault by a workman on the foreman outside working hours which affected the authority of the foreman at the workplace justified summary dismissal.226 It will be a question of degree as to whether out of hours use of the employer’s technology to engage in offending conduct provides the requisite employment connection. Duty to disclose misconduct? [8.350] As was noted at [5.830], the common law does not impose a general duty on employees to volunteer information concerning their own misconduct.227 The Australian courts do not seem to be attracted to the extension of a fiduciary duty to include a positive obligation of disclosure of one’s misconduct.228 However, such a 222

223 224

225 226 227

228

McCarry, “The Contract of Employment and Freedom of Speech” (1981) 19 SLR 333; McCallum and Stewart, “The Duty of Loyalty: Employee Loyalty in Australia” (1999) 20 Comp Lab L & Pol J 155. A third, more recent, article provides a useful account of the position concerning the exercise of free speech rights by employees in the United Kingdom: Wragg, “Free Speech Rights at Work: Resolving the Differences between Practice and Liberal Principle” (2015) 44 ILJ 1. Bear in mind the application of Art 10 of the European Convention on the Human Rights in the United Kingdom. North Australian Workers Union v Newcastle Protective Coating Pty Ltd (1971) 13 AILR 603; Australian Workers Union (WA Branch) v Goldsworthy Mining Ltd (1978) 20 AILR 259 (8). See the summary of authorities in Civil Service Association of WA v Director General of Department of Community Development [2002] WASCA 241 (3 September 2002, Anderson, Parker and Hasluck JJ) at [34]-[35]; McManus v Scott-Charlton (1996) 70 FCR 16 at 21-22 and 28-29; HEF of Australia v Western Hospital (1991) 4 VIR 310 at 324; Hussein v Westpac Banking Corporation (1995) 59 IR 103 at 107. It is not so much a matter of where the conduct occurs, but rather its impact, or potential impact, on the employer’s business: Smith v Christchurch Press Co Ltd [2001] 1 NZLR 407. As to the position in the United Kingdom see Samuels, “Sack the Football Hooligan: Fair or Unfair?” (2000) Sol Jo 540. Hussein v Westpac Banking Corporation (1995) 59 IR 103. Re Transfield Pty Ltd; Re Dismissal of Union Delegate [1974] AR (NSW) 596. Bell v Lever Bros Ltd [1932] AC 161 at 228 per Lord Atkin; Hands v Simpson, Fawcett & Co Ltd (1928) 44 TLR 146; Concut Pty Ltd v Worrell (2000) 75 ALJR 312 at [37] per Gleeson CJ, Gaudron and Gummow JJ; Hollingsworth v Commissioner of Police (1999) 47 NSWLR 151; Bank of Credit and Commerce International SA v Ali [2001] 2 WLR 735 at [68]-[69] per Lord Hoffmann; Item Software (UK) Ltd v Fassihi [2005] ICR 450, and see generally, McCarry, “The Employee’s Right to Silence” (1983) 57 ALJ 607 and comment on the High Court decision in Concut Pty Ltd v Worrell in Carter and Stewart, “The Effect of Formalising on Employment Contract: The High Court Misses an Opportunity” (2001) 17 JCL 181. Breen v Williams (1996) 186 CLR 71; Pilmer v Duke Group Ltd (2001) 207 CLR 165; P&V Industries Pty Ltd v Porto (2006) 14 VR 1 at [44] (expressly disagreeing with Item Software); P&V

Summary Dismissal

duty may exist in some circumstances.229 A failure to disclose misconduct or a criminal offence which occurred before the current employment or outside working hours will not normally constitute a breach of duty and could not therefore justify dismissal.230 But if the criminal offence is likely to restrict or impinge upon the performance of the employment then it may give grounds for dismissal. Whilst “it is clear … that … misconduct in the service of the old company cannot ipso facto be a justification for dismissing him from the service of the new company, it may be admissible as being relevant in the circumstances … to the issue of the fitness of the plaintiff to perform or observe his contractual obligations with the new company”.231 In every contract of employment there is an implied term that the employee will render faithful service to the employer but “there is neither reason nor authority for the proposition that the servant impliedly undertakes that his past life has been beyond reproach, nor is there any obligation on him to disclose, unasked, his previous history”.232 If a chauffeur has had her or his licence to drive cancelled, this is material to the employment and will warrant summary dismissal. A suspension of a driving licence of a commercial traveller will not necessarily amount to misconduct warranting dismissal. It was pointed out in Hands v Simpson Fawcett & Co Ltd233 that the commercial traveller could have got someone else to drive the car and the suspension of licence was not disabling. Finlay J suggested that the results would have been different if the contract of employment required the commercial traveller to drive himself. Right to dismiss for misconduct under awards and enterprise agreements

[8.360] The right to dismiss summarily for misconduct at common law has historically been expressly incorporated into various industrial awards governing employment.234 In any event, a provision in an award or enterprise agreement that employment may be terminated by a period of notice does not exclude the right at common law of the employer to dismiss instantly for misconduct.235 A reference in an award or agreement to only some of the grounds justifying summary dismissal does not exclude the general right at common law to dismiss for misconduct.236 Similarly where an award or enterprise agreement provides a right of dismissal in particular circumstances, for example, for malingering, inefficiency, neglect of duty or misconduct, this does not permit the employer to dismiss for any neglect or misconduct of duty; such neglect or misconduct must be such as would at common law be sufficiently serious to justify summary dismissal.237 The award itself is not regarded as the source of the right to summarily dismiss the employee. It assumes that such a right exists at

229 230 231 232

233 234 235

236 237

Industries Pty Ltd v Porto (No 2) [2007] VSC 64 (21 March 2007, Hollingworth J) at [24]-[30]; ASIC v Citigroup Global Markets Pty Ltd (No 4) (2007) 241 ALR 705 at [375]; Blackmagic Design Pty Ltd v Overliese (2011) 191 FCR 1 at [99]-[108]; see also Hodgson v Amcor Limited (2012) 264 FLR 1 at [1357]-[1358]. See [5.830]. Gordon and Gotch (Australia) Ltd v Cox (1923) 31 CLR 370; Nottingham University v Fishel [2000] IRLR 471. Gordon and Gotch (Australia) Ltd v Cox (1923) 31 CLR 370 at 380. Gill v Colonial Mutual Life Assurance Society Ltd [1912] VLR 146 (assistant secretary guilty of misappropriation of moneys in former employment, held no ground for dismissal in current employment). See also McCarry, “The Employee’s Right to Silence” (1983) 57 ALJ 607. Hands v Simpson Fawcett & Co Ltd (1928) 44 TLR 295. Under s 136 of the Fair Work Act 2009 (Cth), federal awards can only contain terms which are about certain prescribed matters. Termination of employment is not one of them. Tinning v Newcastle and Suburban Co-op Society Ltd [1942] AR (NSW) 555. See also IRB v Knox Auto Parts (1982) 1 IR 314; Master Builders Association of NSW v Building Workers Industrial Union (1984) 13 IR 177 at 180-181. AWU v Mackay Harbour Board; Re Keane (1939) 33 QJP 124. North v Television Corp Ltd (1976) 11 ALR 599; J Williams v Printers Trade Services (1984) 7 IR 82.

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law and that the award simply preserves that right.238 The relationship between the contract of employment, awards and statute is examined in Chapter 12.

Condonation and waiver [8.370] If the employer condones the employee’s misconduct then the right to summarily dismiss the employee will be treated as having been waived: The word (condonation) is used as applicable to a case where a master with full knowledge of a servant’s misconduct continues to retain him in his, the master’s service … The master must be fully aware that the servant has by his misconduct forfeited the right to be continued in his master’s service, which is the correlative of the master’s rights to dismiss him, before he can be held to waive that forfeiture.239

The position has been summarised as follows: Consistent with the authorities, the plaintiff, who relies upon condonation in the present proceeding, would have to prove:

(i) that the employer had full knowledge of the employee’s misconduct; (ii) that with that knowledge, the employer retains the employee in his service; and (iii) that having made the election, he deliberately abandons his right to summarily dismiss the employee.240 But previous and waived misconduct may be taken into account in determining whether fresh misconduct justifies summary dismissal.241 Reinstatement of an employee does not always amount to waiver: The whole circumstances leading up to the strike, negotiations during the strike, the terms in which a return to work was arranged, would all be relevant considerations as to whether there had been a waiver or estoppel.242

Thus, if strikers were accepted back at work but subject to facts relating to the strike being established by an inquiry or with a reservation of rights to terminate when all 238 239

240

241

242

J Williams v Printers Trade Services (1984) 7 IR 82. Federal Supply and Cold Storage Co of South Africa v Angehrn (1910) 103 LT 150; see also Re Clarke and Metropolitan Meat Industry Board [1967] AR (NSW) 16 at 25; Martin v South Australia (1982) 49 SAIR 269 at 284 (Full IC); McCasker v Darling Downs Co-op Bacon Association (1988) 25 IR 107; Australasian Transport Officers Association v Department of Motor Transport (1988) 25 IR 235; Pedersen v 3MP Radio (unreported, Employee Relations Commission of Victoria in Full Session, E94/0023, 8 March 1994); Mills v Industrial Fish Tasmania Pty Ltd (1993) 49 IR 416 at 429; Bowie v South Australia Brewing Co Pty Ltd (1991) 58 SAIR 357. Rankin v Marine Power International Ltd (2001) 107 IR 117. In that case, the plaintiff was given three months’ notice and permitted to remain in the service of the defendant to carry out his duties, albeit subject to closer supervision. The plaintiff submitted that in those circumstances, the defendant had elected to waive its right to summarily dismiss the plaintiff. The court concluded that the defendant did not elect to waive its right to terminate without notice. On the contrary, it made it clear that it was terminating the employment of the plaintiff for cause and that it was doing so on notice to enable him to finalise the project of which he had intimate knowledge: at [357]-[360]. Compare Howard v Pilkington (Australia) Limited [2008] VSC 491 (20 November 2008, Judd J) at [139]-[140]. There, the knowledge was gained during the course of a prolonged investigation and it was said that the failure to act at an appropriate time, in full knowledge of the conduct, constituted condonation such that Pilkington lost any opportunity it might otherwise have had to rely upon the conduct to justify dismissal. The burden of proving the election or waiver has been made is with the person who relies on the condonation: Carter v The Dennis Family Corporation [2010] VSC 406 (9 September 2010, Habersberger J) at [124]. John Lysaght (Australia) Ltd v Federated Iron Workers; Re York (1972) 14 AILR 517; McCasker v Darling Downs Co-op Bacon Association (1988) 25 IR 107 (compare 25 IR 235 at 114 (IR), 244-245 (IR)); Wilson v Racher [1974] ICR 428 at 432-433. As to the level of seriousness that the later misconduct must constitute in order to justify dismissal, see Connor v Grundy Television Limited [2005] VSC 466 (30 November 2005, Osborn J) at [58]-[59]. Haddow v Inner London Education Authority [1979] ICR 202 (EAT).

Summary Dismissal

facts were investigated, acceptance back at work would not constitute a waiver of the employer’s rights to dismiss.243 The mere lapse of time between the misconduct and discovery of the wrongdoing by the employer does not amount to condonation or waiver.244

243

244

Haddow v Inner London Education Authority [1979] ICR 202 at 207, 208. Note, however, the statutory protection available to employees participating in protected industrial action: see below, ([14.20]). Boston Deep Sea Fishing & Ice Co v Ansell (1888) 39 Ch D 339. See more recently MUA v DP World Melbourne Pty Ltd [2014] FCA 1321 (10 December 2014, Jessup J) at [186]-[187].

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9

Other Modes of Termination of the Contract of Employment “Female officers will, on marriage, be required to tender their resignations to the Board.” [Provision in Conditions of Service of Northern Ireland General Health Services Board, quoted at [1957] 1 WLR 597.]

[9.10] [9.20] [9.20] [9.30] [9.50] [9.60] [9.70] [9.80] [9.90] [9.130] [9.150] [9.160] [9.170] [9.180] [9.200] [9.210] [9.220] [9.230] [9.240] [9.250] [9.260] [9.280] [9.290] [9.300] [9.310] [9.330] [9.340] [9.360] [9.370] [9.400] [9.410]

Introduction ..................................................................................................... 367 Notice .............................................................................................................. 368 Length of notice required ........................................................................... 368 Implied term as to reasonable notice ........................................................ 369 Requirements for valid notice .................................................................... 375 Effect of notice ............................................................................................ 378 Non-acceptance of notice ........................................................................... 379 Invalid notice .............................................................................................. 379 Withdrawal of notice .................................................................................. 380 Variation of notice ...................................................................................... 382 Payment in Lieu of Notice ............................................................................. 384 Redundancy ..................................................................................................... 387 What is a redundancy? .............................................................................. 388 Severance pay ............................................................................................. 390 Other issues ................................................................................................ 394 Effluxion of Time ............................................................................................ 395 Compulsory retirement ............................................................................... 395 Permanent employment .............................................................................. 395 Frustration or Impossibility ............................................................................ 396 Imprisonment .............................................................................................. 397 Death ........................................................................................................... 398 War .............................................................................................................. 400 Illness .......................................................................................................... 400 Bankruptcy ...................................................................................................... 402 Dissolution, Amalgamation etc of Company ............................................. 402 Dissolution of Partnership (Other Than By Death) ....................................... 405 Agreement to Terminate (or Vary) ................................................................. 405 Change of workplace ................................................................................. 408 Change of duties ......................................................................................... 409 Wage changes ............................................................................................. 412 Change of employer ................................................................................... 412

Introduction [9.10] Chapter 8 addressed the right of either party to terminate the contract in response to the repudiatory conduct of the other. This chapter deals with the exercise by either party of the contractual right to terminate on notice. The employer may also have a contractual right to terminate by

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payment in lieu of notice. Particular attention is given to circumstances in which the employer seeks to terminate the employment not through any fault of the employee, but because the employee’s position has become redundant. In those circumstances, the employer is required to give notice in accordance with the contract. The employee may also have an entitlement to severance pay, for example, by reason of the incorporation of a redundancy policy into the contract of employment, or under the National Employment Standards, an award or enterprise agreement (see [4.480], [12.250]). After considering issues of notice and redundancy, this chapter addresses the circumstances in which the contract of employment is brought to an end in accordance with the wishes of the parties (by agreement or by the effluxion of time) or independently of the wishes of the parties due to some intervening event (frustration or insolvency).

Notice Length of notice required [9.20] One of the National Employment Standards under the Fair Work Act 2009 (Cth), s 117, provides that an employer must not terminate the employment of an employee without first giving the employee a minimum period of notice in writing: see [12.240]. The minimum period starts at one week and may be up to five weeks depending upon the employee’s length of service and age. The statutory minimum can be satisfied by payment in lieu of notice of at least the amount the employer would have been liable to pay the employee, had the employment continued up to the end of the required period of notice. A failure to abide by the obligation exposes the employer to the imposition of a penalty under Pt 4-1 of the Fair Work Act 2009. Similarly, any award1 or enterprise minimum period of notice must be complied with.2 As with all of the National Employment Standards, it is open to the parties to expressly agree to a notice period which is more generous than the statutory minimum. The minimum period of notice might be in the contract itself,3 or it may be set out in a policy.4 There may be a specific notice period in circumstances where the termination comes about as a result of the employee’s position becoming redundant.5 The conferral of such an express right to terminate on notice does not interfere with the right of the employer to summarily dismiss the employee, where grounds exist for such dismissal 1

2

3

4 5

Note that s 136 of the Fair Work Act 2009 (Cth) does not include termination of employment as a matter which may be included in a modern award, but it may be included as part of a clause which deals with an “industry-specific” redundancy scheme under s 141: see [12.60]. An enterprise agreement clause may provide when notice may be given (for example, “at the ordinary finishing time of a working day or shift”). Such clauses (and similar clauses in contracts) can pose problems of interpretation if not comprehensively drafted; for example, as to the effect of notice given while an employee is away on sick or other leave; Re Coal Mining Industry (Miners) Award 1954, NSW (1959) 1 FLR 327 at 335 and cases there cited. No longer can such a provision be included in a modern award: Fair Work Act 2009 (Cth), s 136. The particular terms of the contract will need to be considered: Northern Land Council v Hansen [2000] NTCA 1 (25 January 2000, Mildren, Bailey and Riley JJ); Intercultural Management Services Pty Ltd v White [1999] SASC 4 (14 January 1999, Wicks J). In New South Wales, the courts have used the statutory unfair contracts provisions (Industrial Relations Act 1996 (NSW), Ch 2, Pt 9) to set aside express periods of notice, which are considered unfair, and substitute a period akin to reasonable notice of termination. See, for example, Lavings v Barclay Mowlem Construction (NSW) Ltd (1994) 99 IR 247; Pullen v R & C Products Pty Ltd (1994) 60 IR 183; Caulfield v Broken Hill City Council (1995) 60 IR 221; O’Donnell v GIO Australia Ltd (1996) 64 IR 297. As to the question of whether the policy is contractual, see [4.480]. See, for example, Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014, Griffith J) at [1149]-[1157] and on appeal in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [264]-[270] (Buchanan J).

Notice

(see [8.100]).6 The contractual term may also permit termination forthwith on payment in lieu of notice (see [9.150]). So long as the employer notifies the employee in clear and unambiguous terms that the payment is being made in the exercise of the right to terminate by payment in lieu of notice, it will terminate the contract lawfully and satisfy the statutory NES entitlement.7

Implied term as to reasonable notice [9.30] What of the situation where the contract is silent on the question of notice? The law fills the gap by implying a term that reasonable notice of termination must be given.8 However, before a term will be implied into the contract (whether it is implied at law or based on the presumed intention of the parties)9 it must be necessary and must not be inconsistent with the express terms of the contract.10 It is a question of construction as to whether the parties intended the express provisions relating to termination to be comprehensive. If so, that intention will prevail and there will be no implication of a right to terminate on reasonable notice.11 If not, a specific length of notice ascertained by reference to custom or trade practice may be found to exist. But more usually, the only implication available will be that reasonable notice to terminate

6 7 8 9

10

11

Tinning v Newcastle and Suburban Co-op Society Ltd [1942] AR (NSW) 555; Orr v University of Tasmania (1957) 100 CLR 526. As to the importance of the clear and unambiguous exercise of the right, see Geys v Société Générale, London Branch [2013] 1 AC 523 at [22]-[25] per Lord Hope of Craighead DPSC. See the recent review of authorities on the issue in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [218]-[238] (Buchanan J). See [4.500] as to whether the implied term as to reasonable notice is implied at law or in fact, see Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [206] (implied by law); compare Australian National Hotels Pty Ltd v Jager (2000) 9 Tas R 153 at [11]-[25] (implied by fact). It would seem that the better view is that the implied term as to reasonable notice is a term implied by the law. The assessment as to how much notice is reasonable notice is a question of fact: IOOF Building Society Pty Ltd v Foxeden Pty Ltd (2009) 23 VR 536 at [78] (as to a review of the assessment of reasonable notice on appeal see [79]-[90]); compare Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [111], [218] (Buchanan J), Macauslane v Fisher and Paykel Finance Pty Ltd [2002] 1 Qd R 503 at 512-513. Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 449-450 per McHugh and Gummow JJ; Australian National Hotels Pty Ltd v Jager (2000) 9 Tas R 153 at [11]-[25]. It has been held that a term of a contract allowing for termination by the giving of “not less than one month’s written notice” permits the implication of a term requiring the giving of reasonable notice of termination: Windross v Transact Communications Pty Ltd [2002] FMCA 145 (20 August 2002, Driver FM) at [57]-[59]. It is submitted that this case is wrongly decided. At [14] the Federal Magistrate cited Westen v Union des Assurances de Paris (1996) 88 IR 268 as authority for the proposition that the specification of a minimum period of notice leaves room for the implication of a term as to reasonable notice of a longer period. Westen concerned an award provision rather than the express terms of a contract. The award provision sets a minimum period of notice only. The express terms in the contract in Windross conferred upon either party the contractual right to terminate on the giving of at least one month’s notice. It is inconsistent with the exercise of that express contractual right to require the party giving notice to provide more than at least one month’s notice. Further, the implication of a requirement that the period of notice be reasonable is not necessary in the face of the express contractual entitlement. Although, the issue may turn on the specific words of the award provision: see Bognar v Merck Sharp Dohme Australia) Pty Ltd [2008] FMCA 571 (16 May 2008, O’Sullivan FM) at [139]-[140]. For example, the implication of a term as to reasonable notice is inconsistent with (and not necessary in the face of) an express term that the contract is for a fixed term set to expire at a particular time: Ikin v Danish Club Dannebrog Inc (2001) 140 IR 101 at [17]. See also the authorities concerning contracts for tenured employment: McClelland v Northern Ireland General Health Services Board [1957] 1 WLR 594; New South Wales Cancer Council v Sarfaty (1992) 28 NSWLR 68 at 74-75. McClelland v Northern Ireland General Health Services Board [1957] 1 WLR 594; New South Wales Cancer Council v Sarfaty (1992) 28 NSWLR 68 at 74-75. These were both tenured employment cases.

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must be given. Even if the job is said to be a “job for life” there is most likely still room for the implication of a term as to reasonable notice.12 As to what is “reasonable” notice is considered in more detail at [9.40].13 A question may arise as to whether the implication of such a term would offend the principle of coherence which demands that the common law not develop in a way which is incoherent with statute (see [1.110]). Much will depend upon the specific terms of the statutory notice provision. Almost invariably, like s 117 of the Fair Work Act 2009, these provisions prescribe minimum rather than actual periods of notice.14 The implication of a term as to reasonable notice may be considered unnecessary in the face of such a statutory provision or an equivalent award provision.15 The award clause under consideration in Brennan v Kangaroo Island Council16 provided that the employee “must be given notice of termination” in accordance with the table set out in the clause. In the face of such a clause, the Full Court held that the implication of an obligation to give reasonable notice was not necessary to give business efficacy to the contract.17 However, this appears to be 12

13 14

15

16

17

Haley v Public Transport Corporation of Victoria (1998) 119 IR 242 at [83]. The courts will require that any contract which is said to create a “job for life” must be in the clearest possible terms: Waddell v mathematics.com.au Pty Ltd [2013] NSWSC 142 (1 March 2013, Rothman J) at [88]-[89]. See also the detailed analysis undertaken recently in Irving, “Australian and Canadian Approaches to the Assessment of the Length of Reasonable Notice” (2015) 28 AJLL 159. It is likely that in prescribing the standard set out in s 117(2) of the Fair Work Act 2009 (Cth), the Parliament was prescribing a statutory minimum to protect the position of a certain class of employees: see McCarry, “Termination of Employment, Payment in Lieu of Notice, Garden Leave and the Right to Work” (1999) 12 AJLL 56 at 60. Section 117 does not confer upon the employer a right to terminate the employment by giving the prescribed amount of notice. It merely sets a minimum period of notice which must be given in the event that the employer exercises its right to terminate the employment. Section 117 does not import the prescribed period of notice into the contract. It is notable that the Parliament has adopted the phrase “at least the period” prescribed and identifies that period as the “minimum period of notice”: Guthrie v News Limited (2010) 27 VR 196 at [197]. See also Australian Bank Employees’ Union v Australia & New Zealand Banking Group Ltd (1990) 34 IR 1. The equivalent provision in the Workplace Relations Act 1996 (Cth), s 661 imposed an obligation to “give the required period of notice” as prescribed. Compare the award provision in Bognar v Merck Sharp Dohme Australia) Pty Ltd [2008] FMCA 571 (16 May 2008, O’Sullivan FM) at [135]-[137] which was said to provide an actual period of notice, thus preventing the implication of a term as to reasonable notice. Whilst the award provision is not automatically incorporated into the contract (Byrne v Australian Airlines Ltd (1995) 185 CLR 410), it has been said that the award confers a statutory right upon the employer to terminate the employment by giving notice in accordance with the award and that this leaves no room for an implied term covering the same subject matter: Brackenridge v Toyota Motor Corp Australia Ltd (1996) 67 IR 162 at 189 (issue not considered on appeal; Brackenridge v Toyota Motor Corp Australia Ltd (1996) 142 ALR 99); Elliott v Kodak Australasia Pty Ltd (2001) 108 IR 23; Bognar v Merck Sharp Dohme Australia) Pty Ltd [2008] FMCA 571 (16 May 2008, O’Sullivan FM) at [134]. A similar approach has been taken in relation to an express notice provision contained in an Australian workplace agreement: Hastings v JH Corporate Security Services Pty Ltd [2000] SASC 216 (6 June 2000, Debelle J). Such a term cannot be implied into an Australian Workplace Agreement: Hasting v JH Corporate Services Pty Ltd [2000] SASC 216 (6 June 2000, Debelle J) at [7]. Brennan v Kangaroo Island Council (2013) 120 SASR 11. Special leave to appeal was refused by the High Court, see [2014] HCASL 153 (15 August 2014). However, the High Court has again recently warned that reasons for the refusal of special leave are in no way binding: Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited [2015] HCA 37 (14 October 2015, French CJ, Kiefel, Bell, Gaegler, Keane, Nettle and Gordon JJ) at [112] (Kiefel and Keane JJ). See also District Council of Barunga West v Hand (2014) 120 SASR 228 at [57]-[62] (Nicholson J) noting but not endorsing the decision in Brennan v Kangaroo Island Council. Brennan v Kangaroo Island Council (2013) 120 SASR 11 at [23]-[34]. There is nothing in the reasons to suggest that the High Court decision in Kilminster v Sun Newspapers Limited (1931) 46 CLR 284 at 289 was brought to the attention of the court, but it seemed to reject a similar argument based on Westen v Union des Assurances de Paris (1996) 88 IR 268. As has been pointed out in Irving, “Australian and Canadian Approaches to the Assessment of the Length of Reasonable Notice” (2015) 28 AJLL 159 at 161, the court considered only whether the term was implied in fact, rather than implied as a matter of law into all contracts of employment.

Notice

inconsistent with High Court authority.18 An award notice provision generally does not confer a right to terminate the employment, but merely prescribes a minimum period of notice that must be given by the employer in the event that it exercises its contractual right to terminate the employment.19 Those cases are to be contrasted with other statutory notice provisions which have been found to prevent the implication of a term as to reasonable notice because they import into all contracts of employment the right to terminate the employment upon the giving of the requisite period of notice,20 leaving no gap to fill.21

What is reasonable? [9.40] The rule here is not rigid. For example, the requisite length of notice is not tied to the length of hiring, save perhaps in the case of a daily or weekly hiring which, whilst historical, may retain some relevance in the meat industry and some other rural industries.22 Again historically, evidence of industry practice or custom has been regarded as relevant, even if it falls short of showing an implied term that the parties intended that some common industry usage as to notice was to govern their relationship.23 However, as has been recently pointed out, modern examples of such industry practice or custom are hard to come by.24 What is reasonable notice will depend on the circumstances of the case. The courts25 and the texts26 rightly caution against placing too great a reliance on particular instances.27 The assessment as to what is reasonable notice is determined in light of all of the circumstances applying as at the date the notice is given, not at the date of the 18 19

20

21 22

23 24 25

26 27

Kilminster v Sun Newspapers Limited (1931) 46 CLR 284 at 289. Queensland Meat Export Co Pty Ltd t/as Smorgon Meat Group v Hawkins (unreported, Industrial Relations Court of Australia, Wilcox CJ, Spender and Moore JJ, 6 December 1996). See also Irving, “Australian and Canadian Approaches to the Assessment of the Length of Reasonable Notice” (2015) 28 AJLL 159 at 161–162. The Industrial Relations Act 1984 (Tas), s 47(2) confers a right on the employer to terminate a contract of employment by giving notice in accordance with those sections. This would leave no necessity for a term as to reasonable notice to be implied; see Australian National Hotels Pty Ltd v Jager (2000) 9 Tas R 153; Holt v Musketts Timber Sales Pty Ltd (1994) 54 IR 323 at 329-330. See also the statutory provision under consideration in Machtinger v HOJ Industries Ltd [1992] 1 SCR 986 (Supreme Court of Canada) rendering void a contractual notice provision which was less than the statutory minimum, leaving a gap to be filled by the implication of a term as to reasonable notice. Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [234] (Buchanan J). McCarthy v Windeyer (1926) 26 SR (NSW) 29; Edwards v Dowsett (1914) 20 ALR (CN) 17; Mirror Newspaper Co v Crozier (1911) 13 WALR 70; Davis v Marshall (1861) 4 LT (NS) 216 at 217; Buckman v Barnawartha Abattoirs Pty Ltd (1994) 140 IR 376. In England, it used to be the position that menial servants were entitled to one month’s notice except where termination occurred at the end of the first month, in which event a fortnight’s notice given to expire at the end of the month was enough: George v Davies [1911] 2 KB 445. Fisher v Dick & Co [1938] 4 All ER 467 at 470. Irving, “Australian and Canadian Approaches to the Assessment of the Length of Reasonable Notice” (2015) 28 AJLL 159 at 185–186. Grout v Gunnedah Shire Council (No 2) (1995) 58 IR 67 at 80; Brookton Holdings No V Pty Ltd v Kara Kar Holdings Pty Ltd (1994) 57 IR 288 at 290-291; Irons v Merchant Capital Ltd (1994) 116 FLR 204 at 209. See Batt, Law of Master and Servant (5th ed, Pitman, 1967), p 78; Sykes and Yerbury, Labour Law in Australia (LexisNexis), vol 1, p 35. It cannot be said that what is reasonable can be reduced to a single correct calculation. The court’s assessment of what is reasonable involves the exercise of a judicial discretion: Macauslane v Fisher and Paykel Finance Pty Ltd [2002] 1 Qd R 503 at 512-513. See also by way of instructive comparison the recent recitation of the law in Canada: Honda Canada Inc v Keays [2008] 2 SCR 3 at [25]-[32].

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commencement of the contract.28 The circumstances may differ depending upon whether the employer or the employee is giving notice. The presumption of reciprocity is said not to apply.29 The purpose of the obligation to give notice is to allow the other party a reasonable period in which to adjust their affairs so as to minimise the impact of the termination.30 For the employee, this means a reasonable period in which to secure alternative employment31 Therefore, relevant considerations generally pertain to the employee and to the job. For the employer, this means a reasonable period in which to secure a replacement employee. Considerations pertaining to the employee will not be so relevant. Rather, they will more likely pertain to the job and the likelihood of the employer securing a replacement.32 Turning to the most common situation, where the employer terminates the employment, one can extract a few relevant factors which are taken into account.33 Earlier editions of this text have identified the duration of the hiring and industry practice as relevant. It is accepted that modern authorities, whilst acknowledging their relevance, do not pay specific regard to those two factors as they 28

29 30

31

32

33

Martin Baker Aircraft Co Ltd v Canadian Flight Equipment [1955] 2 QB 556 at 581; Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at 580; Logan v Otis Elevator Co Pty Ltd (1999) 94 IR 218 at [35]; Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [227]-[229]; IOOF Building Society Pty Ltd v Foxeden Pty Ltd (2009) 23 VR 536 at [72]; Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014, Griffith J) at [1164] and on appeal in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [111] (Buchanan J). McClelland v Northern Ireland General Health Services Board [1957] 1 WLR 594; Macauslane v Fisher and Paykel Finance Pty Ltd [2002] 1 Qd R 503 at 514-515. IOOF Building Society Pty Ltd v Foxeden Pty Ltd (2009) 23 VR 536 at [72]; Rogan-Gardiner v Woolworths Ltd (2012) 218 IR 417 at [46]-[47] (Newnes JA, Allanson J agreeing); compare at [4] (McLure P); Cohen v iSoft Group Pty Ltd [2012] FCA 1071 (28 September 2012, Flick J) at [120]) (reversed on appeal for reason unrelated to the principles in relation to a reasonable period of notice: see Cohen v iSoft Group Pty Ltd (2013) 298 ALR 516. Matthews v Coles Myer Ltd (1993) 47 IR 229; Brookton Holdings No V Pty Ltd v Kara Kar Holdings Pty Ltd (1994) 57 IR 288 at 290-291; Sinclair v Anthony Smith & Associates Pty Ltd (unreported, Industrial Relations Court of Australia, von Doussa J, 1 December 1995) (to allow time for the employee to deal with the emotional, family and domestic stresses likely to descend upon them when the employment is brought to an end); Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [220]-[221]. Compare the particular arrangements that might be in place for seasonal workers: AMIEU v Central Queensland Meat Export Co (Aust) Pty Ltd (1999) 90 IR 364 at [25]-[29]. In Rogan-Gardiner v Woolworths Ltd (2012) 218 IR 417 at [4], McLure P questioned the legitimacy of having regard to factors not known to the employer at the time of entry into the contract, such as circumstances prevailing at the time of the termination which may impact on the ability of the employee to secure alternative equivalent employment. This seemed to be based on a concern about the lack of certainty. However, it must be borne in mind that the term implied is a requirement to provide reasonable notice. The term is certain. Its content, what is reasonable, is determined by the particular circumstances which are relevant at the time the notice is given. See also Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014, Griffith J) at [1161]-[1163] and on appeal in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [111] (Buchanan J). Macauslane v Fisher and Paykel Finance Pty Ltd [2002] 1 Qd R 503 at 515-517, where the court concluded that the employer’s financial circumstances are irrelevant. That might be so where the assessment of reasonable notice arises in circumstances where the employee is giving notice. However, it might be said that the size and financial health of the employer’s business will have some impact on the ability of the employer to secure an adequate replacement in a timely manner. One can imagine circumstances in which a small employer heavily dependent upon a senior employee who resigns on short notice would have some difficulty in readily securing a replacement, particularly if the nature of the employer’s business is relationship based and the resigning employee has occupied a central role in the development of the business. For the relevance of an award notice period to the assessment of what is reasonable notice, see Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 429 per Brennan CJ, Dawson and Toohey JJ; Pickering v JRA Ltd (Scheme Administrator Appointed) trading as Austral Denning (1995) 151 QGIG 466 at 472-473; see also Logan v Otis Elevator Co Pty Ltd (1999) 94 IR 218 at [37]-[38] and Elliott v Kodak Australasia Pty Ltd (2001) 108 IR 23 at [97].

Notice

have little relevance today.34 Other relevant job-related factors have been identified (albeit in somewhat overlapping fashion) to include:35 (a) the “high grade” of the appointment;36 (b) the importance of the position;37 (c) the size of the salary;38 (d) the nature of the employment.39 Factors which pertain to the employee and which are relevant in assessing the reasonableness of notice include: (a) the length of service of the employee;40 (b) the professional standing of the employee;41 (c) the employee’s age;42 (d) the employee’s qualifications and experience;43 (e) her or his degree of job mobility;44 34 35

36

37

38

39

40

41 42 43

44

Irving, “Australian and Canadian Approaches to the Assessment of the Length of Reasonable Notice” (2015) 28 AJLL 159 at 184–186. The list of relevant considerations in this form has appeared in previous editions of this text, at least from the third edition in 1990, and has been regularly adopted by the courts: see Rogan-Gardiner v Woolworths Ltd (2012) 218 IR 417 at [50]-[51] (Newnes JA, McLure P and Allanson J agreeing); Cohen v iSoft Group Pty Ltd [2012] FCA 1071 (28 September 2012, Flick J) at [122] (reversed on appeal for reason unrelated to the principles in relation to a reasonable period of notice: see Cohen v iSoft Group Pty Ltd (2013) 298 ALR 516). Hill v C A Parsons Ltd [1971] 3 WLR 995 at 1002; Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at 580; Rigby v Technisearch Ltd (1996) 67 IR 68 at 92; Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [232]. Adams v Union Cinemas [1939] 3 All ER 136; Dyer v Peverill (1979) 2 NTR 1 at 5; Kilburn v Enzed Precision Products Pty Ltd (1988) 4 VIR 31; Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at 580; Dunstan v National Mutual Life Association of Australasia Ltd (1992) 5 VIR 73; Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [232]. The importance of the position must be considered in the context of the employer’s business as a whole: Rogan-Gardiner v Woolworths Ltd (2012) 218 IR 417 at [56]-[57] (Newnes JA, McLure P and Allanson J agreeing) finding no error at first instance: see Rogan-Gardiner v Woolworths Ltd (No 2) [2010] WASC 290 (22 October 2010, Hall J) at [168]. Mulholland v Bexwell Estates Co (1950) 66 TLR 764; Orman v Saville Sportswear Ltd [1960] 1 WLR 1055; Dunstan v National Mutual Life Association of Australasia Ltd (1992) 5 VIR 73, Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [232]. Fisher v Dick & Co [1938] 4 All ER 467 at 471; Orman v Saville Sportswear Ltd [1960] 1 WLR 1055; Dyer v Peverill (1979) 2 NTR 1 at 5; Lavings v Barclay Mowlem Construction (NSW) Ltd (1994) 99 IR 247; O’Donnell v GIO Australia Ltd (1995) 64 IR 297 at 303. It is important to look at the true nature of the employment rather than any “highfalutin title” given to the employee, Brookton Holdings No V Pty Ltd v Kara Kar Holdings Pty Ltd (1994) 57 IR 288 at 290-291. Hill v CA Parsons Ltd [1917] 3 WLR 995 at 999; Holden v Com-law (No 50) Pty Ltd (1990) 13 QLR 14 at 16 (lifetime employee); compare Waterson v Mortgage Acceptance Corporation Ltd (unreported, Supreme Court of New South Wales, Priestley JA, 23 June 1993) (short period of service) and Saad v TWT Ltd (unreported, Supreme Court of New South Wales, Ireland J, 19 May 1995) (employee had not yet commenced employment); Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [232] (where it was said that a lengthy period of service may be a drawback for senior executives on the basis that a person with experience in a variety of different employments, would be considered a better prospect than a person who had been employed in the one job). Hill v C A Parsons Ltd [1971] 3 WLR 995 at 999; Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at 580. Thorpe v SA Football League (1974) 10 SASR 17 at 36; Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at 580; Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [232]. Thorpe v SA Football League (1974) 10 SASR 17 at 36; Dyer v Peverill (1979) 2 NTR 1 at 5; O’Donnell v GIO Australia Ltd (1995) 64 IR 297 at 303; Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [232]. Thorpe v SA Football League (1974) 10 SASR 17 at 36; Lavings v Barclay Mowlem Construction

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(f) the expected period of time it would take the employee to obtain alternative employment;45 (g) the period it was likely, apart from the dismissal, that the employee would have continued in the employment;46 (h) what the employee gave up to come to the present employer (for example, a secure long-standing job);47 (i) the employee’s prospective pension or other rights.48 The courts will be reluctant to impose on the parties a requirement in excess of what either of the parties would have considered reasonable when they turned their minds to that topic.49 A list of factors such as those above50 is no more helpful than the conventional aphorism that each case in this area will depend on its own facts.51 But

45

46

47

48

49

50

51

(NSW) Ltd (1994) 99 IR 247; Percival v Fosters Brewing Group Ltd (1993) 49 IR 85 at 86; see also Caulfield v Broken Hill City Council (1995) 60 IR 221 at 231 (remoteness of the location); O’Donnell v GIO Australia Ltd (1996) 64 IR 297 at 303 (specialist actuary); Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [229] (the circumstances of the dismissal were relevant to the assessment of the time it would take the employee to obtain alternative employment). Grout v Gunnedah Shire Council (No 1) (1994) 57 IR 243 at 250-251; Birrell v Australian National Airlines Commission (1984) 5 FCR 447 at 458; Grout v Gunnedah Shire Council (No 2) (1995) 58 IR 67 at 79; Rogan-Gardiner v Woolworths Ltd (2012) 218 IR 417 at [46]-[47] (Newnes JA, Allanson J agreeing); compare [4] (McLure P); Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014, Griffith J) at [1149]-[1157] and on appeal in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [264]-[270] (Buchanan J). Grout v Gunnedah Shire Council (No 2) (1995) 58 IR 67 at 79; Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at 580; Irons v Merchant Capital Ltd (1994) 116 FLR 204 at 209; Gane v Total Freight Agency Pty Ltd (1996) 68 IR 204 at 207. Thorpe v SA Football League (1974) 10 SASR 17 at 36; Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at 580; Waterson v Mortgage Acceptance Corporation Ltd (unreported, Supreme Court of New South Wales, Priestley JA, 23 June 1993); Kilburn v Enzed Precision Products Pty Ltd (1988) 4 VIR 31; Dyer v Peverill (1979) 2 NTR 1 at 5. Hill v C A Parsons Ltd [1917] 3 WLR 995; Mulholland v Bexwell Estates Co (1950) 66 TLR 764; McClelland v Northern Ireland General Health Services Board [1957] 1 WLR 594; Dyer v Peverill (1979) 2 NTR 1 at 5; including the employees expected superannuation protection, for example, Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at 581. In Caulfield v Broken Hill City Council (1995) 60 IR 221 at 231 when assessing what was reasonable notice, Marks J took into account the fact that the termination involved a redundancy and that severance payments were made to the employee because, it was said, a failure to take such account would involve a degree of double counting. Edward Keller (Australia) Pty Ltd v Hennelly (1990) 35 IR 464. Equally, the courts will not imply a term which is to similar effect to a term which was rejected by one party in negotiating the contract: IOOF Building Society Pty Ltd v Foxeden Pty Ltd (2009) 23 VR 536 at [65] (during negotiations, the period of notice was not agreed because one party rejected a two month period which the other party sought to impose). On the basis that the assessment of reasonableness is made at the time the notice is given, a preparedness by the employer to allow the employee to go on “garden leave” for the notice period is evidence that it is prepared to carry on business without the employee, and would detract from any argument that the notice given by the employee is insufficient: Zuellig v Pulver [2000] NSWSC 7 (3 February 2000, Rolfe J). See also Reilly v Praxa Ltd [2004] ACTSC 41 (9 June 2004, Gray J) at [22]-[24]. Industrial tribunals appear to be prepared to take into account a broader range of factors, some of which may militate against a longer period of notice such as the provision of outplacement services (Percival v Fosters Brewing Group Ltd (1993) 49 IR 85) or a refusal to take long service leave or annual leave on the employer’s request so as to delay a prospective dismissal due to redundancy: Thomas v John Shearer Ltd (1991) 40 IR 397. However, industrial tribunals will consider the issue only insofar as it is relevant to the question of fairness of the dismissal, rather than for the purposes of enforcing contractual rights. Grout v Gunnedah Shire Council (No 2) (1994) 58 IR 67 at 80; Brookton Holdings No V Pty Ltd v Kara Kar Holdings Pty Ltd (1994) 57 IR 288 at 290-291; Irons v Merchant Capital Ltd (1994) 116 FLR 204 at 209; Rogan-Gardiner v Woolworths Ltd (2012) 218 IR 417 at [49]-[51] (Newnes JA, McLure P and Allanson J agreeing).

Notice

obviously, if one has an “important” and “high grade” appointment carrying a large salary and occupied by a long-serving employee with but a few years to serve until retirement, a generous period of notice will be required, perhaps nine or 12 months.52 But in the case of a lowly paid person in a routine job a much shorter period will be held reasonable, especially if the employee has not had a lengthy period of service. A week might still be enough in that case. This remains subject to statutory or award minimum notice requirements discussed earlier in this chapter. A non-legal, if, for some, unpalatable, rationalisation of the cases on reasonableness of notice is to say that the higher the job on the socio-economic scale, the longer will be the necessary period of notice. The lower the job, the shorter the notice.

Requirements for valid notice [9.50] As we have seen the period of notice given to terminate an employment contract must be as prescribed or agreed or, if there is no prescription or agreement, it must be reasonable.53 There are other requirements, besides specification of the correct period of notice, which are necessary for the validity of a notice of termination. In the absence of an agreement or award provision to the contrary there is no general requirement that notice of termination, whether given by employer or employee, be in writing.54 If it is in writing, no particular wording is required, again absent agreement or award to the contrary. A contract requiring a written notice can be terminated orally by agreement.55 However, an oral notice is likely to cause difficulties, especially if given in the heat of the moment. Writing is to be preferred. Sometimes even a written notice of resignation is not what it seems, and may be a dismissal at least for some purposes.56 The circumstances of the resignation should be examined to determine whether it was in substance equivalent to a dismissal by the employer.57 For example, an employer who accepts and subsequently relies on notice of resignation given at a moment of emotional upset, may be held to have dismissed the employee concerned.58 52

53 54 55 56

57 58

Twelve months seems to be the high point at common law for the Australian courts: see, for example, Kilburn v Enzed Precision Products Pty Ltd (1988) 4 VIR 31; Rankin v Marine Power International Pty Ltd (2001) 107 IR 117; Hem v Cant (2007) 159 IR 113 at [24]. One exception arises from the first instance decision in Jager v Australian National Hotels Pty Ltd (1998) 7 Tas R 437 (24 months). However, that decision was overturned on appeal on the basis that the relevant statutory provisions did not leave room for the implication of a term as to reasonable notice: Australian National Hotels Pty Ltd v Jager (2000) 9 Tas R 153. The New Zealand courts have been prepared to consider notice periods in excess of 12 months: see Ogilvy and Mather (NZ) Ltd v Turner [1996] 1 NZLR 641 (18 months). Under statutory unfair contract provisions, industrial courts have been prepared to vary the express terms of a contract to require payments greater than an equivalent of 12 months’ pay, although these cases most often arise in circumstances where the employee’s position has become redundant: see, for example, Newton v Goodman Fielder Mills Ltd (1997) 81 IR 227; David Jones Ltd v Cukeric (1997) 78 IR 430. Compare Guthrie v News Limited (2010) 27 VR 196 at [196]-[198]. See the table compiled in Irving, “Australian and Canadian Approaches to the Assessment of the Length of Reasonable Notice” (2015) 28 AJLL 159 at 189–190. See McCarry, “Termination of Employment Contracts by Notice” (1986) 60 ALJ 78. However, in order to satisfy the statutory minimum period of notice in s 117 of the Fair Work Act 2009 (Cth), that notice must be in writing: see [12.240]. Latchford Premier Cinema Ltd v Ennion [1931] 2 Ch 409. A notice requiring an employee to resign forthwith followed a few days later by the employee’s resignation has been held to be a dismissal, rather than a resignation: Stephenson v London Joint Stock Bank (Ltd) (1903) 20 TLR 8; compare Silberschneider v MRSA Earthmoving Pty Ltd (1987) 68 WAIG 33 at 35. Hiser v Hardex Co-op Ltd (In liq) (unreported, Supreme Court of New South Wales, Santow J, 14 December 1994). See [8.80]; Achal v Electrolux Pty Ltd (1993) 50 IR 236; Kwik-Fit (GB) Pty Ltd v Lineham [1992] ICR 183; compare Stanfield v Peter J Burgess & Associates Pty Ltd (1992) 42 IR 266; Minato v Palmer Corporation Ltd (1995) 63 IR 357 at 362.

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The notice, whether oral or in writing must be in clear and unambiguous terms and it must be communicated.59 If valid, the notice once given operates according to its terms: see [9.60]. However, if the words used are ambiguous, recourse may be had to the surrounding circumstances and to the parties’ understanding of what was said.60 Whether oral or written, notice of termination must specify when the termination is to occur, or must at least make it possible for that to be ascertained.61 A notice may be conditional, so long as the condition is clearly stated and sufficiently certain to allow the person receiving the notice to ascertain whether the condition is satisfied.62 To constitute “notice, the communication must be something more than a mere statement of intention to terminate and must be given by a person with authority to terminate the contract”.63 If the period given in the notice is “a week” it is probable that the week will exclude the day on which the notice is given and will include the whole of the day on which it expires.64 In England it has been held that a notice of termination given orally will exclude the day on which the notice is given, at any rate if the employee has commenced work on that day.65 Awards66 and enterprise agreements can sometimes contain clauses which impose restrictions on the time when notice of termination can be given: for example, a clause to the effect that a notice of termination may not run concurrently with annual holidays. The High Court has endorsed comments of the minority in Automatic Fire Sprinklers Pty Ltd v Watson67 to the effect that a prohibition on doing an act under a penalty does not show that the act cannot be done.68 Accordingly, a termination in contravention of an award clause will not prevent the termination taking effect. However, it would still amount to a breach of the award.69 In light of the very broad powers available to the courts under Pt 4-1 of the Fair Work Act 2009 to make any orders it thinks appropriate including injunctions, orders for the payment of 59

60

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62 63

64 65 66 67 68

69

Geys v Société Générale, London Branch [2013] 1 AC 523 at [57]-[61] per Baroness Hale of Richmond JSC, where payment into the employee’s bank account was not of itself sufficient to notify the employee of the termination. This had important consequences for the employee’s entitlement to a bonus payment due at a particular date after the payment into the bank account, but before the employee received written confirmation that his employment was terminated. B G Gale Ltd v Gilbert [1978] ICR 1149 at 1152-1153; Chapman v Letheby & Christopher Ltd [1981] IRLR 440 at 441.These are just two of a number of decisions of the English Employment Appeal Tribunal which are cited in this part of the chapter. These decisions are often useful, but must be used with some caution. Morton Suntour Fabrics v Shaw (1967) 2 ITR 84 (QBD), applied in The Burton Group Ltd v Smith [1977] IRLR 351 at 354. See also Thickbroom v Newcastle Wallsend Coal Co Pty Ltd (1998) 83 IR 193 at 197. The effect of a notice which is specific, but inaccurate, is considered at [9.80]. Fardell v Coates Hire Operations Pty Ltd (2010) 201 IR 64 at [85]-[92]. IOOF Building Society Pty Ltd v Foxeden Pty Ltd (2009) 23 VR 536 at [96]-[103] (public statement not specifically directed to the party concerned). See also Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014, Griffith J) at [1164] and on appeal in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [111] (Buchanan J). Boilermakers Society v Duncan (1947) 58 CAR 111 at 113 and authorities there cited. West v Kneels Ltd [1987] ICR 146. Note that s 136 of the Fair Work Act 2009 (Cth) does not include termination of employment as a matter which may be included in a modern award. Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 454 per Latham CJ. Compare earlier Re Journalists (Metropolitan Daily Newspapers) Award (1959) 4 FLR 164. Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 428 per Brennan CJ, Dawson and Toohey JJ, where it was said that “short of a law deeming an employment relationship to exist when it does not, the question whether or not it continues to exist seems to us to be a question of fact”. This would seem to include notice given which fails to comply with a minimum period set down by an award: AFMEPKIU v Mechanical Engineering Services Pty Ltd [2007] FCA 1736 (16 November 2007, Finkelstein J) at [28]-[29]. The same principle would apply to notice given which fails to comply with statutory minimum periods of notice such as that provided for in s 117 of the Fair Work Act 2009 (Cth); see [12.240].

Notice

compensation and reinstatement,70 dismissal contrary to such a clause may result in an order preventing the dismissal taking effect or an interim order for reinstatement. Unless there is some such term, there seems to be no legal impediment to giving notice which expires during a period of leave.71 In that case the employment contract and the leave would expire, for there can be no leave from employment which has ended.72 The contrary view is that it is not open to the employer to deprive the employee of the entitlement to paid leave,73 or alternatively to deprive the employee of an entitlement to return to work from unpaid parental leave.74 Absent agreement75 or award to the contrary, there appears to be no requirement that a notice be given at any particular time or that it be worded to expire at any particular time. If any such requirements do exist and the notice of termination fails to comply with those requirements, the notice will be ineffective76 to terminate the contract unless it is accepted by the other party. In the absence of provision to the contrary, the notice must actually be received by the person to whom it is directed,77 and there needs to be certainty as to when the employee ceases to be an employee.78 One English case goes so far as to say that an employer who terminates a worker’s employment summarily by letter “must show that the employee has actually read the letter or, at any rate, had a reasonable opportunity of reading it”.79

70 71

72

73 74 75

76 77 78 79

Fair Work Act 2009 (Cth), s 545. Compare Re Coal Mining Industry (Miners) Award 1954 NSW (1959) 1 FLR 327 at 335; Australian Institute of Marine and Power Engineers v Australian Coastal Shipping Commission (1972) 146 CAR 468. Chapman v Commissioner of Government Transport (1956) 74 WN (NSW) 80, applying Christensen v Railway Commissioners for NSW (1921) 21 SR (NSW) 141; Chapman went to the High Court where Kitto J also indicates that retirement will normally be incompatible with the continuance of employment: (1957) 97 CLR 160 at 175-176. See also to the same effect Obee v Railway Commissioners for NSW (1930) 30 SR (NSW) 201 at 206, approved by Kitto J in Commissioner for Railways v Scott (1959) 102 CLR 392 at 420; Ex parte Wurth; Re Flanagan (1957) 58 SR (NSW) 51 at 58; Kinconne Pty Ltd v Brombey (1985) 10 IR 122 at 124. Particularly one conferred by statute: LHMU v Cuddles Management Pty Ltd (2009) 183 IR 89 at [116]-[117]. Fair Work Act 2009 (Cth), s 384 See for example, Carr v Blade Repairs Australia Pty Ltd (No 2) (2010) 197 IR 307 (notice not to be given before termination of a contract of supply to which the employer was party). See also Adventure World Travel Pty Ltd v Newsom (2014) 86 NSWLR 515 at [31]. A notice of requisite length, but issued pursuant to a recommendation improperly made, has been called a “nullity”: Gunton v Richmond-upon-Thames LBC [1981] Ch 448 at 474 per Brightman LJ. Finch v Oake [1896] 1 Ch 409 at 415-416; Riordan v War Office [1959] 1 WLR 1046 at 1054-1055. Geys v Société Générale, London Branch [2013] 1 AC 523 at [57]-[61] (Baroness Hale of Richmond JSC). Brown v Southall & Knight [1980] ICR 617 at 628; confirmed in Gisda Cyf v Barratt [2010] ICR 1475 at [32]-[34].

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Effect of notice [9.60] A valid notice of termination will operate according to its terms80 and will bring the contract of employment to an end when the notice expires81 or is due to expire (unless the contract is otherwise ended by some independent means).82 There is nothing else the employer needs to do to produce such a result.83 Termination of the contract does not mean that the contract ceases to have all legal effect. For example, restraint clauses can be enforced and breaches of, say, the employee’s duty of fidelity and loyalty, can be restrained or sued on (see [5.520]).84 The employer–employee relationship will also end when the contract of employment ends if that relationship has not ended earlier. The possibility of the contract of employment existing after the employment relationship has ended seems established,85 although ordinarily it will be of “no real significance”.86 A majority of the High Court has confirmed the existence of the distinction between the contract of employment and the employment relationship.87 80

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82 83 84

85

86

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Adventure World Travel Pty Ltd v Newsom (2014) 86 NSWLR 515. There the relevant clause provided for a minimum period of notice of 12 months, if exercised in the first two years of employment, and three months after that. The exercise of the power by the employee giving 12 months notice just prior to the two year minimum period passed could not be undermined by the employer giving three months notice of termination soon after the two year minimum period expired. The right to terminate on notice was exhausted: at [31] per Meagher J. Further, to permit the employer to terminate on a shorter period of notice would deprive the employee of the benefit of the 12 month notice provision, contrary to the implied duty to do all things necessary to enable the employee to have the benefit of the contract; at [47] per Leeming JA. Hill v Parsons [1972] 1 Ch 305 at 313-314 per Lord Denning MR; Birrell v Australian National Airlines Commission (1984) 5 FCR 447 at 457; Springbank Ltd v Craig [1974] IRLR 7 at 10 (NIRC); Grout v Gunnedah Shire Council (No 1) (1994) 57 IR 243 at 251-252; Fryar v System Services Pty Ltd (1995) 60 IR 68 at 87; APESMA v Skilled Engineering Pty Ltd (1994) 54 IR 236 at 246. H W Smith (Cabinets) Ltd v Brindle [1974] 1 WLR 1652 at 1657-1658. APESMA v Skilled Engineering Pty Ltd (1994) 51 IR 236 at 246. For example, General Billposting Co Ltd v Atkinson [1909] AC 118; MacDonald v South Cambridgeshire Rural District Council (NIRC) [1973] ICR 611 at 614; Sanders v Parry [1967] 1 WLR 753; Ormonoid Roofing and Asphalts Ltd v Bitumenoids Ltd (1930) 31 SR (NSW) 347. Compare the position where the contract ends upon the acceptance of a repudiatory breach on the part of the employer: see [8.20], [8.80]. Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 450-453, 456-457 per Latham CJ, at 465-466 per Dixon J, at 476 per Williams J; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 428 per Brennan CJ, Dawson and Toohey JJ; Gunton v Richmond-upon-Thames LBC [1981] Ch 448 at 475 per Brightman LJ; compare Freedland, The Contract of Employment (1976), p 20. Compare the comments of Gray J in two cases; Gregory v Philip Morris Ltd (1987) 77 ALR 79 at 99 and APESMA v Skilled Engineering Pty Ltd (1994) 1 IRCR 106 at 114; 54 IR 236 at 242-243. In both cases, Gray J argues that the distinction between the employment relationship and the contract of employment is non-existent and in fact has never existed. See also, Grout v Gunnedah Shire Council (No 2) (1995) 58 IR 67 at 69 where Moore J says that there is now a “well developed line of recent authority in the Federal Court that a distinction should not be drawn between the employment relationship and the contract of employment”; see also Cooper v Darwin Rugby League Club Inc (1994) 57 IR 238 at 240. Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 428 per Brennan CJ, Dawson and Toohey JJ. In a previous edition of this text, it was said that Turner v Australasian Coal and Shale Employees Federation (1984) 55 ALR 635 overlooked the distinction between the employment relationship and the contract of employment. This passage drew comment from two members of the Industrial Relations Court of Australia: Siagian v Sanel Pty Ltd (1994) 54 IR 185 at 200 per Wilcox CJ; APESMA v Skilled Engineering Pty Ltd (1994) 54 IR 236 at 242 per Gray J. Chief Justice Wilcox was of the view that it was unnecessary for the court in Turner’s case to decide the issue of whether or not the distinction exists: Siagian v Sanel Pty Ltd (1994) 54 IR 185 at 200. Justice Gray, who was also a member of the Full Federal Court in Turner, said that the court in Turner’s case treated the distinction as non-existent: APESMA v Skilled Engineering Pty Ltd (1994) 54 IR 236 at 242. Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 428 per Brennan CJ, Dawson and Toohey JJ; Visscher v Giudice (2009) 239 CLR 361 at [55].

Notice

Non-acceptance of notice [9.70] At times an employer or employee “refuses to accept” a notice of termination of employment. In the absence of special situations, Windeyer J has pointed out: “expressions such as the tendering and acceptance of a resignation, although commonly used, are merely linguistic courtesies”.88 Provided a notice is valid, a purported refusal to accept it cannot alter the legal situation,89 and the notice will operate to end the contract when the period specified therein expires, or is due to expire, unless the contract is properly ended in the meantime by some other independent cause, such as summary dismissal of the employee for misconduct, or unless the notice is withdrawn by mutual agreement. It is suggested that the only legal significance of a refusal to accept a notice may be to facilitate subsequent consensual withdrawal of the notice. As will be seen, a valid notice, once given, cannot be withdrawn without the consent of the party to whom it has been given. A continuing “refusal” to accept the notice by that party may be evidence of consent to any subsequent withdrawal of the notice by the party giving it.

Invalid notice [9.80] A notice of termination which is invalid (for example, because it is not given in accordance with the requirements in an award or contract, or because it specifies too short a period), will not operate to end the contract of employment.90 An invalid notice has been called a “nullity”91 for the purposes of assessing damages to which the innocent party may be entitled as a result of the breach of contract by the party terminating the contract invalidly.92 In Automatic Fire Sprinklers Pty Ltd v Watson, Dixon J called an inadequate notice “abortive”.93 Inadequate notice may be made effective by the recipient’s acceptance.94 Alternatively, the giving of inadequate notice may be treated as an offer to terminate capable of acceptance.95 The invalid notice constituting the repudiation can be withdrawn unilaterally96 at any time before it is accepted by the innocent party, for “an unaccepted repudiation is a thing writ in water”.97 However, a repudiatory notice, if accepted by the innocent 88 89

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93 94 95 96

97

Marks v Commonwealth (1964) 111 CLR 549. Riordan v War Office [1959] 1 WLR 1046 at 1054; compare the situation where the resignation is given at a moment of emotional upset. Query whether the notice is valid, or whether the employee should be permitted to withdraw the notice. Although it may end the employer–employee relationship if, say, an employee is given short notice and is excluded from the employer’s premises when the period of notice expires: Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 451, 461, 466, 469, 476; Hill v C A Parsons Ltd [1972] 1 Ch 305 at 313 per Lord Denning MR. Gunton v Richmond-upon-Thames LBC [1981] Ch 448 at 474 per Brightman LJ. The usual basis for calculation of damages at common law is to assess the way in which the contract could be lawfully terminated least favourably to the innocent party (usually by giving notice) and to account for what the employee would have earned during that time: see [10.100]. Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 467. This was a case where there was no acceptance of the inadequate notice. Hill v C A Parsons & Co Ltd [1972] Ch 305 at 313; Gunnedah Shire Council v Grout (1995) 134 ALR 156 at 164-165. Gunnedah Shire Council v Grout (1995) 134 ALR 156 at 166: whether a particular notice should be treated as such an offer is a matter of construction. Heyman v Darwins Ltd [1942] AC 356 at 361 per Viscount Simon LC; Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361 at 382 per Buckley LJ. The ability of the guilty party to withdraw the invalid notice depends on the giving of the notice being regarded as an “anticipatory repudiation” committed with respect to a future executory obligation under the contract: Norwest Holst Group Administration Ltd v Harrison [1985] ICR 668 at 678, 681, 683. See [8.30]. Howard v Pickford Tool Co Ltd [1951] 1 KB 417 at 421.

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party, will bring the contract to an end upon such acceptance98 (rather than from the time of the repudiation constituted by service of the invalid notice).99 A purported acceptance of a supposed repudiation will not bring a contract of employment to an end, nor will it operate as a valid notice of termination under the contract.100 Consider, for example, an employee’s notice of resignation of, say, one month, in accordance with the contract, which is (wrongly) regarded by the employer as giving too short a period of notice. A purported acceptance by the employer of this supposed repudiation by the employee would not end the contract forthwith nor operate as a valid notice by the employer. The contract would end at the expiry of the one-month notice period. An attempt by the employer to exclude the employee prior to the expiration of the one-month notice would be a repudiation by the employer, entitling but not obliging the employee to regard the contract as at an end at that point in time. An exception to this analysis may be possible where the issue of termination is dealt with by statute, or for that matter by an award.

Withdrawal of notice Unilateral withdrawal [9.90] An invalid notice of termination, being a repudiation, can be withdrawn unilaterally unless and until it is accepted by the innocent party as putting the contract at an end. Subject to two or three arguable exceptions, a valid notice, on the other hand, cannot be withdrawn without the consent of the party to whom it is given, even where the period specified in the notice has not expired. Whilst it has been recognised that there is surprisingly little authority on this question101 there is authority to support the proposition that unilateral withdrawal is not possible. In Riordan v War Office Diplock J said: “The giving of a notice terminating a contractual employment, whether by employee or employer, is the exercise of the right under the contract of employment to bring the contract to an end, either immediately or in the future. It is a unilateral act, requiring no acceptance by the other party, and, like a notice to quit a tenancy, once given it cannot in my view be withdrawn save by mutual consent.”102 There is a passage to the same effect in Harris & Russell Ltd v Slingsby,103 a decision of the National Industrial Relations Court in which the court was apparently not referred to Riordan. In Birrell v Australian National Airlines Commission,104 Gray J agreed that in principle, this conclusion must be correct.105 98

99 100 101 102 103

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Heyman v Darwins Ltd [1942] AC 356 at 361 per Viscount Simon LC; Gunton v Richmond-uponThames LBC [1981] Ch 448 at 467-468 per Buckley LJ; Norwest Holst Group Administration Ltd v Harrison [1985] ICR 668 at 683. Thomas Marshall (Exports) Ltd v Guinle [1979] 1 Ch 227 at 240. Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361. Birrell v Australian National Airlines Commission (1984) 5 FCR 447 at 457. Riordan v War Office [1959] 1 WLR 1046 at 1054 per Diplock J, affirmed on appeal [1961] 1 WLR 210. Harris & Russell Ltd v Slingsby [1973] ICR 454 at 455. See also Cavenagh v William Evans Ltd [2013] 1 WLR 238 at [36]-[39], where the employer, having exercised the right to terminate on payment in lieu of notice, could not seek to withdraw the termination and rely upon misconduct (not known at the time) to justify summary dismissal. Compare Melbourne Stadiums Ltd v Sautner (2015) 317 ALR 665 at [123]. Birrell v Australian National Airlines Commission (1984) 5 FCR 447 at 458. See also State of New South Wales v Paige (2002) 60 NSWLR 371 at [283]. See also Saddington v Building Workers Industrial Union of Australia (1993) 49 IR 323 at 336-337, where Ryan J agrees with the conclusion expressed in Birrell. Two other Australian authorities, at times cited in support of the proposition that unilateral withdrawal of notice is not possible, are Emery v Commonwealth [1963] VR 586 and Australian Wool Selling Brokers Employers’ Federation

Notice

This situation accords with the very term of the contract, express or implied, whereby it was agreed that termination by notice could occur. To allow a party unilaterally to withdraw a notice once given would be contrary to the agreed term. There seems to be no direct authority, but a purported withdrawal of a valid notice is arguably a breach of the contract, although possibly not a breach of such magnitude as to allow the recipient of the notice to regard the contract as at an end.106 As Gray J said in Birrell,107 if unilateral withdrawal of notice was allowed, most inconvenient results could follow. For example, an employee given notice might thereupon enter into a fresh contract of employment with another to commence duty on the expiration of notice from the present employer. If the notice could then be withdrawn by the first employer, the employee would find herself or himself bound by two concurrent contracts of employment.108 In the case of any person whose engagement is made under a statute, the law concerning withdrawal of notice may be subject to another consideration. If a statutory employer issues a notice of termination, otherwise valid, it may be able to be withdrawn if issued under the statute, either by implication109 or because of the operation of an appropriate interpretation statute. But if the notice is issued under the contract of employment, the general rule will apply, and unilateral withdrawal will not be available.110 A statute may actually prohibit withdrawal of resignation, even by consent.111

Withdrawal after emotional upset [9.100] There is another possible situation where unilateral withdrawal of a valid notice may be allowed, and that is where notice is given by a person in a highly emotional state and is retracted upon recovery from that condition. Such an exception was allowed in Martin v Yeoman Aggregates Ltd.112 But Birrell v Australian National Airlines Commission indicates that the exception is tightly confined, so that the notice must be given in the heat of the moment, and withdrawn as soon as the person realises she or he has acted in anger.113 Rather than regard this as an exception to the general rule, it is probably more correct to say that a notice given in such circumstances is not a valid or effective notice, and so could be withdrawn under the principles discussed earlier.114 However, if such a notice was not withdrawn as soon as emotions subsided, but was allowed to stand, the invalidating circumstance would be removed and the

106 107 108 109 110

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112 113 114

v Federated Storemen and Packers Union of Australia (1976) 176 CAR 884. Gray J in Birrell pointed out that Emery appears to have assumed the correctness of a concession made by counsel for the Commonwealth to the effect that unilateral withdrawal was not possible. Australian Wool Selling Brokers relied on Emery. To that extent the cases are, of course, of little precedential value on this aspect. Compare the situation where the other party mistakenly treats a valid notice of termination as invalid (for example, because it is too short) and purports to terminate forthwith: see [9.80]. Birrell v Australian National Airlines Commission (1984) 5 FCR 447. Birrell v Australian National Airlines Commission (1984) 5 FCR 447 at 458. Palais Parking Station Pty Ltd v Shea (1977) 16 SASR 350 especially at 368 per King J. Given the usual employment practices of statutory authorities, this might prove difficult: Australian National University v Burns (1982) 43 ALR 25; Sellars v Woods (1982) 45 ALR 113; Bayley v Osborne (1984) 4 FCR 141 at 150; compare Chittick v Ackland (1984) 1 FCR 254; Australian Film Commission v Mabey (1985) 59 ALR 25. R v The Mayor and Town Council of Wigan (1885) 14 QBD 908. The case dealt with resignation from a municipal body rather than from employment. The possibility exists with respect to any statutory employer, although modern examples are not easy to find. Martin v Yeoman Aggregates Ltd [1983] ICR 314. Birrell v Australian National Airlines Commission (1984) 5 FCR 447 at 459. See, for example, Gunnedah Shire Council v Grout (1995) 134 ALR 156; by way of obiter dicta the court said that if the employee’s act of resignation was given in such a state of confusion that it could not be considered a voluntary act, it would not be open to the employer to accept the resignation. A parallel argument might be made with respect to a resignation extracted under pressure. In Australian

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notice thus ratified or adopted; it would seem that thereafter it could not be withdrawn unilaterally. Acceptance of such notice by the employer may, however, amount to a constructive dismissal: see [8.80].115

Withdrawal where notice not yet communicated [9.110] Another situation where a valid notice apparently can be withdrawn occurs where, say, a notice of resignation is given to a secretary to the manager, for later transmission to the manager. If the secretary receives the notice as agent for the person giving it, the notice could be withdrawn until such time as the secretary gave it to the manager. But if the notice is given to the secretary as agent for the manager, which will be the usual case, it cannot be withdrawn.116 In the first situation the notice is not really being withdrawn; it has not been given to or received by the employer or the employer’s agent at all. The issue is whether the notice of resignation reached the employer in the manner for which the contract provided.117

Effect of withdrawal [9.120] If a notice of termination is withdrawn by agreement, a question arises whether the employment continues under the old contract or under a new contract. There seems to be no clear authority on this, but the better view is that the original contract continues.118 Of course, if there is more than a withdrawal of notice, and the employee continues to work, but under changed conditions, such as different duties, salary, etc, there may be a new contract. But its existence is explained not by operation of the consensual withdrawal but by other principles of contract law.119

Variation of notice [9.130] At times, where a notice of termination is given, discussions or correspondence can follow which result, and are intended to result, in a different, usually shorter, period of notice being substituted.120 Of itself, an employee’s request to leave prior to the expiration of a period of notice given by the employer will not operate as a notice terminating the contract.121 But if the request is refused and the employer insists that

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Film Commission v Mabey (1985) 59 ALR 25 a resignation allegedly obtained under “duress” was later purportedly withdrawn, but in the events which happened it was not necessary for the court to pass on the legal efficacy of this. In Stephenson v London Joint Stock Bank Ltd (1903) 20 TLR 8 a notice requiring an employee to resign forthwith followed a few days later by the employee’s resignation was held to be a dismissal, rather than a resignation. Compare Silberschneider v MRSA Earthmoving Pty Ltd (1987) 68 WAIG 33 at 35; where two New South Wales cases on “constructive dismissal” are cited. See McCarry, “Constructive Dismissal of Employees in Australia” (1994) 68 ALJ 494. It appears that industrial tribunals are prepared to find that there is some obligation to give the employee an opportunity to withdraw a resignation which is given in a state of emotional upset; Kwik-Fit (GB) Ltd v Lineham [1992] ICR 183; Achal v Electrolux Pty Ltd (1993) 50 IR 236; Ngo v Link Printing Pty Ltd (1999) 94 IR 375 at [12]-[13]. However, these decisions often turn on the wording of the governing legislation, which may not reflect the position at common law; Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200; Attorney-General v Western Australian Prison Officers’ Union of Workers (1995) 62 IR 225. Analogising Riordan v War Office [1959] 1 WLR 1046 at 1054-1055. State of New South Wales v Paige (2002) 60 NSWLR 371 at [292]-[300]. Emery v Commonwealth (1963) 5 FLR 209 at 217. These are dealt at [9.340]. An example of where the employer and employee agreed to extend the period of notice arose in Mowlem Northern Ltd v Watson [1990] ICR 751. An employer who notified an employee that his position was redundant later sought to negotiate a major contract which would have given the employee further work. The employer and employee agreed to continue the employment while the negotiations took place. Ultimately the negotiations were unsuccessful and the employment was terminated. Glacier Metal Co Ltd v Dyer [1974] 3 All ER 21.

Notice

the employee serve out the period of notice, then abandonment of the employment by the employee would be a breach on her or his part which would probably justify summary dismissal by the employer. As to the consequences of an employer making a payment in lieu of notice, or refusing to allow an employee to work out notice period, see [9.150].122 Where, by consent, an employee does leave before notice has expired, it is largely a question of fact, but sometimes a difficult question, to decide whether there has occurred an agreed variation of the original notice, or the giving of a fresh notice by one or other of the parties.123 Generally speaking, it will require fairly clear evidence to show the giving of a fresh notice; the more readily available conclusion will be that there has been an agreed variation.

Garden leave124 [9.140] The employer may simply waive an obligation on the employee to “work out” some or all of the period of notice, often referred to as placing an employee on “garden leave”.125 Whether an employer is entitled to place the employee on garden leave during the notice period will turn on the express terms of the contract126 or, in the absence of an express term, any such implied power dependent upon all of the circumstances of the employment.127 Even where there is an express power to direct an employee to not attend work during the notice period, the employer will need to ensure that the power is exercised strictly in accordance with its terms and that it complies with all other terms of the contract. Failure to provide a motor vehicle and other benefits to which the employee is entitled as part of the remuneration package during the period of garden leave may amount to a repudiation of the contract.128 In Tullett Prebon (Australia) Pty Ltd v Purcell129 the express terms of the contract permitted the employer to direct the employee not to attend work during the notice period. The employee repudiated the contract by resigning short of the fixed term of the contract. The employer refused to accept the employee’s repudiation and obtained an injunction to prevent the employee from leaving the employment and commencing work with a competitor whilst the contract remained on foot. The court upheld the express right to direct the employee not to attend work whilst the contract continued.130 In Bearingpoint Australia Pty Ltd v Hillard131 the employee argued that, 122 123

124

125

126 127

128 129 130

As to whether the breach is repudiatory, see Spencer v Marchington [1988] IRLR 392 at 395 (Ch D). See, for example, Tunnel Holdings Ltd v Woolf [1976] ICR 387; Staffordshire County Council v Secretary of State for Employment [1987] ICR 956, where some of the English authorities are collected. Leech v Preston Borough Council [1985] ICR 192 at 196. “Gardening leave” was recently described as an “unfortunate expression” due to its connotation that “the employer has so much power over an employee that the employer is entitled to direct a resigning employee to go home and tend the garden during the notice period”: Actrol Parts Pty Ltd v Coppi (No.2) [2015] VSC 694 (9 December 2015, Bell J) at [18]. As to the duty to provide work generally, see [5.310]. Delaney v Staples [1992] 1 All ER 944 at 947; Marshall (Cambridge) Ltd v Hamblin [1994] ICR 362. Further, the courts will be reluctant to enforce a garden leave clause to any greater extent than would be covered by a justifiable restraint of trade: Credit Suisse v Armstrong [1996] ICR 882 at 892; Metcash Limited v Jardim (No 3) (2010) 273 ALR 407 at [43] and on appeal Jardin v Metcash Ltd (2011) 285 ALR 677 at [84]-[86] per Meagher JA. See A Coulthard, “Garden Leave, the Right to Work and Restraints of Trade” (2009) 22 AJLL 87. Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414 at [25]. Bearingpoint Australia Pty Ltd v Hillard [2008] VSC 115 (18 April 2008, Habersberger J) at [84]-[111]. Such a term is more likely to be implied where the employee is in a senior position in which he or she has access to confidential information and is directly exposed to client relationships: Actrol Parts Pty Ltd v Coppi (No 2) [2015] VSC 694 (9 December 2015, Bell J) at [23]. Actrol Parts Pty Ltd v Coppi (No 2) [2015] VSC 694 (9 December 2015, Bell J) at [43]. Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414. Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414 at [24]-[25]. Interestingly, the

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by placing him on garden leave during the notice period following the employee’s resignation, absent an express right to do so, the employer repudiated the contract. The claim was rejected. After considering the authorities, the court considered that the circumstances of Mr Hillard’s employment were not such that it was appropriate to imply a term requiring Bearingpoint to give him work to do, therefore permitting it to direct him to take garden leave during the notice period. An important consideration was the need for Bearingpoint to prepare for his successor to take up the position of Managing Director, and the potential impact his departure would have on clients and staff.132 A variation on this theme occurred in Birrell, where it was held that the employee could not unilaterally withdraw his notice of resignation. The employee could withdraw that part of his letter which sought the employer’s agreement to waive the requisite period of notice, unless the employer had accepted the request to waive in the meantime. The employer had attempted to accept the offer to waive the period of notice, but had not effectively communicated that acceptance to the employee before the employee withdrew the offer to waive.133

Payment in Lieu of Notice [9.150] It is not uncommon for an employer to give payment in lieu of notice to an employee, even where there is no express contractual provision or award so allowing. It has been said that the phrase “payment in lieu of notice” has an inherent ambiguity.134 In the absence of an express provision allowing it, payment in lieu of notice generally means one of two things. First, it can mean a payment to an employee, whom it is proposed to summarily dismiss, of a lump sum compensating the employee for loss of wages for the notice period. Where the contract expressly provides for termination on the giving of a certain period of notice, in the absence of an express term as to pay in lieu of notice, the law does not imply a term allowing for termination by way of payment in lieu of that

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employer later directed the employee to attend work and, upon the employee’s refusal to do so, accepted the employee’s repudiation, terminated the contract and successfully sued for a liquidated sum in accordance with the contract: Tullett Prebon (Australia) Pty Ltd v Purcell [2009] NSWSC 1079 (9 October 2009, Ward J), upheld on appeal Purcell v Tullett Prebon (Australia) Pty Ltd [2010] NSWCA 150 (28 September 2010, Allsop P, Basten JA and Handley AJA). Bearingpoint Australia Pty Ltd v Hillard [2008] VSC 115 (18 April 2008, Habersberger J). Bearingpoint Australia Pty Ltd v Hillard [2008] VSC 115 (18 April 2008, Habersberger J) at [100]-[107]. It may be that the considerations relevant to assessment of whether it is lawful to direct an employee to go on garden leave during a notice period may differ from those where the direction occurs during the employment. See [5.310]. Birrell v Australian National Airlines Commission (1984) 5 FCR 447 at 462, relying on Tallerman & Co Pty Ltd v Nathan’s Merchandise (Victoria) Pty Ltd (1957) 98 CLR 93 at 111; compare Gunnedah Shire Council v Grout (1995) 134 ALR 156, where the acceptance of the resignation (notice of which was communicated to the employee) amounted to a waiver of the required notice period. Siagian v Sanel Pty Ltd (1994) 1 IRCR 1 at 20; 54 IR 185 at 203. See Freedland, The Personal Contract of Employment (OUP, 2003), pp 318-322; also Fodder and Freer, “The Effect of Contractual Provision for Payment in Lieu of Notice” (2001) 30 ILJ 215. In Quinn v Gray (2009) 184 IR 279 at [11]-[12], a court refused to overturn an award of a private arbitrator of $25,000, for breach of an express notice provision by the employer paying the employee and terminating the employment forthwith, to compensate the employee for the greater difficulty he may encounter in securing alternative employment whilst not in work when searching (although, it is important to bear in mind that the statutory standard applicable in an appeal from a decision of an arbitrator at the time was to establish a manifest error of law on the face of the award, Commercial Arbitration Act 1984 (Vic), s 38(5): compare now Commercial Arbitration Act 2011 (Vic), s 34A and equivalent provisions in other States).

Payment in Lieu of Notice

notice, because it would fly in the face of the express term of the contract.135 Therefore, even where payment in lieu is made, the failure to give the notice amounts to a breach.136 The payment which is made to the employee in these circumstances equates to a payment on account of damages to which the employee would be entitled in respect of the breach of contract for the failure to give the notice.137 In WT Partnership (Aust) Pty Ltd v Sheldrick138 the failure to allow the employee to work out the notice period was significant. The employee’s visa status in Malaysia was dependent upon his employment. The failure to let the employee work out the notice period meant that the employee no longer had a valid visa, preventing him from exploring further employment opportunities in Malaysia. The Full Court of the Federal Court accepted the assessment of the judge at first instance that this lost opportunity should be valued at $30,000.139 Claims may also be brought in circumstances where, had the employee been permitted to work out the notice in accordance with the contract, he or she would have secured a bonus or share options in accordance with a contractual bonus scheme or employee share option plan: see [10.160]. Secondly, it can mean a payment of wages for the notice period and otherwise excusing the employee from duty for the notice period (garden leave, see [9.140]).140 In the first case, the employment terminates on the date of payment of the lump sum. In the second case, the employment extends until the expiry of the period for which the payment was made.141 In Australia it may be possible to argue that, in some industries at least, payment in lieu is so well established as to constitute an industry custom or practice, to be implied into contracts of employment in that industry, other than in circumstances where there is an express notice provision.142 For such a term to be implied into the contract of a new entrant into the industry it is not necessary to show that the new entrant knew of the custom and practice.143 If payment in lieu is not permissible, then the appropriate notice would have to be given,144 unless the parties agreed to a consensual termination of the contract on payment of the appropriate sum by way of variation of the original agreement. The converse situation, namely forfeiture of a sum by a departing employee in lieu of notice, can also occur, although Freedland argues that this is inappropriate in that the payment by the employee, which would normally be equivalent to wages for the period, is not related to the loss caused by the summary departure of the employee.145 Moreover, a contract of employment which purported to provide for forfeiture of wages, as distinct from a sum equivalent thereto, might well be in breach 135 136

137 138 139 140 141 142 143

144 145

Sanders v Snell (1998) 196 CLR 329 at [16]; Carter v The Dennis Family Corporation [2010] VSC 406 (9 September 2010, Habersberger J) at [54]. Sanders v Snell (1998) 196 CLR 329 at [16]; query whether the breach amounts to a repudiation. It was said to do so in Northern Tableland Insurance Brokers Pty Ltd v Howell (2009) 184 IR 307 at [30]-[36], so that, upon acceptance of the repudiation by the employee, the contract was discharged and the employer was not permitted to enforce a post-employment restraint. Compare Wallace v United Graingrowers Ltd [1997] 3 SCR 701 (Supreme Court of Canada). Delaney v Staples [1992] 1 All ER 944; Sanders v Snell (1998) 196 CLR 329 at [16]. WT Partnership (Aust) Pty Ltd v Sheldrick (1999) 96 IR 202. See also McCarry, “Termination of Employment, Payment in Lieu of Notice, Garden Leave and the Right to Work” (1999) 12 AJLL 56 at 61. See also [5.310]. See Siagian v Sanel Pty Ltd (1994) 54 IR 185 at 203 and the cases there cited. Sanders v Snell (1998) 196 CLR 329 at [16]. Con-Stan Industries of Australia Pty Ltd v Norwich Winterhur Insurance (Australia) Ltd (1986) 160 CLR 226 at 236-237. Compare Turner v Australasian Coal and Shale Employees Federation (1984) 55 ALR 635 (ignorance, no implied term in the contract). See [4.530]. A failure to provide the notice amounts to a breach: Sanders v Snell (1998) 196 CLR 329 at [16]. Freedland, The Contract of Employment (OUP, 1976), p 185.

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of statutes intended to ensure that an employee in fact receives her or his wages.146 A clause in a contract which purported to specify a sum equivalent to the amount of wages, or some other sum, would need to be drawn with care to ensure that the sum so stated was a genuine pre-estimate of damages and not a penalty.147 In the normal situation where payment in lieu is permitted by the terms of the contract, the contract ends upon such payment.148 However, whether this does occur will depend upon the circumstances of each case.149 Notices accompanying payment in lieu should be drawn with care,150 as difficulties can arise concerning the legally operative date of termination, because it has been said that the expression “paid in lieu of notice” can also have a “broader and more colloquial sense of payment to someone who is excused or prohibited from attending the workplace during the notice period”.151 Australian authority on the issue152 concludes, after considering the various English authorities,153 that in the absence of evidence of a contrary intention, it should usually be inferred that the employer intended the termination to take effect immediately.154 English authority suggests that where the contract provides for termination by payment in lieu of notice, in the absence of notice having been given, the employee is entitled to recover the payment in lieu of notice as a contractual debt and is not under a duty to mitigate her or his loss.155 Accordingly, if an employer wrongfully 146

147

148

149 150 151

152 153 154

155

See also the prohibition on deductions from payment to employees unless agreement is provided in writing in the Fair Work Act 2009 (Cth), ss 323 and 324. If, by making the deduction, the employer fails to satisfy its obligation to pay a minimum rate of pay prescribed by a modern award (s 45), an enterprise agreement (s 50) or a national minimum wage order (s 293), it will be exposed to enforcement proceedings under Pt 4-1 of the Fair Work Act 2009. See [10.50]. See, for example, Jones v TCE Marketing Australia Pty Ltd (unreported, Industrial Relations Court of Australia, Murphy JR, 10 October 1996). In any event, such a clause is likely to be susceptible to variation in circumstances where there is a statutory power to vary unfair contracts. Melbourne Stadiums Ltd v Sautner (2015) 317 ALR 665 at [119]-[123] (Tracey, Gilmour, Jagot and Beach JJ), compare Cavenagh v William Evans Ltd [2013] 1 WLR 238 at [36]-[39] and Geys v Société Générale, London Branch [2013] 1 AC 523 at [57]-[61] (Baroness Hale of Richmond JSC). See also Freedland, The Contract of Employment (OUP, 1976), pp 188-189. This has consequences for an employee who requires service during the notice period to qualify for an entitlement to long service leave, or payment for a public holiday, or payment of a bonus. Leech v Preston Borough Council [1985] ICR 192 at 196; Delaney v Staples [1992] 1 All ER 944 at 947. Geys v Société Générale, London Branch [2013] 1 AC 523 at [57]-[61] (Baroness Hale of Richmond JSC). Leech v Preston Borough Council [1985] ICR 192 at 195; British Building and Engineering Appliances v Dedman [1973] ICR 82. The decision was upheld on appeal: [1974] 1 WLR 171. Compare consideration of English cases in Freedland, The Contract of Employment (OUP, 1976), p 188; see also Mason Gray Strange NSW Ltd v Eisdell noted (1989) 30 AILR 272; Re Braszell noted (1984) AILR 222. Siagian v Sanel Pty Ltd (1994) 54 IR 185. Notably though, the House of Lords’ decision in Delaney v Staples [1992] 1 All ER 944 is not considered. Siagian v Sanel Pty Ltd (1994) 54 IR 185 at 206, where Wilcox CJ comments that “This conclusion not only reflects the more accurate meaning of the phrase ‘payment in lieu of notice’; it accords with common sense”; see also O U Norman International Pty Ltd v Baker noted (1993) AILR 152; compare Mason Gray Strange NSW Ltd v Eisdell noted (1989) 30 AILR 272. Abrahams v Performing Right Society Ltd [1995] ICR 1028. In Australia, see Reilly v Praxa Ltd [2004] ACTSC 41 (9 June 2004, Gray J). It appears that the employer can, upon receiving proper notice of termination from the employee, exercise a contractual right to terminate the employment immediately by payment in lieu of notice without compensating the employee for loss of commissions on sales that might have been achieved during that notice period; see Cerberus Software Ltd v Rowley [1999] IRLR 690, in which the United Kingdom Employment Appeals Tribunal said that the employer has two choices, either to give the notice or make the payment. It is not open to the employer to give no notice and make no payment, and let the employee sue for damages. The employee is entitled to recover the contractual debt without mitigation. It rationalised this view on the basis that payment in

Redundancy

dismisses an employee summarily (for example because no grounds for summary dismissal exist) and there is an express provision for pay in lieu of notice, in the absence of notice having been given, it is arguable that the employee would be entitled to the full amount of the pay in lieu of notice (as a contractual debt) without the need to mitigate her or his loss as a result of the employer’s breach.156

Redundancy [9.160] Redundancy is not a ground for summary termination.157 Therefore, the employer must give the employee proper notice of termination of the contract of employment. In addition to the ordinary contractual requirement that the employee be given notice of termination, certain rights and entitlements flow from the termination of an employee’s employment as a result of her or his position becoming redundant. The employee may have an entitlement to severance pay under the contract of employment,158 a modern award,159 an enterprise agreement or statute. An entitlement to severance pay upon termination of employment due to redundancy is now one of the ten National Employment Standards in the Fair Work Act 2009 (Cth): s 119 (see [12.250]). As will be seen later in this chapter, this entitlement is derived from and reflects the development of the Termination, Change and Redundancy Standard by the former Australian Conciliation and Arbitration Commission and the former Australian Industrial Relations Commission. An employee whose dismissal arises by reason of “genuine redundancy” is not entitled to relief under the unfair dismissal provisions of the Fair Work Act 2009: ss 385(d) and 389 (see [13.140]). However, the employee (or her or his union) may have certain rights to be consulted in relation to the proposed termination of the employment in accordance with the provision of a relevant award, or legislation.160

156 157 158

159 160

lieu, with the obligation to pay up front, is a palliative to the disadvantage of seeking other employment whilst unemployed, at [20]. However, the Court of Appeal overturned the decision of the EAT, and distinguished the decision in Abrahams on the basis that, in the case before it, the employer had the option to elect to make the payment in lieu. It did not have an obligation to make the payment in lieu: Cerberus Software Ltd v Rowley [2001] ICR 371. Leave to appeal to the House of Lords was refused [2001] ICR 1241. See Freedland, The Personal Contract of Employment (OUP, 2003), pp 388-390; also Fodder and Freer, “The Effect of Contractual Provision for Payment in Lieu of Notice” (2001) 30 ILJ 215 at 220-223. See also Marshall (Cambridge) Ltd v Hamblin [1994] ICR 362; query whether the same can be said where the contract does not expressly provide for payment in lieu of notice; see Slee and Stockden Pty Ltd v Blewitt (1992) 47 IR 104 at 115. Reilly v Praxa Ltd [2004] ACTSC 41 (9 June 2004, Gray J) at [25], [32]. ICI Australia Operations Pty Ltd (t/as Dulux Australia) v Hutton (1993) 47 IR 288 at 296. Often as a result of incorporation of the relevant redundancy policy into the contract: Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193; Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120 (7 August 2007, Black CJ, Marshall and Jessup JJ); Yousif v Commonwealth Bank of Australia (2010) 193 IR 212; Romero v Farstad Shipping (Indian Pacific) Pty Ltd (2014) 231 FCR 403; Zafirou v Saint-Gobain Administration Pty Ltd [2014] VSCA 331 (15 December 2014, Osborn and Whelan JJA and Ginnane AJA). See [4.480] for a discussion about incorporation generally. A modern award may contain an industry specific redundancy scheme: Fair Work Act 2009 (Cth), s 141. Fair Work Act 2009 (Cth), ss 530 – 532. Note that some employees are excluded: see [13.60].

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What is a redundancy? [9.170] The classic definition of “redundancy”, referred to with approval in many subsequent cases, was given by Bray CJ in R v Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Co-Op Ltd,161 where his Honour stated: the concept of redundancy in the context we are discussing seems to be simply this, that a job becomes redundant when the employer no longer desires to have it performed by anyone. A dismissal for redundancy seems to be a dismissal, not on account of any personal act or default of the employee dismissed or any consideration peculiar to him, but because the employer no longer wishes the job the employee has been doing to be done by anyone.

The concept of redundancy developed to describe a “category of cessation or termination of employment which is recognised as being quite different from that of a termination of contract of employment in the normal and usual course of events”.162 It was brought about as a result of increasing unemployment consequent upon economic and industry downturns, company amalgamations and takeovers, technological change and restructuring or re-organisations of employment.163 As a result of all of these factors, the Australian Conciliation and Arbitration Commission embarked upon a series of hearings which culminated in its decision in the Termination, Change and Redundancy case.164 Having heard submissions from a wide variety of interests, the Commission established certain standards165 in circumstances where an employee’s employment is to be terminated as a result of redundancy. The courts have been reluctant to attempt an exhaustive definition of the term “redundancy”. However, a number of decisions since the Adelaide Milk Supply Co-Op case, have supplemented the definition given by Bray CJ. It is clear that redundancies can arise as a result of the closure of a business,166 the introduction of technological or organisational change,167 the sale of a business,168 the outsourcing of the relevant part of the business,169 or as a result of the privatisation of a government undertaking.170 A redundancy may arise as a result of a restructure in order to increase the competitiveness

161

162

163 164 165

166 167 168 169

170

R v Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Co-Op Ltd (1977) 16 SASR 6 at 8; see also Lindeman v Bentley (unreported, Supreme Court of Victoria, Beach J, 8 December 1989) at 19-20. ICI Australia Operations Pty Ltd (t/as Dulux Australia) v Hutton (1993) 47 IR 288 at 296; compare the meaning of “retrenchment” considered in Commissioner for Superannuation v Bayley (1979) 28 ALR 293 at 310-311; Lawrence v Clutha Development Pty Ltd (unreported, Federal Court of Australia, Keely J, 10 May 1985); Hawkins v Commonwealth Bank of Australia (1996) 70 IR 213. ICI Australia Operations Pty Ltd (t/as Dulux Australia) v Hutton (1993) 47 IR 288 at 296. Termination, Change and Redundancy Case (1984) 9 IR 115. See also FBIS International Protective Services (Aust) Pty Ltd v MUA (2015) 232 FCR 1 at [8]-[10]. With respect to notice of termination, consultation with unions when a decision is made which involves the introduction of technological change, or which involves employees becoming redundant and minimum severance pay entitlements where an employee’s employment is terminated as a result of the position becoming redundant. The standard was reviewed by a Full Bench of the Australian Industrial Relations Commission in the 2004 Redundancy Test Case (2004) 129 IR 155 and the 2004 Redundancy Test Case Supplementary Decision (2004) 129 IR 57. Re Coles Fossey and Burton (1992) 41 IR 49. Short v F W Hercus Pty Ltd (1993) 50 FCR 511 at 520-521. Australian Nursing Federation; re Suratman and Gell, Appeals (1989) 4 VIR 193; Re Government Cleaning Service (Privatisation) Award (No 2) (1994) 55 IR 199. FSUA v Commonwealth Bank of Australia (2001) 111 IR 241 at [71] and following, and the cases there referred to (decision overturned on appeal, but on the basis that the employees continued to work for the bank and there had been no redundancy as defined in the relevant agreement: Commonwealth Bank of Australia v FSUA (2002) 125 FCR 9 at [23]-[28]). Re Government Cleaning Service (Privatisation) Award (No 2) (1994) 55 IR 199.

Redundancy

or profitability of the business.171 It has been accepted that an employee’s position is redundant where the duties that go to make up that position are split up and spread amongst other employees.172 One formulation, which has been quoted with approval in subsequent cases,173 was provided by Ryan J in the Industrial Relations Court of Australia in Jones v Department of Energy and Minerals. His Honour said: it should be noted that Bray CJ’s description of what can constitute redundancy is not expressed to be exclusive. His Honour’s description was cast in terms of a “job” in the sense of a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employer’s organisation, to a particular employee. However, it is within the employer’s prerogative to rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions including newly-created positions. It is inappropriate now to attempt an exhaustive description of the methods by which a reorganisation of that kind may be achieved. One illustration of it occurs when the duties of a single, full-time, employee are redistributed to several part-time employees. What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the reorganisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant in the sense in which the word was used in the Adelaide Milk Co-Operative case.174

What is apparent is that the question of whether an employee is redundant, and therefore entitled to the benefits that flow, will turn on the words of the relevant contract, statute, award or enterprise agreement.175 The focus is on the work undertaken by the employee, rather than the identity of the employee or the employer.176 This was an issue of importance for the High Court when it determined that a severance pay clause did not confer entitlements upon employees who were transferred (by consent) from one company to another in the same corporate structure, effectively continuing the same job after the transfer.177

171

172

173

174

175 176 177

Howarth v Babin (unreported, Industrial Relations Court of Australia, Wilcox CJ, 30 September 1996); Thomas v Lynch (unreported, Industrial Relations Court of Australia, Wilcox CJ, 20 December 1996). Bunnett v Henderson Federal Spring Works Pty Ltd (1989) 4 VIR 364 at 376; Jones v Department of Energy and Minerals (1995) 60 IR 304 at 308; Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327 at 332-333; Aitken v Construction, Forestry, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia (WA Branch) (1995) 63 IR 1, Dibb v Commissioner for Taxation (2004) 136 FCR 388. Compare the situation where there has been some reallocation of responsibilities which may have arisen due to the employee’s inadequate performance: Encyclopaedia Britannica Australia Ltd v Campbell [2009] NSWCA 286 (10 September 2009, Giles JA, Macfarlan JA and Sackville AJA) at [59]-[74]. Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327 at 332; Aitken v Construction, Forestry, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia (WA Branch) (1995) 63 IR 1; Association of Professional Engineers, Scientists and Managers Australia (on behalf of Cross) v Deniliquin Council No 2 (1995) 134 ALR 267 at 285; Fosters Group Ltd v Wing (2005) 148 IR 224 at [33]-[36]; International Flowers and Fragrances (Australia) Pty Ltd v Hoff [2008] VSC 56 (7 March 2008, Byrne J) at [4]; Whittaker v Unisys Australia Pty Ltd (2010) 192 IR 311 at [92]-[99]. Jones v Department of Energy and Minerals (1995) 60 IR 304 at 308. Further, as to what constitutes an employee’s “position”, see Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539; see also Fosters Group Limited v Wing (2005) 148 IR 224 at [44]; International Flavours and Fragrances (Australia) Pty Ltd v Hoff [2008] VSC 56 (7 March 2008, Byrne J). Hodgson v Amcor (2012) 264 FLR 1 at [371]; UGL Rail Services Pty Limited v Janik [2014] NSWCA 436 (19 December 2014, Emmett JA, Sackville AJA and Adamson J at [118]-[132] (Sackville AJA). This is reflected in the statutory entitlement under s 119 of the Fair Work Act 2009 (Cth). Amcor Ltd v CFMEU (2005) 222 CLR 241 at [44] (Gummow, Hayne and Heydon JJ). This view is reflected in the exclusion of the statutory entitlement to severance pay in the circumstances set out in s 122 of the Fair Work Act 2009 (Cth).

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Severance pay [9.180] We have said that the Fair Work Act 2009 (Cth), s 119(1) confers an

entitlement to severance pay.178 An employer may apply to the Fair Work Commission to reduce the amount of severance pay in circumstances where the employer has obtained acceptable alternative employment for the employee or where the employer cannot pay the amount required by the table in s 119(2): s 120. These concepts have their origins in the development of standard award provisions from test cases conducted in industrial tribunals.179 In the Termination Change and Redundancy case180 a Full Bench of the Australian Conciliation and Arbitration Commission said that severance pay is essentially compensation for the loss of non-transferable credits and inconvenience and hardship imposed upon employees. Severance pay also compensates the employee for disruption to the employee’s routine and social contacts and the competitive disability to long-term employees arising from opportunities forgone in the continuous service of the one employer.181 In Black v Brimbank City Council,182 Moore J suggested that, in the Termination Change and Redundancy case, the Commission was not saying that severance pay could not be referrable to the loss of future income, but was saying that, because the community had assumed the burden of making payments to the unemployed, the rationale for awarding severance pay had to be found in considerations other than income maintenance. The practical effect of severance pay was to provide compensation for the loss of a job, the corresponding loss of opportunity to earn an income, and the associated trauma. There is also a need to compensate employees for the loss of a reasonable expectation of continued employment and for the need to adjust to new circumstances, re-organise their lives and seek new employment.183 The requirement to make a severance payment is in addition to the requirement to provide notice of termination – the two are distinct.184 A period of notice provides the employee with the opportunity to adjust to the change in circumstances which is to occur and to seek other employment.185 The distinction is important in terms of the remedies available for a failure to comply with a contractual obligation in relation to notice or severance pay. Where there is a contractual entitlement to severance pay, that payment is enforceable as a contractual debt. However, where there is no entitlement to severance pay (under the contract, award or statute), but the employer makes a 178 179

180

181 182 183

184

185

See [12.250]. Two early decisions varying the amount of severance pay are Re Affinity Risk Partners (Brokers) Pty Ltd [2011] FWA 295 (17 January 2011, Smith C) and Aztec Steel Pty Ltd v Gaden [2011] FWA 42 (7 January 2011, Williams C). Termination Change and Redundancy Case (1984) 8 IR 34 at 72-73. Upon reviewing the TCR standard in 2004, a Full Bench of the Australian Industrial Relations Commission confirmed this rationale for the creation of severance pay entitlements: 2004 Redundancy Test Case (2004) 129 IR 155 at [133]-[152] and the 2004 Redundancy Test Case Supplementary Decision (2004) 129 IR 57 at [9]. Food Preservers’ Union of Australia v Wattie Pict Ltd (1975) 172 CAR 227; Fryar v System Services Pty Ltd (1996) 137 ALR 321 at 331. Black v Brimbank City Council (1998) 152 ALR 491 at 505. Termination, Change and Redundancy Case (1984) 8 IR 34 at 50; ICI Australia Operations Pty Ltd (t/as Dulux Australia) v Hutton (1993) 47 IR 288 at 297; compare the position in the United Kingdom, Barry v Midland Bank plc [1999] 3 All ER 974. Fryar v System Services Pty Ltd (1996) 137 ALR 321 at 331; compare the approach in Lavings v Barclay Mowlem Construction (NSW) Ltd (1994) 99 IR 247. The National Employment Standards recognize this difference. The minimum notice provision in s 117 applies to all national system employees (apart from those identified in ss 123(1) and (3)) and cannot be excluded. The severance pay obligations in s 119 apply to all national system employees (apart from those identified in ss 123(1) and (4)) only if certain requirements are met and can be excluded in certain circumstances or may be modified by order of the Fair Work Commission. See [12.250]. See [9.40].

Redundancy

severance payment upon termination, the question arises as to whether, in answer to a claim for damages for failure to provide adequate notice, the employer can set off the severance payment which has been made against any entitlement to damages. It is submitted that such an approach is appropriate.186 Whilst in the past it was reasonably rare for an employee to have an express contractual entitlement to severance pay, such provisions are becoming more frequent both in circumstances of redundancy,187 and where there has been a diminution in duties and responsibilities as a result of a takeover of the employer’s business.188 The entitlement to severance pay may arise as a result of the incorporation into the contract of employment of a severance pay provision in a company’s policies or procedures manual.189 The principles applicable to incorporation generally are discussed at [4.480]. Alternatively, an employee may have a contractual entitlement to severance pay on the basis that the terms of a redundancy agreement reached between the employer and the relevant union form part of the terms and conditions of her or his employment.190 In Re Homfray Carpets Pty Ltd (Receivers and Managers Appointed) (In liq)191 the decision of O’Bryan J, who held that the terms of an unregistered redundancy agreement became terms of employment of the employees who were 186

187

188

189

190

191

See Black v Brimbank City Council (1998) 152 ALR 491; Furey v Civil Service Association of WA (Inc) (1999) 91 FCR 407; Kirchner v Mayne Nickless Ltd (2000) 140 IR 340 at [91]-[99]; Reynolds v Southcorp Wines Pty Ltd (2002) 122 FCR 301; Reilly v Praxa Ltd [2004] ACTSC 41 (9 June 2004, Gray J) at [34]-[35]; Guthrie v News Limited (2010) 27 VR 196 at [200]-[204]; compare Haley v Public Transport Corporation of Victoria (1998) 119 IR 242. For example, see Esanda Finance Corp Ltd v Kenchington (unreported, Supreme Court of South Australia, Prior J, 21 May 1993); Ridley v Tioxide Australia Pty Ltd (unreported, Industrial Relations Court of Australia, Parkinson JR, 12 November 1996). In an unusual case the contractual entitlement to severance pay arose from the employee’s acceptance of the employer’s errant overstatement of severance pay entitlements in an offer of voluntary redundancy: Tooheys Pty Ltd v Blinkhorn [2008] NSWSC 499 (26 May 2008, White J). In Guthrie v News Limited (2010) 27 VR 196 at [204]-[207], the court sought to give effect to an express entitlement to an unquantified “severance payment” by approaching the assessment by reference to a range of factors not dissimilar to those relevant to the assessment of reasonable notice of termination: see [9.40]. Earney v Australian Property Investment Strategic Pty Ltd [2010] VSC 621 (22 December 2010, Hargrave J); Fardell v Coates Hire Operations Pty Ltd (2010) 201 IR 64; Suresteps v AG McGrath and Sons [2010] NSWSC 169 (19 February 2010, Brereton J); compare Whittaker v Unisys Australia Pty Ltd (2010) 192 IR 311 (no express entitlement, but the question arose as to whether the change of duties was such that they no longer came within the scope of duties provision in the contract). For example, see Esanda Finance Corp Ltd v Kenchington (unreported, Supreme Court of South Australia, Prior J, 21 May 1993). In Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193, the contract imposed an obligation upon the employee to abide by the policies and procedures in place at the company from time to time. At first instance, [2000] FCA 32 (1 February 2000), Weinberg J concluded that this was broad enough to impose an obligation upon the company to abide by the terms and conditions in the policies and procedures documents because the vast majority of obligations imposed were upon the company, rather than the employee. This decision was upheld by a majority on appeal. See also Reynolds v Southcorp Wines Pty Ltd (2002) 122 FCR 301 at 313. Compare Willis v Health Communications Network Ltd (2007) 167 IR 425 at [63]-[65]. Careful consideration must be given to the terms of the relevant policy. It may exclude an entitlement to severance pay in certain circumstances, such as where the employer makes available a suitable alternative position, or where redeployment is an option: Whittaker v Unisys Australia Pty Ltd (2010) 192 IR 311 at [157]-[162]; Rogan-Gardiner v Woolworths Ltd (No 2) [2010] WASC 290 (22 October 2010, Hall J) at [141]-[145] (not dealt with on appeal, see Rogan-Gardiner v Woolworths Ltd (2012) 218 IR 417 at [65] (Newnes JA, McLure P and Allanson J agreeing). The policy will usually also identify how the severance pay entitlement is calculated (for example, on base remuneration or the total remuneration package): see, for example, Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014, Griffith J) at [1275]-[1284] and on appeal in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [274]-[277] (Buchanan J). See, for example, Hawkins v Commonwealth Bank of Australia (1996) 70 IR 213. Compare United Firefighters Union of Australia v Metropolitan Fire and Emergency Services Board (2003) 123 IR 86 at [56]-[80]. Noted Re Homfray Carpets Pty Ltd (Receivers and Managers (1994) 36 AILR 363.

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represented by the union who negotiated the agreement, was overturned on appeal.192 The Court of Appeal said that there was no certainty as to whom the union represented, the union itself had given no consideration,193 and the conduct of the parties to the agreement was such that they did not intend the agreement to be legally enforceable, but instead intended the agreement to be enforceable as an industrial instrument only.194 See [12.360]. In Ajax Cooke Pty Ltd (t/as Ajax Spurway Fasteners) v Nugent195 the Supreme Court of Victoria held that the terms of a redundancy agreement entered into between the union and the company extended to non-union members. Whilst the agreement itself was negotiated with the unions, a notice was subsequently posted on the employer’s premises advising that the arrangements were to “apply to employees” generally.196 [9.190] An entitlement to severance pay may arise from the implication of a term into the contract of employment based on custom and practice in the employer’s industry. The employer may have a practice of always applying an industry standard redundancy package. Often unions negotiate an industry standard package with the peak employer body in the industry, or with a number of significant employers in the industry and, as a result, other employers follow suit. Whilst it may be difficult to establish a contractual entitlement on the basis of such a custom and practice, often unions are in a position to enforce payment of severance pay under an unregistered industrial agreement or an industry standard through the threat of industrial action. Whilst there are conflicting authorities, it appears that the law in Australia is not yet prepared to recognise an implied term of the contract of employment entitling an employee to severance pay on the basis that the term is necessary to give business efficacy to the contract.197 192 193

194

195 196

197

Ryan v Textile Clothing and Footwear Union Australia [1996] 2 VR 235. Because it was not possible to distil from the agreements any promise by the unions to do or refrain from doing anything, nor was there any promise about future conduct; [1996] 2 VR 235 at 294 per Hayne JA. Re Homfray Carpets Pty Ltd (Receivers and Managers Appointed) (In liq) [1996] 2 VR 235 at 297 per Hayne JA. In United Firefighters Union of Australia v Metropolitan Fire and Emergency Services Board (2003) 123 IR 86 at [80] the court held that an intention that the agreement would be enforceable upon certification under the Workplace Relations Act 1996 (Cth) did not constitute an intention to create legal relations at common law. Ajax Cooke Pty Ltd (t/as Ajax Spurway Fasteners) v Nugent (1993) 5 VIR 551. The court regarded the notice as containing an offer similar to that in Carlill v Carbolic Smokeball Co [1893] 1 QB 256. The offer was accepted by the plaintiff continuing in the employment until he was retrenched. This conclusion was relied upon in a later case, involving the same redundancy agreement, to extend the availability of the redundancy agreement to a non-award employee: see Ajax Cooke Pty Ltd v Wong (unreported, Supreme Court of Victoria, Court of Appeal, Tadgell, Ormiston and Callaway JJA, 18 September 1996) at 5-6. The extent to which this decision in Nugent is overruled by the decision of the Supreme Court of Victoria, Court of Appeal in Ryan v Textile Clothing and Footwear Union Australia [1996] 2 VR 235 is unclear. It is submitted that the incorporation of the term into the employees’ contracts in Ajax Cooke was not because of the union’s role in reaching agreement with the employer, but rather because the employer posted the agreement on the wall and said that it applied to all employees. Therefore the agreement obtained enforceability by means other than any agency between the union and its members. However, the means by which the court in Ajax Cooke found that the necessary consideration existed would appear to be slightly artificial. The court appears to have used the consideration issue as a device to achieve what it believed to be a fair result in the circumstances. In Ajax Cooke Pty Ltd v Wong (unreported, Supreme Court of Victoria, Court of Appeal, Tadgell, Ormiston and Callaway JJA, 18 September 1996) at 3-4, the court expressed a strong inclination to say that there was no offer but, at most, a representation that the package would be available. However, the court felt bound by the common ground accepted at first instance that the document was an offer that at least some employees could accept. This argument was rejected in Patterson v Seeley International Pty Ltd (1994) 177 LSJS 209 at 222. It cannot be said that a requirement to pay severance pay is necessary or so obvious that it goes without saying: Dellys v Elderslie Finance Corporation Ltd (2002) 132 IR 385 at [21]; Willis v Health

Redundancy

The Termination, Change and Redundancy case provides an award standard clause for minimum severance pay requirements, but contains an exclusion for terminations as a result of the “ordinary and customary turnover of labour”.198 The Termination, Change and Redundancy case standard was reviewed in 2004199 but remained largely intact until the Award Modernisation process began under the Workplace Relations Act 1996 (Cth), Pt 10A.200 It remains the foundation for many enterprise agreement provisions. In addition to the Fair Work Act 2009 provisions and award protection, in some States there is statutory protection for employees whose employment is terminated as a result of redundancy.201 Given that the entitlement to severance pay arises from a particular instrument (contract, statute or award), the terms of that instrument will need to be considered to ascertain whether there is an entitlement to severance pay and, if so, what that entitlement is.202 For example, it may be that there is no entitlement to severance pay in circumstances where the employer obtains adequate alternative employment for the employee,203 or the employee can be redeployed,204 or where there is a transfer of

198

199 200

201

202

203

Communications Network Ltd (2007) 167 IR 425 at [33]; Sterling Commerce (Australia) Pty Ltd v Iliff (2008) 173 IR 378 at [28]-[32]. Compare Coles/Myer Ltd T/as Coles Supermarkets v Sweeting (1993) 47 IR 345 at 356-357, overturned by Coles/Myer Ltd v Coppin (1993) 11 WAR 20; 49 IR 275. By way of contrast, in exercising its unfair contracts jurisdiction, the Industrial Court of New South Wales has been prepared to vary contracts to include severance pay provisions: Lavings v Barclay Mowlem Construction (NSW) Ltd (1994) 99 IR 247; see also Rothmans Distribution Services Ltd v Full Court of the Industrial Court of New South Wales (1994) 53 IR 157; Walker v Industrial Court of New South Wales (1994) 53 IR 121; Caulfield v Broken Hill City Council (1995) 60 IR 221 at 231; O’Donnell v GIO Australia Ltd (1996) 64 IR 297; David Jones (Australia) Pty Ltd v Cukeric (1997) 78 IR 430. The mere fact that an employer is a party to an enterprise agreement with a severance pay clause does not of itself provide a basis for the implication of a term entitling employees covered by the agreement to severance pay under their contracts of employment: ACTEW v Pangallo (2002) 127 FCR 1. The mere fact that an employer is a party to an enterprise agreement with a severance pay clause does not of itself provide a basis for the implication of a term entitling other employees (not covered by the certified agreement) to severance pay in similar terms: Tibaldi Smallgoods (Australasia) Pty Ltd v Rinaldi (2008) 172 IR 86 at [52]. As to the meaning of “ordinary and customary turnover of labour” see, for example, SDAEA v Countdown Stores (1983) 7 IR 273; National Union of Workers v Queensland Wool Centre (1992) 41 IR 78; Re Coles Fossey and Burton (1992) 41 IR 49; Re Application for Redundancy Awards (1994) 53 IR 419; Spotless Catering Services Ltd v Daley (1993) 49 IR 434 at 438, 439. With respect to seasonal downturn, see, for example, DR Johnston Group Pty Ltd (Guyra) Abattoir v Arder (1995) 61 IR 107. With respect to the loss of a service contract, see Tempo Services Limited v Klooger (2004) 136 IR 358. 2004 Redundancy Test Case (2004) 129 IR 155; 2004 Redundancy Test Case Supplementary Decision (2004) 129 IR 57. Redundancy and termination of employment are not amongst the matters listed in s 136 of the Fair Work Act 2009 (Cth) as matters which may be included in a modern award. Section 141 permits industry specific redundancy schemes to be included in a modern award. For example, Employment Protection Act 1982 (NSW), ss 7, 8; Employment Protection Regulation 2001 (NSW), Pt 3; De Lisle v Rose Bay Private Hospital Pty Ltd (No 2) (1997) 75 IR 93; Industrial Relations Act 1999 (Qld), Ch 3, Pt 4 and Sch 3. For example, see Commonwealth Bank of Australia v FSUA (2002) 125 FCR 9; Amcor Limited v CFMEU (2005) 222 CLR 241. It will also require a consideration of the scope available to the employer to vary the duties and responsibilities within the terms of the existing contract: Whittaker v Unisys Australia Pty Ltd (2010) 192 IR 311. Fair Work Act 2009 (Cth), s 122(3). The standard redundancy clause arising from the Termination Change and Redundancy Case (1984) 8 IR 34 provides that an employer can seek relief from the obligation to pay severance pay where it procures an offer of adequate alternative employment even if that offer is not accepted: Derole Nominees Pty Ltd (12 September 1989, AIRC, Peterson J, Marsh DP and Oldmeadow C, Print J4414); The assessment of whether the employment offered is adequate is an objective assessment: Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd (1998) 27 IR 226 at 230–231; Allman v Teletech International Pty Ltd (2008) 178 IR 415; FBIS International Protective Services (Aust) Pty Ltd v MUA (2015) 232 FCR 1 at [8]-[21]; Milardovic v Vemco Services

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employment205 or where the relevant function is outsourced.206 Further, the entitlement may be modified by an employee’s pending retirement, or an employee’s entitlement to superannuation benefits.207 If there is an entitlement, the amount becomes payable as a lump sum under the relevant instrument and, if not paid, can be sued for under relevant statutory provisions208 or enforced as a contractual debt.209

Other issues [9.200] In addition to the minimum severance pay entitlements (or access to an industrial tribunal to seek severance pay orders), award provisions and legislation (federally and in some States) provide a set of minimum standards as to notification of relevant unions and government authorities and consultations with unions and employees.210 The Termination, Change and Redundancy case standard clause also provides for consultation with union respondents to the award and for time off work during the notice period to enable the employee to search for alternative work. Also, if the dismissal is not a “genuine redundancy” for the purposes of s 389 of the Fair Work Act 2009 (Cth), the employee may have unfair dismissal rights under Pt 3-2 of the Fair Work Act 2009: see [13.90].

204

205

206

207

208 209 210

Pty Ltd (Administrator Appointed) [2016] FCA 19 (29 January 2016, Mortimer J) at [266]-[277]. It requires consideration of a number of factors: NUW v Tontine Fibres (A Division of United Bonded Fabrics Pty Ltd) (2007) 168 IR 143. Compare De Lisle v Rose Bay Private Hospital Pty Ltd (No 2) (1997) 75 IR 93 at 97-98. See also Hawkins v Commonwealth Bank of Australia (1996) 66 IR 322, Hawkins v Commonwealth Bank of Australia (No 2) (1996) 70 IR 213. As to the impact on severance pay entitlements by securing adequate alternative employment and in a transmission of business situation, see Colonial Mutual Life Assurance Society Ltd v FSUA (2004) 133 IR 149 at [60]-[69]. As to the employer’s ability to direct the employee to change duties see Bruce v AWB Ltd [2000] 100 IR 129; Dunstan v National Mutual Life Association of Australasia Ltd (1992) 5 VIR 73 at 80; Kweifio-Okai v RMIT University [1999] FCA 1686 (8 December 1999, Branson, Marshall and Dowsett JJ); Morante v State Superannuation Board (1998) 84 IR 205: see [5.510] and [9.370]. Fair Work Act 2009 (Cth), s 122(2). Steppes Pty Ltd v ALHMWU (1998) 86 IR 337 at 338; AFMEPKIU v United Milk Tasmania (2000) 140 IR 51; Amcor Limited v CFMEU (2005) 222 CLR 241. Fair Work Act 2009 (Cth), s 122(2). FSUA v Commonwealth Bank of Australia (2001) 111 IR 241 at [71] and following, and the cases there referred to (decision overturned on appeal, but on the basis that the employees continued to work for the bank and there had been no redundancy as defined in the relevant agreement) Commonwealth Bank of Australia v FSUA (2002) 125 FCR 9 at [23]-[28]. See the original TCR clause – Termination Change and Redundancy Case (1984) 9 IR 115; Wynns Winegrowers Pty Ltd v Foster (1986) 16 IR 381; Colonial Mutual Life Assurance Society Ltd v FSUA (2004) 133 IR 149 at [67]. For example, Fair Work Act 2009 (Cth), Pt 4-1. Abrahams v Performing Right Society Ltd [1995] ICR 1028; compare Cerberus Software Ltd v Rowley [2001] ICR 371 (leave to appeal to the House of Lords refused [2001] ICR 1241). See [13.330]. The Fair Work Act 2009 (Cth) provides for the making of an application to the Fair Work Commission for appropriate orders in the event that the employer fails to provide certain information to relevant unions or provide them with an opportunity to consult about measures to avert or mitigate the adverse effects of the redundancies: ss 531 – 533. The Commission’s powers can extend to preventing the redundancies from taking effect: CFMEU v Mt Thorley Operations Pty Ltd (17 March 1998, AIRC, Leary C, Print P9489); CFMEU v Newcastle Wallsend Coal Co Ltd (1998) 88 IR 202. The Fair Work Act 2009 (Cth), s 530 requires an employer to notify the relevant government authority in the event that it terminates the employment of 15 or more employees for reasons of an economic, technological, structural or similar nature.

Effluxion of Time

Effluxion of Time [9.210] Where a contract provides for employment for a fixed term, the contract will automatically end when the term expires unless, of course, it is lawfully terminated in some other way in the meantime.211 However, if, without expressly extending the term of the contract, the employment continues beyond the expiry of the fixed term, a court is likely to conclude that a new contract has commenced. The employer could not then rely on the expiration of the fixed term contract to justify the termination.212 A failure by the employer to renew a contract that is part of a series of contracts may, for the purposes of unfair dismissal legislation, amount to a termination by the employer rather than a termination by the effluxion of time.213 These decisions turn on the construction of the particular contracts and statutes there under consideration. Accordingly, care must be taken when applying them.214

Compulsory retirement [9.220] Where a contract215 or legislation216 prescribes a compulsory retirement age, the employment will come to an end by reason of the operation of the contract or statute rather than by any act of the party. However, the employee may have other rights under legislation which prohibits discrimination on the ground of age.217

“Permanent” employment [9.230] Sometimes employment is described as “permanent” or “tenured” especially in public sector or academic posts, but also in the private sector as well. “When an employment is described as permanent it is generally either a reference to the normal retiring age, intervening sickness or misconduct excepted; or at least to the expectation of the employee that, unless exceptional circumstances intervene, he or she may anticipate continuous employment for an indefinite time.”218 Probably the second sense is the one which most often represents the legal position of so-called “permanent” employees. Of course, provided the employer has a clear power to engage until normal retiring age – and this can be a problem with statutory bodies – there is no legal impediment to a contract for life. But that such a contract has in fact been created will need to appear clearly from the contract or other instrument regulating engagement of 211

212

213 214

215 216

217 218

Victoria v Commonwealth (1996) 187 CLR 416 at 520; Gallotti v Argyle Diamond Mines Pty Ltd [2003] WASCA 166 (15 July 2003, Anderson, McKechnie and Heenan JJ) at [4]-[7]. It is not a “dismissal” under the Fair Work Act 2009 (Cth), s 386(2)(a). D’Arcy v SE Dickens Pty Ltd (1992) 5 VIR 85; Hogan v Wimmera College of TAFE (1993) 5 VIR 412; upheld on appeal, Wimmera College of TAFE v Hogan (unreported, Employee Relations Commission of Victoria, E94/0186, 12 August 1994); D’lima v Board of Management, Princess Margaret Hospital for Children (1995) 64 IR 19, although this case did turn on its particular facts (see at 23 and 29). See [13.120]. Pritchard v Dolly Dolly Creations Pty Ltd (1989) 31 IR 231; Jenner v Copperart Pty Ltd (1993) 60 SAIR 20; compare Marsh v Macquarie University (2005) 147 IR 401. For example, compare R v Secretary of State for Social Services; Ex parte Khan [1973] 1 WLR 187; [1973] 3 All ER 538; and Orange City Bowling Club Ltd v FLAIEU [1979] AR (NSW) 90; see also Walker v Zurich Australian Insurance Ltd [2001] QCA 296 (31 July 2001, de Jersey CJ, Davies and Thomas JJ). Diamond Valley Community Hospital v Hospital Employees’ Federation of Australia (1982) 1 VIR 462. ALHMWU v Commonwealth (1994) 55 IR 18; Forge v Commonwealth (1995) 58 IR 285. Fraser v Sydney Harbour Casino Pty Ltd (1997) 79 IR 472; Secretary, Department of Defence v HREOC (1997) 78 FCR 208. For example, Fair Work Act 2009 (Cth), s 351; State and federal anti-discrimination legislation which prohibits discrimination on the ground of age. See Chapter 15. Re Montgomery and Commissioner for Superannuation (1985) 3 AAR 69 at 73.

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the worker.219 In the absence of a clear power, it is arguable that a contract for life is contrary to public policy and void, or at the very least terminable on reasonable notice.220

Frustration or Impossibility [9.240] There have been a number of theoretical bases for the doctrine of

frustration.221 In a number of earlier decisions there was a preference for the theory that a contract was subject to an implied condition that the parties would be excused from performance of the contract if, before a breach, performance becomes impossible from the perishing of the thing which forms the substance of the contract without default of the contractor.222 However, the doctrine of frustration was set out by Lord Radcliffe in Davis Contractors Ltd v Fareham:223 frustration occurs whenever the law recognizes that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract … It was not this that I promised to do.

This position is accepted as applying in Australia.224 Unlike repudiation (see [8.20]) frustration puts an end to the contract automatically without action by the parties.225 This can be important; for example, it can mean the difference between receiving and not receiving an employment benefit, such as long service leave or a superannuation benefit,226 which depends on the contract being in existence for a particular time or at a particular date. It should be noted that for the parties to be discharged from liability under this doctrine it is not enough that the supervening incident has merely made performance of the contract difficult.227 There must be “the non-existence of the state of things assumed by both contracting parties as the foundation of the contract”.228 A person asserting that a contract has been frustrated bears an onus of showing not only the occurrence of the frustrating circumstances but also that they were not caused by any default on her or his part.229 219

220 221 222 223 224

225 226 227 228 229

Waddell v Mathematics.com.au Pty Ltd [2013] NSWSC 142 (1 March 2013, Rothman J) at [88]-[89]; McClelland v Northern Ireland General Health Services Board [1957] 1 WLR 594 at 601, 602, 605, applied in McCasker v Darling Downs Co-op Bacon Association Ltd (1988) 25 IR 107. See Haley v Public Transport Corporation of Victoria (1998) 119 IR 242 at [83]; Caulfield v Broken Hill City Council (1995) 60 IR 221 at 230. Freedland, The Personal Contract of Employment (OUP, 2003), pp 441-449. Taylor v Caldwell (1863) 3 B and S 826; 122 ER 309 at 833 (B and S), 312 (ER) per Blackburn J. Davis Contractors Ltd v Fareham UDC [1956] AC 696 at 729. Brisbane City Council v Group Projects Pty Ltd (1979) 145 CLR 143 at 159-163 per Stephen J; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 357 per Mason J and 380 per Aickin J with Stephen and Wilson JJ agreeing; compare Brennan J at 409; Walsh v The Police Association (2000) 140 IR 58; Regional Development Australia, Murraylands and Riverina Inc v Smith [2015] SASCFC 160 (10 November 2015, Gray, Sulan and Nicholson JJ) at [31] (Gray J) and [100]-[102] (Nicholson J). Hirji Mulji v Cheong Yue [1926] AC 497; Denny, Mott and Dickson Ltd v James B Fraser & Co Ltd [1944] AC 265. For example, see Cachia v State Authorities Superannuation Board (1993) 47 IR 254. Davis Contractors Ltd v Fareham UDC [1956] AC 696. Krell v Henry [1903] 2 KB 740 at 749, 754 per Vaughan Williams LJ: Marshall v Harland and Wolff [1972] 1 WLR 899 at 904. F C Shepherd & Co Ltd v Jerrom [1987] 1 QB 301 at 319 per Lawton LJ. The contract is not terminated by way of frustration if the employer, purporting to accept an event as frustrating the contract, gives the employee notice of the termination: Walsh v The Police Association (2000) 140 IR 58.

Frustration or Impossibility

The effect of frustration on a contract partly performed by the parties (or one of them) is the subject of some judicial conflict at the highest levels. The High Court of Australia in Re Continental C & G Rubber Co Pty Ltd,230 held that when further performance of a contract becomes impossible not only are both parties excused from further performance but as regards liability not then actually accrued and enforceable, the contract is at an end. So if one had a now unusual type of contract of employment – an entire contract, where nothing is payable to the employee until the whole job is done – the rule could operate harshly. This can be illustrated by reference to the old case of Cutter v Powell.231 A second mate was engaged for a voyage from Jamaica to Liverpool. The contract was found to be an “entire” contract whereby he was not to be paid until he had completed his duties and until the ship had arrived in Liverpool. He died during the voyage. The contract was thereby frustrated (as we would now analyse it), and it was held that the sailor’s estate could recover nothing in respect of the part of that journey completed before the man died. In a more modern setting, if wages are payable periodically (say per month) and the employee dies or the contract is otherwise frustrated part of the way through the month, can the employee (or the estate) recover wages for work done to the date of the frustration? If the employment contract, on its proper construction, is one whereby wages are earned from month to month, the Continental C & G Rubber case would suggest that no recovery under the contract is possible other than for completed months for which a right to recover had already accrued at the date of the frustrating event. But in the Fibrosa case232 the House of Lords allowed recovery of money under a frustrated contract. More recently, the law of restitution and the concept of unjust enrichment have stepped in to assist a party, who has provided a benefit to another, to recover that benefit in circumstances where it would be unjust to allow the other party to retain that benefit.233 It is arguable that where an employer has gained a benefit at the employee’s expense, and the employer retains that benefit despite the occurrence of a frustrating event, the employee should be entitled to restitution of that benefit. In some jurisdictions, the adjustment of rights in these situations is regulated by statute, such as the Frustrated Contracts Act 1978 (NSW) and the Frustrated Contracts Act 1988 (SA). The frustrated contracts legislation generally operates to apportion the burden of the loss as a result of the frustrating event. Even where such legislation is in force, it is still necessary to know when a contract would be frustrated at common law, so that the applicability or otherwise of the Act may be determined. Moreover, it may be possible to contract out of the Act, as in New South Wales. We therefore examine a number of situations in which contracts of employment may be terminated by frustration.

Imprisonment [9.250] The passing of a sentence of imprisonment on an employee will not automatically put an end to the contract from the date of the sentence, but it is capable of doing so.234 Whether it does so or not is a question of fact,235 and will depend on the likely length of absence,236 and the need (or otherwise) to obtain a temporary or 230 231 232 233 234 235 236

Re Continental C & G Rubber Co Pty Ltd (1919) 27 CLR 194. Cutter v Powell (1795) 6 TR 320; 101 ER 573. Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32. Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221. F C Shepherd & Co Ltd v Jerrom [1987] 1 QB 301. F C Shepherd & Co Ltd v Jerrom [1987] 1 QB 301 at 316 per Lawton LJ. For example, this may depend upon conditions of bail imposed in a way which prevents the employee from doing the work: Boyo v Lambeth London Borough Council [1994] ICR 727 at 739.

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permanent replacement.237 It would therefore seem that a prison sentence which could be served in a period of available leave,238 or which could be served by periodic weekend detention would not, of itself, frustrate the contract. But a lengthy period of detention will bring the contract to an end. It is not correctly regarded as a repudiation occasioned by the guilty party’s unlawful conduct, nor is it a case of “self-induced frustration” (which would not bring the contract to an end). The frustrating event is the sentence imposed by the court.239

Death [9.260] Death of an employee puts an end to the employment contract. This was one of the examples cited in Taylor v Caldwell. Blackburn J said: There is a class of contracts in which a person binds himself to do something which requires to be performed by him in person; and such promises, for example, promises to marry, or promises to serve for a certain time, are never in practice qualified by an express exception of the death of the party; and therefore in such cases the contract is in terms broken if the promisor dies before fulfilment. Yet it was very early determined that, if the performance is personal, the executors are not liable; Hyde v Dean of Windsor (1597) Cro Eliz 457, 552 at 553; 78 ER 710, 798. See 2 Wms Exors 1560, 5th ed, where a very apt illustration is given. “Thus”, says the learned author, “if an author undertakes to compose a work, and dies before completing it, his executors are discharged from this contract: for the undertaking is merely personal in its nature, and by the intervention of the contractor’s death, has become impossible to be performed”.240

In Stubbs v Holywell Railway Co, Stubbs was employed as an engineer by the defendants for 15 months, his services being paid for quarterly. He died before the work was done and while two instalments for completed quarters were due and unpaid. It was held that his death dissolved the contract (although it did not divest his administrator of the accrued right of action in respect of the completed quarters). Martin B said: The contract, no doubt, is ended by the death of Stubbs, but only in this sense, that the act of God has made further performance impossible. The man’s life was an implied condition of the contract, but the fact of his death can have nothing whatever to do with the payment due for what has been done – with what has been actually earned by the deceased. The contract had, it is true, an implied condition that he should live for 15 months. But his death does not throw back his representative upon the right of recovering on a quantum meruit only. He can recover the stipulated price, due to the deceased when he died, of the work the deceased had actually executed. No vested right of action is taken away by death. The contract is at an end, but it is not “rescinded”, for rescission is the act of two parties, not of one.241

Death of an individual (sole trader) employer can equally end a contract. In Farrow v Wilson Willes J said: Where … personal considerations are of the foundation of the contract, as in cases of principal and agent and master and servant, the death of either party puts an end to the 237 238 239

240 241

Chakki v United Yeast Co Ltd [1982] 2 All ER 446 at 450. Re Long Service Leave (Coal Miners) Award (1962) 4 AILR 74. F C Shepherd & Co Ltd v Jerrom [1987] 1 QB 301; Boyo v Lambeth London Borough Council [1994] ICR 727 at 739; compare Rose v Dodd [2005] ICR 1776 at [53] (dissolution of partnership due to the unlawful conduct of one of the partners). Taylor v Caldwell (1863) 3 B & S 826; 122 ER 309 at 835 (B & S), 313 (ER); see also Hall v Wright (1858) EB & E 765; 120 ER 695. Stubbs v Holywell Railway Co (1867) LR 2 Exch 311 at 314.

Frustration or Impossibility

relation; and, in respect of service after the death, the contract is dissolved, unless there be a stipulation express or implied to the contrary.242

Even where the employer is somewhat more remote from the employee, there can still be a “personal” contract, or at least a contract involving a close and confidential relationship between the parties. One such contract was an agreement between a millionaire racehorse owner and a jockey for the jockey’s services for the 1928 season. Even though the owner conducted much of his racing business through his trainer, the death of the owner put an end to the contract with the jockey. It was argued that while the jockey’s personal attributes were important, the employer’s were not, and that the contract did not die with him. This was rejected and the personality of the employer was held to be material.243

Dissolution of partnership by death [9.270] The same principles usually apply in the situation where one party, employer or employee, is a partnership, and the partnership is dissolved by the death of one of its members.244 Thus where two persons carried on business as stone merchants, a contract whereby they appointed the plaintiff as their sole agent was terminated on the death of one of the partners.245 The decision did not turn on the question of close involvement or the personal skill of the parties, but on what the parties agreed should be done. It was held that the contract had reference to a certain existing partnership only. The contract was to extend for the period specified in it, but subject to a condition that all the parties lived for such period. In Phillips v Alhambra Palace Co Lord Alverstone CJ laid down this principle: If in any particular case the contract is one which has relation to the personal conduct of the contracting party, then the death of that party puts an end to the contract; if, on the other hand, it has no such relation, the death of the contracting party has not that effect.246

In Alhambra Palace the plaintiffs were a troupe of music hall performers who had contracted with a partnership to perform on stage. The plaintiffs had no knowledge of the persons of whom the partnership consisted; it carried on business as the Alhambra Co. It was held that the death of one of the employing partners did not end the contract. The troupe did not know and did not rely on the personnel of the partnership. Contrast this with a case where a troupe of “speciality entertainers” consisted of three brothers one of whom died, but was replaced. The employing theatre company was held not liable to be sued on the original contract (which it had purported to cancel, unnecessarily it seems). The judgments do not refer to the personal nature of the services to be rendered, but the case is consistent with the earlier authorities and can be explained on the basis that the death of one partner frustrated the contract which 242 243

244

245 246

Farrow v Wilson (1869) LR 4 CP 744 at 746. Graves v Cohen (1929) 46 TLR 121. For another example, see Re Peacock; Long v Dow [1930] VLR 9 where a woman appointed certain persons as agents to manage and collect rents on certain property she owned. It was held that the agreement ended on her death; it was one which depended on the lives of the parties. For example, see Partnership Act 1958 (Vic), s 37; Partnership Act 1963 (ACT), s 38; Partnership Act (NT), s 37; Partnership Act 1892 (NSW), s 33; Partnership Act 1891 (Qld), s 36; Partnership Act 1891 (SA), s 33; Partnership Act 1891 (Tas), s 38; Partnership Act 1895 (WA) s 44. Note though, that the death of a limited partner does not generally result in dissolution of the limited partnership: Partnership Act 1958 (Vic), s 70; Partnership Act 1963 (ACT), Pt 6; Partnership Act 1892 (NSW), s 70; Partnership Act 1891 (Qld), s 61; Partnership Act 1891 (SA), s 68; Partnership Act 1891 (Tas), s 83. Tasker v Shepherd (1861) 6 H & N 575; 158 ER 237. Phillips v Alhambra Palace Co [1901] 1 QB 59 at 63-64.

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depended on the continued existence of the lives of those who initially contracted to perform these specialised, personal services.247

War [9.280] Two cases are usually cited as examples of frustration of employment contracts because of war. The first is Horlock v Beal,248 in which a British ship was in a German port (Hamburg) when World War I broke out. The ship was seized and the crew imprisoned. An action for wages was commenced, but the House of Lords held that it failed. The majority said that the further performance of the contract had become impossible from the date the ship was detained. World War II provided the other example in Morgan v Manser.249 In 1938 Manser (a music hall artist) appointed Morgan to be his manager for ten years and agreed (among other things) that during that time he would not book his services with any other agent or manager. Manser was called up and was in the army from 1940 to 1946. Morgan alleged that shortly before and since his discharge Manser had breached the agreement by engaging his services to others. It was held that he had not breached it; the contract had been fundamentally invaded by the defendant’s call-up and was frustrated thereby.

Illness [9.290] Incapacitating illness is probably the occurrence most likely to cause frustration of an employment contract. Two New South Wales cases provide contrasting approaches to the problems posed by incapacitating illness. In Simmons Ltd v Hay,250 Hay became permanently incapacitated because of a heart condition. Simmons Ltd notified him that his agreement was terminated. Hay sued the company for damages for wrongful dismissal. It was argued that the action should have failed because the service agreement had been discharged by the supervening incapacitating illness of Hay. This argument was sustained by the New South Wales Full Court and the contract was held to have been frustrated upon the onset of Hay’s incapacity. Sugerman J referred to a number of authorities251 and concluded that the case was one “in which, as a result of the plaintiff’s incapacitating illness – there did emerge a situation fundamentally different from that which existed at the outset of the contract of employment”.252 This may be contrasted with Finch v Sayers253 in which Wootten J said: “the usual understanding in many types of employment today is that prolonged incapacity of an employee does not automatically terminate the employment contract, but, subject to sick leave rights, excuses the employee from work and the employer from the obligation to pay, and gives the employer (and perhaps also the employee) the right to terminate the contract.”254 His Honour found that the contract before the court had not been frustrated, because of its terms, but added that if he were wrong as to the content of those terms, he would have reached the same conclusion by a different route 247 248 249 250 251 252 253 254

Harvey & Sons v The Tivoli, Manchester Ltd (1907) 23 TLR 592. Horlock v Beal [1916] 1 AC 486. Morgan v Manser [1948] 1 KB 184. Simmons Ltd v Hay [1964] NSWR 416. Including the oft-cited Poussard v Spiers and Pond (1876) 1 QBD 410. Simmons Ltd v Hay [1964] NSWR 416 at 418. Finch v Sayers [1976] 2 NSWLR 540. Finch v Sayers [1976] 2 NSWLR 540 at 548.

Frustration or Impossibility

applying the criteria for frustration set out in Marshall v Harland and Wolff.255 The approach in Finch v Sayers was said to be “overwhelmingly persuasive in the modern industrial context”.256 The test for frustration has been put as a question: “Was the employee’s incapacity, looked at before the purported dismissal, of such a nature, or did it appear likely to continue for such a period, that further performance of his obligations in the future would either be impossible or would be a thing radically different from that undertaken by him and agreed to be accepted by the employer under the agreed terms of his employment?” In answering the question, one has regard to the terms of the contract, including any provision as to sick pay; how long the employment was likely to last in the absence of illness; the nature of the employment; the nature of the illness and how long it has already continued and the prognosis; and the period of past employment.257 The doctrine of frustration may not be so easy to apply to contracts which can be terminated by a short period of notice.258 But it is clear that it can apply to such a contract. Notwithstanding the possibility of termination on short notice, such contracts may often be intended by the parties to last for many years and there may be a statute-based remedy for the employee if the contract is terminated unfairly.259 It should be emphasised that all these cases dealt with absences from work for a lengthy period of time because of illness. A temporary illness of short duration will not put an end to the contract of employment, even if the employee is not entitled to be paid while away.260 In Notcutt,261 the contract made specific reference to the possibility of absence on account of illness or the like. As a matter of construction this was held not to have intended to refer to a totally disabling illness of the kind which occurred. Therefore disabling illness was something which the parties had not provided for when entering into the contract. So it was capable of causing frustration and was held in this case to have so done. In Finch,262 Harland and Wolff,263 and Notcutt264 (and in other cases where frustration is argued to have occurred), the employer gave notice of termination to the employee. If the contract was, in law, frustrated this was not necessary because

255 256

257 258

259 260 261 262 263 264

Marshall v Harland and Wolff [1972] 1 WLR 899 at 903-904. Cachia v State Authorities Superannuation Board (1993) 47 IR 254 at 273-274; see also Grout v Gunnedah Shire Council (No 1) (1994) 57 IR 243 at 250; Hilton Hotels of Australia Ltd v Pasovska (2003) 122 IR 428; Smith v Moore Paragon Australia Ltd (2004) 130 IR 446; Giancaspro v SHRM (Australia) Pty Ltd (2005) 145 IR 269. Marshall v Harland and Wolff [1972] 1 WLR 899 at 903-904. See some suggested additional considerations in Egg Stores (Stanford Hill) Ltd v Leibovici [1977] ICR 260. Egg Stores (Stanford Hill) Ltd v Leibovici [1977] ICR 260 at 263-265, which sets out nine matters which may be taken into account in reaching a decision in such a case. In Hilton Hotels of Australia Ltd v Pasovska (2003) 122 IR 428 at [54] the NSW Industrial Relations Commission in Court Session seemed to take the view that the doctrine could not apply. However, this decision has been the subject of academic criticism: Guthrie and Meredith, “Long-Term Employee Illness and Frustration of the Contract of Employment” (2007) 49 JIR 87 at 92-94. Hart v AR Marshall and Sons (Bulwell) Ltd [1977] ICR 539 at 542-543; Notcutt v Universal Equipment Co (London) Ltd [1986] 1 WLR 641 at 644-655. In some jurisdictions there is statutory protection in place for employees who are absent through illness or injury, for example, Fair Work Act 2009 (Cth), ss 352 and 772(1)(a). Notcutt v Universal Equipment Co (London) Ltd [1986] 1 WLR 641. Some provision in relation to sickness was also made in the contract in Simmons Ltd v Hay [1964] NSWR 416. Finch v Sayers [1976] 2 NSWLR 540. Marshall v Harland and Wolff [1972] 1 WLR 899. Notcutt v Universal Equipment Co (London) Ltd [1986] 1 WLR 641.

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frustration, if present, terminates the contract by force of law.265 But conduct, such as the giving of notice, is relevant in deciding whether the changed circumstances brought about by the illness are so fundamental as to strike at the root of the relationship.266

Bankruptcy [9.300] Bankruptcy of an employer will not usually terminate the contract of an employee,267 although there is one authority concerning a contract between author and publisher in which it was observed that the “contract was a personal one” and that the bankruptcy of the publisher put an end to the “joint adventure”.268 Employees of the Crown or officials employed or appointed under various statutes may often be in a different position. In the past, it was not uncommon to find provisions in Public Service Acts, for example, to the effect that an officer appointed under such an Act shall be deemed to have vacated her or his office in any one of a number of defined circumstances including bankruptcy. Now, if bankruptcy is relevant to the specific requirements of the office, it may be the subject of a specific condition of appointment to that office, so that if the officer becomes bankrupt her or his employment is at an end by virtue of the terms of the Act and without further proceedings.

Dissolution, Amalgamation etc of Company [9.310] A court order for the compulsory winding up of a company will constitute a breach of the company’s contract with a director,269 although a director is an officer and may or may not be an employee: see [2.410]. Such a compulsory winding up order will normally operate as a notice of discharge to the company’s employees.270 A resolution by a company for a voluntary winding up may involve a repudiation of an employment contract depending on the terms of the contract. O’Donovan271 has stated the rule as follows: “where it is clear to the employee in the light of all the circumstances that the resolution repudiates the company’s obligations under the contract of service then the resolution operates as a notice of discharge”.272 It was held

265

266

267 268 269 270

271

272

Hirji Mulji v Cheong Yue [1926] AC 497; Denny, Mott and Dickson Ltd v James B Fraser & Co Ltd [1944] AC 265; Egg Stores Ltd v Leibovici [1977] ICR 260 at 263-264; Cachia v State Authorities Superannuation Board (1993) 47 IR 254 at 274. Marshall v Harland and Wolff [1972] 1 WLR 899 at 904. Compare Hart v A R Marshall & Sons [1977] ICR 539 at 543, where failure to dismiss was an important factor. In Walsh v The Police Association (2000) 140 IR 58 at [12] this issue was of some significance. Compare the decisions in the statutory unfair dismissal jurisdiction where illness has provided a valid reason for the termination. See, for example, Hobbs v Capricorn Coal Management Pty Ltd (30 April 2001, AIRC, McIntyre VP, Cartwright SDP and Harrison C, Print PR903643): see [13.160]. Thomas v Williams (1834) 1 Ad & E 685; 110 ER 1369. Lucas v Moncrieff (1905) 21 TLR 683. Measures Bros Ltd v Measures [1910] 2 Ch 248. Re General Rolling Stock Company: Chapman’s Case (1866) LR 1 Eq 346; Re Mack Trucks (Britain) Ltd [1967] 1 WLR 780; Re Associated Dominion Assurance Society Pty Ltd and the Life Insurance Act (1962) 109 CLR 516; Re Beverage Packers (Australia) Pty Ltd [1990] VR 446 at 448; however, see also Corporations Act 2001 (Cth), s 558(1), (2). An article, now somewhat dated, but still relevant is O’Donovan, “Corporate Redundancy” (1976) 4 ABLR 257; see also Duthie, “The Priority of Retrenchment Payments in a Liquidation or Receivership” (1992) 20 ABLR 378; Fletcher, “Adoption of the Contracts of Employment by Receivers and Administrators: The Paramount Case” [1995] JBL 596; Symes, “The Protection of Wages when Insolvency Strikes” (1997) 5 Insolv LJ 196. O’Donovan, “Corporate Redundancy” (1976) 4 ABLR 257 at 260.

Bankruptcy

to be a repudiation in Reigate v Union Manufacturing Co.273 That case differed from earlier authority which had suggested that a resolution for the voluntary winding up of a limited company does not operate as a notice of discharge to the servants of the company.274 Entitlements to severance pay, when an employee’s employment terminates as a result of a winding up, often turn on the wording of the relevant agreement or award. If the employment is terminated as a result of some action of the company, it may have an effect on the employee’s entitlements. In Stillitano v GO Harrison (Liquidator) it was held that an employee who had notice of discharge on the making of the winding up order was terminated “at the initiation of the company” for the purposes of the particular redundancy agreement.275 Further, Young CJ said that even if it were assumed that notice was genuinely given by the liquidator, it could only do so on behalf of the company.276 The appointment of a receiver and manager by court order has been held to amount to a dismissal by the company but this will not necessarily be so in all cases. It is necessary to look at the facts in each case.277 The power given to the receiver and manager to continue to carry on the business and to discharge salaries is consistent with the proposition that the employment continues rather than it being terminated upon the appointment.278 Private appointment of a receiver and manager as agent for the debenture holders may result in termination of the employees’ contracts of employment.279 Private appointment of a receiver and manager as agent of the company generally will not terminate the contract of employment with the company.280 However, in Griffiths v Secretary of State for Society Services, Lawson J identified three situations in which the appointment of a receiver and manager as agent of the company may terminate the contracts.281 First, the appointment may be accompanied by a sale of the 273 274 275 276

277

278

279

280 281

Reigate v Union Manufacturing Co [1918] 1 KB 592 especially at 606 per Scrutton LJ. See also Fowler v Commercial Timber Co Ltd [1930] 2 KB 1. Midland Counties District Bank Ltd v Attwood [1905] 1 Ch 357. See also the review of authorities in McEvoy v Incat Tasmania Pty Ltd (2003) 130 FCR 503 at [6]-[8]. Stillitano v GO Harrison (Liquidator) (unreported, Supreme Court of Victoria, Young CJ, 22 August 1989) at 4. This was on the basis that the company was the employer and, in the absence of some overriding law, only the employer could give notice of discharge (unreported, Supreme Court of Victoria, Young CJ, 22 August 1989) at 4; see also Re Trevor as Liquidator of Grant Electrical Industries Pty Ltd (In liq) (unreported, Supreme Court Western Australia, Scott J, 18 April 1995) at 16; Douglas-Brown v Isles (unreported, Supreme Court Western Australia, Full Court, 2 September 1995) per Rowland J at 9. Reid v Explosives Co Ltd (1887) 19 QBD 264; International Harvester Export Co v International Harvester Aust Ltd [1983] 1 VR 539; Seymour v Stawell Timber Industries Ltd (1985) 9 FCR 241; Sipad Holdings DDPO v Popovic (1995) 19 ACSR 108 at 110; compare Celesta Pty Ltd v Di Risio (unreported, Supreme Court of Western Australia, Ng M, 13 February 1996). International Harvester Export Co v International Harvester Australia Ltd [1983] 1 VR 539 at 544 per Beach J; adopted by Lehane J in the Federal Court of Australia in Sipad Holdings DDPO v Popovic (1995) 19 ACSR 108. See the review of authorities in McEvoy v Incat Tasmania Pty Ltd (2003) 130 FCR 503 at [6]-[8]. In Hopley-Dodd v Highfield Motors (Derby) Ltd [1969] ITR 289 it was held that the receiver and manager offered the employee employment after the date of appointment as agent for the debenture holders rather than as agent of the company. Compare James Miller Holdings Ltd v Graham (1978) 3 ACLR 604 where a statement by the receiver and manager that, upon his appointment, the employment of the employees was automatically terminated but that the employers were immediately re-employed, did not operate to terminate the contracts of employment. The language used was not the language of ending employment but of continuing it. Re Mack Trucks (Britain) Ltd [1967] 1 WLR 780; Griffiths v Secretary of State for Society Services [1974] 1 QB 468. Griffiths v Secretary of State for Society Services [1974] 1 QB 468 at 485-486.

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business.282 Secondly, the receiver and manager may negotiate a new contract with the employees which is inconsistent with the continuation of the original contract of employment.283 Finally, the continuation of the services of the employee may be inconsistent with the position, role and functions of a receiver and manager.284 [9.320] The appointment of an official manager will generally not result in termination of the employees’ contracts of employment. The role of an official manager is to continue the business of the company for the benefit of shareholders and creditors. Given that one of the roles of the official manager is to continue the business of the company, the comments of Beach J in International Harvester Export Co v International Harvester Australia Ltd285 would appear to apply equally to the appointment of an official manager.286 The appointment of an administrator under Pt 5.3A of the Corporations Act 2001 (Cth) will not automatically terminate the employees’ employment. The objects of the appointment of a voluntary administrator include running the business on a temporary basis with a view to maximising the prospect of the company continuing in existence.287 There is some authority for the view that a mortgagee going into possession of a business normally operates as a notice of discharge of employment.288 This may be justified on the basis that the agent for the mortgagee operates in the interests of the mortgagee, which may be adverse to the interests of the company.289 However, where the agent continues to run the business and has the power to discharge salaries, it is submitted that, consistent with the approach in International Harvester Export Co v International Harvester Australia Ltd,290 the employment could continue. However, much will depend upon the terms of the mortgage under which the mortgagee goes into possession. The rationale of these cases, usually unexpressed, probably lies in the personal nature of the employment relationship - an employee cannot be forced against her or his will to work for a person or entity legally different from that which initially engaged her or him or on terms substantially different from those on which the employee was engaged.291 Explicit recognition of such an idea was given in Nokes v Doncaster 282 283 284 285 286 287

288

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290 291

Re Foster Clarke Ltd’s Indenture Trusts [1966] 1 WLR 125. Re Mack Trucks (Britain) Ltd [1967] 1 WLR 780. See the comments in Griffith v Secretary of State for Society Services [1974] 1 QB 468 at 485-486; James Miller Holdings Ltd v Graham (1978) 3 ACLR 604. International Harvester Export Co v International Harvester Australia Ltd [1983] 1 VR 539 at 544. The comments were made in the context of the appointment of a receiver and manager. In ALHMWU v Terranora Lakes Country Club Pty Ltd (1996) 19 ACSR 689, it appears that the court assumed that the employment continued until the administrator gave the employees notice of termination. In Patrick Stevedores (No 2) Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1, the High Court of Australia took the view that the obligations imposed upon a voluntary administrator by the (former) Corporations Law prevailed to the extent of any inconsistency with the obligations imposed by the Workplace Relations Act 1996 (Cth). This left it to the voluntary administrator to decide whether the employment of the employees should be terminated. See also, AMIEU v Aziz [1998] FCA 925 (5 August 1998, Marshall J) and see Darvas, “From the Outside Looking In: Employees and Voluntary Administration” (2001) 29 ABLR 409. Reid v The Explosives Co Ltd [1897] 19 QBD 264 at 267, 269; see also the comments of Viscount Haldane in William H Parsons v The Sovereign Bank of Canada [1913] AC 160 at 167 which emphasised the relevance of a stipulation as to the identity of the parties to the contract. Nicoll v Cutts [1985] BCLC 322; but see the comments of the House of Lords in Powdrill v Watson [1995] 2 WLR 312 at 342 where it was said that legislative amendments were made soon after the decision in Nicoll v Cutts to “correct the law”. International Harvester Export Co v International Harvester Australia Ltd [1983] 1 VR 539 at 544. Note, however, that the Corporations Act 2001, s 558(2) deems employment with the liquidator to be employment with the company for the purposes of calculating entitlements to payment for annual leave and retrenchment payments. As to the consequences of such a provision, see McEvoy v Incat Tasmania Pty Ltd (2003) 130 FCR 503 at [19]-[26].

Agreement to Terminate (or Vary)

Amalgamated Collieries Ltd.292 In that case a court order was made for the amalgamation of two companies and it was held that a service contract existing at the date of the amalgamation between a workman and the transferor company did not automatically become a contract of service between the workman and the transferee company. Lord Atkin found it: astonishing that apart from overriding questions of public welfare power should be given to a court or anyone else to transfer a man without his knowledge and possibly against his will from the service of one person to the service of another. I had fancied that ingrained in the personal status of a citizen under our laws was the right to choose for himself whom he would serve: and that this right of choice constituted the main difference between a servant and a serf.293

Dissolution of Partnership (Other Than By Death)294 [9.330] A change in the composition of a partnership by some other means, such as retirement of a partner, does not necessarily end existing employment contracts. Depending on the circumstances and the terms of the contract, the dissolution may be a breach of contract conferring rights on the employees.295 But such breaches are usually waived by the employees continuing to work for the new partnership, and in any case damages available to the employees would be nominal if the new partnership was willing to continue their employment.296 The position is otherwise if there is a complete split up of a partnership, rather than retirement of one partner or appointment of another. In the case of a split up, contracts of employment are terminated by the dissolution of the partnership.297 The bankruptcy of one or more members of a partnership will generally result in a partnership being dissolved298 and termination of contracts of employment. However, where an individual partner becomes bankrupt and the partnership is dissolved, and the reformed partnership otherwise continues, the continuity of the employment may be preserved. The matter will again depend on the terms of the contract of employment.299 Of particular relevance is the extent to which the contract relates to the personal conduct of the departing partner.300

Agreement to Terminate (or Vary) [9.340] A contract of employment can be terminated (or varied) by agreement: 292 293 294 295 296 297

298

299 300

Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014. Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014 at 1026. The test in Nokes continues to be applied. The impact of the death of a partner on a contract of employment was looked at earlier in this chapter when considering frustration by death: see [9.270] Briggs v Oates [1990] ICR 473 at 481; Rose v Dodd [2005] ICR 1776 at [52]; Bromhead v Graham [2007] NSWCA 257 (21 September 2007, Beazley, Giles and Santow JJA). The Fair Work Act 2009 (Cth), s 22 recognises continuity of service in certain circumstances. Tunstall v Gordon [1980] ICR 786. It is likely to make it impossible for the employee to do any of the work which she or he is employed to do. The contract may be frustrated or there may be a repudiatory breach entitling the employee to treat the contract as at an end: Rose v Dodd [2005] ICR 1776 at [53]. For example, see Partnership Act 1958 (Vic), s 37; Partnership Act 1963 (ACT), s 38; Partnership Act (NT), s 37; Partnership Act 1892 (NSW), s 33; Partnership Act 1891 (Qld), s 36; Partnership Act 1891 (SA), s 33; Partnership Act 1891 (Tas), s 38; Partnership Act 1895 (WA), s 44. The position is different for the bankruptcy of a limited partner in a limited partnership: Partnership Act 1958 (Vic), s 70; Partnership Act 1963 (ACT), Pt 6; Partnership Act 1892 (NSW), s 70; Partnership Act 1891 (Qld), s 61; Partnership Act 1891 (SA), s 68; Partnership Act 1891 (Tas), s 83. Briggs v Oates [1990] ICR 473 at 481. See Phillips v Alhambra Palace Co [1901] 1 KB 59.

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I see no reason in this connection to draw a distinction between a variation of a contract and a rescission of it. If the parties agree consensually to vary the terms of the contract of employment, or to rescind it and substitute a new contract of employment, the plain fact is that the contract is not terminated by the employers, but by consent.301

A termination without objection by the employee may nevertheless be a unilateral termination, not a consensual one, and may even be a dismissal, at least for some purposes. But where there is a mutual consent established and freely reached between the parties there will be a termination by agreement.302 With respect to relationships which are intended to continue after the consensual change it is not always clear whether what the parties have done, albeit consensually, is but a variation of their existing contract or the cancellation of that contract and its replacement by a new one. It is not open to an employer (or an employee) to change unilaterally the terms of a contract of employment.303 If a party to a contract – any contract – attempts to force upon the other party some alteration in the contract which is not contracted for or agreed to, the party so attempting will very likely commit a breach of the contract. If this breach amounts to a repudiation, it will confer on the other party the right to regard the contract as at an end and to sue for damages. Working under changed arrangements for a time will not necessarily constitute acceptance of the change; acceptance of the repudiation may still be possible.304 More than evidence of mere acquiescence is required.305 A series of difficulties can arise where the employer or employee seeks to change something about the work or its performance. Say an employer wishes to send an employee to a different location, or to have that employee perform different work and the employee objects. The first question is whether the changes are permissible under the agreement by which the employee was engaged. If so, the employee is obliged to implement them; they are lawful orders.306 If not, they are attempts at unilateral variation. Often the employee does not object to this and there is a change, by agreement, in the employee’s duties, pay, etc. Whether the changes result in a new contract being created or the old contract continuing as varied, is a question of fact.307 The parties may intend a variation, but succeed in achieving a termination (or vice versa).308 The court will look to the terms of the agreement to assess whether it was the intention of the parties that there be a new contract, or simply a variation to the old contract. In Concut Pty Ltd v Worrell309 the High Court overturned a decision of the Court of Appeal in Queensland that the 301 302 303 304 305

306

307 308 309

Marriott v Oxford and District Co-op Society (No 2) [1969] 3 WLR 984 at 988. Birch v University of Liverpool [1985] ICR 470. RS Components Ltd v Irwin [1974] 1 All ER 41 at 43: Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 at [111] (North J) and [152] (Mansfield J). For example, Shields Furniture Ltd v Goff [1973] 2 All ER 653 (change of workplace); Rigby v Ferodo Ltd [1988] ICR 29 (change in pay). Buckman v Barnawatha Abattoirs Pty Ltd (1994) 140 IR 376; TCFUA v Bellechic Pty Ltd [1998] FCA 1465 (19 November 1998, Ryan J); Downe v Sydney West Area Health Service (No 2) (2008) 71 NSWLR 633 at [341]; Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014, Griffith J) at [1256]-[1266] and on appeal in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [290]-[309] (Buchanan J). For example, White v Reflecting Roadstuds Ltd [1991] ICR 733. In that case, a mobility clause allowed the employer to transfer the employee to alternative work. The Employment Appeal Tribunal said that the employer was permitted to transfer the employee to alternative work, but should not do so capriciously or without reasonable and sufficient grounds for doing so. See also United Bank v Akhtar [1989] IRLR 507; Johnstone v Bloomsbury Health Authority [1992] 1 QB 333. Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at 575; Reilly v Praxa Ltd [2004] ACTSC 41 (9 June 2004, Gray J) at [16]. See generally Tallerman & Co Pty Ltd v Nathan’s Merchandise (Vic) Pty Ltd (1957) 98 CLR 93; Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567. Concut Pty Ltd v Worrell (2000) 75 ALJR 312. See Carter and Stewart, “The Effect of Formalising an

Agreement to Terminate (or Vary)

relevant contract was a new and discrete contract which had the effect of terminating and replacing a prior oral agreement. There was no change to the duties or position. The terms of the written contract manifested no intention to displace the original contract. Instead it was designed to supplement the existing employment relationship. Though difficult to determine, the matter is not academic, for long service leave or pension rights, redundancy pay and possible criminal or civil liability of an employer for wrongful termination can all depend on whether the contract has been put at an end or has continued in existence with variations. [9.350] The contract itself, and any relevant award or enterprise agreement, can always provide from the outset for change of duties or work location, or for promotion or stand down etc from time to time during the life of the contract.310 Moreover, there is probably implied (if not expressed) in the contract a right of the employer to order the performance of incidental or ancillary duties, especially in an emergency. There are no doubt many situations where the proper interpretation of the contract will yield the conclusion that the parties agreed from the outset that there could be changes of this kind from time to time. For example, there are some industries or workplaces where the practice of the employer is to move employees around for experience or for the convenience of the business.311 If such a practice is known to a new employee, it is fairly easy to conclude that the employee has implicitly agreed to the practice as a term of the contract. When such a change occurs it will not mark the end of the contract and the commencement of another. Even so, there are limits to what an employer can ask of an employee under a contract or award clause which does allow for change. For example, a “mixed functions” clause in an award providing that “employees shall perform such work as the company reasonably shall require” does not entitle the employer to switch an employee from one classification to another at will.312 However, all changes of this kind which are expressly or impliedly being contracted for at the outset, are not even variations, let alone terminations of the contract, nor are they unilateral changes forced by one party on the other. They merely involve the exercise by the employer of its rights under the contract.313 If the change does constitute a variation, the application of traditional principles of contract law require that there be valuable consideration given to render the term (as varied) enforceable: see [4.130]. However, there does seem to be a greater preparedness on the part of the courts to find the existence of valuable consideration for agreed

310

311 312 313

Employment Contract: The High Court Misses an Opportunity” (2001) 17 JCL 181 at 183-186. The question will not be determined simply by taking the position that any change not contemplated by the original agreement necessarily requires the conclusion that a new contract has been set up, but rather by focusing on the circumstances that a change of great magnitude in the relationship between the parties was effected: Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at 578. However, the conferral of an unconstrained discretion on the employer to vary terms may be void for uncertainty: Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 at [111] (per North J) and [152] (per Mansfield J). There may be a higher degree of flexibility available in relation to policies or rules which govern discretionary bonus and option schemes during the life of the employment: see for example, Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014, Griffith J) at [991]-[1004] and on appeal in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [115]-[126] (Buchanan J): see [5.230] and [10.160]. The flexibility available to a public sector employer to change an employee’s duties under public service legislation would mean that in doing so, the employer is not repudiating the contract of employment by seeking to impose any such change on the employee: see Litchfield v Chief Executive, Department of Manufacturing, Innovation, Trade, Resources and Energy (2014) 119 SASR 293 at [64]-[65], [92] citing Morante v State Superannuation Board (1998) 84 IR 205. But see Real Estate Institute of Western Australia Inc v Federated Clerks’ Union of Australia Industrial Union of Workers (WA Branch) (1993) 51 IR 415. Dispute at No 2 Merchant Mill of BHP (1976) 18 AILR 255. Bruce v AWB Ltd (2000) 100 IR 129 where the contract required the employee to perform duties as specified “or as directed by the Managing Director”. This provided scope for the managing director to impose a significant change in duties upon the employee.

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variations during the course of a contract of employment, for example: by enforcing a pay increase; by finding that the employee has given up something by committing to the continued relationship; or, that the employer derived some practical benefit from the change.314 Such a principle has been applied to hold that a restraint of trade clause, introduced during the employment rather than at commencement of the contract, was binding.315 A variation of company policy will generally not make a policy, which is otherwise contractual, unenforceable. Rather the courts will look to assess objectively whether the parties intended that the policies as varied have contractual force: see [4.490]. As indicated, the initial difficulty is often one of interpretation of the (express or implied) terms of the contract. It has to be decided whether one party, usually the employer, is contractually entitled to bring about the change sought. The problems can be illustrated conveniently by considering changes, or attempted changes, to the place of work, to the duties to be performed, to the wages paid and to the identity of the employer.

Change of workplace [9.360] In O’Brien v Associated Fire Alarms Ltd,316 the employer had a business in Liverpool, and its employees engaged in work there lived in the area and were able to return home each day. Business declined in Liverpool and the company directed the employees to work in Cumberland (where it had work). This would have meant that the employees could return home only at weekends. The men refused to go to Cumberland and were dismissed. In proceedings before the relevant Industrial Tribunal it was successfully argued that, although there was no express term in the contract to cover the situation, there was an implied term that the men would work anywhere in the company’s area. When this was sought to be challenged it was put that it was a finding of fact (against which no appeal lay). But whether a term was to be implied was held to be a question of law. Hence an appeal lay, and it was held on appeal, that the employers had failed to prove the alleged implied term. The dismissal was therefore wrongful. A similar interpretation problem involving a change of workplace arose in construing a clause in the Metal Trades Award 1952 which provided certain allowances or expenses for an employee engaged in one locality and sent to work in another or sent from her or his usual locality to another on a permanent basis. The Commonwealth Industrial Court held as follows: the provisions of cl 9 of the award clearly, by express provision or by necessary implication, envisage the right of the employer to require an employee to work away from his accustomed workshop, depot or locality, providing the prescribed allowances and expenses are paid, and unless the terms of an individual contract otherwise provide, an employee is bound to obey a lawful direction given by virtue of the award prescription.317

The location of the job may be a central element to the contract of employment.318 If the employer changes her or his place of business to a distant place, there is old 314

315 316 317 318

Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 at 745-747. See also Hough and SpowartTaylor, “The Doctrine of Consideration: Dead or Alive in English Employment Contracts?” (2001) 17 JCL 193 and Coote, “Variation Sans Consideration” (2011) 27 JCL 185. Figjam Pty Ltd Trading as LJ Hooker Casino v Pedrini [2005] NSWSC 221 (17 March 2005, Burchett AJ) at [17]-[18]. O’Brien v Associated Fire Alarms Ltd [1969] 1 All ER 93, see [5.500]. Re Metal Trades Award 1952 (1965) 8 FLR 255 at 261; see also Rowbotham v Arthur Lee & Sons Ltd [1975] ICR 109 at 115 citing Briggs v ICI Ltd (1968) 3 ITR 270. For example, Re Rubber Plastic and Cablemaking Industry (Consolidated) Award 1983 (1989) 31 IR 35 at 48-50.

Agreement to Terminate (or Vary)

authority that the employer thereby commits a breach of contract and the employee is not obliged to work for the employer at the new location. If the distance is short, the employee may be obliged to go also.319 In Australia, before a refusal by an employee to relocate can justify termination by the employer, the direction to relocate must not only be open on the terms of the contract (whether express or implied), it must also be reasonable.320 In the United Kingdom, the courts may well have drawn on the implied term as to trust and confidence to moderate the capricious use of a lawful right to relocate the employee.321 As was said earlier, the problem of termination or variation usually arises not where one party disputes the change from the beginning, as in the illustrations just given, but where a change occurs, by consent, and it later becomes necessary to ascertain its true legal character. Agreed changes of duties have proved a source of difficulty here.322

Change of duties [9.370] Cases in England and Australia indicate that a change of duties, even by consent, will often be correctly characterised in law as the termination of an existing contract and the commencement of a new one and not simply a variation of the terms of an existing contract.323 Marriott v Oxford and District Co-op Society Ltd (No 2)324 involved a change of duties, with reluctant consent for a short time. Marriott was employed as a foreman by the respondents for seven years. They then found they had not enough work for him and his position became redundant. They offered him a position of supervisor at a reduced wage. He protested and tried to obtain work elsewhere. The respondents informed Marriott in writing that his wages would be reduced. Again he protested but did not leave at once. His wages were reduced and some three or four weeks later he left for another job. Was he entitled to redundancy pay? The answer to that depended on whether he had been “dismissed” within the meaning of the English legislation. Under that legislation an employee shall “be taken to be dismissed by his employer if, but only if – (a) the contract under which he is employed by the employer is terminated by the employer”. The Court of Appeal held that the contract had been terminated even though Marriott continued to work for the respondents on the other duties. It was said to be clear from the circumstances, including Marriott’s protests, that he had not accepted the changed terms, even though he had continued to work for the respondents for some weeks while he found another job. Adrema325 is not referred to in the judgments. 319

320

321

322 323

324 325

Eaton v Western (1882) 9 QBD 636; Batty v Monks (1865) 12 LT (NS) 832. See also Rowbotham v Arthur Lee & Sons Ltd [1975] ICR 109. Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd (1998) 27 IR 226 at 230-231; NUW v Tontine Fibres (A Division of United Bonded Fabrics Pty Ltd) (2007) 168 IR 143. Kwefio-Okai v RMIT University [1999] FCA 1686 (8 December 1999, Branson, Marshall and Dowsett JJ); Morante v State Superannuation Board (1998) 84 IR 205; Pawel v Australian Industrial Relations Commission (1999) 94 FCR 231, although this case was decided under the statutory unfair dismissal provisions. United Bank v Akhtar [1989] IRLR 507; Johnstone v Bloomsbury Health Authority [1992] 1 QB 333; Brodie, “The Heart of the Matter; Mutual Trust and Confidence” (1996) 25 ILJ 121 at 126-127; Brodie, “Beyond Exchange: The New Contract of Employment” (1998) 27 ILJ 79 at 90-92; Brodie, “Mutual Trust and the Value of the Employment Contract” (2001) 30 ILJ 84 at 93-94. As to silence constituting acceptance of a variation, see Avirone Pty Ltd v Kenneth Pirrie Pty Ltd (unreported, Court of Appeal, New South Wales, Meagher, Handley and Cole JJA, 5 February 1996). See S W Strange Ltd v Mann [1965] 1 WLR 629; Adrema Ltd v Jenkinson [1945] 1 KB 446; Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567; Brackenridge v Toyota Motor Corp Australia Ltd (1996) 142 ALR 99 (Full Court); Reilly v Praxa Ltd [2004] ACTSC 41 (9 June 2004, Gray J). Marriott v Oxford and District Co-op Society Ltd (No 2) [1969] 3 WLR 984. Adrema Ltd v Jenkinson [1945] 1 KB 446.

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Ch 9: Other Modes of Termination of the Contract of Employment

Most of the Australian cases seem to take an approach similar to that in Marriott.326 Where a person was in succession appointed a canvasser then an assistant manager on one month’s notice, then acting manager then manager at an increased salary, Murray CJ took the view that: “unless the original agreement gave the employer the right to the services of the employee in any capacity he chose to direct from time to time there would be a new employment whenever a change was made in the duties to be performed, and it would be a question of fact in each case, what the terms of the new employment were.”327 Other authority is similar to Marriott.328 In Quinn v Jack Chia (Australia) Ltd,329 Quinn commenced employment as an assistant to the construction manager of a large and long-term building project. Soon after commencing he assumed the construction manager’s role and a few months later he was appointed to a quite different role as construction manager for the project and also as General Manager–Construction for the group. He also took up directorships with two related companies. The employer later dismissed Quinn giving him one month’s pay in lieu of notice in accordance with his original contract of employment. Quinn claimed that the one-month notice provision no longer applied because a new contract had supplanted the original contract. He argued there was no express notice provision and was therefore entitled to reasonable notice: see [9.40]. He alleged further that the company had failed to give him reasonable notice of termination and that he should, therefore, be entitled to damages for breach of contract. After referring to a number of earlier cases, Ashley J said that: where employer and employee agree to an alteration in the employee’s duties and responsibilities which is profound, a court should be more ready to hold (unless the original contract of employment provided for the contingency) that a new contract has replaced the old; or at least that the old contract, as varied, contains terms objectively appropriate to the new relationship created.330

Ashley J commented that it may not be enough to result in termination of one employment and commencement of a new employment simply because the changes in position and salary were not contemplated in the original contract. However, in this case, his Honour concluded that the change to Quinn’s position to that of General Manager–Construction for the group was exceptional, far reaching and not within the original contemplation of the parties and not comprehended by the contract initially made between them; and that it did give rise to the institution of a fresh contract of employment. Therefore, the one-month notice provision was not a term of the contract. Reasonable notice of 12 months was required to terminate the contract.331 326

327

328 329 330

331

Dale v William McCulloch & Co Ltd (1883) 9 VLR (L) 136; see also Brookton Holdings No V v Kara Kar Holdings Pty Ltd (1994) 57 IR 288 at 289-290. As to the statutory unfair dismissal jurisdiction, see [13.50]. Federated Mutual Ins Co v Sabine [1920] SALR 284 at 292. See also Meek v Port of London Authority [1918] 2 Ch 96 at 99-100; as to whether a variation may be held to be within the contemplation of the parties on the basis of an implied term of a contract of employment which allows the employer to vary the duties from time to time; see also Brackenridge v Toyota Motor Corp Ltd (1996) 142 ALR 99 at 106; compare comments of Beazley J at first instance; Brackenridge v Toyota Motor Corp Ltd (1996) 67 IR 162 at 173-174. See O’Connor v Argus and Australasian Ltd [1957] VR 374 at 388-389; Truth and Sportsman Ltd v Molesworth [1956] AR (NSW) 924. Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567. Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at 576-577. In assessing the terms objectively appropriate to the new relationship created, it may be relevant to have regard to policies which were previously contractual in nature, such that they too become terms of the new contract: Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014, Griffith J) at [1203]; not considered on appeal in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ). A number of cases have since followed Quinn’s case; see, for example, Real Estate Institute of Western

Agreement to Terminate (or Vary)

Consideration of issues of this nature will sometimes arise in circumstances where, in an effort to avoid termination of employment by reason of redundancy (and perhaps the burden of paying the employee severance pay as a result) the employer seeks to impose a change in duties upon the employee, purportedly in the exercise of existing contractual rights. Whilst it appears that there must be some allowance for a variation to duties not expressly provided for in the contract of employment,332 serious non-consensual intrusions upon the status or responsibilities of, or upon the remuneration attaching to, the job may amount to a repudiation by the employer.333 If the employee establishes that, by imposing the change, the employer repudiated the contract he or she may secure an entitlement to severance pay.334

Minor changes [9.380] Whilst it is important to remember that each case will depend upon the

specific circumstances,335 a less drastic change sought by an employer, such as a change in working hours without change in tasks to be performed or total hours worked, may not have the same consequences.336 Nor would the performance of some small alternative duty for the employer at her or his request without being obliged to do so. If agreed to, these may only be variations and not terminations.337

332

333

334 335

336 337

Australia Inc v Federated Clerks’ Union of Australia Industrial Union of Workers (WA Branch) (1993) 51 IR 415; Buckman v Barnawartha Abattoirs Pty Ltd (1994) 140 IR 376; Reilly v Praxa Ltd [2004] ACTSC 41 (9 June 2004, Gray J) and Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014, Griffith J) at [1158]-[1159], the last of which was overturned on appeal on the basis that the changes were within the scope of the existing contract: Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [261]-[262], [286] (Buchanan J). Compare two earlier cases arising in relation to long service leave entitlements, Carter v Australian Glass Manufacturers’ Co Ltd [1955] AR 68. See [5.510]. Compare Brackenridge v Toyota Motor Corp Australia Ltd (1996) 142 ALR 99 at 106; Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014, Griffith J) at [1224]-[1227] and on appeal Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [261]-[262], [286] (Buchanan J). See [8.20] and Westen v Union des Assurances de Paris (1996) 88 IR 259 at 261. Note, his Honour’s comments were made in the context of applying a “gloss” to a passage which appeared in a previous edition of this book which stated that: “In the absence of a contract allowing, the employer cannot force changes [of job or regrading] on an employee. An attempt to do so will involve the employer in breach of contract if the employer presses her or his requirements.” In doing so, his Honour recognises the existence of an implied term which allows the employer at least to some extent to vary an employee’s duties to allow for some reasonable give and take. This is consistent with the approach in Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 quoted above. See also the acceptance of this position in Whittaker v Unisys Australia Pty Ltd (2010) 192 IR 311 at [41]-[46], later applied in Earney v Australian Property Investment Strategic Pty Ltd [2010] VSC 621 (22 December 2010, Hargrave J) at [77]. Under s 386(2)(c) of the Fair Work Act 2009 (Cth) an employee is not “dismissed” if the employee is demoted but the demotion does not involve a significant reduction in remuneration or duties and the employee remains employed after the demotion. See [13.110]. Gamboni v Bendigo and Adelaide Bank Ltd (2013) 39 VR 578. See, for example, Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014, Griffith J) at [1206]-[1212] and on appeal Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [261]-[262], [286] (Buchanan J). See also Hodgson v Amcor (2012) 264 FLR 1 at [371]; UGL Rail Services Pty Limited v Janik [2014] NSWCA 436 (19 December 2014, Emmett JA, Sackville AJA and Adamson J) at [118]-[132] per Sackville AJA. See the comments of Ashley J, Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at 578 (referred to in [9.370]). Johnson v Nottinghamshire Combined Police Authority [1974] 1 WLR 358. In this case the employees refused to accept the change of hours. See also Application by Water and Sewerage Employees Union (NSW) [1976] 18 AILR 187; Wood v Bayfield Newport Hotel Pty Ltd (unreported, Industrial Relations Court of Australia, Moore J, 13 March 1997). In the case of change of hours there may be the need to take the matter before the appropriate tribunal. Hours are almost always governed by award or statute and there are limits on the changes which can be made, even by agreement. The same applies, of course, to any attempt to vary any other matter covered by an award.

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Change in method of work [9.390] An employer can require employees to adopt a different method of doing the work they are engaged to do without precipitating either a variation or a termination of contract. In other words there is a distinction between a variation of contract and a variation in the scheme of working. So workers such as tax assessors, may be obliged to accept the computerisation of work formerly done by pencil and calculator. Their work remains that as contracted for, namely tax assessment; they have not been required to become computer operators.338 In Dorman Long & Co v Carroll,339 the respondents were mine workers employed under a contract terminable by 14 days’ notice. To increase output a scheme of double shifts was introduced by mutual consent. This was done orally, and no time for its duration was fixed. Over a year later the men wished to revert to the former system and gave eight days’ notice of their intention so to do. The employers contended that the changed arrangement was a variation of the original contract and therefore, formed part of the contract, and that 14 days’ notice was required. It was held on appeal that the Justices before whom the matter came initially had not erred in concluding that the altered system of working was temporary only and was not a variation of or part of the original contract of service. This conclusion may have been more desirable due to the onerous nature of the variation, working double shifts.

Wage changes [9.400] A similar approach should be taken in considering wage changes. A change in wages can mark the end of the contract and the commencement of another.340 But the common basis on which most contracts of employment are entered into, at least in Australia, is that there will be some increases in wages during the life of the contract. An attempt to force a wage reduction on employees,341 or to remove entitlements such as a motor vehicle,342 or to refuse to pay a contractual bonus343 will be a repudiation of the contract by the employer. An employee will not necessarily be taken to have acquiesced in the change and thereby lose the right to end the contract (and sue for damages) by working at the reduced wage under protest for a short time.344

Change of employer [9.410] An employee cannot be transferred to another employer without the

employee’s consent.345 That consent need not be informed consent. All that is required is assent to the arrangement sufficient to constitute a concluded contract.346 Save in the “hired employee” situation discussed in Chapter 3, a change by the employee from one employer to another will clearly involve termination of one 338 339 340 341 342 343

344 345

346

Cresswell v Board of Inland Revenue [1984] 2 All ER 713. See [5.510]. Dorman Long & Co v Carroll [1945] 2 All ER 567. Hederick v Douwma (1970) 12 AILR 47. Cantor Fitzgerald International v Callghan [1999] 2 All ER 411 at 420-421. Local Government Engineers’ Association of New South Wales v Wollongong City Council (1994) 58 IR 245. Actrol Parts Pty Ltd v Coppi (No.2) [2015] VSC 694 (9 December 2015, Bell J) at [39]-[42]. O’Sullivan Partners (Advisory) Pty Ltd v Foggo (2012) 218 IR 331; Silverbrook Research Ltd v Lindley [2010] NSWCA 357 (17 December 2010, Allsop P, Beazley JA and Hammerschlag J). See [10.160]. Rigby v Ferodo Ltd [1988] ICR 29 (HL). Nokes v Doncaster Amalgamated Collieries Ltd (1940) AC 1014 at 1018; compare Carter v Gribbles Pathology Pty Ltd (unreported, Supreme Court of South Australia, Bollen J, 18 February 1994); TCFUA v Bellechic Pty Ltd [1998] FCA 1465 (19 November 1998, Ryan J); Romero v Auty [2000] VSC 462 (3 November 2002, Warren J) at [43]; McCluskey v Karagiozis (2002) 120 IR 147; FSUA v Commonwealth Bank of Australia (2001) 111 IR 241 at [59]-[64]. Leveque and Papaioannou v James Downey as Liquidator of Willow Fashions (Australia) Pty Ltd (In liq) (unreported, Supreme Court of Victoria, Hayne J, 27 April 1995).

Agreement to Terminate (or Vary)

employment and commencement of a new one.347 The Fair Work Act 2009 (Cth), ss 310 to 320 provides for the continued application of certain industrial instruments in circumstances where there is a “transfer of business” as described in s 311, such as a transfer of assets, outsourcing of work or a transfer between related corporate entities.348 Long service leave statutes349 or awards350 commonly make provision to alter this result in certain specified circumstances, such as where an employee transfers from service with one company to one that is defined as a related corporation in the statute or award or where a business is transmitted and the workers continue to work for the new employer.351 There was also authority that in certain situations an employer may be estopped from denying that service with different employers was continuous, as where the new employer agreed that service with a previous employer should count for the calculation of long service leave or the like.352 This law on estoppel was altered by the House of Lords decision in Secretary of State for Employment v Globe Elastic Thread Co Ltd353 which contains two important lessons. First, where a statute, and presumably an award, contains a provision setting out the various circumstances in which continuity of employment or contract will be deemed not to have been broken, then apart from these specified exceptions continuity of employment will be broken by a change of employer or presumably by any other circumstance which, under the general law, would bring about a break in continuity. Secondly, the House of Lords indicated that Evenden was wrongly decided on the estoppel point, so that the doctrine of promissory estoppel cannot be used in the way it was used in that case to benefit the employee. Therefore, if it is sought to preserve an entitlement that falls outside the specified exceptions created by award or statute then the employee should ensure that the contract with the new employer specifically provides for the preservation of those entitlements.

347

348

349 350

351

352 353

Amcor Ltd v CFMEU (2005) 222 CLR 241. Where there is a transfer of employment by agreement between related entities in a corporate group, the change of employer may not necessarily crystallise an employee’s entitlements payable in the event of a redundancy: see [9.180]. “Position” for the purposes of the clause in the certified agreement in question in the Amcor case was held to mean position in a business, not a position with a particular employer. Therefore, upon a transmission of that business to another employer, the position continued to exist, albeit with a new employer. See now Fair Work Act 2009 (Cth), ss 22 and 310 – 320. In the latter situation, it remains an important question as to which entity in a corporate group is the true employer, particularly in circumstances where one of those entities becomes insolvent. See, for example, Gothard v Davey [2010] FCA 1163 (28 October 2010, Edmonds J) at [52]-[65] and [193]-[200] and the cases there cited. And in some cases other entitlements: see, for example, Industrial Relations Act 1996 (NSW), ss 101 – 104; Industrial Relations Act 1999 (Qld), ss 67 – 71. See the TCR standard clause for redundancy in the Termination Change and Redundancy Case (1984) 8 IR 34; (1984) 9 IR 115; 2004 Redundancy Test Case (2004) 129 IR 155; 2004 Redundancy Test Case Supplementary Decision (2004) 129 IR 57. Importantly, there is no longer a need for such a clause to be included in a modern award as the award covers all employees in a particular industry. Its coverage no longer turns on the particular employer being a named respondent, as was the case in the past: see Chapter 1. This does not alter the fact that, technically, there has been a termination of one employment and the commencement of a new employment. As to the employee’s right to severance pay in these circumstances, see [9.180]. Evenden v Guildford City Association Football Club [1975] 3 WLR 251. Secretary of State for Employment v Globe Elastic Thread Co Ltd [1980] AC 506.

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In Australia, on the basis of Waltons Stores (Interstate) Ltd v Maher,354 it is possible that an employee could use the doctrine of promissory estoppel355 to claim, against the new employer, entitlements which cover the employee’s service with the previous employer. Even though the right to leave may arise under the Act or award, an agreement, say to count prior service with another employer, cannot alter the Act or award and cannot, of course, transgress it. If such an agreement is to be enforceable at all it must be as a valid contract between the parties.356 There can be no statutory enforcement of more than the statute grants.

354 355 356

Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 381. As a “sword” rather than a “shield”, by satisfying the six elements of the test espoused by Brennan J in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 428-429. Compare Evenden v Guildford City Association Football Club [1975] 3 WLR 251 at 258 per Browne LJ; at 259-260 per Brightman J.

10

Remedies – Actions for Wages or Damages [10.10] [10.20] [10.20] [10.30] [10.50] [10.60] [10.60] [10.70] [10.120] [10.130] [10.370]

Introduction ..................................................................................................... 415 Wages ............................................................................................................... 416 The wages–work bargain ........................................................................... 416 Payment of wages for broken periods ....................................................... 416 Recovery of statutory minimum wages ...................................................... 419 Action for Damages for Breach of Contract .................................................. 421 Introduction – general principles .............................................................. 421 Readiness and willingness ......................................................................... 421 Action for damages by employers ............................................................. 423 Action for damages by employees ............................................................. 425 Other Actions for Damages ............................................................................ 450

Introduction [10.10] Apart from a brief period following the amendment of the Workplace Relations Act 1996 (Cth) by the Workplace Relations Amendment (Work Choices) Act 2006 (Cth) (see [1.20]), industrial awards have been the vehicle through which minimum wages have been set in Australia. The Fair Work Commission is also required to set, and review annually, minimum wage rates for each classification in a modern award. It is required to set, and review annually, a National Minimum Wage: see [12.130]-[12.140]. Higher rates of pay may be prescribed in enterprise agreements which displace the operation of modern awards: see [12.80]. Further, it is open to the parties to agree by contract to a higher rate of pay than that prescribed by a modern award or an enterprise agreement. There are also many jobs, particularly in management and the professions, where there is no relevant modern award. Whilst the National Minimum Wage underpins wages in those jobs, it has no practical relevance because rates of pay agreed by contract will (often by far) exceed the statutory minimum. In this chapter, we consider the means by which employees, or others such as a registered organisation or the Fair Work Ombudsman, can recover unpaid wages under the Fair Work Act 2009 (Cth) (see [10.50]) and at common law under contract (see [10.30]) or, in the rare situation where there are no wages agreed, by way of a claim in quantum meruit (see [10.40]). We then consider actions available for damages for breach of contract by both the employee and the employer. Whilst there is a particular focus on damages for wrongful dismissal, consideration is also given to actions for damages for breach of contract during the employment. It follows the development of case law in relation to discretionary income regimes and the like: see [10.160]. However, it should be borne in mind that, even though there are statutory protections available for employees, such actions during employment are the exception, due to a concern to keep one’s job: see [13.260]. Many of the cases on the issue arise in circumstances where the employment has ended and the employee is seeking damages associated with the termination, which

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Ch 10: Remedies – Actions for Wages or Damages

may include the lost opportunity to secure a discretionary bonus. Finally, consideration is given to recent developments in relation to the limitations on the availability of general damages for breach of an employment contract.

Wages The wages–work bargain [10.20] One of the central issues taken up in Chapter 5 was the wages–work bargain. That is, whether wages had been earned in accordance with the terms of the contract of employment, relevant statute or award. It was there made clear that, where an action is brought for recovery of wages in the nature of an action for recovery of a debt, wages are not recoverable unless those wages have been earned. As the reader will see in Chapter 5, an employee wrongfully prevented from earning wages is not left without remedy. Although an action for recovery of wages as such cannot be brought (because the wages have not been earned),1 the employee may have an action in damages against the employer if the employer has been in breach of some express or implied term in the contract, such as the termination clause, the obligation to supply work or possibly the obligation to co-operate.2 The authorities examined in detail in Chapter 5 also support the view that an employer is not obliged to accept less than the service contracted for, so that if an employee refuses to render some particular item of lawfully required service, such as work under a ban, the employer can withhold all pay for the time such refusal continues. As to industrial action, the position regarding payment is now governed by the Fair Work Act 2009 (see [14.70]). If the refusal or failure to attend work is not found to be “industrial action” for the purposes of the Fair Work Act 2009, it is open to the employer to accept less than the service contracted for. However, the employer will be obliged to pay wages, although perhaps having a remedy in damages for the breach of contract by the employee.

Payment of wages for broken periods [10.30] As discussed in Chapter 12 [12.130]-[12.140], modern awards and enterprise agreements generally prescribe remuneration and benefits as accruing on a day-to-day or hour-to-hour basis.3 Section 323 of the Fair Work Act 2009 requires the employer to pay its employees in full (without deduction) and in money, at least monthly. Section 326 renders void a term of a modern award, enterprise agreement or contract which permits an employer to make a deduction, or requires an employee to make a payment to an employer, which is for the employer’s benefit and which is unreasonable in the circumstances. The statutory regime avoids issues concerning whether an employee has a right to be paid wages for broken work periods. Amounts due to the employee are therefore readily calculable based on the hours of work performed. The principles of performance of entire service under a contract, and the ameliorating effects of substantial performance have been rendered otiose.4 The distinction between “entire” and divisible contracts has little or no application. 1 2 3 4

See Rothenburger Australia Pty Ltd v Poulsen (2003) 58 NSWLR 288 at [40]-[41]. Geys v Société Générale, London Branch [2013] 1 AC 523 at [78]-[79] (Lord Wilson JSC), at [121], [126]-[127] per Lord Sumption JSC. The minimum rate of pay prescribed by the national minimum wage order made under s 294 of the Fair Work Act 2009 (Cth) is also prescribed as both a weekly and an hourly rate of pay. Freedland, The Personal Contract of Employment (OUP, 2003), pp 203-204; see also Sim v Rotherham Metropolitan Borough Council [1986] ICR 897 at 935; Item Software (UK) Ltd v Fassihi [2005] ICR 450.

Wages

As to “entire contracts”, the general principle was established in Cutter v Powell5 where a man was employed as second mate on a voyage from Jamaica to England in consideration for the sum of 30 guineas provided he “proceeds continues and does his duty as second mate in the said ship from hence to the port of Liverpool”. Wages paid were almost four times the going rate of £4 per month for a journey that usually took two months. The court held that since the man died before the whole journey had been completed, no proportion of his wages could be paid to his estate.6 Today, it is most unlikely to appear from the contract, statute or award that services must be completely performed before remuneration will be payable such that, if the employment is terminated by the employee before completion, no part of the wages as such are payable. Rather, all contracts are divisible. The contract, statute or award provides that wages are to accrue at specified periodic intervals so that the employee is entitled to be paid for periods actually completed. If wages are to be paid periodically this will usually be construed as a divisible contract requiring payment for each completed period. For example, in Taylor v Laird7 a seaman had contracted to serve on board a ship during the currency of the voyage. Wages were expressed in the contract of employment to be payable at monthly intervals. It was held that wages could be recovered for the months already served, even though the contract had been terminated as a result of the plaintiff’s own misconduct.8

Quantum meruit [10.40] Similarly, by reason of the statutory prescription of minimum wages, either directly or by modern awards or enterprise agreements, there is little if any room for the operation of equitable principles concerning quantum meruit. Only if the contract, relevant statute or award makes no provision for payment for broken periods may an action on a quantum meruit be available to the employee for recovery of wages for a broken period. This is a claim by an employee for reasonable remuneration for work already performed and voluntarily accepted by the employer and may be available to allow recovery for services rendered during a broken period. A plaintiff cannot, however, recover reasonable remuneration if there is an express provision in the contract binding the parties. It is only if the contract is at an end or is unenforceable that a claim can be made upon a quantum meruit.9 The party in breach can no longer keep the innocent party to the contract price but will be bound to pay a reasonable price for services rendered. The contract rate will provide the upper limit on recovery.10 According to the traditional contract rule there could be no claim for reasonable remuneration if the contract had been lawfully terminated as a result of the plaintiff employee leaving the employment before the expiry of the wages accrual period11 or where the employee had been justifiably dismissed. Originally the claim was not allowed because of the contractual rule that there could be no pro rata recovery for part performance of an entire contract.12 The courts were willing, however, to impose a 5 6 7 8 9 10 11 12

Cutter v Powell (1795) 6 TR 320; 101 ER 573; see also Smith v Jones (1924) 24 SR (NSW) 444 criticised in Stevens v Grazcos Co-op (1962) 3 FLR 163. Cutter v Powell (1795) 6 TR 320; 101 ER 573 at 325 (TR). Taylor v Laird (1856) 1 H & N 266; 156 ER 1203. See also Re Waterside Workers Awards (1957) 1 FLR 119 at 123; Parkin v South Hetton Coal Co (1907) 98 LT 162. Taylor v Laird (1856) 1 H & N 266; 156 ER 1203 at 273 (H & N). Sumpter v Hedges [1898] 1 QB 673; Flett v Deniliquin Publishing Co Ltd [1964] NSWR 383 at 385, 387-388; Pavey and Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 256 per Deane J. Pavey and Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 257 per Deane J. In respect of claims for reasonable remuneration for broken periods, each wages accrual period is in a sense an entire contract and the rules relating to entire contracts apply in respect of each period. Boston Deep Sea Fishing & Ice Co v Ansell (1888) 39 Ch D 339 at 360, 364-365. Compare where

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legal obligation to pay a reasonable sum13 where the contract came to an end by reason of the employer’s default. Thus an employee wrongly dismissed before the right to wages accrued could recover a reasonable sum for work performed up to the time of dismissal. In Planche v Colburn14 it was accepted that action on a quantum meruit was available for part performance of an entire contract.15 In that case the plaintiff agreed to write a book for a series published by the defendants. The plaintiff was to receive £100 on completion. After a substantial amount of work had been done but before completion the defendants abandoned the series. A claim in contract could not have succeeded as the right to payment accrued only upon completion but it was held that since the contract had been discharged by the defendant’s breach, the plaintiff was entitled to a reasonable sum which was assessed at 50 guineas.16 Thus an employee dismissed in breach of contract may sue upon a quantum meruit for a reasonable sum for services performed. The employee is not limited to sums payable for the broken period but is entitled to recover reasonable remuneration for all work performed in respect of which no payment has been made.17 Generally the contract will provide a measure of the amount recoverable.18 Alternatively an action may be brought for wrongful dismissal (see [10.190]); wages payable in respect of the broken period will be taken into account in assessing damages for dismissal.19 The actions for damages for wrongful dismissal and an action upon a quantum meruit are strict alternatives. If the employee accepts the wrongful dismissal as repudiating the contract, the employee may either sue for damages for wrongful dismissal or sue upon a quantum meruit for work actually performed. The action for quantum meruit can be brought only if the contract is at an end, for only then would the courts imply a term to pay a reasonable sum for services rendered.20 Similarly, an employee cannot sue for wages payable under a contract of employment in respect of work performed and in addition claim a reasonable sum for those services. The courts traditionally denied recovery of wages for a broken period in a quantum meruit claim where an employee in breach of contract left the job or was justifiably dismissed before wages accrued. Although the claim was originally disallowed because of the rules relating to entire contracts, there is now substantial support for the view that refusal to allow the quantum meruit claim amounts to a penalty or forfeiture for

13

14 15 16

17

18 19 20

there has been substantial performance, the contract price may be recovered subject to a counterclaim for damages: Hoenig v Isaacs (1952) 2 All ER 176; Napier, “Aspects of the Wage-Work Bargain” (1984) 43 CLJ 337. See also Item Software (UK) Ltd v Fassihi [2005] ICR 450. The claim based on quantum meruit does not depend on an inference of implied promise but rather is imposed by law, see Pavey and Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 252-253 per Deane J; at 227-228 per Mason and Wilson JJ; compare at 266-267 per Dawson J. Planche v Colburn (1831) 8 Bing 14; 131 ER 305. See also, Segur v Franklin (1934) 34 SR (NSW) 67 at 72 per Jordan CJ; Hoenig v Isaacs [1952] 2 All ER 176 at 181. See criticism in Goff and Jones, The Law of Restitution (5th ed, 1998), pp 532-533. Some early authorities suggested that the entire sum was recoverable rather than pro rata recovery: O’Neil v Armstrong, Mitchell & Co [1985] 2 QB 418, although cited for support of that approach was, semble, an action for wrongful dismissal. De Bernardy v Harding (1853) 8 Ex 822; 155 ER 1586; Lodder v Slowey [1904] AC 442 (PC). Hoenig v Isaacs [1952] 2 All ER 176 at 180 criticised by Goff and Jones, The Law of Restitution (5th ed, 1998), p 533. Note Industrial Relations Act 1984 (Tas), s 49 allowing recovery of weekly award wages if during the period the employee was ready and willing to work. Compare the continuing operation of the Apportionment Act 1870 (UK): Item Software (UK) Ltd v Fassihi [2005] ICR 450. Pavey and Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 257 per Deane J. Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 451 and 462. Britain v Rossiter (1879) 11 QBD 123 at 127; Flett v Deniliquin Publishing Co Ltd [1964] NSWR 383. But see Pavey and Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 252-253 per Deane J; at 227-228 per Mason and Wilson JJ; compare at 266-267 per Dawson J, the doctrine does not depend upon an implied promise.

Wages

breach.21 A number of leading writers have argued that a quantum meruit claim should be allowed.22 The High Court judgment in Pavey and Matthews Pty Ltd v Paul23 accepts that a quantum meruit claim should be available where there has been unjust enrichment of the other party to the contract. This would seem to leave the way open to a claim by an employee for pro rata wages up to the time of leaving the employment but subject to the qualification that the employer may be entitled to damages in respect of any loss suffered as a result of the failure in performance.24 If the contract terminates through no fault of either party, the circumstances may give rise to frustration of the contract.25 At common law where the contract was frustrated there could be no recovery of wages for the broken period and no claim on a quantum meruit.26 It is arguable, however, that if the policy against unjust enrichment can allow a quantum meruit claim by a party in breach then an innocent party should also be able to claim on a quantum meruit where the other party has obtained a benefit from the part performance of the frustrated contract.27 Frustrated contracts legislation in New South Wales and South Australia allows a claim in respect of work done prior to frustration provided that there has been some benefit to the employer after frustration.28

Recovery of statutory minimum wages [10.50] In addition to the right to wages under the contract of employment, the employee may have a right to wages under the Fair Work Act 2009 or a modern award or enterprise agreement. The interrelationship between the contract, statute, modern award and enterprise agreements is discussed in Chapter 12, [12.290]-[12.340]. The right to be paid award wages creates a statutory debt that arises independently of any agreement between the employer and employee. An employee entitled to the benefit of an award can recover award wages even if she or he agreed to receive a lower wage.29 It is not open to an employer to unilaterally deduct from wages (whether set by a modern award, enterprise agreement or contract) an amount owing by the employee to the employer; see [12.160].30

21 22 23 24

25 26 27

28 29

30

Williams, “Partial Performance of Entire Contracts” (1941) 57 LQR 373. Williams, “Partial Performance of Entire Contracts” (1941) 57 LQR 373; Goff and Jones, The Law of Restitution (5th ed, 1998), pp 552-553. Pavey and Matthews Pty Ltd v Paul (1987) 162 CLR 221. See Goff and Jones, The Law of Restitution (5th ed, 1998), pp 553-554 and authors’ comments on the proposals contained in the United Kingdom Law Commission, Report on Pecuniary Restitution for Breach of Contract (Law Com 121, 1983). As to the effect of frustration, see [9.240]. Cutter v Powell (1795) 6 TR 320; 101 ER 573; Appleby v Myers (1867) LR 2 CP 651. See Carter, “The Quantum Meruit Concept” (Committee for Postgraduate Studies in the Department of Law, Faculty of Law, University of Sydney, 9 August 1988), p 29; compare Cutter v Powell (1795) 6 TR 320; 101 ER 573. Where work is done after the contract has been frustrated, see Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337. Frustrated Contracts Act 1978 (NSW), s 11(2); Frustrated Contracts Act 1988 (SA), s 7. Mallinson v Scottish Australian Investment Co Ltd (1920) 28 CLR 66; Josephson v Walker (1914) 18 CLR 691 at 700; Moxham v Henderson [1981] 2 NSWLR 282 at 285. Theoretically an action would still be available to recover agreed wages unless contracts for less than award rates are prohibited. See True v Amalgamated Collieries of WA Ltd [1940] AC 537; Drury v Dulhunty (1921) 21 SR (NSW) 514 at 520-523; Smith v Huggins; Ex parte Huggins (1932) 26 QJPR 98. Fisher and Will, “Payback: Using Set-off to Recover Money from Employees at the Time of Termination” (2008) 21 AJLL 101. See, for example, Conti Sheffield Real Estate v Brailey (1992) 48 IR 1. As to the issue of whether an employer can set off over-award payments against a claim for award entitlements see Poletti v Ecob (No 2) (1989) 91 ALR 381; Alliance Strata Management Pty

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This right to receive award wages is enforceable under Pt 4-1 of the Fair Work Act 2009 (Cth). It provides a single compliance framework for the statutory regime.31 The enforcement mechanism in relation to minimum rates of pay is founded upon a series of civil remedy (sometimes referred to as civil penalty) provisions which impose an obligation upon national system employers not to contravene a modern award (s 45), an enterprise agreement (s 50) or a national minimum wages order (s 293). If the employer fails to pay the employee the relevant minimum rate of pay, in accordance with the table at s 539 (in particular items 2, 4 and 8), the employee, an employee organisation or an inspector may bring proceedings in the Federal Court of Australia, the Federal Circuit Court of Australia or an eligible State court, seeking the imposition of a penalty for each contravention.32 In addition to the imposition of a penalty, the Federal Court or Federal Circuit Court (but not an eligible State court) can (relevantly) grant an injunction to prevent, stop or remedy the effects of the contravention or make an order compensating the employee for the loss suffered as a result of the contravention (s 545(1), (2)). An eligible State court is restricted to orders making good the underpayment (s 543(3)). The Parliamentary intent appears to be to confer a broader power on the Federal Court and the Federal Circuit Court in relation to recovery of minimum payments to include compensation. Compensation was not a remedy available in the past. Under previous regimes (see Chapter 1) courts were limited to making orders for the recovery of underpayments. Further, in the past, penalty and recovery of underpayments were the only remedies available. The power to make orders for compensation and grant injunctions and the like provide a broader, and potentially significantly more intrusive, regime of remedies available.33 Under Pt 4-1 of the Fair Work Act 2009, an employee or an inspector can apply to the Federal Court or the Federal Circuit Court to enforce a safety net contractual entitlement34 as if it were an entitlement under the Act. However, this does not extend to seeking penalties for a breach of a contractual safety net entitlement.35

31 32

33

34

35

Ltd v Caputo (unreported, Industrial Court of New South Wales, Hungerford J, 27 February 1996); TCFUA v Givoni Pty Ltd (2002) 121 IR 250. Regarding the position under contract and the operation of the Employment Rights Act 1996 (UK), see Freedland, The Personal Contract of Employment (OUP, 2003), pp 209-212. See generally, Anderson and Howe “Making Sense of the Compensation Remedy in Cases of Accessorial Liability Under the Fair Work Act” (2012) 36 MULR 335. By item 11 of the table in s 539(2) of the Fair Work Act 2009 (Cth), the maximum penalty for an individual is 60 penalty units. By s 546(2)(b), the maximum penalty for a corporate entity is five times that amount, 300 penalty units. The value of a penalty unit is set by see s 4AA of the Crimes Act 1914 (Cth). With effect from 31 July 2015, it became $180 and from 28 December 2012 it became $170, prior to that it was $110. The assessment of penalty is to be determined by the value of the penalty unit at the time of the contravention: Murrihy v Betezy.com.au Pty Ltd (No 2) (2013) 221 FCR 118 at [6]-[28]. In relation to the principles applicable to the assessment of penalty, see generally Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; Ponzio v B&P Caelli Constructions Pty Ltd (2007) 158 FCR 543; Kelly v Fitzpatrick (2007) 166 IR 14. Query whether it extends beyond financial losses arising from the particular award or agreement breach, perhaps even as far as compensation in circumstances where the breach is such that the employee is entitled to leave the employment and claim to have been constructively dismissed. Whether a failure to pay the appropriate award or enterprise agreement rate would constitute the necessary repudiation will depend upon the particular circumstances. One example might be a breach of a disciplinary procedure in a modern award or enterprise agreement: see, for example, Van Efferen v CMA Corporation Limited (2009) 183 IR 319; compare the position in the United Kingdom, Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2012] 2 AC 22 (considered in more detail at [10.180]. A contractual entitlement in relation to any matter covered by the National Employment Standards or a modern award (s 12). The provisions of the Workplace Relations Act 1996 (Cth), s 720 was limited to recovery of the award rate. Compare Lynch v Buckley Sawmills Pty Ltd (1984) 3 FCR 503; 9 IR 469. Explanatory Memorandum to the Fair Work Bill 2009 (Cth), at [2141].

Action for Damages for Breach of Contract

An employee entitled under the contract of employment to over-award payments could sue for wages due in the ordinary civil courts without reference to the award.36

Action for Damages for Breach of Contract Introduction – general principles [10.60] Damages for breach of contract are directed to compensating the injured party for the loss it suffers as a result of the breach.37 An action for damages for breach of contract is available to both the employer and employee, although actions by employers against employees are rare.38 Before turning to the main cases dealing with actions for breach of contract in the employment context, we first consider the general principles governing actions for damages for breach of contract.

Readiness and willingness [10.70] In Chapter 5 we referred to the requirement in an action for damages for breach of contract that the plaintiff be able to prove if called upon that she or he was at all relevant times ready, willing and able to perform the contract.39 As already noted, this was at first required to be formally pleaded by the plaintiff; it is now implied in all actions for breach of contract.40 In the industrial context employees involved in strike action, whether an all-out strike or more limited industrial action in the form of selective work bans, will not be able to demonstrate readiness and willingness to work in accordance with the contract of employment and consequently no action for damages will be available to recover moneys not paid during the strike period,41 see [14.70]. Where the employment is governed by statute or award, the common law requirement that the employee be ready and willing to perform the employment may be a pre-requisite to recovery of wages42 (see [5.50]).

Remoteness of damage [10.80] The classic statement governing remoteness of damage resulting from breach of contract is contained in Hadley v Baxendale: Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, that is, according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.43 36 37 38

39 40 41 42 43

True v Amalgamated Collieries of WA Ltd [1940] AC 537; Fagan v Public Trustee (1934) 34 SR (NSW) 189; Steele v Tardiani (1946) 72 CLR 386. Hungerfords v Walker (1989) 171 CLR 125 at 143 per Mason CJ and Wilson J. Damages claims may arise in quite different contexts, for example, equitable remedies for breach of a fiduciary relationship between employer and employee: see O’Sullivan v Management Agency Ltd [1985] QB 428. Hanley v Pease & Partners Ltd [1915] 1 KB 698; Re a Dispute at Metal Manufacturers Ltd; Re Hutchinson [1948] AR (NSW) 818 at 825; Australian National Airlines v Robinson [1977] VR 87. Australian National Airlines v Robinson [1977] VR 87. Australian National Airlines v Robinson [1977] VR 87; Re a Dispute at Metal Manufacturers Ltd; Re Hutchinson [1948] AR (NSW) 818 at 825. Re Hutchinson [1948] AR (NSW) 818 at 827-828; NSW Teachers Federation v Department of Education (NSW) [1980] AR (NSW) 860. Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145 at 354 (Exch), 150 (ER) per Alderson B.

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Aggravated or exemplary damages [10.90] The law of contract does not serve to punish people for their wrongdoing, but

to satisfy the expectations of the party entitled to performance.44 Therefore, damages for breach of contract are compensatory in nature. Exemplary damages which are punitive or deterrent, rather than compensatory, are not available for breach of contract.45

Measure of damages [10.100] Damages are usually measured by reference to the rule in Robinson v

Harman:46

Where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same position with respect to damages as if the contract had been performed.

This rule allows a plaintiff to recover not only loss actually flowing from the breach of contract but also those benefits which would have resulted from performance of the contract.47 The courts traditionally make the assessment on the basis that the respondent would have discharged its contractual obligations in a way which would have been least burdensome to it.48 However, the court will look to the facts rather than proceed upon an improbable factual hypothesis.49 Where the breach arises from the employer purporting to summarily dismiss an employee, and grounds to do so do not exist, the court will readily presume that, had it not dismissed the employee when it did, the employer would have moved to lawfully terminate the employment by giving notice at the earliest opportunity.50 In those circumstances, the starting point for the assessment of damages will be the remuneration payable to the employee during the notice period. On the other hand, where the employment terminates as a result of some other repudiation by the employer, which is accepted by the employee as bringing the 44 45

46 47

48

49

50

Group Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1988] AC 1 at 15. Addis v Gramophone Co Ltd [1909] AC 488 at 494-495; Butler v Fairclough (1917) 23 CLR 78 at 89; Whitfield v De Lauret & Co Ltd (1920) 29 CLR 71 at 81; Gray v Motor Accident Commission (1998) 196 CLR 1 at 6-7; Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157 at [142]-[143], [164]; Harris v Digital Pulse Pty Ltd (2003) 197 ALR 626 at 683 per Heydon JA. Compare the position in Canada following the decision of the Supreme Court in Honda Canada Inc v Keays [2008] 2 SCR 362 at [61]-[70]. Note also that, in Australia, outside the law of contract exemplary damages are available only where the court is satisfied that the amount of compensatory damages has insufficient punitive effect. See a recent consideration of the issue in Vergara v Ewin (2014) 223 FCR 151 at [106]-[112], where it was pointed out that the relevant passage in Rookes v Barnard [1964] AC 1129 at 1228 per Lord Devlin remains good law in Australia, despite the criticism of other aspects of Lord Devlin’s reasons by the High Court in Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118. Robinson v Harman (1848) 1 Ex 850; 154 ER 363 at 855 (Ex), 365 (ER); see also Boyo v Lambeth Borough Council [1994] ICR 727 at 743; Wise Group v Mitchell [2005] ICR 896. As to the recovery of reliance damages (as opposed to expectation damages), see Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64. The High Court accepted the application of the principle in Robinson v Harman (1991) 174 CLR 64 at 80 per Mason CJ and Dawson J. Cockburn v Alexander (1848) 136 ER 1459 at 1468-9; Gunton v Richmond-upon-Thames LBC [1981] Ch 448 at 469 per Buckley LJ; Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 at 156; Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 92-93 per Mason CJ and Dawson J; Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 41 IR 452 at 463; Grout v Gunnedah Shire Council (No 3) (1995) 59 IR 248 at 251. TCN Channel Nine Pty Ltd v Hayden (1989) 16 NSWLR 130 at 154-156; McDonald v Parnell Laboratories (Aust) (2007) 168 IR 375 at [79]. See, for example, TWU v K&S Lake City Freighters Pty Ltd [2010] FCA 1225 (12 November 2010, Cowdroy J) at [187]-[191]: Buitendag v Ravensthorpe Nickel Operations Pty Ltd [2012] WASC 425 (15 November 2012, Le Miere J) at [170]-[183] (issue not dealt with on appeal Buitendag v Ravensthorpe Nickel Operations Pty Ltd [2014] WASCA 29 (6 February 2014, McLure P, Pullin and Murphy JJA)). Willis Australia Group Services Pty Ltd v Mitchell-Innes [2015] NSWCA 381 (2 December 2015, Macfarlan, Ward and Leeming JJA) at [117-[123]; Bartlett v Australia and New Zealand Banking

Action for Damages for Breach of Contract

contract to an end (constructive dismissal), a court will be more inclined to consider the prospect that, absent the employer’s repudiation, it would have been some time before the employer would have sought to terminate the employment by giving notice.51 In some cases where this measure of damages is not appropriate the plaintiff may recover expenditure wasted as a result of the defendant’s breach.52

Liquidated damages [10.110] In some circumstances the courts may not be called upon to assess damages as the parties may have provided a liquidated damages clause in the contract, whereby a certain stipulated sum be payable upon breach of the contract.53 Provided that the sum stipulated is a genuine assessment at the time of the contract of the damage likely to flow from the breach of contract, it will be enforceable. If it amounts to a penalty for breach it will be unenforceable.54 A contract can legitimately provide for payment of a specified sum to an employee on the exercise of a right to terminate the contract of employment early.55

Action for damages by employers [10.120] An employer may recover damages for breach of the contract by the employee in circumstances where the employee leaves without giving appropriate notice, or the employee has acted in breach of contract resulting in loss to the employer. Most actions for damages (or injunctive proceedings) have been brought against

51

52 53

54

55

Group Ltd [2016] NSWCA 30 (7 March 2016, Macfarlan, Meagher and Simpson JJA) at [78]-[84] (Macfarlan JA), [100]-[106] (Meagher JA). A similar approach has been adopted in the assessment of statutory compensation under s 545 of the Fair Work Act 2009 (C’th): Dalfallah v Fair Work Commission (2014) 225 FCR 559 at [161]. Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at [353]-[354] per Jessup J, issue not dealt with on appeal to the High Court in Commonwealth Bank of Australia v Barker (2014) 253 CLR 169. In Fishlock v The Campaign Palace Pty Limited (2013) 234 IR 1 at [275]-[277], the court considered it relevant that it was unlikely that notice would have been given for some time, because the employer would need the employee to assist in a smooth transition to his successor. In Walker v Citigroup Global Markets Australia Pty Ltd (2006) 233 ALR 687 at [82]-[84], the court took the view that it was unlikely that the employer would have exercised its right to terminate on one month’s notice without cause, as allowed by the contract, because the employer was required by the contract to engage the employee for a certain minimum period. By the time the minimum period would have expired, the employee would have been a skilled and competent employee holding a high profile position in its business. The court assessed damages on the basis that Mr Walker would have continued in the employment for a further four and a half years. Neither the judgment of the Full Court, nor the passage in which the judge at first instance dealt with the issue (Walker v Citigroup Global Markets Pty Ltd (2005) 226 ALR 114 at 151-157), made reference to the least burdensome performance rule or the above authorities. See as an illustration, Oldcastle v Guinea Airways Ltd [1956] SASR 325. For example, Tullett Prebon (Australia) Pty Ltd v Purcell [2009] NSWSC 1079 (9 October 2009, Ward J), not challenged on appeal Purcell v Tullett Prebon (Australia) Pty Ltd [2010] NSWCA 150 (28 September 2010, Allsop P, Basten JA and Handley AJA) at [9]-[11]. Compare Guthrie v News Limited (2010) 27 VR 196 (14 May 2010, Kaye J) at [40]-[45], where the relevant clause was found not to provide for compensation payable on termination, but merely what entitlements ought to be provided to the employee on termination prior to expiry of the contract. Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd [1915] AC 79 at 86-88; AMEV-UDC Finance Ltd v Austin (1986) 60 ALJR 741. For applications of the rule to contracts of employment, see the recent statement of principles in Coghill v Indochine Resources Pty Ltd (No 2) [2015] FCA 1030 (17 September 2015, Katzmann J) at [78]-[84]. Earlier authorities include Arlesheim Ltd v Werner [1958] SASR 136; Ajax Insurance Co Ltd v Smith (1962) 79 WN (NSW) 83; R v Stewart [1938] Qd R 87. As to the distinction between liquidated and unliquidated damages in an employment context, see Rothenburger Australia Pty Ltd v Poulsen (2003) 58 NSWLR 288 at [17]-[21]. Earney v Australian Property Investment Strategic Pty Ltd [2010] VSC 621 (22 December 2010, Hargrave J) at [97]-[101]; Coghill v Indochine Resources Pty Ltd (No. 2) [2015] FCA 1030 (17 September 2015, Katzmann J) at [75]-[84].

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employees (or former employees) for breach of the duty of fidelity56 (see [5.520]) or for breach of restrictive work covenants (see [5.590]ff). A remedy may also be available for breach of any fiduciary duty owed by the employee to the employer (see [5.540]). The relief available in equity is broader than that available at common law for breach of contract. The courts have greater flexibility in awarding equitable compensation.57 Equity also makes available avenues through which those who have been knowing recipients of ill-gotten benefits from breach of fiduciary obligations (or those who assist another to breach the fiduciary obligations) have to account for the gains they receive.58 Action against employees for breach of contract where employees have engaged in industrial action in the form of work bans or strike action in breach of contract is now almost non-existent.59 No such claim may be brought in respect of protected industrial action: see [14.20]. In the case of unprotected industrial action, although an action for damages is theoretically available, rarely will the employer be in a position to do more than abide by its statutory obligation to withhold wages for the period of industrial action: see [14.70]. An historical objection has been that it allows an employer to assess damages and act as judge in her or his own cause.60 Although most unprotected industrial action will be in breach of the contract of employment61 practical considerations weigh heavily against any such proceedings being brought (see [14.20]). These practical considerations include making good the loss and damage suffered as a result of the acts of the employee in not providing service.62 The suggestion in Sim v Rotherham Council63 that the employer is entitled to make a deduction from wages on the basis of an equitable set off has no application in Australia because of the prohibition on paying employees for the time during which they are taking the industrial action. Subject to certain statutory protections in place in some States (see [6.90]), actions against employees for breach of contract may also arise, for example, where the employee has been negligent in carrying out the employment.64 An employee will be liable in damages where particular damage such as damage to machinery can be 56

57

58 59

60 61 62

63

64

For an example, see Colour Control Centre Pty Ltd v Ty (unreported, Supreme Court of New South Wales, Santow J, 24 July 1995). The employer may have a right to elect to recover an account of profits or compensatory damages. As to the availability of equitable remedies for breach of confidentiality, see Stewart, “Confidentiality and the Employment Relationship” (1988) 1 AJLL 1; Universal Thermosensors Ltd v Hibben [1992] 3 All ER 257. As to the remedies available where an agent has accepted a bribe, see [5.810]. See the useful summary of the law on this issue in Grimaldi v Chameleon Mining (2012) 200 FCR 296 at [503]ff. Similar duties are imposed upon employees and officers of corporations by Pt 2D.1 of the Corporations Act 2001 (Cth). These are civil penalty provisions (s 1317E). In addition to the potential for the imposition a penalty (s 1317J), the contravener is exposed to claims for statutory compensation under s 1317H. Hodgson v Amcor (2012) 264 FLR 1 at [1636]; Grimaldi v Chameleon Mining (2012) 200 FCR 296 at [553] ff. Gapes v Commercial Bank of Australia (1980) 41 FLR 27 at 33 per Deane J; J Ray McDermott (Australia) Pty Ltd and Australian Institute of Marine and Power Engineers (1977) 189 CAR 883; Royle v Trafford Borough Council [1984] IRLR 184. Contrast Western Australian Government Railways v ARU (WA) (1981) 23 AILR 238. Williams v North’s Navigation Collieries (1889) Ltd [1906] AC 136 at 146 per Lord Atkinson; see also at 141 per Lord Loreburn LC; at 142 per Lord Davey. See discussion at [8.260]. National Coal Board v Galley [1958] 1 WLR 16 at 28-29. As to assessment of damages where there is a continuing breach, see National Coal Board v Galley [1958] 1 WLR 16 at 26-27 per Pearce LJ; and Mann v Capital Territory Health Commission (1982) 148 CLR 97. Sim v Rotherham Council [1986] ICR 897 doubted by Lord Templeman in Miles v Wakefield Municipal District Council [1987] 2 WLR 795 at 810, but see Wiluszynski v London Borough of Tower Hamlets [1988] IRLR 154. Lister v Romford Ice Co [1957] AC 555. In Rowell v Alexander Mackie College of Advanced

Action for Damages for Breach of Contract

directly attributed to that employee. Damages will normally be measured by reference to the plaintiff’s position if the contract had been performed. If, however, this is not appropriate, the plaintiff can recover wasted expenditure resulting from the contract breach. For example, an employer may be entitled to substantial damages based on the employer’s costs in training an employee as in Oldcastle v Guinea Airways Ltd.65 Oldcastle was employed by an airline company who agreed to train and employ him as a pilot in consideration of the employee agreeing to serve as a pilot for five years. Substantial sums were spent on training but several weeks after completion of training Oldcastle left the employment in breach of contract. Although the company was unable to show specific pecuniary loss, it was held that it was entitled to substantial damages. The training scheme was intended to enable the company to have the exclusive call on the services of the pilots whom it had trained and thus avoid being dependent upon the goodwill of a rival airline, which from time to time had provided the company with spare crews for planes on routes in direct competition. Damages were assessed at the cost of training.

Action for damages by employees [10.130] The most usual circumstances giving rise to actions for damages by an employee against an employer will be where there has been a wrongful dismissal.66 These are addressed in detail at [10.190]ff). First though, we consider actions for damages for breach by the employer during the employment.

Damages for breach of contract during the employment [10.140] Proceedings for damages are theoretically available for any breach of contract on the part of the employer. However, there is a practical impediment to proceedings being brought by existing employees against their employer – fear of retribution. Now, Pt 3-1 of the Fair Work Act 2009 (Cth) provides a level of protection to employees who make complaints in relation to their employment or exercise workplace rights. The employer cannot take adverse action against the employee for making the complaint or exercising the workplace right: see [13.260]. With this protection, and the greater presence of substantial discretionary remuneration schemes, particularly in banking and finance and investment businesses, it is reasonable to expect that the traditional reluctance of employees to sue their employer during the employment may fade. Before turning to a few specific areas, it should be noted that such actions have been employed in cases in claims for damages by an employee that the employer breached the duty to provide work,67 and that the employer had underpaid68 or failed to pay wages in breach of contract,69 or failed to make contractual payments due upon the election of an employee to bring the employment to an end on the change of control of

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Education (1988) 25 IR 87 an employee negligently crashed a company vehicle on the way home after assisting at a social function at work. The NSW Court of Appeal found that there was no implied term that the employee was not liable for his own negligence in the course of employment. Oldcastle v Guinea Airways Ltd [1956] SASR 325; see also Arlesheim Ltd v Werner [1958] SASR 136. If the contract is repudiated by either party before the time for performance commences, for example, the employer refuses to accept the employee for employment, the innocent party may immediately treat the contract as at an end and sue for damages: Hochester v De La Tour (1853) 2 E & B 678; 118 ER 922; Gregory v Philip Morris (1988) 80 ALR 455. See [5.310]ff. See, for example, Mann v Capital Territory Health Commission (1982) 148 CLR 97; William Hill Organisation Ltd v Tucker [1999] ICR 291; Wesoky v Village Cinemas International Pty Ltd [2001] FCA 32 (2 February 2001, Merkel J); compare Bearingpoint Australasia Pty Ltd v Hillard [2008] VSC 115 (18 April 2008, Habersberger J). See Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539 at [80]; Riley, “Pensioning Off Lord Asquith’s Cook” (2005) 18 AJLL 177. Rigby v Ferodo Ltd [1988] ICR 29. Compare Welbourn v Australian Postal Commission [1984] VR 257 which was a claim for wages.

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the employer.70 An action will not be available to an employee for damages for breach of contract for an unlawful suspension unless the employee was at all relevant times ready, willing and able to perform the contract.71 Performance appraisals

[10.150] It is common to see a performance appraisal regime in place in the modern workplace, particularly in a professional environment. Questions may arise as to whether the regime is contractually binding. This may turn on issues such as whether a policy setting down the performance appraisal regime is incorporated into the contract (on this, see [4.480]). Since the High Court in Commonwealth Bank of Australia v Barker72 concluded that the trust and confidence term is not part of the law in Australia, employees may be left to rely upon other implied terms; such as the employer’s duty of care (see [6.100]) or the duty to co-operate (see [5.190]) or, if it exists, a general duty of good faith73 (see [5.170]). Alternatively, a failure to provide key performance indicators for the purposes of a performance review regime may constitute adverse action for the purposes of the general protections provisions in Pt 3-1 of the Fair Work Act 2009 (Cth)74 (see [13.240]). Much will depend upon the nature of the performance appraisal regime which is in place. It may be detailed and formal. It may be relaxed and casual. Whilst the prediction was made, as long ago as 1992, that this would be a fruitful field for litigation, it does not yet appear to be so.75 One can readily see the potential for claims in the event that the employer fails to conduct the appraisal, or conducts the appraisal but in an off-handed and inadequate manner, perhaps not in compliance with prescribed procedures, or fails to take into account some positive aspect of the employee’s performance which may stand against other negative aspects. The consequences for the employee may be significant.76 If there is any breach of a contractual term, the employee may be able to establish that it caused the employer to look less favourably upon the employee in a subsequent promotional opportunity, or in the application of a bonus scheme or in the exercise of a discretion in determining a bonus or pay review.77 Such a claim gives rise to interesting questions about the assessment of damages. The court would be invited to look at what would have 70 71

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77

Whittaker v Unisys Australia Pty Ltd (2010) 192 IR 311; Earney v Australian Property Investment Strategic Pty Ltd [2010] VSC 621 (22 December 2010, Hargrave J). See [5.50] Hanley v Pease & Partners Ltd [1915] 1 KB 698; Re a Dispute at Metal Manufacturers Ltd; Re Hutchinson [1948] AR (NSW) 818 at 825. Damages will usually be equivalent to the amount of unpaid wages payable during the period of suspension: Hanley v Pease & Partners Ltd [1915] 1 KB 698 at 705-706. Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 at [41] per French CJ, Bell and Keane JJ, [109] per Kiefel J and [115] per Gaegler J. There may of course be significant potential for statutory claims to be brought as well, such as unfair dismissal proceedings [13.50], a general protections claim [13.230], a bullying claim [13.370], discrimination proceedings (Chapter 15), a misleading and deceptive conduct claim [10.370], as well as possible proceedings in tort [6.100]. Milardovic v Vemco Services Pty Ltd (Administrator Appointed) [2016] FCA 19 (29 January 2016, Mortimer J) at [238]-[243], [261]. Colvin and McCarry, “Performance Appraisal of Workers: Some Legal Considerations” (1992) 5 AJLL 209. In Bartlett v Australia and New Zealand Banking Group Ltd [2016] NSWCA 30 (7 March 2016, Macfarlan, Meagher and Simpson JJA) at [51]-[56] (Macfarlan JA) the court considered that the consequences of the termination for the employee was a consideration relevant to the assessment of Wednesbury Corporation type reasonableness (see Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 229-230) in the reaching of an opinion as to the seriousness of the an employee’s misconduct when relying upon an express power to terminate the employment in the event that the employer was of the opinion that the employee had engaged in serious misconduct. See, for example, Westfield Limited v Helprin (1998) 82 IR 411.

Action for Damages for Breach of Contract

happened had the contractual obligation in relation to the performance appraisal been complied with. This may give rise to an assessment of the value of the lost opportunity to secure a promotion or a bonus or a pay rise. Discretionary payments [10.160] There have been a number of recent cases which look at the issue of discretionary remuneration schemes. The issue may arise where an employee claims that the employer has failed to properly apply a bonus scheme during the employment. Questions of assessment of damages can also arise in wrongful dismissal claims which may put in issue the value of the lost opportunity to secure “at risk” income in addition to the loss of base salary as a result of the dismissal.78 As always, the outcome will turn on the particular terms of the contract.79 First, is there a contractual entitlement to the “at risk” remuneration?80 The scheme may be set out in a policy, or may be detailed in the contract itself: see [4.480]. It may be unwritten. It may adopt a particular formula, or it may confer an unconstrained discretion upon the employer to choose whether to pay a bonus and, if so, to determine the amount of the bonus. If the former, it may be more likely to be contractually binding. If the latter, it may not be contractually binding.81 Alternatively, implied terms may operate on the exercise of the discretion to give rise to a contractually binding obligation. However, the implied terms cannot operate inconsistently with the express terms of the contract: see [4.540]. In assessing whether the employee should be entitled to additional damages to compensate for the lost opportunity to earn a bonus or an equity interest in the business, the relevant question is whether the employer’s breach deprived the employee of the opportunity to obtain a bonus or equity in the business. If there were other factors which determined the issue, such as the lawful refusal by a superior to exercise her or his discretion to make a recommendation that a bonus be paid, then there should be no award.82 Secondly, do the terms of the clause giving rise to the entitlement apply a particular formula and, if so, has the formula been applied? There may be specific “gateways” to be satisfied before a bonus is to be paid. The formula may be prescriptive in that it sets specific targets for the employee or for the part of the business that the employee works 78

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See [5.210]; Clark v Nomura International plc [2000] IRLR 766; Merrill Lynch (Australia) Ltd v Commissioner of Taxation (2001) 113 FCR 79 at [95]-[99]; Malone v BPB Industries Ltd [2002] ICR 1045; Transco plc v O’Brien [2002] ICR 721; Corrs Brewers Ltd v Adcock [2007] ICR 93; Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 (17 December 2010, Allsop P, Beazley JA and Hammerschlag J) at [4]-[10] per Allsop P, and [19] per Beazley JA (agreeing), compare [53]-[56] per Hammerschlag J; Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014, Griffiths J) at [976] and on appeal in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [126]-[131] (Buchanan J); O’Sullivan Partners (Advisory) Pty Ltd v Foggo (2012) 218 IR 331; Eshuys v St Barbara Ltd (2011) 205 IR 302; Heugh v Central Petroleum Ltd (No 5) [2014] WASC 311 (29 January 2014, Le Miere J); Hodgson v Amcor (2012) 264 FLR 1; compare Reda v Flag [2002] All ER 201. See Freedland, The Personal Contract of Employment (OUP, 2003), pp 223-230. See also Moir, “Discretion, Good Faith and Employer Control Over Executive Remuneration” (2011) 24 AJLL 121. Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [115]-[131] (Buchanan J). Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014, Griffiths J) at [732]-[734], [976]-[992], [1044]-[1058] and on appeal in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [126]-[131] (Buchanan J). Fink v Fink (1946) 74 CLR 127; Placer Development Ltd v Commonwealth (1969) 121 CLR 353 at 356 per Kitto J; Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 at [111] per North J, [152] per Mansfield J; Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 (17 December 2010, Allsop P, Beazley JA and Hammerschlag J) at [8] per Allsop P. Rankin v Marine Power International Pty Ltd (2001) 107 IR 117 at [406].

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in, or for the whole of the employer’s enterprise. Alternatively, the formula may guide the exercise of the employer’s discretion by identifying certain matters that the employer is required to take into account in determining the amount of the “at risk” component, such as whether (or the extent to which) the employee has satisfied key performance criteria, or other goals set over the relevant period, or whether the employee has satisfied sales targets, or whether the part of the employer’s business has met profit targets or budgets and the like.83 In Rankin v Marine Power International84 the court was required to consider whether the employee should be compensated for loss as a result of the termination of his employment including a lost opportunity to earn a bonus. Under the relevant bonus system, the decision as to whether or not a bonus should be paid was made by the parent company, rather than the employer. The employer had not made a recommendation to the parent company. The parent company had made no decision. There was no express obligation on the employer to make such a recommendation. There was no express contractual entitlement to a bonus. It was alleged that the failure to make the recommendation was a breach of an implied term as to trust and confidence, which (it was alleged) required the employer to give consideration to making the recommendation. This argument was rejected. In Silverbrook Research Pty Ltd v Lindley85 the contract provided that the employee was eligible to receive an annual performance bonus of $40,000 subject to the assessment of her performance against set objectives at the end of each quarter, but the decision as to whether a bonus would be paid was entirely within the discretion of the employer. At no time did the employer set the objectives and no bonus was paid. The breach was made out. The assessment of the value of the lost opportunity to participate in the bonus scheme is considered at [10.170].

[10.170] Thirdly, absent a formula, do the express terms of the clause giving rise to the entitlement regulate or influence the exercise of the discretion available to the employer under the clause? Further, are there any implied terms which may operate to control the exercise of the discretion available to the employer under the clause?86 See [5.210]. In Reda v Flag,87 despite a commitment in the letter of appointment to commence an option plan, the option plan had not been established prior to the termination of the employment. The employee claimed that the commencement was deliberately delayed so as to avoid payment. It was submitted that the delay was in breach of the implied term as to trust and confidence. The Privy Council said that it was not a breach of the implied term. The fixed term contracts of the employees were about to expire. Their contracts were not to be renewed. The object of the share option plan was to advance the interests of Flag by promoting a closer identity of interest between senior managers and stockholders. There was no future in the relationship. There was no loss suffered by the employees. At most, they had a loss of chance claim. However, there was no realistic chance of being granted options which were capable of being exercised. Even if 83 84 85 86

87

Woodhouse v ADA Manufacturing Co Ltd [1954] SASR 263. Rankin v Marine Power International (2001) 107 IR 117. See also Bearingpoint Australia Pty Ltd v Hillard [2008] VSC 115 (18 April 2008, Habersberger J) at [112]-[121]. Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 (17 December 2010, Allsop P, Beazley JA and Hammerschlag J). Clark v Nomura International plc [2000] IRLR 766; Merrill Lynch (Australia) Ltd v Commissioner of Taxation (2001) 113 FCR 79 at [95]-[99]; Malone v BPB Industries Ltd [2002] ICR 1045; Cantor Fitzgerald International v Horkulak [2005] ICR 402; Corrs Brewers Ltd v Adcock [2007] ICR 93; alternatively, by reason of the employer’s obligation not to deprive the employee of the benefit of the contract: Australian Airline Flight Engineers Association v Ansett Australia Ltd (2000) 102 IR 162 at [18]; Walker v Andrew (2002) 116 IR 380 at [35]. See Moir, “Discretion, Good Faith and Employer Control Over Executive Remuneration” (2011) 24 AJLL 121. Reda v Flag [2002] All ER 201.

Action for Damages for Breach of Contract

the scheme started, it is unlikely that the discretion would have been exercised to grant the options on the eve of their departure. To do so would make no commercial sense. In Clark v Nomura,88 on its face, the employer’s discretion to determine the appropriate bonus payment to be made to the employee was unfettered. The High Court in England said that the employer would be in breach of the implied term as to trust and confidence if no reasonable employer would have exercised the discretion in the way which it did. It expressed the view that the concept of an obligation on an employer to act reasonably in the exercise of the discretion was too low a test because it may result in the court simply substituting its own view for that of the employer. Rather, a test of perversity or irrationality would prevent the court from substituting its own view. It would require the court to ask the question whether any reasonable employer could have come to the same conclusion. This introduced concepts in administrative law concerning reasonableness. Was the assessment so unreasonable that no reasonable employer could have reached the view that was reached by the employer in all the circumstances: a Wednesbury Corp test.89 In Malone v BPB Industries Ltd90 the court, after referring to Clark v Nomura, held that the discretion to cancel share options, though absolute, had to be exercised properly. Given that the options were granted in reward for past performance and in anticipation of future loyalty and that mature options were a vested property right, on the evidence, the directors’ decision to cancel all of the employees’ mature options was an irrational exercise of their discretion and, accordingly, the employees were entitled to damages. In Horkulak v Cantor Fitzgerald International91 the Court of Appeal in a unanimous judgment, after referring to Clark v Nomura and Malone v BPB, concluded that the employee was entitled to a bona fide and rational exercise by the employer of the discretion as to whether or not to pay the employee a bonus. The objective purpose of the bonus clause on the evidence was to motivate and reward the employee in respect of his endeavours to maximise the commission revenue of the relevant business of the employer. Further, a condition precedent that the employee should be working and should not have given notice or attempted to resign prior to the payment of the bonus demonstrated that the bonus was to be paid in anticipation of future loyalty. Such a provision must be read as a contractual benefit to the employee, rather than being a mere declaration of the employer’s right to pay a bonus if he wishes. The upshot was that the employer was required to exercise the discretion rationally and in good faith in awarding or withholding a benefit provided for under the contract of employment. That did not occur in this case. Therefore, the court proceeded to exercise the discretion in that way on the basis of the evidence before it. This resulted in an award of damages of approximately £900,000. The Court of Appeal in Horkulak distinguished the Privy Council decision in Reda v Flag.92 The Australian courts have tended to adopt an approach built around the administrative law principles applied in Clark v Nomura. When considering what would have happened had the employer complied with its contractual obligation and set the objectives, in Silverbrook Research Pty Ltd v Lindley,93 Allsop P said that it would not have been open to the employer to withhold the bonus capriciously, arbitrarily or unreasonably. The exercise of the discretion should be understood against the proper scope and content of the contract. It was an agreed bonus to be assessed 88 89 90 91 92 93

Clark v Nomura [2000] IRLR 766. See Riley, Employee Protection at Common Law (Federation Press, 2005) p 83; and Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 229-230. Malone v BPB Industries Ltd [2002] ICR 1045. Horkulak v Cantor Fitzgerald International [2005] ICR 402. Reda v Flag [2002] All ER 201. Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 (17 December 2010, Allsop P, Beazley JA and Hammerschlag J).

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against set criteria.94 The discretion was to be exercised honestly and conformably with the purpose of the contract. It would require a very clear statement of intent if the parties had agreed that the payment could be withheld capriciously. In Eshuys v St Barbara Ltd, it was accepted that the principles in Clark v Nomura governed the exercise of the discretion in determining “the extent of compliance” with stated goals which, if met, were to result in a substantial incentive payment.95 The approach in Silverbrook has since been applied to the assessment of the value of the lost opportunity to secure a bonus payment under an incentive scheme,96 the assessment of the value of the lost opportunity to secure a salary increase in a regular annual salary review,97 and to the consideration (and rejection) of a recommendation made to a senior officer of the employer in circumstances where the letter of appointment imposed an obligation upon lower management to make the recommendation. In the latter case it was concluded that the rejection was not arbitrary or capricious.98 Fourthly, if any obligation (express or implied) has been breached, what consequences flow? Adopting normal principles, the court will look to put the employee in the position he or she would have been in had the employer complied with the contractual obligation. Whilst the courts are reluctant to put themselves in the position of the employer, they are required to assess the loss and damage that flows from the employer’s breach. This will require the court to make an assessment of the likely bonus payable in the event that the employer complied with the contractual terms or, in the event that the question arises as a result of the wrongful dismissal of the employee, an assessment of the value of the lost opportunity to secure a bonus had the employment not been terminated.99 Contractual disciplinary procedures [10.180] In Australia at least, an employee may also have a claim for damages for breach of a contractual disciplinary procedure prior to termination which has resulted in loss and damage.100 The position is different in the United Kingdom due to the development of the Johnson exclusion zone (see [10.290]) and its application to breaches of express terms as well as implied terms. In Edwards v Chesterfield Royal Hospital NHS Foundation Trust101 the United Kingdom Supreme Court considered the question of whether damages are recoverable for breach of contract in relation to the manner of dismissal even where the breach was of an express term regulating the disciplinary procedures leading to dismissal. The court concluded that, as a result of the specific regulatory environment, by which employers are required to set out applicable 94 95 96

97 98 99

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Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 (17 December 2010, Allsop P, Beazley JA and Hammerschlag J) at [5]. Eshuys v St Barbara Ltd (2011) 205 IR 302 at [14], [103]-[114]. Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014, Griffiths J) at [732]-[734], [976]-[992], [1044]-[1058] and on appeal in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [126]-[131] (Buchanan J). Heugh v Central Petroleum Ltd (No 5) [2014] WASC 311 (29 January 2014, Le Miere J) at [114]. UGL Rail Services Pty Ltd v Janik [2014] NSWCA 436 (19 December 2014, Emmett JA, Sackville AJA and Adamson J) at [189]-[190] per Sackville AJA. Murphy v Westpac Banking Corporation [2014] FCA 1104 (14 October 2014, Griffiths J) at [732]-[734], [976]-[992], [1044]-[1058] and on appeal in Westpac Banking Corporation v Wittenberg [2016] FCAFC 33 (14 March 2016, Buchanan, McKerracher and White JJ) at [126]-[131] (Buchanan J); Heugh v Central Petroleum Ltd (No 5) [2014] WASC 311 (29 January 2014, Le Miere J) at [114]. Such loss and damage may include loss of employment if the court is persuaded that, had the disciplinary procedure been complied with, the employment would have continued: Van Efferen v CMA Corporation Limited (2009) 183 IR 319. Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2012] 2 AC 22.

Action for Damages for Breach of Contract

disciplinary procedures in writing and a tribunal dealing with any unfair dismissal complaint is required to have regard to any failure to adhere to the process when determining appropriate compensation, the parties could not be taken to have intended that a breach of the disciplinary procedure would found a claim in damages for breach of the disciplinary procedure.102 It remains to be seen whether this extension of the Johnson exclusion zone will flow through to Australia. It is unlikely to do so. The position is likely to continue to be governed by original authority on the point (see [10.210]).103

Damages for wrongful dismissal Introduction [10.190] Dismissal will be wrongful104 and in breach of contract where the employee is not given notice of sufficient length to lawfully terminate the contract, or has been summarily dismissed for misconduct in circumstances which do not warrant summary dismissal (see [8.100]), or is constructively dismissed by the employer: see [8.80]. Wrongful dismissal will also occur where the employer fails to follow contractual procedures required prior to dismissal (see [10.180]).105 The dismissal may be in breach of anti-discrimination legislation (see Chapter 15), or Pt 3-1 (general protections) (see [13.230]) or Pt 6-4 (additional provisions in relation to termination of employment) (see [13.330]) of the Fair Work Act 2009 (Cth), or in breach of award entitlements.106 Protective legislation may give independent remedies for breach such as a right to reinstatement or a claim for damages at large. Such rights may be more advantageous to the employee than the limited amounts of damages recoverable in actions for damages for wrongful dismissal. It is important at the outset to distinguish three different actions which may be available to the employee upon a wrongful dismissal. The three remedies are: first, an action for damages for wrongful dismissal; secondly, an action upon a quantum meruit for work actually performed but in respect of which payment has not been made; thirdly, an action for wages due under contract or award. The action for damages for wrongful dismissal differs from the other available actions in that it allows recovery of damages for wages or salary that the employee has been prevented from earning by virtue of the wrongful dismissal.107 Actions upon a quantum meruit and for wages due are dealt with at [10.40] and [10.20]. General principles [10.200] As mentioned, the general rule is that the employee wrongfully dismissed can recover as damages pecuniary loss resulting from failure to terminate the employment 102 103

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106 107

Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2012] 2 AC 22 at [37]-[39], [89]. Gunton v Richmond-upon-Thames LBC [1981] Ch 448; Dietman v Brent London Borough Council [1988] IRLR 299 (CA). See also R v BBC; Ex parte Lavelle [1983] ICR 99 at 113; Boyo v Lambeth Borough Council [1994] ICR 727; Van Efferen v CMA Corporation Limited (2009) 183 IR 319. But still effective to bring the employment to an end: Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 449 to 451 per Latham CJ; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 427-428; Visscher v AIRC [2007] FCAFC 206 (21 December 2007, Ryan, Madgwick and Buchanan JJ) at [42] per Buchanan J. See Gunton v Richmond-upon-Thames LBC [1981] Ch 448; Dietman v Brent London Borough Council [1988] IRLR 299 (CA). See also R v BBC; Ex parte Lavelle [1983] ICR 99 at 113; Boyo v Lambeth Borough Council [1994] ICR 727; Van Efferen v CMA Corporation Limited (2009) 183 IR 319; The procedures may be incorporated into the contract from a policies manual (see [4.480]) or, alternatively, may be expressly incorporated into a contract from a relevant industrial award; Byrne v Australian Airlines Ltd (1995) 185 CLR 410; compare University of Wollongong v NTIEU [2002] FCA 360 (28 March 2002, Wilcox, Ryan and Conti JJ) at [33]-[36]. See, for example, Byrne v Australian Airlines Ltd (1995) 185 CLR 410; Gregory v Philip Morris Ltd (1988) 80 ALR 455, discussed [10.240]. See discussion of Watson’s case at [5.30].

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in accordance with the terms of the contract. Subject to what is said at [10.100], in the usual case where the employment is terminable by notice, damages will be equivalent to wages for the period of proper notice.108 The basis of this rule is that the employer is entitled to perform the contract in the manner least disadvantageous to the employer.109 [10.210] Breach of disciplinary procedure: Subject to the recent developments in the United Kingdom mentioned at [10.180], if an employee is dismissed on disciplinary grounds without following contractually prescribed procedures, damages will include wages for the period reasonably necessary to complete those procedures110 and for the lost opportunity to continue in the employment had the disciplinary procedure been carried out according to the contract and resulted in a decision not to dismiss.111 This is the case even if sufficient notice was given to lawfully terminate the employment in cases not involving misconduct.112 The employer is not entitled to ignore procedural safeguards intended to protect employees. At common law, damages will not extend to compensation for a lost opportunity to bring unfair dismissal proceedings even where the termination was initiated to avoid the unfair dismissal jurisdiction.113 [10.220] Possible breach where pay in lieu of notice: In the absence of an express provision as to pay in lieu of notice, an employer who terminates the employment forthwith and provides the employee with a payment in lieu of notice will do so in breach of the contract. The breach is the failure to give notice in accordance with the terms of the contract.114 The payment purportedly made in lieu of notice will be treated as a payment to be set off against any award of damages for the breach.115 Similarly, a court may offset payments made in respect of accrued statutory entitlements, such as annual leave, upon termination if the employer would have had the right to direct the employee to take the leave during the relevant notice period.116 On the other hand, 108 109

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114 115

116

Cockburn v Alexander (1848) 136 ER 1459 at 1468; Baker v Denkara Ashanti Mining Corp Ltd (1903) 20 TLR 37. Withers v General Theatre Corp Ltd [1933] 2 KB 536 at 549-552. See also Gunton v Richmondupon-Thames LBC [1981] Ch 448 at 468 per Buckley LJ; Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 92 per Mason CJ and Dawson J; Grout v Gunnedah Shire Council (No 3) (1995) 59 IR 248 at 251; Freedland, The Personal Contract of Employment (OUP, 2003), pp 353-368 (challenging the authenticity of this approach). Gunton v Richmond-upon-Thames LBC [1981] Ch 448 at 470 per Buckley LJ; at 471 per Brightman LJ; Dietman v Brent London Borough Council [1987] ICR 737 (Hodgson J); [1988] IRLR 299 (CA). But the court should also take into account the possibility of a favourable outcome to disciplinary proceedings and the possibility of the employee retaining the job: see J McMullen’s comment in (1988) 17 ILJ 182 at 187. See also Boyo v Lambeth Borough Council [1994] ICR 727; compare Johnson (AP) v Unisys Ltd [2003] 1 AC 518. Van Efferen v CMA Corporation Limited (2009) 183 IR 319; Dalfallah v Fair Work Commission (2014) 225 FCR 559 at [177]-[178]. Gunton v Richmond-upon-Thames LBC [1981] Ch 448 at 470 per Buckley LJ; at 471 per Brightman LJ. Harper v Virgin Net Ltd [2005] ICR 921. However, following the House of Lords decision in Johnson (AP) v Unisys Ltd [2003] 1 AC 518 the damages assessment does not extend to compensation for the lost opportunity to bring unfair dismissal proceedings brought about by the wrongful dismissal of an employee prior to the expiry of the statutory minimum period of service for bringing such proceedings: Harper v Virgin Net Ltd [2005] ICR 921; The Wise Group v Mitchell [2005] ICR 896 at [46]-[55]; compare Raspin v United News Shops Ltd [1999] IRLR 9 (EAT). See [9.20]; Sanders v Snell (1998) 196 CLR 329 at [16]-[17]. This may result in damages being merely nominal: Delaney v Staples [1992] 1 All ER 944. However, in some circumstances the breach, being the failure to give notice, will be significant. See, for example, WT Partnership (Aust) Pty Ltd v Sheldrick (1999) 96 IR 202 at [16], [38]-[39] where a damages award of $30,000 was made to compensate the employee for the lost opportunity to secure employment in Malaysia. The failure to give notice resulted in his visa being revoked, leaving him without an opportunity to remain in Malaysia and seek alternative employment. Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at [40]; Macauslane v Fisher and Paykel Finance Pty Ltd [2003] 1 Qd R 503 at 518.

Action for Damages for Breach of Contract

where the employer gives the employee notice in accordance with the contract and invites the employee not to attend work for the notice period (placing the employee on “garden leave”), in some circumstances, the employer may be acting in breach of a contractual obligation to provide the employee with work during the notice period.117 The issue will turn on the express terms of the contract118 or, in the absence of any express terms, whether all of the circumstances of the employment suggest that the employer has such a duty.119 Where there is an express provision for payment in lieu of notice, rather than sue for damages for breach of the contract (in respect of which the employee will be subject to a duty of mitigation, see [10.350]), if the employer fails to make the payment, the employee may be in a position to enforce the payment in lieu of notice as a contractual debt (in respect of which the employee is not subject to a duty of mitigation: see [9.150]).120

[10.230] Fixed term contracts: If the employment is for a fixed term not subject to termination by notice, damages will be equivalent to the salary or wages over the remainder of the period of the contract121 – subject, however, to reduction for likelihood of re-employment within the remaining contractual period,122 and the possibility of termination of the contract before the expiry of the period without fault on the part of the employer.123 Thus the court is entitled to take into account the risk of ill health, premature death, and the possibility of termination by reason of fraud or misconduct in determining the quantum of damages payable.124 A court can also take into account the lost opportunity to have the contract renewed for a further term. It is submitted that such damages are available upon proof of some value which can be attached to the opportunity which is said to have been forgone or 117

118 119

120

121

122

123

124

See [9.140] and [5.310] and see William Hill Organisation Ltd v Tucker [1999] ICR 291; Wesoky v Village Cinemas International Pty Ltd [2001] FCA 32 (2 February 2001, Merkel J). The courts are reluctant to allow garden leave clauses to be used as de facto restraints of trade, see Credit Suisse v Armstrong [1996] ICR 882 at 892; William Hill Organisation Ltd v Tucker [1999] ICR 291 at [25]. Compare Bearingpoint Australasia Pty Ltd v Hillard [2008] VSC 115 (18 April 2008, Habersberger J) at [84]-[111]. Damages are also often difficult to assess. Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414 at [25]. See the review of the relevant authorities in Bearingpoint Australasia Pty Ltd v Hillard [2008] VSC 115 (18 April 2008, Habersberger J) at [84]-[111]. See also A Coulthard, “Garden Leave, the Right to Work and Restraints of Trade” (2009) 22 AJLL 87. Abrahams v Performing Right Society Ltd [1995] ICR 1028; distinguished in Cerberus Software Ltd v Rowley [2001] ICR 371 (leave to appeal to the House of Lords refused [2001] ICR 1241) on the basis that in the case before them, the employer had the option to elect to make the payment in lieu. It did not have an obligation to make the payment in lieu. See discussion in Fodder and Freer, “The Effect of Contractual Provision for Payment in Lieu of Notice” (2001) 30 ILJ 215. Re English Joint Stock Bank; Yelland’s Case (1867) LR 4 Eq 350; Scharmann v APIA Club Ltd (1983) 6 IR 157; Mills v Australian Card Services (unreported, Supreme Court of Victoria, Kaye J, 21 March 1989). Re English Joint Stock Bank; Yelland’s Case (1867) LR 4 Eq 350; see, eg, Beck v Darling Downs College of Advanced Education (unreported, Supreme Court of Queensland, Dowsett J, 20 April 1990), where damages were assessed on the basis of the full salary for one year (assessed as a reasonable period over which Beck would be trying to obtain employment at a similar status) and at a discounted rate for the balance of the term of the contract, to take into account an income from a lesser position which it would have been reasonable to accept after 12 months. Hartland v General Exchange Bank Ltd (1866) 14 LT 863; Salt v Power Plant [1936] 3 All ER 322 at 325; Bold v Brough, Nicholson and Hall Ltd [1964] 1 WLR 201 at 206; Gregory v Philip Morris (1988) 80 ALR 455 at 484. Beach v Reed Corrugated Cases Ltd [1956] 1 WLR 807 at 815 per Pilcher J. The court did not take into account favourable vicissitudes such as the possibility of an increase in wages or the possibility of the employee working beyond the contractual date on the ground that these factors were not relevant to an action for breach of contract.

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lost as a result of the termination.125 In Commonwealth v Amann Aviation Pty Ltd126 the High Court of Australia was prepared to take into account the lost opportunity of renewal of a coastal surveillance contract in assessing damages payable to Amann as a result of the Commonwealth’s breach of a three-year agreement.127 However, in Clunne v Nambucca Shire Council,128 Moore J held that Amann “does not provide a foundation for awarding damages for the loss of the opportunity to obtain further employment”.129 The assessment of damages turns on the possibilities and probabilities of what would or might have happened if the breach did not occur. The prospect of renewal must not be so low as to be regarded as speculative.130 In circumstances where the employer dismissed the employee for performance related reasons, one would think that the prospects of renewal of a contract would be minimal, unless of course the employer moved capriciously and the employee could prove that there was a prospect of renewal. In circumstances where the breach is constituted by a failure to abide by a contractual disciplinary procedure, an employee who can prove that, had the procedure been followed, there was a sound answer to the allegations put against her or him, the court would be prepared to look beyond the immediate contract to assess the value of the lost opportunity to continue the contract: see [10.180].131 Ultimately, it will come down to a question of remoteness of damage to be determined on the basis of the application of the rule in Hadley v Baxendale.132 Contractual provisions prohibiting unfair dismissals [10.240] Until 1995, a line of cases in the Federal Court of Australia held that an award clause prohibiting dismissals which were harsh, unjust or unreasonable was imported into the contract of employment independently of the intention of the parties.133 The resultant damages awarded for breach of the contractual requirement that the dismissal not be harsh, unjust or unreasonable appeared to be greater than an 125

126 127 128 129

130 131 132

133

See the useful summary of authorities on the point in Guthrie v News Limited (2010) 27 VR 196 (14 May 2010, Kaye J) at [45]-[47]. See also Lennon v South Australia [2010] SASC 272 (2 September 2010, Layton J) at [689]. Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64. For a detailed account of the Amann decision and its implications for wrongful dismissal claims, see Stewart, “Damages for Wrongful Dismissal and the Problem of Contingencies” (1993) 6 AJLL 50. Clunne v Nambucca Shire Council (1995) 63 IR 304. Clunne v Nambucca Shire Council (1995) 63 IR 304 at 315; see also New South Wales Cancer Council v Sarfaty (1992) 28 NSWLR 28, where the court appears to have distinguished Amann on the basis that it concerned an assessment of damages based on the expenditure undertaken by the plaintiff (for the purposes of satisfying its contractual obligations) in the expectation that it would continue to supply the services beyond the life of the current contract. That view was adhered to in Murray Irrigation Ltd v Balsdon (2006) 67 NSWLR 73 at [54]-[58]. However, it has recently been criticized on the basis that the court was in error in regarding itself as being constrained by the High Court decision in Amann Aviation from awarding such damages: Guthrie v News Ltd (2010) 27 VR 196 (14 May 2010, Kaye J) at [52]: see also Tasmania Development and Resources v Martin (2000) 97 IR 66 at [35]-[38]. Guthrie v News Ltd (2010) 27 VR 196 (14 May 2010, Kaye J) at [167]-[168]; Lennon v South Australia [2010] SASC 272 (2 September 2010, Layton J) at [689]. Van Efferen v CMA Corporation Ltd (2009) 183 IR 319. Hadley v Baxendale (1854) 9 Ex Ch 341; 156 ER 145 at 354 (Ex Ch), 150 (ER) per Alderson B (see [10.80]). This was the approach taken by the Full Court of the Federal Court of Australia in Tasmania Development and Resources v Martin (2000) 97 IR 66 at [35]-[38] upholding the assessment by the judge at first instance that the employee should be entitled to an additional amount of $20,000 to compensate him for the lost opportunity to renew the contract. See also Macdonald v Australian Wool Innovation Ltd [2005] FCA 105 (Weinberg J, 18 February 2005) at [236]-[250]. Gregory v Philip Morris Ltd (1988) 80 ALR 455; Wheeler v Philip Morris Ltd (1989) 97 ALR 282; Lane v Arrowcrest Group Pty Ltd (1990) 27 FCR 427; Gorgevski v Bostik (Australia) Pty Ltd (1991) 39 IR 229 and, on appeal, Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20; Schaale v Hoechst Australia Ltd (1993) 47 IR 249; Barnes v Ranger Uranium Mines Pty Ltd (1993) 44 FCR 331.

Action for Damages for Breach of Contract

award of damages for wrongful dismissal.134 This line of authority was overturned by a Full Court of the Federal Court consisting of five judges in Byrne v Australian Airlines Ltd.135 The decision of the Full Court of the Federal Court was subsequently unanimously upheld by the High Court.136 Accordingly, no longer is such an award clause automatically incorporated into the contract of employment. However, the Federal Court’s approach to the assessment of damages for breach of a provision prohibiting unfair dismissal may still be relevant where a contract expressly incorporates the terms of an award or enterprise agreement provision in similar terms137 or a policy or procedure that proscribes the circumstances in which an employer may dismiss an employee:138 see [4.480]. In Byrne v Australian Airlines Ltd, the High Court rejected an argument that a term prohibiting unfair dismissal should be implied into a contract of employment to give the contract business efficacy.139 In Gregory v Philip Morris the Federal Court assessed damages having regard to the principle that “assessment of damages involves a comparison of Mr Gregory’s position, as it was after his dismissal, with the position in which he would have been placed if he had not been wrongfully dismissed”.140 Regard was had to the probability that Gregory would have continued in employment with Philip Morris until retirement.141 The court took into account the usual risks of interruption of employment.142 Similarly, in Wheeler v Philip Morris Ltd143 Gray J applied the principle that: 134

135 136 137

138

139

140 141 142

143

See Gregory v Philip Morris Ltd (1988) 80 ALR 455; Wheeler v Philip Morris Ltd (1989) 97 ALR 282; Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20; however, it is submitted that the basic principles which apply to the assessment of damages are no different. Byrne v Australian Airlines Ltd (1994) 47 FCR 300. Byrne v Australian Airlines Ltd (1995) 185 CLR 410. Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 420; see also Moama Bowling Club Ltd v Armstrong (1995) 64 IR 238 at 239-240. However, note that termination of employment is not listed in s 139 of the Fair Work Act 2009 (Cth) as one of the matters that may be dealt with in a modern award. As to the right of statutory office holders to be afforded procedural fairness before removal from office, see Jarratt v Commissioner of Police for New South Wales (2005) 224 CLR 44. See Carabetta, “Going, Going … Gone? The Demise of the Dismissal at Pleasure Doctrine in Public Sector Employment” (2006) 19 AJLL 283. Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193; Thomson v Orica Australia Pty Ltd (2002) 116 IR 186 at [141]; Goldman Sachs JB Were Services Pty Ltd v Nikolich (2007) 163 FCR 62; compare Johnson (AP) v Unisys Ltd [2003] 1 AC 518; Wise Group v Mitchell [2005] ICR 896. Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 422 per Brennan CJ, Dawson and Toohey JJ; at 440-446 per McHugh and Gummow JJ; compare Brooks, “Damages for Harsh, Unjust or Unreasonable Dismissal; The Implications of Gorgevski v Bostik (Australia) Pty Ltd” (1995) 8 AJLL 41 at 43-44 (written before the High Court decision in Byrne v Australian Airlines Ltd). Gregory v Philip Morris (1988) 80 ALR 455 at 483 per Wilcox and Ryan JJ. See also Wheeler v Philip Morris (1989) 97 ALR 282. Gregory v Philip Morris (1988) 80 ALR 455 at 484 per Wilcox and Ryan JJ. By reason of illness, premature death, strikes or other work absences, the continuing difficulties with the union and the risk that Philip Morris would have no option but to dismiss him in the face of union antagonism had to be taken into account in assessing damages. The adoption of these principles to determine damages recoverable, in the case of Gregory, meant the difference between a maximum of $3,000 gross and the ultimate damages award of $30,000 (Jenkinson J, unlike Wilcox and Ryan JJ, would have awarded damages of $15,000, being wages for the period of lawful notice). The court did not address the question whether this sum should have been discounted to take into account the benefit of receiving cash in hand in lieu of future earnings over the period of employment. It is arguable that the discount rate of 3% established in Todorovic v Waller (1981) 150 CLR 402 should be applied to dismissal cases. For its application to redemption payments, see Commonwealth v Blackwell (1987) 163 CLR 428. No discount was made on this ground in Wheeler v Philip Morris (1989) 97 ALR 282. Wheeler v Philip Morris Ltd (1989) 97 ALR 282.

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[D]amages will be assessed for loss of the opportunity to continue the employment, discounted appropriately for foreseeable events which might have brought the employment to an end.144

The principles of assessment in Gregory and Wheeler were adopted by Keely J at first instance in Gorgevski v Bostik (Australia) Pty Ltd145 where his Honour assessed damages at $195,000.146 This assessment was not disturbed on appeal.147 Other benefits

[10.250] The employee is entitled to compensation for loss of benefits she or he would have been legally entitled to claim if the contract had been performed. Fringe benefits are recoverable for the period required to lawfully terminate the employment.148 Thus it has been held that pecuniary loss resulting from loss of tips that would have been earned,149 the value of board and lodgings,150 use of a car,151 allowances,152 relocation expenses,153 and pension or superannuation entitlements154 during the period required to lawfully terminate the contract is recoverable.155

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147 148

149

150

151

152

153 154

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Wheeler v Philip Morris Ltd (1989) 97 ALR 282 at 311. Gorgevski v Bostik (Australia) Pty Ltd (1991) 39 IR 229. Discounting the sum of $219,150 (a figure equivalent to what Gorgevski would have earned if he had worked until retirement) to account for vicissitudes. See comment by Brooks, “Damages for Harsh, Unjust or Unreasonable Dismissal: The Implications of Gorgevski v Bostik (Australia) Pty Ltd” (1995) 8 AJLL 41 at 60-61. Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20. Cull v Oil Field Inspection Services Group Pty Ltd [1990] SLT 205 (grossed up amount of benefits including subscriptions, telephone, car and health insurance); Henderson v Australian Chamber of Manufactures noted (1991) 34 AILR 10. Manubens v Leon [1919] 1 KB 208. See also Bold v Brough, Nicholson and Hall Ltd [1964] 1 WLR 201 (employer’s discretion to discontinue pension scheme did not prevent compensation for loss of pension rights); compare Beach v Reed Corrugated Cases Ltd [1956] 1 WLR 807. Lindsay v Queen’s Hotel [1919] 1 KB 212; Henderson v Australian Chamber of Manufactures (1991) 34 AILR 10 (housing loan subsidy); compare Mills v Australian Card Services Pty Ltd (unreported, Supreme Court of Victoria, Kaye J, 21 March 1989) (accommodation overseas not allowable when the transfer to the overseas position did not take place); Black v Metro Farms Pty Ltd (1993) 60 SAIR 459. The employee’s only remedy for exclusion from accommodation provided by the contract is an action for damages: Barossa Co-op Winery Ltd v Kolarovich (1977) 16 SASR 392. Kilburn v Enzed Precision Products (Australia) Pty Ltd (1988) 4 VIR 31; Black v Metro Farms Pty Ltd (1993) 60 SAIR 459; Brookton Holdings No V Pty Ltd v Kara Kar Holdings Pty Ltd (1994) 57 IR 288. Grout v Gunnedah Shire Council (No 2) (1995) 58 IR 67 at 82; compare Mills v Australian Card Services Pty Ltd (unreported, Supreme Court of Victoria, Kaye J, 21 March 1989) (school fees at an overseas school not allowable when the transfer to the overseas position did not take place). Irons v Merchant Capital Ltd (1994) 116 FLR 204. Bold v Brough, Nicholson and Hall Ltd [1964] 1 WLR 201 at 211; compare Beach v Reed Corrugated Cases Ltd [1956] 1 WLR 807 at 816-817; Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 (CA); Quinn v Jack Chia Australia Ltd [1992] 1 VR 567 at 581; Furey v Civil Services Association of WA (Inc) (1999) 91 FCR 407; Ikin v The Danish Club “Dannebrog” Inc (2001) 140 IR 101 at [25]. The same position may not hold for a failure to make statutory superannuation contributions during the employment. There, it may be said that the source of the obligation to make the contributions arises from the statute, not the contract and that, absent a breach of the contract, there can be no claim for damages: Akmeemana v Murray (2009) 190 IR 66 at [35]. For a detailed discussion of the basis upon which damages are assessed, see Freedland, The Contract of Employment (OUP, 1976), pp 250-271.

Action for Damages for Breach of Contract

The loss of an opportunity to secure equity in the employer’s business in accordance with contractual provisions,156 the loss of an opportunity to secure a share of profits, a bonus payment or some other form of discretionary or “at risk” payment,157 is discussed at [10.160]. The timing of the dismissal may determine the entitlement to any such additional loss and damage.158 In Lavarack v Woods of Colchester Ltd159 the Court of Appeal held that damages would not be recoverable by an employee in respect of additional benefits which the contract did not oblige the employer to confer even though the employee might reasonably have expected the employer to bestow these benefits upon him in due course.160 Diplock LJ said that “the first task of the assessor of damages is to estimate as best he can what the plaintiff would have gained in money or money’s worth if the defendant had fulfilled his legal obligations and had done no more”.161 Thus there would be no recovery of directors’ fees where there was no obligation to pay under the contract even though in the normal course these would be an annual vote of directors’ fees.162 Loss of benefits under a retirement scheme for directors would not be compensable where the employer was under no obligation to make further payments to the scheme after termination of the employment. Beach v Reed Corrugated Cases Ltd163 concerned a non-participatory scheme, the rules of which provided for the payment of a reduced pension where there was termination by the employer before the normal retirement date. It was held that loss of increased pension rights that would have accrued if the plaintiff had not been wrongly dismissed were not recoverable. Contrast the subsequent case of Bold v Brough, Nicholson and Hall Ltd164 where the plaintiff claimed loss of pension entitlements. Under the rules governing the pension scheme the employers could, on six months’ notice, terminate the whole scheme. It was accepted that whilst the scheme remained in force the plaintiff was entitled to pension payments but it was argued that since the employer had no legal obligation to continue the scheme the plaintiff ought not receive any significant damages for loss of pension rights. This argument was rejected on the ground that the employers had not discontinued the scheme nor were they likely to close down the scheme benefiting all employees and certainly there was no likelihood that the scheme would be discontinued in order to defeat the plaintiff’s claim. Were this argument accepted it would have left the way open for a defendant to argue that there was no liability to damages because the employer had no legal obligation to continue its business.165 156 157

158 159 160 161

162 163 164 165

Macdonald v Australian Wool Innovation Ltd [2005] FCA 105 (Weinberg J, 18 February 2005) at [251]-[255]. Subject to what is said at [10.160]; Re Rubel Bronze and Metal Co Ltd and Vos [1918] 1 KB 315. See also Burton v Litton Business Systems Pty Ltd (1977) 16 SASR 162; Kilburn v Enzed Precision Products (Australia) Pty Ltd (1988) 4 VIR 31; Kis Australia Pty Ltd v Laud noted (1988) 30 AILR 103 (Brownie J, SC, NSW); compare Buckman v Barnawartha Abattoirs Pty Ltd (unreported, Supreme Court of Victoria, Smith J, 28 July 1994); NZI Leasing Corporation Ltd v Charles (unreported, Supreme Court of New South Wales, Santow J, 4 October 1995). See, for example, Melbourne Stadiums Ltd v Sautner (2015) 317 ALR 665; Geys v Société Générale, London Branch [2013] 1 AC 523. Lavarack v Woods of Colchester Ltd [1967] 1 QB 278. See Rankin v Marine Power International Pty Ltd (2001) 107 IR 117. Lavarack v Woods of Colchester Ltd [1967] 1 QB 278 at 294. See also at 295 per Diplock LJ, and at 298-300 per Russell LJ; O’Laoire v Jackel Ltd [1991] ICR 718 (refusal to take into account stock options available at the discretion of the Board); compare Bold v Brough, Nicholson and Hall Ltd [1964] 1 WLR 201. Beach v Reed Corrugated Cases Ltd [1956] 1 WLR 807 at 812; see also O’Laoire v Jackel Ltd (No 2) [1991] ICR 718 at 730. Beach v Reed Corrugated Cases Ltd [1956] 1 WLR 812 at 816-817. Bold v Brough, Nicholson and Hall Ltd [1964] 1 WLR 201 at 211. See Freedland, The Contract of Employment (OUP, 1976), pp 250-271.

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General damages [10.260] In England and Australia it is a general rule that damages are not recoverable for distress or disappointment which arises from a breach of contract.166 However, the courts have been prepared to recognise a number of exceptions to the general rule.167 Damages for distress or disappointment will be available for breach of an express or implied term that the promisor will provide the promisee with enjoyment or pleasure or freedom from molestation.168 Where there is such a term, express or implied, the issue of remoteness of damage is usually not in doubt.169 A further exception to the general rule is where the breach of contract causes physical injury to the plaintiff, or where a plaintiff has suffered physical inconvenience from the breach of contract and the mental suffering is directly related to that physical inconvenience.170 As psychiatric illness constitutes personal injury,171 damages for mental distress associated with psychiatric illness are also recoverable in an action for breach of contract.172 However, any such damages may be constrained by the relevant statutory workers’ compensation regime.173 Contracts for actors and actresses174 and contracts of apprenticeship seem also to form an exception to the general rule.175 The rule in Addis [10.270] In 1909, the House of Lords, in Addis v Gramophone Co,176 held that, where an employee is wrongfully dismissed, the damages for the dismissal cannot include compensation for the manner of the dismissal, or injured feelings, or for the loss 166

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171 172

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Addis v Gramophone Co [1909] AC 488; Fink v Fink (1946) 74 CLR 127. For a discussion of the policy considerations behind the rule see Addis v Gramophone Co [1909] AC 488 at 495 per Lord Atkinson; Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 361-362 per Mason CJ; at 369 per Brennan J; at 396-397 per McHugh J. These exceptions are listed by Mason CJ in Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 362-363. See, for example, the holiday cases such as Jarvis v Swans Tours Ltd [1973] 1 QB 233; Athens-Macdonald Travel Services Pty Ltd v Kazis [1970] SASR 264 and Baltic Shipping Co v Dillon (1993) 176 CLR 344. There is New Zealand and Canadian authority for the view that, even where no such term exists, general damages may be available under the second limb of the test of remoteness in Hadley v Baxendale (see [10.120]). Rowlands v Collow [1992] 1 NZLR 178; Bohemier v Storwal International Inc (1982) 142 DLR (3d) 8. Hamlin v Great Northern Railway Co (1856) 1 H & N 408; 156 ER 1261 at 411 (H & N), 1262 (ER); Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 362-363 per Mason CJ; at 381 per Deane and Dawson JJ; and at 405 per McHugh J. Mt Isa Mines Ltd v Pusey (1970) 125 CLR 383; Koehler v Cerebos (2005) 214 ALR 355. Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 405 per McHugh J (dissenting, but without disagreement of the majority on this point); Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 67 IR 162 at 192; Gogay v Hertfordshire County Council [2000] IRLR 703; Goldman Sachs JB Were Services Pty Ltd v Nikolich (2007) 163 FCR 62 at [72] (Black CJ). See [6.90] and South Australia v McDonald (2009) 185 IR 45 at [204]-[205], [400]-[401]. See the discussion in relation to the relevant provisions in South Australia: at [180]-[204]. Ultimately, the issue falls to be determined by the provisions in place in each State. It remains open as to whether this impacts on claims for damages for breach of contract. Actors and actresses whose continued employment depends upon reputation and publicity may recover damages for loss of reputation or publicity: Herbert Clayton and Jack Waller Ltd v Oliver [1930] AC 209. As to possible extensions of this rule see Flamingo Park Pty Ltd v Dolly Dolly Creations Pty Ltd (1986) 65 ALR 500 at 523-524 and Giller v Procopets (2008) 24 VR 1 at [31] per Maxwell P, [148]-[154] per Ashley JA and [408]ff per Neave JA. Maw v Jones (1890) 25 QBD 107; Dunk v George Waller and Son Ltd [1970] 2 QB 163. The position in Canada is not so limited. There, the Supreme Court, after a considered review of the common law authorities including Baltic Shipping, said that the “peace of mind” class of cases should not be viewed as an exception to the rule, but rather as an application of the reasonable contemplation or forseeability principle that applies generally to determine the availability of damages for breach of contract: Fidler v Sun Life Assurance Company of Canada (2006] 2 SCR 3 at [49]. Addis v Gramophone Co [1909] AC 488.

Action for Damages for Breach of Contract

the employee may sustain from the fact that the dismissal of itself makes it more difficult for the employee to obtain fresh employment.177 The case reached the House of Lords in unfortunate circumstances.178 The plaintiff was employed in Calcutta on a contract which provided for termination of employment on the giving of six months’ notice. The company gave him six months’ notice but, at the time, appointed someone to act as his successor, and took steps to prevent him from continuing as manager. The plaintiff treated the employment as at an end and returned to London and commenced proceedings. The fact that there was a breach of a contract was not in issue. Lord Loreburn said that, if the conduct did not amount to a wrongful dismissal, it was a breach of the employee’s right to act as manager during the six-month notice period and to earn commissions accordingly. Either way, according to Lord Loreburn, damages were to be the same. Damages were assessed on the basis of the salary to which the employee was entitled for the six-month notice period. Lord Loreburn said: I cannot agree that the manner of dismissal affects these damages … If there be a dismissal without notice the employer must pay an indemnity; but that indemnity cannot include compensation either for the injured feelings of the servant, or for the loss he may sustain from the fact that his having been dismissed of itself makes it more difficult for him to obtain fresh employment.179

This passage has generally been accepted as precluding a court from awarding additional damages (seemingly including any damages to compensate the employee for the financial loss, but most certainly including damages to compensate for any non-financial loss such as injured feelings and the like) as a result of an employee’s wrongful dismissal. The rule in Addis has generally180 been adhered to in England181 and Australia.182

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This statement is taken directly from the headnote. In Johnson (AP) v Unisys Ltd [2003] 1 AC 518, Lord Steyn suggested that the headnote inaccurately reports the judgment in Addis. Lord Steyn said, at [16], that it is “tolerably clear that the ratio-decidendi of Addis’s Case does not preclude the recovery of special damages flowing from the manner of a wrongful dismissal”. The opening passage of the judgment of Lord Loreburn states that “This is a most unfortunate litigation, in which the costs must far exceed any sum that may be at stake. A little common sense would have settled all these differences in a few minutes”: Addis v Gramophone Co [1909] AC 488 at 489. Addis v Gramophone Co [1909] AC 488 at 491. The exceptions seem to be, in England, Cox v Philips Industries Ltd [1976] 3 All ER 161, and, in Australia, Sheldrick v WT Partnership (Aust) Pty Ltd (1998) 89 IR 206 where the damages award included an order for the payment of $1,000 to compensate for medical expenses incurred in relation to the treatment for a stress disorder and $10,000 for “vexation, stress and disappointment of being summarily dismissed”. There were related claims brought under the Trade Practices Act 1974 (Cth) which may have provided scope for such an award, but those claims were dismissed. The award of damages was seemingly not challenged on appeal: WT Partnership (Aust) Pty Ltd v Sheldrick (2000) 96 IR 202. For example, Bliss v South East Thames Regional Health Authority [1987] ICR 700; See also O’Laoire v Jackel Ltd (No 2) [1991] ICR 718; Hayes v Dodd [1990] 2 All ER 815 at 824 per Staughton LJ. Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney (2008) 72 NSWLR 559 at [63]-[64], [55]. For example, Burazin v Blacktown City Guardian (1996) 142 ALR 144 at 151; Thorpe v South Australian National Football League (1974) 10 SASR 17 at 38; Tucker v Pipeline Authority (1981) 3 IR 120; Pullen v R & C Products Pty Ltd (1994) 60 IR 183 at 216; McDonald v South Australia (2008) 172 IR 256 at [478], [541]-[542] and on appeal South Australia v McDonald (2009) 185 IR 45 at [222], [403]; Lennon v South Australia [2010] SASC 272 (2 September 2010, Layton J) at [688]. The High Court of Australia was presented with the opportunity to consider the issue in Mann v Capital Territory Health Commission (1982) 148 CLR 97. However, it determined the case on other grounds without commenting on this point. In Quinn v Gray (2009) 184 IR 279 at [24]-[31] a court refused to overturn an award of damages by a private arbitrator of $35,000, for

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Narrowing the scope of the rule in Addis

[10.280] The relatively recent development of the law concerning the implied term as to trust and confidence in the United Kingdom183 has provided some scope for damages awards to be made which do not encounter the limitation imposed by Addis. In Malik v BCCI184 the House of Lords considered a claim that a number of employees had suffered financial loss185 consequent upon the stigma of being associated with a corrupt and dishonest business, making it more difficult for the employees to obtain alternative employment in the future.186 Because the case was presented to the House of Lords on the basis of an alleged breach of the implied term, the House of Lords did not feel constrained by Addis. Addis was decided long before the implied term was recognised by the courts in the United Kingdom. Now that the implied term existed, damages for a breach of the implied term should be assessed in accordance with ordinary contractual principles. Although the case before the House of Lords did not concern the manner of dismissal (the alleged breach occurred during the course of employment), Lord Nichols said that Addis could not preclude the recovery of damages where the manner of dismissal involved a breach of the trust and confidence term and this caused financial loss.187 However, as will be seen at [10.290], there are other limitations which have been found to apply which preclude the courts in the United Kingdom from awarding damages for the manner of dismissal, whether the loss or damage flows from a breach of an express188 or implied term.189 See [10.300] and [10.310]. In Australia, the courts have adhered to that position insofar as the cause of action has been dependent upon alleged breaches of implied terms. The position regarding a breach of any relevant express term awaits judicial consideration.190 Following the House of Lords decision in Malik’s case, a number of former employees of the bank were selected to represent different categories of claims for the purposes of assessing damages flowing from the breach of the implied term as to trust and confidence. The rules as to causation and remoteness imposed a significant

183 184 185

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188 189 190

distress and anxiety flowing from breach of the implied term as to trust and confidence (it is important to bear in mind that the statutory standard applicable in an appeal from a decision of an arbitrator is to establish a manifest error of law on the face of the award, Commercial Arbitration Act 1984 (Vic), s 38(5)). See [5.140]. Malik v Bank of Credit and Commerce International SA (In liq) [1998] AC 20. The members of the House of Lords were at pains to point out the fact that the claim was restricted to financial loss: Malik v Bank of Credit and Commerce International SA (In liq) [1998] AC 20 at 36-39 per Lord Nicholls and 50-51 per Lord Steyn. The case went to the House of Lords on the basis of assumed facts including that the bank operated in a corrupt and dishonest manner (a matter of which the plaintiffs were completely unaware until after the employment terminated) and that there was implied into the contract of employment a term to the effect that the employer would not, without reasonable and proper cause, conduct itself in a manner likely to destroy or seriously damage the relationship of confidence and trust between the employer and employee. Malik v Bank of Credit and Commerce International SA (In liq) [1998] AC 20 at 39; see also 50-52 per Lord Steyn; see also Brodie, “The Heart of the Matter: Mutual Trust and Confidence” (1996) 25 ILJ 121: Brodie, “Beyond Exchange: The New Contract of Employment” (1998) 27 ILJ 79; Brodie, “Mutual Trust and the Value of the Employment Contract” (2001) 30 ILJ 84; Brodie, “Fair Dealing and the Disciplinary Process” (2002) 32 ILJ 294; McCarry, “Damages for Breach of the Employer’s Implied Duty of Trust and Confidence” (1998) 26 ABLR 141. Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2012] 2 AC 22. Johnson (AP) v Unisys Ltd [2003] 1 AC 518; Eastwood v Magnox Electric plc [2005] 1 AC 503. Shaw v New South Wales (2012) 219 IR 87 at [113]-[119]; See also Van Efferen v CMA Corporation Limited (2009) 183 IR 319.

Action for Damages for Breach of Contract

evidential burden on the employees to establish that the stigma of being associated with the collapse of the bank caused the financial loss.191 The Johnson exclusion zone [10.290] In Johnson (AP) v Unisys Ltd192 the claimant sought compensation for the financial loss arising from a psychiatric illness alleged to have been caused by the employer’s conduct in adopting an unfair procedure resulting in the termination of the employment of the employee. This conduct was alleged to amount to a breach of the implied term as to trust and confidence. The House of Lords concluded that, in the face of statutory unfair dismissal laws, there was no room for the implied term as to trust and confidence to control the manner of dismissal. However, the members of the House of Lords took the opportunity to comment on the position if this were not the case. Lords Hoffmann and Millett concluded that the implied term as to trust and confidence had no role to play in the manner of dismissal because it conflicted with the express terms of the contract concerning notice. Further, the implied term as to trust and confidence was directed more to the continuance of the employment relationship rather than the termination.193 Lord Steyn (dissenting on this issue) said that the implied term could live together with an express term as to notice, to ensure fair dealing between employer and employee, extends to the process of dismissal.194 In Johnson (AP) v Unisys Ltd, the House of Lords was not strictly required to deal with the limitations imposed by Addis. However, Lord Steyn took the opportunity to indicate his view that the headnote in Addis was inaccurate and that Addis did not preclude the recovery of damages flowing from the manner of wrongful dismissal, particularly in light of the development of the implied term as to trust and confidence.195 His Lordship indicated that what may have been dismissively referred to as “injured feelings” early last century in Addis could today constitute a recognisable psychiatric illness. Given the significant increase in pressures upon employees, there is a role for implied terms to protect employees and create avenues through which damages would be available in the event of a breach.196 His Lordship said that, even if the headnote does correctly report Addis, he would now be willing to depart from Addis.197 Lord Nicholls reiterated the view that he had expressed in Malik,198 that Addis did not preclude recovery of damages where the manner of dismissal involved a breach of the trust and confidence term and this caused financial loss.199 As a result, the House of Lords distinguished between loss flowing from the dismissal itself, which was exclusively within the domain of an employment tribunal dealing with an unfair dismissal claim (within the Johnson exclusion zone) and loss flowing from the employer’s antecedent breaches, which may be recoverable at common law (outside the Johnson exclusion zone).

191

192 193 194 195 196 197 198 199

Bank of Credit and Commerce International SA v Ali (No 2) (1999) 4 All ER 83 at [269]-[271], and on appeal [2002] ICR 1258 at [40]-[44] per Pill LJ, [58]-[60] per Robert Walker LJ and [97] per Jonathan Parker LJ. See also Ur-Rahman v Ahmad [2013] ICR 28 at [17], [20] (EAT). Johnson (AP) v Unisys Ltd [2003] 1 AC 518. Alternatively referred to as the “Johnson exclusion area”: GAB Robins (UK) Ltd v Triggs [2008] ICR 529 at [31]-[32]. Johnson (AP) v Unisys Ltd [2003] 1 AC 518 at [42] and [46] per Lord Hoffmann and at [78] per Lord Millett. Lord Bingham agrees with “them both” at [1]. Johnson (AP) v Unisys Ltd [2003] 1 AC 518 at [24] and [26]. Johnson (AP) v Unisys Ltd [2003] 1 AC 518 at [16]. Johnson (AP) v Unisys Ltd [2003] 1 AC 518 at [19]. Johnson (AP) v Unisys Ltd [2003] 1 AC 518 at [20]. See [10.280]. Johnson (AP) v Unisys Ltd [2003] 1 AC 518 at [2].

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Eastwood v Magnox Electric plc

[10.300] The artificial nature of this dividing line was again the subject of comment by

the House of Lords.200 Eastwood v Magnox Electric plc involved two appeals from the Court of Appeal. In the Eastwood matter, the employer went on a witch hunt aimed to secure evidence to form the basis of a decision to terminate an employee, Mr Eastwood. The employer asked another employee to make a false statement so as to support the employer’s position and then very publicly suspended Mr Eastwood from work. In the McCabe matter, it was alleged that a teacher behaved inappropriately towards female students. The employer suspended the teacher, without carrying out a proper investigation and without informing the teacher of the allegations for a period of five months. In both matters, the conduct was found to be capable of giving rise to a breach of the implied term as to trust and confidence (see [5.150]), entitling the employees to recover damages for any consequent loss and damage including that flowing from any psychiatric illness arising from the pre-dismissal breach. The Johnson exclusion zone and the House of Lords decision in Eastwood v Magnox Electric later guided the Court of Appeal to find that the Employment Appeal Tribunal went beyond jurisdiction when, in assessing compensation under the statutory unfair dismissal system, it took into account losses attributable to the employer’s antecedent breaches which could not be said to amount to damage suffered in consequence of the dismissal.201 This was so even though the very conduct that caused the losses constituted the repudiatory conduct of the employer which was then relied upon by the employee to justify her resignation and claim that she was constructively dismissed.202 Edwards v Chesterfield Royal Hospital

[10.310] The United Kingdom Supreme Court considered a further two cases in

Edwards v Chesterfield Royal Hospital NHS Foundation Trust.203 In the first case, following a disciplinary hearing in which the employee, Dr Edwards, was found to have examined a female patient inappropriately, he was dismissed on grounds of gross misconduct. Because of the finding of professional misconduct, Dr Edwards was unable to secure another full time medical post. It was alleged that, in breach of the contractual disciplinary procedure, the disciplinary tribunal was incorrectly constituted and, as a result, Dr Edwards should be awarded damages for breach of contract to compensate him for the stigma associated with the finding of the disciplinary tribunal. In the second case, the employee, Mr Botham, was a youth worker who was dismissed for gross misconduct following a disciplinary proceeding in which he was found to have engaged in inappropriate conduct towards two teenage girls. As a result, Mr Botham was placed on a list of persons deemed unsuitable to work with children. He alleged that various contractual requirements regarding the disciplinary procedure were not followed and sought damages for breaches of those express terms including loss of reputation, being placed on the list of unsuitable persons and being precluded from further employment in his chosen field. The United Kingdom Supreme Court held by a 6:1 majority that the Johnson exclusion zone operated so that damages were not available for breach of an express 200 201 202

203

Eastwood v Magnox Electric plc [2005] 1 AC 503 at [32] per Lord Nicholls and [43]-[45] per Lord Steyn. See also GAB Robins (UK) Ltd v Triggs [2008] ICR 529 at [31]-[34]. GAB Robins (UK) Ltd v Triggs [2008] ICR 529 at [37]. The Court of Appeal said that these were losses that had been caused by the antecedent breaches of the implied term as to trust and confidence and Mrs Triggs had an already accrued right to sue for damages in respect of them before dismissal. Therefore, damages were recoverable at common law rather than under the statutory unfair dismissal jurisdiction: GAB Robins (UK) Ltd v Triggs [2008] ICR 529 at [34]. Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2012] 2 AC 22.

Action for Damages for Breach of Contract

term of the contract in relation to the manner of dismissal.204 In relation to Dr Edwards, a 4:3 majority took the view that the alleged breach giving rise to the reputational harm could not be divorced from the dismissal itself. In relation to Mr Botham, a 6:1 majority concluded that the damages claimed for the loss of reputation were caused by the dismissal itself. As mentioned at [10.180], the result turned to a large degree upon the specific regulatory environment, by which employers are required to set out applicable disciplinary procedures in writing and a tribunal dealing with any unfair dismissal complaint is required to have regard to any failure to adhere to the process when determining appropriate compensation. As a result, it was said that the parties could not be taken to have intended that a breach of the disciplinary procedure would found a claim in damages for breach of the disciplinary procedure.205 In Australia, there is no reason to suggest that the courts will depart from the position set out at [10.160] and [10.180]. Whether damages might extend to compensation for the stigma associated with the findings of a disciplinary tribunal, causing reputational harm and making it difficult to secure alternative employment, awaits judicial determination. In Van Efferen v CMA Corporation Limited,206 the statutory compensation for breach of an Australian Workplace Agreement was assessed on the normal contractual basis, but no claim was made for damages for loss of a chance of renewal of the employee’s fixed term contract and there was no claim for damages for reputational harm or the stigma associated with the dismissal in the face of an investigation that failed to accord with the process set down in the Australian Workplace Agreement. It is apparent that damages are not available in contract for injury to reputation if the injury flows from dismissal in breach of the contract.207 The current position

[10.320] Therefore, the current position in England seems to be that damages are available to compensate the employee for financial loss flowing from a breach of the implied term as to trust and confidence which occurs during the employment. The statutory unfair dismissal provisions prevent similar damages being available for the loss flowing from the manner of the dismissal of the employee, whether the term relied upon is an express term or an implied term. General damages would seem to be available for psychiatric illness (and any associated distress or anxiety) arising as a consequence of a breach of the implied term as to trust and confidence which occurs during the employment, but seemingly not because of the manner of dismissal. In the absence of any psychiatric illness, such damages are not available to compensate an employee for mere distress and anxiety as a result of a breach of the implied term as to trust and confidence either during the employment or due to the manner of dismissal.208 204

205 206 207

208

Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2012] 2 AC 22 at [40]-[41], [49] per Lord Dyson JSC (with whom Lord Walker of Gestingthorpe JSC agreed), [75], [86]-[88] per Lord Phillips of Worth Matravers PSC, [89]-[90], [94] per Lord Mance JSC and [150] per Lord Kerr of Tonaghmore JSC (with whom Lord Wilson JSC agreed); compare [110]-[122] per Baroness Hale of Richmond JSC (in dissent). See the helpful analysis in Collins, “Compensation for Dismissal: In Search of Principle” (2012) 41 ILJ 208. Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2012] 2 AC 22 at [37]-[39] per Lord Dyson JSC (with whom Lord Walker of Gestingthorpe JSC agreed), [89] per Lord Mance JSC. Van Efferen v CMA Corporation Limited (2009) 183 IR 319. Barker v Commonwealth Bank of Australia (2012) 296 ALR 706 at [374] (Besanko J at first instance), upheld on appeal in Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at [157]-[158] per North and Bromberg JJ and [370] per Jessup J. The issue did not arise in the appeal to the High Court. See [5.150]ff. However, it may be argued that any distress and anxiety suffered as a result of the manner of the dismissal ought be taken into account in assessing the reasonableness of the employee’s

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The position in Australia would seem to be similar, other than in relation to a breach of express terms going to the manner of dismissal.209 In Burazin v Blacktown City Guardian,210 the Full Court of the Industrial Relations Court of Australia felt constrained by the House of Lords in Addis and said that damages for distress resulting from wrongful dismissal would be available only after rejection, at the High Court level, of the decision in Addis.211 This position has since been confirmed.212 The advent of the two House of Lords decisions since Burazin has not provided the means by which the Australian courts have been able to break free of the limitations imposed by Addis. In New South Wales v Paige, for reasons similar to those in Johnson (AP) v Unisys Ltd, the Court of Appeal said that, in the face of the statutory unfair dismissal regime, there was no room for the implication of a term as to fair dealing in the manner of dismissal of employees in Australia.213 Since the High Court in Commonwealth Bank of Australia v Barker214 concluded that the trust and confidence term is not part of the law in Australia, employees will be left to rely upon other implied terms, such as the

209

210 211

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213

214

efforts to secure new employment in mitigation of any loss suffered: see, for example, Hansen v Northern Land Council [1999] NTSC 69 (12 July 1999, Angel J) at [33], which seems to have been accepted on appeal: Northern Land Council v Hansen [2000] NTCA (25 January 2000, Mildren, Bailey and Riley JJ at [56]. Shaw v New South Wales (2012) 219 IR 87 at [113]-[119]; Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney (2008) 72 NSWLR 559 at [58]-[63]; Lennon v South Australia [2010] SASC 272 (2 September 2010, Layton J) at [688]; Quinn v Gray (2009) 184 IR 279 at [24]-[31] refusal to set aside an award of an arbitrator (where the statutory standard is to establish a manifest error of law on the face of the award, Commercial Arbitration Act 1984 (Vic), s 38(5)). Burazin v Blacktown City Guardian (1996) 142 ALR 144. Burazin v Blacktown City Guardian (1996) 142 ALR 144 at 151; the Full Court hinted at the possibility that the implied term could bring contracts of employment within the scope of one of the exceptions to the general rule (see [10.260]) on the basis that one of the purposes of the implied term was to protect the employee from oppression, harassment and loss of job satisfaction. Whilst this is suggestive of the availability of general damages for breach of the implied term, it has its limits. In Johnson (AP) v Unisys Ltd [2003] 1 AC 518 Lords Hoffmann and Millett (Lord Bingham agreeing) took the view that there was a practical impediment to the availability of general damages. Lord Hoffmann said that such damages would be grossly disproportionate to the employer’s degree of fault and may even be likely to inhibit the future engagement of psychologically fragile employees. Lord Millett said that the courts would be left with a difficult task of distinguishing between the mental distress and other non-pecuniary injury consequent upon the unfairness of the dismissal (for which the employer would be liable) and similar loss consequent upon the dismissal itself (for which it would not). Aldersea v Public Transport Corporation (2001) 183 ALR 545; New South Wales v Paige (2002) 60 NSWLR 371 at [154]; McDonald v Parnell Laboratories (Aust) (2007) 168 IR 375 at [92]; McDonald v South Australia (2008) 172 IR 256 at [479]-[481], [541] and on appeal South Australia v McDonald (2009) 185 IR 45 at [222], [403]; Lennon v South Australia [2010] SASC 272 (2 September 2010, Layton J) at [686]; Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney (2008) 72 NSWLR 559 at [63]-[65]. New South Wales v Paige (2002) 60 NSWLR 371 at [132]-[154]. It held that the statutory unfair dismissal scheme in New South Wales (and federally) evinces a similar intention to the UK scheme, to limit the class of people and quantum of any awards of compensation, and courts should refuse to expand the duty of care in negligence, or contractual duties, to provide an alternative to the statutory cause of action. Compare Irving, “Damages Arising from the Manner of an Employee’s Dismissal” (2003) 16 AJLL 99; Riley, “Mutual Trust and Good Faith: Can Private Contract Law Guarantee Fair Dealing in the Workplace?” (2003) 16 AJLL at 40-41. See also Aldersea v Public Transport Corporation (2001) 183 ALR 545 at [82]-[90]; Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney (2008) 72 NSWLR 559 at [63]-[65]; Lennon v South Australia [2010] SASC 272 (2 September 2010, Layton J) at [686]; Walker v Citigroup Global Markets Pty Ltd (2005) 226 ALR 114 at [86] (not dealt with on appeal Walker v Citigroup Global Markets Australia Pty Ltd (2006) 233 ALR 687); McDonald v Parnell Laboratories (Aust) (2007) 168 IR 375 at [88]-[91]. See also Godfrey, “Contracts of Employment: Renaissance of the Implied Term of Trust and Confidence” (2003) 77 ALJ 764 at 772-773. Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 at [41] per French CJ, Bell and Keane JJ, [109] per Kiefel J and [115] per Gaegler J.

Action for Damages for Breach of Contract

employer’s duty of care (see [6.100]) or the duty to co-operate (see [5.190]) or, if it exists, a general duty of good faith: see [5.170]. Of the latter, the High Court said that the question as to whether there is a general obligation to act in good faith in the performance of contracts was not before it.215 It would appear that, whatever term is sought to be implied, it will encounter the limitations imposed by Addis and the Johnson exclusion zone. The reasoning in Paige, rested upon a view that the area of unfair dismissal in Australia was heavily regulated both at State and federal level in a way which represented a particular and carefully calibrated balancing of the conflicting interests between preserving the expectations of employees on the one hand and enabling employers to create jobs and wealth on the other hand.216 Whilst the courts may be called upon to consider whether the current unfair dismissal regime maintains the carefully calibrated balancing of interests identified in Paige,217 given the support for the conclusion in Paige in subsequent decisions,218 one suspects that the present position will prevail. Finally, of course, even if an argument navigates the murky waters created by the above line of cases, in order to succeed, a dismissed employee will need to establish causation and remoteness and meet any argument concerning mitigation.219

[10.330] The Industrial Relations Court of Australia has held that, where the dismissal has caused, or exacerbated, a psychiatric illness of a dismissed employee,220 the

215

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218 219

220

Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 at [42] per French CJ, Bell and Keane JJ, [107] per Kiefel J and [119] per Gaegler J. See also Regulski v Victoria [2015] FCA 206 (13 March 2015, Jessup J) at [219]. New South Wales v Paige (2002) 60 NSWLR 371 at [154] (Spigelman J). His Honour’s assessment was based upon a comparison with the House of Lords assessment of the statutory unfair dismissal regime under consideration in Johnson (AP) v Unisys Ltd [2003] 1 AC 518, which was itself focused primarily on three matters: the creation of a specialist tribunal, the limitation of the class of applicants who could bring an unfair dismissal claim and the limitation of the size of the award of compensation available under the legislation: New South Wales v Paige (2002) 60 NSWLR 371 at [141]-[144]. Further considerations are identified at [145]. This would require a consideration of the three primary considerations identified in New South Wales v Paige (2002) 60 NSWLR 371 at [141]-[144] and the further considerations identified at [145]. A further, no less important, consideration is the removal of compensation for distress, anxiety and the like, from any order for payment in lieu of reinstatement under the federal unfair dismissal jurisdiction: Fair Work Act 2009 (Cth), s 392(4). However, the weight to be given to this latter issue may not be significant following the House of Lords confirmation of the Johnson exclusion zone in Eastwood v Magnox Electric plc [2005] 1 AC 503, despite its decision in Dunnachie v Kingston Upon Hull County Council [2005] 1 AC 226 that such compensation was not available in an award of damages under the United Kingdom statutory unfair dismissal system. Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney (2008) 72 NSWLR 559 at [63]; Dalfallah v Fair Work Commission (2014) 225 FCR 559 at [128]-[132]. In Australia, see Shaw v New South Wales (2012) 219 IR 87 at [118]-[119]. In the United Kingdom, see Bank of Credit and Commerce International SA v Ali (No 2) (1999) 4 All ER 83 at [269]-[271], and on appeal [2002] ICR 1258 at [40]-[44] per Pill LJ, [58]-[60] per Robert Walker LJ and [97] per Jonathan Parker LJ. See also Ur-Rahman v Ahmad [2013] ICR 28 at [17], [20] (EAT). Grout v Gunnedah Shire Council (No 2) (1995) 58 IR 67 at 76. (This decision was overturned on appeal on other grounds.) It should be noted that the Industrial Relations Court of Australia did take the view that it was entitled to include in a statutory award of compensation pursuant to s 654(7) of the Industrial Relations Act 1988 (Cth) an award of compensation for mere distress and anxiety regardless of whether it is associated with a psychiatric illness; Aitken v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia – Western Australian Branch (1995) 63 IR 1; Burazin v Blacktown City Guardian (1996) 142 ALR 144. However, see now Fair Work Act 2009 (Cth), s 392(4). See [13.220]. As to the distinction between stress and a recognised psychiatric illness, see O’Leary v Oolong Aboriginal Corporation Inc [2004] NSWCA 7 (24 May 2004, Spigelman CJ, Sheller and McColl JJ); Koehler v Cerebos (2005) 214 ALR 355.

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employee may recover damages for distress and anxiety.221 In Aldersea, Ashley J seems to suggest that these cases appear to be at odds with principle.222 His Honour said that such damages would not be available if the injury occurred at the end of the employment because such loss or damage would be too remote.223 Therefore, some uncertainty remains as to the true position in Australia and England. However, the courts in New Zealand and Canada have taken a different course, and are no longer burdened by the limitation imposed by the rule in Addis. In New Zealand the courts have been prepared to find that damages can be awarded for distress and anxiety caused by a dismissal in breach of contract. They have done so either on the basis of some form of implied term which has been breached,224 or under the second limb of the rule as to remoteness of damages in Hadley v Baxendale.225 The Canadian courts appear to have resolved the issue on the basis of the test of remoteness of damage.226

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224

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226

However, the distress or anxiety must flow as a direct result of the psychiatric illness. It is not enough if the distress or anxiety is itself the direct consequence of the breach of contract. See Hamlin v Great Northern Railway Co (1856) 1 H & N 408; 156 ER 1261 at 411 (H & N), 1262 (ER); Heywood v Wellers [1976] QB 446 at 463-464 per Bridge LJ. Aldersea v Public Transport Corporation (2001) 183 ALR 545 at [117]. Ashley J does not cite Sheldrick v WT Partnership (Aust) Pty Ltd (1998) 89 IR 206 where the damages award included an order for the payment of $1,000 to compensate for medical expenses incurred in relation to the treatment for a stress disorder and $10,000 for “vexation, stress and disappointment of being summarily dismissed”. There were related claims brought under the Trade Practices Act 1974 (Cth) which may have provided scope for such an award, but those claims were dismissed. The award of damages was seemingly not challenged on appeal: WT Partnership (Aust) Pty Ltd v Sheldrick (2000) 96 IR 202. See also Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney (2008) 72 NSWLR 559 at [63]-[65]. Aldersea v Public Transport Corporation (2001) 183 ALR 545 at [108]-[109]. Consistent with the need for coherence between statutory provisions and common law of employment (see New South Wales v Paige (2002) 60 NSWLR 371 at [93], [132]; Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney (2008) 72 NSWLR 559 at [63]), one doubts whether the courts would allow an employee to escape the constraints of statutory workers’ compensation systems by framing a claim for a work-related psychiatric injury as a claim in contract, based on a breach of implied terms. See, for example, Whelan v Waitaki Meats Ltd [1991] 2 NZLR 74 where the court awarded general damages for breach of an implied term that the employer would not, without reasonable and proper cause, conduct itself in a manner calculated or likely to destroy or seriously damage the reputation of the employee, or cause the employee undue mental distress, anxiety, humiliation, loss of dignity or injury to feelings. Compare Brandt v Nixdorf Computer Ltd [1991] 3 NZLR 750. See, for example, Rowlands v Collow [1992] 1 NZLR 178 where Thomas J suggested that the question of whether or not damages for mental distress are recoverable should be resolved in terms of the test of remoteness. That case involved a claim for damages for breach of contract with respect to the construction of a driveway. Ogilvy & Mather (NZ) v Turner (1996) 1 NZLR 641; Raddock v Air New Zealand Ltd [1997] ER NZ 517; Castle v Rongotai College [1997] ER NZ 505. Honda Canada Inc v Keays (2008] 2 SCR 3, Bohemier v Storwal International Inc (1982) 142 DLR (3d) 8; Pilon v Peugeot Canada Ltd (1980) 114 DLR (3d) 378. In Wallace v United Grain Growers Ltd [1997] 3 SCR 701, the majority rejected an implied duty to exercise the power of dismissal in good faith, instead suggesting that bad faith conduct in the manner of dismissal is a factor that is properly compensated for by an addition to the notice period, exposing the employer to additional damages. The minority in Wallace (McLachlin J) took the view that there is a separate term that the power of dismissal will be exercised fairly and in good faith, a breach of which gave rise to a separate cause of action. The view of McLachlin J won favour with Lord Hoffmann in Johnson AP v Unisys Ltd [2003] 1 AC 518 at [46]. The construct of extending the notice period to compensate the employee has been eschewed in favour of a more conventional application of the principles of assessment of damages; that is, what was in the contemplation of the parties. As a result, damages arising from the manner of dismissal are available if they result from employer conduct during the course of the dismissal that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive. Rather than extend the notice period, the award of damages should reflect the actual damage suffered: Honda Canada Inc v Keays (2008] 2 SCR 3 at [50]-[59]. This brought the position into line with the earlier decision in Fidler v Sun Life Assurance Company of Canada (2006] 2 SCR 3 at [47]-[49]. It is also based upon a more sound jurisprudential foundation.

Action for Damages for Breach of Contract

Whilst the rule in Addis may prevent damages from being available at common law for the stigma of being unemployed as a result of a dismissal in breach of contract, the stigma remains relevant to the issue of whether the plaintiff has acted reasonably in mitigation of loss.227 Taxation

[10.340] Taxation provisions relating to entitlements during and upon termination of employment have become increasingly complex and a detailed account is beyond the scope of this text. Prior to amendments to the Income Tax Assessment Act 1936 (Cth) in 1984, damages recovered for wrongful dismissal would have been taxed at the rate of 5%. Unless this tax advantage were taken into account an employee wrongfully dismissed would be in a better tax position than if she or he had continued to be employed. The courts therefore held that this saving of income tax had to be taken into account in assessing the plaintiff’s damages. This was done by calculating the plaintiff’s loss on the basis of net take home salary and wages.228 Taxation provisions229 make these amounts paid as damages liable to tax. Consequently, damages for wrongful dismissal will generally be assessed on gross rather than net salary or wages.230 Where there is no difference between the tax rate applicable to the lost earnings and that applicable to the award of damages, the appropriate basis for the award of damages is gross earnings;231 and, where there is a difference between the tax rates, the award should be based on net earnings plus an amount allowable for tax payable on the award.232 This approach, it was said, best achieves the objective of compensating the plaintiff for actual loss incurred.233 Damages claims may come within the capital gains tax legislation, although certain classes of damages claims are exempted from capital gains tax.234 Mitigation [10.350] The “duty” to mitigate is not really a duty on the person alleging to have suffered loss because the onus falls upon the defendant to make good the allegation that the plaintiff has failed to take reasonable steps to mitigate.235 It applies equally to an 227

228 229 230

231

232

233 234 235

See, for example, Gregory v Philip Morris (1988) 80 ALR 455 at 483 per Wilcox and Ryan JJ; Scharman v Apia Club Ltd (1983) 6 IR 157 at 167; Ikin v The Danish Club “Dannebrog” Inc (2001) 140 IR 101 at [26]. Cullen v Trappell (1980) 146 CLR 1. Income Tax Assessment Act 1997 (Cth), ss 82 – 130 to 82 – 160 and 83 – 295. Kilburn v Enzed Precision Products (Australia) Pty Ltd (1988) 4 VIR 31; Wheeler v Philip Morris (1989) 97 ALR 282. Note that in Gregory v Philip Morris (1988) 80 ALR 455 the Federal Court assessed damages net of tax. There appeared to be no argument on this issue. See also Walker v Citigroup Global Markets Pty Ltd (2005) 226 ALR 114 at [131] (issue not dealt with on appeal Walker v Citigroup Global Markets Pty Ltd (2006) 233 ALR 68). Slifka v JW Sanders Pty Ltd (1995) 67 IR 316; Atlas Tiles Ltd v Briers (1978) 144 CLR 202; Wheeler v Philip Morris (1989) 97 ALR 282; 32 IR 323; Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20; 41 IR 452. New South Wales Cancer Council v Sarfaty (1992) 28 NSWLR 68 at 79-80; see also Patterson v Middle Harbour Yacht Club (unreported, Federal Court of Australia, Whitlam J, 20 March 1996). In circumstances where there are differential rates of taxation between the country where the income was being paid under the contract and the country where the award of damages is made, the courts will strive to account for that difference to achieve the objective of compensating the plaintiff for the actual loss incurred: WT Partnership (Aust) Pty Ltd v Sheldrick (2000) 96 IR 202 at [23]. Compare Reilly v Praxa Ltd [2004] ACTSC 41 (Gray J, 9 June 2004) at [33]. Slifka v JW Sanders Pty Ltd (1995) 67 IR 316 at 332; compare Daniels v Anderson (1995) 37 NSWLR 438 at 585. Income Tax Assessment Act 1997 (Cth), s 118-37. Watts v Rake (1960) 108 CLR 158 at 159 per Dixon CJ; Goldberg v Shell Oil Company of Australia Ltd (1990) 95 ALR 711 at 714-717; Prus-Grzybowksi v Everingham (1986) 87 FLR 182. Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313 (17 November 2000, Handley, Stein and Giles JJA) at [187].

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employer as it does to an employee.236 An employee who has been wrongfully dismissed must take reasonable steps to mitigate her or his loss.237 In practical terms this requires the employee to diligently seek suitable alternative employment.238 The test is an objective one, requiring the employee to take reasonable steps only.239 In Brace v Calder240 the plaintiff’s employment was terminated on dissolution of a partnership with whom he was employed. He was immediately offered re-employment by two of the partners on similar terms and conditions as before. The offer was refused. It was held that nominal damages only were recoverable. On the other hand, an employee might be justified in refusing an offer of re-employment with the employer, for example, if the employer had wrongly accused the employee of being a thief.241 The employee is not generally required to take employment of a different or inferior kind,242 although in some circumstances it may be unreasonable not to accept employment at a lower status and salary level. Yetton v Eastwoods Froy Ltd243 provides an example. The plaintiff was employed as managing director of a company for a fixed term of five years at an annual salary of £7,500. With three years of the contract to run he was wrongfully dismissed but was offered employment in the same company at the same salary but at the lower status of assistant managing director. The plaintiff refused to accept and sought employment at commensurate salary and status elsewhere. After failing, he sought employment at £4,000 pa but at the time of the proceedings was unsuccessful in obtaining employment at this level. It was held that his refusal to accept employment as assistant manager was reasonable as was his subsequent conduct. However, the court was of the view that the plaintiff might in the two years left to run under the contract find employment at £3,000 pa and assessed damages over the remaining two-year period on that basis even though it was admitted that the commercial value of the plaintiff’s services was greatly in excess of that figure.244 236 237

238

239

240 241

242

243 244

Bowes and Partners v Press [1894] 1 QB 202 at 212. Compare the position where the employer has a right to terminate by paying the employee in lieu of notice, but fails to make the payment. It has been held that the employee in that case is under no duty to mitigate because the employee is suing for the payment of a debt; Abrahams v Performing Right Society [1995] ICR 1028; Reilly v Praxa Ltd [2004] ACTSC 41 (Gray J, 9 June 2004) at [32]; Fishlock v The Campaign Palace Pty Limited (2013) 234 IR 1 at [278]-[284]; compare Cerberus Software Ltd v Rowley [2001] ICR 371 (leave to appeal to the House of Lords refused Cerberus Software Ltd v Rowley [2001] ICR 1241). See the discussion in Fodder and Freer, “The Effect of Contractual Provision for Payment in Lieu of Notice” (2001) 30 ILJ 215 (see [9.150]). Brace v Calder [1895] 2 QB 253. This aspect of the duty to mitigate has been referred to as “avoidable loss”. That is, loss which the employee could have avoided had he or she taken reasonable steps to secure an alternative source of income. The onus is on the employer to prove the failure to take reasonable steps: Tasman Capital Pty Ltd v Sinclair [2008] 75 NSWLR 1 at [57] per Giles JA and the authorities there cited. For example, a refusal to accept an offer of re-employment Brace v Calder [1895] 2 QB 253 with the same employer will not be unreasonable, where the employer had previously treated the employee poorly because of his injured status: Wilding v British Telecommunications plc [2002] ICR 1079. Brace v Calder [1895] 2 QB 253. Yetton v Eastwoods Froy Ltd [1967] 1 WLR 104 at 119-120. Compare Payzu Ltd v Saunders [1919] 2 KB 581 at 588-589. Each case will turn on its own facts. See, for example, Regional Development Australia Murraylands v Riverland Inc [2015] SASCFC 160 (10 November 2015, Gray, Sulan and Nicholson JJ). In Whittaker v Unisys Australia Pty Ltd (2010) 192 IR 311 at [173]-[174] it was said that in employment cases different considerations may apply to the question of whether it would be reasonable to require an employee to resume work in the face of a repudiatory breach by the employer. Truth and Sportsman Ltd v Molesworth [1956] AR (NSW) 924; Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20; compare Dunstan v National Mutual Life Association of Australasia Ltd (1992) 5 VIR 73, where an employee, who genuinely believed that it would not be in his interests to accept an alternative position offered at the same salary, was held not to have failed to mitigate his loss, even though the court took the view that a reasonable person would have accepted the alternative position offered. Yetton v Eastwoods Froy Ltd [1967] 1 WLR 104. See also Beck v Darling Downs College of Advanced Technology (unreported, Supreme Court of

Action for Damages for Breach of Contract

[10.360] A second aspect of the rule relating to mitigation of damages is that there is no recovery for loss which the plaintiff has avoided, unless the matter is collateral.245 Salary or wages, including any fringe benefits, received from a new employment will reduce the damages payable.246 Although, income which is earned in alternative employment, but is not paid, and is not able to be recovered, is not brought into account.247 In line with personal injuries claims unemployment benefits received will also be deductible.248 “Ex gratia” payments received from the employer relating to the termination may also be taken into account.249 Payment of accrued annual leave on termination may be taken into account and offset if the employer would have had the right to direct the employee to take annual leave during the notice period.250 However, expenses incurred in seeking alternative employment to mitigate one’s loss may be brought into account.251 Pay in lieu of notice may be taken into account.252 As severance payments constitute a benefit received as a result of dismissal, it is arguable that these should also be taken into account in wrongful dismissal claims.253 An amount paid as severance pay (other than in accordance with a statutory, award or contractual obligation) can be set off against an entitlement to damages for failure to provide adequate notice in accordance with the contract.254 In contrast, a retirement pension will not be taken into account if it is payable whenever the employment is terminated, irrespective of whether it comes about through resignation, dismissal or by retirement in due course.255

245

246 247 248

249

250 251

252 253 254

255

Queensland, Dowsett J, 20 April 1990), where the assessment of damages took into account a reasonable time (12 months) to obtain alternative employment of equal status and, if unsuccessful, after that it would be reasonable to expect that the plaintiff would mitigate his loss by taking a position of lesser status. This has been referred to as “avoided loss”. As with “avoidable loss” (see [10.350]), it appears that the onus remains with the employer to prove any reduction in the employee’s entitlement to damages by reason of income secured from alternative sources: Tasman Capital Pty Ltd v Sinclair [2008] 75 NSWLR 1 at [72] per Giles JA. For detailed discussion of this aspect of mitigation of loss see Freedland, The Contract of Employment (OUP, 1976), p 262. See Bold v Brough, Nicholson and Hall Ltd [1964] 1 WLR 201; Lavarack v Woods of Colchester [1967] 1 QB 278 at 301; Tasman Capital Pty Ltd v Sinclair (2008) 75 NSWLR 1 at [55]. Hem v Cant (2007) 156 IR 113 at 120. Evans v Muller (1983) 151 CLR 117; McCasker v Darling Downs Co-op Bacon Association Ltd (1988) 30 AILR 316; Wood v District Council of Crystal Brook (1992) 42 IR 189. Contrary authority in Burton v Litton Business Systems Pty Ltd (1977) 16 SASR 162 at 169 can no longer be considered correct. Saddington v Building Workers Industrial Union of Australia (1993) 49 IR 323 Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 (17 December 2010, Allsop P, Beazley JA and Hammerschlag J) at [12]-[15] per Allsop P, and [19] per Beazley JA (agreeing), compare [66]-[67] per Hammerschlag J. Macauslane v Fisher and Paykel Finance Pty Ltd [2003] 1 Qd R 503. Brookton Holdings No V Pty Ltd v Kara Kar Holdings Pty Ltd (1994) 57 IR 288. Costs incurred in proceedings seeking reinstatement under a statutory unfair dismissal regime, whilst incurred in an effort to mitigate one’s loss, are not taken into account because to do so would be inconsistent with the purpose of the statutory regime in which the award of costs is exceptional: Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney (2008) 72 NSWLR 559 at [48]-[50]. Gregory v Philip Morris (1988) 80 ALR 455. Stocks v Magna Merchants Ltd [1973] ICR 530 at 534 per Arnold J; Colledge v Bass Mitchells and Butlers Ltd [1988] ICR 125. The severance payment arises from the act which constituted the breach for which damages are sought: Black v Brimbank City Council (1998) 152 ALR 491 at 505; see [9.190]. If the termination resulted from an event which gave rise to an entitlement to severance pay under an industrial award or agreement or the contract (for example, by incorporation of a redundancy policy), rather than by way of a voluntary non-contractual payment, the amount would not be set off against any entitlement to damages for failure to give adequate notice. See also Westfield Holdings v Adams (2001) 114 IR 241 at 276-277. Stocks v Magna Merchants Ltd [1973] ICR 530 at 534 per Arnold J; Hopkins v Norcross Pty Ltd

449

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Other Actions for Damages [10.370] An employee may have available a range of causes of action under the Fair Work Act 2009 (Cth) in respect of which the court is able to make an order for payment of compensation under Pt 4-1.256 This will include any claim for breach of an award or enterprise agreement (see Chapter 12) or any breach of Pt 3-1 (general protections) (see [13.310]) or Pt 6-4 (additional provisions in relation to termination of employment) (see [13.330]), but not under the unfair dismissal provisions in Pt 3-2 (see [13.200]) or the anti-bullying provisions in Pt 6-4B: see [13.370]). If the factual underpinning of the contravention involves dismissal from employment, the court will look to the loss of chance or opportunity to continue that employment, rather than be constrained by the least burdensome performance rule.257 An employee may have available an action for damages other than for breach of contract. For example, in certain limited circumstances, an employee may have an action for damages at common law in the tort of negligence. As to whether an action in tort lies in respect of a negligent reference, or whether the employee must establish that the reference is defamatory, see [5.290]. An employee will generally be compensated under the relevant workers’ compensation system for a genuine stress claim which arises as a result of the way in which she or he has been treated by the employer (see [6.30]ff).258 However, there are limitations on the entitlement. Generally, workers’ compensation legislation excludes an entitlement to compensation if the injury arises out of a reasonable action taken in a reasonable manner by the employer, amongst other things, to transfer, demote, discipline, redeploy, retrench or dismiss the employee.259 The courts are conscious of the need to ensure that the common law is coherent with statute law.260 One suspects that the courts would be reluctant to enter into a field which the Parliament has determined ought not be covered by the statutory workers’ compensation regime without first establishing a particular type of injury and secondly, establishing that it is not excluded (see [6.30]ff). Further, query whether the damages available extend to compensation for mere distress and anxiety (see [10.260]).261 The courts in New

256 257 258

259 260 261

[1993] 1 All ER 784. On this test superannuation payments received whether from a contributory or non-participatory scheme would not be taken into account unless benefits were paid to which the employee was not legally entitled. See Bold v Brough, Nicholson and Hall Ltd [1964] 1 WLR 201, a return of an employee’s own contributions to a superannuation scheme would not be taken into account. See generally, Anderson and Howe, “Making Sense of the Compensation Remedy in Cases of Accessorial Liability under the Fair Work Act” (2012) 36(2) MULR 335. MUA v Fair Work Ombudsman [2015] FCAFC 120 (28 August 2015, Allsop CJ, Mansfield and Siopis JJ) at [30]. Note also that reinstatement is available as a statutory remedy In some cases the employee’s reaction has extended beyond that which could reasonably have been foreseen: Gillespie v Commonwealth (1991) 104 ACTR 1; Miller v Royal Derwent Hospital Board of Management [1992] Aust Torts Reports ¶81-175. The consequence of such a finding was that, if the employer had taken reasonable care, it would not have prevented the injuries: see also Wodrow v Commonwealth (1993) 45 FCR 52. The content of the employer’s duty of care in tort must be considered in taking into account the obligations which the parties owe one another under the contract of employment, the obligations arising from the relationship which equity would enforce and, of course, any applicable statutory provisions including industrial instruments and antidiscrimination legislation: Koehler v Cerebos (2005) 214 ALR 355 at [21]; Goldman Sachs JB Were Services Pty Ltd v Nikolich (2007) 163 FCR 62 at [70]-[72] per Black CJ. See [6.310]. New South Wales v Paige (2002) 60 NSWLR 371 at [93], [132]. This issue was touched on in Rigby v Technisearch Ltd (1996) 67 IR 68 at 94, where Marshall J was “by no means certain” that an employer owed the employee a duty of care to investigate the employee’s conduct so as not to negligently cause loss or injury. Compare Goldman Sachs JB Were Services Pty Ltd v Nikolich (2007) 163 FCR 62 at [70]-[71] (Black CJ).

Other Actions for Damages

Zealand have been prepared to find that, in an action in tort, foreseeable distress can form an ingredient of an award for damages.262 An employee may also be entitled to damages at common law for any loss suffered as a result of a misrepresentation by the employer. In an action for damages for fraudulent misrepresentation, the innocent party should, as far as possible, be restored to the position she or he would have been in if they had not entered into the contract.263 The assessment of damages arises in the tort of deceit, not in contract. The employee must be able to prove financial loss as a result of the fraudulent misrepresentation. However, in the rare cases that physical injury (perhaps in the form of a psychiatric illness) results from the deceit, damages may be recoverable for that injury in accordance with normal principles, opening the way for damages for associated distress and anxiety.264 Damages for negligent misrepresentation are assessed on a similar basis. In respect of an innocent misrepresentation, generally there is no cause of action for damages unless the representation becomes a term of the contract, in which case contractual principles will apply. Damages may be available under ss 18 and 31 of the Australian Consumer Law (formerly ss 52 and 53B of the Trade Practices Act 1974 (Cth)) to a prospective employee who suffers loss as a result of misleading statements by the employer in negotiations prior to the employment commencing265 and perhaps, conduct during the course of negotiations for a contract for a new position with an existing employee,266 or during discussions concerning the possible transfer or possible termination of employment as a result of a restructure and sale of part of the employer’s business.267 It has been held that the former s 82 of the Trade Practices Act 1974 (now s 82 of the Competition and Consumer Act 2010) provides sufficient scope to include an order for compensation for loss of reputation268 or distress and anxiety269 in respect of a contravention of ss 18 and 31 of the Australian Consumer Law. 262

263 264 265

266 267

268

Horsburgh v New Zealand Meat Processors Industrial Union of Workers [1988] 1 NZLR 698; Mouat v Clark Boyce [1992] 2 NZLR 559; see also Whelan v Waitaki Meats Ltd [1991] 2 NZLR 74; Hayes v Dodd [1990] 2 All ER 815. Holmes v Jones (1907) 4 CLR 1692 at 1709. Aldersea v Public Transport Corporation (2001) 183 ALR 545 at [44]-[45] per Ashley J and the cases there cited. Whether the body of case law on former ss 52 and 53B may be used as precedent, now that the equivalent provisions have been moved into a schedule of the main Act dealing principally with consumer law is a matter that awaits further judicial analysis. Godfrey, “The Trade Practices Alternative” (2005) 18 AJLL 136. See also equivalent provisions in the Fair Trading Acts in each State, which have adopted the Australian Consumer Law. For example, see Carter v Geoff Layton and Co Pty Ltd (unreported, Federal Court of Australia, Full Court, 21 June 1993); Saad v TWT Ltd (unreported, Supreme Court of New South Wales, Ireland J, 19 May 1995); O’Neill v Medical Benefits Fund of Australia (2002) 122 FCR 455 at [181]-[187]; Walker v Salomon Smith Barney Securities Pty Ltd (2003) 140 IR 433 (issue not dealt with on appeal (2006) 233 ALR 687); Robertson v Knott Investments Pty Ltd (No 3) [2010] FCA 1074 (1 October 2010, Flick J). Stoelwinder v Southern Health Care Network (2000) 177 ALR 501. McCormick v Riverwood International Pty Ltd (1999) 167 ALR 689 at [27]-[30]; Walker v Salomon Smith Barney Securities Pty Ltd (2003) 140 IR 433 (issue not dealt with on appeal Walker v Salomon Smith Barney Securities Pty Ltd (2006) 233 ALR 687, but assumed to be correct to support a cross-claim on damages). Flamingo Park Pty Ltd v Dolly Dolly Creations Pty Ltd (1986) 65 ALR 500; see also Brabazon v Western Mail Ltd (1985) 8 FCR 122 at 127. See also Zoneff v Elcom Credit Union Ltd (1990) 94 ALR 445 at 467-469; compare Pavlovic v Commonwealth Bank of Australia (1992) 56 SASR 587 at 590. The sum of $5,000 was awarded at first instance in Walker v Salomon Smith Barney Securities Pty Ltd (2003) 140 IR 433. The damages award was increased to $100,000 on appeal, without the need for expert evidence: (2006) 233 ALR 687 at [91]. From 20 April 2006 to 31 December 2010, the exclusion in s 82(1AAA) of the former Trade Practices Act 1974 (Cth) prevented an award of damages for death or personal injury. Query whether this would have prevented the award in Walker’s case. Damages for death or personal injury are now governed by Pt VIB of the Competition and Consumer Act 2010 (Cth).

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Ch 10: Remedies – Actions for Wages or Damages

An employee may, in certain circumstances, have an action for damages at common law in the tort of defamation (see [5.290]). Where an employer dismisses an employee for misconduct and the employee discloses that reason to another person, the employer may be liable to the employee for the publication to that person of the defamatory imputation conveyed by the disclosure in certain limited circumstances. If an employee publishes defamatory material in respect of a co-employee, or if an employer publishes a reference that causes foreseeable damage to an employee’s reputation, the employee may have an action in defamation: see [5.2920]. An action may be available for damages at common law in the tort of breach of statutory duty.270 However, it is now clear that a breach of an award does not give rise to an action for damages for breach of a statutory duty.271

269 270 271

Aldersea v Public Transport Corporation (2001) 183 ALR 545 at [39]-[43] per Ashley J and the cases there cited. See O’Connor v S P Bray Ltd (1937) 56 CLR 464. Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 425 per Brennan CJ, Dawson and Toohey JJ, and at 457-462 per McHugh and Gummow JJ.

11

Injunction and Declaration “Work was his life, his life was work.” [Honore, The Question for Security: Employees, Tenants, Wives (Hamlyn Trust Series, 1982), p 1. (Taken from a tombstone in a Black Forest Churchyard.)]

[11.10] [11.10] [11.20] [11.50] [11.60] [11.70] [11.90] [11.100] [11.110] [11.110] [11.120] [11.130] [11.140] [11.150]

Injunction ......................................................................................................... 453 Introduction ................................................................................................ 453 Injunctions enforcing negative covenants .................................................. 456 Tailoring remedies to protect contractual rights ....................................... 459 Injunctions restraining an employer from dismissing an employee ......... 463 Australian cases ......................................................................................... 467 Injunctions under the Fair Work Act 2009 (Cth) ...................................... 471 Conclusion .................................................................................................. 472 Declaration ...................................................................................................... 473 Introduction ................................................................................................ 473 Special circumstances ................................................................................ 475 Declaration must serve a useful purpose .................................................. 475 Other limits on declaratory judgments ...................................................... 476 Advantages of the declaratory remedy ...................................................... 476

Injunction Introduction [11.10] The common law courts have traditionally refused to grant specific

performance of a contract of employment and refused to grant an injunction1 to restrain a breach of a contract of employment where it would effectively amount to an order for specific performance.2 This approach applied equally to applications for injunctions by an employer as well as to applications by an employee to restrain a breach of the contract of employment. The principal reasons for this approach have been the policy of the law against forcing the continuance of a personal relationship 1

2

The issue may come before the court by way of a claim for an interim or interlocutory injunction. In order to obtain such relief the plaintiff must make out a prima facie case and establish that the balance of convenience between the parties favours the award of an injunction: see Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [65]-[72] (Gummow and Hayne JJ); and see generally Meagher, Heydon and Leeming, Meagher, Gummow and Lehane’s, Equity, Doctrines and Remedies (4th ed, LexisNexis, 2002), pp 662-664 and 755-759 and as illustrations Hill v C A Parsons Co Ltd [1972] 1 Ch 305; Evening Standard Ltd v Henderson [1987] ICR 588; Lawrence David Ltd v Ashton [1989] ICR 123; Tradition Australia Pty Ltd v Gunson (2006) 152 IR 395; Gutnick v Bondi Mizrachi Synagogue [2009] NSWSC 257. Whitwood Chemical Co v Hardman [1891] 2 Ch 416. Compare injunctions to restrain unauthorised use of confidential information after the employment has ended: see Roger Bullivant Ltd v Ellis [1987] ICR 464; Slevin v Associated Insurance Brokers of Australia (Qld) Pty Ltd (noted at (1996) 40 AILR 9-049); and see Stewart, “Confidentiality and the Employment Relationship” (1988) 1 AJLL 1.

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against the will of one of the parties, loss of confidence between the parties and the need for continuing supervision. This policy is to be balanced against the clear advantages that the injunctive remedy may have as against, for example, a claim for damages in a wrongful dismissal case. Damages in a wrongful dismissal case do not at present extend to allow recovery for disappointment, the effect on the employee’s reputation, injured feelings, loss of work satisfaction and employment,3 unemployment, and the accrual of benefits (such as additional superannuation entitlements) to which the employee may not be contractually entitled at the time of dismissal.4 The injunctive remedy may result not just in the employee keeping her or his job at least during the period required for lawful termination but may result in continuing employment.5 In recent years there has been a proliferation in the sources of statutory power to order reinstatement or grant injunctions preventing the termination of employment of employees. The unfair dismissal provisions in the Fair Work Act 2009 (Cth), Pt 3-2 confer upon the Fair Work Commission the power to order reinstatement or re-employment (see [13.210]). The Fair Work Act 2009 “General Protections” provisions in Pt 3-1 also permit employees to seek injunctions if their employment has been adversely affected for a discriminatory reason,6 because of their participation (or refusal to participate) in industrial activities,7 or because they have been temporarily absent from work due to illness or injury8 (see [13.290]). Both the general protections and unfair dismissal provisions appear to confer an unfettered discretion on the decision-maker as to when reinstatement, rather than compensation is the appropriate order, and reinstatement under the statute means an entitlement to return to work, and not merely to reinstatement of the contract.9 The court may order reinstatement both on an interlocutory10 and a permanent basis.11 It is now clear that at common law there is no automatic rule that prevents the granting of an injunction to restrain a breach of the contract of employment or an order for specific performance of an employment contract.12 In 1984, the Full Federal Court in Turner v Australasian Coal and Shale Employees Federation13 recognised that “the courts will no longer set their faces against the remedies of declaration and injunction with respect to contracts of employment”.14 The court said that a court may decline to order specific performance which would involve constant recourse to the court by the parties and determinations by the court of the rights and wrongs of a multiplicity of 3 4 5 6 7 8 9 10

11 12

13 14

See [10.320] The courts are prepared to recognise that it is more difficult to secure work when out of work than whilst still employed: Walsh v The Police Association (2000) 140 IR 58 at [63]. These factors were of considerable weight in Walsh v The Police Association (2000) 140 IR 58 at [63]. See also [10.250]. In an action for wrongful dismissal the plaintiff is also under a duty to mitigate loss. See, for example, Powell v Brent London Borough Council [1988] ICR 176 at 188. See Fair Work Act 2009 (Cth), s 351. See Fair Work Act 2009 (Cth), ss 346 – 347. These provisions replace the freedom of association protections in Pt 16 of the Workplace Relations Act 1996 (Cth). See Fair Work Act 2009 (Cth), s 352 and Fair Work Regulations 2009 (Cth), reg 3.01. See Blackadder v Ramsay Butchering Services Pty Ltd (2005) 221 CLR 539. AMIEU v G & K O’Connor Pty Ltd (2000) 100 IR 383; NUW v Davids Distribution Pty Ltd (1999) 165 ALR 550; MUA v Patrick Stevedores (No 1) Pty Ltd (1988) 79 IR 281, and in the High Court, Patrick Stevedores Operations (No 2) Pty Ltd v MUA (No 3) (1988) 195 CLR 1. See also, Skilled Engineering Ltd v AFMEPKIU (2001) 108 IR 116 at [17]-[18] and Hayman Reese v AFMEPKIU (2001) 108 IR 441 at [19]-[26]. ASU v Greater Dandenong City Council (2000) 101 IR 143; confirmed on appeal Greater Dandenong City Council v ASU (2001) 112 FCR 232. See Downe v Sydney West Area Health Service (No 2) (2008) 174 IR 385 at [454] and [465] for a case in which an injunction was granted restraining an employer from suspending an employed doctor from duties. Turner v Australasian Coal and Shale Employees Federation (1984) 6 FCR 177. Turner v Australasian Coal and Shale Employees Federation (1984) 6 FCR 177 at 193.

Injunction

obligations in the contract. Contracts of employment should be subject to the same rules as other contracts with respect to the discretion to grant equitable relief in the form of an injunction or an order for specific performance.15 Megarry J in CH Giles & Co Ltd v Morris,16 adverted to some of the difficulties in ordering specific performance of contracts for personal services: If a singer contracts to sing, there could no doubt be proceedings for committal if, ordered to sing, the singer remained obstinately dumb. But if instead the singer sang flat, or sharp, or too fast, or too slowly, or too loudly, or too quietly, or resorted to a dozen of the manifestations of temperament traditionally associated with some singers, the threat of committal would reveal itself as a most unsatisfactory weapon: for who could say whether the imperfections of performance were natural or self-induced? To make an order with such possibilities of evasion would be vain; and so the order will not be made. However, not all contracts of personal service or for the continuous performance of services are as dependent as this on matters of opinion and judgment, nor do all such contracts involve the same degree of daily impact of person upon person. In general, no doubt, the inconvenience and mischief of decreeing specific performance of most of such contracts will greatly outweigh the advantages, and specific performance will be refused. But I do not think that it should be assumed that as soon as any element of personal service or continuous services can be discerned in a contract the court will, without more, refuse specific performance. Of course, a requirement for the continuous performance of services has the disadvantage that repeated breaches may engender repeated applications to the court for enforcement. But so may many injunctions; and the prospects of repetition, although an important consideration, ought not to be allowed to negative a right. As is so often the case in equity, the matter is one of the balance of advantage and disadvantage in relation to the particular obligations in question; and the fact that the balance will usually lie on one side does not turn this probability into a rule.

The judgments in Turner v Australasian Coal and Shale Employees Federation,17 and subsequent cases18 (see [11.70]) evidence the continuation of the slow process of the courts in recognising that equitable remedies should not automatically be excluded in cases involving personal services. We now turn to trace the development of the injunction and its use in employment cases.19 Generally, at common law, an application for an injunction to continue the employment relationship arises in one of two circumstances. First, the employer may seek an injunction to prevent an employee from breaching a restraint which operates during the employment, effectively requiring the employee to remain in employment with the employer.20 Secondly, an employee may seek an injunction to prevent an employer from wrongfully dismissing the employee in breach of the terms of the contract of employment.21 The earliest cases allowing injunctions to restrain breaches of the contract of employment concerned proceedings by employers to restrain breaches of negative 15 16 17 18

19 20

21

Turner v Australasian Coal and Shale Employees Federation (1984) 6 FCR 177. CH Giles & Co Ltd v Morris [1972] 1 WLR 307 at 318-319. Turner v Australasian Coal and Shale Employees Federation (1984) 6 FCR 177. For example, Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20; Lane v Fasciale (1993) 35 AILR 425; Linnane v Monash University (unreported, Industrial Relations Court of Australia, North J, 2 January 1996); Paras v Public Service Body Head of the Department of Infrastructure (2006) 152 IR 75; Downe v Sydney West Area Health Service (No 2) (2008) 174 IR 385. See generally Freedland, The Personal Contract of Employment (OUP, 2003), pp 368-376. See, for example, Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414, where an employee was restrained from taking up alternative employment and held to a period of “garden leave”. The duration of garden leave provisions will, however, be subject to the doctrine making illegal restraints of trade. See generally Heydon, The Restraint of Trade Doctrine (3rd ed, LexisNexis Butterworths, 2008), pp 86-187. For example, where the contract expressly provides for a procedure to be undertaken before a

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covenants. These covenants were generally concerned with the provision of exclusive services to the employer or covenants against competition with the employer. These cases demonstrate how far the courts were willing to restrain an employee from engaging in other employment even if this meant indirectly enforcing the continuance of the employment contract. There is some support for the view, particularly by Megarry J, in C H Giles & Co Ltd v Morris22 in the passage extracted above, that equitable remedies in effect enforcing the contract of employment should be available subject only to what justice, equity and the balance of convenience in the particular case requires.23 The result of this approach would be that the grant of an injunction to restrain breach of a negative covenant undertaken by an employee would be only one illustration of the possible reach of equitable remedies. After earlier resistance, Australian courts have become more willing to adopt the Megarry approach.24 There is still a requirement that damages must not provide an adequate remedy and the necessary confidence between employer and employee must not have eroded to the extent that the future relationship would require the constant supervision of the courts.25

Injunctions enforcing negative covenants [11.20] The first in the line of cases allowing an injunction restraining the breach of a

negative covenant is the famous case of Lumley v Wagner.26 The defendant, Miss Wagner, niece of Richard, contracted to sing at Lumley’s theatre during the opera season and undertook not to sing elsewhere during that period. In breach of that undertaking Miss Wagner agreed for a higher price to sing for Gye at the Royal Italian Opera, Covent Garden. It was held that the court would not interfere to order Miss Wagner to sing at Lumley’s theatre as this would breach the then fundamental rule of equity that contracts of employment would not be specifically enforced. However, an injunction was issued restraining Miss Wagner from singing elsewhere.

22 23

24

25

26

determination can be made to dismiss an employee: Baker v University of Ballarat [2005] FCA 99 (15 February 2005, Sundberg J), and on appeal (2005) 225 ALR 218; Paras v Public Service Body Head of the Department of Infrastructure (2006) 152 IR 75. C H Giles & Co Ltd v Morris [1972] 1 WLR 307. C H Giles & Co Ltd v Morris [1972] 1 WLR 307 at 318-319; Hill v Parsons [1972] Ch 305 at 323 per Stamp LJ; Chappell v Times Newspapers [1975] 1 WLR 482 at 503-504 per Stephenson LJ; Gordon v Victoria [1981] VR 235; Baker v Corporation of Salisbury (1982) 2 IR 168. But see Thomas Marshall Exports Ltd v Guinle [1979] 1 Ch 227 at 243 – Megarry VC stating that the court is powerless to force an employee to serve for a term of years if the servant refuses to do so. See also Gregory v Philip Morris (1988) 80 ALR 455 at 481. As to the matters that can be taken into account in determining the balance of convenience, see R v National Heart and Chest Hospitals; Ex parte Pardhanani (unreported, Court of Appeal, 1984), cited in Irani v Southampton and South West Hampshire Health Authority [1985] ICR 590 at 601-602; McMahon v Labor Council of NSW (1985) 10 IR 217; Reilly v State of Victoria (1991) 5 VIR 33. As to whether the risk of strike or industrial action is sufficient to prevent grant of injunction, see Hill v C A Parsons [1972] Ch 305 at 320-321, 323; McMahon v Labor Council of NSW (1985) 10 IR 217 at 221; Gregory v Philip Morris Ltd (1988) 80 ALR 455. See, for example, Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414; Bulldogs Rugby League Club Ltd v Williams [2008] NSWSC 822 (concerning an interlocutory injunction to prevent a football player from playing another code of football, in another jurisdiction). An example of a mandatory injunction being granted arose in Reilly v State of Victoria (1991) 5 VIR 1. In that case, the court took the view that damages was an inadequate remedy because it could not properly compensate the plaintiff for the lost opportunity of permanent employment in the Public Service. See also Linnane v Monash University (unreported, Industrial Relations Court of Australia, North J, 2 January 1996); the court heard uncontradicted evidence that the plaintiff’s reputation as an outstanding scientist would suffer irreparably if he was removed from his position, and that the plaintiff had a positive and healthy working relationship with his superior. Compare Baker v University of Ballarat [2005] FCA 99 (15 February 2005, Sundberg J), and on appeal (2005) 225 ALR 218. Lumley v Wagner (1852) 1 De GM & G 604; 42 ER 687. The New South Wales Court of Appeal rejected an argument that some “modern rule” has displaced Lumley v Wagner; see Curro v Beyond Productions Pty Ltd (1993) 30 NSW LR 337 at 348.

Injunction

The Lord Chancellor in his judgment referred to the objection made that the operation of the injunction granted in effect amounted to an order for specific performance and said: It is true that I have not the means of compelling her to sing, but she has no cause of complaint if I compel her to abstain from the commission of an act which she has bound herself not to do, and thus possibly cause her to fulfil her engagement … The effect, too, of the injunction in restraining J Wagner from singing elsewhere may, in the event of an action being brought against her by the plaintiff, prevent any such amount of vindictive damages being given against her as a jury might probably be inclined to give if she had carried her talents and exercised them at the rival theatre: the injunction may also, as I have said, tend to the fulfilment of her engagement; though, in continuing the injunction, I disclaim doing indirectly what I cannot do directly.27

Subsequent cases have confined the authority of Lumley’s case. The authorities restricted the operation of the principle by first requiring that there be an express stipulation negative in form and substance inserted in the contract itself,28 and secondly by confining the issue of injunctions to negative covenants involving special services.29 More recent Australian cases enforcing covenants not to compete with a former employer have not been restricted to performers and sports champions, but have also been applied to former employee’s with a more mundane range of commercial skills.30

Express negative stipulations [11.30] The first of these two restrictions was imposed in Whitwood Chemical Co v

Hardman.31 There the manager of a manufacturing company agreed to give, during the term of his employment, “the whole of his time to the company’s business”. The Court of Appeal refused to grant an injunction restraining the defendant from working for a rival company and said that although a negative covenant not to work for any other company might be implied, the court would not grant an injunction unless there was an express negative stipulation to that effect. In the later case Ehrman v Bartholomew,32 an employee expressly covenanted during the period of employment not to engage or obtain employment in any other business. The Court of Chancery refused to grant an injunction restraining a breach of this negative covenant on the ground that this would effectively bring about specific performance of the contract as the employee’s only other choice was idleness and starvation.33 27 28 29 30

31 32 33

Lumley v Wagner (1852) 1 De G M & G 604; 42 ER 687 at 619-620 (De G M & G), 693 (ER). Davies v Foreman [1894] 3 Ch 654; Whitwood Chemical Co v Hardman [1891] 2 Ch 416; Kirchner & Co v Gruban [1909] 1 Ch 413. Warner Bros Pictures Inc v Nelson [1937] 1 KB 209; Atlas Steels Australia Pty Ltd v Atlas Steels Ltd (1948) 49 SR (NSW) 157 at 166 per Sugerman J. See, for example, Seven Network (Operations) Ltd v James Warburton (No 2) [2011] NSWSC 386 (a television executive); HRX Holdings Pty Ltd v Pearson [2012] FCA 161 (a recruitment consultant); John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995 (a media buyer). For a critique of this development, see Riley, “Sterilising Talent: A Critical Assessment of Injunctions Enforcing Negative Covenants” (2012) 34(2) SLR 617. Whitwood Chemical Co v Hardman [1891] 2 Ch 416. Ehrman v Bartholomew [1898] 1 Ch 671. See also Heine Bros (Aust) Pty Ltd v Forrest [1963] VR 383 at 384-385; Atlas Steels Australia Pty Ltd v Atlas Steels Ltd (1948) 49 SR (NSW) 157 at 163 per Sugerman J; Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 at 348; and Bearingpoint Australia Pty Ltd v Hillard [2008] VSC 115 (18 April 2008, Habersberger J) at [144]-[149]. It might be argued that the requirement of an express negative covenant serves no purpose; the real issue is whether the enforcement of the covenant express or implied amounts to an order for specific performance of the contract. For a recent Australian case refusing an injunction on the ground that it may force idleness upon the employee, see Network Ten Pty Ltd v Seven Network (Operations) Ltd [2014] NSWSC 692 at [149]-[157].

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However, later cases suggest that an injunction to restrain breach of a negative covenant will be available if the covenant is confined to “special services”, and may be available in the case of other professional work.

Negative covenants involving special services [11.40] In Warner Brothers Pictures Inc v Nelson,34 Mrs Nelson (Bette Davis) had agreed to give her exclusive services as a motion picture or stage actress to the plaintiffs. The agreement provided that Mrs Nelson would “not during [the term of the contract] render any services for or in any other photographic, stage or motion picture production … or business of any other person … or engage in any other occupation without the written consent of the producer being first had and obtained”. Branson J granted an injunction restraining Mrs Nelson from acting in breach of contract. His Lordship found that the defendant’s services were of “a special, unique, extraordinary and intellectual character” the loss of which could not be adequately compensated by award of damages. Ehrman v Bartholomew was distinguished on the ground that the defendant’s choice was not between performing the contract or remaining idle, since Mrs Nelson could remuneratively employ herself in some sphere of activity other than films or on stage. The fact that such other work may be far less remunerative did not affect the position: The conclusion to be drawn from the authorities is that, where a contract of personal service contains negative covenants the enforcement of which will not amount either to a decree of specific performance of the positive covenants of the contract or to the giving of a decree under which the defendant must either remain idle or perform those positive covenants, the court will enforce those negative covenants; but this is subject to a further consideration. An injunction is a discretionary remedy, and the Court in granting it may limit it to what the Court considers reasonable in all the circumstances of the case.35

The injunction requested and granted was not as wide as the negative stipulation; it was confined to forbidding the defendant, without the consent of the plaintiff, from rendering services in any motion picture or stage production for anyone other than the plaintiff. The injunction was granted for the duration of the contract or a three-year period whichever was the shorter. It is arguable that this notion of “special services” does no more than emphasise the primary test of whether the employee is forced to perform the employment or to remain idle and starving. The Australian courts have recognised the rule in Lumley v Wagner “with varying degrees of enthusiasm”.36 The restrictive approach to the grant of injunctions to restrain a breach of a negative covenant in agreements involving the provision of personal services has been followed in Australia. In Atlas Steels Australia Pty Ltd v Atlas Steels Ltd,37 Sugerman J in refusing to grant an injunction regarded Lumley v Wagner38 as an anomaly which it would be very dangerous to extend. His Honour thought that it should be restricted to express negative stipulations involving special services, that is, to “other employments or businesses of the same kind as those in which the restrained employee was bound to engage under the employment contract”.39 However, the decision in Atlas Steels has been strongly criticised.40 34 35 36 37 38 39 40

Warner Brothers Pictures Inc v Nelson [1937] 1 KB 209. Warner Brothers Pictures Inc v Nelson [1937] 1 KB 209 at 217. See Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 at 347 and the cases there cited. Atlas Steels Australia Pty Ltd v Atlas Steels Ltd (1948) 49 SR (NSW) 157. Lumley v Wagner (1852) 1 De G M & G 604; 42 ER 687. Atlas Steels Australia Pty Ltd v Atlas Steels Ltd (1948) 49 SR (NSW) 157 at 166; see also Heine Bros (Aust) Pty Ltd v Forrest [1963] VR 383. Meagher, Heydon and Leeming, Meagher Gummow and Lehane’s Equity, Doctrines and Remedies

Injunction

More recently, Australian courts have indicated that they are prepared to restrain breaches of express negative covenants in contracts for special services41 where the balance of discretionary considerations is in the plaintiff’s favour.42 In Curro v Beyond Productions Pty Ltd, the Supreme Court of New South Wales granted an injunction to prevent a television presenter from taking employment with a competitor in breach of an express negative covenant not to engage in any other presentation activity during the term of the agreement. The court noted that some attempts to obtain injunctions based on Lumley v Wagner had failed43 but said that these cases did not support an argument that some modern rule had displaced Lumley v Wagner.44 The exercise of the discretion involves a balance of considerations such as whether damages provide an adequate remedy,45 whether the granting of an injunction would impose an unfair burden on one of the parties,46 whether grant of an injunction would leave the employee idle;47 whether the conduct of one of the parties is such that the court should lend it no sympathy48 and whether there is a lack of mutuality in the relationship.49 An offer by the employer to pay compensation to the employee for a period will not justify the grant of an injunction.50 The grant of an injunction will be subject to the doctrine making illegal restraints of trade that go further than is reasonably necessary to protect a legitimate business interest: see [4.340]-[4.450].

Tailoring remedies to protect contractual rights [11.50] The difficulties in trying to protect a plaintiff’s contractual rights and at the same time not forcing an unwilling employee to continue to work for the plaintiff are well illustrated in Evening Standard Ltd v Henderson.51 There the plaintiffs’ employee, Henderson, gave notice well short of the contractual period required for termination of the employment so that he could take up employment with a competitor of the employer. Failure to give due notice amounted to a repudiation of the contract, which the employer refused to accept. This had the effect that the contract continued in force

41

42 43 44 45

46

47 48

49

50 51

(4th ed, LexisNexis, 2002), p 757; the Supreme Court of New South Wales has suggested that it may be necessary to examine whether Atlas Steels still represents good law in the 1990s: see TCN Channel Nine Pty Ltd v Northern Star Holdings Ltd (unreported, Supreme Court of New South Wales, Young JA, 31 May 1990) at 10. Buckenara v Hawthorn Football Club [1988] VR 39; Hawthorn Football Club v Harding [1988] VR 49; Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337; Bulldogs Rugby League Club Ltd v Williams [2008] NSWSC 822. Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337. Refer to Page One Records Ltd v Britton [1968] 1 WLR 157; [1967] 3 All ER 822. Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 at 348. In some cases, this may be decisive; see Film House Pty Ltd v Silverstein (unreported, Supreme Court of Victoria, Beach J, 16 November 1990); Motovasia Hong Kong Ltd v Allen (unreported, Supreme Court of Victoria, Beach J, 8 August 1994). For example, by compelling the parties to continue a relationship for a number of years; Page One Records Ltd v Britton [1968] 1 WLR 157; [1967] 3 All ER 822; Motovasia Hong Kong Ltd v Allen (unreported, Supreme Court of Victoria, Beach J, 8 August 1994). See Network Ten Pty Ltd v Seven Network (Operations) Ltd [2014] NSWSC 692 at [149]-[157]. For example, delay in bringing the application; Film House Pty Ltd v Silverstein (unreported, Supreme Court of Victoria, Beach J, 16 November 1990); Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337; Network Ten Ltd v Fulwood (unreported, Court of Appeal New South Wales, Mahoney JA, 4 December 1995), where the court also considered the shortness of the remaining term of the contract to be relevant. Despite a blatant breach of the express negative stipulation by Ms Fulwood, the weight of other factors resulted in the court refusing to grant an injunction. This is a discretionary factor and not an absolute defence; Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 at 348; Warren v Mendy [1989] 3 All ER 103; [1989] 1 WLR 853 at 113 (All ER), 866 (WLR). See Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852 at [87]; Network Ten Pty Ltd v Seven Network (Operations) Ltd [2014] NSWSC 692 at [159]-[160]. Evening Standard Ltd v Henderson [1987] ICR 588.

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and with it a negative covenant that for the duration of the employment the defendant would not engage in work outside the company without special permission. The plaintiffs brought an action seeking an injunction restraining the defendant from undertaking employment with any competitor of the plaintiffs in breach of the contract of employment. Pending trial of the matter the plaintiffs sought an interlocutory injunction to so restrain the defendant. In these proceedings the plaintiffs undertook to perform their part of the contract, that is, to pay Henderson’s salary and provide him with other contractual benefits to which he was entitled under the contract during the period required to terminate the contract lawfully. They also undertook not to require the defendant to work for them nor to claim damages for his failure to work. The plaintiffs also indicated a willingness for the defendant to continue working until the expiry of proper notice if he so wished. The Court of Appeal held that on the balance of convenience an injunction should issue. Lawton LJ said: What we have to ask ourselves is: what, in the circumstances of this case, is the balance of convenience? If the defendant leaves the employment of the plaintiffs today as he says he intends to do, and takes himself off straightaway or very shortly to the rival newspaper, the plaintiffs, in my judgment, will undoubtedly suffer damage but, as I have already said … it will be almost impossible to quantify that damage. It follows, on the face of it, that the defendant ought not, pending trial, to be allowed to do the very thing which his contract was intended to stop him doing, namely, working for somebody else during the period of his contract. But that has got to be balanced against what I have said is the trite law. The injunction must not force the defendant to work for the plaintiffs and it must not reduce him, certainly, to a condition of starvation or to a condition of idleness, whatever that may mean on the authorities on this topic. But all that … is overcome by the fact that the plaintiffs have made the offer they have. The defendant can go back to work for them. If he elects not to go back (and it will be a matter entirely for his election: there will be nothing in the judgment which forces an election on him) he can receive his salary and full contractual benefits under his contract until such time as his notice would have expired had it been for the proper period.52

As Lawton LJ, however, went on to point out, this left the employee in a much superior position because the injunction did not force the employee to work for the employer, damages would be difficult or impossible to assess and the only risk the employee ran was the risk of having to pay costs of any legal proceedings. In short the employee in breach could sit back and do nothing and be paid. The contract was not regarded as a contract involving “special services” so as to allow the grant of an injunction without the plaintiff undertaking to pay the defendant for the period until termination of the contract.53 There is support for the approach adopted in Henderson’s case in the more recent case of Provident Financial Group plc v Hayward.54 There an injunction restraining a breach of a restrictive covenant was refused in circumstances similar to Henderson’s case save that the employee was not permitted to work out the period of notice. Dillon LJ said:55 It is not enough just that the employee has contracted in certain terms and will not starve if the terms are enforced against him while the employer continues to pay him in full. The employee has a concern to work and a concern to exercise his skills. That has been recognised in some circumstances concerned with artists and singers who depend upon publicity, but it applies equally … to skilled workmen and even to chartered accountants.

In addition, since no significant damage or detriment to the plaintiff could be shown the application for injunction was refused. 52 53 54 55

Evening Standard Ltd v Henderson [1987] ICR 588 at 594. Evening Standard Ltd v Henderson [1987] ICR 588 at 595 per Lawton LJ. The existence of alternative employment, even in some other field, might allow grant of the injunction. Provident Financial Group plc v Hayward [1989] ICR 160. Provident Financial Group plc v Hayward [1989] ICR 160 at 168.

Injunction

In Buckenara v Hawthorn Football Club Ltd56 and Hawthorn Football Club Ltd v Harding,57 professional footballers were bound by negative covenants not to play for any club other than Hawthorn during the currency of their contracts. In both instances the Hawthorn Football Club sought injunctions restraining Buckenara and Harding from breaching these covenants. In Buckenara the Hawthorn Football Club did not claim damages, as it was agreed that if the contract were breached by Buckenara the breach would not be amenable to assessment of compensatory damages. Crockett J noted that a claim by the club for a decree of specific performance was abandoned in recognition of the rule that such decrees are not available to enforce a contract for personal service. In his judgment Crockett J found that the enforcement of the negative covenant in this case would be “tantamount to the enforcement of the positive covenant”.58 This was on the ground that although the plaintiff was not restrained from pursuing other employment it was unlikely that the plaintiff, who was unskilled, would be able to obtain secure and remunerative employment outside football. The enforcement of the prohibition would cause considerable financial hardship. His Honour was able to solve the problem of protecting the club’s investment without at the same time forcing the plaintiff to perform the contract against his will. An injunction was issued to restrain the plaintiff during the years 1987-1988 from playing with the team of any constituent club of the Victorian Football League; it was further provided that the grant of the injunction was conditional upon the defendant’s undertaking that it would permit the plaintiff’s transfer to another club if the plaintiff so wished. Fees for transfer were to be negotiated in accordance with usual procedures. In contrast, Tadgell J held in Hawthorn Football Club Ltd v Harding, that granting an injunction restraining the defendant from playing with any other club during the currency of the agreement would not have the substantial and practical effect of forcing the defendant to play football for the plaintiff; it would not result in the defendant being left with the choice of idleness and starvation. The defendant, in this case, was a dental technician and was capable of making a living outside football.59 In more recent cases, the question of hardship has diminished in importance. In Bulldogs Rugby League Club Ltd v Williams,60 Austin J granted an interlocutory injunction preventing a Sydney-based rugby league player with very limited alternative career prospects from playing rugby union in France, stating that the weight of any hardship caused by such an order was reduced because the defendant had caused his own grief. A similarly unforgiving judgment was made in John Fairfax Publications Pty Ltd v Birt,61 where Brereton J considered but rejected an advertising salesman’s argument that his young family would suffer financial hardship if a post-employment restrictive covenant were enforced against him, on the basis that the defendant was the author of his own misfortune. In Curro v Beyond Productions Pty Ltd,62 Curro’s service agreement obliged her to provide her services to assist in the presentation of a television programme Beyond 2000 and further, not to engage in other presentation activity during the term of the agreement. During the term of the agreement, Curro entered into a contract with a rival network to work as a television reporter on 60 Minutes. Beyond Productions sought and obtained an injunction to prevent Curro from taking up the role at 60 Minutes. Curro appealed to the New South Wales Court of Appeal. When weighing the discretionary considerations, the court said the following: 56 57 58 59 60 61 62

Buckenara v Hawthorn Football Club Ltd [1988] VR 39. Hawthorn Football Club Ltd v Harding [1988] VR 49. Buckenara v Hawthorn Football Club Ltd [1988] VR 39 at 47. Hawthorn Football Club Ltd v Harding [1988] VR 49 at 61. Bulldogs Rugby League Club Ltd v Williams [2008] NSWSC 822 at [66]. John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995 at [49]. Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337.

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We are of the view that the authorities establish that in a Lumley v Wagner case, an injunction will still be granted when the balance of discretionary factors is in the plaintiff’s favour. In the present case, to grant the injunction sought is not to order specific performance of the service and services contracts. Ms Curro could comply with the injunctions without resuming work for Beyond. She would not be forced to choose between service with Beyond or idleness. Other employments would be open to her. There is no question of her being destitute. Damages would not be an adequate remedy. The final injunctions granted by Cole J only continue until 11 August, a relatively short period. Her breach of contract was flagrant and opportunistic. She sought to justify her behaviour by giving evidence which the Judge found was untrue and in relation to the contents of her tape recording deliberately misleading. The injunctions do no more than oblige Ms Curro to comply with negative promises which are part of a fair and freely negotiated bargain made less than two years ago. We see no reason at all why she should not be ordered to keep her word. These considerations alone would require that any judicial discretion be exercised in its favour.63

In Tullett Prebon (Australia) Pty Ltd v Purcell,64 an investment broker purported to terminate his employment contract only nine months into a two year fixed term contract. His employer sought and obtained a final injunction, keeping the contract on foot (so that Mr Purcell could not take up alternative employment) for a further six months. Brereton J assessed the appropriate period for the duration of the injunction at six months, after taking account of the doctrine making illegal a restraint of trade which goes further than is reasonably necessary to protect a legitimate interest of the covenantee.65 Brereton J was willing to enforce the notice period to this extent, notwithstanding that the contract of employment contained a liquidated damages clause, stipulating a method for calculating how much compensation the broker must pay the employer if he should terminate his fixed term contract prematurely. Although this liquidated damages clause removed “difficulty of calculation” as a factor to be considered, Brereton J held that it remained unjust that “Mr Purcell should be able to escape from his contractual obligations at the price of paying damages”.66 He stated: “Equity holds parties to their agreements, rather than allowing them to escape from them at the price of damages.”67 This edict suggests that in this field at least, equity has begun to usurp rather than follow the common law.68 In any event, Mr Purcell did not ultimately escape paying damages. When the period of the injunction came to an end, the employer issued an order that he should return to his post. When he refused to do so, the employer sought and obtained damages according to the liquidated damages clause in the contract.69 His refusal to return to work was treated as a fresh breach of 63

64 65 66 67 68 69

Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 at 348. Interestingly, Beyond had offered to continue to pay Curro for the balance of her contract without requiring her to perform her services. The court took the view that such an undertaking was irrelevant to its consideration of whether or not an injunction should be granted. The court would not allow Beyond to use the processes of the court to purchase an injunction by offering to do something it was not bound to do. Injunctions are granted to enforce existing rights. They are not a mechanism for creating new rights; see at 349-350. Compare Evening Standard Ltd v Henderson [1987] ICR 588 (passage quoted above). See also Network Ten Ltd v Fulwood (1995) 62 IR 43 and Network Ten Ltd v Fulwood (unreported, Court of Appeal New South Wales, Mahoney JA, 4 December 1995), where factors relevant to the exercise of the discretion included the delay in bringing the application for an injunction and the shortness of the remaining term of the contract. Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414. Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414 at [71]. Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414 at [102]. Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414 at [102]. For a critique of these cases, see Riley, “Sterilising Talent: A Critical Assessment of Injunctions Enforcing Negative Covenants” (2012) 34(2) SLR 617. See Tullett Prebon (Australia) Pty Limited v Purcell [2009] NSWSC 1079, upheld by the Court of Appeal in Purcell v Tullett Prebon (Australia) Pty Ltd [2010] NSWCA 150.

Injunction

the employment contract (which had remained on foot during the period of garden leave), giving rise to a new opportunity for the employer to seek damages. It is arguable that these more recent authorities take the issue of injunctions for breaches of negative covenants one step further towards the general principle that injunctions should issue if the court assesses that justice and equity and the balance of convenience so require. It is now clear that the issue of an injunction restraining a breach of the employment contract is not limited to the enforcement of negative covenants. The rules that specific performance of a contract involving personal services will not be ordered, or that injunctions restraining breach or directing compliance with such contracts will not be granted are no longer regarded as absolute rules. The difficulty is to determine what is the exceptional case.

Injunctions restraining an employer from dismissing an employee [11.60] The first of the cases to grant an injunction restraining an employer from implementing an unlawful notice of dismissal of the plaintiff employee was the case of Hill v Parsons,70 a decision of the English Court of Appeal. In Hill v Parsons the plaintiff had been employed by the defendant for 35 years as an engineer, and was due to retire in two years’ time. The defendants, under an agreement with a union, required the plaintiff to join that union. On the plaintiff’s failure to comply, the defendants, acting because of union pressure, gave the plaintiff one month’s notice to terminate the employment. It was not a term of the plaintiff’s employment that he be a member of any particular union.71 The plaintiff sought an injunction preventing the defendants from implementing the notice to dismiss. In proceedings for an interlocutory injunction pending trial a majority of the Court of Appeal, consisting of Lord Denning MR and Sachs LJ, held that an injunction restraining the defendant from implementing the notice to dismiss should be granted. Their Lordships held that the plaintiff was entitled to six months’ notice and the defendants in giving only one month’s notice were acting in repudiation of the contract. In the circumstances the contract of employment continued to subsist.72 In addition, before the expiry of the six months period, the provisions of the Industrial Relations Act 1971 (UK) would be in force granting protection to the plaintiff against both the requirement that he join a particular union and against unfair dismissal. Under this legislation an industrial tribunal could recommend re-engagement or alternatively compensation for unfair dismissal. The compensation payable could greatly exceed what would generally be recoverable in a common law action for wrongful dismissal.73 The issue of an injunction restraining the defendant from continuing with the dismissal would give the plaintiff the benefit of this legislation. The case remains the foremost authority on the circumstances in which an injunction can be used to restrain a breach of an employment contract. Lord Denning MR said that injunctive (and declaratory) remedies were available where special circumstances could be made out. His Lordship, however, made it clear that the court would not order the employer to provide work for the employee and presumably would not order the employee to render services. His Lordship in granting the injunction said: Suppose that a senior servant has a service agreement with a company under which he is employed for five years certain – and, in return, so long as he is in the service, he is entitled to a free house and coal – and at the end to a pension from a pension fund to which he and 70 71 72

73

Hill v Parsons [1972] 1 Ch 305. Hill v Parsons [1972] 1 Ch 305 at 316 per Sachs LJ. Lord Denning MR thought this was an exceptional case where repudiation by one party did not bring the employment automatically to an end. In Australia, repudiation by one party will not automatically terminate the employment contract: Visscher v Giudice (2009) 239 CLR 361. Hill v Parsons [1972] 1 Ch 305 at 315 per Lord Denning MR; at 317-318 per Sachs LJ, but see at 322-324 per Stamp LJ (dissenting).

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his employers have contributed. Now, suppose that, when there is only six months to go, the company, without any justification or excuse, gives him notice to terminate his service at the end of three months. I think it plain that the court would grant an injunction restraining the company from treating the notice as terminating his service. If the company did not want him to come to work, the court would not order the company to give him work. But, so long as he was ready and willing to serve the company, whenever they required his services, the court would order the company to do their part of the agreement that is, allow him his free house and coal, and enable him to qualify for the pension fund … It may be said that, by granting an injunction in such a case, the court is indirectly enforcing specifically a contract for personal services. So be it. Lord St Leonards did something like it in Lumley v Wagner … And I see no reason why we should not do it here.74

Sachs LJ spelled out the special circumstances that made the injunctive remedy appropriate. His Lordship distinguished earlier cases refusing to grant injunctions in the absence of express negative stipulations in the contract on the following basis: Foremost amongst the grounds given in Fry on Specific Performance, 6th ed (1921), p 50 is that it is wrong to enforce a contract which needs personal confidence as between the parties when such confidence may not exist. Here such confidence does exist. Another ground is that common law damages normally proved an adequate remedy. Here they do not … A further ground is often the difficulty of reinstatement when the plaintiff’s post has been filled. That difficulty does not exist here.75

Sachs LJ concluded: Over the last two decades there has been a marked trend towards shielding the employee, where practicable, from undue hardships he may suffer at the hands of those who may have power over his livelihood – employers and trade unions. So far has this now progressed and such is the security granted to an employee under the Industrial Relations Act 1971 that some have suggested that he may now be said to acquire something akin to a property in his employment. It surely is then for the courts to review and where appropriate to modify, if that becomes necessary, their rules of practice in relation to the exercise of a discretion such as we have today to consider – so that its practice conforms to the realities of the day.76

Hill v Parsons has been regarded subsequently as a special exception to the rule that a court will not grant an injunction restraining a breach of contract if this would, in effect, amount to specific performance of the contract. It has been so regarded because the factors regarded as critical by Sachs LJ77 will usually be missing, viz the personal confidence necessary for the maintenance of the master–servant relationship will not exist,78 damages will often be an adequate remedy79 and the plaintiff’s position may have been filled.80 In addition it will only be in rare cases that the use of the injunctive remedy will enable the plaintiff to gain the special protection of statute. 74 75 76 77 78

79

80

Hill v Parsons [1972] 1 Ch 305 at 314-315. Hill v Parsons [1972] 1 Ch 305 at 320. Hill v Parsons [1972] 1 Ch 305 at 321. Hill v Parsons [1972] 1 Ch 305 at 320-321 per Sachs LJ and supported by Lord Denning MR in Chappell v Times Newspapers [1975] 1 WLR 482. Chappell v Times Newspapers [1975] 1 WLR 482 at 506 per Geoffrey Lane LJ. For an interesting illustration of the evidentiary problem involved see Powell v Brent London Borough Council [1988] ICR 176. See also Ali v London Borough of Southwark [1988] IRLR 100. Gordon v Victoria [1981] VR 235. See as illustrations of cases where damages provided a sufficient remedy, Lloyd v Foster (1988) 30 AILR 6 (Phillips J, Supreme Court of Victoria); Ryan v Metropolitan Transit Authority and State Transport Authority (1988) 30 AILR 7 (Phillips J, Supreme Court of Victoria); MacPherson v London Borough of Lambeth [1988] IRLR 470. Sometimes it may be inconvenient for a key position to be left unfilled pending trial of the matter.

Injunction

Following Hill v Parsons, several English cases dealt with applications for injunctive relief in employment cases. In the first of these cases, Kulatilake v Nottingham Area Health Authority (Teaching)81 the Court of Appeal refused to order a Health Authority to continue the active employment of a senior officer who, with justification, had been the subject to a disciplinary inquiry concerning misappropriation of funds when it was clear that the employing authority no longer had the requisite trust or confidence in the employee. Since then, the courts have shown an increasing preparedness to find a way around the lack of confidence and trust as an impediment to the granting of injunctive relief. In Irani v Southampton and South West Hampshire Health Authority,82 the Health Authority sought to terminate the plaintiff’s employment without following the procedures incorporated into the plaintiff’s contract of employment. The reason for the dismissal was that there were irreconcilable differences between the plaintiff and a consultant appointed by the authority. It was decided that as they could not work together one would have to go, preferably the plaintiff as he was only a part-time junior. There was no suggestion that the plaintiff in any way lacked professional competence, had been guilty of any misconduct or that the defendant authority had no faith in the honesty, integrity or loyalty of Mr Irani. Warner J accepted that the defendant authority would be willing to continue employing Mr Irani were it not for the incompatibility between a consultant appointed by the authority and the plaintiff. Warner J found in addition that damages would be an inadequate remedy and that the issue of an injunction would give the plaintiff the benefit of contractual procedures required before termination. The defendant authority was restrained pending trial of the matter from terminating the plaintiff’s employment without following appropriate procedures. The counsel for the defendant argued that Hill v Parsons should be distinguished (that is, not applied in Irani) on the ground that, unlike Hill v Parsons, the authority in Irani did not wish to continue the employment. Warner J rejected the argument pointing out that in Hill v Parsons the defendant would have been willing to continue the plaintiff in its employ but for union pressure to dismiss him. In the present case the employer would be willing to continue the employment of Mr Irani but for the incompatibility of Mr Irani and one of the authority’s consultants. The plaintiff did not seek an order that he be reinstated in the employment pending trial of the matter.83 A later decision of the English Court of Appeal confirms that an injunction may have the effect of ordering a continuance of the employment. In Powell v Brent London Borough Council84 the plaintiff sought an injunction restraining the defendant council from re-advertising a position which the plaintiff occupied pursuant to an unconfirmed appointment. The appointment had not been confirmed because, after the plaintiff’s commencement in the new position, an unsuccessful applicant sought written reasons for non-selection on the grounds of better qualifications and a possible breach by the council of its code of practice relating to discrimination and promotion of equal opportunity. The plaintiff was then informed that her new position could not be confirmed, that the post would be re-advertised and that she should re-apply. Although she was informed that she should return to her previous position, the employer gave an undertaking for a limited period to allow her to continue to act in the new position. The plaintiff claimed an interim injunction pending trial. The Court of Appeal held that the

81 82 83 84

Thus a court may take this into account in refusing to award an interlocutory injunction: see R v National Heart and Chest Hospitals; Ex parte Pardhanani (unreported, Court of Appeal, 1984) cited in Irani v Southampton and South West Hampshire Health Authority [1985] ICR 590 at 601-602. Kulatilake v Nottingham Area Health Authority (Teaching) (unreported, Court of Appeal, 1980), cited in Irani v Southampton and South West Hampshire Health Authority [1985] ICR 590 at 600. Irani v Southampton and South West Hampshire Health Authority [1985] ICR 590. See also Jones v Lee [1980] ICR 310. The report of the judgment records that the plaintiff undertook not to present himself for work at any establishment of the defendant’s pending trial. Powell v Brent London Borough Council [1988] ICR 176 at 187.

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interim injunction ought to be granted. This was a case where the requisite trust and confidence between the parties existed and where damages would not adequately protect the plaintiff. Ralph Gibson LJ said: Sufficiency of confidence must be judged by reference to the circumstances of the case, including the nature of the work, the people with whom the work must be done and the likely effect upon the employer and the employer’s operations if the employer is required by injunction to suffer the plaintiff to continue the work. The council is a large organisation employing many people in different departments. It is vastly different from a man or woman with a small business, partnership or small firm with a small staff. The council is also an organisation which, among the senior staff, who must, by their view and attitudes, greatly affect the attitudes of others, is a rational and fair-minded organisation well able to accept the independent view of the court as to the fair and proper basis of preserving the rights of the parties pending trial.85

The Court of Appeal assessed the sufficiency of confidence on the basis of all of the circumstances of the case rather than on the basis of the subjective view of the employer.86 The nature of the injunction sought was an injunction to restrain the defendant from re-advertising the post. The intended effect of the grant of the injunction was, however, to retain the plaintiff in that position until the case came to trial. The court was of the view that there was a real prospect that the plaintiff would be able to obtain a permanent injunction at trial. In a similar case, Robb v Hammersmith and Fulham London Borough Council,87 the court granted an injunction restraining the council from giving effect to its decision to dismiss the plaintiff without following the disciplinary procedures incorporated into the plaintiff’s contract of employment. The court recognised that without the Council’s trust and confidence in the plaintiff’s ability to perform his job, his position as an employee would be unworkable. However, on the basis of a proposal from the plaintiff that he be suspended on full pay and not carry out any duties unless instructed to do so by the employer, the court granted the orders sought.88 In Mezey v South West London and St George’s Mental Health NHS Trust,89 an injunction was granted to prevent a hospital employer from suspending an employed psychiatrist and instituting disciplinary proceedings. The Court of Appeal held that the hospital’s purported imposition of disciplinary proceedings in this case was a breach of an agreed procedure which formed part of the doctor’s employment contract, and such a breach “can be restrained by injunction”.90

85

86 87 88

89 90

Powell v Brent London Borough Council [1988] ICR 176 at 194; see comments to similar effect in relation to corporate employers and the diminished relevance of the close personal relationship in AMIEU v G & K O’Connor Pty Ltd (2000) 100 IR 383 at [42]-[43]; compare McIntosh v Australian Postal Corporation (2001) 140 IR 108 at [9]-[11]. See Furness, “Injunctions and the Contract of Employment” (1989) 2 AJLL 234 at 242. Robb v Hammersmith and Fulham London Borough Council [1991] ICR 514. Compare Alexander v Standard Telephones and Cables plc [1990] ICR 291 where the court took the view that by receiving an injunction in the form that did not require the plaintiff to attend work, there was a strong indication that the plaintiff’s remedy lay in damages for breach of contract, in that it would not be practicable to make an order which would procure work for them (at 308). For an interesting example of the injunctive remedy being used to force the employer to comply with the terms of the contract of employment, see Hughes v London Borough of Southwark [1988] IRLR 55 (QBD); compare MacPherson v London Borough of Lambeth [1988] IRLR 470 (Ch D). Mezey v South West London and St George’s Mental Health NHS Trust [2007] IRLR 237 (QB); [2010] EWCA Civ 293 (Court of Appeal). Mezey v South West London and St George’s Mental Health NHS Trust [2010] EWCA Civ 293 at [59].

Injunction

Australian cases [11.70] In the first of the Australian cases to follow Hill v Parsons,91 Baker v Corp of

Salisbury,92 Mitchell J approved comments by Sachs LJ in Hill v Parsons that courts in the exercise of their discretion should take into account changes in the climate of opinion including the views of the legislature expressed on behalf of the community in its enactments and also the trend of judicial decisions; these revealed a growing protection for the employee. Her Honour also approved comments by Megarry J in Giles v Morris quoted at [11.10]. In Turner v Australasian Coal and Shale Employees Federation,93 Turner had been offered and accepted employment in Elcom. He was, however, not allowed to commence work because of the refusal by the relevant union to admit him to union membership. In accordance with an alleged industry custom requiring union membership for employment Elcom purported to withdraw its offer of employment. But by then Turner had commenced proceedings in the Federal Court seeking a declaration against Elcom that he was entitled to be admitted to the union as a member. This required the court to decide, inter alia, whether a contract of employment existed at the relevant time. The court held that Turner was entitled to be admitted and remain a member of the union by virtue of s 144 of the Conciliation and Arbitration Act 1904 (Cth), and that Elcom’s withdrawal of the offer of employment constituted a repudiation of the contract which had not been accepted by Turner (see [8.30]). The Federal Court adopted the view that the courts should no longer set their faces against the grant of equitable remedies. Their Honours continued: There have been suggestions in some cases that, where special circumstances exist, a declaration might be granted as to the continuing existence of a contract of employment; see Francis v Municipal Councillors of Kuala Lumpur [1962] 1 WLR 1411 at 1417-18, and Gordon v State of Victoria [1981] VR 235 at 239. Cases where continuing obligations and rights are in question might give rise to such special circumstances. It is possible to envisage situations in which the desire to acquire, or to continue membership of an organisation may constitute special circumstances.94

As no determination had been made whether special circumstances existed which would justify the granting of such a declaration, the court remitted the question of what relief, if any, should be granted against Elcom back to the judge for decision. The question not directly answered by the Federal Court was whether injunctive and declaratory remedies are to be limited to cases involving “special circumstances” or whether the whole matter is simply a matter of what justice, equity and convenience require in the particular case. The later Federal Court decision of Gregory v Philip Morris Ltd95 suggests that special circumstances are required before specific performance of the contract or injunctive remedies will be available. That case involved an application by the plaintiff for an order that the defendant “observe and perform the terms of its contract of employment with the applicant by allowing him to work according to the terms of that contract”. The order sought was in the nature of a claim for specific performance96 of the contract. The Federal Court consisting of Jenkinson, Wilcox and Ryan JJ refused to grant such an order. The Federal Court adopted the views of the Privy Council in 91 92 93 94 95 96

Hill v Parsons [1972] Ch 305. Baker v Corp of Salisbury (1982) 2 IR 168. Turner v Australasian Coal and Shale Employees Federation (1984) 6 FCR 177. Turner v Australasian Coal and Shale Employees Federation (1984) 6 FCR 177 at 193. Gregory v Philip Morris Ltd (1988) 80 ALR 455. Specific performance is technically only available where the agreement is executory, that is, one which requires the execution of an instrument or the doing of an “act in law”. If the court directs a party

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Francis v Kuala Lumpur Councillors97 that there is a “general principle of law that the courts will not grant specific performance of contracts of service”.98 Wilcox and Ryan JJ said: As was suggested in Turner, it may be that, under modern conditions and in connection with large employers, the circumstances which gave rise to the general principle will not apply. We would not wish to give any endorsement to the view that there may never be an order in the nature of specific performance of a contract of employment. But the making of such an order is a matter within the discretion of the court. Where such an order is sought, careful consideration must always be given to the likely consequences of the order. The evidence in the present case suggests that industrial difficulties would occur if Gregory were now to be re-employed. Each of the traditional reasons for denial of specific performance – a loss of confidence between the parties and the problem of supervision of the relationship – applies in this case.99

The order for specific performance was therefore refused. In Bostik (Australia) Pty Ltd v Gorgevski (No 1), Sheppard and Heerey JJ said that normally, a breach of a contract of employment does not attract the remedy of specific performance.100 In the same case, Gray J said that, if their Honours’ statement was intended to be no more than a description of the practical position, he did not disagree with it.101 After reviewing a number of cases, Gray J set out his view of the law: From this examination of the authorities, it may be seen that the proposition that contracts of employment normally do not attract the remedy of specific performance cannot be supported as a matter of law. The courts do not now adopt as a starting point any strict rule about what remedies are available in respect of breaches of such contracts. By their nature, such contracts have features which will often give rise to the exercise of a discretion against specific enforcement, but this is not to say that there are special rules applicable. Each case must be judged on its own circumstances. The trend in the law is in part related to the change in the nature of employment contracts of recent times. Instead of being merely contracts for the performance of work and the payment of remuneration, such contracts now commonly contain many other provisions, whether expressly agreed or implied from industrial awards. In particular, superannuation is rapidly becoming an incident of most employment. When an employee’s superannuation rights are affected by the cessation or continuance of the contract of employment, it may be important that the courts not be seen to adopt a strict position that they will not act to preserve the employee’s rights in the event of breach.102

97 98 99 100 101

102

under an executed contract to perform some or all of the contractual obligations this is not an order of specific performance rather it is a mandatory injunction, see Meagher, Heydon and Leeming, Meagher, Gummow and Lehane’s Equity, Doctrines and Remedies (4th ed, LexisNexis, 2002), pp 652-654. Francis v Kuala Lumpur Councillors [1962] 1 WLR 1411 at 1417-1418. Compare Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20 at 32 per Sheppard and Heerey JJ and at 38 per Gray J. Gregory v Philip Morris Ltd (1988) 80 ALR 455 at 482. Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20 at 32. Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20 at 36; compare Wishart v National Association of Citizens Advice Bureaux Ltd [1990] ICR 794 at 804; see also Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 at 346. Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20 at 38.

Injunction

Gray J returned to the issue (albeit, exercising statutory jurisdiction)103 in AMIEU v G&K O’Connor Pty Ltd.104 His Honour put in context the limited supervisory role undertaken by the courts when granting injunctive relief to preserve the employment relationship. He said that all the court is doing is enjoining an employer from treating a purported act of dismissal as terminating the contract of employment. The contract remains on foot and the parties remain free to manage their relationship in accordance with its terms, the only compulsion being against viewing the contract as having been terminated by a past act.105 There is some merit in the proposition that a conferral upon the court of some supervisory role should no longer stand in the way of injunctive relief being granted to prevent a termination of employment taking effect. However, much will depend upon the particular circumstances of each case as to whether it is practically realistic to expect the parties to continue their relationship in the face of the wishes of at least one of the parties. This may turn on whether it can be said, objectively, that there is a sufficient reserve of confidence in the relationship to allow it to continue.106 In Lane v Fasciale107 Nathan J said: The present position in Australia is best recited as follows: specific performance of employment contracts will be enforced in exceptional and rare circumstances where damages would provide an inadequate remedy, and where the confidence necessary between employer and employee has not been eroded to such an extent that observance of the contract would require frequent court supervision, or where there is a reasonable expectation the parties could accommodate themselves to each other.

Interestingly, specific performance was refused in Lane v Fasciale and the comments of Gray J in Bostik (Australia) Pty Ltd v Gorgevski (No 1) arose in circumstances where specific performance was not sought. His Honour was merely responding to a passage in the joint judgment of Sheppard and Heerey JJ. The position in Australia remains that the requisite degree of confidence is an important consideration, but its weight is diminishing with the advent of large corporate employers.108 There must be grounds for a real loss of confidence, not merely a statement by the employer to that effect.109 In Walsh v The Police Association110 the court noted that the case was somewhat different to the “run of the mill contract of employment cases where the relationship between the employer and employee has broken down and is irretrievably destroyed”. There was no question of loss of faith, misconduct or neglect of duty nor was there any suggestion that the parties could not have a relationship free of tension or pressure. The 103

104 105 106 107 108

109

110

One needs to be cautious when drawing on authorities concerning the exercise of a statutory discretion to order reinstatement because often the courts will be influenced by the need to give effect to the purpose of the statutory protection afforded to employees when considering the appropriateness of a reinstatement order: see, for example, Bowling v General Motors-Holden Ltd (1980) 50 FLR 79 at 84; CEPU v ACI Operations Pty Ltd (2005) 147 IR 315 at 327-328. AMIEU v G&K O’Connor Pty Ltd (2000) 100 IR 383. AMIEU v G&K O’Connor Pty Ltd (2000) 100 IR 383 at [47]. See also Skilled Engineering Ltd v AFMEPKIU (2001) 108 IR 116. Lane v Fasciale (1991) 5 VIR 33 at 37. AMIEU v G & K O’Connor Pty Ltd (2000) 100 IR 383 at [42]-[43]; CPSU v Stellar Call Centres Pty Ltd [2000] FCA 1739 (20 November 2000, Madgwick J) at [18]. See also Skilled Engineering Ltd v AFMEPKIU (2001) 108 IR 116 at [17]-[18] and Hayman Reese v AFMEPKIU (2001) 108 IR 441 at [19]-[26]. Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20 at 38; Linnane v Monash University (unreported, Industrial Relations Court of Australia, North J, 2 January 1996) at 7. See also the comments of the Full Court of the Industrial Relations Court of Australia in Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 expressing the importance of scrutinising any claim by an employer that it has lost confidence in an employee when assessing the appropriateness of an order for reinstatement under the former Div 3 of Pt VIA of the Workplace Relations Act 1996 (Cth); see [13.210]. Walsh v The Police Association (2000) 140 IR 58.

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employment was brought to an end by the Association because Mr Walsh was absent for a long period of time due to ill-health.111 In Downe v Sydney West Area Health Service (No 2),112 a specialist neonatologist was successful in obtaining an injunction restraining the Health Service from suspending her from her position as director of a neonatal intensive care unit and directing her to work in another role and location. Rothman J held that these directions constituted a breach of her employment contract because the new position represented a considerable demotion. The Health Service argued that it had no duty to provide Dr Downe with any duties, so it could not be required by grant of an injunction to provide any duties. Rothman J rejected this argument, on the basis that Dr Downe was a senior and highly skilled specialist, so it was unreasonable to imply into her contract a term that the employer could suspend her indefinitely from duties when there was suitable work to be performed.113 Rothman J was careful to explain that the injunction requiring the employer to refrain from directing her not to perform her duties as director did not restrain the Health Service from dismissing her.114 The injunctions operated only for so long as the employment contract remained on foot.

Other considerations [11.80] Other issues also tend to deter courts from granting specific performance (or an injunction which effectively amounts to specific performance). These include whether the court may be involved in close supervision of performance of the contract,115 whether the position has been filled and whether damages provide an adequate remedy.116 Several other possible barriers to success may exist.117 First is the requirement that the plaintiff be ready, willing and able to perform contractual obligations.118 Employees who refuse to carry out the lawful directions of the employer or who refuse to give an undertaking not to engage in disruptive activities are not ready, willing and able to perform their part of the contract.119 Secondly, where the contract of employment involved is terminable on short notice or pay in lieu, equitable remedies 111 112 113

114 115

116

117

118

119

Walsh v The Police Association (2000) 140 IR 58 at [66] (Gillard J). Downe v Sydney West Area Health Service (No 2) (2008) 174 IR 385. Downe v Sydney West Area Health Service (No 2) (2008) 174 IR 385 at [410]-[431]. Note that Rothman J was careful to distinguish an indefinite suspension without reason from a suspension for the purposes of conducting an investigation into conduct or competence: at [414]. Downe v Sydney West Area Health Service (No 2) (2008) 174 IR 385 at [457]. When exercising statutory jurisdiction, the courts seem untroubled by this consideration: AMIEU v G & K O’Connor Pty Ltd (2000) 100 IR 383 at [45]-[47]. One is tempted to ask why the position should be any different at common law: see Blackadder v Ramsay Butchering Services Pty Ltd (2005) 221 CLR 539 at 566 [80] per Callinan and Heydon JJ. State Transport Authority v Apex Quarries [1988] VR 187; Reilly v State of Victoria (1991) 5 VIR 1. In Reilly, it was inappropriate to confine the plaintiff to a remedy in damages because damages could not properly compensate her for the lost opportunity to seek permanent employment as an officer of the public service under the relevant guidelines. In Walsh v The Police Association (2000) 140 IR 58 at [63], the court said that damages would not be an adequate remedy because there is a degree of difficulty about assessing damages in that the contract was arguably for an indefinite period, the termination affected Walsh’s reputation, Walsh wanted to remain with the Police Association, and it would be harder for Walsh to secure alternative employment without the benefit of still being in employment. Unnecessary delay may prevent the exercise of discretion in favour of the applicant: see Dietmann v Brent London Borough Council [1988] IRLR 299; Lane v Arrowcrest Group Pty Ltd (1990) 27 FCR 427; Network Ten Ltd v Fulwood (1995) 62 IR 43. Measures Bros Ltd v Measures [1910] 2 Ch 248 at 254; Australian Hardwoods Pty Ltd v Commissioner for Railways [1961] 1 WLR 425 at 432-433; Reilly v State of Victoria (1991) 5 VIR 1 at 12. Chappell v Times Newspapers [1975] 1 WLR 482; Australian National Airlines v Robinson [1977] VR 87; Gordon v Victoria [1981] VR 235. See also MacPherson v London Borough of Lambeth [1988] IRLR 470 (Ch D).

Injunction

may not be available.120 Thirdly, the remedy of specific performance (and presumably injunctive relief in this context), according to the more recent authority, is dependent on the continuance of the contract; once termination has occurred both parties are relieved from further performance of the main terms of the contract and damages are the only remedy.121 The use of injunctions to restrain breaches of employment contracts has not always been at the suit of private individuals; some cases have concerned the award of equitable remedies in situations involving industrial disputes.122 Where the injunctive remedy is sought in an industrial dispute the applicant risks the court refusing to exercise its discretion in her or his favour on the ground that the issue is better dealt with by the relevant industrial tribunal (where such a tribunal has jurisdiction),123 or according to the terms of a dispute resolution clause in a collective enterprise agreement.124 This has not prevented attempts in England and Australia to use the injunctive remedy as a method of resolving industrial disputes (see [14.60]).125

Injunctions under the Fair Work Act 2009 (Cth) [11.90] The Fair Work Act 2009 (Cth) confers a range of injunctive powers upon the Federal Court of Australia and the Federal Circuit Court of Australia. Section 545 empowers those courts to enforce by way of injunction, any civil remedy provision of the Fair Work Act 2009. The civil penalty provisions of the Act are extensive126 and include provisions requiring compliance with the National Employment Standards,127 modern awards,128 enterprise agreements,129 and the general protections for a range of workplace rights (see [13.320]).130 These rights include freedom of association131 and freedom from discrimination (see [13.290]).132 Section 405 120

121

122

123

124

125

126 127 128 129 130 131 132

McMahon v Labor Council of NSW (1985) 10 IR 217 at 220 per Kearney J, citing Linfield Linen Pty Ltd v Nejan (1951) 51 SR (NSW) 280 holding that a weekly tenancy was not of sufficient permanence to warrant an order of specific performance. In the case of employment does such a rule ignore the chances of continuing long-term employment if an injunction were to be granted? Johnson v Agnew [1979] 2 WLR 487; Ogle v Comboyuro Investments Pty Ltd (1976) 136 CLR 444; Dietmann v Brent London Borough Council [1987] ICR 737 at 755 and see McMullen, “A Synthesis of the Mode of Termination of Contracts of Employment” (1982) 41 Cam LJ 110. A claim for reinstatement may be available. See, for example, Australian National Airlines Commission v Robinson [1977] VR 87 (pilots); Gordon v Victoria [1981] VR 235 (go slow by teachers); Chappell v Times Newspapers [1975] 1 WLR 482; compare Baker v Corp of Salisbury (1982) 2 IR 168. See Harry M Miller Attractions Pty Ltd v Actors and Announcers Equity Association of Australia [1970] 1 NSWR 614 at 615 per Street J; Slattery v Public Service Board [1983] 3 NSWLR 41; McMahon v Labor Council of NSW (1985) 10 IR 217 at 220 per Kearney J. Since the enactment of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth), the jurisdiction of industrial tribunals in Australia to arbitrate industrial disputes has been curtailed: see Forsyth ““Exit Stage Left” now “Centre Stage”: Collective Bargaining under Work Choices and Fair Work” in Forsyth and Stewart (eds), Fair Work: the New Workplace Laws and the Work Choices Legacy (Federation Press, Sydney, 2008), pp 120-140. See, for example, Australian National Airlines Commission v Robinson [1977] VR 87; Gordon v Victoria [1981] VR 235; Chappell v Times Newspapers [1975] 1 WLR 482; compare Baker v Corp of Salisbury (1982) 22 IR 168. See the table of provisions in Fair Work Act 2009 (Cth), s 539(2). Fair Work Act 2009 (Cth), s 44. Fair Work Act 2009 (Cth), s 45. Fair Work Act 2009 (Cth), s 50. Fair Work Act 2009 (Cth), s 340. Fair Work Act 2009 (Cth), ss 346 – 350. Fair Work Act 2009 (Cth), s 351. See also Chapter 15. Chapter 15 is the discrimination chapter dealing with legislation other than the Fair Work, and adverse action for discriminatory reasons is in the General Protections in Chapter 13.

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prohibiting contravention of an unfair dismissal order made by the Fair Work Commission is also a civil remedy provision, so an applicant may seek an injunction enforcing such an order in the Federal Court or Federal Circuit Court:133 see [13.220]. Section 545(2) also empowers the court to make interim injunctions to prevent or stop a contravention. The grant of an interim injunction to prevent the termination of employment taking effect (or the power to grant reinstatement on an interlocutory basis) creates some interesting issues. Arguably such an order could remove the whole basis of any cause of action under the statutory provisions. The court could not later order reinstatement because the employee is already in a job by virtue of the interim injunction. In the context of the freedom of association provisions in the former Workplace Relations Act 1996, Gray J gave thought to this issue in AMIEU v G & K O’Connor Pty Ltd.134 His Honour said that, if an order was made reinstating the applicant and the applicant was subsequently unsuccessful in the claim for final relief, the employment relationship, having been revived would still be in existence. Despite the outcome of the final proceeding, the respondent may not be able to prevent the employee from continuing to be its employee without dismissing him again, giving rise to a risk of further proceedings. His Honour circumvented this problem by including in the order a term to the effect that, if final relief was not granted, the employment relationship was to cease forthwith. If, on the other hand, in granting final relief, the court confirmed the order for reinstatement, or the interim injunction, that final relief would need to be couched in terms that recognised the parties’ lawful rights to bring the employment to an end.

Conclusion [11.100] Is the reluctance of the courts to grant specific performance of the employment contract (or injunctions) justified? Is there any real difference between forcing (tempting) an employee as a matter of economics to work for an employer, as in the negative covenant cases, and specifically enforcing a contract of employment? The grant of specific performance or injunctive remedies does not mean that the parties will always have to work together; either party may lawfully bring the contract to an end135 subject to a claim in an industrial tribunal for lawful but unfair dismissal. It is arguable that the reluctance of the courts to grant injunctive remedies is now unwarranted in the light of the frequently successful orders of reinstatement granted by industrial tribunals and courts exercising statutory powers to grant reinstatement or other injunctive remedies, although it must be conceded that they too will sometimes refuse reinstatement on discretionary grounds which parallel the old principles. Should it be the position that parties who come within the umbrella of protection of industrial tribunals may be reinstated more readily in employment than those outside who have no similar remedy in the courts? One argument that might be made is that reinstatement issues can best be dealt with in an industrial context rather than through the use of the injunctive remedy in the ordinary courts. Unlike the injunctive remedy, reinstatement in the industrial tribunals provides greater flexibility. Although the injunctive remedy can be tailored to the occasion, unlike the reinstatement remedy it cannot create new rights between the parties. In contrast reinstatement may, for example, be on the basis that the employee is to be demoted or transferred to another 133 134

135

As to what constitutes reinstatement, see Blackadder v Ramsay Butchering Services Pty Ltd (2005) 221 CLR 539. AMIEU v G & K O’Connor Pty Ltd (2000) 100 IR 383. See also Skilled Engineering Ltd v AFMEPKIU (2001) 108 IR 116 at [17]-[18] and Hayman Reese v AFMEPKIU (2001) 108 IR 441 at [19]-[26]; AFMEPKIU v Eaton Electrical Systems Pty Ltd (2005) 139 IR 260. Irani v Southampton and South West Hampshire Health Authority [1985] ICR 590; Turner v Australasian Coal and Shale Employees Federation (1984) 6 FCR 177 at 193.

Declaration

section.136 The tribunal also has a discretion whether to order payment of wages for the period between dismissal and reinstatement. Reinstatement is discussed at [13.210].

Declaration Introduction [11.110] An action for a declaration differs from the normal remedies in that the plaintiff does not ask the court to make any order requiring the defendant to act, or refrain from acting in a certain manner. The court, in granting a declaration, merely declares the legal position between the plaintiff and the defendant. The declaratory judgment, which is discretionary, does not give rise to sanctions for conduct contrary to the declared rights but in the usual case, particularly if the defendant is a public body, the defendant will abide by the terms of the declaration. A declaration, therefore, that an attempted repudiation of a contract of employment was a nullity might, in appropriate circumstances, bring about a specific performance of the contract, the offending party feeling bound to continue the employment or at least terminate it lawfully.137 Although there is continuing debate concerning the availability of the declaratory remedy where there has been a wrongful dismissal, a declaration may be granted in a wide variety of situations not involving dismissal of an employee. For example, a court in its discretion may declare that the suspension of employees without pay is in breach of the employer’s statutory duty,138 that an employer is not entitled to make deductions from an employee’s wages,139 that a direction to perform work in a new role or location is unlawful as a breach of contract,140 or that termination constitutes a violation of a law.141 A declaration may be made as to the enforceability of or meaning to be attributed to particular clauses in the contract of employment.142 In the case of wrongful dismissal at common law the courts have demonstrated the same reluctance to award a declaration that the contract of employment continues or that a purported dismissal is null and void as has been the case with the injunctive remedy. The reasons for this reluctance are the same. In Howes v Gosford Shire Council143 Jacobs J said: If it is a suit between master and servant in which the servant seeks to prevent the master suspending or dismissing him and goes no further, then this court will not interfere. If it is a suit for a declaration that the service continues, again in the case of an ordinary relationship of master and servant, this court will not interfere. It is hardly necessary to refer to authority for that proposition. The reason for the existence of that rule has been variously stated. It has been placed upon the ground that the equity court will not compel either master or servant to continue a personal relationship which has become noxious to either one of them. It has also been placed upon the ground that the equity court will not 136 137

138 139 140 141 142

143

Blackadder v Ramsay Butchering Services Pty Ltd (2005) 221 CLR 539. See, for example, Network Ten Pty Ltd v Seven Network (Operations) Ltd [2014] NSWSC 692, where a television network succeeded in obtaining a declaration that its new contract with a programming executive remained on foot, notwithstanding his purported change of mind, prior to commencement of service under the contract. Bennett v Commonwealth [1980] 1 NSWLR 581; compare Csomore v Public Service Board of New South Wales (1987) 10 NSWLR 587. Williams v North’s Navigation Collieries (1889) Ltd [1904] 2 KB 44. See Downe v Sydney West Area Health Service (No 2) (2008) 174 IR 385 at [466]. For example, Workplace Relations Act 1996 (Cth), Pt 12, Div 4, Sub-div C; see Liddell v Lembke (1994) 127 ALR 342. See Meagher, Heydon and Leeming, Meagher, Gummow and Lehane’s Equity, Doctrines and Remedies (4th ed, LexisNexis, 2002), pp 619-620; and, for example, Richardson v Queensland Corrective Services Commission (1994) 55 IR 475. Howes v Gosford Shire Council [1962] 62 NSWR 58 at 63.

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enforce a contract which requires the constant supervision of the court. There is, of course, a third ground for the rule, namely that in the ordinary case of master and servant the dismissal of the servant by the master is never a nullity.

The Federal Court in Turner v Australasian Coal and Shale Employees Federation144 accepted that there is no automatic rule preventing the grant of declaratory remedies in ordinary master and servant cases but stated that special circumstances would generally be required before a declaration would be granted as to the continuing existence of a contract of employment. The court said: Cases where continuing obligations and rights are in question might give rise to such special circumstances. It is possible to envisage situations in which the desire to acquire, or to continue membership of an organisation may constitute special circumstances.145

Earlier cases granting declarations, for example, that a purported dismissal was null and void have generally concerned statutory schemes of employment, some form of public employment or the grant of a declaration in the exercise of a court’s supervisory jurisdiction.146 For example, in Vine v National Dock Labour Board147 the plaintiff had been a dock labourer for 30 years and was registered as employed by the National Dock Labour Board. Under the statutory scheme of employment set up employment of dock workers was limited to those registered under the scheme. The plaintiff was wrongfully dismissed and his name withdrawn from the register. An action was brought by the plaintiff claiming damages for wrongful dismissal and a declaration that the conduct of the National Dock Labour Board in dismissing the plaintiff and removing his name from the register was ultra vires and void. The House of Lords upheld the grant of the declaration. Viscount Kilmuir in his judgment concurred with the dissenting view of Jenkins LJ in the Court of Appeal and said: First, it follows from the fact that the plaintiff’s dismissal was invalid that his name was never validly removed from the register and he continued in the employ of the National Board. This is an entirely different situation from the ordinary master and servant case; there, if the master wrongfully dismisses the servant, either summarily or by giving insufficient notice, the employment is effectively terminated, albeit in breach of contract. Here, the removal of the plaintiff’s name from the register being, in law, a nullity, he continued to have the right to be treated as a registered dock worker with all the benefits which, by a statute, that status conferred on him. It is therefore right that, with the background of this scheme, the court should declare his rights. Secondly, it was said that the grant of a declaration would lead to further litigation; I cannot believe that the National Board would do other than comply with the declaration, and, in that case, I do not see why there should be further litigation. Thirdly, … I find it difficult to see that damages would be an adequate remedy.148

It was assumed that unless there was some public or statutory element in the employment the declaratory remedy would not be available in cases of wrongful dismissal. But Hill v Parsons149 suggested otherwise. The case (discussed at length at [11.60]) was important not only in opening the door to an expansion of injunctive remedies but also in suggesting that in similar circumstances declarations may be granted to the effect that the contract of employment continued. As previously noted, 144 145 146

147 148 149

Turner v Australasian Coal and Shale Employees Federation (1984) 6 FCR 177 at 193. Turner v Australasian Coal and Shale Employees Federation (1984) 6 FCR 177 at 193. Thorpe v SA National Football League (1974) 10 SASR 17 at 30-31, citing Lord Wilberforce in Malloch v Aberdeen Corporation [1971] 2 All ER 1278. See also McVicar v Commissioner for Railways (NSW) (1951) 83 CLR 521; Baker v Gough [1963] 1 NSWLR 1345; Bennett v Commonwealth [1980] 1 NSWLR 581 at 588. Vine v National Dock Labour Board [1957] AC 488. Vine v National Dock Labour Board [1957] AC 488 at 500-501. Hill v Parsons [1972] Ch 305.

Declaration

the Court of Appeal in Hill v Parsons granted an injunction despite the argument by the defendant that the injunction so granted amounted to specific enforcement of the contract of employment and was contrary to long-established principles of equity. The Court of Appeal referred to Francis v Kuala Lumpur Councillors150 in support of this approach.151 Lord Borth-y-Gest in the Francis case said: [W]hen there has been a purported termination of a contract of service a declaration to the effect that the contract of service still subsists will rarely be made. This is a consequence of the general principle of law that the courts will not grant specific performance of contracts of service. Special circumstances will be required before such a declaration is made and its making will normally be in the discretion of the court.152

Neither Hill v Parsons nor the two Federal Court cases of Turner and Gregory v Philip Morris (see [11.70]) suggested that any public or statutory element in the employment was necessary before a declaration relating to wrongful dismissal could be awarded. The award of the declaratory remedy in cases of dismissal depends upon proof of special circumstances.

Special circumstances [11.120] What will constitute special circumstances in an ordinary employer–employee case? It may be suggested that the availability of some special statutory protection as in Hill v Parsons153 may constitute a special circumstance. Where the plaintiff’s eligibility to work within a particular industry is affected this may constitute special circumstances. Thus the right to remain on an employment register154 or to obtain or retain union membership155 may be sufficient. In the United Kingdom, declarations may be made where there has been a failure to follow disciplinary procedures requisite for dismissal.156 The constraints imposed upon the ability of the courts to grant declaratory relief may not apply where an industrial tribunal is given power to make binding declarations.157

Declaration must serve a useful purpose [11.130] Even if special circumstances can be shown, a declaration will only be granted if it serves some useful purpose. A useful purpose may be served by granting a declaration to the effect that an employee was retrenched within the terms of public sector superannuation legislation so as to ensure that the employee is entitled to certain 150 151 152 153 154

155 156

157

Francis v Kuala Lumpur Councillors [1962] 1 WLR 1411. Hill v Parsons [1972] Ch 305 at 314 per Lord Denning MR. Francis v Kuala Lumpur Councillors [1962] 1 WLR 1411 at 1417-1418. It was suggested that the protection of the Industrial Relations Act 1971 (UK) would be available at the time of expiry of proper notice; but see Hill v Parsons [1972] Ch 305 at 325 per Stamp LJ. Vine v National Dock Labour Board [1957] AC 488. See also Irani v Southampton and South West Hampshire Health Authority [1985] ICR 590 (injunction issued where continued employment with National Health Service would be affected). Turner v Australasian Coal and Shale Employees Federation (1984) 55 ALR 635, and see [11.70]. See, for example, Taylor v National Union of Seamen [1967] 1 WLR 532; Stephenson v United Road Transport Union [1977] ICR 893; R v BBC; Ex parte Lavelle [1983] 1 WLR 23; compare R v East Berkshire Health Authority; Ex parte Walsh [1984] 3 WLR 818 at 829, 831. See also Jones v Lee [1980] ICR 310. For example, Federal Court of Australia Act 1976 (Cth), s 21; the New South Wales Industrial Commission in Court Session is empowered to grant declaratory relief under the Industrial Relations Act 1996 (NSW), s 154: see Public Service Association of NSW v Public Service Board of New South Wales (1985) 12 IR 98.

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superannuation benefits.158 A declaration that a dismissal constituted a violation of a statutory unfair dismissal scheme,159 a declaration as to the existence of an implied term in a contract of employment,160 or a declaration as to the effect of an award on an employee’s contract of employment,161 may also serve a useful purpose. In Gregory v Philip Morris Ltd162 the Federal Court considered, inter alia, whether a declaration could be granted declaring that the plaintiff’s employment had not been lawfully terminated. Wilcox and Ryan JJ said: There are circumstances in which the making of a declaration upon such a matter may serve a useful purpose; for example, where some ancillary benefit can thereby be obtained. But in this case, if specific performance is refused, the making of a declaration will not achieve any useful purpose. We bear in mind what was said by Barwick CJ and Jacobs J in Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286 at 307; 3 ALR 151 at 168: “Unless the parties are agreed on the consequences which flow from a declaration that such a contract has or has not been validly rescinded it is generally undesirable that the court should so declare without any orders for consequential relief.” That comment was made about a contract for the sale of land. It seems to us that it applies even more strongly to a case where a contract of employment has been breached in circumstances of industrial tension.163

But to approach the matter in this way is to circumscribe the remedy in exactly the same way as the injunctive remedy. It has the effect that the declaratory remedy will rarely achieve any significance as a remedy available to the employer and employee in the case of a disputed dismissal.

Other limits on declaratory judgments [11.140] The issue of a declaration lies in the discretion of the court.164 Factors relevant to the exercise of the discretion include whether an award of damages would provide an adequate remedy,165 and whether the case before the court involves an industrial matter presently before an industrial tribunal where that tribunal has power and jurisdiction to finally decide all matters in controversy between the parties where the court does not.166

Advantages of the declaratory remedy [11.150] The declaratory remedy has a number of advantages over other remedies. It is comparatively swift, is less expensive, minimises the risk of protracted litigation and allows negative relief to be given, for example, that the contract is not enforceable or 158 159

160 161 162 163

164

165 166

Australian Workers’ Union, New South Wales Branch v Roads & Traffic Authority (NSW) (1989) 29 IR 202. The desire for vindication may be an important element in an employee’s decision to make a claim. A union may wish to establish a precedent about a particular mode of dismissal; for example, Liddell v Lembke (1994) 56 IR 447 at 462. Compare Liddle v Central Australian Legal Aid Service (1999) 150 FLR 142, where the contract had come to an end and the declaration sought would not restore Liddle to her employment. Richardson v Queensland Corrective Services Commission (1994) 55 IR 475. Honeyman v Nhill Hospital [1994] 1 VR 138. Gregory v Philip Morris Ltd (1988) 80 ALR 455. Gregory v Philip Morris Ltd (1988) 80 ALR 455 at 482. See also Csomore v Public Service Board of New South Wales (1986) 10 NSWLR 587 where Rogers J refused to exercise his discretion to grant a declaration on the ground that there was no entitlement to wages despite an unlawful suspension of employees. As to the nature of the remedy and whether equitable defences are relevant, see Meagher, Heydon and Leeming, Meagher, Gummow and Lehane’s Equity, Doctrines and Remedies (4th ed, LexisNexis, 2002), p 641. Gordon v Victoria [1981] VR 235 at 239. Slattery v Public Service Board [1983] 3 NSWLR 41.

Declaration

that there is no breach.167 More importantly in the industrial context it has been suggested that the declaratory remedy offers a special advantage to an employee unlawfully dismissed: The reluctance of the judges to grant a declaration that a dismissal is null and void has been due in part to their view that the effect of such a declaration would have the result that wages would be payable as from the date of the purported dismissal onwards. The effect would then be that the rules of mitigation of loss would be circumvented, the employee would have been allowed to “sit in the sun” at the employer’s expense and this the judges have regarded as undesirable. It has, on the whole, been taken for granted that this is the effect of a declaration of nullity of dismissal.168

In Csomore v Public Service Board of New South Wales,169 Rogers J in the Supreme Court of New South Wales qualified such a view. His Honour said that the right to wages depended upon whether the plaintiff employee could show readiness and willingness to carry out the employment (a prerequisite for a claim for damages for breach of contract) or that wages had been earned by service (the usual requirement for recovery of wages). The declaration that an employee had been unlawfully suspended of itself would not entitle that employee to wages during the period of suspension.170 But this, of course, does not cover the whole ground. An employee ready and willing to carry out the employment would at common law be entitled to damages representing at least wages payable during the period required for lawful dismissal.171 But as the passage quoted above points out, the declaratory remedy, in this respect, may be much more advantageous in allowing recovery for a much longer period without requiring the plaintiff to mitigate loss by seeking other employment. The point of the Csomore case is, however, that the declaratory order of itself does not require that wages be paid for the whole period between the purported dismissal and the declaratory order. The problem is not likely to arise if courts follow the rule suggested in Gregory v Phillip Morris (see [11.70]) that declaratory orders should be accompanied by orders for consequential relief. It may be argued that the decision of the Federal Court in Gregory v Philip Morris and its approach on the question of consequential relief imply that the obligation to pay wages will not automatically arise as a result of a declaratory order that the dismissal is null and void. Such an approach would be consistent with the Watson principle that wages are not payable even if the inability of the employee to earn them arises from the employer’s wrongful act: see [5.30].

167 168

169 170 171

Meagher, Heydon and Leeming, Meagher, Gummow and Lehane’s Equity, Doctrines and Remedies (4th ed, LexisNexis, 2002), p 641. Freedland, The Contract of Employment (OUP, 1976), p 290 and see authorities cited therein including Francis v Kuala Lumpur Councillors [1962] 1 WLR 1411 at 1418 per Lord Morris; Ridge v Baldwin [1964] AC 40 at 140 per Lord Devlin; Taylor v Furness Withy Ltd (1969) 6 KIR 488. Csomore v Public Service Board of New South Wales (1986) 10 NSWLR 587. His Honour said that his earlier decision in Bennett v Commonwealth [1980] 1 NSWLR 581 granting a declaration was not authority for the contrary view. Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 465-466 per Dixon J.

477

12

Conditions of Employment “[F]or a number of reasons, some to do with the work of the legislatures … we can no longer say that, in all but exceptional cases, the rights and liabilities of parties to a written contract can be discovered by reading the contract.” [The Hon Murray Gleeson, “Individualised Justice – the Holy Grail” (1995) 69 ALJ 421 at 428.]

[12.10] [12.20] [12.20] [12.60] [12.170] [12.260] [12.270] [12.280] [12.290] [12.290] [12.300] [12.310] [12.320] [12.330] [12.340] [12.360] [12.390]

Introduction ..................................................................................................... 479 Fair Work Act 2009 ........................................................................................ 480 Coverage ..................................................................................................... 480 National Employment Standards and modern awards .............................. 483 The National Employment Standards ........................................................ 495 Other statutory workplace rights ............................................................... 500 Ban on strike pay ....................................................................................... 501 Terms and conditions of work for independent contractors ..................... 501 Intersection of Contract and Statute ............................................................... 502 Contract and statute ................................................................................... 502 Statutory remedies for breach of contract ................................................. 503 Incorporation of statutory obligations by reference ................................. 503 Awards and employment contracts ............................................................ 504 Above award provisions ............................................................................. 506 Enterprise agreements and the contract of employment .......................... 506 Unregistered collective agreements and contract ..................................... 509 Incorporation of terms from unregistered collective agreements ............. 511

Introduction [12.10] Part 1 of this book, particularly in Chapters 4 and 5, focused on the creation, construction and interpretation of common law employment contracts. In Part 2, we turn to the role of statutes in determining the terms and conditions of employment, and in particular, we focus on the rights and obligations of employees and employers under the Fair Work Act 2009 (Cth). In the following chapter (Chapter 13) we consider those rights and obligations which promote job security for certain employees, notably, those who are eligible for protection from unfair dismissal under Pt 3-2 of the Fair Work Act 2009. These obligations significantly curtail employers’ opportunities to terminate employment contracts on the principles permitted by contract law. In this chapter we explain the mandatory provisions that govern employees’ entitlements to wages, leave and other benefits of employment. Some of these provisions are enshrined in legislation (such as the National Employment Standards (NES),1 and the right to be paid in money at least monthly2), and some arise as a consequence of the employment relationship 1 2

See Pt 2-2 of the Fair Work Act 2009 (Cth). See Fair Work Act 2009 (Cth), s 323. The obligation in s 323(2) to pay in cash, by cheque or electronic funds transfer is the modern manifestation of the entitlement to be paid in the currency of the realm, provided by Truck legislation. See [12.160].

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being covered by an applicable modern award, or an enterprise bargain or other instrument made under the provisions of the Fair Work Act 2009. Employers and employees cannot contract out of their statutory obligations although they may (in most circumstances) contract to provide enhanced benefits. Statutory obligations do not automatically become terms of the employment contract. Statutory obligations and entitlements are enforceable according to the provisions of the statute creating them. Nevertheless, the enactment of statutory schemes regulating matters relevant to employment has had considerable influence on the development of the common law of employment (see [5.160]). This chapter outlines the principal statutory constraints on employment contracts, and explains the interaction between statute and the employment contract in determining rights and obligations of parties to employment relationships. The chapter focuses on the provisions in the Fair Work Act 2009 (Cth) establishing mandatory conditions of employment for most private sector Australian employees. This discussion includes an explanation of the industrial instruments made under the Act, including modern awards, and collective enterprise agreements.3

Fair Work Act 2009 Coverage [12.20] The Fair Work Act 2009 (Cth) imposes obligations on “national system employers”, defined in s 14 to include “constitutional corporations”; the Commonwealth and Commonwealth authorities; employers of flight crew officers, maritime or waterside workers who are engaged in “constitutional trade or commerce”; bodies corporate and other persons who carry on commercial, government or other activities in the Territories; and other employers who are covered by the Act as a consequence of State legislation referring powers over industrial matters to the Commonwealth. This definition has been framed to encompass the full extent of the Commonwealth’s powers to legislate directly for the imposition of labour standards. From federation until the enactment of the Industrial Relations Reform Act 1993 (Cth), federal regulation of industrial relations was believed to be limited by s 51(xxxv) of the Australian Constitution (the labour power). Constitutional orthodoxy was that the federal government could only exert indirect influence over labour standards, by establishing an independent, industrial relations tribunal to make awards by conciliation and arbitration of interstate industrial disputes.4 The High Court’s decision in Victoria v Commonwealth5 affirmed the use of the corporations power in s 51(xx) of the Constitution to directly regulate the industrial relationships of corporations. The enactment of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) took full advantage of this finding, by abandoning reliance on the labour power and framing the reformed Workplace Relations Act 1996 (Cth) to deal principally with the workplace relationships of “constitutional corporations”. In doing so, this federal enactment – for the first time in Australian industrial relations history – expressed an intention to override all State industrial laws (with some limited 3

4 5

Information provided in this chapter is necessarily brief. For a full study of the Fair Work Act 2009 (Cth), see Herbert, Parry, Phillips and Stewart, National Workplace Relations (Thomson Reuters, subscription service), Vol 1. For an historical overview of the use of the labour power, see Kirby “Industrial Conciliation and Arbitration in Australia – A Centenary Reflection” (2004) 17 AJLL 229. Victoria v Commonwealth (1996) 187 CLR 416.

Fair Work Act 2009

exceptions),6 so that from March 2006, all incorporated employers engaged in trading and financial activities were covered exclusively by federal workplace relations legislation. The High Court affirmed the validity of this legislation in New South Wales v Commonwealth (Work Choices Case),7 and the Fair Work Act 2009 has continued to rely upon the corporations power, with some assistance from other commonwealth powers, to create a national system. The definition of “constitutional corporation” in Fair Work Act 2009, s 14 captures the foreign,8 and trading and financial corporations over which the Commonwealth wields legislative power by virtue of the Australian Constitution, s 51(xx).9 Inclusion of employers of airline and maritime workers engages the trade and commerce power in s 51(i), and the Territories power in s 122 of the Constitution explains the specific reference to employers in the Territories.10 Notwithstanding this extensive definition, many Australian employees (particularly those engaged by unincorporated employers, such as sole traders and partnerships) were not covered by the federal statute until the States (with the exception of Western Australia) were persuaded to join Victoria in referring powers to the Commonwealth.11 The State referrals have solved (at least for the time being) difficult questions about whether the employees of local government authorities12 and corporations operating in the not-for-profit sector enjoy the protections of the Fair Work system.13 Whether local government employers in Western Australia are bound to comply with the federal laws depends on the extent to which they engage in trading and commercial activities.14

6

See Workplace Relations Act 1996 (Cth), s 16, now repealed.

7

New South Wales v Commonwealth (Work Choices Case) (2006) 229 CLR 1. See Evans et al, Work Choices: the High Court Challenge (Thomson Reuters, Sydney, 2007). A foreign corporation is one formed outside of Australia: see New South Wales v Commonwealth of Australia (1990) CLR 482 at 504. The Fair Work Act 2009 (Cth) will apply to an employee of a foreign corporation where the work is performed under an employment contract made in Australia: Gardner v Milka-Ware International Ltd [2010] FWA 1589. See Gouliaditis, “The Meaning of “Trading and Financial Corporations”: Future Directions” (2008) 19 PLR 110 for an examination of case law. Whether an organisation is a trading corporation depends upon the extent of its trading activities. So a professional sporting club was found to be a trading corporation in R v Judges of the Federal Court of Australia; Ex parte Western Australian National Football League (1979) 143 CLR 190, but not in Hughes v Western Australia Cricket Association (Inc) (1986) 19 FCR 10. Likewise a charitable organisation which earned substantial income from trading activities was held to be a trading corporation in E v Australian Red Cross Society (1991) 27 FCR 310, but one with a small but insignificant trading income was not in Hardeman v Children’s Medical Research Institute (2007) 166 IR 196. For an overview of federal legislative power over labour relations, see Williams, Labour Law and the Constitution (Federation Press, 1998). See Fair Work (Commonwealth Powers) Act 2009 (Vic); Fair Work (Commonwealth Powers) Act 2009 (SA); Industrial Relations (Commonwealth Powers) Act 2009 (NSW); Fair Work (Commonwealth Powers) and Other Provisions Act 2009 (Qld); Industrial Relations (Commonwealth Powers) Act 2009 (Tas). Victoria first referred industrial matters to the Commonwealth by the enactment of the Commonwealth Powers (Industrial Relations) Act 1996 (Vic). See Fair Work Act 2009 (Cth), s 14(2)(a)(ii). See Fair Work Act 2009 (Cth), ss 30A – 30S.

8

9

10 11

12 13 14

See Bysterveld v Shire of Cue [2007] WAIRComm 941; Bell v Shire of Dalwallinu [2008] WAIRComm 01269. See also Owens, “Unfinished Constitutional Business: Building a National System to Regulate Work” (2009) 22 AJLL 258.

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Employees [12.30] Generally, the provisions of the Fair Work Act 2009 dealing with minimum labour standards apply to employees only, and not to any of the other classifications of workers (including dependent contractors) described in Chapter 2.15 The Act provides no special definition of employee, so the common law tests (explained in Chapter 2) mark out those workers who enjoy the protection of these provisions of the Act. There are provisions (in ss 357 – 359) outlawing “sham” independent contracting arrangements, to discourage employers from treating as contractors those workers who would be classified as employees under the common law tests.16 These are “civil remedy” provisions, which means that persons affected by the contravention of the Act, or an industrial association or workplace inspector can initiate action in the Federal Court or Federal Circuit Court for the imposition of a fine.17 The court may also grant injunctions, award compensation, or (if relevant) order reinstatement of an employee.18 Employers are bound to comply with the Fair Work Act 2009 in respect of their own employees, that is, those workers with whom they have a direct employment contract. A host employer will not be bound in respect of the employees of labour hire providers. In Australian and International Airline Pilots Association v Qantas Airways Ltd and Jetconnect Ltd,19 the Australian airline was not bound to provide Australian award conditions to pilots flying trans-Tasman routes, when those pilots had been hired through a commercial arrangement with a wholly-owned New Zealand subsidiary that employed the pilots. Likewise, in Fair Work Ombudsman v Valuair Ltd (No 2),20 Jetstar was not required to pay Australian award wages to cabin crew hired through arrangements with associated labour hire companies incorporated in Singapore and Thailand.

High income employees [12.40] In keeping with the Fair Work Act’s concern to protect low to middle income workers, modern awards (described at [12.60]ff) do not apply to “high income employees”, defined in s 329 as employees who have been given a guarantee of annual earnings which exceeds the current “high income threshold”, annually adjusted according to a procedure set out in the Fair Work Regulations 2009, reg 2.13.21 “Earnings” are defined in s 332 to include wages, salary sacrifice benefits22 and the agreed money value of non-monetary benefits, but not contributions to superannuation, nor any amount that cannot be determined in advance (such as discretionary bonuses, commissions and overtime payments). Reimbursements are also not included as “earnings”.23 (See also [13.80].)

15 16 17 18 19 20 21 22

23

Note that some of the general workplace rights, including protection of freedom of association, apply to “persons” and therefore to non-employed workers. See, for example, FWO v Quest South Perth Holdings Pty Ltd [2015] HCA 45. See Fair Work Act 2009 (Cth), s 539(2) Item 11. See Fair Work Act 2009 (Cth), s 545(2). Australian and International Airline Pilots Association v Qantas Airways Ltd and Jetconnect Ltd [2011] FWAFB 3706. Fair Work Ombudsman v Valuair Ltd (No 2) [2014] FCA 759. The high income threshold was raised to $136,700 from 1 July 2015. See Tuohy v Polyfoam (Aust) Pty Ltd [2010] FWA 9112 at [56]. The value of a motor vehicle used for private purposes was included in the calculation of earnings for the purpose of the high income threshold: see Zappia v Universal Music Australia Pty Ltd [2012] FWAFB 6108; (2012) 225 IR 122. See Ablett v Gemco Rail Pty Ltd [2010] FWA 8124 (reimbursement of training expenses were not earnings).

Fair Work Act 2009

Exclusion of State laws [12.50] The Fair Work Act 2009 applies to the exclusion of all State and Territory industrial laws that would otherwise apply to national system employers and their employees.24 The extensive definition of “State or Territory industrial law” in s 26(2) covers all laws dealing with the regulation of employment relationships, including any law providing for review of unfair contracts or arrangements.25 However s 27 provides for some particularly important exceptions, including the anti-discrimination and equal opportunity statutes of the States and Territories. Section 27(2) includes an extensive list of “non-excluded matters” over which States may continue to exercise control. This list includes (among other things) superannuation, workers compensation, occupational health and safety, outworkers, child labour, workplace surveillance, business trading hours and “claims for enforcement of contracts of employment” (although not a claim for review of a contract on the basis of unfairness). Modern awards and enterprise agreements prevail over State and Territory laws to the extent of any inconsistency, with the exception of any State or Territory anti-discrimination legislation listed in s 27(1A), or any State or Territory law dealing with the non-excluded matters listed in s 27(2).26 Hence, there are still many important State laws which can influence the enforcement of employment contracts, and it is still permitted to bring an action for breach of an employment contract in State courts. These matters are listed at [1.90].

National Employment Standards and modern awards [12.60] The Fair Work Act 2009 creates a national safety net of minimum wages and working conditions by requiring national system employers to comply with a set of ten National Employment Standards (NES) and any modern award which applies to the employer in respect of employees.27 The NES is a set of basic conditions applying to all national system employees, and underpinning modern awards and enterprise agreements. The ten NES are: 1. Maximum working hours;28 2. A right to request flexible working arrangements (although an employer’s decision to refuse the request on reasonable business grounds cannot be challenged before the Fair Work Commission unless the parties have agreed in a contract of employment, enterprise agreement or other written agreement to allow the Commission to hear the matter);29 3. Unpaid parental leave and related entitlements (such as the right to be transferred to a safe job during pregnancy);30 4. Annual leave;31 24 25

26 27 28 29 30 31

See Fair Work Act 2009 (Cth), s 26(1). This exclusion means that the unfair contracts provisions in the Industrial Relations Act 1996 (NSW), s 106 will not apply to private sector employees in New South Wales. For a detailed examination of these provisions and their history (commencing with the Industrial Arbitration Act 1940 (NSW), s 88F, introduced in 1959) see earlier editions of this book, particularly the 5th edition, published in 2002. See Fair Work Act 2009 (Cth), s 29. See Fair Work Act 2009 (Cth), ss 44 – 47. Fair Work Act 2009 (Cth), ss 62 – 64. Fair Work Act 2009 (Cth), ss 65, 739(2). See Charlesworth and Campbell, “Right to Request Regulation: Two New Australian Models” (2008) 21(2) AJLL 116. Fair Work Act 2009 (Cth), ss 67 – 85. Fair Work Act 2009 (Cth), ss 86 – 94.

483

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Ch 12: Conditions of Employment

5. Personal/carer’s and compassionate leave;32 6. Community service leave (including pay for jury service);33 7. Long service leave;34 8. Public holidays;35 9. Notice of termination36 and redundancy pay;37 10. Right to receive a Fair Work Information Statement.38 Each of the modern awards applies to a particular industry sector or classification of work, and fleshes out the mandatory minimum working conditions applicable in that industry.39 Modern awards cannot exclude the NES,40 but they may supplement or clarify the more flexible NES entitlements (for example, by articulating limits to “reasonable” additional working hours under s 62: see [12.170]). Modern awards are a very different species of industrial instrument from the old industrial awards made by State and federal industrial relations commissions as a consequence of sector-wide industrial bargaining between employers and unions. The old federal awards were arbitrated solutions to industrial disputes brought by the parties, and until the enactment of the Workplace Relations Act 1996 (Cth), s 89A, awards could include any matter that pertained to the relationship between an employer as employer and employees, and were the predominant instrument governing wages and working conditions in most industries.41 The Workplace Relations reforms commencing in 1997 reduced to 20 the matters that were “allowable” in federal awards, and stipulated that awards must provide only a minimum safety net of wages and conditions, to encourage industrial parties to engage in enterprise bargaining, according to new prescriptions in the Act. From March 2006, the Work Choices laws stripped back the content of awards even further, and abolished the traditional process of conciliation and arbitration for award-making. Wage setting was placed in the hands of the Australian Fair Pay Commission. The Fair Work system operating from 1 January 2010 revived awards as an important element of the safety net, restored wages as components of awards, and completed a comprehensive review of existing federal and State awards to create 122 modern awards.42 The Act also permits the making of modern “enterprise awards” that relate to a single enterprise, group of related bodies corporate or franchisees.43 32 33

Fair Work Act 2009 (Cth), ss 95 – 107. Fair Work Act 2009 (Cth), ss 108 – 112.

34 35 36

Fair Work Act 2009 (Cth), ss 113 – 113A. Fair Work Act 2009 (Cth), ss 114 – 116. Fair Work Act 2009 (Cth), ss 117 – 118.

37 38 39

Fair Work Act 2009 (Cth), ss 119 – 123. Fair Work Act 2009 (Cth), ss 124 – 125. The list of modern awards is available on the Fair Work Australia website at http://www.fwa.gov.au/ index.cfm?pagename=awardsfind#modernawards. Fair Work Act 2009 (Cth), s 55(1). For an explanation of the traditional system of award-making by conciliation and arbitration, see the 4th edition of this work: Macken, O’Grady and Sappideen, Macken, McCarry & Sappideen’s The Law of Employment (4th ed, LBC Information Services, 1997), pp 564-569. The making of new modern awards involved some compromise of the government’s commitment that no worker would lose take home pay as a consequence of the rationalisation of several State awards into a single federal modern award. Transitional arrangements have been implemented to permit employees who have been disadvantaged by the introduction of a modern award to apply for a Take Home Pay Order. See Fair Work (Transitional Provisions and Consequential Amendments) Act 2010 (Cth), Sch 5 Pt 3. See Fair Work Act 2009 (Cth), ss 168A – 168D.

40 41

42

43

Fair Work Act 2009

Matters that can be (and in some cases must be), included in modern awards are:44 • Wages, including pay scales for skill levels, incentive-based payments, piece rates and bonuses; • Types of employment, including full-time, casual, regular part-time, shift work, and flexible working arrangements; • Hours of work,45 rostering, rest breaks and arrangements for varying working hours (including a requirement that modern awards require employers to consult with employees about changes to rosters or regular hours of work46); • Overtime and penalty rates for working unsociable hours, or on weekends and public holidays; • Annualised wage arrangements (for making sense of the maximum working hours provisions in cases of irregular shift arrangements); • Allowances for work-related expenses, such as tools; for special skills and responsibilities; and for onerous working conditions, such as dirty or dangerous work, or work in remote locations; • Leave arrangements, including leave loadings and cashing out; • Superannuation;47 and • Procedures for settlement.48

consultation,

representation

and

grievance

dispute

Modern awards may also contain “outworker terms”, which relate to the terms and conditions upon which an employer may engage persons who work in residential or other non-business premises.49 Where a modern award provides for an entitlement related to one of these matters, employers and employees can contract for better conditions, but cannot provide for lesser benefits. Any trade-off of an improvement in one benefit for surrender of another can be effected only by making and securing approval of an enterprise agreement made under Pt 2-4 of the Fair Work Act 2009. Enterprise agreements are subjected to a “better-off-overall-test”50 prior to approval, to ensure than such trade-offs do not erode safety net standards. (See [12.80].) [12.70] Awards may not contain any “objectionable” terms,51 which are terms that would permit any action that would constitute a breach of the General Protections provisions protecting freedom of association (see [13.280]), and any term that would 44 45 46 47 48

49

50 51

See Fair Work Act 2009 (Cth), ss 139 – 155 for the full catalogue of matters that may, must and must not be included in modern awards. Awards must contain a term specifying the ordinary hours of work for each classification of employee and type of employment: see Fair Work Act 2009 (Cth), s 147. See Fair Work Act 2009 (Cth), s 145A. See particularly Fair Work Act 2009 (Cth), ss 149B – 149D which deal with the requirement that modern awards contain a “default fund term”. Awards must contain a term setting out a procedure for resolving disputes about matters arising under the award, or under the National Employment Standards, but not about whether the employer had “reasonable business grounds” for refusing a request for flexible working hours: Fair Work Act 2009 (Cth), s 146. See Fair Work Act 2009 (Cth), s 140, and the definition of outworker in s 12. For an understanding of outworker regulation, see Rawling, “The Regulation of Outwork and the Federal Takeover of Labour Law” (2007) 20 AJLL 189; Rawling, “The Impact of Federal Legislation upon the Scope of State Jurisdictions to Regulate Outwork” (2009) 22 AJLL 147. Fair Work Act 2009 (Cth), s 193. Fair Work Act 2009 (Cth), s 150.

485

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Ch 12: Conditions of Employment

require employers to pay a “bargaining services fee”.52 (The legislative prohibition of bargaining service fees puts to rest a long running argument over whether “matters pertaining to employment” include claims that an employer should pay union dues on behalf of employees, or any other fee to a trade union to compensate the union for its role in providing bargaining services.53) Terms permitting any compulsory payments or deductions from wages for the benefit of employers that would contravene the prohibitions in s 326 are also unlawful in an award,54 as are terms dealing with union rights of entry to workplaces.55 The logic of these prohibitions is that awards should not be permitted to undermine decisions made by the legislature about the extent of certain rights and responsibilities, particularly the rights and responsibilities of trade unions when exercising their entitlements to enter workplaces for discussions with their members. Awards may not contain any terms that discriminate on the grounds of the same catalogue of characteristics that are protected in the General Protections (see [13.290]), that is, race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.56 There are exceptions to mirror those in the General Protections for terms which accommodate the inherent requirements of the position and (in the case of religious institutions) the religious susceptibilities of adherents to that faith. If any discriminatory term does creep into an award it will be unenforceable,57 and it is also susceptible to an application by the Australian Human Rights Commission made under the Australian Human Rights Commission Act 1986 (Cth), s 46PW for the Fair Work Commission to review the award to remove the discriminatory provision.58 Modern awards cannot contain terms dealing with long service leave.59 Long service leave entitlements will be governed either by non-excluded State laws,60 or by an enterprise agreement or other industrial instrument which continues to apply to the employee.61 There is some limited scope for making “individual flexibility arrangements” to vary the application of awards to particular employees, but these arrangements must conform with an overarching “flexibility term” in the award that sets boundaries on the award terms that may be varied.62 They can only be made to make the employee “better off overall”, and they are impermanent. According to the model flexibility clause determined by a Full Bench of the Fair Work Commission in Re Modern Awards Review 2012 – Award Flexibility,63 individual flexibility arrangements can be terminated by either the employer or the employee by giving no more than 13 weeks (90 days) written notice, so long as the requirements in s 144(4) of the Act are met. Those requirements are that the employee and employer must “genuinely agree” to the arrangement, it must pass the “better off overall test”, it must be in writing and signed 52 53 54 55 56 57 58 59 60 61 62 63

See Fair Work Act 2009 (Cth), s 12 definitions, and s 353. See Electrolux Home Products Pty Ltd v Australian Workers’ Union (2004) 221 CLR 309. Fair Work Act 2009 (Cth), s 151. Fair Work Act 2009 (Cth), s 152. Union rights of entry are regulated extensively by the Fair Work Act 2009 (Cth), Pt 3 – 4. Fair Work Act 2009 (Cth), s 153. Fair Work Act 2009 (Cth), s 137. Fair Work Act 2009 (Cth), s 161. Fair Work Act 2009 (Cth), s 155. See Fair Work Act 2009 (Cth), s 27(2)(g). See Fair Work Act 2009 (Cth), s 113(2). See Fair Work Act 2009 (Cth), s 144. Re Modern Awards Review 2012 – Award Flexibility [2013] FWCFB 2170.

Fair Work Act 2009

by both parties (and by a parent or guardian in the case of an employee under 18), and it must set out its own termination procedures. If these requirements are not met, an individual flexibility agreement can be terminated within 28 days.64 Individual flexibility terms are not vetted in advance by the Fair Work Commission for compliance with the better off overall test, nor registered nor notified in any public register, so it is entirely possible that employers who believe they have varied the terms of a modern award through individual flexibility arrangements in respect of particular employees will discover some time later that the flexible terms agreed breached the award and exposed the employer to civil penalties.65

Enterprise agreements [12.80] The collective bargaining system instituted by the Fair Work Act 2009 permits employers and employees (with the assistance of their bargaining representatives) to make binding enterprise agreements. Enterprise agreements may or may not be negotiated. The provisions in Pt 3-3 of the Act permit employees and their representatives to take protected industrial action in the course of robust enterprise bargaining (see [14.30]), so in industries where trade unions are strong, enterprise bargaining can be a drawn-out process and result in a genuinely negotiated agreement. Employers are not required to agree to make enterprise agreements, and can refuse to participate in negotiations initiated by unions, unless the union (or other bargaining representative for employees) has obtained a “majority support determination” upon application to the Fair Work Commission.66 The Commission will make a majority support determination if it is satisfied that the employer has not already agreed to bargain, and a majority of the employees who will be covered by the proposed agreement who have been fairly chosen do want to bargain.67 It is not necessary that any formal balloting process take place to determine whether a majority wish to bargain.68 The Fair Work Commission may, at its discretion, take account of petitions and surveys.69 The significance of a majority support determination is that once it is obtained, an employer will be obliged to bargain “in good faith”, according to the prescription in s 228 of the Act, and a failure to do so may provoke applications for bargaining orders.70 The good faith bargaining obligations require parties to attend and participate in meetings at reasonable times, disclose relevant (but not commercially sensitive) information in a timely manner, give genuine consideration and reasoned responses to proposals, and refrain from engaging in capricious or unfair conduct that undermines the bargaining process or the freedom of association rights of employees.71 Good faith bargaining does not, however, require that any party make concessions, or reach any agreement.72 64 65 66 67

68 69

70 71

Fair Work Act 2009 (Cth), s 145(4), and Re Modern Awards Review 2012 – Award Flexibility [2013] FWCFB 2170. Fair Work Act 2009 (Cth), s 145(3). Fair Work Act 2009 (Cth), ss 236-237. See MSS Security Pty Ltd v Liquor Hospitality and Miscellaneous Union [2010] FWAFB 6519 at [16]. Fair Work Act 2009 (Cth), s 236(2). See also the Fair Work Commission’s powers to make “scope orders” to ensure that the proposed enterprise agreement will cover only appropriate employees: ss 238 – 239. See United Firefighters’ Union of Australia v Metropolitan Fire & Emergency Services Board [2010] FWAFB 3009. The Commission may order a ballot if in doubt: see Australian Workers’ Union v BlueScope Steel Ltd t/as BlueScope Lysaght [2011] FWA 7525. Fair Work Act 2009 (Cth), s 236(3). See Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) v Veolia Water Operatons Pty Ltd [2015] FWC 2561. See Fair Work Act 2009 (Cth), ss 229 – 233. Fair Work Act 2009 (Cth), s 228(1). The good faith bargaining provisions have been the subject of significant litigation and commentary. See Construction, Forestry, Mining and Energy Union – Mining

487

488

Ch 12: Conditions of Employment

Nevertheless, enterprise agreements can also be made without prior negotiation. Employers who intend to introduce an enterprise agreement are required to take all reasonable steps to notify employees of their right to appoint a bargaining representative,73 and must give employees access to a copy of a proposed enterprise agreement for at least seven days before calling for a vote on the agreement.74 This means that employees must be given an opportunity to bargain and to seek bargaining assistance, but it is not necessary that they avail themselves of this opportunity before an enterprise agreement can be made. Employers can initiate all steps themselves, and so long as the resultant agreement meets the requirements for approval by the Fair Work Commission,75 it will determine the conditions of employment for all employees covered by the agreement until it is terminated.76 Enterprise agreements are “made” when a majority of employees cast a valid vote in favour of the agreement,77 however they do not come into operation until seven days after approval by the Fair Work Commission.78 Once in operation, the terms of an enterprise agreement prevail over the terms of an award in respect of any employee to whom the enterprise agreement applies.79 Nevertheless, it is very unlikely that an enterprise agreement will contain any terms that are detrimental to employees when compared with an applicable modern award. Enterprise agreements must pass a “better off overall test”, administered by the Fair Work Commission, before they can be approved, meaning that each employee covered by the agreement must be better off overall than they would be under the relevant modern award.80 If a proposed agreement fails this test, it can only be approved if the Fair Work Commission determines that it would not be contrary to the public interest to approve the agreement, because of exceptional circumstances.81 Exceptional circumstances include permitting the employer to reduce labour costs as a “reasonable strategy to deal with a short-term crisis”.82 The application of this test means that there are only very limited opportunities for employers to bargain around the minimum safety net standards mandated by the NES and modern awards.

78 79

and Energy Division v Tahmoor Coal Pty Ltd [2010] FWAFB 3510; Endeavour Coal Pty Ltd v Association of Professional Engineers, Scientists and Managers, Australia [2012] FCA 764. See Bukarica and Dallas, Good Faith Bargaining under the Fair Work Act 2009 (Federation Press, 2012); Read, “Direct Dealing, Union Recognition and Good Faith Bargaining under the Fair Work Act 2009” (2012) 25(2) AJLL 130. Fair Work Act 2009 (Cth) s 228(2). Fair Work Act 2009 (Cth), ss 173 – 178. Fair Work Act 2009 (Cth), s 180(4). See Re Boral Resources (Country) Pty Ltd [2011] FWA 6796 for a case in which an enterprise agreement was refused approval because employees were not given the minimum number of days before the vote. See Fair Work Act 2009 (Cth), ss 185 – 201. Commentary on these provisions can be found in the annotations to the Rinaldi, Lambropoulos, Millar and Neal, Fair Work Legislation 2015 (Lawbook Co, 2015), pp 273-298. The termination of enterprise agreements is governed by Fair Work Act 2009 (Cth), ss 219 – 227. Essentially, termination can be effected by the consent of the parties, during or after the agreement’s nominal expiry date, or by an application to the Fair Work Commission by one party after the nominal expiry date. In all cases, the Fair Work Commission must approve termination before it is effective: see s 219(2). The Commission will consider the factors in s 226, including the views of and effect upon employers, employees and employee organisations, before approving termination: see Re Aurizon Operations Ltd [2015] FWCFB 540. Fair Work Act 2009 (Cth), s 182. See also ss 172 – 181 for the procedures that must be followed before an enterprise agreement can be put to a vote of employees. Fair Work Act 2009 (Cth), s 54. See Fair Work Act 2009 (Cth), s 57.

80 81 82

Fair Work Act 2009 (Cth), s 193. Fair Work Act 2009 (Cth), s 189. See Fair Work Act 2009 (Cth), s 189.

72 73 74

75

76

77

Fair Work Act 2009

An enterprise agreement cannot be made or approved without the agreement of the employer. Although employers may ultimately reach agreement after robust industrial bargaining with unions who are permitted to take protected industrial action (subject to strict constraints, see [14.30]), all enterprise agreements are voluntary on the part of employers. (Employees, on the other hand, may find that an enterprise agreement applies to their employment, notwithstanding that they voted against the agreement.) Content of enterprise agreements

[12.90] Enterprise agreements can contain permitted matters, must contain mandatory matters, and must not contain any unlawful, objectionable or discriminatory matters. Permitted matters include any matter “pertaining to the relationship between an employer that will be covered by the agreement and that employers’ employees who will be covered by the agreement”.83 The phrase “matters pertaining” to the employment relationship has been subjected to extensive judicial scrutiny over many decades. It has been held to include working hours, but not trading hours;84 entitlements to superannuation contributions,85 but not choice of fund;86 and there have been rigorous disputes over whether the automatic deduction of union dues is a matter pertaining to employment.87 Many of these disputes have been rendered irrelevant by additional provisions in the Fair Work Act 2009 that permit agreements to contain matters pertaining to the relationship between employers and employee associations,88 and a specific provision permitting terms about “deductions from wages for any purpose authorised by an employee”.89 Terms dealing with how agreements will operate are also permitted.90 It is mandatory for enterprise agreements to include a term setting out procedures for settling disputes arising under the agreement, although a dispute resolution clause does not need to provide for mandatory arbitration of disputes;91 and a “flexibility term” to permit employers and employees to make individual flexibility arrangements.92 The flexibility term must set out which of the enterprise agreement terms may be varied by an individual flexibility arrangement. The Fair Work Regulations 2009 set out a “model flexibility clause” that suggests that individual arrangements should be able to be made about when work is to be performed, overtime and penalty rates, allowances and leave loadings.93 Just as in the case of individual flexibility arrangements made under modern awards, flexibility arrangements for employees covered by enterprise bargains must be the subject of genuine agreement, must pass the “better off overall” test, must include provisions about termination of the arrangement, and must be in writing and signed by 83 84 85 86

87

88 89 90 91 92 93

Fair Work Act 2009 (Cth), s 172(1)(a). See R v Kelly; Ex parte Victoria (1950) 81 CLR 64. See Re Manufacturing Grocers’ Employees Federation of Australia; Ex part Australian Chamber of Manufacturers (1986) 160 CLR 341 at 356. See Re Finance Sector Union of Australia; Ex parte Financial Clinic (Vic) Pty Ltd (1993) 178 CLR 353. Note that the cases concerning superannuation have been overtaken by specific legislation dealing with choice of fund. See R v Portus; Ex parte ANZ Banking Group Ltd (1972) 127 CLR 353; Re Alcan; Ex parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 54 IR 475, and Electrolux Home Products Pty Ltd v Australian Workers Union (2004) 221 CLR 309. Fair Work Act 2009 (Cth), s 172(1)(b). Fair Work Act 2009 (Cth), s 172(1)(c). Fair Work Act 2009 (Cth), s 172(1)(d). Fair Work Act 2009 (Cth), s 186(6), and see Re Woolworths Ltd t/as Produce and Recycling Distribution Centre (2010) 192 IR 124; [2010] FWAFB 1464. Fair Work Act 2009 (Cth), s 202. Fair Work Regulations 2009, reg 2.08 and Sch 2.2

489

490

Ch 12: Conditions of Employment

the parties.94 (See [12.70].) They must also include only permitted matters (see above), and must not contain any unlawful terms.95 Unlawful terms include discriminatory terms (see [12.70]),96 objectionable terms (see [12.70]),97 opt out clauses (that permit employers to unilaterally exempt themselves from terms of the agreement),98 or terms that would take away an employee’s statutory unfair dismissal entitlements (see [13.50]),99 or indeed improve those entitlements by conferring a right to make an unfair dismissal application before completing the minimum employment period of six months (or one year in the case of small businesses, with fewer than 15 employees).100 Unlawful terms also include terms permitting protected industrial action to be taken in circumstances other than those permitted by Pt 3-3 of the Act (see [14.30]),101 terms dealing with rights of entry in any manner contrary to Pt 3-4,102 and certain superannuation terms.103 Transfer of enterprise agreements

[12.100] Employers who acquire a business and take on employees of the former business owner may find that their ability to set new terms and conditions of employment for staff is complicated by the application of the “Transfer of Business” provisions in the Fair Work Act 2009, Pt 2-8. Federal legislation has long provided that employees who continue in a job after the ownership of the business changes will continue to enjoy the terms and conditions enshrined in a statutory industrial instrument (although not in a common law employment contract104), subject to certain conditions.105 The first provisions of this nature were introduced to discourage the avoidance of arbitrated industrial awards.106 Over successive years, statutory provisions have evolved to deal with a changing industrial landscape, and with contemporary business organisation practices, including the outsourcing (and sometimes in-sourcing) of aspects of a business enterprise. In the early days, the general application of industry-wide awards meant that opportunities for disputes over the transmission of awards were limited. All employers in an industry would be bound by the same award terms in any event. The introduction of collective enterprise bargaining (which facilitated variations in pay and conditions across different enterprises in an industry) increased the incidence of disputes about the carry-over of pay and conditions for employees when an enterprise changed ownership.107 Dissatisfaction with the outcomes of some disputes led to political pressure to amend transmission of business 94 95

Fair Work Act 2009 (Cth), s 203(3)-(7). Fair Work Act 2009 (Cth), s 203(2)(b).

96 97 98 99

Fair Work Act 2009 (Cth), s 194(a). Fair Work Act 2009 (Cth), s 194(b). Fair Work Act 2009 (Cth), s 194(ba). Fair Work Act 2009 (Cth), s 194(d).

100 101 102

Fair Work Act 2009 (Cth), s 194(c). Fair Work Act 2009 (Cth), s 194(e). Fair Work Act 2009 (Cth), s 194(f) and (g).

103 104 105

Fair Work Act 2009 (Cth), s 194(h). See Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014. The initial legislation preserving award entitlements following a succession, assignment or transmission of business was the Conciliation and Arbitration Act 1904 (Cth), s 61(d). See George Hudson Ltd v Australian Timber Workers Union (1923) 32 CLR 413. Enterprise bargaining was introduced by the Industrial Relations Reform Act 1993 (Cth). Two significant decisions on the transmission of business after that time were PP Consultants Pty Ltd v Finance Sector Union of Australia (2000) 201 CLR 648 and Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd (2005) 222 CLR 194.

106 107

Fair Work Act 2009

provisions.108 Major changes were made by Work Choices,109 which sought to limit the transfer of terms and conditions to transferring employees only (and not to all employees in the newly transferred business), and for a limited 12 month period.110 These provisions were substantially rewritten in the Fair Work Act 2009.111 The central provision in the Fair Work Act 2009 (s 311) identifies the circumstances in which a “transfer of business” will occur: the employment with an old employer must be terminated; within three months, that employee must take up the new employment to perform the same, or substantially the same work; and there must be some connection between the old and new employers. A connection will arise if the old and new employer are associated entities (according to the definition in the Corporations Act 2001 (Cth), s 50AAA112); or if the old and new employer have entered into an arrangement by which the new employer acquires the ownership or beneficial use of some or all of the assets (tangible or intangible) of the old employer used in connection with the transferring work.113 Outsourcing and insourcing of aspects of a business will also constitute a “connection”.114 Where a transfer has taken place, transferring employees will continue to be entitled to the terms and conditions in any relevant enterprise agreement, subject to any order of the Fair Work Commission that the agreement should not bind the new employment. New recruits (identified as “non transferring employees”) to the transferred business will also be covered if there is no other enterprise agreement applicable to their employment.115 The Fair Work Commission has broad powers under ss 318 and 319 to determine applications about whether transferring instruments should apply, and must exercise those powers according to a range of factors including potential economic disadvantage to employees and employers, productivity at the workplace, “business synergy” between the transferring instrument and other instruments applicable to work in the new employer’s enterprise, and the public interest.116 Other statutory workplace instruments determining conditions of work [12.110] Since the enactment of the Work Choices laws in 2006, the federal industrial relations tribunal (now the Fair Work Commission) has had very limited powers to arbitrate a settlement of an industrial dispute by making a “workplace determination”.117 These instruments are more limited in scope and duration than enterprise agreements and can generally only be made to break a bargaining deadlock 108 109 110 111

112 113 114

115 116

117

See Sebbens, “Wake, O Wake – Transmission of Business Provisions in Outsourcing and Privatisation” (2003) 16 AJLL 133. Workplace Relations Amendment (Work Choices) Act 2005 (Cth). See the Workplace Relations Act 1996 (Cth), s 581 (defining “transferring employee”) and s 580(4) (defining “transmission period”). For early commentary on the Fair Work Act 2009 transfer of business provisions, see Riley, “Transfer of Business under the Fair Work Act” (2009) 23(2) CLQ 15, and Creighton and E Shi, “The Transfer of Business Provisions of the Fair Work Act in National and International Context” (2009) 23(1) AJLL 39. See Fair Work Act 2009 (Cth), s 311(6) and s 12 “definition”. Fair Work Act 2009 (Cth), s 311(3). See Fair Work Act 2009 (Cth), s 311(4) and (5). This means that a case like PP Consultants v Finance Sector Union of Australia (2000) 201 CLR 648 and Urquhart v Automated Meter Reading Services (Australia) Pty Ltd (2008) 172 FCR 73 would be decided differently under the Fair Work Act 2009 provisions. Fair Work Act 2009 (Cth), s 314. For commentary on the concept of the public interest in industrial regulation, see Naughton. ““Public Interest” in Australian Labour Law – Reshaping an Old Concept in the Enterprise Bargaining Era” (2014) 27(2) AJLL 112. See Fair Work Act 2009 (Cth), Pt 2-5.

491

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Ch 12: Conditions of Employment

in a damaging industrial dispute,118 although the Fair Work Act 2009 also permits the making of “low paid workplace determinations” in limited circumstances.119 Since the enactment of the Fair Work Act 2009 (Cth) there has been no opportunity (outside of the very limited option to use “individual flexibility arrangements” described at [12.70]) for employers to escape award obligations by entering into binding individual statutory agreements (Australian Workplace Agreements, or AWAs),120 so employers must be mindful of the safety net (comprised by the NES and any applicable modern award), and of any applicable enterprise agreements when making individual common law contracts with staff. Any common law contract term which purports to diminish any NES, modern award or enterprise agreement entitlement will be unenforceable.

Interpretation of awards and agreements [12.120] “Fair work instruments”, including modern awards, enterprise agreements, workplace determinations and orders of the Fair Work Commission, are expressly exempted from being legislative instruments for the purposes of the Legislative Instruments Act 2003 (Cth).121 The interpretation of awards and enterprise agreements involves different considerations when compared to the interpretation of statutes. For instance, there is a long tradition of generous construction of awards over a strictly literal approach.122 It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon.123

Wages [12.130] The employer’s obligation to pay wages upon receipt of services by the employee arises as a consequence of the existence of a contract of employment.124 However while this obligation is a necessary term of the employment contract, the quantum of the wages that the employer must pay may be governed not 118

119

120

121 122 123

124

Fair Work Act 2009 (Cth), s 266. Industrial action-related workplace determinations have been made in Australian and International Pilots Association v Qantas Airways Ltd [2013] FWCFB 317; Transport Workers’ Union of Australia v Qantas Airways Ltd (2012) 225 IR 13; [2012] FWAFB 6612; and Australian Licensed Aircraft Engineers Association v Qantas Airways Ltd (2012) 218 IR 165; [2012] FWAFB 236. Each of these decisions arose as a consequence of the Commission’s exercise of its powers under the Fair Work Act 2009 (Cth), s 423 to terminate a bargaining period during the destructive Qantas industrial action in 2011. See Australian and International Pilots Association v Fair Work Australia (2012) 202 FCR 200, and commentary in Riley, “A Safe Touch-down for Qantas?” (2012) 25(1) AJLL 76. See Fair Work Act 2009 (Cth), ss 260 – 265. For consideration of the prospects for these relatively novel provisions, see Naughton, “The Low Paid Bargaining Scheme – An Interesting Idea, but Can It Work?” (2011) 24(3) AJLL 214. See also Re United Voice Low-paid Authorisation [2011] FWAFB 2633. For information on AWAs and the transitional instruments (Individual Transitional Employment Agreements or ITEAs, see the 6th edition of this work, Sappideen, O’Grady and Warburton, Macken’s Law of Employment (Thomson Reuters, 2009), [1.10]-[1.15] and [15.55]-[15.70]. See also Riley and Peterson, Work Choices: A Guide to the 2006 Changes (Thomson Reuters, 2006). See Legislative Instruments Act 2003 (Cth), s 7(1) and Items 18–19A. City of Wanneroo v Holmes (1989) 30 IR 362; City of Wanneroo v AMAC and S Union [2006] FCA 813 per French J. Kucks v CSR Ltd (1996) 66 IR 182 at 184 per Madgwick J. See also NTEIU v University of Wollongong [2002] FCA 31 at [28] and Soliman v University of Technology, Sydney [2008] FCA 1512 at [82]. See [5.20]–[5.50].

Fair Work Act 2009

by contract but by statute or a statutory instrument, such as an award, enterprise agreement or workplace determination. According to Isaacs J in Josephson v Walker,125 the employee’s statutory right to receive a particular wage rate stipulated by an award is “a right which was unknown before to the law: a right to receive from an employer more than was bargained for”. Minimum wages

[12.140] Modern awards set minimum wages for those employees covered by the award. Award wages, and the national minimum wage, are determined by annual reviews conducted by the Fair Work Commission.126 Employers can pay wages in excess of the minimum, but cannot contract to pay less than the award provides. Likewise, if an employer is bound by an enterprise agreement in respect of an employee, the employer cannot contract to pay wages below the rates stipulated in the enterprise agreement.127 Overtime and penalty rates

[12.150] Rates of pay for hours outside of the “ordinary hours” stipulated in an award are also set by awards. Awards can only be varied by the Fair Work Commission under its powers to review awards “if necessary to achieve the modern awards objective”.128 The Commission exercises these powers in the context of four yearly reviews of awards,129 and may also review an award outside of these four yearly reviews upon its own initiative,130 or upon the application of an employer, employee, or employee organisation covered by the award in question.131 The Commission must also review a modern award if the Australian Human Rights Commission refers a matter to the Commission under the Australian Human Rights Commission Act 1986 (Cth), s 46PW, because the award is alleged to contain discriminatory terms. Employers cannot contract out of these arrangements. The only effective way for an individual employer to vary overtime and penalty rates set by an award is to enter into an enterprise agreement or possibly an individual flexibility arrangement (see [12.70]).132 Enterprise agreements will not be approved by the Fair Work Commission unless they pass the “better off overall test”, or “exceptional circumstances” justify approval notwithstanding.

125 126 127 128

129 130 131 132

Josephson v Walker (1914) 18 CLR 691 at 700. See Fair Work Act 2009 (Cth), ss 285 – 299. Minimum wages and annual wage review information can be found on the Fair Work Commission website at http://www.fwc.gov.au. Fair Work Act 2009 (Cth), s 157(1). The “modern award objective” is defined in s 134(1), and provides that the Fair Work Commission is to ensure that modern awards provide “a fair and relevant minimum safety net of terms and conditions”, taking into account a range of factors including relative living standards and the needs of the low paid; incentives to encourage collective bargaining; promotion of social inclusion through workforce participation; promotion of flexibility, efficiency and productivity; additional remuneration for overtime, unsociable working hours and shiftwork; the “regulatory burden” on businesses; and macroeconomic concerns (such as inflation, employment growth, and global competitiveness). The Fair Work Commission conducted a review of penalty rates in 2012 (see Re Modern Awards Review 2012 – Penalty Rates [2013] FWCFB 1635) and determined that only a very few amendments needed to be made to awards. At the time of writing, the release of a Productivity Commission Report had initiated debate about whether penalty rates for Sunday work should be reduced to Saturday rates in the hospitality and retail industries. Fair Work Act 2009 (Cth), s 156. Fair Work Act 2009 (Cth), s 157(3). Fair Work Act 2009 (Cth), s 158. For commentary on the practice of attempting to overcome obligations to pay overtime and penalty rates for certain hours in the week by using “preferred hours” clauses in agreements, see Cameron, “Oxymoronic or Employer Logic? Preferred Hours under the Fair Work Act” (2012) 25(1) AJLL 43.

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Payment of wages

[12.160] The Fair Work Act 2009, s 323 provides that employers must pay their employees fully in money (that is, in cash, or by cheque or electronic funds transfer). An employer who purports to pay employees by some other means (for example, in store vouchers or goods) will find that employees can still recover their full wages entitlement in money, without any set-off for the value of the goods.133 Section 323 is also a civil remedy provision, so an employer may be liable to a fine of up to 60 penalty units for purporting to pay wages in kind rather than in money.134 It appears that deductions from pay for breakages and till shortages are also prohibited. Section 324 expressly permits employers to agree “salary sacrifice” arrangements with staff, so long as these arrangements are authorised by employees and are “principally for the employee’s benefit”. However, any deduction that is “directly or indirectly for the benefit of the employer or a party related the employer” and is unreasonable is prohibited by s 326, and any term in an award, enterprise agreement or contract which purports to permit the employer to make these kinds of deductions from pay has no effect. The Fair Work Bill Explanatory Memorandum (at [1297]) named a fine for lateness as an example of an unreasonable and therefore unenforceable deduction. Section 325 also imposes a restraint of “reasonableness” on any requirement in an employment contract that an employee is required (either directly or indirectly) to spend their wages on work expenses. The Fair Work Bill Explanatory Memorandum (at [1292]) said the tradesperson required to purchase tools for work was an example of a requirement that “may be reasonable”, and cited an obligation to make a donation to a charitable or religious organisation as an unreasonable requirement.135 The Fair Work Regulations 2009, reg 2.12 provides that for the purposes of s 326, employer deductions for the provision of goods and services will only be “reasonable” if they are provided to the employee at no less favourable terms than the employer provides those goods and services to the general public. These provisions have their pedigree in State-based Truck Acts, now overridden by federal law.136 Truck enactments date from as early as 1646 in England, and were intended to stop the exploitative practices of some masters who purported to pay their servants in goods, valued at the master’s discretion. For the history of and policy behind Truck enactments, see Lord Ackner’s opinion in Bristow v City Petroleum Ltd.137 (Bristow concerned a petrol service station attendant who won his complaint against an employer who deducted till shortages from his wages.138)

133 134

See Fair Work Act 2009 (Cth), s 327. See Fair Work Act 2009 (Cth), s 539(2), Item 10.

135

In Radploy Pty Ltd T/A Lake Imaging [2011] FWA 39 at [49], Gooley C opined that a clause in a proposed agreement permitting an employer to deduct recruitment costs from employees’ wages, if the employees resigned prematurely, would breach s 326 because the deduction would be for the benefit of the employer only. Under the Workplace Relations Act 1996 (Cth), s 16(3)(h) – (j), matters concerning method and frequency of payment of wages, and deductions from wages, were “non-excluded” matters that might still be regulated by State and Territory laws. These are no longer “non-excluded matters” under the Fair Work Act 2009 (Cth), s 27(2). Bristow v City Petroleum Ltd [1987] 1 WLR 529 at 532-535. See also a useful account of the history of the Truck Act 1896 provisions and the statutory scheme of Fair Work Act 2009 (Cth), ss 323 – 326 in AEU v Victoria [2015] FCA 1196 (6 November 2015, Bromberg J) at [148]-[175]. Mr Bristow brought his complaint under the Truck Act 1896. The relevant United Kingdom legislation is now the Wages Act 1986.

136

137

138

Fair Work Act 2009

The National Employment Standards Hours of work [12.170] The NES provide that employers must not require employees to work more than 38 hours a week unless the additional hours of work requested are “reasonable” taking into account a range of factors listed in s 62(3).139 These factors include: • Risks to the employee’s health and safety; • The employee’s personal circumstances, including family responsibilities; • The needs of the workplace or enterprise; • Whether the additional hours attract remuneration at penalty rates; • The amount of notice given; • The usual pattern of work in the industry; and • The nature of the employee’s role and level of responsibility. So an employment contract providing for more than 38 hours of work each week is at risk of breaching the Fair Work Act 2009 unless the additional hours are assessed to be reasonable according to these criteria. What is “reasonable” is assessed on a case by case basis.140 Modern awards and enterprise agreements can include terms permitting the averaging of hours over a period, to accommodate patterns of work in an industry or business.141 Award and agreement-free employees can enter into written contracts to average working hours, so long as the averaging period does not exceed 26 weeks.142 Awards and enterprise agreements also often deal with rostering, and the minimum duration of shifts for casual and part-time workers. Certain employees have a right to request flexible working hours, notwithstanding the ordinary hours set by an award or enterprise agreement. These include parents or carers of children who are school-aged or younger, other carers as defined by the Carer Recognition Act 2010 (Cth), s 5,143 people with disabilities, those who are 55 or older, victims of domestic violence, and carers of victims of domestic violence.144 The employee must have completed at least 12 months’ continuous service with the employer, and if a casual, must be a long term casual with a reasonable expectation of continuing work on a regular and systematic basis.145 Requests for flexible hours must be made in writing, and employers must have “reasonable business grounds” in order 139

140

141 142 143

144 145

The following notes provide a brief outline only of the essential features of the NES. For detailed discussion, see Herbert, Parry, Phillips and Stewart, National Workplace Relations (Thomson Reuters, subscription service). See Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2015] FCAFC 25, at [173]. For a case in which a weekly hours clause in an enterprise bargain was considered to be unreasonable and therefore contravened the NES, see ALDI Foods Pty Ltd v Transport Workers’ Union of Australia (2012) 227 IR 120. See also Premier Pet Pty Ltd t/as Bay Fish v Brown (No 2) [2013] FCA 167. Fair Work Act 2009 (Cth), s 63. Fair Work Act 2009 (Cth), s 64. The Carer Recognition Act 2010 (Cth), s 5 includes carers of the frail aged, and persons with disabilities and chronic illnesses, so long as the care is not provided under an employment contract or contract of services, and is not done in the context of volunteering for a charitable organisation. The definition also provides that merely being a relative or guardian of, or residing with, a person who requires care is insufficient to qualify as a carer. See Fair Work Act 2009 (Cth), s 65. Fair Work Act 2009 (Cth), s 65(2).

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to refuse the request.146 These grounds include (but are not limited to) matters such as the cost of providing flexibility, the employer’s ability to reorganise rosters of other employees, and any negative impact on customer service. Employers have 21 days to respond to a request, and must do so in writing.147 An employer’s decision to refuse the request is not a matter that can be arbitrated by the Fair Work Commission, unless the employer agrees to submit to arbitration of the matter.148

Parental leave [12.180] The Fair Work Act 2009 mandates that employers must permit permanent employees and long term casuals with at least 12 months service, to take up to 12 months unpaid parental leave.149 Employees may also request a further period of up to 12 months’ leave, but employers are not obliged to allow further leave requests if they provide a written response identifying “reasonable business grounds” for refusal.150 The leave must be taken as a continuous period,151 however the continuous period will not be broken by “keeping in touch days”, as defined by s 79A(2). The leave period may start up to six weeks prior to the expected birth date, or earlier if the employer agrees, and must not start later than the birth date of the child.152 Employers may request a medical certificate from a pregnant employee who wishes to continue working in the six weeks before the anticipated delivery.153 Awards and enterprise agreements may also provide for a period of paid parental leave, subject to qualifying conditions.154 The principal statutory benefit in the NES is the right to return to work at the conclusion of the leave to the same position, or if that position no longer exists, to “an available position for which the employee is qualified and suited nearest in status and pay to the pre-parental position”.155 Contests over this right arise when employer organisations undergo restructuring while employees are on parental leave. A restructuring resulting in a genuine redundancy of the pre-parental leave position may defeat this right to return to work.156 Replacement of the person on leave with a new recruit will not create a genuine redundancy, and the legislation requires employers to specifically notify replacement staff that their positions are temporary.157 Also, employers who make an employee’s position redundant while he or she is on parental leave will bear the onus of proving that the reason for selecting this position for redundancy did not include any reason prohibited by the General Protections against discrimination (see [13.290]). Selection of a candidate for redundancy because of their pregnancy, marital status, or family responsibilities, or because they were exercising the workplace right to take a period of leave, would constitute illegitimate adverse action for the purposes of the General Protections. 146 147

See Fair Work Act 2009 (Cth), s 65(5A). Fair Work Act 2009 (Cth), s 65(4).

148 149 150 151

See Fair Work Act 2009 (Cth), s 44(2). See Fair Work Act 2009 (Cth), ss 67 – 85. Fair Work Act 2009 (Cth), s 76(4). Fair Work Act 2009 (Cth), s 71(2).

152 153 154

Fair Work Act 2009 (Cth), s 71(3). Fair Work Act 2009 (Cth), s 73(1). The Paid Parental Leave Act 2010 (Cth) governs the administration of a government-sponsored scheme for the payment of parental leave. Discussion of this legislation is outside of the scope of this book.

155 156

Fair Work Act 2009 (Cth), s 84. See Stanley v Service to Youth Council Inc [2014] FCA 643 at [225]; Poppy v Service to Youth Council Inc [2014] FCA 656 at [165]. See Fair Work Act 2009 (Cth), s 84A.

157

Fair Work Act 2009

Parental leave can be taken by natural or adopting parents, and the 12 month leave period may be shared by both parents.158 A female employee with at least 12 months’ continuous service may also take unpaid “special maternity leave” if she is unfit for work because of a pregnancy-related illness, or because she miscarries within 28 weeks of the expected date of birth.159 The parental leave provisions include an entitlement for a pregnant employee, who is entitled to take unpaid parental leave, to be transferred to a safe job if the current position poses risks to her pregnancy. If no safe job is available, she will be entitled to take “paid no safe job” leave.160 A pregnant employee who needs for medical reasons to be transferred to a safe job, but who is not entitled to unpaid parental leave (for instance, because she has not yet served the 12 months’ qualifying period), will be entitled to “unpaid no safe job leave” if no safe job can be found for her.161

Annual leave [12.190] Until the enactment of Work Choices, mandatory minimum annual leave entitlements were a matter of State regulation. Now, the NES includes an entitlement to a minimum of four weeks of paid leave at an employee’s base rate of pay for every year of service by permanent employees.162 Casual employees are not entitled to annual leave. The casual leave loadings in awards are intended to compensate for the denial of paid recreation and sick leave for casuals.163 Shift workers (defined as employees who are rostered to work on rotating shifts, covering 24 hours a day, seven days a week including public holidays164) are entitled to five weeks paid leave. Modern awards and enterprise agreements may include terms providing for the cashing out of annual leave so long as the employee leaves at least one year’s entitlement (four weeks) “in the bank”.165 Employees who are not covered by an award or enterprise agreement may enter into a written agreement to cash out surplus leave, on the same basis.166

Personal/carer’s and compassionate leave [12.200] Once known as “sick leave”, and included in old awards and workplace agreements, “personal/carer’s leave” is an entitlement of 10 days of paid leave each year to permit permanent employees to manage their own illness and injury, and to attend to an immediate family or household member who is suffering illness, injury or some unexpected emergency.167 Casual employees do not enjoy paid personal/carer’s leave entitlements. Just as accrued annual leave entitlements can be cashed out by the provisions of a modern award, enterprise agreement or (for award/agreement-free employees) by a written employment contract, so can employees agree to cash out surplus personal/ carer’s leave so long as they keep a minimum of 15 days in the bank.168 In addition to paid leave, employees who have exhausted their paid leave entitlements have a statutory entitlement to take up to two days unpaid carer’s leave on 158

See Fair Work Act 2009 (Cth), s 72.

159 160 161 162

Fair Work Act 2009 (Cth), s 80. Fair Work Act 2009 (Cth), s 81A. See Fair Work Act 2009 (Cth), s 82A. See Fair Work Act 2009 (Cth), ss 87, 90.

163 164 165

See Fair Work Act 2009 (Cth), s 294(2)(c). See Fair Work Act 2009 (Cth), s 87(3). Fair Work Act 2009 (Cth), s 93.

166 167 168

See Fair Work Act 2009 (Cth), s 94. Fair Work Act 2009 (Cth), ss 96 – 99. Fair Work Act 2009 (Cth), s 101.

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any occasion when an immediate family or household member requires care or support as a result of illness, injury or unexpected emergency.169 Permanent employees (but not casuals) are also entitled to two days paid leave for every occasion when an immediate family or household member dies or suffers a life-threatening disease or injury.170 Employers are entitled to receive notice of the employee’s intention to take such leave (although notice may be given after the leave has commenced), and may require such evidence of the need for the leave that would satisfy a “reasonable person”.171 These statutory entitlements to take leave to deal with illness and family emergencies are also supported by a general workplace right not to be subjected to any “adverse action” on account of family responsibilities,172 or because the employee has been temporarily absent from work due to illness or injury.173

Community service leave [12.210] Employees are entitled to reasonable absences from work to undertake voluntary community service activities, including jury service and emergency management activities (such as fire-fighting), subject to complying with notice requirements and the various limitations set out in Fair Work Act 2009, s 109. In the case of jury service, permanent employees (but not casuals) also have a right to receive their ordinary base rate of pay for up to ten days of absence on jury service. This is also subject to meeting notice and other requirements.174 Community service is one area where the federal statute does not override any relevant State laws. Where a State or Territory law would provide employees who are called for jury or emergency services with more beneficial entitlements, the State or Territory law prevails.175

Long service leave [12.220] Long service leave entitlements are a peculiarly Australian phenomenon, possibly deriving from practices developed when the Australian States were British colonies, and long-serving public servants were permitted, and possibly even encouraged, to take the long sea voyage back to the mother country after a long tour of duty. Until the enactment of the Fair Work Act 2009, long service leave was regulated by State laws and State and federal industrial awards and enterprise agreements. The NES does not prescribe a single long service leave entitlement for all employees. Instead it preserves existing entitlements derived from awards and agreements (including State awards) where those entitlements are more generous than the long service leave entitlements prescribed by State and Territory laws.176 State laws dealing with long service leave are “non-excluded matters” that may still operate in respect of any employee who does not enjoy an “award-derived” or “agreement-derived” long service leave entitlement under the NES.177 169 170 171

Fair Work Act 2009 (Cth), s 102. Fair Work Act 2009 (Cth), ss 104 – 106. Fair Work Act 2009 (Cth), s 107.

172

See Fair Work Act 2009 (Cth), s 351. Note however the result in CFMEU v Endeavour Coal Pty Ltd [2015] FCAFC 76, where an employer was able to excuse taking adverse action against an employee because of his unpredictable attendance record as a result of taking carer’s leave. See [13.300]. See Fair Work Act 2009 (Cth), s 352. The Fair Work Regulations 2009 (Cth), reg 3.01 prescribes three months as a temporary absence.

173 174 175 176

Fair Work Act 2009 (Cth), ss 110 – 111. Fair Work Act 2009 (Cth), s 112. See Fair Work Act 2009 (Cth), ss 113 – 113A.

177

See Fair Work Act 2009 (Cth), s 27(2)(g). State and Territory legislation dealing with long service leave includes: Long Service Leave Act 1955 (NSW); Long Service Leave Act 1958 (WA); Long Service

Fair Work Act 2009

Absence from work on public holidays [12.230] The Fair Work Act 2009 provides employees with a right to be absent from work on public holidays, however this right is considerably weakened by provisions which allow employers to make “reasonable requests” that employees attend work on public holidays, and put employees to the test of establishing that such requests were “unreasonable”, or that the employee had good reasons for refusing to comply with the request. Section 115 sets out a list of eight public holidays, and includes any other day declared to be a public holiday by a State or Territory law. This means that State public holidays (such as Melbourne Cup Day in Victoria) also attract the Fair Work Act 2009 entitlements.178 Employees who are normally rostered to work on the public holiday are entitled to be paid for the absence. Rates of pay for those employees who do work on public holidays are determined by modern awards, enterprise agreements or (in the case of award and agreement-free employees) employment contract terms. Typically, modern awards and enterprise agreements provide the most generous penalty rates for named public holidays.179

Notice of termination [12.240] Minimum notice periods for terminating an employee’s employment are set out in s 117. These periods range from one week for an employee with less than a year’s service, to five weeks for an employee with more than five years’ service who is also over 45 years old. Notice may be given and served, or employers may pay the employee in lieu of notice.180 Fixed term and casual employees, and those who have been dismissed for serious misconduct, are not entitled to notice according to s 117.181 These are minimum periods of notice only. Longer periods may be prescribed in a modern award, enterprise agreement, or agreed in a common law employment contract.182 The ability of employers to effectively terminate an employment contract is also constrained by Pt 3-2 of the Fair Work Act 2009, which permits eligible employees who have been dismissed in circumstances that prove to be “harsh, unjust or unreasonable” to make an application to the Fair Work Commission for reinstatement or compensation.183 The existence of statutory remedies for unfair dismissal does not preclude an employee from bringing an action in contract for damages calculated on the basis of putative earnings during a proper notice period, as the many successful termination of contract cases prove.184 So where a contract of employment stipulates a greater notice period than the statutory minimum, an employee may bring an action in contract for damages based on the longer, contractual notice period. Where there is no stipulated notice period, an employee may bring a contract claim for a “reasonable

178

179

180 181 182 183 184

Leave Act 1976 (Tas); Long Service Leave Act 1976 (ACT); Long Service Leave Act (NT); Long Service Leave Act 1987 (SA); Long Service Leave Act 1992 (Vic); Long Service Leave Act 1999 (Qld). Long service leave entitlements can be extremely complex, especially where entitlements derive from an old industrial instrument (such as State or federal certified agreement made before the enactment of the Fair Work Act 2009). Readers are advised to seek specific legal advice on individual problems. State legislation declaring public holidays includes Public Holidays Act 2010 (NSW); Public Holidays Act 1993 (Vic); Holidays Act 1958 (ACT); Holidays Act 1910 (SA); Public Holidays Act (NT); Public and Bank Holidays Act 1972 (WA); Holidays Act 1983 (Qld); Statutory Holidays Act 2000 (Tas). For a study of public holidays and the interaction of the Fair Work Act 2009 (Cth), industrial instruments and State laws, see Riley, Public Holidays in NSW: Review of the Banks and Bank Holidays Act 1912 (NSW Government, 2009). Fair Work Act 2009 (Cth), s 117(2)(b). Fair Work Act 2009 (Cth), s 123. See Chapter 8. See Fair Work Act 2009 (Cth), ss 379 ff, and Chapter 13. See, for example, Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357; Guthrie v News Ltd [2010] VSC 196; Whittaker v Unisys Australia Pty Ltd [2010] VSC 9.

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period of notice”, and depending upon the circumstances of the employment, this may be a considerably longer period than the statutory minimum (see [9.30]).185

Redundancy [12.250] Employees who have been dismissed for reasons of redundancy also have an entitlement to receive a severance payment according to the schedule set out in s 119(2).186 This schedule reflects the scale of payments determined in the Australian Industrial Relations Commission’s 2004 Redundancy Test Case.187 Payments range from four weeks’ pay for employees with at least one year but less than two years’ service, to 16 weeks for employees with between nine and ten years’ service. Once an employee has accumulated ten years’ service, the redundancy pay entitlement is fixed at 12 weeks pay. The reason for the entitlement sliding down from 16 to 12 weeks at this point is that the long service leave entitlement cuts in as soon as an employee has served continuously for ten years. Small business employers (defined in s 23 as an employer with fewer than 15 employees) are exempt from the obligation to pay the NES redundancy entitlements.188 Enterprise agreements can, and frequently do, provide for more generous redundancy benefits. Redundancy entitlements are explained more fully in Chapter 13.

Other statutory workplace rights [12.260] The Fair Work Act 2009 provides for a number of workplace rights that also constrain the complete freedom of employers and employees to agree their own terms. For example, terms of employment that would permit discriminatory treatment of employees based on their exercise of freedom of association rights, or on the basis of characteristics protected by discrimination laws, risk breaching the General Protections provisions in Pt 3-1 of the Act. The protection from discriminatory treatment is dealt with in Chapter 15. Likewise, the employer’s ability to terminate an employment contract may be constrained by the risk of a successful application for reinstatement under the unfair dismissal provisions in Pt 3-2 of the Act (see [13.50]). At the same time, the statutory provisions governing the payment of compensation in lieu of reinstatement have curtailed the expansion of common law damages to include any sum in respect of hurt or humilation.189 In Burazin v Blacktown City Guardian Pty Ltd,190 a case decided according to the unfair dismissal provisions in the former Industrial Relations Act 1988 (Cth), the court was prepared to award a sum in compensation for the humiliating manner of the applicant’s dismissal. This is no longer permitted according to the Fair Work Act 2009, s 392(4) (mirroring the former Workplace Relations Act 1996 (Cth), s 654(9) which was introduced with the Work Choices amendments). On the basis of the principle in Johnson v Unisys Ltd,191 accepted in New South Wales v Paige,192 the existence of a statutory prohibition on awarding compensation for “shock, distress or 185 186 187 188 189 190 191 192

See, for example, Ma v Expeditors International Pty Ltd [2014] NSWSC 859, where reasonable notice was assessed at 10 months for a highly paid, 51 year old executive. See Chapter 9 for a discussion of redundancy. Redundancy Test Case (2004) 129 IR 155. This case expanded the entitlements determined in the Termination Change and Redundancy Case (1984) 8 IR 34. Fair Work Act 2009 (Cth), s 122(1)(b). See Gray, “Damages for Wrongful Dismissal: Is the Gramophone Record Worn Out?”, in McCallum, McCarry and Ronfeldt (eds), Employment Security (Federation Press, 1994). Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144. Johnson v Unisys Limited [2001] 2 All ER 801. New South Wales v Paige (2002) 60 NSWLR 371 at 396-400, [136]-[155].

Fair Work Act 2009

humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal”193 arguably curbs the development of any common law principle permitting recovery of such compensation, absent some clear contractual promise to avoid such harm.194 Note also State laws, the operation of which are preserved by Fair Work Act 2009, s 27 (listed at [1.80] and [1.90].)

Ban on strike pay [12.270] Employers are also prohibited from agreeing to pay employees for any period during which the employees took industrial action, whether that action was “protected action” or unprotected action.195 Prohibitions on payment of (or requests for) strike pay have been in the federal legislation since the enactment of the Workplace Relations and Other Legislation Amendment Act 1996 (Cth). So any term in an employment contract that provides for payment during any period of industrial action would be void as an illegal contract term. See [5. 120] for further discussion of the statutory ban on strike pay.

Terms and conditions of work for independent contractors [12.280] In some specialised areas, legislation operates to empower courts or other administrative decision-makers to vary the terms and conditions of work for certain kinds of workers, and in certain circumstances. One example is the unfair contracts review jurisdiction of the Federal Court and Federal Circuit Court under the Independent Contractors Act 2006 (Cth), s 12 (see [4.300]). This jurisdiction applies only to contracts of service, and not to any employment contracts (see [2.130]). Although the Independent Contractors Act 2006 overrides State industrial laws, it preserves the jurisdiction of certain State laws providing for the regulation of non-employed work in the transport industry. These include the Owner Drivers and Forestry Contractors Act 2005 (Vic); ch 6 of the Industrial Relations Act 1996 (NSW) (dealing with “Public Vehicles and Carriers”); and the Owner Drivers (Contracts and Disputes) Act 2007 (WA).196 These State enactments are notable for their establishment of mechanisms for the review, and in some cases variation, of contract rates and conditions.197 See, for example, Owner Drivers and Forestry Contractors Act 2005 (Vic), s 21 which mandates a minimum notice period of three months for the termination of a driving contract with a forestry or heavy vehicle driver (with exceptions for terminations for willful breach of contract). So even in work relationships outside of the boundaries created by the concept of “employment”, and where it is

193 194

195 196

197

Fair Work Act 2009 (Cth), s 392(4). In Nikolich v Goldman Sachs J B Were Services Pty Ltd [2006] FCA 784, Wilcox J allowed recovery of some damages for psychological distress based on the principle in Baltic Shipping Company v Dillon (1993) 176 CLR 344, because he held that there was an express term in the employment contract guaranteeing an harassment-free workplace. This issue was not explicitly dealt with on appeal in Goldman Sachs J B Were Services Pty Ltd v Nikolich (2007) 163 FCR 62. See also Commonwealth Bank of Australia v Barker [2014] HCA 32, discussed at [5.160]. See Fair Work Act 2009 (Cth), ss 473 – 475. Chapter 14 explains protected and unprotected industrial action. See Independent Contractors Act 2006 (Cth), s 7 and Independent Contractors Regulations 2007 (Cth), reg 4. The regulations also retain the operation of the various State Building and Construction Industry Security of Payment Acts dealing with rights to progress payments in construction contracts. For a detailed account of these schemes, see Johnson, “Developing Legislative Protection for Owner Drivers in Australia: The Long Road to Regulatory Best Practice”, in Fudge et al (eds), Challenging the Legal Boundaries of Work Regulation (Hart Publishing 2012), p 121.

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generally assumed that the principles of commercial law apply, there are areas of regulation that constrain the freedom of those engaging labour to write and enforce their own contracts.198

Intersection of Contract and Statute Contract and statute [12.290] The statutory rights and obligations described above arise as a consequence of an enactment by Parliament, and will have the legal effect that the statute itself determines. Breach of a statutory obligation will not ordinarily give rise to a right to bring an action in contract. In Byrne v Australian Airlines Ltd199 the High Court held that there is no automatic incorporation of an award into the contract of employment regardless of the actual intention of the parties to the contract of employment. A section in a statute which provided that “all wages earned shall be paid monthly not later than the first day of each month” was held, in its context, not to preclude an agreement to pay wages more frequently, nor to preclude an award being made to the like effect. The section made it impermissible to pay wages less frequently.200 The statute did not, however, create the right to receive wages; that right depended upon the agreement between the parties.201 It is clear that where a statute lays down requirements to be observed by parties to an employment contract, the statute will be decisive. The matter is authoritatively stated in Director-General of Education v Suttling where it was said: “If the relationship is contractual, the contract must be consistent with any statutory provision, which affects the relationship. No agent of the Crown has authority to engage a servant on terms at variance with the statute. To the extent that the statute governs the relationship, it is idle to inquire whether there is a contract which embodies its provisions. The statute itself controls the terms of service”.202 Likewise, where a statutory provision (or a term in an award or enterprise agreement) comprehensively regulates a particular aspect of the employment relationship, there will generally be no room for the implication of any contract terms dealing with that matter. So in South Australia v McDonald,203 the South Australian Court of Appeal held that a school teacher’s employment contract did not include the usual implied obligation not to destroy mutual trust and confidence in the relationship, on the basis that the extensive provisions in the Education Act 1972 (SA) and Education Regulations 1997 (SA) dealing with dispute resolution and grievance procedures left no room for the implication of this common law obligation. Similarly, in McAleer v University of Western Australia,204 Siopis J held that the extensive formal procedures set out in a certified agreement operated to exclude the implication of any common law obligation not to destroy trust and confidence by failing to afford the employee procedural fairness during a disciplinary investigation. The High Court of 198 199 200 201 202

203 204

For a study on the regulation of non-employed work, see Johnstone et al, Beyond Employment: The Legal Regulation of Work Relationships (Federation, 2012). Byrne v Australian Airlines Ltd (1995) 185 CLR 410. Federated Seamen’s Union of Australasia v Commonwealth Steamship Owners Association (1922) 30 CLR 144. Federated Seamen’s Union of Australasia v Commonwealth Steamship Owners Association (1922) 30 CLR 144 at 163 per Starke. Director-General of Education v Suttling (1987) 162 CLR 427 at 437-438 per Brennan J for the majority. His Honour cited McVicar v Commissioner for Railways (NSW) (1951) 8 CLR 521 at 527 in support. South Australia v McDonald (2009) 104 SASR 344. McAleer v University of Western Australia [2007] FCA 52 at [63].

Intersection of Contract and Statute

Australia has confirmed that courts must be reluctant to imply any term into an employment contract where there is an extensive statutory regime dealing with the matter.205

Statutory remedies for breach of contract [12.300] The Fair Work Act 2009 provides that “safety net contractual entitlements”

are also enforceable under the machinery of the Fair Work Act 2009.206 “Safety net contractual entitlements” are defined in s 12 to mean any entitlement agreed in a contract between an employer and employee that deals with one of the matters in the NES or in a modern award. An employment contract may include terms which agree to meet or exceed the minimum entitlements set out in the NES or an applicable award. The effect of this provision is to permit employees to bring breach of employment contract claims in respect of these matters before the Federal Circuit Court, and so take advantage of the small claims procedures in s 548 of the Act.

Incorporation of statutory obligations by reference [12.310] Parties to employment contracts will sometimes make reference to a statutory obligation, award or enterprise agreement in an employment contract. The question then arises as to whether the contract incorporates the statutory provision by reference, so that the parties are bound in contract by the statutory term (see Chapter 5). It is clear, following Commonwealth Bank of Australia v Barker,207 that parties must clearly express an intention to incorporate the term before it will become part of their contractual obligations. A court will not imply such a term. Sometimes parties to an employment contract attempt or purport to incorporate by reference the substance of some legislation or regulation which does not of its own force apply to the employee. Such a course of action is fraught with real and potential difficulties. Tucker v Pipeline Authority208 concerned a condition of employment of an engineer which stated, among other things: “the provisions that apply to Australian public servants should be applied mutatis mutandis to the staff of the Authority”. The engineer was dismissed. The court was satisfied that the condition imported into the contract the “fundamental concepts” of the main disciplinary provisions of the Public Service Act 1922 (Cth), although not the “administrative machinery appropriate to those concepts”. Nevertheless: “the concepts incorporated in each of those sections are to be imported into the contract which was made between the plaintiff and the defendant”.209 This would seem to have required that the dismissed engineer should have been, in effect, charged with incompetence and given a hearing. These steps were not taken and so his dismissal was wrongful. Again in Ellis v Minister for Lands210 a person was employed by an authority other than the public service. Correspondence relating to the employment made provision for termination “similar to that” applicable to permanent public servants in the Northern Territory, although the employee was not in fact such a public servant. He was later suspended. The legislation governing his employment had been amended since his employment, but, it was held, not in such a way as to deprive him of whatever rights he had acquired on initial engagement. These rights included an entitlement to be dealt with in accordance with procedures similar to those accorded public servants who were to be suspended or dismissed. As he had not been dealt with in that way, his purported 205 206 207 208 209 210

See Commonwealth Bank of Australia v Barker [2014] HCA 32 at [40], discussed at [5.160]. See Fair Work Act 2009 (Cth), ss 542 – 543. Commonwealth Bank of Australia v Barker [2014] HCA 32. Tucker v Pipeline Authority (1981) 3 IR 120. Tucker v Pipeline Authority (1981) 3 IR 120 at 122. Ellis v Minister for Lands (1985) 82 FLR 58.

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suspension was held invalid.211 Secretary of State for Employment v Globe Elastic Thread Co Ltd212 involved an agreement to count the service of an employee with two different companies as continuous in circumstances where the relevant redundancy legislation did not preserve continuity of service. It was held that the earlier service could not be taken into account in calculating entitlements under the Act. The employee had contractual rights and the purpose of the litigation was to ascertain whether the employer was entitled to a rebate from the government in respect of the redundancy payments it had made. These difficulties point to the inadvisability of drafting contracts of employment whose terms incorporate by reference statutes or regulations not applicable by their own force to the parties, or which attempt or appear to modify or extend statutory rights. Whatever the parties wish to achieve by their contract seems better set out fully in the contract. If it is not, the “incorporating” clause should be drafted with great care and with particular attention to the terms of the statute. In particular it needs to be borne in mind that a contract cannot make available statutory remedies which the statute does not itself make available to the parties. Consequently, if the contract incorporates the substance of statutory provisions not otherwise applicable to the parties, they will be enforceable as clauses in the contract, not under the statutory regime.

Awards and employment contracts [12.320] Modern awards assume the existence of a contract of employment however the terms of awards are not automatically incorporated into the employment contract. Whether award terms become contract terms will depend on whether the parties intended to incorporate the award terms into their contract. The question is an important one in cases where an aggrieved party is seeking to bring a common law action for damages for breach of the employment contract. The usual remedy for breach of contract is payment of expectation-based damages, that is, damages based on the innocent party’s entitlement to be placed in the position he or she would have been, had the contract been properly performed according to its terms.213 The remedies for breach of an award are determined by statute, and include pecuniary penalties, injunction, compensation for loss suffered as a consequence of the contravention, and (in appropriate cases) reinstatement orders.214 Application of these statutory remedies may not produce the same outcome as a contract claim. For example, it was argued in Gregory v Philip Morris Ltd215 that an award clause prohibiting dismissals that were “harsh, unjust or unreasonable” was necessarily incorporated as a term in an employment contract, so that the employee was entitled to contract damages based on his expectation of long term employment. Mr Gregory received an amount of $30,000 in respect of approximately 18 months wages that the court estimated he would have been likely to have received if Philip Morris had complied with its obligations under the award. If the matter had been resolved purely on the basis that there had been a breach of the award, the appropriate remedy would have been an order that the employer observe the award, or a pecuniary 211

212 213 214 215

But compare Australian Film Commission v Mabey (1985) 59 ALR 25 at 33 where Bowen CJ and Fox J concluded on the facts: “the agreement being terminated was wholly contractual. Provisions of statutes were incorporated by the contract, but were not of statutory effect. The power which was exercised [termination] did not arise under any statute, or, indeed under the provisions of any statute incorporated by reference.” McGregor J seems to have been of a similar view. Secretary of State for Employment v Globe Elastic Thread Co Ltd [1980] AC 506 (HL). See Chapter 10. Fair Work Act 2009 (Cth), ss 45, 539 and 545. Gregory v Philip Morris Ltd (1988) 80 ALR 455. See also Wheeler v Philip Morris Ltd (1989) 97 ALR 282 and Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20.

Intersection of Contract and Statute

fine. Following Gregory, the Federal Court awarded contract-based damages of several years wages to an unfairly dismissed employee in Bostik (Australia) Pty Ltd v Gorgevski (No 1).216 This line of authority was overturned in Byrne v Australian Airlines Ltd,217 where the High Court held that industrial awards were not incorporated into employment contracts without the express intention of the parties. The High Court held that award terms would not be implied into employment contracts in fact or by law.218 The High Court held that awards operate with statutory force and there was no need to convert statutory rights and obligations into contractual rights and obligations. Brennan CJ, Dawson and Toohey J indicated that: in a system of industrial regulation where some, but not all, of the incidents of an employment relationship are determined by Award, it is unnecessary that the contract of employment should provide for those matters already covered by the Award. The contract may provide additional benefits, but cannot derogate from the terms imposed by the Award. The Award operates with statutory force to secure those terms and conditions. Neither from the point of view of the employer nor the employee is there any need to convert those statutory rights and obligations to contractual rights and obligations.219

The Court did accept that it was possible for an award term to be implied into a contract of employment on the basis of custom or usage. However this was said to be a question of fact and there must be evidence of its acceptance such that it was “reasonable to assume that the parties contracted on the basis of the custom and that it is therefore reasonable to import such a term into the contract”.220 In Byrne there was found to be a lack of evidence of custom whereby, as between persons in the position of the parties to the contract the provisions of the relevant clause in the award was so well known and accepted that all parties of the relevant description could reasonably be presumed to contract on the basis that the said clause became a term of the contract.221 So before parties will be bound in contract by an award term, it is necessary to demonstrate that the parties have voluntarily agreed to be so bound. This is consistent with the underpinning rationale of contract law. Only those obligations to which parties have willingly consented are binding in contract. The obligation to comply with an award arises as a matter of compulsion, so only those remedies stipulated by the statute apply in the case of contravention. In Hotville Pty Ltd v New South Wales Nurses’ Association222 the vendor employer of a nursing home in anticipation of settlement of a contract for sale of its nursing home business terminated the contracts of employment of some of its long serving employees contrary to a transmission of business clause in the relevant award. But then in order to avoid its liability to make redundancy payments to these employees under another award the vendor employer sought declarations that its purported terminations were void and of no effect as being in breach of the transmission of business clause. Peterson J consistent with Byrne v Australian Airlines Ltd held that the terminations of employment were effective under the general law of contract even though it was in breach of the award. Termination in breach of the award gave rise to a statutory penalty for breach but did not render the terminations void for illegality. 216 217 218 219 220 221 222

Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20. Byrne v Australian Airlines Ltd (1995) 185 CLR 410. See Chapter 4. Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 421. Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 423. Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 423. Hotville Pty Ltd v New South Wales Nurses’ Association [2002] NSWIRComm 338.

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Above award provisions [12.330] Awards never, or rarely, deal “with all the matters which affect the relations of any particular employer and any particular employee … there are terms of their relationship which do not depend on any award. For example, the employee must always obey the lawful orders of the employer, but awards do not commonly include a term to that effect.”223 So: the contract may provide for terms additional to those prescribed by the award … Whether the terms of an award constitute the whole of the terms of a contract of employment which must be obeyed by the parties to the contract, or whether there are additional terms, is a question of fact to be determined in each particular case.224

Furthermore, even in respect of matters which are dealt with in an award, the parties to a contract of employment can usually agree to make more generous provision.225 It has been said that “[w]here parties have made an agreement, whether registered or unregistered, to provide for terms and conditions of employment for work which is also covered by an award then both the award and the agreement must be observed … Where … the rates and conditions under an agreement are superior to those in the award then the obligations under the award are satisfied by the application of the superior provisions of the agreement.”226 A contract can provide for wages in excess of the minimum rates which are prescribed by an award.227 Most awards do prescribe minimum rates, and so agreements for “over award payments” are possible.228

Enterprise agreements and the contract of employment [12.340] Just as award clauses are not automatically incorporated as terms of the employment contract, so it is with the terms of any enterprise agreement. In ACTEW Corporation Ltd v Pangallo,229 a full bench of the Federal Court held that the principle articulated in Byrne v Australian Airlines in respect of awards also applied in the case of certified enterprise agreements, notwithstanding that enterprise agreements are made as a consequence of consensual industrial arrangements. The court held that “a certified agreement is solely a creature of statute having force by virtue of the statute”.230 Before a term in an enterprise agreement will have effect as a term of the employment contract (and give rise to contractual damages for breach) it will be necessary to demonstrate that the parties either expressly or impliedly intended the term to have contractual effect (and not merely effect according to the statute). Where parties are shown to have agreed to incorporate the statutory provision or industrial instrument into the contract, terms from the statute or instrument will be given contractual effect, so long as the terms are promissory in nature. So in Riverwood 223 224 225

226 227 228 229 230

Amalgamated Collieries (WA) Ltd v True (1937) 59 CLR 417 at 423 per Latham CJ. Brain v Goodyear Tyre & Rubber Co (Australia) Ltd (1959) 58 AR 643 at 654 and 655. Federated Engine Drivers and Firemen’s Association of Australia v Adelaide Chemical & Fertiliser Co Ltd (1920) 28 CLR 1 at 12. See also Wiseman v Professional Radio & Electronics Institute of Australia (1979) 35 FLR 24 at 52ff; Regional Express Holdings Ltd (ACN 099 547 270) v Clarke [2007] FCA 957 at [44]. Re Meadow Lea Foods and Australian Workers’ Union (NSW Branch) (unreported, Industrial Commission of New South Wales, Hill J, 6 December 1988, No 74 of 1988). Amalgamated Collieries (WA) Ltd v True (1937) 59 CLR 417 at 431 per Dixon J. See also Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466 at 492-493 per Isaacs J. Re Journalists (Sydney County Council) Award (1959) 58 AR 555 at 556. ACTEW Corporation Ltd v Pangallo [2002] FCAFC 325. See also McAleer v The University of Western Australia [2007] FCA 52 at [54]. ACTEW Corporation Ltd v Pangallo [2002] FCAFC 325 at [33].

Intersection of Contract and Statute

International Australia Pty Ltd v McCormick,231 redundancy pay provisions from an enterprise agreement made between the employer and a union that had been included in a human resources policy manual which the employee had agreed to “abide by” were held (by majority) to be incorporated by reference into the employment contract. A term from an enterprise agreement that provided that the employee would not be dismissed without cause was held to be incorporated into the employment contract in Murray Irrigation Ltd v Balsdon.232 Nevertheless, mere mention of the existence of an award or enterprise agreement which binds the parties will not conclusively determine that the award or agreement clauses are incorporated into and binding in contract. It may be that on proper construction of the contract document, the reference to the award or agreement manifests nothing more than an acknowledgment by the parties of the statutory instruments which will also govern their relationship, according to the terms of the statute. Mention of industrial instruments in a contract document may serve to identify “relevant information capable of affecting the parties contractual relations rather than documents intended to be binding and enforceable as part of their contractual relations”.233 [12.350] In an appropriate case, it may be held that terms of an enterprise agreement are to be implied into an employment contract, because the particular term is so well-accepted in the industry that it would meet the Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur (Australia) Ltd234 test for implication according to custom or usage. In Tibaldi Smallgoods (Australasia) Pty Ltd v Rinaldi235 it was argued that as a result of custom and usage it was an implied term of a contract of employment that the employee was entitled to severance pay in accordance with a certified agreement registered under the former Workplace Relations Act 1996. The employer was party to the certified agreement but during the term of employment of the respondent employee it did not apply to him. The employee nevertheless argued that by custom and usage certain terms of the certified agreement could be incorporated into the employment contract. Coghlan J recognised that the High Court in Byrne v Australian Airlines Ltd236 accepted that as a result of custom, matters might be implied into a contract of employment. His Honour did not seek to distinguish that authority as limited to issues regarding the incorporation of terms of awards into contracts but concluded that there was no basis in the evidence to support the argument of the employee. The evidence went no further than establishing that during the relevant time there was in force an enterprise agreement which applied to other workers. That circumstance was insufficient to establish custom or usage in the workplace and to imply the term into the employee’s contract. In Quickenden v O’Connor, Commissioner of the AIRC237 the Full Federal Court considered an argument that the certification of an enterprise agreement pursuant to former s 170LJ of the Workplace Relations Act 1996 where the agreement incorporated a performance assessment scheme infringed the constitutional guarantee in s 51(xxxi), that any statutory acquisition of property must be on just terms. The basis of the argument was that the certified agreement replaced the pre-existing common law contract between Dr Quickenden and his university employer. Dr Quickenden further argued that these pre-existing contractual rights constituted a chose in action and therefore property, which were displaced entirely by the certified agreement. Black CJ 231 232 233 234 235 236 237

Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193. Murray Irrigation Ltd v Balsdon (2006) 159 IR 52. Soliman v University of Technology, Sydney [2008] FCA 1512 at [67] per Jagot J. Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur (Australia) Ltd (1986) 160 CLR 226. Tibaldi Smallgoods (Australasia) Pty Ltd v Rinaldi [2008] VSC 112 per Coghlan J. Byrne v Australian Airlines Ltd (1995) 185 CLR 410. Quickenden v O’Connor, Commissioner of the AIRC (2001) 184 ALR 260.

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and French J rejected this argument and held that the certified agreement “created rights and obligations which were statutory in character and could operate in addition to the rights and obligations under his contract and, where inconsistent, no doubt displace them”.238 However, they found nothing in the certified agreement which displaced the terms of the common law rights generally, and accordingly they found that it was not exhaustive of the rights and duties of those bound by it.239 Carr J came to the same conclusion and drew the analogy with the relationship between the award and the contract: if they conflict, the award or certified agreement may modify the relevant contractual provisions, but otherwise they continue to co-exist.240 The continued co-existence of an enterprise agreement and employment contract obligations was affirmed in Visscher v Giudice.241 In that case Mr Visscher’s promotion from third mate to chief officer became the matter of an industrial dispute between the employer and the Australian Maritime Officers Union (AMOU). The employer made and registered a certified agreement with the AMOU in settlement of that dispute, and a schedule in the certified agreement listed Mr Visscher as a third mate. Mr Visscher refused to accept this demotion and continued to work and receive wages on the basis that he was acting as a Chief Officer. Sometime later, when the employer purported to reassign duties to Mr Visscher at the level of Second Mate, Mr Visscher claimed that this redeployment constituted constructive dismissal and that he had a right to bring an application for unfair dismissal. The employer’s argument that his level of employment was governed by the schedule of positions in the enterprise agreement was rejected by a majority of the High Court (Gummow J dissenting). The majority held that the schedule in the enterprise agreement “did not constitute a term of employment to which Mr Visscher was bound”.242 If the majority in Visscher had held (as Gummow J did) that Mr Visscher’s ranking as listed in the enterprise agreement was binding on the employer, then it would not be possible for the parties to contract out of that obligation. In McLennan v Surveillance Australia Pty Ltd243 the Full Federal Court of Australia considered whether an agreement entered into between an employer and an employee which would have varied the terms of an Australian Workplace Agreement (AWA)244 could be enforceable by the employer if the variation agreement had not been submitted to the Employment Advocate and approved in accordance with the provisions governing AWAs in the Workplace Relations Act 1996. The Full Federal Court concluded after a detailed examination of the legislative scheme that an AWA did not need to deal in a comprehensive way with the terms and conditions of employment between employer and employee and would therefore “leave some room for the operation of terms implied by the common law”.245 At the same time, however, if the AWA did deal with a particular matter, as was the case in McLennan, any subsequent common law agreement purporting to vary that part of the AWA would be unenforceable since under s 367(2) of the Workplace Relations Act 1996 a workplace agreement could not be varied except in accordance with that sub-section. In Regional Express Holdings Ltd v Clarke246 the Federal Court considered a similar issue but in the context of a collective industrial instrument made under the former Workplace Relations Act 1996. Gordon J found that the “statutory architecture” 238 239 240 241 242 243 244 245 246

Quickenden v O’Connor, Commissioner of the AIRC (2001) 184 ALR 260 at [69]. Quickenden v O’Connor, Commissioner of the AIRC (2001) 184 ALR 260 at [69]. Quickenden v O’Connor, Commissioner of the AIRC (2001) 184 ALR 260 at [131]. Visscher v Giudice (2009) 239 CLR 361. Visscher v Giudice (2009) 239 CLR 361 at [78]. McLennan v Surveillance Australia Pty Ltd [2005] FCAFC 46. AWAs were individual statutory agreements permitted by federal legislation between 1996 and 2008. McLennan v Surveillance Australia Pty Ltd [2005] FCAFC 46 at [43]. Regional Express Holdings Ltd v Clarke [2007] FCA 957.

Intersection of Contract and Statute

dealing with certified agreements was not relevantly different in McLennan v Surveillance Australia Pty Ltd and adopted mutatis mutandis the following statement of principle by the Full Court in that case: Having regard to the protective legislative framework, it is unlikely that the legislature intended that the parties to [a certified agreement] could reach agreement under the umbrella of that protection about matters pertaining to the employment relationship, [obtain certification from the Commission] thereby removing protection which might be afforded by an award (made under the Act or a State award) or afforded by State law, and thereafter bargain without similar protection to reach a collateral agreement (enforceable under the common law) imposing additional burdens on an employee in relation to matters dealt with by the [certified agreement]. Indeed it is for this reason (and probably one other) that the Workplace Relations Act 1996 contains procedures with that protection for parties to [certified agreement] to reach, and obtain approval for, a variation agreement. The other reason would be to allow the parties to [a certified agreement] to add to the [certified agreement] provisions concerning a matter not then dealt with by the [certified agreement].247

Similar provisions pertain under the Fair Work Act 2009, ss 207 – 216 in respect of the requirement that parties follow certain procedures for agreeing variations of enterprise agreements, and obtaining the Fair Work Commission’s approval.

Unregistered collective agreements and contract [12.360] Collective agreements which do not comply with the statutory requirements for approval for one reason or another raise particular problems. Such agreements will not be enforceable under statute because of the parties’ failure to obtain approval of the agreement. The question then raised is: can they have effect as common law contracts? In Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (the Private Arbitration Case),248 the High Court was asked to consider whether a collective agreement that dealt with a matter that was not permitted to be included in a registered certified agreement could nevertheless be binding as a common law contract. The court said: “the underlying agreement remains and the validity of that agreement depends on the general law, not the legislative provisions”.249 This question became particularly important during the Work Choices years when legislation prohibited certain matters (particularly those supporting a role for unions at workplaces) from being included in workplace agreements.250 Many employers who were willing to continue to make arrangements for these kinds of matters with unions entered into “side deals” by way of common law deeds.251 To the extent that these common law agreements are made between an employer and a registered union, they will bind those parties, so long as the parties have capacity to contract, and the agreement meets the usual requirements for validity of a common law contract, including that the parties have demonstrated an intention to be legally bound.252 However it is questionable whether such agreements will create binding obligations between employers and the individual employees whom the union purports 247 248 249 250 251 252

Regional Express Holdings Ltd v Clarke [2007] FCA 957 at [54]. Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (the Private Arbitration case) (2001) 203 CLR 645. Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (2001) 203 CLR 645 at 658, [34]. See former Workplace Relations Act 1996 (Cth), s 358 and Workplace Relations Regulations 1996 (Cth), regs 8.5, 8.6 and 8.7. See Stewart and Riley, “Working Around Work Choices: Collective Bargaining and the Common Law” (2007) 31 MULR 903. As was shown in Chapter 4, contracts may be unenforceable for a number of reasons. There may be no consideration (though this will be provided where the agreement is made in a deed); the parties may

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to represent. Collectively made agreements may fail to bind the parties to the individual employment contracts, because individual employees may be unable to establish that they were parties to the contract at the time it was made. In such a case, the doctrine of privity of contract proves an obstacle.

Intention to create legal relations [12.370] In Australian Agricultural Co v Federated Engine-drivers and Firemen’s

Association of Australia253 the parties entered into an industrial agreement which they intended should be filed in the office of the Industrial Registrar. If so filed it would have been enforceable as an award. It was held not able to be so filed, because it was contrary to public policy in that it purported to suppress or exclude the jurisdiction of the Court of Conciliation and Arbitration. The High Court had to consider whether it nevertheless was efficacious as an agreement at common law. A majority of the High Court held that it was not, for it had not been the intention of the parties that it should have that effect if registration was refused. The difficulty in a case of this kind is, of course, to ascertain the intention of the parties. As in the decision just cited, this can be largely a matter of construction of the written document. Sometimes the parties can state what their intention is, although if that is to be done it is best done unambiguously.254 More often, there is no attempt to state expressly what the intention of the parties is to be. In the Ford Motor Co case255 the employer sought injunctions to restrain breaches of agreements entered into with trade unions. These were first obtained but later discharged on the basis that the parties had never intended that the agreement be legally binding. It is interesting to note the material on which Geoffrey Lane J relied to arrive at that conclusion. He looked first at the wording of the agreement; it contained no express provision. Moreover, it contained some clauses which were “vague aspirations” only. He looked at the climate of industrial relations opinion in England at the time as evidenced by, for example, academic writings, the report of the Royal Commission on trade unions under Lord Donovan and the evidence given to that Commission, and other official publications. From all this it was concluded that the climate of opinion at that time was almost unanimous that no legally enforceable contract resulted from collective agreements. This climate of opinion was not, of course, decisive for the court. But it indicated that the persons negotiating the agreements before the court against this background were unlikely to have intended to enter into a legally enforceable agreement; and so it was held.256 In Administrative and Clerical Officers Association v Commonwealth257 two large public sector unions sought an interlocutory injunction to restrain the employer from ceasing to deduct union dues from members’ salaries and remitting them to the unions in consideration of a commission. The arrangement whereby this was done followed negotiations and discussions between the parties. The unions failed. Mason J remarked that the terms of the letter between the parties which was relied on as establishing the substance of the contract was “expressed in the language of administrative decision,

253 254 255 256 257

have exhibited an intention to be bound in honour only, and not by law; or the contract may be contrary to public policy for one reason or another. For example, it may purport to oust the jurisdiction of the courts; it may have been entered into under duress; or it may be in unlawful restraint of trade. Australian Agricultural Co v Federated Engine-drivers and Firemen’s Association of Australia (1913) 17 CLR 261. Printing & Kindred Industries Union v Printing & Allied Trades Employers Federation of Australia (1982) 2 IR 320. Ford Motor Co Ltd v Amalgamated Union of Engineering & Foundry Workers [1969] 2 QB 303. In Ryan v Textile Clothing & Footwear Union Australia (1996) 2 VR 235 it was held that the agreements were intended to have practical industrial, as opposed to legal consequences. Administrative and Clerical Officers Association v Commonwealth (1979) 53 ALJR 588.

Intersection of Contract and Statute

not the language of contract. An administrative decision resulting in an administrative arrangement might be thought to be the likely outcome of a negotiation between public service unions collectively representing public servants on the one hand and the executive government as their employer on the other hand, more especially when the negotiation relates to the making of arrangements [of the kind outlined]”.258 These arrangements were not so obviously “business” arrangements where there might be presumed unless rebutted an intention to enter into legal relationships. But they were concluded as part of a “serious” occasion and do not fit easily, or indeed at all, into the class of so-called “social” arrangements where the presumption is against an intention to create legal relationships. If the union is not incorporated a further complication arises in enforcing its agreements – it is the familiar one concerning who can sue or be sued on the union’s behalf, for an unincorporated body cannot be sued in its own name at common law. Statutes may ameliorate this difficulty, at least partially, in some jurisdictions.

Privity of contract problems [12.380] In Ryan v Textile Clothing & Footwear Union Australia259 it was held that the redundancy benefits stipulated in an unregistered collective agreement were not legally binding upon an employer. The unregistered collective agreement had been made between the employer and a union. Individual employees were held not to be parties to the agreement. The agreement purported to cover all employees, including those who were not union members, and those who were not even employed at the time the agreement was initially made. The court held that it was impossible to find that a common law contract could bind and be enforced by parties who did not consent to its making. The union was not able to establish that it had entered into the agreement as an agent for the employees for the same reasons: it could not show that all employees had authorised the union to act on their behalf, nor could it demonstrate that the putative “principals” were even employed at the time.

Incorporation of terms from unregistered collective agreements [12.390] It may be that some terms in unregistered collective agreements, such as those setting up an employer-union grievance consultative process, are not apt for incorporation into individual contracts. However, there is no doubt that at least some of the terms of a collectively bargained agreement can become incorporated into the contracts of individual employees.260 An example might be a clause providing for extra redundancy benefits in a particular industry. But incorporation into individual contracts will not always or necessarily occur. In the case of unregistered collectively bargained agreements, incorporation of the contents of the agreement into the contract can certainly occur by express agreement, and this is the most reliable method of ensuring that the terms of an unregistered agreement will apply to individual employees. To ensure that individual employment contracts pick up changes to collective agreements made over time, the wisest strategy is to state in the individual employment contract that the parties agree to be bound by the collective agreement, as it stands from time to time. So long as individual employees are given sufficient notice of changes in the terms, and an opportunity to object, they may be taken to be bound by changed terms. It is also possible that terms from an unregistered collective agreement may become terms implied by a course of dealing between the parties. This is possible where a collective agreement is entered into 258 259 260

Administrative and Clerical Officers Association v Commonwealth (1979) 53 ALJR 588 at 589. Ryan v Textile Clothing & Footwear Union Australia [1996] 2 VR 235. For example, Edwards v Skyways Ltd [1964] 1 WLR 349; Ajax Cooke Pty Ltd v Nugent (1993) 5 VIR 551.

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between a union and employer, and is notified or becomes known to all in the industry so that the employers and the employees conduct their employment relationships on terms reflecting those in the collective agreement.261 This would amount to a variation of the existing contracts of employment, or perhaps, although less likely, a termination of those contracts and the entry into new ones.262 Incorporation in this manner can be accomplished even if the collective agreement is unenforceable, as between employer and union, for one of the reasons given above.263 Of course, a more reliable way of giving effect to a collective agreement is to ensure that it is made and approved under the provisions of the Fair Work Act 2009.264

261 262 263 264

See Ryan v Textile Clothing & Footwear Union Australia [1996] 2 VR 235. As to the distinction between termination and variation, see Chapter 8. Marley v Forward Trust Group Ltd [1986] ICR 891 (CA). See Fair Work Act 2009 (Cth), Pt 2-4.

13

Statutory Protection for Job Security “A person’s employment is usually one of the most important things in his or her life. It gives not only a livelihood but an occupation, an identity and a sense of self-esteem. The law has changed to recognise this social reality.” [Johnson (AP) v Unisys Ltd [2003] 1 AC 518 at [35] per Lord Hoffmann.]

[13.10] [13.40] [13.50] [13.50] [13.60] [13.90] [13.200] [13.230] [13.230] [13.240] [13.260] [13.280] [13.290] [13.300] [13.310] [13.330] [13.330] [13.340] [13.350] [13.370] [13.370] [13.380] [13.390] [13.400] [13.410]

Introduction ..................................................................................................... 513 Multiple actions .......................................................................................... 517 Unfair Dismissal .............................................................................................. 518 Overview ..................................................................................................... 518 Who is protected from unfair dismissal? ................................................... 519 What is an unfair dismissal? ..................................................................... 523 Remedies ..................................................................................................... 536 General Protections ......................................................................................... 540 Overview ..................................................................................................... 540 Adverse action ............................................................................................ 541 Workplace rights ......................................................................................... 545 Freedom of association and involvement in lawful industrial activities ...................................................................................................... 547 Other protections against discrimination .................................................. 549 Reasons and reverse onus .......................................................................... 550 Remedies ..................................................................................................... 553 Other rights on termination ............................................................................ 556 Overview ..................................................................................................... 556 Unlawful termination, prohibited grounds – s 772 ................................... 556 Notification and consultation regarding certain dismissals ...................... 559 Workplace Bullying ......................................................................................... 562 Overview ..................................................................................................... 562 Who is a worker? ....................................................................................... 563 What is bullying? ....................................................................................... 564 Bullying at work ......................................................................................... 565 Orders ......................................................................................................... 565

Introduction [13.10] The limitations of the common law in providing adequate remedies for termination of employment have been addressed in recent decades by the availability of statutory regimes providing more accessible remedies for “unfair” and “unlawful” dismissals.1 This chapter considers the provisions presently available in federal legislation for employees to complain of an unfair or an unlawful dismissal, or of other “adverse action”, or workplace bullying. This includes a study of the unfair dismissal 1

The distinction between “unfair” and “unlawful” is significant. See commentary at [13.20].

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provisions in Pt 3-2 of the Fair Work Act 2009 (Cth), the General Protections (Pt 3-1), the workplace bullying provisions (Pt 6-4B), and, finally, a number of other provisions in the Act which make remedies available for employees who have been dismissed from their employment. In Australia, the development of these schemes has had a number of influences, the earliest being attempts by the trade union movement to include provisions in old industrial awards to protect employees from capricious dismissal. Initially, these attempts were resisted on the basis that a claim relating to the dismissal of any individual employee could not be arbitrated to resolve an “interstate industrial dispute”, and so would be an impermissible exercise of commonwealth power, given the limitations set by s 51(xxxv) of the Constitution.2 A series of decisions eventually overcame these objections.3 “Termination Change and Redundancy” provisions became common in the old awards,4 and provided remedies until they were effectively replaced by legislated provisions, in both State and federal industrial laws. The enactment of legislation to restrict the permitted content of awards5 and to prevent enterprise agreements from containing terms providing remedies for unfair dismissal, 6 have removed this means of bringing unfair dismissal claims. The first federal provisions were enacted by the Industrial Relations Reform Act 1993 (Cth) and purported to give effect to Australia’s obligations under the International Labour Organisation’s Termination of Employment Convention 19827 and the Termination of Employment Recommendation 1982,8 thus relying on the external affairs power in the Constitution, s 51(xxix). The external affairs power supports the enactment of federal laws to give effect to international treaties, but only to the extent that the domestic legislation is appropriate and adapted to giving effect to the terms of the international instrument. The new division inserted into the Industrial Relations Act 1988 (Cth) provided that an employer must not terminate an employee’s employment unless there was a valid reason or reasons, connected with the employee’s capacity or conduct, or based on the operational requirements of the employer’s business.9 A reason could not be valid if, having regard to all the circumstances of the case the termination was harsh, unjust or unreasonable. In Victoria v

2

3

4 5

6

7 8 9

Constitution, s 51(xxxv) allows the federal parliament to make laws with respect to conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State. Re Ranger Uranium Mines Ltd; Ex parte Federated Miscellaneous Workers’ Union of Australia (1987) 163 CLR 656 at 660-661; Re Federated Storemen and Packers Union; Ex parte Wooldumpers (Vic) Ltd (1989) 166 CLR 311 at 318; Re Boyne Smelters (1993) 177 CLR 446 at 455; Re Vista Paper Products (1993) 67 ALJR 604 at 609-610; and AMACSU v McIntyre (1996) 73 IR 170; R v Kirby; Ex parte Boilermakers Society of Australia (1956) 94 CLR 254. See The Termination Change and Redundancy Case (1984) 8 IR 34; 9 IR 115. Award content is now restricted by Fair Work Act 2009 (Cth), s 139. Restrictions were first introduced by the Workplace Relations Act 1996 (Cth), s 513 (formerly, s 89A(2) pre-Work Choices). See also, the award simplification process in the Workplace Relations and Other Legislation Amendment Act 1996 (Cth), Sch 5, Items 49, 50 and 51. Workplace Relations Act 1996 (Cth), s 356; Workplace Relations Regulations 2006 (Cth), Ch 12, Pt 8, reg 8.5(5); but see Alcoa of Australia Ltd v Barrett (2007) 170 IR 254. There is no equivalent provision in the Fair Work Act 2009 (Cth), however s 194(c) and (d) provide that enterprise agreements cannot extend unfair dismissal protection to persons who have not met the statutory minimum qualifying period (see [13.70]). Also, any matter in an enterprise agreement must be about matters pertaining to the relationship between the employer and employees or their employee organisation, and other ancillary matters: s 172. See [12.90]. Adopted by the General Conference of the International Labour Organization on 22 June 1982; available at http://www.ilo.org. Adopted by the General Conference of the International Labour Organisation on 22 June 1982; available at http://www.ilo.org. Industrial Relations Act 1988 (Cth), s 170DE(1).

Introduction

Commonwealth,10 the High Court of Australia declared s 170DE(2) of the Industrial Relations Act 1988 (Cth) to be invalid on the basis that the inclusion of the “harsh, unjust or unreasonable” criterion went beyond the terms of the Termination of Employment Convention 1982, which largely protected workers from discriminatory, but not merely capricious, dismissal. Subsequent enactment of the unfair dismissal provisions in the Workplace Relations Act 1996 (Cth) separated “unfair” dismissal from “unlawful” dismissal. Proceedings could be brought in the Australian Industrial Relations Commission alleging that the termination of employment was harsh, unjust or unreasonable.11 Alternatively, an employee could bring “unlawful termination” proceedings in the Federal Court of Australia12 alleging that the termination was for reasons including a prohibited reason, or if the employer failed to comply with minimum notice requirements,13 failed to comply with an order of the Australian Industrial Relations Commission concerning severance pay,14 or failed to notify the relevant federal government authority15 in certain situations involving redundancies. The unlawful dismissal provisions were underpinned by the external affairs power and so covered all Australian employees. The unfair dismissal provisions were made in reliance on the labour power (s 51(xxxv)), the overseas trade power (s 51(i)) and principally the corporations power (s 51(xx)) of the Australian Constitution, and this explains the more limited reach of those provisions (see [12.20]).

[13.20] The shape of the federal protections have also evolved over time under the influence of political pressure. The first provisions were amended quickly under pressure from business and industry groups to exclude high income earners from the unfair dismissal protections and to impose caps on the amount of compensation available. The Work Choices reforms in 2006 notoriously excluded all employers with 100 or fewer employees from susceptibility to unfair dismissal claims, although not to unlawful dismissal claims.16 The “unlawful termination” provisions continued to deal with termination for reasons including a prohibited reason,17 or if the employer failed to comply with minimum notice requirements,18 or failed to notify the relevant federal

10 11

12

13 14

15 16 17 18

Victoria v Commonwealth (1996) 187 CLR 416 at 517. For the government of the day’s reasoning, see Workplace Relations and Other Legislation Amendment Bill 1996 (Cth), Supplementary Explanatory Memorandum (Senate), pp 18-19. See Stewart, “Federal Labour Law and New Uses for the Corporations Power” (2001) 14 AJLL 145. Before issuing proceedings, the employee must have made application to the Australian Industrial Relations Commission pursuant to the former s 170CE of the Workplace Relations Act 1996 (Cth) (later s 643, post-Work Choices). The Commission was required to attempt to resolve the matter by conciliation. An application could not be made to the Federal Court unless the employee had first obtained a certificate from the Commission (setting out a relevant unresolved ground of complaint) and had elected to issue proceedings in the court: former s 170CP(5) (later s 663(5) post-Work Choices). Workplace Relations Act 1996 (Cth), s 170CM (later s 661 post-Work Choices). Workplace Relations Act 1996 (Cth), s 170CN (repealed by the Work Choices amendments). The former s 170CN entitled an employee to seek a remedy where the employer failed to comply with an order of the Australian Industrial Relations Commission concerning severance pay. It was repealed following the removal of the jurisdiction of the Australian Industrial Relations Commission to make orders concerning payment for severance pay conferred by the former s 170FA: see cl 143 of Sch 1 to the Workplace Relations Amendment (Work Choices) Act 2005 (Cth). Workplace Relations Act 1996 (Cth), s 170CL (later s 660 post-Work Choices). The relevant authority was Centrelink: see Workplace Relations Regulations 2005 (Cth), Ch 2, Pt 12, reg 12.9. These new exclusions did not apply to the unlawful termination provisions (in subdiv C of Div 4 of Pt 12 of the Workplace Relations Act 1996 (Cth), post-Work Choices). Workplace Relations Act 1996 (Cth), post-Work Choices, s 659. Workplace Relations Act 1996 (Cth), post-Work Choices, s 661.

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government authority19 in certain situations involving redundancies.20 A significant part of the Commission’s jurisdiction was also removed by preventing employees from bringing unfair dismissal proceedings in circumstances where their employment was terminated for “genuine operational reasons” or for reasons that included “genuine operational reasons”.21 The Fair Work Act 2009 (Cth) repealed the previous unfair dismissal, unlawful termination and freedom of association provisions and implemented a new regime.22 In general terms it broadened the range of employees who can bring unfair dismissal proceedings, most significantly by removing the 100 employee minimum exemption and removing the genuine operational reasons exclusion.23 The Fair Work Act 2009 protects small business employers with fewer than 15 employees from unfair dismissal proceedings if the new Small Business Fair Dismissal Code is met: see [13.130].24 Further, Pt 3-1 of the Fair Work Act 2009 provides a comprehensive range of General Protections that seek to protect against discrimination (part of the former unlawful termination provisions) and to protect certain workplace rights: see [13.230]. Finally, the Fair Work Act 2009 retains and enhances a range of other protections which were contained in the former unlawful termination provisions of the Workplace Relations Act 1996 (Cth): see [13.340]. In addition to the protection against discrimination in Pt 3-1, the prohibition on termination of employment on certain grounds remains in place.25 The minimum notice requirement is now one of 10 National Employment Standards,26 along with an entitlement to severance pay upon termination of employment by reason of redundancy.27 The Fair Work Act 2009 also imposes an obligation on employers to notify Centrelink and consult with registered employee associations about certain dismissals.28 [13.30] Since the enactment of the Conciliation and Arbitration Act 1904 (Cth) the relevant federal statutory regime of the day has contained, in some form or another, a range of protections to prevent employers victimising employees for exercising certain rights during their employment or because of their membership of industrial associations. Prior to the enactment of the Fair Work Act 2009, those provisions were 19 20

21

22

23 24 25 26 27 28

Workplace Relations Act 1996 (Cth), post-Work Choices, s 660. The relevant authority continued to be Centrelink: see Workplace Relations Regulations 2005 (Cth), Ch 2, Pt 12, reg 12.9. Due to the repeal of the former s 170CN of the Workplace Relations Act 1996 (Cth), pre-Work Choices, there was no provision concerning the enforcement of an obligation to comply with an order of the Australian Industrial Relations Commission concerning severance pay. Workplace Relations Act 1996 (Cth), s 643(8), (9). This had the consequence of significantly reducing the number of unfair dismissal applications being lodged with the Australian Industrial Relations Commission. The total number of termination of employment matters lodged with the Commission nationally reduced from 6,127 in the year from 27 March 2005 to 26 March 2006 to 4,998 in the year from 27 March 2006 to 27 March 2007 (IRSA National Conference, Spring Address, Justice Giudice, President of the Australian Industrial Relations Commission, 30 March 2007). For a detailed comparison of the provisions of the Fair Work Act 2009 and those of the former Workplace Relations Act 1996, see Chapman, “The Decline and Restoration of Unfair Dismissal Rights”, in Forsyth and Stewart (eds), Fair Work, The New Workplace Laws and The Work Choices Legacy (Federation Press, 2009). However, dismissal by way of “genuine redundancy” is not a dismissal for the purposes of the provisions: see [13.140]. Fair Work Act 2009 (Cth), ss 385(c), 388. Fair Work Act 2009 (Cth), s 772. Fair Work Act 2009 (Cth), ss 117 (national system employers) and 760 (non-national system employers). Fair Work Act 2009 (Cth), s 119. Fair Work Act 2009 (Cth), ss 530 to 533 (national system employers) and 785 – 788 (non-national system employers).

Introduction

contained in Pt 16 of the Workplace Relations Act 1996 (Cth).29 A comprehensive review of the earlier provisions can be found in Chapter 11 of the sixth edition of this text (2008). Following the referral of powers by the State parliaments (other than Western Australia), the General Protections in Pt 3-1 of the Fair Work Act 2009 now provide a comprehensive set of provisions which seek to protect freedom of association (see [13.280]). As a consequence of the increasing reach of the federal system and the referrals from each of the States other than Western Australia,30 equivalent State provisions conferring rights upon dismissal and the like have very limited application: Fair Work Act 2009, s 26. Those provisions have been dealt with in previous editions of this text. State anti-discrimination laws identified in s 27(1A) of the Fair Work Act 2009 are not excluded by s 26: see [1.80]. Much of the case law cited in this chapter is based on earlier statutory provisions, many of which have simply been re-enacted in the Fair Work Act 2009, some of which have been re-enacted with changes in language and others which have been amended more substantially. Whilst it may be reasonable to expect that the courts and Fair Work Commission will draw on them when considering the new provisions in the Fair Work Act 2009, caution should be exercised before relying on these decisions as authority in matters to be decided under the current provisions.31

Multiple actions [13.40] As a result of the proliferation of available causes of action, Pt 6-1 of the Fair Work Act 2009 seeks to protect against multiple causes of action being brought in respect of the same contravening conduct. The Fair Work Commission must not make orders in relation to consultation with industrial associations (see [13.350]) if an acceptable alternative remedy is available under another law of the Commonwealth or a State or Territory based on the Termination of Employment Convention 1982.32 A person must not make an unlawful termination application (see [13.340]) in relation to conduct if the person is entitled to make a General Protections application (see [13.230]) in relation to the same conduct.33 In general terms, if a person has made any of the following applications, he or she is prevented from making any other sort of application in the list, unless the first application has been withdrawn or has failed for want of jurisdiction or, where relevant, a requisite certificate has not been issued:34 • a General Protections application to Fair Work Commission (s 727, see [13.290]); • a General Protections application to a court (s 728, see [13.290]); • an unfair dismissal application (s 729, see [13.50]); • an unlawful termination application to the Fair Work Commission (s 730, see [13.340]); 29 30

31 32 33 34

AWU v BHP Iron Ore Pty Ltd (2001) 106 FCR 482 at [48] (Kenny J). See Stewart, “Federal Labour Law and New Uses for the Corporations Power” (2001) 14 AJLL 145. In Western Australia, employees of employers who are not constitutional corporations will have their rights and remedies dealt with under the Industrial Relations Act 1979 (WA). See, for example, ss 23, 23A, 27, 29, 29AA, and 96B to 96L. Such caution was advocated in Unsworth v Tristar Steering and Suspension Australia Ltd (2008) 175 IR 320 at [17]. Fair Work Act 2009 (Cth), s 722. Fair Work Act 2009 (Cth), s 723. Fair Work Act 2009 (Cth), s 725.

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• an unlawful termination application to a court (s 731, see [13.340]); and • an application or complaint under another law of the Commonwealth, a Territory or a State in relation to the person’s dismissal (such as under an anti-discrimination law, s 732). Finally, a person must not make a General Protections application in relation to conduct that does not involve a dismissal if an application has been made under an anti-discrimination law in relation to the same conduct, and vice versa: s 734.

Unfair Dismissal Overview [13.50] Part 3-2 of the Fair Work Act 2009 seeks to establish a framework for dealing with unfair dismissal that balances the needs of business and the needs of employees through the use of a quick, flexible and informal process.35 It seeks to provide remedies, if a dismissal is found in all of the circumstances to be unfair, with an emphasis on reinstatement.36 Subject to limits on the scope of the operation of the Part, it is available to national system employees. An employee has 21 days from the date the dismissal took effect to make application to the Fair Work Commission.37 However, in exceptional circumstances, the Fair Work Commission has a discretion to accept an application that is lodged out of time.38 Consistent with the objects of the Part, the Fair Work Commission has flexibility as to the procedures it may wish to adopt when dealing with an unfair dismissal claim, after first determining that it has jurisdiction to deal with the matter.39 In determining whether the dismissal was harsh, unjust or unreasonable, the Fair Work Commission is required to take into account a number of matters specifically identified in s 387 (see [13.150]). As the Fair Work Commission acts as an administrative decision-maker and not a court of law, it exercises considerable discretion in assessing these matters. The Commission’s role is to find a solution which respects a “fair go all round” and this will often depend on the peculiar circumstances of the case, including the nature of the employment, and the particular experience and characteristics of the employee involved. Cases turn on their own facts, and a decision

35 36

37

38

39

Fair Work Act 2009 (Cth), s 381(1)(a), (b). Fair Work Act 2009 (Cth), s 381(1)(c). A failure to comply with the minimum notice requirements in s 117 does not affect this position: Borman v Visy Board Pty Ltd [2011] FWA 587 (28 January 2011, O’Callaghan SDP) at [16]. Fair Work Act 2009 (Cth), s 394(2)(a). This time limit was increased from 14 days to 21 days by the Fair Work Amendment Act 2012 (Cth). Note that the application cannot be made earlier than the time when the dismissal took effect, that is, when the employment relationship came to an end at the end of a notice period, if notice was given: see Mihajloviv v Lifeline Macarthur [2014] FWCFB 1070; (2014) 241 IR 142 (5 March 2014, Ross P, Hatcher VP, Bull C). Fair Work Act 2009 (Cth), s 394(2)(b). The considerations relevant to the assessment of whether exceptional circumstances exists so as to justify the grant of an extension of time are set out in s 394(3): see McConnell v A&PM Fornataro [2011] FWAFB 466 (31 January 2011, Lawler VP, O’Callaghan SDP, Bissett C); Cheval Properties Pty Ltd v Smithers [2010] FWAFB 7251 (17 September 2010, Acton SDP, Cartwright SDP, Thatcher C). The considerations identified are similar to those which were considered relevant in cases decided under previous provisions which conferred a general discretion. See, for example, Brodie-Hanns v MTV Publishing Ltd (1995) 67 IR 298; Telstra Network Technology Group v Kornicki (1997) 140 IR 1 and Clark v Ringwood Private Hospital (1997) 74 IR 413 at 418. Fair Work Act 2009 (Cth), ss 396 to 399.

Unfair Dismissal

in one case does not necessarily provide a precedent in others.40 If the tribunal concludes that the person was unfairly dismissed, it may make an order for reinstatement, including reinstatement to an associated entity: s 391 (see [13.210]). Alternatively, if it thinks that reinstatement is inappropriate, it may make an order requiring the employer to pay the employee an amount of compensation in lieu of reinstatement up to the equivalent of six months’ remuneration (capped at a specified sum): s 392 (see [13.220]). Subject to any right of appeal to the Full Bench (s 400), a person to whom an order applies must not contravene the order: s 405. If so, they may be subject to enforcement proceedings under Pt 4-1, including an injunction issued by the Federal Court of Australia or the Federal Circuit Court of Australia.41 The Fair Work Commission has a limited power to grant orders in respect of costs.42 Under s 400A, the Commission may order costs against a party for costs incurred by the other party if the Commission is satisfied that the first party caused these costs to be incurred by behaving unreasonably in conducting or continuing the matter. Under s 401, the Commission may also award costs against the legal representative of a party, if the Commission is satisfied that the representative unreasonably encouraged the party to continue with the matter despite there being no reasonable prospects of success. These powers to order costs are used cautiously, especially against unrepresented applicants who do not have the training and expertise of a legal representative to assess prospects of success.43 The provisions are intended to ensure that “a fair go all round” is accorded to both the employer and the employee concerned: s 381(2). As a note to s 381(2) indicates, the expression “a fair go all round” was used by Sheldon J in Re Loty and Holloway v Australian Workers’ Union.44 There, it was said that: The objective in these cases is always industrial justice and to this end weight must be given in varying degrees according to the requirements of each case to the importance but not the inviolability of the right of the employer to manage his business, the nature and quality of the work in question, the circumstances surrounding the dismissal and the likely practical outcome if an order of reinstatement is made. There certainly may be cases where the dismissal had many elements of unfairness but an industrial authority if it was convinced of the practical uselessness of trying to re-establish the employer–employee relationship, would not intervene at all. There may be other cases where there are reasonable prospects for the future of the relationship if clarifying conditions are imposed.

Who is protected from unfair dismissal? [13.60] Only certain people are “protected from unfair dismissal”: s 382. 40

41 42

43

44

The Fair Work Commission maintains a useful “Benchbook” published on line at http:// www.benchbooks.fwc.gov.au/unfair/. Readers should consult a current version of the benchbook for guidance on the Commission’s own approach to determining unfair dismissal matters. See Pt 4-1 generally, and in particular s 539(2), item 13, and s 545(2)(a). Fair Work Act 2009 (Cth), ss 400A – 404 and 611. It may order that costs be paid by a party’s representative in limited circumstances: s 401. See under former equivalent provisions: Forsyth v Hi Security Fencing Systems Pty Ltd (2007) 166 IR 413; Smith v Department of Foreign Affairs and Trade (2008) 173 IR 257; Goffett v Recruitment National Pty Ltd (2009) 187 IR 262. See, for example, Livingstones Australia v ICF (Australia) Pty Ltd (t/as IC Frith & Associates) [2014] FWCFB 1276; (2014) 240 IR 448 (3 March 2014, Lawler VP, Richards SDP, Blair C), where a Full Bench cited CFMEU v Clarke (2008) 170 FCR 574 at [29] for its warning against exercising a discretion to award costs in a way that would unduly discourage people from pursuing litigation “in the manner which they deem best”. Costs were awarded against legal representatives, but not the applicant himself, in Veal v Sundance Marine Pty Ltd [2013] FWCFB 8960; (2013) 238 IR 55 (12 December 2013, O’Callaghan SDP, Hamilton DP, Gregory C), on the basis that the legal representative had encouraged the applicant to pursue an appeal in which the chances of achieving any better result were “extremely remote”, but the additional costs payable to the legal representative were high. Re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95 at 99.

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The person must be a national system employee (ss 13 and 380, see [13.60]) who has completed a period of employment with her or his employer of at least the “minimum employment period” (s 382(a)). In addition, one or more of the following must apply: s 382(b): • a modern award covers the person;45 • an enterprise agreement applies to the person in relation to the employment;46 • the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.47 The Fair Work Commission must decide whether a person is protected from unfair dismissal before considering the merits of the case.48

Minimum period of employment [13.70] The length of the minimum period of employment is dependent upon whether the employer is a “small business employer”. A small business employer is one who employs fewer than 15 employees,49 including the employee who is dismissed and any other employee who is also being dismissed at the same time and any casual employee who is employed on a regular and systematic basis.50 Importantly, associated entities are taken to be one entity for the purposes of determining whether an employer is a small business employer.51 If the employer is not a small business employer, the minimum period of employment is six months ending at the earlier of the date the person is given notice of the dismissal, or immediately before the dismissal: s 383(a). If the employer is a small business employer, the minimum period of employment is 12 months ending at the earlier of the date the person is given notice of the dismissal, or immediately before the dismissal: s 383(b). In calculating the minimum period of employment, one looks to the period of continuous service that the employee has completed with the employer: s 384(1).52 Continuity of service is determined by the application of s 22. It excludes any unauthorised absence or any period of unpaid leave other than community service leave under the NES or a period of stand down under s 524 of the Fair Work Act 2009 or any contract or enterprise agreement. Whilst not counted as part of the employee’s service, those absences do not break the continuity of service: s 22(3). Specific provision is made to deal with casual employees and where there is a transfer of business: s 384(2). A period of service as a casual employee does not count towards the employee’s period of employment for the purposes of achieving the minimum of six or 12 months 45 46 47 48 49

50 51 52

See Fair Work Act 2009 (Cth), s 48. See McMenemy v Thomas Duryea Consulting Pty Ltd [2012] FWAFB 7184; (2012) 223 IR 125 (28 August 2012, Richards SDP, Harrison DP, Cambridge C). See Fair Work Act 2009 (Cth), s 52(1). The high income threshold is set by Fair Work Act 2009 (Cth), s 333 and reg 2.13(1) of the Fair Work Regulations 2009 (Cth). From 1 July 2015 it was $136,700. It is an indexed figure: reg 2.13(2), (3). Fair Work Act 2009 (Cth), s 396(b). For a transitional period from 1 July 2009 to 31 December 2010, this meant 15 full time equivalent employees: see Sch 12A of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth). Fair Work Act 2009 (Cth), ss 23(2) and (4). Fair Work Act 2009 (Cth), s 23(2). As to the meaning of “associated entity” see s 50AAA of the Corporations Act 2001 (Cth). See Shortland v The Smiths Snackfood Co Ltd [2010] FWAFB 5709 (16 September 2010, Lawler VP, Drake SDP, Lewin C).

Unfair Dismissal

unless the employment was on a regular and systematic basis and the employee had a reasonable expectation of continuing employment on that basis: s 384(2)(a).53 “Regular and systematic” work does not necessarily mean that the employee has worked a consistent pattern of shifts. In Cori Ponce v DJT Staff Management Services (t/as Daly’s Traffic),54 a traffic control worker was employed by an organisation providing traffic control services to construction sites. The flow of work depended upon the needs of the construction site controllers, and varied from more than full-time hours in some weeks, to no work in others. Nevertheless, the employee (dismissed for an outburst of temper) was held to meet the requirements of regular and systematic work for the purposes of bringing an unfair dismissal claim. The restriction on unfair dismissal rights of casual employees has a problematic history. Original regulations were declared invalid.55 The exclusion was reintroduced in statutory form, albeit with some variation.56 As a consequence, care needs to be taken not to rely upon decisions dealing with earlier versions of the exclusion, whether in statutory or regulatory form.57 The period of service will include a period of service with a previous employer where there has been a transfer of employment of the employee from that employer to the employer at the time of the dismissal: s 22(5), (6) and (7).58 The transfer of employment must occur in circumstances where there is some arrangement between the former and the new employer that would satisfy the requirements for a transfer of business under s 311 of the Fair Work Act 2009.59 (See [12.100].) However, the period with the previous employer will not count if the employers are not associated entities and the new employer informed the employee in writing before the new employment started that a period of service with the old employer would not be recognised: s 384(2)(b).

High income threshold [13.80] The high income threshold does not apply to a person who is covered by a modern award, or to whom an enterprise agreement applies.60

A person who has completed the minimum period of service of six or 12 months will be “protected from unfair dismissal” if a modern award covers the person. Each modern award is to have a coverage term: s 143. A modern award covers the person if the modern award is expressed to cover that person or it covers the person by reason of 53

54 55 56

57

58 59

60

See Il Migliore Pty Ltd v Miss Kelly McDonald [2013] FWCFB 5759; (2013) 236 IR 160 (14 August 2013, Lawler VP, Smith DP, Blair C) for a case in which a “permanent” casual was held to have broken the continuity of her long term and regular casual arrangement by signaling an intention to find other work. Cori Ponce v DJT Staff Management Services (t/as Daly’s Traffic) [2010] FWA 2078. Workplace Relations Regulations 1996 (Cth), reg 30B(1)(d) and (3) (since repealed); Hamzy v Tricon International Restaurants t/as KFC (2001) 115 FCR 78. Workplace Relations Act 1996 (Cth), s 170CBA(1), (3) (since repealed) inserted by the Workplace Relations Amendment (Fair Termination) Act 2003 (Cth): Nightingale v Little Legends Child Care (2004) 134 IR 111 at [9]. For example, Nightingale v Little Legends Child Care (2004) 134 IR 111, distinguishing Cetin v Ripon Pty Ltd (2003) 127 IR 205 and cases such as Bluesuits Pty Ltd (t/as Toongabbie Hotel) v Graham (1999) 101 IR 28, distinguishing the earlier reliance on the Termination of Employment Convention 1982 in cases such as Reed v Blue Line Cruises (1996) 73 IR 420. Compare the position under the former s 634(7) of the Workplace Relations Act 1996 (Cth): Aged Care Services Australia Group Pty Ltd v Ziday (2008) 172 IR 385. See Peter Zabrdac v Transclean Facilities Pty Ltd [2011] FWA 4492 (25 August 2011, Bissett C); John Lucas Hotel Management Services (t/as World Square Pub) v Hillie [2013] FWCFB 1198; (2013) 224 IR 260 (22 February 2013, Drake SDP, Hamberger SDP, Bull C) (no connection found between old and new lessees of a hotel). See Cubillo v North Australian Aboriginal Family Violence Legal Service (2011) 211 IR 394.

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specific provision or order of the Fair Work Commission or a court: s 48(1), (2).61 A modern award only covers a person during its operation: s 48(4). A person who has completed the minimum period of service of six or 12 months will be “protected from unfair dismissal” if an enterprise agreement applies to the person. An enterprise agreement applies to a person if the enterprise agreement is in operation62 and covers that person and nothing else in the Fair Work Act 2009 provides or has the effect that the enterprise agreement does not apply to the person: s 52. An enterprise agreement covers a person if it is expressed to cover that person or it covers the person by reason of specific provision or order of the Fair Work Commission or a court: s 53(1). A person who has completed the minimum period of service of six or 12 months will still be “protected from unfair dismissal”, even if they are not covered by a modern award or an enterprise agreement does not apply to them, so long as the sum of the person’s annual rate63 of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold. The high income threshold is set by s 333 and the formula in reg 2.13. From 1 July 2015, the threshold was $136,700, and it is indexed annually. Annual earnings are calculated at the time of dismissal, based on the rate of earnings at that time, not on what the employee has actually earned over the previous 12 months.64 “Earnings” is defined to include wages, amounts paid on behalf of the employee or at the employee’s direction and the agreed value of non-monetary benefits. “Earnings” do not include amounts that cannot be determined in advance, such as discretionary bonuses.65 The requirement that the value of such benefits be “agreed”66 is undermined by reg 3.05(6) of the Fair Work Regulations 2009, which permits the Fair Work Commission to attach a real or notional money value to any non-monetary benefit in respect of which no monetary value has been agreed between the employee and the employer. As a consequence, there remains significant scope for dispute before the Fair Work Commission over the value of such benefits. In Zappia v Universal Music Australia Pty Ltd,67 a Full Bench of the Commission determined that the value of a motor vehicle provided principally for the employee’s private use should be given a notional value, and this caused the employee’s earnings to exceed the threshold.68 The issue of ascertaining notional values to non-salary benefits also burdened the Australian Industrial Relations Commission under previous provisions.69 61 62 63

64 65 66 67 68

69

See McMenemy v Thomas Duyea Consulting Pty Ltd [2012] FWCFB 7184; (2012) 223 IR 125 (28 August 2012, Richards SDP, Harrison DP, Cambridge C). Fair Work Act 2009 (Cth), s 54. What is relevant is the rate of remuneration (on an annualised basis), not the employee’s annual remuneration in total: Hitchcock v Beverage Industry Environment Council (2004) 133 IR 393; Bell v McArthur River Mining Pty Ltd (1998) 81 IR 436; Keith Miller & Sons Builders Pty Ltd v Flemming (1999) 91 IR 399. The specified rate is that which applied at the time of termination: Anderson v STA Travel Pty Ltd (19 May 2005, AIRC, Watson SDP, Duncan SDP and Whelan C, Print PR958200) at [18]-[20]. See Zappia v Universal Music Australia Pty Ltd [2012] FWAFB 6108; (2012) 225 IR 122 (24 July 2012, Kaufman SDP, Booth DP, Harrison C). See Jenny Craig Weight Loss Centres Pty Ltd v Margolina [2011] FWAFB 9137 (23 December 2011, Justice Giudice P, Hamilton DP, Roberts C) at [19]. Fair Work Act 2009 (Cth), s 332(3). Zappia v Universal Music Australia Pty Ltd [2012] FWAFB 6108; (2012) 225 IR 122 (24 July 2012, Kaufman SDP, Booth DP, Harrison C). In Davidson v Adecco Australia Pty Ltd (t/as Adecco) [2012] FWA 8393 (4 October 2012, Booth C), a travel allowance provided for the employee to use his own vehicle for work was only partially counted as earnings. The component deemed to cover business use was not. See Roberts v High Professional Productions Pty Ltd [2010] FWA 3462 (30 April 2010, Leary DP) and Tuohy v Polyfoam (Australia) Pty Ltd [2010] FWA 9112 (1 December 2010, Cribb C). Under former provisions, see, for example, Watiyawanu Community Government Council v Jones (30 June

Unfair Dismissal

What is an unfair dismissal? [13.90] Only a person who has been “unfairly dismissed” can obtain a remedy from the Fair Work Commission under Pt 3-2. Under s 385 of the Fair Work Act 2009, this requires the Fair Work Commission to be satisfied that: (a) the person has been dismissed; and (b) the dismissal was harsh, unjust or unreasonable; and (c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and (d) the dismissal was not a case of genuine redundancy. We return to the issue of whether the dismissal was harsh, unjust or unreasonable at [13.150].

Dismissed [13.100] Section 386 guides the determination of whether a person has been “dismissed” for the purposes of s 385(a). In what has become a common form of legislative drafting, it identifies criteria for when a person has been dismissed and then goes on to identify when a person has not been dismissed. The provisions are built upon issues that have arisen for determination under previous statutory unfair dismissal regimes. The person making the application must be an employee.70 A person is dismissed if their employment has been terminated “on the employer’s initiative”: s 386(1)(a). This is intended to capture the case law relating to the meaning of “termination at the initiative of the employer” which applied under the previous statutory regimes.71 In Mohazab v Dick Smith Electronics Pty Ltd the Full Court of the Industrial Relations Court of Australia said that the phrase “termination at the initiative of the employer” involves a “termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship … [A]n important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship”.72 There must

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2000, AIRC, McIntyre VP, Drake SDP and Raffaelli C, Print S7110) (board or accommodation, electricity supply, air fares); Condon v G James Extrusion Co (1997) 74 IR 283 (motor vehicle, superannuation); Kumberllaynja Community Government Council v Fewings (7 May 1998, AIRC, Ross VP, Watson SDP and Bacon C, Print Q0675) (motor vehicle); Johnson v Combined Instruments Systems (17 July 1997, AIRC Watson SDP, Print N9963) (mobile phone); Rofin Pty Ltd v Newton (1997) 78 IR 78 (fringe benefits tax); Fischer v SMS Employees Pty Ltd (19 September 2000, AIRC, Watson SDP, Print T0978) (superannuation, commissions and bonuses, car parking). Pawel v Australian Industrial Relations Commission (1999) 94 FCR 231 at [14]; Sammartino v Mayne Nickless (2000) 98 IR 168. In order to establish that an employment relationship exists, there must be a contract between the parties: Paisley v American Banknote Australasia Pty Ltd (15 September 2000, AIRC, Munro J, Williams SDP, Smith C, Print T0808); compare Advanced Australian Workplace Solutions Pty Ltd v Fox (25 October 1999, AIRC, Giudice P, McIntyre VP, Redmond C, Print S0253). Query whether the expression “employment” extends beyond the common law concept of a contract of employment: Sammartino v Mayne Nickless (2000) 98 IR 168 at [48] in which the Full Bench of the AIRC relied upon the decision of the Full Court of the Federal Court in Konrad v Victoria Police (1999) 91 FCR 95. A later decision of a Full Bench in Williams v Commonwealth of Australia (17 October 2000, AIRC, Giudice P, McIntyre VP and Hodder C, Print T2042) distinguishes Konrad on the basis that it was decided under the old statutory regime. The new regime does not place the same reliance upon the Termination of Employment Convention 1982. Explanatory Memorandum to the Fair Work Bill 2009, at [1528]. Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200 at 205. In Rheinberger v Huxley Marketing Pty Ltd (1996) 67 IR 154 at 160-161, Moore J queried whether a termination would be at the initiative of the employer if the action of the employer would on any reasonable view have the effect of bringing the employment to an end, even where it may not have been intended by the employer to do so.

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be some action of the employer which is either intended to bring the employment to an end or which has the probable result of bringing the employment to an end.73 The intent of the Parliament is that a dismissal only occurs upon the termination of the employment relationship. Under the provisions considered in Mohazab, the Industrial Relations Court of Australia was concerned with the termination of the employment relationship, rather than the termination of the contract of employment.74 As a result, in circumstances where an employee was demoted but continued in the employment under protest, whilst the contract of employment may have been repudiated, the employment relationship continued. As a result, there was no termination of employment to found the jurisdiction for the tribunal to deal with the application.75 The distinction between the contract of employment and the employment relationship was also of significance in the former statutory unfair dismissal jurisdiction in circumstances where the parties had entered a contract, but the employee had not yet commenced employment,76 where there was a long term absence, where the employment was truly casual, or where the employment continued on the basis of a series of separate contracts.77 Under the Fair Work Act 2009 the statutory reference to the passage in Mohazab, continues to focus attention on the termination of the employment relationship rather than termination of the contract of employment.78 [13.110] The Parliament has endeavoured to reduce the level of uncertainty that arose in relation to prior statutory provisons by enacting s 386(1)(b) and 386(2).79 However, its endeavour to do so may have failed. There may be a repudiation in circumstances where the demotion does result in a significant reduction in the remuneration or duties. An acceptance of the employer’s repudiation by the employee will bring the contract to an end. However, if the employee continues in the employment under protest and brings an unfair dismissal claim, will the Fair Work Commission found jurisdiction on the termination of the contract, or will it refuse jurisdiction on the ground that the employment relationship has not been terminated? Section 386(2)(c) does not prevent there being a “dismissal”. Once again it falls back to the test in Mohazab. According to the High Court, the real question will be whether what was said or done by the 73

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77 78

79

Mosey v Australian Customs Services (2002) 116 IR 1; O’Meara v Stanley Works Pty Ltd (11 August 2006, AIRC, Giudice P, Watson SDP, Cribb C, Print PR973462); Searle v Moly Mines Ltd (2008) 174 IR 21; Gauci v Glaxo SmithKline Australia Pty Ltd (2008) 173 IR 264. Industrial Relations Act 1988 (Cth), Div 3, Pt VIA at which time the provisions were underpinned by the external affairs power and reliance upon the Termination of Employment Convention 1982 and the Termination of Employment Recommendation 1982. For a discussion on the distinction between the employment relationship and the contract of employment see Siagian v Sanel Pty Ltd (1994) 1 IRCR 1; 54 IR 185 at 17 (IRCR), at 200 (IR) per Wilcox CJ; APESMA v Skilled Engineering Pty Ltd (1994) 1 IRCR 106; 54 IR 236 at 114-115 (IRCR), at 242 (IR) per Gray J; Capay Holdings Pty Ltd (t/as Cuddles Long Day Centre) v Slattery (unreported, Industrial Relations Court of Australia, Wilcox CJ, Moore and Marshall JJ, 11 December 1996); see also Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 428 and Visscher v Giudice (2009) 239 CLR 361 at [51]-[55]. Strachan v Liquorland (Australia) Pty Ltd (unreported, Industrial Relations Court of Australia, Moore J, 6 February 1996). For a detailed account of this issue, see the sixth edition of this text (2008). For an unusual situation, in which the employee appeared to have kept the contract alive by refusing to accept the employer’s repudiation by demoting him, only to continue in the same position (protesting against the demotion) on the same pay, see Visscher v Giudice (2009) 239 CLR 361 at [57], [59]. Capay Holdings Pty Ltd (t/as Cuddles Long Day Centre) v Slattery (unreported, Industrial Relations Court of Australia, Willcox CJ, Moore and Marshall JJ, 11 December 1996); Sarker v South Tees Acute Hospitals MHS Trust [1997] ICR 673. Department of Justice v Lunn (2006) 158 IR 410 at [27]. It was said that the distinction will often be more illusory than real: Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia & Grivell (1999) 70 SASR 240 at [41]; Department of Justice v Lunn (2006) 158 IR 410 at [27]-[29]. The distinction continues to have significance at common law: see [8.30]. In the past, the issue has had particular significance when dealing with the situation where the employee has been demoted and remains in the employment.

Unfair Dismissal

employer constituted a repudiation of the contract, such that the termination of the employment relationship could be said to be at its initiative.80 A person is dismissed if she or he has resigned, but was forced to do so because of conduct, or a course of conduct, engaged in by the employer: s 386(1)(b). The Explanatory Memorandum to the Fair Work Bill 2009, states that this is intended to “reflect the common law concept of constructive dismissal”.81 On the formulation in Mohazab, a forced resignation would appear to be within the concept of “termination at the employer’s initiative”. The common law concept of constructive dismissal turns on the conduct of the employer which constitutes a repudiation of the contract of employment (see [8.20]). The statutory enhancement in s 386(1)(b) requires that the person was “forced to” resign. What of the situation where the employee resigns as a result of the conduct, or a course of conduct of the employer, but the employee cannot be said to have been “forced” to resign for the purposes of s 386(1)(b)? Can the termination be said to be at the employer’s initiative? On the test in Mohazab, it may be. Does s 386(1)(b) have the effect of limiting the scope of the test in Mohazab? One suspects that the Fair Work Commission will be guided by decisions of the past on this issue.82 It has been held that a resignation submitted under duress,83 or as a response to a direction to perform different duties or reduced hours of work,84 or following a substantial pay reduction,85 may amount to a termination at the initiative of the employer. On the other hand, a termination of employment as a result of the employee abandoning the employment,86 the effluxion of time87 (including the expiry of a contract, whether the contract is for a specified period or a maximum period terminable on notice in the meantime),88 or as a result of the operation of a statutory provision providing for compulsory retirement,89 does not amount to a termination at the initiative of the employer. In Davidson v Commonwealth (represented by the Department of Climate Change and Energy Efficiency,90 a suspension from duties on 80 81

82 83

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86 87 88 89 90

Visscher v Giudice (2009) 239 CLR 361 at [81]. Explanatory Memorandum to the Fair Work Bill 2009, at [1528]. This comment may derive from the way in which s 642(4) of the Workplace Relations Act 1996 (Cth) was dealt with by the Australian Industrial Relations Commission. One member of the Commission has expressed the view that this is no more than an attempt to reflect the common law position: Hastie v Impress Australia Pty Ltd [2008] AIRC 182 (20 March 2008, Richards SDP) at [46]-[63]; see also [295]-[296] of the Supplementary Explanatory Memorandum to the Workplace Amendment (Work Choices) Bill 2005 and Barghouthi v Transfield Pty Ltd (2002) 122 FCR 19 at [16]-[17]. For a discussion of the difficulties in identifying a constructive dismissal under the statute, see Thai, “Constructive Dismissal: A Re-examination” (2014) 27(2) AJLL 137-162. Ngo v Link Printing Pty Ltd (1999) 94 IR 375; Dover-Ray v Real Insurance Pty Ltd (2010) 194 IR 22; compare Beck v Castran Gilbert Real Estate Pty Ltd (14 March 2000, AIRC, Giudice P, Williams SDP, Holmes C, Print S4014). Pawel v Australian Industrial Relations Commission (1999) 94 FCR 231 and, after remittal back to the Full Bench of the Australian Industrial Relations Commission from the Full Court of the Federal Court of Australia, Pawel v Advanced Precast Pty Ltd (12 May 2000, AIRC, Polites SDP, Watson SDP and Gay C, Print S5904); Hambly v Ramsey Butchering Services Pty Ltd (23 June 2000, Marsh SDP, Harrison SDP, Larkin C, Print S7354). See Hobbs v Achilleus Taxation Pty Ltd (as trustee for the Achilleus Taxation Trust) [2012] FWA 2907 (4 April 2012, Deegan C). Late payment by an employer will not warrant a finding that the employee has been forced to resign: Bruce v Fingal Glen Pty Ltd (in liq) [2013] FWC 3941 (19 June 2013, O’Callaghan SDP). Searle v Moly Mines Ltd (2008) 174 IR 21; Gauci v Glaxo SmithKline Australia Pty Ltd (2008) 173 IR 264. Mitchell v Senia & Associates (8 August 2000, AIRC, Giudice J, Watson SDP and Foggo C, Print S8899); compare Bloomfield v Jayrook Pty Ltd (2001) 106 IR 350. Marsh v Macquarie University (2005) 147 IR 401; Department of Justice v Lunn (2006) 158 IR 410. Fraser v Sydney Harbour Casino Pty Ltd (23 December 1997, AIRC, Marsh SDP, Polites SDP, Whelan C, Print P7676). Commonwealth (represented by the Department of Climate Change and Energy Efficiency [2011] FWAFB 6265; (2011) 213 IR 120 (16 September 2011, Justice Boulton SDP, Hamilton DP, Ryan C).

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pay (accompanied by a withdrawal of phone, email and building access) was held not to constitute a dismissal for the purposes of Pt 3-2. On the other hand, in Rind v Australian Institute of Superannuation Trustees,91 a woman who was unreasonably refused part-time hours when returning from parental leave was held to have been forced to resign, within the terms of s 386 of the Act. [13.120] Section 386(2) identifies three circumstances in which a person is taken not to have been “dismissed”. First, a person has not been “dismissed” if the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season: s 386(2)(a). If the employment is terminated at the employer’s initiative (or the employee is forced to resign etc) before the end of the period, the completion of the task, or the end of the season, the employee will be able to establish the requisite “dismissal”.92 Protection is also in place in circumstances where the substantial purpose of the employer employing the person under a contract of the kind referred to is to avoid its obligations under the unfair dismissal provisions: s 386(3). A contract will not be for a specified period93 or a specified task94 where the employer has an unqualified right to terminate the contract on notice before its expiry date. A qualified right to terminate the contract before its expiry may not prevent it from being a contract for a specified period.95 The expiry date must be certain.96 The mere existence of a possibility of employment for a further fixed term does not affect the nature of a contract for a specified period of time if provision is made for a further contract for a specified period of time97 or the contract is susceptible to outside variation by some other statutory provision.98 A series of contracts for a specified period may, in limited circumstances, amount to a single continuing contract.99 A 91 92

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96 97 98 99

Rind v Australian Institute of Superannuation Trustees [2013] FWC 3144, (2013) 231 IR 143 (31 May 2013, Lewin C). This is in contrast to the provisions in the Workplace Relations Act 1996 (Cth), which excluded any employee who was engaged under a contract of employment for a specified period or specified task from bringing an unfair dismissal application: s 638(1)(a): see Nikulin v University of Newcastle (7 July 1999, AIRC, Harrison SDP, Duncan DP, Lawson C, Print R6875). Here, the employee is not excluded by reason of the engagement. Rather, the employee will be prevented from establishing the requisite “dismissal” if the contract took its course. Anderson v Umbakumba Community Council (1994) 1 IRCR 457; 56 IR 102 at 462-463 (IRCR), 106 (IR); Cooper v Darwin Rugby League Club Inc (1994) 1 IRCR 130; 57 IR 238; Mitchell v Senia & Associates (8 August 2000, AIRC, Giudice J, Watson SDP and Foggo C, Print S8899); compare Dadey v Edith Cowan University (1996) 70 IR 295 (an award entitlement for the employee to resign on six months’ notice does not prevent the contract from being for a “specified period”) and on appeal Dadey v Edith Cowan University (unreported, Industrial Relations Court of Australia, Lee, Marshall and North JJ, 2 April 1997). In the common law context, see Walker v Zurich Australian Insurance Ltd [2001] QCA 296 (31 July 2001, de Jersey CJ, Davies and Thomas JJA). SPC Ardmona Operations Ltd v Esam (2005) 141 IR 338. For example, a right to terminate for breach of the agreement or for serious and willful misconduct: Trigar v Latrobe University (1 November 2000, AIRC, Giudice P, Acton SDP, Gay C, Print T2860) at [9]-[11]. Compare the situation where the employer retained the right to terminate in the event that funding from a sponsor was withdrawn or restricted: Grycan v Table Tennis Australia Incorporated (23 July 1999, AIRC, Giudice J, Boulton J and Cribb C, Print R7452). Primus v State Rail (Passenger Fleet Maintenance) (1999) 90 IR 26; Grycan v Table Tennis Australia Incorporated (23 July 1999, AIRC, Giudice J, Boulton J and Cribb C, Print R7452). Trigar v Latrobe University (1 November 2000, AIRC, Giudice P, Acton SDP, Gay C, Print T2860) at [9]-[11]; Ledington v University of Sunshine Coast (2003) 127 IR 152. Qantas Airways Ltd v Fetz (9 June 1998, AIRC, Giudice J, Harrison SDP and Lawson C, Print Q1482). D’Lima v Board of Princess Margaret Hospital (1995) 64 IR 19; Minister for Health v Ferry (1996) 65 IR 374; compare Fisher v Edith Cowan University (1996) 70 IR 206. However, regard must be had

Unfair Dismissal

contract for a specified task is one where the specified task is conferred upon the employee, not where the employee is involved in carrying out duties on a specified task which is being carried out by the employer.100 Even if the relevant contract is not one for a specified period because it is terminable on notice during the term, whilst not excluded by s 386(2)(a), the employee may not have been “dismissed” because the employment was not terminated on the employer’s initiative, but by reason of the effluxion of time upon the expiry of the contract.101 Secondly, a person has not been “dismissed” if the person was an employee to whom a training arrangement applied and the employment was for a specified period or was for any reason limited to the duration of the training arrangement and the employment terminated at the end of the training arrangement: s 386(2)(b).102 A training arrangement is a combination of work and training that is subject to a training agreement, or a training contract, that takes effect under a law of a State or Territory relating to the training of employees: s 12.103 Thirdly, a person has not been “dismissed” if the person was demoted in employment, but the demotion does not involve a significant reduction in his or her remuneration or duties and the employee remains employed with the employer who effected the demotion: s 386(3).104 This reflects the position under the Workplace Relations Act 1996 (Cth)105 which itself was a result of statutory reform brought in to deal with the way in which previous provisions had been interpreted. Under the provisions of the former Industrial Relations Act 1988 (Cth), a Full Court of the Federal Court took the view that, despite the demotion, which may involve a termination of one contract of employment and the commencement of a new contract, the employment relationship continued and, therefore, there was not the necessary termination of employment for the purposes of the unfair dismissal provisions.106 In its consideration of the provisions of the Workplace Relations Act 1996 (Cth), the Australian Industrial Relations Commission distinguished the Full Court decision in

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to the terms of the final contract: Marsh v Macquarie University (2005) 147 IR 401. The burden of establishing that the Commission should go beyond the terms of the contract to effectively make out that the contract is a “sham” is significant: Department of Justice v Lunn (2006) 158 IR 410 at [30]-[40]. Drury v BHP Refractories Pty Ltd (1995) 62 IR 467; Hewitt v ACTek Custom Engineering Pty Ltd (25 May 2001, AIRC, Lacy SDP, Print PR904665). An apprenticeship is not an engagement for a specified task; Qantas Airways Ltd v Fetz (9 June 1998, AIRC, Giudice J, Harrison SDP, Lawson C, Print Q1482). A contract for a specified task can be extended, provided that the extension pertains to the same task: D’Ortenzio v Telstra (1998) 82 IR 52; Hewitt v ACTek Custom Engineering Pty Ltd (25 May 2001, AIRC, Lacy SDP, Print PR904665) at [27]. Marsh v Macquarie University (2005) 147 IR 401; Department of Justice v Lunn (2006) 158 IR 410; Drummond v Canberra Institute of Technology [2010] FWAFB 5455 (6 August 2010, Drake SDP, Cartwright SDP, Roberts C). Termination prior to the end of the training arrangement may warrant an unfair dismissal application: see Turner v Mindar Holdings Pty Ltd (t/as JTS Ladies & Mens Hairstylists) [2011] FWA 8087 (29 November 2011, Williams C). The training arrangement must be entered into in advance of the employment and the employee must knowingly enter the agreement: Matusiewicz v Expotech Pty Ltd (18 May 2001, AIRC, Acton SDP, Print PR904339). Where an employee is demoted and elects not to continue in the employment and resigns, the Tribunal will have jurisdiction if the demotion was significant and it was not open to the employer to demote the employee in this way: Westen v Union des Assurances de Paris (1996) 88 IR 259; Cowell v Irlmond Pty Ltd (1997) 76 IR 352. The former s 642(3) replicated the earlier s 170CD(1A) (pre-Work Choices), which was inserted by item 9 of Sch 1 of the Workplace Relations Amendment (Termination of Employment) Act 2001 (Cth). A lawful demotion in accordance with the terms of a enterprise agreement, award or contract of employment did not constitute a termination of employment: Gorczyca v RMIT University (12 September 2002, AIRC, Polites SDP, O’Callaghan SDP and Hingley C, Print PR922414); Charlton v Eastern Australian Airlines Pty Ltd (2006) 154 IR 239 at [34]. Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 142 ALR 99.

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Brackenridge on the basis of the change in the statutory regime which reduced the emphasis on the Termination of Employment Convention 1982. Instead, it adopted the position of the Full Court of the Supreme Court of South Australia in Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia and Grivell107 on the basis that the context in that case required the consideration of general law principles, which are equally applicable under the Workplace Relations Act 1996.108

Small Business Fair Dismissal Code [13.130] Under s 385(c) a person is not “unfairly dismissed” if the dismissal was consistent with the Small Business Fair Dismissal Code. The Fair Work Commission is required to consider whether the dismissal is consistent with the Code as an initial matter, prior to considering the merits of the case: s 396(c).109 As its name suggests, the code applies only to a small business employer, as defined in s 23: see [13.70]. The Small Business Fair Dismissal Code is an instrument of declaration by the Minister made under s 388(1).110 It is brief in its terms and is accompanied by a checklist to assist employers to determine whether they have complied with the Code. It is noticeable that it is fair for a small business employer to justify summary dismissal if it believes on reasonable grounds that the employee’s conduct is sufficiently serious to 107 108

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Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia and Grivell (1999) 70 SASR 240; 90 IR 211. Charlton v Eastern Australian Airlines Pty Ltd (2006) 154 IR 239 at [33]. Query whether anything turns on the definitions of “employee” and “contract of employment” in the statutory provisions under consideration in Grivell’s case (at [24]-[25]). Compare Gemmell v Sleepmaster Pty Ltd (2005) 145 IR 154 at [13]. If so satisfied, it must dismiss the matter: Re Industrial Automation Group Pty Ltd [2010] FWAFB 8868 (2 December 2010, Kaufman SDP, Richards SDP, Hampton C) at [34]. It is available at https://www.fwc.gov.au/about-us/legislation-regulations/small-business-fairdismissal-code. At the time of writing, it stated as follows: Summary Dismissal It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report. Other Dismissal In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job. The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement. The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations. Procedural Matters In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity. A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Commission, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.

Unfair Dismissal

justify summary dismissal.111 This seems to relieve the small business employer from the burden of proving, by way of evidence before the Fair Work Commission, that the employee engaged in such conduct.112

Genuine redundancy [13.140] Under s 385(d) a person is not “unfairly dismissed” if the dismissal was a “genuine redundancy”. The Fair Work Commission must decide this question prior to considering the merits of the case: s 396(d). Section 389 defines a “genuine redundancy” and then goes on to indicate what is not a genuine redundancy. A person’s dismissal is a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and (b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy. The definition is based on redundancy provisions in industrial awards. The reason for the employer no longer wanting the job to be done by anyone must be because of changes in the “operational requirements” of the employer’s enterprise. The test focuses on the job, rather than the functions which go to make up the job.113 Prior to the reforms introduced by the Workplace Relations Amendment (Work Choices) Act 2005, the unfair dismissal jurisdiction of the Australian Industrial Relations Commission was regularly accessed by employees seeking relief in relation to their dismissal by way of redundancy. The earlier provisions afforded relief to an employee who could establish that there was no valid reason related to the “operational requirements” of the employer’s undertaking, establishment or service. “Operational requirements” is not defined in the Fair Work Act 2009, guidance may be sought from decisions under the Workplace Relations Act 1996 (Cth). In Nettlefold v Kym Smoker Pty Ltd114 Lee J said that a termination will be “based on the operational requirements of an undertaking if the action of the employer is necessary to advance the undertaking and is consistent with management of the undertaking that meets the employer’s obligations to the employee”. His Honour indicated that the phrase “operational requirements” permits a consideration of matters such as “past and present performance of the undertaking, the state of the market in which it operates, steps that may be taken to improve the efficiency of the undertaking by installing new processes, equipment or skills, or by arranging for labour to be used more productively, and the application of good management to the undertaking”.115 The onus was upon the employer to establish first that there was a genuine need for the redundancy related to the operational requirements of the 111

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See, for example, Pinawin v Domingo [2012] FWAFB 1359; (2012) 219 IR 128 (21 March 2012, Watson VP, Richards SDP, Cloghan C); Steri-Flow Filtration Systems (Aust) Pty Ltd v Erskine [2013] FWCFB 1943; (2013) 231 IR 121 (24 April 2014, Acton SDP, Smith DP, Cloghan C); McKenna v Home Theatre Group Pty Ltd (t/as Home Theatre Group) [2012] FWA 9309 (30 October 2012, Roe C); Puri v Sydney Strata Pty Ltd [2012] FWA 7317 (27 August 2012, Watson VP). A dismissal was held not to be consistent with the Small Business Code in Shaw v Pat Thomas Memorial Community House Inc [2012] FWA 8303 (10 October 2013, Williams C). Compare the test which applies to the burden of proving a valid reason for the dismissal under Fair Work Act 2009 (Cth), s 387(a): see [13.160]. Jones v Department of Energy and Minerals (1995) 60 IR 304 at 308; Ulan Coal Mines Ltd v Howarth (2010) 196 IR 32 at [15]-[19]. Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370 at 373. Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370 at 373. See also Tasmania Development and Resources v Martin (2000) 97 IR 66 at 71-73.

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business, and, secondly, that the selection of the particular employee concerned was sound, defensible, well-founded and objectively justifiable.116 Upon the introduction of the Work Choices reforms, s 643(8) of the Workplace Relations Act 1996 (Cth) provided that an unfair dismissal application could not be brought if the employee’s employment was terminated for genuine “operational reasons” or for reasons that include genuine operational reasons. Section 643(9) defined “operational reasons” as reasons of an economic, technological, structural or similar nature relating to the employer’s undertaking, establishment, service or business or to a part of the employer’s undertaking, establishment, service or business.117 The exclusion was controversial and much litigated.118 It effectively prevented the Australian Industrial Relations Commission from dealing with redundancy dismissals. The Fair Work Act 2009 provision falls somewhere between these two provisions. The Fair Work Commission must be satisfied as to the operational requirements119 and compliance with modern award or enterprise agreement provisions.120 If not, the dismissal is not a case of genuine redundancy, giving it jurisdiction to determine whether the person was unfairly dismissed. Finally, the Fair Work Commission is required to inquire as to whether it would have been reasonable in all of the circumstances for the person to be redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer: s 389(2). If so, the dismissal is not a case of genuine redundancy, giving Fair Work Commission jurisdiction to determine whether the person was unfairly dismissed. The kinds of matters that are raised in determining whether redeployment ought to have been considered include the geographical location of the new job,121 and whether the employee has the skills and competence to perform the new job “either immediately or with a reasonable period of training”.122 Reasonable retraining does not, however, include funding general education courses.123 Redeployment may, however, involve considering an employee for a position with lower pay and duties.124

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117 118

119 120

121 122 123 124

Association of Professional Engineers, Scientists and Managers Australia v Deniliquin Council No 3 (1995) 134 ALR 267 at 287; Kenefick v Australian Submarine Corporation Pty Ltd (1996) 65 IR 366; McCarthy v FJ Trousers Pty Ltd (12 October 2000, AIRC, Watson SDP, Print T1853). It is for the employer to determine its own priorities concerning the running of its business. It is not for the tribunal to sit in the managerial chair; Lang v Tenix Defence Systems Pty Ltd (20 April 2000, AIRC, Williams SDP, Print S5182); Kenefick v Australian Submarine Corporation (1995) 62 IR 107 at 116. The employer must not be motivated in the selection of the particular employee by some other matter such as the employee’s participation in an industrial dispute; Dahlstrom v Wagstaff Cranbourne Pty Ltd (25 September 2000, AIRC, Boulton J, Acton SDP and Simmonds C, Print T1001). See the Explanatory Memorandum to the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) at [2125]-[2130]. See Forsyth, Freedom to Fire: Economic Dismissals under Work Choices (Report for the Victorian Office of the Workplace Rights Advocate, August 2007); Keats, “No Logical Response Required: the Full Bench Explains Genuine Operational Reasons” (2007) 20 AJLL 104; Carter v Village Cinemas Australia Pty Ltd (2007) 158 IR 137. See the Explanatory Memorandum to the Fair Work Bill 2009, at [1547]-[1548]. Including such provisions relating to consultation with employees and industrial associations: Ulan Coal Mines Ltd v Howarth (2010) 196 IR 32 at [28]-[32]; Monks v John Holland Group Pty Ltd [2012] FWA 6453; Morrisey v Transit Australia Pty Ltd [2012] FWA 7988. See, for example, Roy v SNC-Lavalin Australia Pty Ltd [2013] FWC 7309 (30 September 2013, Richards SDP). Ulan Coal Mines Ltd v Honeysett (2010) 199 IR 363 at [34]. See Kaye Wilson v Mackay Taxi Holdings Ltd (t/as Mackay Whitsunday Taxis) [2014] FWC 2425 (16 April 2014, Simpson C). See, for example, Ho v AP Eagers Ltd [2010] FWA 5987 (27 August 2010, Simpson C), where a generous view of the exclusion was adopted, so as to confer jurisdiction.

Unfair Dismissal

Harsh, unjust or unreasonable [13.150] By s 387, in considering whether a person’s dismissal was harsh, unjust or

unreasonable, the Fair Work Commission must take into account:125 (a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and (b) whether the person was notified of that reason; and (c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and (d) any unreasonable refusal by the employer to allow the person to have a support person present to assist in any discussions related to the dismissal;126 and (e) if the dismissal related to unsatisfactory performance by the person – whether the person had been warned about the unsatisfactory performance before the dismissal; and (f) the degree to which the size of the employer’s enterprise would be likely to impact upon the procedures to be followed in effecting the dismissal; and (g) the degree to which the absence of a dedicated human resources specialist or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and (h) any other matters the Fair Work Commission considers relevant. As a consequence of this statutory prescription, the relevance of the historical interpretation of the phrase “harsh, unjust or unreasonable” by the courts, both in the State unfair dismissal jurisdictions and federal award unfair dismissal provisions, is confined to the consideration of any other matters that the Fair Work Commission considers relevant under s 387(h).127 Nevertheless, in considering what is “harsh, unjust or unreasonable”, the Fair Work Commission needs to ensure that a “fair go all round” is accorded to both the employer and the employee concerned.128 Valid reason [13.160] In Selvachandran v Peteron Plastics Pty Ltd, it was said that, in order to be valid, the reason must be: 125

126

127

128

The words “must take into account” are interpreted in the same way as the phrase “must have regard to” which appeared in the equivalent provisions in the former Workplace Relations Act 1996 (Cth), s 652(3). The words “must have regard to” required the Commission to take into account, consider and give due weight to each of these factors: Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 (and an application for prerogative relief in Re Crozier; Ex parte AIRC [2001] FCA 1031 (1 August 2001, Gray, Branson and Kerr JJ) where it was said at [15] that it is for the Commission to determine what weight it gives to each matter); Chubb Security Australia Pty Ltd v Thomas (2 February 2000, AIRC, McIntyre VP, Marsh SDP, Larkin C, Print S2679); Annetta v Ansett Australia Ltd (2000) 98 IR 233; Britax Rainsford v Jones (2001) 109 IR 381; Selak v Woolworths Ltd (2008) 171 IR 267. Apart from this ground, the considerations in s 387 are the same as those which applied under s 652(3) of the Workplace Relations Act 1996 (Cth). The paragraph does not impose a positive obligation on the employer to invite a support person to attend. It applies only in circumstances when an employee asks to have a support person present. See Explanatory Memorandum to the Fair Work Act 2009 (Cth) at [1541]. See, for example, Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20 at 28; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 467 per McHugh and Gummow JJ; Gregory v Philip Morris Ltd (1988) 80 ALR 455; Wheeler v Philip Morris Ltd (1989) 97 ALR 282. For a more recent review of the authorities, see Toms v Harbour City Ferries Pty Ltd (2015) 229 FCR 537 (Buchanan J, Allsop CJ and Siopsis J agreeing). Fair Work Act 2009 (Cth), s 381(2); Windsor Smith v Liu (1998) 140 IR 398. The importance of providing a fair go all round does not override the considerations under s 387; Bridgestone TG Australia Pty Ltd v Nhut Chau Banh (27 July 1998, AIRC, McIntyre VP, Duncan DP and Jones C, Print Q4039); St John-Sweeting v University of Adelaide (23 June 1996, Ross VP Jennings DP and Hingley C, Print R5960). The obligation to afford a “fair go all round” applies to all procedures and remedies: s 381(2). See Hill v Adult Multicultural Education Services (2008) 171 IR 360 at [67]-[79].

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sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason … in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must be “applied in a practical, commonsense way to ensure that” the employer and employee are each treated fairly.129

When determining whether a dismissal is for a valid reason, this test has been consistently applied and it has been accepted that the reason must be defensible or justifiable on an objective analysis of the facts, taking into account the “entire factual matrix”.130 It is not the role of the tribunal to determine whether it would have reached the same view as the employer, but rather to assess whether the employer had a valid reason.131 The focus of the consideration is upon the employer and the basis for its decision to terminate rather than the consequences for the employee.132 Nevertheless, the penalty of dismissal must be proportionate to the reason relied upon.133 The valid reason must be related to the capacity or conduct of the employee.134 An employee’s capacity covers not only her or his physical capacity135 or mental capacity, but also the employee’s performance.136 There must be evidence upon which the Fair Work Commission can make a finding that the employee is incapable of performing the inherent requirements of the position.137 Similarly, in conduct-related dismissals, the Fair Work Commission must make a finding that the misconduct occurred138 and, if so, that the conduct was sufficiently 129 130

131 132

133

134 135

136

137

138

Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373. Beck v Castran Gilbert Real Estate Pty Ltd (14 March 2000, AIRC, Giudice P, Williams SDP, Holmes C, Print S4014); Annetta v Ansett Australia Ltd (2000) 98 IR 233; Vallette v GrainCorp Operations Ltd (8 March 2001, AIRC, Marsh SDP, Harrison SDP and Cargill C, Print PR902074) referring to a series of decisions under the provisions of the Industrial Relations Act 1988 (Cth) such as Kerr v Jaroma Pty Ltd (1996) 70 IR 469; Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410 and Qantas Airways Ltd v Cornwall (1998) 84 FCR 483. Walton v Mermaid [1996] 142 ALR 681 at 685 per Moore J. Container Terminals Australia Ltd v Toby (24 July 2000, AIRC, Boulton J, Marsh SDP and Jones C, Print S8434). These are matters that are to be taken into account under the other heads of s 387. See also Ricegrowers Co-operative Ltd v Schliebs (31 August 2001, AIRC, Duncan SDP, Cartwright SDP, Larkin C, Print PR908351) at [17]. Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 465 per McHugh and Gummow JJ; Ricegrowers Co-operative Ltd v Schliebs (31 August 2001, AIRC, Duncan SDP, Cartwright SDP, Larkin C, Print PR908351) at [12]. Fair Work Act 2009 (Cth), s 387(a). Hobbs v Capricorn Coal Management Pty Ltd (30 April 2001, AIRC, McIntyre VP, Cartwright SDP and Harrison C, Print PR903643); Birdi v Rail Corpoation NSW (t/as Railcorp) [2011] FWA 7728 (10 November 2011, Harrison C); Harte v Forbes Australia Pty Ltd t/as Hunt Boilers [2011] FWA 6948 (18 October 2011, Bissett C). Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137; Re Crozier; Ex parte AIRC [2001] FCA 1031 (1 August 2001, Gray, Branson and Kenny JJ) at [13]-[14]. In Fichera v Thomas Warburton Pty Ltd [2012] FWA 4382 (24 May 2012, Gooley C), the employee’s incapacity to provide necessary leadership in a management position was held to provide a valid reason for dismissal (although ultimately the dismissal was held to be unfair for want of procedural fairness: see [13.170]). Erskine v Chalmers Industries Pty Ltd (30 March 2001, AIRC, Williams SDP, Acton SDP and Blair C, Print PR902746). Even if there is such an incapacity, it may not provide a valid reason if the dismissal would be contrary to a prohibition in State workers compensation legislation: J Boag and Son Brewing Pty Ltd v Button [2010] FWAFB 4022 (26 May 2010, Lawler VP, O’Callaghan SDP, Williams C) at [29]. That is on the basis of the evidence before it, which may include evidence of matters of which the employer was not aware at the time of the dismissal: Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1; Department of Social Security v Uink (1997) 77 IR 244; King v Freshmore (Vic) Pty Ltd (17 March 2000, AIRC, Ross VP, Williams SDP and Hingley C, Print S4213); Metricon Homes Pty Ltd v Bradley (2009) 181 IR 115 (applying the common law principles, see [8.130]).

Unfair Dismissal

serious to justify dismissal.139 Where there is an allegation that the employee has abandoned the employment, the Fair Work Commission will look for any extenuating circumstances or any reasonable explanation for the alleged abandonment.140 Where the conduct alleged involves a breach of company policy, the employer must establish that the policy was reasonable and that the employee was aware of the existence of the policy and its contents.141 Other grounds which may provide a valid reason for the dismissal include dishonesty,142 drunkenness,143 illicit drug use,144 fighting,145 harassment of a fellow employee,146 sleeping on duty,147 abusive or aggressive behaviour,148 theft,149 a failure to abide by a lawful and reasonable direction,150

139

140

141

142 143

144 145

146

147 148

149

150

Byrne v Australian Airlines (1995) 185 CLR 410 at 465-466 per McHugh and Gummow JJ; Department of Social Security v Uink (1997) 77 IR 244 at 256-257. The onus falls upon the employer to establish that the conduct occurred and was sufficiently serious to justify dismissal: Miller v AIRC (2001) 108 FCR 192. The more serious the conduct alleged, the higher the standard of proof that needs to be met: Hassan v Nestlé Dairy Products (24 May 2001, AIRC, Watson SDP, Acton SDP and Hingley C, Print S6338); Qantas Airways Ltd v Reyn (1 June 2001, Harrison SDP, Duncan SDP and Raffaelli C, Print PR904809). An assessment of whether the conduct justifies dismissal does not involve consideration as to whether at common law the conduct would justify summary dismissal. Annetta v Ansett Australia Ltd (2000) 98 IR 233; Ricegrowers Co-operative Ltd v Schliebs (31 August 2001, AIRC, Duncan SDP, Cartwright SDP and Larkin C, Print PR908351) at [13]. Collins v Chubb Protective Services (21 November 1997, AIRC, O’Connor C, Print P6862); McKenzie v Meran Rise Pty Ltd t/as Nu Force Security Services (21 September 1999, Giudice J, Polites SDP and Foggo C, Print R9029). Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20; Jancso v Telstra Corporation Ltd (1 June 2001, AIRC, Giudice P, Harrison SDP and Larkin C, Print PR904791); Atfield v Jupiters Ltd (2003) 124 IR 217; Woolworths Ltd v Brown (2005) 145 IR 285; Selak v Woolworths Ltd (2008) 171 IR 267; Queensland Rail v Wake (2006) 156 IR 393; Gane v Rail Corporation of New South Wales (2010) 197 IR 138; Linfox Australia Pty Ltd v Stutsel [2012] FWAFB 7097; (2012) 217 IR 52 (where the employer had failed to make and publicise an adequate social media use policy); Australian Postal Corp v Rushiti [2012] FWAFB7423; (2012) 224 IR 382 (where the employer had an effective email use policy prohibiting the circulation of pornographic material). Streeter v Telstra Corporation Ltd (2008) 170 IR 1. Robins v Sir Charles Gairdner Hospital (13 July 1999, AIRC, MacBean SDP, Coleman DP and Smith C, Print R7087); compare Vallette v GrainCorp Operations Ltd (8 March 2001, AIRC, Marsh SDP, Harrison SDP and Cargill C, Print PR902074). Toms v Harbour City Ferries Pty Ltd (2015) 229 FCR 537. AWU-FIME Amalgamated Union v Queensland Alumina Ltd (1995) 62 IR 385; Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201; DP World Sydney Ltd v Lambley [2012] FWAFB 6949 (24 August 2012) Watson VP, Sams DP, Deegan C), although the tribunal will look to whether there are any extenuating circumstances: Qantas v Kearney (26 March 1998, AIRC, Polites SDP, Watson SDP and Simmonds C, Print 9657); Culpeper v Intercontinental Ship Management Pty Ltd (2004) 134 IR 243. The Commission will also require convincing proof of the assault allegations: see Dewson v Boom Logistics Ltd [2012] FWA 9027 (24 October 2012, Cambridge C). Sandman v Visyboard Coolaroo (20 November 2000, Polites SDP, Watson SDP and Hingley C, Print T3495); compare GH Operations Pty Ltd (t/as The Grand Hyatt Melbourne) v Smith (14 May 2001, AIRC, Giudice P, O’Callaghan SDP and Smith C, Print PR904136); Graincorp Operations Ltd v Markham (2002) 120 IR 253. Evans v BHP Steel (JLA) Pty Ltd (2 April 1996, AIRC, Whelan C, Print N0584); CFMEU v Kodak (Australasia) Pty Ltd (unreported, 21 December 1994, IRCA, Murphy JR). Kenley v JB Hi-Fi (22 June 2000, Ross VP, Watson SDP and Holmes C, Print S7235). Threatening a colleague via social media was a valid reason for dismissal in O’Keefe v Williams Muir’s Pty Ltd (t/as Troy Williams The Good Guys) [2011] FWA 5311 (11 August 2011, Swan DP). McIndoe v BHP Coal Pty Ltd (2 March 2001, AIRC, Giudice P, Williams SDP and Bacon C, Print PR901846); Woodman v Hoyts Corporation Pty Ltd (2001) 107 IR 172; Barbaro v Certegy Australia (2003) 126 IR 348. Miller v AIRC (2001) 108 FCR 192.

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misuse of work information,151 negligence152 or poor performance153 on the part of the employee. Conduct which occurs outside the workplace may constitute a valid reason so long as there is a relevant connection between the conduct and the employment.154 Even where the employer can establish a valid reason for dismissal, the Commission may nevertheless find that it is harsh, unjust or unreasonable for failing to meet procedural fairness requirements.155 Notice of the reason and an opportunity to respond [13.170] Procedural fairness requires that an employee be notified of the reason for the dismissal before any decision is taken to terminate the employment so as to provide the employee with an opportunity to respond to the reason before the dismissal takes effect.156 To this extent, the obligation to notify the employee of the reason for the dismissal in s 387(b) operates in conjunction with the obligation to provide the employee with an opportunity to respond to any reason related to capacity or conduct under s 387(c). The notification must be made in such a way as to give the employee adequate time to respond to the allegation157 and it must clearly set out the grounds upon which the employment is being terminated158 in a way which avoids pre-judgment.159 Before providing the opportunity to respond to the allegations, the employer must have properly investigated those allegations so that they can be put with sufficient particularity to the employee.160 The provision does not extend to require the employer to ensure that the opportunity is taken up by the employee.161 Whether the opportunity is actually taken up by the employee is irrelevant other than for the purposes of establishing whether or not the opportunity which is provided was a proper opportunity.162 151 152

153 154

155

156 157 158 159 160

161

162

Applicant v Australian Federal Police [2012] FWA 1352 (19 April 2012, Harrison SDP) (leave to appeal refused in [2012] FWAFB 6949). Sprigg v Arthur J Purslowe & Co Pty Ltd (unreported, Industrial Relations Court of Australia, Tomlinson JR, 5 May 1995); Eshak v Public Transport Corporation (unreported, Industrial Relations Court of Australia, Marshall J, 30 August 1996). Hurskin v Australian Jewish Press Pty Ltd (1996) 69 IR 123. Hussein v Westpac Banking Corporation (1995) 59 IR 103; Appellant v Respondent (1998) 89 IR 407; Rose v Telstra Corporation Ltd (4 December 1998, AIRC, Ross VP, Print Q9292); Farquharson v Qantas Airways Ltd (2006) 155 IR 22; Kolodjashnij v J Boag and Son Brewing Pty Ltd [2010] FWAFB 3258 (3 May 2010, Acton SDP, O’Callaghan SDP, Cribb C); see also Kennedy, “More Sinned Against Than Sinning?” (2008) 21 AJLL 59. See, for example, Agnew v Nationwide News Ltd PR 927597 (AIRC, 11 February 2003, Rafaelli C) where employees dismissed for drinking alcohol on their lunch break contrary to the employer’s policy were nevertheless found to have been unfairly dismissed, because the policy had not been consistently applied. See also Flanagan v Thales Australia Ltd (t/as Thales Australia) [2012] FWA 6291 (7 September 2012, Bull C). Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137. GH Operations Pty Ltd (t/as The Grand Hyatt Melbourne) v Smith (14 May 2001, AIRC, Giudice P, O’Callaghan SDP and Smith C, Print PR904136) at [18]. Gutteridge v AC & R Pty Ltd (9 January 1998, AIRC, Cargill C, Print P7971); Lang v Tenix Defence Systems Pty Ltd (20 April 2000, AIRC, Williams SDP, Print S5182). ASU v Ansett Australia Ltd (2000) 175 ALR 173; Shields v CUB (1999) 86 FCR 446. Mutton v Hotel Sofitel (19 April 1999, AIRC, Guidice P, Acton DP and Whelan C, Print R3586); Proebstel v TechPacific Australia Pty Ltd (6 September 2000, AIRC, Marsh SDP, Harrison SDP, and Wilks C, Print S9446) (employee’s refusal to participate in the investigation of itself amounted to misconduct). Mollinger v National Jet Systems Pty Ltd (18 March 2001, AIRC, Guidice P Polities SDP and Gregor C, Print R3130). See too Formway Group v Batrachenko [2013] FWCFB 9829, (2013) 238 IR 273. Phan v Unilever Australia Ltd (29 April 1998, AIRC, Watson SDP, Williams SDP and Larkin C, Print

Unfair Dismissal

The new consideration in s 387(d) reflects a standard approach under previous provisions that it is relevant to consider whether the employee was allowed the opportunity to have a representative present at any meeting.163 An unreasonable refusal to allow the employee to bring a support person to a disciplinary meeting, or a refusal to schedule a meeting so that a support person can attend, may be held to be unfair.164 Warning of unsatisfactory performance [13.180] The relevance of whether the employee had received a warning arises only in circumstances where the dismissal is for reasons related to the unsatisfactory performance of the employee. Therefore, where the dismissal is upon grounds other than unsatisfactory performance, s 387(e) is not a relevant consideration in assessing whether the dismissal is harsh, unjust or unreasonable.165 The warning must identify the relevant aspect of the employee’s performance which is of concern to the employer and make it clear to the employee that the continued employment is at risk unless the performance issue is addressed.166 Warnings must provide a genuine opportunity for the employee to respond and to improve. A mechanistic approach to providing pro-forma warnings will fail this requirement, if the Commission takes the view that the disciplinary process had a pre-determined outcome.167 Other matters [13.190] The Fair Work Commission is required to take into account the degree to which the size of the employer’s enterprise would be likely to impact upon the procedures to be followed in effecting the dismissal, and the degree to which the absence of a dedicated human resources specialist or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal.168 Section 387(h) is a catch-all provision which enables the Fair Work Commission to take into account any other matter it considers relevant to the assessment of whether or not the dismissal is harsh, unjust or unreasonable. Relevant considerations may include the effect of the dismissal on the employee,169 the employee’s length of service,170 the personal and economic situation of the employee,171 the predisposition of the relevant

163

164 165 166

167 168 169

170 171

Q0498); Jancso v Telstra Corporation Ltd (1 June 2001, AIRC, Giudice P, Harrison SDP and Larkins C, Print PR904791); GH Operations Pty Ltd (t/as the Grand Hyatt Melbourne) v Smith (14 May 2001, Guidice P, O’Callaghan SDP and Smith C, Print PR904136). CPSU v Stellar Call Centres Pty Ltd (3 August 2000, AIRC, Bacon C, Print S8849); Oran v Cadia Goldmine (16 January 2001, AIRC, Harrison C, Print PR900336). According to the Explanatory Memorandum to the Fair Work Bill 2009, at [1542], this consideration will only be relevant when an employee asks for a support person. It does not impose a positive obligation to offer an employee the opportunity to have a support person present. See Dewson v Boom Logistics Ltd [2012] FWC 760 (5 February 2013, Cambridge C); Laker v Bendigo and Adelaide Bank Ltd [2010] FWA 5713 (28 September 2010, Lewin C). Fischer v Telstra Corporation Ltd (1 March 1999, AIRC, Ross VP, Duncan DP and Redmond C, Print R2558); Annetta v Ansett Australia Ltd (2000) 98 IR 233. Fastidia Pty Ltd v Goodwin (2000) 102 IR 131 at [43]. This contrasts with the requirement under the former s 170DC of the Industrial Relations Act 1988 (Cth) which, according to the Industrial Relations Court of Australia, did not require any particular degree of formality: Gibson v Bosmac Pty Ltd (1995) 60 IR 1. See Joshi v Panasonic Australia Pty Ltd [2010] FWA 2946 (15 April 2010, Cambridge C). Fair Work Act 2009 (Cth), s 387(f) and (g). Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 465 per McHugh and Gummow JJ; Ricegrowers Co-operative Ltd v Schliebs (31 August 2001, AIRC, Duncan SDP, Cartwright SDP, Larkin C, Print PR908351) at [26]. Container Terminals Australia Ltd v Toby (24 July 2000, AIRC, Boulton J, Marsh SDP and Jones C, Print S8434). Kerry v Ansett Australia Ltd (21 September 1998, AIRC, Duncan DP, Print Q6686).

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supervisor,172 the comparative treatment of employees in a like position173 and whether the employer has complied with procedures set out in a certified agreement or relevant policies and procedures manual.174

Remedies [13.200] If satisfied that the person was protected from unfair dismissal (see [13.60]) and the person was unfairly dismissed (see [13.90]), the Fair Work Commission can order reinstatement, re-employment to another position, or payment of an amount of compensation in lieu of reinstatement: s 390(1). It may only make an order for payment of compensation if it is satisfied that reinstatement is inappropriate and if it considers that an order for payment of compensation is appropriate in all the circumstances: s 390(3).

Reinstatement [13.210] The power to order reinstatement has been described as “akin to an injunction compelling a wrongdoer to restore the position of the innocent party”.175 It involves more than restoring contractual or other legal rights. It means that the employment situation, including the work the employee was performing, as it existed immediately before the termination, must be restored.176 Reinstatement is the primary remedy. So much flows from the words in s 390(3) which provide that the Fair Work Commission may only order compensation if it is satisfied “that reinstatement of the person is inappropriate”.177 An order for reinstatement must be an order that the employer reinstate the person by reappointing that person to the position in which the person was employed immediately before the dismissal, or by appointing them to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.178 If the position which the person held is no longer a position in the employer’s enterprise, but is with an associated entity, the Fair Work Commission can order the associated entity to appoint the person into that position or another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal: s 391(1A). Reinstatement is most likely to be awarded in a case where there was no proven valid reason for dismissal, and the employment relationship can be restored without undue 172 173

174 175 176 177

178

Henshall v South Pacific Tyres (12 April 2001, AIRC, Lewin C, Print PR903422); Whitling v South Pacific Tyres (12 April 2001, AIRC, Lewin C, Print PR903454). Serco Gas Services Pty Ltd v Alkemade (21 June 1999, AIRC, Ross VP, Polites SDP and Hingley C, Print R6090); Mollinger v National Jet Systems Pty Ltd (18 March 1999, AIRC, Guidice J, Polites SDP and Gregor C, Print R3130); Fagan v Department of Human Services [2012] FWA 3043 (19 April 2012, Cribb C). Anderson v Groote Eylandt Mining Co Pty Ltd (5 September 2000, AIRC, Duncan SDP, Print T0277); Buerckner v Australian Taxation Office (8 December 2000, AIRC, Deegan C, Print T4239). Anthony Smith & Associates Pty Ltd v Sinclair (1996) 67 IR 240 at 244. Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539. Fair Work Act 2009 (Cth), s 390(3)(a); Ellawala v Australian Postal Corporation (17 April 2000, AIRC Ross VP, Williams SDP and Gay C, Print S5109); Erskine v Chalmers Industries Pty Ltd (30 March 2001, AIRC, Williams SDP, Acton SDP and Blair C, Print PR904713). Fair Work Act 2009 (Cth), s 391(1)(b); Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1; McVinish v Flight West Airlines (8 September 1998, AIRC, Ross VP, Munro J and Gay C, Print Q5910); Kennedy v Cumnock No 1 Colliery Pty Ltd (14 June 2001, AIRC, Giudice P, Harrison SDP and Jones C, Print PR905197). In IGA Distribution (Vic) Pty Ltd v Nguyen (2011) 212 IR 141, a full bench of the Commission held that the “no less favourable” requirement would be satisfied by the reappointment to a position that was a “close substitute”, and that it was not necessary that the terms and conditions of the position be the same.

Unfair Dismissal

harm to the employer or other employees.179 If reinstatement is likely to impose unacceptable problems or embarrassment, or seriously affect productivity, or harmony within the business, it may be inappropriate to order reinstatement.180 An employer opposing reinstatement on the basis that the necessary trust and confidence has been lost bears the onus of establishing such loss of trust and confidence on a sound and rational basis.181 The effluxion of time would not of itself make reinstatement inappropriate.182 Where the Fair Work Commission does order reinstatement or re-employment, it has a discretion to also make orders necessary to maintain the continuity of the employee’s employment and order payment of remuneration lost because of the dismissal.183 In doing so, it must take into account remuneration earned from other employment and any remuneration reasonably likely to be so earned: s 391(4).184

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182 183

184

See, for example, William Fitzpatrick v Mt Arthur Coal Pty Ltd [2015] FWC 2343, where a shotfirer was reinstated after dismissal for allegedly threatening co-workers, because the allegations were unproven, the original complainant had left the workplace, and a number of the applicant’s co-workers provided signed testimonials favouring his reinstatement. He also enjoyed a reputation as a highly skilled worker, with no record of poor performance. Nicolson v Heaven & Earth Gallery Pty Ltd (1994) 57 IR 50 at 61; see also Cox v South Australian Meat Corp (1995) 60 IR 293; Johns v Gunns Ltd (1995) 60 IR 258; Abbott-Etherington v Houghton Motors Pty Ltd (1995) 63 IR 394 at 397; Nokia Telecommunications Pty Ltd v Davis (unreported, Industrial Relations Court of Australia, Wilcox CJ, 10 October 1996) (relevance of the applicant’s attitude to his work and duty to implement reasonable instructions of his superiors); Patterson v Newcrest Mining Ltd (1996) 68 IR 419 (injury incapacitated applicant making it inappropriate to order reinstatement); Bishop v Emora Pty Ltd (unreported, Industrial Relations Court of Australia, 7 February 1997, Wilcox CJ) (relevance of the effect of an order for reinstatement on a third party, such as a replacement employee); Rio Tinto Coal Australia Pty Ltd v Smith (AIRC, 14 April 2005, Watson SDP, Kaufman SDP, Smith C, Print PR957290) (where employees would be surplus to requirements). Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 at 191 (the problem was of the employer’s own making; it wrongly accused a senior employee of supplying marijuana to fellow employees; in the circumstances the court said that it was important to scrutinise any claim by an employer that reinstatement is inappropriate because of loss of confidence in the employee): Rosedale v Telstra Corporation (22 June 2001, AIRC, Larkin C, Print PR905481) at [55]-[58]. See also Balfours Bakery v Cooper [2011] FWAFB 8032 (2 December 2011, Justice Giudice P, Hamberger SDP, Spencer C) (no breakdown in trust); compare with Bellia v Assisi Centre Inc t/as Assisi Centre Aged Care [2011] FWAFB 5944 (5 September 2011, Drake SDP, Ives DP, Simpson C) (reinstatement of a priest to a pastoral role overturned on appeal, because of a relationship breakdown). Johns v Gunns Ltd (1995) 60 IR 258 at 272-273; Crawford v Coal and Allied Operations Pty Ltd (9 July 2001, AIRC, Leary DP, Print PR906250) at [296]. Fair Work Act 2009 (Cth), s 391(2), (3). See however Serafini v Holcim (Australia) Pty Ltd [2011] FWAFB 7794 (10 November 2011, Drake SDP, Sams DP, Cloghan C) where a reinstated employee was denied lost pay because the Commission considered that his conduct (dangerous driving) warranted some punishment. It would appear that exceptional circumstances are required before refusing an order for back pay: Davison v Aurora Energy Pty Ltd (8 March 2001, AIRC, Watson SDP, Williams SDP and Holmes C, Print PR902108). The discretion is to be exercised in the context of the objects of the division set out in Fair Work Act 2009 (Cth), s 381, is conditional upon an order for reinstatement, and allows the making of any order the tribunal thinks appropriate. See also Wark v Melbourne City Toyota (20 May 1999, AIRC, Williams SDP, Acton SDP and Tolley C, Print R4864). As to the calculation of remuneration lost, see Erskine v Chalmers Industries Pty Ltd (31 May 2001, AIRC, Williams SDP, Acton SDP and Blair C, Print PR904713). The amount may be discounted for contingencies: Hajuku Pty Ltd v Gates (31 May 2001, AIRC, Harrison SDP, Drake SDP and Raffaelli C, Print PR904780). As to whether a discount ought to be made for social security payments received in the meantime, see Kennedy v Cumnock No 1 Colliery Pty Ltd (19 September 2001, AIRC, Giudice P, Harrison SDP, Jones C, Print PR908987). For an interesting example of the consequences of an order for reinstatement in a different context (whether or not the employee regains the seniority he or she held) see Barlow v Qantas Airways Ltd (1997) 75 IR 100.

537

538

Ch 13: Statutory Protection for Job Security

Compensation in lieu of reinstatement [13.220] If it considers that reinstatement is inappropriate, the Fair Work Commission may make an order requiring the payment of an amount of compensation in lieu of reinstatement: s 390(3)(a).185 It must consider that an order for payment of compensation is appropriate in all the circumstances: s 390(3)(b). There is a cap on the amount of any such order. It must not exceed the lesser of the total amount of remuneration received by the person, or to which the person was entitled, for the period of 26 weeks prior to the dismissal, and half of the high income threshold immediately before the dismissal: s 392(5) and (6).186 In assessing what amount of compensation is appropriate,187 under s 392(2) the Fair Work Commission must take into account188 all of the circumstances of the case, including the effect of the order on the viability of the employer’s enterprise,189 the length of the person’s service with the employer,190 the remuneration the person would have received or would have been likely to receive had he or she not been dismissed,191 the efforts of the person (if any) to mitigate their loss because of the dismissal,192 remuneration earned from other employment and any remuneration 185

186

187

188

189

190 191

192

The payment is not compensation for unpaid entitlements. It is compensation in lieu of an order for reinstatement which involves the exercise of arbitral rather than judicial power: Wright v Ramsey Food Packaging No 2 Pty Ltd [2007] AIRC 606 (8 August 2007, Richards SDP). The high income threshold is determined by the formula in Fair Work Act 2009 (Cth), s 333: see [13.80]. At the time of writing, the high income threshold was $136,700. Therefore, the cap under s 392(5)(b) is $68,350. The figure is subject to indexation in accordance with reg 2.13 of the Fair Work Regulations 2009 (Cth). See also s 392(6)(b) and reg. 3.06 concerning leave without pay during the six month period. In assessing appropriateness, the tribunal may be guided by the “fair go all round” principle: Mollinger v National Jet Systems Pty Ltd (18 March 1999, AIRC, Guidice J, Polites SDP and Gregor C, Print R3130) at [13]. The words “must take into account” are likely to be interpreted in the same way as the previous phrase which applied, being “must have regard to”. This requires that each of the matters listed be properly considered and treated as a matter of significance in the decision-making process: Swain v Ramsey Food Packaging Pty Ltd (13 April 2000, AIRC, Marsh SDP, Drake SDP and Lawson C, Print S4919); but only in so far as those matters are applicable or relevant to the particular circumstances of the case; Henderson v Department of Defence (28 July 2000, AIRC, Guidice P, Williams SDP, Huxter C, Print S8591); Vallette v GrainCorp Operations Ltd (8 March 2001, AIRC, Marsh SDP, Harrison SDP and Cargill C, Print PR902074); GH Operations Pty Ltd (t/as The Grand Hyatt Melbourne) v Smith (14 May 2001, AIRC, Giudice P, O’Callaghan SDP and Smith C, Print PR904136). Fair Work Act 2009 (Cth), s 392(2)(a). In respect of which the onus is on the employer to bring relevant evidence: Moore v Highpace Pty Ltd (18 May 1998, AIRC, Boulton J, Watson SDP and Whelan C, Print Q0871). Fair Work Act 2009 (Cth), s 392(2)(b). GH Operations Pty Ltd (t/as The Grand Hyatt Melbourne) v Smith (14 May 2001, AIRC, Giudice P, O’Callaghan SDP and Smith C, Print PR904136). Fair Work Act 2009 (Cth), s 392(2)(c). This involves an assessment of how long it was likely that the employment would have continued: Fastidia Pty Ltd v Goodwin (2000) 102 IR 131 (likely improvement in performance if warning given); Marchetta v B & P Caelli Constructions (Vic) Pty Ltd (28 March 2001, AIRC, Watson SDP, Acton SDP and Smith C, Print PR902682) (illness or injury); Orden v Myer Grace Brothers (30 June 1998, AIRC, Cargill C, Print Q2645) (period of time for appropriate consultation); GH Operations Pty Ltd (t/as The Grand Hyatt Melbourne) v Smith (14 May 2001, AIRC, Giudice P, O’Callaghan SDP, Smith C, Print PR904136) (likelihood of the employee continuing the offensive conduct). As to provision for contingencies, see Printlinx Pty Ltd v Hughes (17 October 2001, AIRC, Ross VP, Lacy SDP and Holmes C, Print PR910359); Enhance Systems Pty Ltd v Cox (AIRC, 31 October 2001, Williams SDP, Actons SDP, Gay C, Print PR910799). Fair Work Act 2009 (Cth), s 392(2)(d). Biviano v Suji Kim Collection (AIRC, 28 March 2002, Ross VP, O’Callaghan SDP, Foggo C, Print PR915963); Vdoukakis v DJ Cussen Pty Ltd (AIRC, 23 July 2004, Duncan SDP, O’Callaghan SDP, Redmond C, Print PR949780). The behaviour of the employee is relevant to the assessment of the compensation: GH Operations Pty Ltd (t/as The Grand Hyatt Melbourne) v Smith (14 May 2001, AIRC, Giudice P, O’Callaghan SDP and Smith C, Print PR904136); Tenix Defence Systems Pty Ltd v Fearnley (22 May 2000, AIRC, Ross VP, Polites SDP and Smith C, Print S6238).

Unfair Dismissal

reasonably likely to be so earned from the time of dismissal to the time of the order for compensation, and any other matter the Fair Work Commission considers relevant.193 The Fair Work Commission’s own “Unfair Dismissal Benchbook”194 advises that in assessing compensation, Commissioners commonly apply a formula known as the “Sprigg formula”, from Sprigg v Pauls Licensed Festival Supermarket.195 In that decision, a Full Bench of the Commission adopted the principles set out by Ross VP (as he then was) in Shorten v Australian Meat Holdings196 which require that in assessing the amount of compensation, the tribunal should first estimate the remuneration the employee would have received or would have been likely to have received if the employer had not terminated the employment. Next, it should deduct the employee’s earnings since termination.197 Then, the remaining amount of compensation is discounted for the contingency that the employment may have ended lawfully in a manner which was not harsh, unjust or unreasonable at some later time. Next, the impact of taxation is calculated. Finally, the legislative cap is applied. The Fair Work Commission must make the assessment of an appropriate amount independent of the statutory limit and, if the assessment is over the statutory limit, then apply the statutory limit.198 The Fair Work Commission is prevented from awarding compensation for shock, distress, humiliation or other analogous hurt caused to the person by the manner of the person’s dismissal: s 392(4).199 Section 392(3) requires the Fair Work Commission to reduce the amount of compensation it would otherwise order by an appropriate amount if it is satisfied that misconduct of a person contributed to the employer’s decision to terminate the employment. This is a curious provision. The purpose of the provisions, consistent with the objects of the Part, is to provide remedy if a dismissal is found to be unfair. It is not to punish the employee for misconduct during the employment. It is difficult to see, in this context, what is an “appropriate amount on account of the misconduct”.200 193

194 195 196 197

198

199

200

Fair Work Act 2009 (Cth), s 392(2)(e), (f), (g). The payment of a retrenchment benefit is no bar to an award of compensation and, in some circumstances, may be taken into account and offset against an award of compensation: Smith v Moore Paragon Australia Pty Ltd (23 January 2003, AIRC, Lacy SDP, Print PR915674). Published 24 December 2015, available online at http://www.fwc.gov.au, p 137. Sprigg v Pauls Licensed Festival Supermarket (1998) 88 IR 21. Shorten v Australian Meat Holdings (1996) 70 IR 360. The Commission may also deduct an amount in respect of potential earnings, where an employee has failed to accept a bona fide offer of reemployment (see Bechara v Gregory Harrison Healey & Co (1996) 65 IR 382), or has made no effort to look for other work: see Robat v Iveco Trucks Australia Ltd [2011] FWA 2915 (16 May 2011, Lewin C). This process has been consistently adopted: see, for example, Ellawala v Australian Postal Corporation (17 April 2000, AIRC, Ross VP, Williams SDP and Gay C, Print S5109); West v Steggles Ltd (11 May 2000, AIRC, Watson SDP, Williams SDP and Smith C, Print S5876); GH Operations Pty Ltd (t/as The Grand Hyatt Melbourne) v Smith (14 May 2001, AIRC, Giudice P, O’Callaghan SDP and Smith C, Print PR904136); Printlinx Pty Ltd v Hughes (17 October 2001, AIRC, Ross VP, Lacy SDP and Holmes C, Print PR910359); Wright v Cheadle Hume Pty Ltd t/as Macedon Spa [2010] FWA 675 (10 February 2010, Lewin C). Previously, the Australian Industrial Relations Commission took the view that such compensation was available so long as the evidence demonstrated that the employee had suffered damage of that kind. Liu v Coms 21 Ltd (25 February 2000, AIRC, Giudice P, Duncan DP and Larkin C, Print S3571); Leemon v Treasure Books Australia Pty Ltd (t/as Merchant Sampler Advertising) (1997) 75 IR 138; Rutherford v Melbourne’s Cheapest Tyres Pty Ltd (17 September 2001, AIRC, Lacy SDP, Print PR909034) at [102]-[104]. However, query whether such compensation was within the concept of “an amount in lieu of reinstatement” under the former s 170CH(6). In Tabro Meat Pty Ltd v Heffernan (2011) 208 IR 101, an appeal bench reduced a compensation order by 15% on account of the employee’s misconduct in engaging in dangerous operation of a forklift truck and swearing at a superior.

539

540

Ch 13: Statutory Protection for Job Security

Orders of the Fair Work Commission are enforceable in Federal Court or Federal Circuit Court proceedings. The court may order a pecuniary penalty, in addition to any order of an injunction or compensation.201

General Protections Overview [13.230] One of the principal objects of the Fair Work Act 2009 is “enabling fairness and representation at work and the prevention of discrimination by recognising the right to freedom of association and the right to be represented, protecting against unfair treatment and discrimination, providing accessible and effective procedures to resolve grievances and disputes and providing effective compliance mechanisms”.202 This object governs the operation of Pt 3-1 entitled “General Protections”, which gathers together and enhances a range of provisions in the former Workplace Relations Act 1996 (Cth). Section 336(1) provides further specific objects of Pt 3-1, being: (a) to protect workplace rights; (b) to protect freedom of association by ensuring that persons are: (i) free to become, or not become, members of industrial associations; and (ii) free to be represented, or not represented, by industrial associations; and (iii) free to participate, or not participate, in lawful industrial activities; (c) to provide protection from workplace discrimination; and (d) to provide effective relief for persons who have been discriminated against, victimised or otherwise adversely affected as a result of contraventions of this Part. A detailed consideration of the whole of Pt 3-1 is beyond the scope of this text. Rather, the focus is on those aspects of Pt 3-1 which concern the relationship as between employee and employer.203 Relevantly, Pt 3-1 seeks to achieve the above objects, insofar as they protect the interests of employees, by conferring upon them a series of protections. First, Div 3 protects workplace rights such as employment entitlements and ensures the freedom to exercise those rights and enforce those entitlements. Secondly, Div 4 protects the ability of people to engage or not engage in industrial activities. This group of protections covers freedom of association, being the right to be or not be a member or officer of an industrial association and to participate in lawful activities, including those of an industrial association. Thirdly, Div 5 protects against discrimination on the grounds of race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political option, national extraction or social origin.204 This Division also protects employees from dismissal on the grounds of temporary absence from work because of illness or injury.205 Finally, Div 6 protects employees from “sham” contracting arrangements.206 201

202 203 204 205 206

Fair Work Act 2009 (Cth), ss 545 – 546. See Meadley v Sort Worx Pty Ltd [2013] FCA 1012 (8 October 2013, Tracey J) for a case in which the court imposed a fine, in addition to an award for compensation. Fair Work Act 2009 (Cth), s 3(e). See Quinn, “To Be or Not To Be a Member – Is That the Only Question? Freedom of Association under the Workplace Relations Act” (2004) 17 AJLL 1. Fair Work Act 2009 (Cth), s 351(1). Fair Work Act 2009 (Cth), s 352. See also Fair Work Regulations 2009 (Cth), reg 3.01 for the requirements governing access to this protection. Fair Work Act 2009 (Cth), ss 357 to 359.

General Protections

Before considering each of these areas in turn, we first consider the meaning of “adverse action” which qualifies the relevant action in many of the provisions in Pt 3-1 as contravening action susceptible to enforcement proceedings under Pt 4-1. That is, in the most general of terms, a person must not take adverse action against another because that person has a workplace right or has or has not exercised a workplace right, or has or has not engaged in an industrial activity, or has a particular prescribed attribute. We also consider the statutory provisions which impose the evidential burden on the employer to prove that the reason for the adverse action was not one which is proscribed by the General protection provisions (see [13.300]) and the remedies available upon enforcement proceedings being brought under Pt 4-1: see [13.310]. There are some constitutional limitations upon the scope of operation of Pt 3-1.207 Action will only be captured by Pt 3-1 if one of the underpinning constitutional foundations in s 338 is met.208 The major constitutional bases arise from exercise of the industrial relations power,209 the corporations power,210 the trade and commerce, Commonwealth public service and Territories powers.211 It is given even more comprehensive coverage by reason of the referral of industrial relations powers by each of the States other than Western Australia: see [12.20].212

Adverse action [13.240] “Adverse action” is defined in s 342 of the Fair Work Act 2009 in terms which depend upon who engages in the action and who is the intended recipient of the action. Item 1 of the table in s 342(1) states that an employer takes adverse action against an employee if the employer: (a) dismisses the employee; (b) injures the employee in her or his employment; (c) alters the position of the employee to the employee’s prejudice; or (d) discriminates between the employee and another employee.213 Adverse action is defined to include threatening to take, or organising, any action that is covered by the table in s 342(1).214 It does not include any action that is permitted by a law of the Commonwealth or a law of a State or Territory: s 342(3). Specifically, it does not include exercising a contractual right to stand down an employee who is engaged in protected industrial action: s 342(4). Presumably it also does not include taking protected industrial action of itself.215 207

208 209 210 211 212 213

214 215

Fair Work Act 2009 (Cth), ss 337 to 339. The constitutional validity of a number of predecessor provisions in the former Pt 16 of the Workplace Relations Act 1996 (Cth) has withstood challenge, before a single judge in the Federal Court: AWU v BHP Iron Ore Pty Ltd (2001) 106 FCR 482; Rowe v TWU (1998) 90 FCR 95. Fair Work Act 2009 (Cth), s 339 provides an alternative constitutional framework, based on a “direct federal connection”: see the Explanatory Memorandum to the Fair Work Bill 2009, at [1354]-[1357]. Constitution, s 51(xxxv). Constitution, s 51(xx). See Stewart, “Federal Labour Law and New Uses for the Corporations Power” (2001) 14 AJLL 145. Constitution, ss 51(i), 52 and 122; and see the Explanatory Memorandum to the Fair Work Bill 2009, at [1349]-[1353]. Fair Work Act 2009 (Cth), ss 30G and 30R. An expansive consideration of the definition of adverse action and a comparison with other discrimination laws can be found in Andrades, “Intersections between “General Protections” Under the Fair Work Act 2009 (Cth) and Anti-Discrimination Laws” (Working Paper no 47, CELRL, University of Melbourne, December 2009). See also Chapman, “Judicial Method and the Interpretation of Industrial Discrimination” (2015) 28(1) AJLL 1-34. Fair Work Act 2009 (Cth), s 342(2). See LHMU v Cuddles Management Pty Ltd (2009) 183 IR 89 at [98]-[99]. It is open to an employer to take employer response action: Fair Work Act 2009 (Cth), s 411.

541

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Ch 13: Statutory Protection for Job Security

Under the former provisions, it was said that the relevant action of the employer must be directed to an employee or employees.216 The employee must, individually speaking, be in a worse situation after the employer’s acts than before them. The deterioration must have been caused by the employer’s acts. Those acts of the employer must have been intentional in the sense that the employer intended them to occur.217 Further, if the deterioration occurs by operation of the law or an industrial instrument (such as a change from an award to an enterprise agreement) the employer will not have altered the position of the employees individually speaking. The change in the position of the employees occurs by operation of the relevant legislation rather than the conduct of the employer in making the enterprise agreement.218 Subject to s 340(2) (adverse action against another because a third party has, or has the right to exercise, a workplace right), it would seem that this position will prevail under the General protections in the Fair Work Act 2009. Action which applies generally to a group of employees may be action undertaken for a proscribed reason so far as some of the employees within the group are concerned.219 This does not mean that the employee has to be singled out.220 For example, under the former provisions, a termination of employment due to the employer’s decision to outsource the relevant work was regarded as conduct directed to each individual who is dismissed as a result of the outsourcing of the work.221 On the other hand, offering improved terms and conditions (for example, in the form of individual employment agreements) to all employees, and acceptance by only some of the employees, was found not of itself to involve conduct directed to the employees who do not accept the offer.222 For the purposes of para (a) of the definition of “adverse action”, the meaning of “dismisses” is governed by the definition in s 12 which directs one to Pt 3-2, the unfair dismissal provisions, in particular s 386: see [13.120].223 216

217 218 219

220 221

222

223

BHP Iron Ore Pty Ltd v AWU (2000) 102 FCR 97 at [35]-[37] and [45]-[48]. AWU v BHP Iron Ore Pty Ltd (2001) 106 FCR 482 at [52]-[54]; CPSU v Telstra Corporation Ltd (2001) 107 FCR 93 at [17]-[21]; FSUA v Commonwealth Bank of Australia (2005) 147 FCR 158 at [23]-[30]. In some provisions the relevant conduct is directed to a prospective employee or to another person (an independent contractor). Whilst the conduct must be directed to an employee or employees, it need not of itself directly involve the employee or employees. It may consist of a direction to management which impacts on the position of the employees: CPSU v Telstra Corporation Ltd (2001) 107 FCR 93 at [15]-[18]; CPSU v Commonwealth (2007) 163 FCR 481 at [86]-[89], or the effect of a commercial transaction: Patrick Stevedores Operations (No 2) Pty Ltd v MUA (No 3) (1998) 195 CLR 1. In CFMEU v Mammoet [2013] HCA 36 it was accepted that ceasing to provide employees with their usual accommodation because their union notified an intention to negotiate an enterprise bargain could constitute adverse action within the meaning of s 342. AWU v BHP Iron Ore Pty Ltd (2001) 106 FCR 482 at [54]; see also McIlwain v Ramsey Food Packaging Pty Ltd (2006) 154 IR 511 at [344]-[355]. ALHMWU v Liquorland (Aust) Pty Ltd (2002) 114 IR 165. McIlwain v Ramsey Food Packaging Pty Ltd (2006) 154 IR 511 at [344]-[355]; CPSU v Commonwealth (2006) 157 IR 470 at [43]; CPSU v Commonwealth [2007] FCA 1861 (4 December 2007, Cowdroy J) at [53]. MUA v Geraldton Port Authority (1999) 93 FCR 34 at [257]. ASU v Greater Dandenong City Council (2000) 101 IR 143 at [90]-[92]. This issue was not considered on appeal, Greater Dandenong City Council v ASU (2001) 112 FCR 232; compare FSUA v Commonwealth Bank of Australia (2005) 147 FCR 158 at [95]-[96]. BHP Iron Ore Pty Ltd v AWU (2000) 102 FCR 97 (FC) at [38]; FSUA v Commonwealth Bank of Australia (2000) 106 IR 139 at [34] per Finkelstein J. It remains to be seen whether a similar approach would be taken in relation to an offer of more generous contracts of employment or individual flexibility arrangements. A refusal to offer such enhanced terms to some employees is likely to constitute adverse action because it discriminates between employees of the employer: see item 1(d) of the table at s 342(1) of the Fair Work Act 2009 (Cth). This reflects the position adopted by the courts under the former Pt 16 of the Workplace Relations Act 1996 (Cth). See Anderson v Edith Cowan University [1999] FCA 1802 (20 December 1999, Boon JR) at [95]-[98] (expiry of a fixed term contract); TWU v De Vito (2000) 140 IR 33 at [31] (consensual

General Protections

For the purposes of paras (b) and (c) of the definition of “adverse action”, the concepts of injury and prejudicial alteration are concepts of wide operation.224 Injury encompasses the deprivation of one of the more immediate practical incidents of employment such as a loss of pay or reduction in rank.225 Prejudicial alteration is a broad additional category covering not only legal injury, but any adverse affectation of, or deterioration in, the advantages enjoyed by the employee before the action in question.226 The action must amount to a prejudicial alteration which is real and substantial, rather than merely possible or hypothetical. It is not enough merely to intend to injure or prejudicially alter the position of the employee.227

[13.250] Action which has been found to amount to injury or prejudicial alteration of the position of an employee includes the effect of a commercial transaction entered into by an employer which has, or may have, an unfavourable impact on employees,228 the denial of training opportunities,229 the denial of a wage increase,230 less congenial shifts which result in a reduced opportunity to work overtime and the loss of an additional week of annual leave,231 suspension of international postings which attracted additional remuneration and benefits,232 commencing an investigation into the conduct of an employee,233 issuing a warning234 or show cause letter,235 and contracting out work which would have an effect on the ability of the relevant employees to maintain relevant skills.236

224

225

226

227 228 229 230 231 232 233 234

235

236

termination); AWU v Johnson Matthey (Aust) Ltd (2000) 171 ALR 410 at [53]-[56], [72] per Marshall J (casual worker engaged on a regular basis laid off work); MUA v Geraldton Port Authority (1999) 93 FCR 34 at [246] per Nicholson J (voluntary redundancy is not a dismissal). MUA v Patrick Stevedores (No 1) Pty Ltd (1998) 79 IR 281 at 288 per North J. This view has been accepted adhered to under the Fair Work Act 2009 (Cth) provisions, see Jones v Queensland Tertiary Admissions Centre Ltd (No 2) (2010) 186 FCR 22 at [64]-[65]. As to whether there is a distinction between “injury” and “prejudicial alteration”, see ALAEA v Qantas Airways Ltd [2011] FMCA 58 (11 February 2011, Raphael FM) at [29]. MUA v Geraldton Port Authority (1999) 93 FCR 34 at [225]-[229]; Fair Work Ombudsman v Drivecam Pty Ltd [2011] FMCA 600 (9 August 2011, Emmett FM) (under award payment of disabled employee). Patrick Stevedores Operations (No 2) Pty Ltd v MUA (No 3) (1998) 195 CLR 1 at [4]; Greater Dandenong City Council v ASU (2001) 112 FCR 232 at [89] (Wilcox J); at [141] (Merkel J); and at [203] per Finkelstein J. As to the distinction between injury and prejudicial alteration, see CPSU v Telstra Corporation Ltd (2001) 107 FCR 93 at [20]. CPSU v Telstra Corporation Ltd (2001) 107 FCR 93 at [18]. However, a threat to do so will be enough: s 342(2). MUA v Patrick Stevedores (No 1) Pty Ltd (1998) 79 IR 281 (North J). CPSU v Victoria [1999] FCA 948 (23 June 1999, Marshall J) at [22]. HSUA v Tasmania (1996) 73 IR 140 at 145 (Marshall J); MUA v Geraldton Port Authority (1999) 93 FCR 34 at [231]. MUA v Geraldton Port Authority (1999) 93 FCR 34 at [232]; Canturi v Sita Coaches Pty Ltd (2002) 116 FCR 276; Independent Education Union v Canonical Administrators (1998) 87 FCR 49 at 68. Australian Licensed Aircraft Engineers Association v Qantas Airways Ltd [2011] FMCA 58 (11 February 2011, Raphael FM). Jones v Queensland Tertiary Admissions Centre Ltd (No 2) (2010) 186 FCR 22 at [72]-[80] and the cases there cited. CFMEU v Coal & Allied Operations Pty Ltd (1999) 140 FLR 131 at [90]-[96]; FSUA v Australia and New Zealand Banking Group Ltd (2002) 120 FCR 107 (formal counselling); United Firefighters’ Union of Australia v Metropolitan Fire and Emergency Services Board (2003) 123 IR 86 at 112-113; Automotive Food Metals Engineering Printing and Kindred Industries Union and Zwart v Visy Packaging Pty Ltd [2011] FCA 953 (31 August 2011, Murphy J). Jones v Queensland Tertiary Admissions Centre Ltd (No 2) (2010) 186 FCR 22 at [96]-[101]; alternatively a show cause letter could be a “threat to take adverse action” under s 342(2)(a): Barclay v The Board of the Bendigo Regional Institute of Technical and Further Education [2011] FCAFC 14 (9 February 2011, Gray, Lander and Bromberg JJ) at [57] per Gray and Bromberg JJ. However, no threat is made unless a particular result is achieved. ALHMWU v Coca-Cola Amatil [2000] FCA 782 (5 June 2000, Kenny J) at [36].

543

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Ch 13: Statutory Protection for Job Security

Action which has been found to be insufficient to amount to injury or prejudicial alteration includes abusive graffiti,237 a refusal of an application for special leave,238 a failure to afford natural justice during an investigation,239 and a failure to provide work as a result of a breakdown of a vehicle.240 It has been held that an offer of voluntary redundancy does not amount to an injury or prejudicial alteration to the position of the employees to whom the offer is made. It is merely an offer, acceptance of which by the employee brings an end to the employment.241 Similarly, a prospect of redeployment cannot of itself amount to a threat to injure or prejudicially alter the position of the employee until the redeployment occurs.242 Unlike paras (a), (b) and (c) of the definition of “adverse action”, para (d) involves a comparison of the position of the employee with that of other employees.243 There is no definition of “discriminates” in the Fair Work Act 2009. It generally involves less favourable treatment when compared to others, here relevantly other employees of the employer. Query whether it extends to indirect discrimination. See a more detailed analysis at [15.120].244 By the table in s 342(1) of the Fair Work Act 2009, a prospective employer takes adverse action against a prospective employee if it refuses to employ the prospective employee or discriminates against the prospective employee in the terms and conditions which it offers employment. Under the former provisions, it was specifically provided that a refusal to employ does not occur if the employer does not intend to employ anyone.245 Therefore, it appears that such a refusal will occur only if there was, at the relevant time, a vacancy or prospective vacancy.246 The refusal may be constituted by a decision to employ someone else.247 It remains to be seen if, despite the absence of such a provision, the courts adopt the same interpretation of item 2 of the table in s 342(1). Section 360 of the Fair Work Act 2009 provides that a person takes action for a particular reason if the reasons for that action include that reason. This reflects the position that prevailed under Pt 16 of the Workplace Relations Act 1996.248 It would appear that the relevant reason need not be the substantial reason, but must at least be 237 238 239 240 241

242 243 244 245 246

247

248

CPSU v Victoria (2000) 95 IR 54 at [30] per Marshall J. Where the employer had the discretion to refuse the application: Major v South Australia [1999] FCA 1648 (3 December 1999, Marshall J) at [18]. Jones v Queensland Tertiary Admissions Centre Ltd (No 2) (2010) 186 FCR 22 at [116]-[122] TWU v De Vito (2000) 140 IR 33 at [33]. MUA v Geraldton Port Authority (1999) 93 FCR 34 at [244] (Nicholson J); seemingly quoted with approval by the Federal Court of Australia in BHP Iron Ore Pty Ltd v AWU (2000) 102 FCR 97 at [43]. As to the binding nature of the employee’s acceptance, see Tooheys Pty Ltd v Blinkhorn [2008] NSWSC 499 (26 May 2008, White J) even though the employer significantly overstated the severance pay entitlements of the employees concerned. MUA v Geraldton Port Authority (1999) 93 FCR 34 at [265] per Nicholson J; CPSU v Telstra Corporation Ltd (2000) 107 FCR 93 at [22] per Finkelstein J. Barclay v The Board of the Bendigo Regional Institute of Technical and Further Education [2011] FCAFC 14 (9 February 2011, Gray, Lander and Bromberg JJ) at [35]-[36] per Gray and Bromberg JJ. See Andrades, “Intersections between “General Protections” Under the Fair Work Act 2009 (Cth) and Anti-Discrimination Laws” (Working Paper no. 47, CELRL, University of Melbourne). Workplace Relations Act 1996 (Cth), s 792(3). CFMEU v BHP Steel (AIS) Pty Ltd [2000] FCA 1008 (27 July 2000, Wilcox J) at [51]; McIlwain v Ramsey Food Packaging Pty Ltd (2006) 154 IR 111; compare AMIEU v Belandra Pty Ltd (2003) 126 IR 165 at 181-186. MUA v Burnie Port Corporation Pty Ltd (2000) 101 IR 435 at [44], confirmed on appeal in Burnie Port Corporation Pty Ltd v MUA (2000) 104 FCR 440 at [14]; Employment Advocate v Barclay Mowlem Construction Ltd (2005) 214 ALR 463 at [48]; compare AMIEU v Belandra Pty Ltd (2003) 126 IR 165 at [49]-[51]. NUW v Davids Distribution Pty Ltd (1999) 165 ALR 550 (FC) at [105]-[106] per Wilcox and Cooper JJ; MUA v Patrick Stevedores (No 1) Pty Ltd (1998) 79 IR 281 at 290 per North J.

General Protections

an operative reason.249 There must be someone who has the relevant workplace right, or who has engaged in the relevant industrial activity or the right to do so, for without that, no reason which is proscribed by Pt 3.1 can be attributed to the action.250

Workplace rights [13.260] Division 3 of Pt 3-1 seeks to protect workplace rights and the exercise of those rights. The main operative provision is s 340. It provides that a person must not take adverse action against another person: (a) because251 the other person: (i) has a workplace right; or (ii) has, or has not, exercised a workplace right; or (iii) proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or (b) to prevent the exercise of a workplace right by the other person. Further, a person must not take adverse action against another person (the second person) because a third person has exercised, or proposes or has at any time proposed to exercise, a workplace right for the second person’s benefit, or for the benefit of a class of persons to which the second person belongs: s 340(2). In order to give the prohibition any meaning, one has to go to a series of definitions in different parts of the Fair Work Act 2009. As to the meaning of “workplace right”, one goes to s 341. It provides that a person has a workplace right if the person: (a) is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body;252 or (b) is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument;253 or (c) is able to make a complaint or inquiry: (i) to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or (ii) if the person is an employee – in relation to his or her employment. “Workplace law” is defined in s 12 to mean the Fair Work Act 2009, the Fair Work (Registered Organisations) Act 2009 (Cth) or the Independent Contractors Act 2006 249

250

251

252 253

Barclay v The Board of the Bendigo Regional Institute of Technical and Further Education [2011] FCAFC 14 (9 February 2011, Gray, Lander and Bromberg JJ) at [30] per Gray and Bromberg JJ; MUA v CSL Australia Ltd (2002) 113 IR 326 at 337-342; General Motors Holdens Pty Ltd v Bowling (1976) 12 ALR 605; MUA v Geraldton Port Authority (1999) 93 FCR 34 at [222]-[224]; ASU v Ansett Australia Ltd (2000) 175 ALR 173 at [70] (Merkel J); Employment Advocate v NUW (2000) 98 IR 302 at [89] (Einfeld J). Employment Advocate v Williamson (2001) 111 FCR 20 at [23]; CFMEU v BHP Coal Pty Ltd [2010] FCA 590 (11 June 2010, Collier J) where there was a mistaken belief that a meeting was being conducted in accordance with a right under an enterprise agreement. No contravention of s 340 could arise because the attendance at the meeting did not involve the exercise of a workplace right, as no such right was being exercised under the enterprise agreement. The word “because” requires an inquiry into the actual reasons of the relevant decision-maker (that is, the person initiating the adverse action): see Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 and CFMEU v BHP Coal Pty Ltd [2014] HCA 41, discussed at [13.300]. This might include a bargaining agent: Jones v Queensland Tertiary Admissions Centre Ltd (No 2) (2010) 186 FCR 22 at [45]. This might include the ability to participate in the process of making an enterprise agreement: Jones v Queensland Tertiary Admissions Centre Ltd (No 2) (2010) 186 FCR 22 at [46]-[59].

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(Cth) or any other law of the Commonwealth, a State or Territory that regulates relationships between employers and employees (including by dealing with occupational health and safety matters254). “Workplace instrument” is defined in s 12 to mean an instrument that is made under, or recognised by, a workplace law and which concerns the relationships between employees and employers. A “process or proceedings under a workplace law or workplace instrument” means any of the following: (a) a conference conducted or hearing held by Fair Work Commission; (b) court proceedings under a workplace law or workplace instrument; (c) protected industrial action; (d) a protected action ballot; (e) making, varying or terminating an enterprise agreement; (f) appointing, or terminating the appointment of, a bargaining representative; (g) making or terminating an individual flexibility arrangement under a modern award or enterprise agreement; (h) agreeing to cash out paid annual leave or paid personal/carer’s leave; (i) making a request under Division 4 of Part 2-2 (which deals with requests for flexible working arrangements); (j) dispute settlement for which provision is made by, or under, a workplace law or workplace instrument; (k) any other process or proceedings under a workplace law or workplace instrument. The prohibition is clearly very broad. However, the entire reach of the prohibition is not immediately apparent. It will take some time and considerable judicial determination to properly identify what is within and what is outside the scope of the prohibition in s 340 of the Fair Work Act 2009. However, given the recognition of the relevance of past provisions in the Workplace Relations Act 1996 in the objects of Pt 3-1 and the Explanatory Memorandum to the Fair Work Bill, one can draw on decisions from the past to at least make some observations.

[13.270] One of the most frequently litigated sections under past statutory provisions has been the prohibition on engaging in conduct under s 792(1) of the former Workplace Relations Act 1996 (post-Work Choices, and before that s 289K of the former Workplace Relations Act 1996 pre-Work Choices) for reasons including the fact that the employee is entitled to the benefit of an industrial instrument or an order of an industrial body.255 This prohibition now comes within the scope of s 341(a). The prohibition in the past has been concerned only with a present or existing, rather than a contingent or prospective, entitlement to the benefit of an industrial instrument.256 The action is proscribed not only if it is motivated by the mere fact that an employee is entitled to the benefit of an industrial instrument, but also if it is motivated by the level, degree or extent of the entitlement under the industrial 254 255 256

In Stephens v Australian Postal Corporation [2011] FMCA 448 the relevant workplace right was a right to claim compensation under the Safety Rehabilitation and Compensation Act 1988 (Cth). Former Workplace Relations Act 1996 (Cth), s 793(1)(i) (post-Work Choices) and s 298L(1)(h) (pre-Work Choices). Greater Dandenong City Council v ASU (2001) 112 FCR 232. Burnie Port Corporation Pty Ltd v MUA (2000) 103 IR 153 at [22]-[24] (Full Court); AWU v BHP Iron Ore Pty Ltd (2001) 106 FCR 482 at [68] (Kenny J).

General Protections

instrument.257 The offering of an individual employment agreement to all employees, regardless of the fact that they are entitled to the benefits of particular awards or certified agreements was held not to amount to conduct for a reason identified in former s 793(1)(i).258 A decision to outsource a particular aspect of an employer’s operations may involve action under s 341(1)(a) for a reason including the fact that those particular employees were entitled to the benefits of a particular workplace instrument.259 The Fair Work Act 2009 does not have the equivalent provision which was inserted into the former Workplace Relations Act 1996 (Cth) (post-Work Choices) requiring that, in order for conduct to constitute a contravention of s 792(1) or (5), the entitlement to the benefit of an industrial instrument must have been the sole or a dominant reason for the conduct.260 The higher onus was brought in to stem the tide of litigation arising in outsourcing situations. The transfer of business provisions in Pt 2-8 of the Fair Work Act 2009 have provided some protection against the prospect of discrimination against employees by outsourcing their work for reasons related to the fact that they are entitled to the benefit of a particular workplace instrument, because it is now more likely than not that the instrument will become binding upon the new employer. Division 3 also prohibits the coercion of another person to exercise or not exercise a workplace right,261 and the exertion of undue influence or undue pressure on an employee to enter or not enter certain types of arrangements in relation to their employment,262 and prohibits a person from misrepresenting the workplace rights or the exercise or effects of the exercise of such rights by another person.263

Freedom of association and involvement in lawful industrial activities [13.280] Division 4 of Pt 3-1 of the Fair Work Act 2009 seeks to protect freedom of association and involvement in lawful industrial activities. The main operative provision is s 346. It provides that a person must not take adverse action against another person because the other person: (a) is or is not, or was or was not, an officer or member of an industrial association; or (b) engages, or has at any time engaged or proposed to engage, in industrial activity within the meaning of paragraph 347(a) or (b); or (c) does not engage, or has at any time not engaged or proposed to not engage, in industrial activity within the meaning of paragraphs 347(c) to (g). The prohibition in s 346(a) is readily identifiable as in part a re-enactment (with variations) of the prohibitions in the former Workplace Relations Act 1996 (Cth), s 793(1)(a) and (b). However, in order to track through the Fair Work Act 2009 provisions to reveal the remainder of the previous prohibitions, one again has to look 257 258 259 260 261

262

263

Greater Dandenong City Council v ASU (2001) 112 FCR 232 at [46]-[80] per Wilcox J; at [123]-[131] per Merkel J and at [212] per Finkelstein J. AWU v BHP Iron Ore Pty Ltd (2001) 106 FCR 482 at [210] per Kenny J. Greater Dandenong City Council v ASU (2001) 112 FCR 232; TWU v BP Australia Ltd (2001) 187 ALR 697 at [30]-[35]; MUA v CSL Australia Ltd (2002) 113 IR 326. Former Workplace Relations Act 1996 (Cth), s 792(4), (8). Fair Work Act 2009 (Cth), s 343. See s 44 of the Building and Construction Industry Improvement Act 2005 (Cth), as to which, see John Holland Pty Ltd v AMEPKIU (2009) 174 FCR 526; Williams v AFMEPKIU (2009) 178 IR 458. Fair Work Act 2009 (Cth), s 344. See the similar prohibition in s 44 of the Building and Construction Industry Improvement Act 2005 (Cth), as to which, see John Holland Pty Ltd v AMEPKIU (2009) 174 FCR 526; Williams v AFMEPKIU (2009) 178 IR 458. Fair Work Act 2009 (Cth), s 345. See also s 790 of the former Workplace Relations Act 1996 (Cth), Stuart-Mahoney v CFMEU (No 2) [2008] FMCA 1015 (4 August 2008, Burchardt FM) and on appeal, CFMEU v Stuart-Mahoney [2011] FCA 56 (8 February 2011, Ryan J).

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more carefully at the definitions provided. This is particularly so, when considering the reach of the prohibitions in s 346(b) and (c). The prohibition in s 346(b) of the Fair Work Act 2009 on taking adverse action against someone for engaging etc in an industrial activity refers to activities in s 347(a) and (b) which are as follows: (a) becomes or does not become, or remains or ceases to be, an officer or member of an industrial association; or (b) does, or does not: (i) become involved in establishing an industrial association; or (ii) organise or promote a lawful activity for, or on behalf of, an industrial association; or (iii) encourage, or participate in, a lawful activity organised or promoted by an industrial association; or (iv) comply with a lawful request made by, or requirement of, an industrial association; or (v) represent or advance the views, claims or interests of an industrial association; or (vi) pay a fee (however described) to an industrial association, or to someone in lieu of an industrial association; or (vii) seek to be represented by an industrial association. This would appear to cover a number of the prohibitions (with variations) which appeared in the former Workplace Relations Act 1996 such as those relating to one’s membership264 or non-membership265 of, or failure or refusal to pay a fee to,266 an industrial association; a person’s refusal or failure to join industrial action267 or accept an enterprise agreement;268 a person’s proposal for, or participation in, a secret ballot;269 a person’s complaint or participation in a proceeding, under an industrial law;270 being a person who is a member of an industrial association which is seeking better industrial conditions, and who is dissatisfied with their conditions;271 a person’s absence from work without leave for the purposes of duties as an officer of an 264

265 266 267 268 269 270

271

Former Workplace Relations Act 1996 (Cth), s 793(1)(a); See Quinn, “To Be or Not To Be a Member – Is That the Only Question? Freedom of Association under the Workplace Relations Act” (2004) 17 AJLL 1 at 27-31. As to the distinction between an adverse action because the person is an officer and taking adverse action because of the activities of the person as an officer, see Board of the Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 and CFMEU v BHP Coal Pty Ltd [2014] HCA 41, discussed at [13.300]. Former Workplace Relations Act 1996 (Cth), s 793(1)(b), (c). Former Workplace Relations Act 1996 (Cth), s 793(1)(d). Former Workplace Relations Act 1996 (Cth), s 793(1)(e). Former Workplace Relations Act 1996 (Cth), s 793(1)(f), Australian Collieries’ Staff Association v BHP Coal Pty Ltd (2000) 99 FCR 137 at [8], [68]. Former Workplace Relations Act 1996 (Cth), s 793(1)(g), (h). Former Workplace Relations Act 1996 (Cth), s 793(1)(j), (k) and (l); Independent Education Union v Geelong Grammar School [2000] FCA 557 (20 April 2000, Finkelstein J) at [30]; Professional Officers’ Association (Victoria) v CSL Ltd [2001] FCA 628 (29 May 2001, Kenny J) at [30]; CFMEU v Coal and Allied Operations Pty Ltd (1999) 140 FLR 131 at [75]; ANF v Alcheringa Hostel Incorporated (2004) 136 FCR 530 at 542-543; Byrne v Australian Ophthalmic Supplies Pty Ltd (2008) 169 IR 236. Former Workplace Relations Act 1996 (Cth), s 793(1)(m); it would seem that the dissatisfaction must relate to a specific demand on the employer: Heidt v Chrysler Australia Ltd (1976) 13 ALR 365; United Firefighters’ Union of Australia v Metropolitan Fire and Emergency Services Board (2003) 123 IR 86 at 116. The employee’s dissatisfaction can be evidenced by participation in industrial action: NUW v Davids Distribution Pty Ltd (1999) 165 ALR 550 at [104] per Wilcox and Cooper JJ; compare Burchett J in dissent at [122]-[124]. See also Independent Education Union v Geelong Grammar School [2000] FCA 557 (20 April 2000, Finkelstein J).

General Protections

industrial association;272 and being a person who is a member of an industrial association, lawfully pursuing the interests of that association.273 Again, it is with caution that one would proceed to rely upon past decisions in relation to these prohibitions.274 The prohibition in s 346(c) of the Fair Work Act 2009) on taking adverse action against someone for not engaging etc in industrial activity refers to activities in s 347(c) to (g), which are as follows: (c) organises or promotes an unlawful activity for, or on behalf of, an industrial association; or (d) encourages, or participates in, an unlawful activity organised or promoted by an industrial association; or (e) complies with an unlawful request made by, or requirement of, an industrial association; or (f) takes part in industrial action; or (g) makes a payment: (i) that, because of Division 9 of Part 3-3 (which deals with payments relating to periods of industrial action), an employer must not pay; or (ii) to which an employee is not entitled because of that Division. These prohibitions are more likely to be relevant to the situation in which an industrial association engages in adverse action against an individual. Division 4 also prohibits coercing another to engage in industrial activity,275 misrepresenting a person’s obligation to engage in industrial activity or their obligation to disclose such engagement,276 and inducing another person to become or not become an officer or member of an industrial association.277

Other protections against discrimination [13.290] Division 5 of Pt 3-1 seeks to provide other protections, including protections from discrimination. The main operative provision is s 351. It states that an employer must not take adverse action against a person who is an employee, or prospective employee, of the employer because of the person’s race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin. It broadly covers the prohibition on unlawful termination under the former s 659(2)(f) of the Workplace Relations Act 1996, with the addition of the attribute of family or carer’s responsibilities. It is also replicated in s 772(1)(f) of the current unlawful termination provisions of the Fair Work Act 2009 (see [13.340]) where the case law under the former provisions is considered in more detail. By s 351(2), the prohibition in s 351(1) is limited in that it does not apply to action that is: (a) not unlawful under any anti-discrimination law in force in the place where the action is taken; or 272 273 274 275 276 277

Former Workplace Relations Act 1996 (Cth), s 793(1)(n); CFMEU v Coal and Allied Operations Pty Ltd (1999) 140 FLR 131. Former Workplace Relations Act 1996 (Cth), s 793(1)(o); ASU v Ansett Australia Ltd (2000) 175 ALR 173 at [73]-[75] per Merkel J. Unsworth v Tristar Steering and Suspension Australia Ltd (2008) 175 IR 320 at [17]. Fair Work Act 2009 (Cth), s 348. Fair Work Act 2009 (Cth), s 349. Fair Work Act 2009 (Cth), s 350. See also s 789 of the former Workplace Relations Act 1996 (Cth), Stuart-Mahoney v CFMEU (No 2) [2008] FMCA 1015 (4 August 2008, Burchardt FM) and on appeal, CFMEU v Stuart-Mahoney [2011] FCA 56 (8 February 2011, Ryan J).

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(b) taken because of the inherent requirements of the particular position concerned;278 or (c) if the action is taken against a staff member of an institution conducted in accordance with the doctrines, tenets, beliefs or teachings of a particular religion or creed – taken: (i) in good faith; and (ii) to avoid injury to the religious susceptibilities of adherents of that religion or creed. For the purposes of the exception in s 351(2)(a), “anti-discrimination law” is defined in s 351(3) to include a number of anti-discrimination statutes, both federal and State. The scope of s 351 and its interaction with State anti-discrimination laws is explored more fully at [15.270]. Section 352 prohibits an employer from dismissing an employee because the employee is temporarily absent from work because of illness or injury of a kind prescribed by the regulations. This broadly covers the prohibition on unlawful termination under the former s 659(2)(a) of the Workplace Relations Act 1996. It is also replicated in s 772(1)(a) of the current unlawful termination provisions of the Fair Work Act 2009.279 Other provisions in Div 5 of Pt 3-1 prohibit people from demanding bargaining services fees,280 prohibit discrimination against employers because their employees are covered or not covered by a particular instrument281 and prohibit coercion of a person to employ or not employ or engage or not engage another person, or allocate or not allocate work or duties to a particular person.282

Reasons and reverse onus [13.300] Section 361 of the Fair Work Act 2009 retains, but varies, the reverse onus provision in s 809 of the Workplace Relations Act 1996 (Cth). It operates such that, where it is alleged that a person took or is taking action for a particular reason or with a particular intent, which reason or intent would constitute a contravention of Pt 3-1, it is presumed that the action was or is being taken for that reason or with that intent, unless the person proves otherwise.283 The applicant must establish that the relevant action occurred and the objective facts which provide the basis for the reason, and then 278

279 280 281

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283

For examples of what have been found to be “inherent requirements” under earlier enactments, see Qantas Airways Ltd v Christie (1998) 193 CLR 280 (age for airline pilots fixed by international regulations); X v Commonwealth (1999) 200 CLR 177 (defence personal needed to be free of HIV infection). For commentary see MacDermott, “Age Discrimination and Employment Law: The Sky’s the Limit” (1998) 11 AJLL 144. See also the discussion of defences to discrimination in [15.180]. Note the relevant regulation is reg 3.01, as opposed to reg 6.04 which applies to the prohibition in s 772(1)(a). The differences between the two regulations are merely linguistic in nature. Fair Work Act 2009 (Cth), 353. Fair Work Act 2009 (Cth), 354. This prohibition is in broadly similar terms to that in s 45 of the Building and Construction Industry Improvement Act 2005 (Cth), as to which, see John Holland Pty Ltd v AMEPKIU (2009) 174 FCR 526. Fair Work Act 2009 (Cth), 355. This prohibition is in broadly similar terms to that in s 43 of the Building and Construction Industry Improvement Act 2005 (Cth), as to which, see Cahill v CFMEU (No 2) (2008) 170 FCR 357; John Holland Pty Ltd v AMEPKIU (2009) 174 FCR 526. Employment Advocate v NUW (2000) 98 IR 302 at [81] per Einfeld J; and see Jessup, “The Onus of Proof in Proceedings under Part XA of the Workplace Relations Act 1996” (2002) 15 AJLL 198. Note that the reverse onus does not apply in relation to the granting of an interim injunction: s 361(2). This is said to address the problems that can arise from the interaction of the reverse onus with the balance of convenience test that applies to interim injunction applications: Explanatory Memorandum to the Fair Work Bill 2009 at [1461] and previously the Explanatory Memorandum to the Workplace Relations Amendment (Work Choices) Bill 2005 at [2612]; in respect of which, see Jessup. The provision may have actually created more problems than it solves: Police Federation of Australia v

General Protections

allege that the action was for a proscribed reason or taken with a proscribed intent.284 Section 361 then presumes that the action was for reasons including the alleged proscribed reason. As a result, the onus falls upon the respondent to prove otherwise.285 An express denial of the allegation does not in itself rebut the presumption.286 The decision-maker must give evidence of some other genuine reason for the action alleged.287 Where more than one decision-maker influenced the ultimate decision, a court will interrogate the reasons of all decision-makers who actively contributed to the decision to take the adverse action.288 Where reasons for the action other than proscribed reasons exist,289 the court applies the civil onus of proof (on the balance of probabilities).

284

285

286 287

288

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Nixon (2008) 168 FCR 340 at [69]. The fact that the reverse onus would operate at trial may assist the court at the interlocutory stage to be persuaded that there will be sufficient likelihood of success at trial to favour the grant of interlocutory relief: CPSU v Blue Star Pacific Pty Ltd (2009) 184 IR 333 at [24]. Barclay v The Board of the Bendigo Regional Institute of Technical and Further Education [2011] FCAFC 14 (9 February 2011, Gray, Lander and Bromberg JJ) at [34] (Gray and Bromberg JJ); CFMEU v BHP Coal Pty Ltd [2010] FCA 590 (11 June 2010, Collier J) at [44]; CFMEU v Coal and Allied Operations Pty Ltd (1999) 140 IR 131 at [161]-[162]; Rojas v Esselte Australia Pty Ltd (No 2) (2008) 177 IR 306 at [49]-[50]; Jones v Queensland Tertiary Admissions Centre Ltd (No 2) (2010) 186 FCR 22 at [10]; Stevenson v Murdoch Community Services Inc [2010] FCA (23 June 2010, Gordon J) at [99]-[100]. NUW v Davids Distribution Pty Ltd (1999) 165 ALR 550 at [109]-[113] per Wilcox and Cooper JJ; MUA v Geraldton Port Authority (1999) 93 FCR 34 at [220] per Nicholson J; CFMEU v Coal and Allied Operations Pty Ltd (1999) 140 IR 131 at [159]-[163]; AMIEU v G&K O’Connor Pty Ltd (2000) 100 IR 383 at [30]; ASU v Ansett Australia Ltd (2000) 175 ALR 173 at [61] per Merkel J; see Jessup, “The Onus of Proof in Proceedings under Part XA of the Workplace Relations Act 1996” (2002) 15 AJLL 198. In the dissenting judgment of Finkelstein J in Greater Dandenong City Council v ASU (2001) 112 FCR 232, his Honour said that former s 809 does not operate in a case where there is sufficient evidence to enable the trial judge to make a positive finding that the conduct was carried out for the alleged reason or with the alleged intent. Where there is sufficient evidence for such a finding, the judge cannot resort to s 809 as an alternative to finding facts, [219]. Merkel J took a different view, concluding that there was a sufficient basis upon which to conclude that the council had failed to discharge the s 809 onus, [180]. Wilcox J did not need to consider this issue because he determined the appeal on other issues. Nevertheless, it would appear that mere speculation cannot form the basis of a grant of interlocutory relief: NUW v Qenos Pty Ltd [2000] FCA 1340 (21 December 2000, Finkelstein J) at [17]-[22]. There must be sufficient evidence to enable a positive finding to be made that none of the operative reasons for the carrying out of the conduct was a prescribed reason: MUA v CSL Ltd (2002) 113 IR 326 at 343 [60]. Query whether anything further is needed in relation to the establishment of the prejudicial alteration, as opposed to dismissal or refusal to employ, to enliven the operation of the reverse onus: McIlwain v Ramsey Food Packaging Pty Ltd (2006) 154 IR 511 at [338]-[343]. AMIEU v G&K O’Connor Pty Ltd (2000) 100 IR 383 at [35]; ASU v Ansett Australia Ltd (2000) 175 ALR 173 at [78]-[79] (Merkel J). Unsworth v Tristar Steering and Suspension Australia Ltd (2008) 175 IR 320 at [35], or perhaps the absence of any causal link between the two (at [36]); Barclay v The Board of the Bendigo Regional Institute of Technical and Further Education [2011] FCAFC 14 (9 February 2011, Gray, Lander and Bromberg JJ) at [32] per Gray and Bromberg JJ and at [195] per Lander J (note this decision has been overturned by the High Court (2012) 248 CLR 500); Stevenson v Murdoch Community Services Inc [2010] FCA (23 June 2010, Gordon J) at [110]. See CFMEU v Clermont Coal Pty Ltd [2015] FCA 1014 (11 September 2015, Reeves J) at [120]-[122], applying Elliott v Kodak Australasia Pty Ltd (2001) 129 IR 251; [2001] FCA 1804 at [37]. MUA v Geraldton Port Authority (1999) 93 FCR 34 at [302], the court should be cautious not to decide matters simply by looking at the reverse onus. As to the evidence of a decision taken by a collective group such as a Board or a Municipal Council, see ASU v Greater Dandenong City Council (2000) 101 IR 143 at [62] per Madgwick J and on appeal Greater Dandenong City Council v ASU (2001) 112 FCR 232 at [179] per Merkel J; MUA v Geraldton Port Authority (1999) 93 FCR 34 at [277] (Nicholson J); AWU v BHP Iron Ore Pty Ltd (2001) 106 FCR 482 at [171]-[172] per Kenny J; Jones v Queensland Tertiary Admissions Centre Ltd (No 2) (2010) 186 FCR 22 at [128]-[156].

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The meaning of “because” in these provisions has been scrutinised by the High Court of Australia in two important decisions: Board of Bendigo Regional Institute of Technical and Further Education v Barclay (Barclay),290 and CFMEU v BHP Coal Pty Ltd.291 Barclay was employed by Bendigo Regional Institute, and was also president of the local sub-branch of the Australian Education Union (AEU). He was suspended from his duties by a senior manager, Dr Harvey, after Barclay circulated an email to members of the AEU referring to allegations of inaccurate reporting in the Institute’s accreditation process. He refused to give up the names of the AEU members who had raised this allegation when questioned by Dr Harvey, so she suspended him from duties pending an investigation. Dr Harvey maintained that her reason for taking what was clearly adverse action against Barclay was his involvement in a breach of a relevant Code of Conduct. At first instance, Tracey J accepted Dr Harvey’s stated reason for acting as she did, and found that her reasons did not include Barclay’s union membership nor his activities as an officer of the union. On appeal, a majority of the Federal Court (Bromberg and Gray JJ) applied an objective assessment of her reasons, and found that she was actuated, if unconsciously, by his industrial activities.292 “But for” his industrial activities as a union organiser in communicating information to members and protecting confidential sources, he would not have engaged in the conduct which provoked her punishment. The High Court overturned this decision, holding that there was no warrant in s 346, nor in the reverse onus provisions in s 361, for requiring any enquiry into the objective reasons for a decision to take adverse action. Interrogation of her credible, stated reasons for taking action was sufficient to exonerate her. Barclay was tested again in CFMEU v BHP Coal Pty Ltd,293 when the CFMEU alleged that one of its members (Doevendans) was subjected to adverse action when he was dismissed for waving a sign on a picket line which read “No principles SCABS No guts”. The general manager of the mine, Mr Brick, decided that this sign was a flagrant violation of a workplace policy requiring all employees to treat others with courtesy, dignity and respect, and so terminated Doevendans’ employment. The majority applied the reasoning in Barclay to find that the court was not required to examine whether the adverse action could be characterised as connected with the employee’s industrial activity. It needed only to interrogate the reasons given by the decision-maker (in this case, Brick) for acting as he did. Hayne and Crennan JJ dissented, finding (separately) that in this case, no distinction could reasonably be drawn between the act of representing the views of the CFMEU on the picket line, and the offensive manner in which this was done. This decision, even more poignantly than Barclay, demonstrates that an employer’s assertion of a right to enforce workplace policies against disruptive or even merely discourteous conduct easily trumps the assertion of freedom of association rights, notwithstanding the apparent protection of those rights in the Fair Work Act 2009. Barclay was also applied to deny a remedy to a colliery worker whose roster was changed as a punishment for unreliable attendance at work.294 He had taken a number of days of personal leave in accordance with his entitlements under an enterprise agreement which permitted employees to take leave to support an immediate family member “because of illness or injury or … an unexpected emergency”.295 The court 290 291 292 293 294 295

Board of Bendigo Regional Institute of Technical and Further Education v Barclay (Barclay) [2012] HCA 32, (2012) 248 CLR 500. CFMEU v BHP Coal Pty Ltd [2014] HCA 41. See Barclay v The Board of Bendigo Regional Institute of Technical and Further Education [2011] FCFCA 14 (9 February 2011). CFMEU v BHP Coal Pty Ltd [2014] HCA 41. CFMEU v Endeavour Coal Pty Ltd [2015] FCAFC 76. Leave to appeal to the High Court was refused. CFMEU v Endeavour Coal Pty Ltd [2015] FCAFC 76 at [60].

General Protections

held that the employer had satisfied the reversed burden of proof in demonstrating that the adverse action was not taken because the employee exercised his right to take personal leave, but because he occasionally gave insufficient notice of the “unexpected emergency” events that caused him to miss a shift. The manager “did not want to have workers on [the weekend] shift whose attendance was not predictable and reliable”.296 Consistently with the reasoning in Barclay, the court ignored the causative relationship between taking a right to leave in “unexpected emergencies” and an imperfect record of attendance. The line of authority now developing around the General Protections suggests that the underpinning rationale of these provisions is not protection of worker entitlements in any absolute sense, but punishment of conscious and deliberate victimisation of employees. So long as a decision-maker can give credible, direct testimony establishing a non-proscribed reason for taking adverse action, the decision-maker will discharge the burden of proof.297 This jurisprudential approach pays regard to the penal nature of breaches of the general protections and the seriousness of the allegations.298

Remedies [13.310] In a dismissal situation, the person has 21 days from the date the dismissal took effect to apply to the Fair Work Commission to deal with the General Protections dispute.299 The person cannot make application to a court unless they first can make application to the Fair Work Commission to deal with the dispute.300 The Fair Work Commission has power to seek to resolve the dispute by way of a conference in private301 and, if it remains unresolved, must issue a certificate to that effect.302 If the parties notify the Fair Work Commission within 14 days of receiving this notice that they agree to the Commission arbitrating the dispute, the Commission may deal with the dispute by arbitration, and may make any of a range of orders, including reinstatement, payment of compensation or remuneration, and maintenance of continuity of employment.303 If the parties do not agree to arbitration, the person has 14 days after the issue of the notice in which to commence a General Protections court application.304 In a non-dismissal situation, the person may make an application under s 372 for the Fair Work Commission to deal with the dispute, and where such an application is made, and the parties agree, the Commission may deal with the matter by holding a private conference with a view to mediating or conciliating the dispute. The Fair Work Commission has no power to arbitrate a non-dismissal dispute. A person may also commence court proceedings without first going to the Fair Work Commission. The 296 297 298

299

300 301 302 303 304

CFMEU v Endeavour Coal Pty Ltd [2015] FCAFC 76 at [34]. See also Victoria (OPP) v Grant [2014] FCAFC 184. Briginshaw v Briginshaw (1938) 60 CLR 336 at 362-363 per Dixon J; MUA v Geraldton Port Authority (1999) 93 FCR 34 at [200]-[209] per Nicholson J; ASU v Ansett Australia Ltd (2000) 175 ALR 173 at [80] per Merkel J; Employment Advocate v NUW (2000) 98 IR 302 (29 May 2000, Einfeld J) at [25]-[29]; CPSU v Victoria (2000) 99 IR 217; Hamberger v CFMEU (2000) 104 IR 45 at [30]. See also s 140(2) of the Evidence Act 1995 (Cth). Fair Work Act 2009 (Cth), ss 365 and 366. Although the Fair Work Commission has the discretion to extend time in exceptional circumstances. The factors in s 366(2) guide the exercise of the discretion. It is similar to that in s 394(2)(b) (unfair dismissal applications). Fair Work Act 2009 (Cth), s 371(1)(a). Fair Work Act 2009 (Cth), s 368. Fair Work Act 2009 (Cth), s 368(3). Fair Work Act 2009 (Cth), s 369. Fair Work Act 2009 (Cth), s 370, subject to the exercise of the court’s discretion to extend time.

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same time limit does not apply.305 It is important to note that claims can be brought not only by the affected employee but also by the Fair Work Ombudsman (FWO)306 which has considerable inspection and enforcement powers and resources.307 In a General Protections court proceeding, the relief available is governed by Pt 4-1 of the Fair Work Act 2009. The Federal Court and the Federal Circuit Court of Australia are given broad powers.308 In addition to the imposition of a penalty, the court may make any order it considers appropriate including but not limited to injunctions, an order for the payment of compensation and an order for reinstatement.309 Pursuant to s 546, the Federal Court or Federal Circuit Court may make an order imposing a penalty of up to 60 penalty units for an individual, or five times that for a body corporate (that is, $51,000).310 When considering an appropriate penalty, the court must consider each particular breach.311 The court will generally take into account the circumstances in which the relevant action took place, whether there are any previous breaches of similar provisions, whether more than one contravention is involved, the consequences of the action, and the need, in the circumstances, for the protection of workplace rights and the like, and the need for deterrence.312 Whilst these considerations may be used as a guide, ultimately the task undertaken by the court is one of “instinctive synthesis”,313 taking into account the appropriateness of the overall penalty for the action in question.314 Penalties near the maximum are reserved for serious incidents or where the need for deterrence is very strong.315 Where the court can grant relief such that no injury or prejudicial alteration becomes actual, it may be inappropriate to also order the imposition of a penalty.316

[13.320] Under the former s 298U(b) (pre-Work Choices), reinstatement was regarded as the primary remedy and would be ordered except where it was impracticable to do

305 306 307 308 309 310

311 312

313 314

315

316

Fair Work Act 2009 (Cth), s 372. It would seem that the general limitation period of six years in s 544 applies. Fair Work Act 2009 (Cth), s 539 (table item 11). Fair Work Act 2009 (Cth), Pt 5-2, Div 3. See for example FWO v Drivecam Pty Ltd [2011] FMCA 600. See by way of example under previous provisions, Patrick Stevedores Operations (No 2) Pty Ltd v MUA (No 3) (1998) 195 CLR 1 at [30]. Fair Work Act 2009 (Cth), s 545(1) and (2). Since 28 December 2012, the value of a penalty unit has been $170: Crimes Act 1914 (Cth) s 4AA. The assessment of a penalty is determined by the value of the penalty unit at the time of the contravention: Murrihy v Betezy.com.au (No 2) (2013) 221 FCR 118 at [6]-[28]. MUA v Geraldton Port Authority (No 2) (2000) 94 IR 404 at [38]-[43] per Nicholson J. Commonwealth Bank of Australia v FSUA (2007) 157 FCR 329; CFMEU v Coal and Allied Operations Pty Ltd (No 2) (1999) 94 IR 231 at [8]-[11] (Branson J); CPSU v Telstra Corporation Ltd (2001) 108 IR 228 at [8]-[9]; Employment Advocate v NUW (2000) 98 IR 302; AWU v Johnson Matthey (Aust) Ltd [2000] FCA 728 (28 May 2000, Marshall J); AFMEPKIU v DMG Industries Pty Ltd (2000) 102 IR 175. Markarian v The Queen (2005) 228 CLR 357 at [37]; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at [55], [91] per Graham J. ACCC v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36 at 53; Ponzio v B&P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at [145] per Jessup J; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at [66]-[73] per Graham J; at [94]-[97] per Buchanan J and at [23] per Gray J (agreeing with Buchanan J); compare CPSU v Telstra (2001) 108 IR 228. CFMEU v Coal and Allied Operations Pty Ltd (No 2) (1999) 94 IR 231 (9 December 1999, Branson J) at [14]; Markarian v The Queen (2005) 228 CLR 357 at [31]; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at [108]-[110] per Buchanan J. MUA v Geraldton Port Authority (No 2) (2000) 94 IR 404 at [58] per Nicholson J.

General Protections

so, or where there were other just and compelling reasons against doing so.317 The court was prepared to grant reinstatement on an interlocutory basis where appropriate.318 Even in the absence of a specific statutory priority, one would expect that, in order to remedy the effects of a dismissal for a proscribed reason, the courts will continue to look to reinstatement as the primary remedy in appropriate circumstances.319 One of the major concerns when ordering reinstatement on an interlocutory basis is the preservation of the relationship of trust and confidence. In AMIEU v G&K O’Connor Pty Ltd,320 Gray J commented that the advent of corporate employers has diminished the importance of this element of the employment relationship. His Honour said that a corporation has no sensitivity. The crucial question will be the effect, if any, that a loss of trust by a manager in an employee is likely to have on the operation of the workplace concerned. It may be more convenient to know the position of the employee’s immediate supervisor. Resort to an assertion that trust and confidence in a particular person has been lost cannot be a “magic formula” for resisting the compulsory reinstatement of an employee.321 Other considerations in assessing whether or not reinstatement should be ordered on an interlocutory basis include the employee’s own conduct,322 the passing of time and supervening events,323 and the hardship on the employee and her or his family.324 Employers have sought to overcome the imposition of an order for interlocutory reinstatement by offering an undertaking to pay the employee until the date of trial.325 Compensation appears to provide an alternative to reinstatement.326 The statutory remedy is broad enough to cover damages for distress and anxiety if there is an evidential basis for the claim.327 317

318

319

320 321 322 323 324 325 326 327

Greater Dandenong City Council v ASU (2001) 112 FCR 232 at [111] per Wilcox J; at [183] per Merkel J; and at [228] per Finkelstein J; compare CPSU v Stellar Call Centres Pty Ltd [2000] FCA 1739 (5 December 2000, Madgwick J): CEPU v ACI Operations Pty Ltd (2005) 147 IR 315 at 327-328. AMIEU v G&K O’Connor Pty Ltd (2000) 100 IR 383 at [45]; ANF v Croft Health Care (Vic) Pty Ltd [2000] FCA 93 (9 February 2000, Heerey J); Independent Education Union v Geelong Grammar School [2000] FCA 557 (20 April 2000, Finkelstein J); compare AFMEPKIU v Maintenance Resource Engineering Pty Ltd [2003] FCA 570 (6 June 2003, Ryan J). An example of the use of the broad remedial powers available can be seen in FSUA v Commonwealth Bank of Australia (2005) 224 ALR 467 (and on appeal, Commonwealth Bank of Australia v FSUA (2007) 157 FCR 329). There, employees were offered alternative employment with a related entity. It was found that that altered the position of the employees to their prejudice by reason of a failure to consult with their union in accordance with industrial instruments applicable to their employment. The court orders at trial required the original employer to offer the employees their job back based on terms and conditions applicable prior to the employees resigning and taking up employment with the related entity. The orders were tailored to allow the employees the option to elect whether to stay where they were or be reinstated. This aspect of the orders was not interfered with on appeal: Commonwealth Bank of Australia v FSUA (2007) 157 FCR 329. AMIEU v G&K O’Connor Pty Ltd (2000) 100 IR 383 at [42]-[43]. See also CPSU v Stellar Call Centres Pty Ltd [2000] FCA 1739 (20 November 2000, Madgwick J) at [18]; McIntosh v Australian Postal Corporation (2001) 140 IR 108 at [9]-[11]. ASU v Greater Dandenong City Council (2000) 101 IR 143 at [129]; confirmed on appeal in Greater Dandenong City Council v ASU (2001) 112 FCR 232. ASU v Greater Dandenong City Council (2000) 101 IR 143 at [131]; confirmed on appeal in Greater Dandenong City Council v ASU (2001) 112 FCR 232. AMIEU v G&K O’Connor Pty Ltd (2000) 100 IR 383 at [39]; Independent Education Union v Geelong Grammar School [2000] FCA 557 (20 April 2000, Finkelstein J) at [35]. See, for example, AWU v John Holland Pty Ltd (2000) 102 IR 172; CPSU v Stellar Call Centres Pty Ltd [2000] FCA 1739 (20 November 2000, Madgwick J). See, for example, ASU v Greater Dandenong City Council (No 2) [2001] FCA 1076 (1 August 2001, Madgwick J). McIlwain v Ramsey Food Packaging Pty Ltd (No 4) (2006) 158 IR 181 at [58]-[65]. Compensation for non-economic loss will only be available if there is evidence to establish that more than the usual element of distress accompanied termination: CEPU v ACI Operations Pty Ltd (2006) 150 IR 179 at [4], [11].

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The power to grant an injunction pursuant to s 545(2) includes the power to grant an interim injunction or an interlocutory injunction.328 Under the former provisions, an injunction could be directed to someone other than the employer in order to properly remedy the effects of the contravening action.329 An example of the extent to which the Federal Court has been prepared to use its powers to grant injunctive relief under past statutory provisions is apparent from orders made preventing an employer from introducing individual employment agreements into workforces of a considerable size in both BHP Iron Ore Pty Ltd v AWU330 and FSUA v Commonwealth Bank of Australia331 and its orders preventing outsourcing of work going ahead.332

Other Rights on Termination Overview [13.330] As mentioned above, in addition to unfair dismissal protection and the General protections, the Fair Work Act 2009 provides for a range of other rights and remedies on termination of employment. These include a prohibition on termination of employment on certain grounds,333 minimum notice obligations,334 an entitlement to severance pay upon termination of employment by reason of redundancy,335 and an obligation on employers to notify Centrelink and consult with registered employee associations about certain dismissals.336 Care needs to be taken when considering the obligations of employers and the rights and remedies of employees under these provisions as they are often limited to certain classes of employees, dependent upon the underlying constitutional basis for the provision or Parliament’s intent to limit the scope of operation of the provisions.

Unlawful termination, prohibited grounds – s 772 [13.340] Section 772 is intended to give effect to the Convention Concerning Discrimination in Respect of Employment and Occupation, the Convention Concerning Equal Opportunities and Equal Treatment for Men and Women Workers: Workers with Family Responsibilities, the Termination of Employment Convention 1982 and the Termination of Employment Recommendation 1982.337 Because the provision is 328

329 330

331 332

333 334 335 336 337

Federal Court of Australia Act 1976 (Cth), s 23; see also Patrick Stevedores Operations (No 2) Pty Ltd v MUA (No 3) (1999) 195 CLR 1 at [27]-[28], [35]-[39] per Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ and at [104]-[110] per Gaudron J; NUW v Davids Distribution Pty Ltd (1999) 165 ALR 550 at [35]-[40] (Full Court); AMIEU v G&K O’Connor Pty Ltd (2000) 100 IR 383 at [9]. Patrick Stevedores Operations (No 2) Pty Ltd v MUA (No 3) (1998) 195 CLR 1 at [26] per Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ; at [111]-[112] per Gaudron J. BHP Iron Ore Pty Ltd v AWU (2000) 102 FCR 97 (7 April 2000, Black CJ, Beaumont and Ryan JJ), the court was assisted in making the orders on the basis of undertakings from the relevant unions that they would expedite the matter to final trial. FSUA v Commonwealth Bank of Australia (2000) 106 IR 139 at [56]-[59] per Finkelstein J. Patrick Stevedores Operations (No 2) Pty Ltd v MUA (No 3) (1998) 195 CLR 1; ASU v Greater Dandenong City Council (2000) 101 IR 143; confirmed on appeal Greater Dandenong City Council v ASU [2001] FCA 349; TWU v BP Australia Ltd (2001) 187 ALR 697; FSUA v Commonwealth Bank of Australia (2005) 224 ALR 467. Fair Work Act 2009 (Cth), s 772. Fair Work Act 2009 (Cth), s 117 (national system employers) and 760 (non-national system employers). Fair Work Act 2009 (Cth), s 119. Fair Work Act 2009 (Cth), ss 530 – 533 (national system employers) and 785 – 788 (non national system employers). Fair Work Act 2009 (Cth), s 771. The full title of each of the various conventions and recommendations is at s 771. The full text of each is available at http://www.ilo.org.

Other Rights on Termination

underpinned by the external affairs power, it applies to all employees, not just national system employees.338 There is a considerable overlap between s 772 and the equivalent provision in the General protections in Pt 3-1 of the Fair Work Act 2009, see [13.290]. Application cannot be made under s 772 if the person is entitled to make a General protections application under Pt 3-1 in relation to the same conduct: s 723. Section 772(1) provides that an employer must not terminate an employee’s employment for reasons, or for reasons including one or more of the following reasons: the employee’s temporary absence because of illness or injury339 or carrying out a voluntary emergency management activity,340 the employee’s participation in union activities,341 non-membership of a union,342 seeking office as or acting in the capacity of a representative of employees,343 filing a complaint,344 or on grounds345 of race, colour, sex,346 sexual preference, age,347 physical or mental disability,348 marital status, family responsibilities,349 pregnancy,350 religion, political opinion, national extraction or social origin or an employee’s absence from work during maternity or

338 339

340 341 342 343 344

345 346 347 348 349

350

Fair Work Act 2009 (Cth), s 770. Whether an employee is temporarily absent through illness or injury will depend upon whether the requirements in the relevant regulations are satisfied: Fair Work Regulations 2009 (Cth), reg 6.04. An absence of more than three months will not be a temporary absence. Sperandio v Lynch (2006) 160 IR 360; Lee v Hills Before and After School Care Pty Ltd (2007) 160 IR 440; Moussalli v Western Power (No 3) [2010] FMCA 389 (4 June 2010, Lucev FM) at [26]-[33]. Although it sounds trite, the absence must be due to illness or injury. For an unusual example, see Anderson v Crown Ltd [2008] FMCA 152 (3 March 2008, Burchardt FM). Compare s 352 and reg 3.01 which deal with the equivalent protection in Pt 3-1: see [13.290]. Fair Work Act 2009 (Cth), s 772(1)(h), (4). Fair Work Act 2009 (Cth), s 772(1)(b); Griffiths v Freedom Furniture Pty Ltd [2002] FCA 595 (10 May 2002, Mansfield J). Fair Work Act 2009 (Cth), s 772(1)(c). Fair Work Act 2009 (Cth), s 772(1)(d). Filing a complaint or participation in proceedings against an employer involving alleged violation of laws, regulations or recourse to competent administrative authorities: Fair Work Act 2009 (Cth), s 772(1)(e). A competent administrative authority will generally be a governmental or public body or official, exercising a power or function of an executive, ministerial or administrative nature (rather than, for example, a legislative or judicial nature) and having competence to receive the complaint to which the worker has recourse to it: CSR Viridian Ltd (formerly Pilkington Australia Ltd) v Claveria [2008] 171 FCR 554 at [48] per Goldberg and Jessup JJ. See, for example, Fox v St Barbara Mines Ltd [1998] FCA 621 (4 June 1998, French J) (exercising rights under a disputes procedure in an award); Robertson v South (2000) 140 IR 169 (the employer must be aware of the making of the complaint); Ettridge v TransAdelaide [1998] FCA 275 (27 March 1998, von Doussa J) (complaint under the Whistleblowers Protection Act 1986 (SA)). It does not include a workers’ compensation claim: Jennings v Salvation Army (2003) 128 IR 366 at [35]; Zhang v Royal Australian Chemical Institute (2005) 144 FCR 347 at [34]; or a claim directly to the employer: He v Lewin (2004) 137 FCR 266; Zhang v Royal Australian Chemical Institute (2005) 144 FCR 347. As to whether a trade union can be a “competent administrative authority” for the purposes of the provision, see the useful discussion in CSR Viridian Ltd (formerly Pilkington Australia Ltd) v Claveria [2008] 171 FCR 554 at [35]-[59] per Goldberg and Jessup JJ concluding that, in the matter before the court, the union was not such an authority. Fair Work Act 2009 (Cth), s 772(1)(f). Stewart v Nickles [1999] FCA 888 (1 July 1999, Ryan JR). See, for example, Qantas Airways Ltd v Christie (1998) 193 CLR 280. Galvin v Renito Pty Ltd [1999] FCA 1005 (26 July 1999, Ryan JR). See, for example, Wannberg v Alloa Holdings Pty Ltd t/as Energy Publications (unreported, 31 July 1996, Industrial Relations Court of Australia, Ritter JR); Laz v Downer Group Ltd (2000) 108 IR 244; Robertson v South (2000) 140 IR 169. Stojanovic v Commonwealth Club Ltd (unreported, 8 December 1995, Industrial Relations Court of Australia, Moore J); Laz v Downer Group Ltd (2000) 108 IR 244 (the employer must be aware of the pregnancy).

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other parental leave.351 A limited defence is available if the reason is based on the inherent requirements of the particular position.352 Once an employee raises one of the grounds as a reason for the termination, the onus is imposed upon the employer to establish that the employment was not terminated for that particular reason, or for reasons including that particular reason.353 An application under s 773 of the Fair Work Act 2009 alleging that the termination was contrary to s 772 is made initially to the Fair Work Commission. It must be made within 21 days after the employment was terminated or within such other time as the tribunal allows.354 The Fair Work Commission has power to deal with the matter in private conference and, if the matter is not resolved, must issue a certificate to that effect.355 If the parties agree to the Fair Work Commission arbitrating the dispute, and make an application for that purpose within 14 days, the Fair Work Commission can arbitrate the matter and is able to make a range of orders including reinstatement, compensation, remuneration, and continuity of employment.356 After securing the certificate, if the parties do not agree to arbitration, a party can make an application to the Federal Court or Federal Circuit Court to seek relief under Pt 4-1.357 Under Pt 4-1, the remedies available to an employee in respect of an employer’s contravention of s 772 include the imposition of a penalty,358 reinstatement,359 an order for payment of compensation.360 351 352

353

354 355 356 357 358

359

360

Fair Work Act 2009 (Cth), s 772(1)(g), (3); ALHMWU v Woonona Bulli RSL Memorial Club Ltd (2007) 166 IR 314. Fair Work Act 2009 (Cth), s 772(2)(a). The defence is available only in relation to grounds prohibited by s 772(1)(f). As to the meaning of “inherent requirements of the particular position” see Qantas Airways Ltd v Christie (1998) 193 CLR 280; Laz v Downer Group Ltd (2000) 108 IR 244; Cucanic v IGA Distribution (Vic) Pty Ltd [2004] FCA 1226 (20 September 2004, Marshall J) at [20]-[24]. Specific provision is also made in relation to religious institutions, Fair Work Act 2009 (Cth), s 772(2)(b). Fair Work Act 2009 (Cth), s 783; Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 at 266 (Northrop J); Robertson v South (2000) 140 IR 169 at [13]-[16]; Laz v Downer Group Ltd (2000) 108 IR 244 at [25]-[26]; Galvin v Renito Pty Ltd [1999] FCA 1005 (26 July 1999, Ryan JR) at [25]-[28]. See above [13.300] in relation to the equivalent provisions in Pt 3-1: s 361. Fair Work Act 2009 (Cth), s 774(1)(a). Exceptional circumstances must be shown to extend time: s 774(2). Fair Work Act 2009 (Cth), ss 776, 777. Fair Work Act 2009 (Cth), s 777. Fair Work Act 2009 (Cth), s 778(a), unless application is made for an interim injunction: s 778(b). The court application must be made within 14 days or such other time as the court permits: s 778(a)(ii). Of up to $51,000 for corporate employers, or $10,200 for non-corporate employers: Fair Work Act 2009 (Cth), s 539(2), item 35, and s 546; see Fox v St Barbara Mines Ltd [1998] FCA 621 (4 June 1998, French J); Laz v Downer Group Ltd (2000) 108 IR 244; Claveria v Pilkington Australia Pty Ltd (2007) 167 IR 444 (subject to appeal at the time of writing). Fair Work Act 2009 (Cth), s 545(2)(c): Ettridge v TransAdelaide [1998] FCA 275 (27 March 1998, von Doussa J); Laz v Downer Group (2000) 108 IR 244; Anthony Smith & Associates Pty Ltd v Sinclair (1996) 67 IR 240. The power to order reinstatement, and the power to make any other order that the court considers appropriate, under s 545(1), or the ability to make an order awarding compensation for loss suffered under s 545(2)(b), would most likely provide the court with the power to make an order for payment of back pay in the event that an order for reinstatement is made: under the former provisions, see Laz v Downer Group Ltd (2000) 108 IR 244;. Fair Work Act 2009 (Cth), s 545(2)(b). Note that the prohibition on awards of compensation for shock, distress or humiliation and the like in the former provisions no longer applies: see Workplace Relations Act 1996 (Cth), s 665(2). Earlier provisions had been interpreted in a way which allowed for compensation by way of damages for distress etc, if there is an evidential basis for such a claim: Sperandio v Lynch (No 2) [2006] FCA 1838 (19 December 2006, Jessup J) at [11]; Vickery v Assetta [2004] FCA 555 (4 May 2004, Finkelstein J). There is no cap on any order for compensation. Compare, Workplace Relations Act 1996 (Cth) in respect of which there was a cap of six months’ remuneration or (alternatively, for employees not employed under award-derived conditions: see s 642(6)) the lesser of 6 months’ remuneration and an indexed statutory cap: s 665(3), (4), Workplace Relations Regulations 2005 (Cth), Ch 2, Pt 12, reg 12.6. Compensation was found to include an order

Other Rights on Termination

Notification and consultation regarding certain dismissals [13.350] Part 3-6, ss 530 to 534 of the Fair Work Act 2009 provides protection for

national system employees (other than certain excluded employees)361 in redundancy situations. In order to give effect to the Termination of Employment Convention 1982 and the Termination of Employment Recommendation 1982, ss 784 to 788 make the same protections available to non-national system employees (other than certain excluded employees).362 Notification to Centrelink: Where the employer decides to dismiss 15 or more employees for reasons of an economic, technological, structural or similar nature, or for reasons including those reasons, as soon as practicable after so deciding (and before dismissing the employees) the employer must give the relevant government authority written notice of the intended dismissals advising of the reasons for the dismissals, the number and categories of employees likely to be affected and the time when, or the period over which, the employer intends to carry out the dismissals.363 The employer must not terminate the employment until it complies with this requirement.364 A failure to comply may also result in the imposition of a penalty of not more than 30 penalty units ($25,500 for a corporate employer or $5,100 for a non-corporate employer)365 or an order preventing the employer from terminating the employment until it has complied with the provisions.366 There does not seem to be anything in Pt 4-1 which would prevent orders being made for compensation, reinstatement or any other order that the Federal Court or Federal Circuit Court considers appropriate under s 545(1) and (2), other than granting an injunction: ss 530(5)(b) and 785(5)(b). Notification and consultation with industrial associations: Both national system employers367 and non-national system employers368 are required to give a notice in

361

362

363

364 365 366 367

for payment of lost superannuation contributions to the trustee of the relevant superannuation fund: Claveria v Pilkington Australia Pty Ltd (No 2) [2007] FCA 1917 (6 December 2007, Kenny J) at [10] (not considered on appeal, see CSR Viridian Ltd (formerly Pilkington Australia Ltd) v Claveria [2008] 171 FCR 554. Fair Work Act 2009 (Cth), s 534 excludes the following employees: • an employee employed for a specified period of time, for a specified task, or for the duration of a specified season; • an employee who is dismissed because of serious misconduct; • a casual employee; • an employee (other than an apprentice) to whom a training arrangement applies and whose employment is for a specified period of time or is, for any reason, limited to the duration of the training arrangement; • a daily hire employee working in the building and construction industry (including working in connection with the erection, repair, renovation, maintenance, ornamentation or demolition of buildings or structures); • a daily hire employee working in the meat industry in connection with the slaughter of livestock; • a weekly hire employee working in connection with the meat industry and whose dismissal is determined solely by seasonal factors. Other than a variance in language, based around the terminology used in the Convention and Recommendation, s 789 provides for the exclusion of the same classes of employees as Fair Work Act 2009, s 534. Fair Work Act 2009 (Cth), s 530(1), (2), (3); Fair Work Regulations 2009 (Cth), reg 3.30 (national system employees) and s 785(1), (2), (3) and reg 6.07 (non-national system employees). See former Workplace Relations Act 1996 (Cth), s 660(1), (2); Workplace Relations Regulations 2005 (Cth), Ch 2, Pt 12, reg 12.9. Fair Work Act 2009 (Cth), ss 530(4) and 785(4). Fair Work Act 2009 (Cth), ss 539(2), items 29 and 37, 546. Fair Work Act 2009 (Cth), ss 530(5)(a) and 785(5)(a). Fair Work Act 2009 (Cth), ss 531(1), (2).

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broadly similar terms to relevant registered industrial associations.369 In addition, national system employers370 and non-national system employers371 are required to consult with any such association about measures to avert or minimise proposed dismissals and measures (such as finding alternative employment) to mitigate the effects of the proposed dismissals. The Fair Work Commission has jurisdiction to make whatever orders it considers appropriate in the public interest to put the employees and any relevant registered industrial association in the position they would have been had the employer complied with its obligation to notify and consult. However, it cannot make an order for reinstatement, withdrawal of notice of termination, payment of compensation or severance pay or require the disclosure of confidential or personal information.372 Requirement to give notice or pay in lieu of notice and pay severance pay

[13.360] While they are not strictly job security protection measures, two of the National Employment Standards recognise the employees’ interest in being afforded time to adjust to a termination of their employment, especially when the employee’s job is made redundant. Section 117 of the Fair Work Act 2009 prohibits a national system employer from terminating an employee’s employment without first giving written notice of the day of the termination, which notice period must be at least the period prescribed.373 Alternatively, the national system employer must provide a relevant employee with payment at the employee’s full rate of pay374 for the period that the employee would have continued to work had the minimum period of notice been given. The minimum notice requirement does not apply in relation to certain employees,375 most importantly an employee whose employment is terminated for

368 369

370 371 372 373

374

375

Fair Work Act 2009 (Cth), ss 786(1), (2). Similar provisions appeared in the Workplace Relations Act 1996 (Cth), s 170GA (pre-Work Choices) and s 668 (post-Work Choices). See CFMEU v Mt Thorley Operations Pty Ltd (17 March 1998, AIRC, Leary C, Print P9489); CFMEU v Newcastle Wallsend Coal Co Ltd (1998) 88 IR 202. Fair Work Act 2009 (Cth), s 531(3). Fair Work Act 2009 (Cth), s 786(3). Fair Work Act 2009 (Cth), ss 532 and 787. Calculated in accordance with the table in s 117(3), based on the employee’s period of service with an additional week for employees over 45 years of age with at least two years of service. The period of service is ascertained having regard to the matters in s 22. See [12240]. Calculated in accordance with Fair Work Act 2009 (Cth), s 18. For decisions under former statutory provisions see Fox v St Barbara Mines Ltd [1998] FCA 621 (4 June 1998, French J) and Furey v Civil Services Association of WA (Inc) (1999) 91 FCR 407; 93 IR 349; Moloney v Beverage Engineering Pty Ltd (2007) 212 FLR 282. Fair Work Act 2009 (Cth), s 123(1) and (3) have the effect that s 117 does not apply to the following employees (unless a substantial reason for any of the first 4 of these arrangements is to avoid the obligation to give notice or pay in lieu): • an employee employed for a specified period of time, for a specified task, or for the duration of a specified season; • an employee whose employment is terminated because of serious misconduct; • a casual employee; • an employee (other than an apprentice) to whom a training arrangement applies and whose employment is for a specified period of time or is, for any reason, limited to the duration of the training arrangement; • a daily hire employee working in the building and construction industry (including working in connection with the erection, repair, renovation, maintenance, ornamentation or demolition of buildings or structures); • a daily hire employee working in the meat industry in connection with the slaughter of

Other Rights on Termination

serious misconduct.376 In order to give effect to the Termination of Employment Convention 1982 and the Termination of Employment Recommendation 1982, the obligation in s 117 is extended to non-national system employers, subject to certain exceptions.377 In another of the National Employment Standards, s 119 of the Fair Work Act 2009 confers an entitlement to severance pay in circumstances where the employment is terminated at the employer’s initiative because the employer no longer requires the job which was being done by the employee to be done by anyone (except where this is due to the ordinary and customary turnover of labour) or where the employment is terminated because of the insolvency or bankruptcy of the employer. The severance pay entitlement is prescribed by a table in s 119(2): see [12.250].378 Once again, certain employees are excluded from the entitlement to severance pay.379 The obligation to pay severance pay does not apply where the employer is a small business employer as defined in s 23.380 An employee will not be entitled to a severance payment under s 119 in circumstances where there is a transfer of employment and service with the first employer is recognised,381 or where the employee rejects an offer of employment made in a transfer of business situation which is on terms and conditions substantially similar to, and considered on an overall basis, no less favourable than, the terms and conditions of employment with the first employer, and which recognises the period of livestock; • a weekly hire employee working in connection with the meat industry and whose termination of employment is determined solely by seasonal factors. 376

377 378

379

380

381

As defined in the Fair Work Regulations 2009 (Cth), reg 1.07. For a consideration of equivalent regulations under former provisions see Kennelly v Incitec Ltd [1998] FCA 1470 (29 October 1998, Spender J); NTEIU v University of Wollongong (2001) 183 ALR 592. Fair Work Act 2009 (Cth), ss 758 – 762. Note that the time at which the period of service ends is the time at which notice is given in accordance with s 119, so that if the employee’s employment then extends beyond 12 months so as to serve the notice period, no entitlement accrues on the basis that the employee has at least one year of service (which would otherwise confer an entitlement to four weeks’ severance pay): s 121(1)(a). Fair Work Act 2009 (Cth), s 123(1) and (4) have the effect that s 119 does not apply to the following employees (unless a substantial reason for any of the first 4 of these arrangements is to avoid the obligation to pay severance pay): • an employee employed for a specified period of time, for a specified task, or for the duration of a specified season; • an employee whose employment is terminated because of serious misconduct; • a casual employee; • an employee (other than an apprentice) to whom a training arrangement applies and whose employment is for a specified period of time or is, for any reason, limited to the duration of the training arrangement; • an employee who is an apprentice; or • an employee to whom an industry-specific redundancy scheme in a modern award applies; or • an employee to whom a redundancy scheme in an enterprise agreement applies if: (i) the scheme is an industry-specific redundancy scheme that is incorporated by reference (and as in force from time to time) into the enterprise agreement from a modern award that is in operation; and (ii) the employee is covered by the industry-specific redundancy scheme in the modern award. Fair Work Act 2009 (Cth), s 121(1)(b). For a transitional period from 1 July 2009 to 31 December 2010, a small business employer was one with fewer than 15 full time equivalent employees: see Sch 12A of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth). Fair Work Act 2009 (Cth), s 122(2).

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service with the first employer for the purposes of future severance pay entitlements.382 The obligation to provide notice or pay in lieu is not subject to the same exceptions. Along with other National Employment Standards, ss 117 and 119 are enforceable under Pt 4-1 of the Fair Work Act 2009 (Cth). That is, a contravention of either provision constitutes a contravention of s 44, which is a civil remedy provision, leaving the employer exposed to the imposition of a penalty of up to 60 penalty units ($51,000 for corporate employers or $10,200 for non-corporate employers) and other relief such as an injunction, compensation, an order for reinstatement or any other order that the Federal Court or Federal Circuit Court considers appropriate.383

Workplace Bullying Overview [13.370] Since 1 January 2014 the Fair Work Commission has exercised a special jurisdiction, authorised by Pt 6-4B of the Fair Work Act 2009, to hear complaints of workplace bullying and to make orders that the bullying cease. According to the Explanatory Memorandum to the Fair Work Amendment Bill 2013, the Commission’s anti-bullying jurisdiction was created in response to the House of Representatives Standing Committee on Education and Employment report, Workplace Bullying –We Just Want it to Stop. Cases of serious bullying have often manifested as claims against employers on the basis that they have been vicariously liable for torts committed by co-workers, or on the basis of a direct breach of the employer’s duty of care to provide a safe place of work.384 (See [6.50].) The Commission’s anti-bullying jurisdiction has been conceived as a preventative measure, aimed at providing a quick and cost-effective means for workers who are being subjected to workplace bullying to seek assistance in having that behaviour stop, before it causes irreparable harm to their health and well-being, and before it destroys the employment relationship.385 The Fair Work Commission’s role is to intervene quickly, within 14 days of receiving an application from a worker.386 If the matter cannot be resolved by discussion in a conference,387 the Commission is empowered to make orders focusing on the prevention of future harm, not on providing redress for past harm.388 The Commission has no power to make pecuniary orders,389 and will not make orders in a case where there is no prospect of continued bullying.390 The anti-bullying provisions do not create any offences, 382

383

384

385 386 387 388 389 390

Fair Work Act 2009 (Cth), s 122(3). The Fair Work Commission has the power to vary the amount of severance pay in s 119(2) if the exclusion in s 122(3) would operate unfairly for the employee: s 122(4). Fair Work Act 2009 (Cth), ss 539(2), item 1, 545(1), (2). An eligible State court has more limited powers. It can order the imposition of a penalty or order the employer to make good any underpayment: s 545(3). See, for example, Naidu v Group 4 Securitas Pty Ltd [2005] NSWSC 618; Nationwide News Pty Ltd v Naidu [2007] NSWCA 377; WorkCover Authority (NSW) (Inspector Maddaford) v Coleman (2004) 138 IR 21; Blenner-Hassett v Murray Goulburn Co-operative Co Ltd [1999] VCC 6; Willett v Victoria [2013] VSCA 76; Ferguson v Strautman Australia Pty Ltd [2009] VCC 184; New South Wales v Mannall [2005] NSWCA 367; Goldman Sachs JB Were Services Pty ltd v Nikolich (2007) 163 FCR 62. See Explanatory Memorandum to the Fair Work Bill 2013 at pp 9-11. Fair Work Act 2009 (Cth), s 789FE(1). Conferences may be convened under the Commission’s powers in s 592 of the Fair Work Act 2009 (Cth). See McInnes [2014] FWCFB 1440 (6 March 2014, Justice Ross P, Hatcher VP, Hampton C) at [9]. Fair Work Act 2009 (Cth), s 789FF(1). Fair Work Act 2009 (Cth), s 789FF(1)(b)(ii). See for example GC [2014] FWC 6988 (9 December

Workplace Bullying

although a refusal to comply with a bullying order made by the Commission would expose the recalcitrant person to the risk of a civil penalty under s 789FG. The more contentious aspects of the anti-bullying provisions are: • Who can make an application? Who is a “worker” for the purposes of these provisions? • What kind of conduct constitutes “bullying” for the purposes of these provisions? • When does bullying occur “at work”? • What kinds of orders can be made?

Who is a “worker”? [13.380] Part 6-4B of the Fair Work Act 2009 applies to “workers” as defined by the

Work Health and Safety Act 2011 (Cth), s 7 (and not only to employees)391 who work in “constitutionally covered businesses”.392 This definition captures constitutional corporations,393 the Commonwealth, Commonwealth authorities and bodies incorporated in the Territories, and businesses conducted principally in a Territory or Commonwealth place.394 The definition of “worker” explicitly excludes members of the defence forces,395 and the provisions cannot be used in any way that would or could “reasonably be expected to be prejudicial to” Australian’s defence, national security or the operations of the Australian Federal Police.396 The Work Health and Safety Act 2011 definition of a “worker” includes persons who carry out work in any capacity for a “person conducting a business or undertaking”, and specifically includes: (a) an employee; or (b) a contractor or subcontractor; or (c) an employee of a contractor or subcontractor; or (d) an employee of a labour hire company who has been assigned to work in the person’s business or undertaking; or (e) an outworker; or (f) an apprentice or trainee; or (g) a student gaining work experience; or (h) a volunteer; or

391 392 393

394

395 396

2014, Hampton C) (where no order was made because the worker’s fixed term contract had already expired); and Obatoki v Mallee Track Health & Community Services [2015] FWCFB 1661 (27 March 2015, Catanzariti VP, Smith DP, Blair C) (no order due to the cessation of a work contract). Fair Work Act 2009 (Cth), s 789FC(2). Fair Work Act 2009 (Cth), s 789FD. “Constitutional corporation” is defined in Fair Work Act 2009 (Cth), s 12 as a corporation to which s 51(xx) of the Australian Constitution applies, that is, foreign corporations, and trading or financial corporations formed within the Commonwealth. See [12.20]. A Commonwealth place is defined in the Fair Work Act 2009 (Cth), s 12 as a place referred to in the Australian Constitution, s 52(i) other than the seat of government. This includes airports and accommodation owned by the Commonwealth for its employees. A complaint by an employee of the New South Wales Department of Education was dismissed on jurisdictional grounds, because the Department was not a constitutional corporation in Re AB [2014] FWC 6723 (30 September 2014, Hampton C). See also Re Stancu [2015] FWC 1999 (26 March 2014, Lee C) (concerning a volunteer working outside of Australia for the Ministry of Public Works and Utilities in South Tarawa, Kiribati). See also Re Ms McInnes [2014] FWC 1395 (Hampton C) (a community based organisation providing psychiatric services was not a trading corporation, therefore the Commission had no jurisdiction). Fair Work Act 2009 (Cth), s 789FC(2). Fair Work Act 2009 (Cth) s 789FI.

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Ch 13: Statutory Protection for Job Security

(i) a person of a prescribed class.397 Although this definition is wide, and includes unpaid workers (such as volunteers and work-experience students), it is constrained by the requirement that the worker be engaged to perform work for a “person conducting a business or undertaking”. It therefore does not include a person receiving a carer’s payment under the Social Security Act 1991 (Cth), because the carer is not performing work for the department who made the payment.398 Likewise other unpaid work that is not done in the context of a business undertaking (for example, the work of students in pursuing their studies at a school or college, or domestic work undertaken in a family context) would not come within the jurisdiction.399 Neither will the work of volunteers in a community volunteer association which does not employ anyone, because volunteer associations are excluded from the definition of a “person conducting a business or undertaking” by the Model Work Health and Safety Act 2011 (Cth), s 5(7).400 The Fair Work Commission’s jurisdiction is limited to bullying at work, and does not extend to the scourge of bullying in the wider community.

What is “bullying”? [13.390] Bullying behaviour is defined as conduct which is unreasonable, repeated, and creates a risk to health and safety.401 Single incidents which manifest no likelihood of repetition will not constitute bullying.402 The Fair Work Commission will also refuse to make an order when the bullying will not be repeated because the worker is no longer employed in the organisation. Decisions on this point reiterate that the purpose of these provisions is preventative and not punitive.403 Reasonable management action is specifically excluded by s 789FD(2). The Explanatory Memorandum to the Fair Work Amendment Bill 2013 stated: Persons conducting a business or undertaking have rights and obligations to take appropriate management action and make appropriate management decisions. They need to be able to make necessary decisions to respond to poor performance or if necessary take disciplinary action and also effectively direct and control the way work is carried out. For example, it is reasonable for employers to allocate work and for managers and supervisors to give fair and constructive feedback on a worker’s performance. These actions are not considered to be bullying if they are carried out in a reasonable manner that takes into account the circumstances of the case and do not leave the individual feeling (for example) victimised or humiliated.404

This suggests that performance appraisals, disciplinary proceedings, workplace investigations, and decisions to review duties and remuneration will not constitute 397 398 399 400 401 402

403

404

See Model Work Health and Safety Regulations 2011 (Cth), reg 7(3). Balthazaar v Department of Human Services (Cth) [2014] FWC 2076 (Watson VP). Balthazaar v Department of Human Services (Cth) [2014] FWC 2076 (Watson VP). See Gaylene May McDonald [2016] FWC 300 (15 January 2016, Hampton C) (art centre volunteer was not a worker for the purposes of Fair Work Act 2009 (Cth), s 789FC(2)). Fair Work Act 2009 (Cth) s 789FD(1). See SB [2014] FWC 2104 (12 May 2014, Hampton C); The Applicant v General Manager and Company C [2014] FWC 3940 (17 June 2014, Roe C); Willis v Gibson; Capital Radiology Pty Ltd (t/a Capital Radiology; Carroll) [2015] FWC 1131 (17 February 2015, Lewin C); [2015] FWC 3538 (22 May 2015, Lewin C); Re Singh [2015] FWC 5850 (28 August 2015, Hampton C). In Hammon [2015] FWC 5565 (14 August 2015, Roe C) a series of bullying incidents were treated as individual incidents, and therefore not “repeated” conduct, because the acts were committed by a number of different co-workers, not working in concert with each other. See Shaw v ANZ [2014] FWC 3408 (26 May 2014, Gostencnik DP); GC [2014] FWC 6988 (9 December 2014, Hampton C); Obatoki v Mallee Track & Community Services [2015] FWCFB 1661 (27 March 2015, Catanzariti VP, Smith DP, Blair C); Re Mr M T [2014] FWC 3852 (23 June 2014, Johns C) at [22]–[23]; Re Ms Brenton [2014] FWC 4166 (24 June 2014, Cloghan C). Explanatory Memorandum to the Fair Work Amendment Bill 2013 at cl 112.

Workplace Bullying

bullying so long as those actions are “reasonable”, according to an objective assessment of what is reasonable on the facts of the case.405 The kinds of matters that the Commission will consider include whether the management action was consistent with established practices and policies.406 The kinds of conduct that have been found to constitute bullying in decisions made under these provisions include threats of violence, physical intimidation by slamming objects on the desk, swearing and yelling abuse, and belittling conduct.407 (See discussion at [8.120] for the kinds of conduct that has been held to constitute workplace misconduct, sufficient to warrant summary termination of an employment contract at common law.)

Bullying “at work” [13.400] Some difficulties have arisen in determining when a person has been bullied “at work”, especially where the bullying has taken place via social media. A Full Bench of the Commission has held that the “concept of being ‘at work’ encompassed by the performance of work and when the worker is engaged in some other activity which is authorized or permitted by the employer”.408 So, for example, a person may be at work during meal breaks, and while accessing social media at work. The alleged bully does not need to be at work at the time of the bullying.

Orders [13.410] If a matter remains unresolved and goes to hearing, the Fair Work Commission may make “any order it considers appropriate (other than an order requiring payment of a pecuniary amount) to prevent the worker from being bullied at work”.409 Before making any order, the Commission must take account of the outcomes of any investigation into the matters alleged, any procedures available to the worker to resolve the grievance, and any other relevant matters.410 Examples of orders made include orders that parties to workplace conduct should not contact each other, should not comment on clothes or appearance, should be rostered onto different shifts so that they do not need to deal with each other, should not exchange any correspondence by email but should negotiate all work issues through their supervisor.411 Orders have also included requirements that employers establish and implement appropriate workplace policies, procedures and training programs to address workplace bullying.412 Contravening a bullying order is a civil remedy provision.413 Applications for penalties can be brought by “person affected”, industrial association or the Fair Work 405

406 407

408

409 410 411 412 413

See Ms SB [2014] FWC 2104 (12 May 2014, Hampton C) at [52]. See also Re Mr Sun [2014] FWC 3839 (16 June 2014, Cloghan C); Amie Mac v Bank of Queensland Ltd [2015] FWC 774 (13 February 2015, Hatcher VP); Mohamed Aly [2015] FWC 4419 (10 August 2015, Bissett C). Ms SB [2014] FWC 2104 (12 May 2014, Hampton C). See Applicant v Respondent [2014] FWC 9184 (16 December 2014, Drake SDP); CF NW v Company A and ED [2015] FWC 5272 (5 August 2015, Hampton C); Roberts v VIEW Launceston Pty Ltd [2015] FWC 6556 (23 September 2015, Wells DP). See Bowker et al v DP World Melbourne Ltd (t/as DP World); Maritime Union of Australia, the Victorian Branch [2014] FWCFB 9227 (19 December 2014, Justice Ross P, Hatcher VP, Gostencnik DP, Hampton C, Johns C) at [51]. Fair Work Act 2009 (Cth), s 789FF(1). Fair Work Act 2009 (Cth), s 789FF(2). See Applicant v Respondent PR548852 (21 March 2014, Drake SDP). See CF NW v Company A and ED [2015] FWC 5272 (5 August 2015, Hampton C). See Fair Work Act 2009 (Cth), s 539. The maximum penalty for an individual is 60 penalty units and for a corporation is five times that (that is, 300 penalty units): see s 546(2)(b). The Crimes Act 1914 (Cth), s 4AA provides that a penalty unit is $170.

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Ombudsman. An accessory liability provision (s 550) enables penalties to be sought against people who are “by act or omission, directly or indirectly, knowingly concerned in or party to the contravention”.

14

Industrial Action “Where the rights of labour are concerned, the rights of the employer are conditioned by the rights of the men to give or withhold their services. The right of workers to strike is an essential element in the principle of collective bargaining.” [Lord Wright, in Crofter Hand Woven Harris Tweed Co v Veitch [1942] AC 435 at 463.]

[14.10] [14.20] [14.20] [14.30] [14.40] [14.50] [14.60] [14.70] [14.80] [14.80] [14.90] [14.90] [14.100] [14.110] [14.110] [14.120] [14.130] [14.140] [14.160] [14.170] [14.180] [14.190] [14.230] [14.230] [14.240] [14.250] [14.260] [14.270] [14.280] [14.290] [14.300] [14.310] [14.330] [14.340] [14.350] [14.350] [14.360] [14.370] [14.410]

Introduction ..................................................................................................... 568 Fair Work Act and Industrial Action .............................................................. 568 Right to take protected industrial action ................................................... 568 Limitations on the right to take protected industrial action .................... 570 Controls on protected industrial action ..................................................... 572 Secondary boycotts ..................................................................................... 573 Common law injunctions ............................................................................ 573 Statutory prohibition on payments during periods of industrial action .......................................................................................................... 574 Industrial Torts ................................................................................................ 575 Introduction ................................................................................................ 575 Injunctions ....................................................................................................... 577 The interlocutory injunction ....................................................................... 577 The ex parte interlocutory injunction ........................................................ 578 Inducing Breach of Contract .......................................................................... 579 Introduction ................................................................................................ 579 Intention ...................................................................................................... 582 Knowledge .................................................................................................. 583 Direct interference ...................................................................................... 585 Indirect interference ................................................................................... 588 Liability of employees and agents ............................................................. 590 Interference with contract .......................................................................... 591 Defences – justification .............................................................................. 591 Intimidation ..................................................................................................... 595 Introduction ................................................................................................ 595 Position of the intermediary ...................................................................... 596 Two-party intimidation ............................................................................... 597 The requirement of a threat ....................................................................... 597 Intermediary must bow to threat ............................................................... 598 Unlawful conduct ....................................................................................... 599 Defences – justification .............................................................................. 600 The Tort of Conspiracy ................................................................................... 601 Conspiracy to injure ................................................................................... 601 Conspiracy by unlawful means .................................................................. 605 Justification ................................................................................................. 606 Interference with Trade or Business by Unlawful Means ............................. 607 Introduction ................................................................................................ 607 Interests protected by the tort .................................................................... 608 Requirements for liability ........................................................................... 609 Defences – justification .............................................................................. 614

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[14.420]

Conclusion ....................................................................................................... 614

Introduction [14.10] This chapter is concerned with the rights and responsibilities of employers and employees in respect of industrial action. In earlier editions of this book, the material in this chapter was dealt with in the context of the common law principles governing the commission of what are known as “industrial torts”, or sometimes “economic torts”, which typically arise in the context of labour disputes between employees, unions and employers. Those tort actions are still available to persons who have suffered injury by any unlawful action taken by striking workers and their unions, and so this edition continues to deal with the principles applying in industrial tort actions later in this chapter (see [14.80] to [14.410]). Nevertheless, the existence of a workplace right (albeit one constrained by many procedural requirements) to take protected industrial action in the General Protections of the Fair Work Act 2009 (Cth), Pt 3-3 means that in contemporary Australian society, industrial action rarely provokes a common law suit against a union or union official for commission of an industrial tort.1 Even where industrial action fails to comply with the statutory procedures and falls outside of the immunities from suit, employers are more likely to seek the intervention of the Fair Work Commission, wielding its broad powers to order the cessation of unlawful industrial action.2 There are also remedies available to the victims of secondary boycott action in the Competition and Consumer Act 2010 (Cth)3 which provide access to statutory remedies that may also be more appealing to a person affected by a boycott than the remedies available under the common law for a tort action. So, before considering the industrial torts, the Fair Work Act 2009 rights to take protected industrial action, and the statutory controls on unprotected action are reviewed.

Fair Work Act and Industrial Action Right to take protected industrial action [14.20] Since the enactment of provisions encouraging collective enterprise bargaining, Australian employees have enjoyed a right to take protected industrial action while bargaining over the terms of a statutory collective enterprise agreement.4 The ability to engage in robust industrial negotiations, including taking strike action, is an important feature of a system of industrial relations that expects parties to pursue their own 1

2 3

4

Although tort action is not unknown: see Qantas Airways Ltd v Transport Workers Union (2011) 211 IR 1; CFMEU v Boral Resources (Vic) Pty Ltd [2014] VSCA 348 (19 December 2014, Maxwell P, Neave, Redlich and Beach JJA, Kaye AJA). Fair Work Act 2009 (Cth), ss 418 – 422. See Competition and Consumer Act 2010 (Cth), ss 45D – 45EB. The sanctions against trade boycotts in the Trade Practices Act 1974 (Cth) (subsequently renamed as the Competition and Consumer Act 2010) were first extended to industrial boycotts by the Trade Practices (Boycotts) Amendment 1980 (Cth) which introduced s 45E. Over the years, these provisions (enacted by the Fraser government) have been amended subject to the winds of political change. The Keating government enacted provisions in the Industrial Relations Act 1988 (Cth) to exclude industrial boycotts from the operation of the Trade Practices Act 1974, and to bring them within the jurisdiction of the Australian Industrial Relations Commission to deal with industrial disputes by conciliation: see Industrial Relations Act 1988 (Cth), s 162. The Howard government reinstated the trade practices sanctions in a more extensive group of sections when enacting the Workplace Relations and Other Legislation Amendment Act 1996 (Cth). The first collective bargaining provisions in federal legislation were enacted by the Industrial Relations Reform Act 1993 (Cth). Provisions conferring an immunity from suit for industrial action during lawful enterprise bargaining activities have remained in subsequent iterations of federal legislation, including the Workplace Relations Act 1996 (Cth), both before and after the amendments made by the Workplace Relations Amendment (Work Choices) Act 2006 (Cth).

Fair Work Act and Industrial Action

agreements to establish terms and conditions of employment, even when that system imposes an obligation to bargain “in good faith”, as the Fair Work Act 2009 does.5 The right to take protected industrial action under the Fair Work Act 2009 ought not to be confused with a general “right to strike”. Except for a very brief period between 1993 and 1996, when the Industrial Relations Act 1988 (Cth), s 334 provided a general protection from dismissal or other injury in employment for participants in industrial action, there has never been a general right to strike in Australian law.6 Striking employees and their union organisers have enjoyed various immunities from suit, but these immunities have been conditioned upon compliance with certain procedures.7 In the notorious airline pilots’ dispute of 1989, for example, the pilots’ union stepped outside of these immunities by refusing to submit to arbitration of the dispute by the Industrial Relations Commission.8 The union and its officers were subsequently sued successfully for the industrial torts of interference with contractual relations (see [14.110]), interference with trade or business by unlawful means (see [14.350]), conspiracy (by encouraging mass resignations) (see [14.300]), and intimidation (of potential new recruits to fill their positions) (see [14.230]).9 Similarly, in Dollar Sweets Pty Ltd v Federated Confectioners Association of Australia,10 the strikers who were subjected to tort claims, were acting in defiance of an order of the industrial tribunal. Nevertheless, in Australia, common law tort actions against striking workers and their unions have been relatively uncommon, even before the introduction of a specific right to take protected industrial action, principally because of the existence of statutory machinery permitting industrial tribunals to deal with industrial disputes in considerably shorter time and with less disruption to production than is possible through litigation. Since 1996, the powers of the tribunal to intervene in industrial disputes have been restricted,11 but employees have been able to take “protected industrial action” in pursuit of a collective enterprise agreement. So long as the taking of industrial action complies with strict procedures (including, since 2006, a mandatory secret ballot of employees12), and does not infringe prohibitions on pattern bargaining, peaceful industrial action will be immune from suit in tort.13 This immunity is not available for any industrial action which causes personal injury, willful or reckless 5 6

7

8 9

10 11

12 13

See Fair Work Act 2009 (Cth), s 228. See Maritime Union of Australia v Total Marine Services [2009] FWA 187 (1 September 2009, Thatcher C) at [101]. See Ewing, “The Right to Strike in Australia” (1989) 2 AJLL 18. For a complete study on the right to strike under Australian law, see Shae McCrystal The Right to Strike in Australia (Federation Press, 2010). The earliest statutory immunities from suit for trade unions were enacted in the Trade Union Acts of 1871 and 1876. For a general study on the development of trade union laws, see Portus, The Development of Australian Trade Union Law (Melbourne University Press, Carlton Victoria, 1958). See Ansett Transport Industries Operations Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211. For commentary on this dispute, see McEvoy and Owens, “The Flight of Icarus: Legal Aspects of the Pilots’ Dispute” (1990) 3 AJLL 87, and “On a Wing and A Prayer: The Pilots’ Dispute in the International Context” (1993) 6 AJLL 1. Dollar Sweets Pty Ltd v Federated Confectioners Association of Australia [1986] VR 383. Prior to 2006, any party wishing to take common law action in relation to unprotected industrial action was required under former s 166A of the Workplace Relations Act 1996 to give the Australian Industrial Relations Commission (AIRC) 72 hours to attempt to resolve the dispute before commencing court action, however this provision was repealed as part of the Work Choices amendments which withdrew some dispute resolution powers from the AIRC. State legislation has provided similar incentives to resolution of industrial disputes without resort to tort litigation. State laws have only a limited effect following the enactment of federal legislation covering the field of industrial relations, and supporting referrals of industrial matters by the States: see [1.20]. See Fair Work Act 2009 (Cth), ss 435 – 469. See Fair Work Act 2009 (Cth), Pt 3-3, ss 406 – 477. These requirements have been criticized as excessively restrictive, and in breach of International Labour Organisation Conventions supporting rights to freedom of association and collective bargaining: see Shae McCrystal, “A New Consensus:

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destruction of or damage to property, unlawful appropriation of property, or defamation.14 Taking protected industrial action is a “workplace right”, so employees will also be protected from dismissal or other injury in their employment, under the General Protections in Pt 3-1 (see [13.280]).15

Limitations on the right to take protected industrial action [14.30] The immunities from suit for “protected industrial action” in the Fair Work Act 2009 apply only to industrial action taken in the course of bargaining to make a proposed collective enterprise agreement.16 Protected action cannot be taken to support bargaining for a new agreement until a current agreement has reached its nominal expiry date.17 Agreements can have a nominal expiry date of up to four years after approval by the Fair Work Commission.18 While parties may seek to negotiate a variation or termination of the agreement prior to the nominal expiry date, they will not be permitted to take protected industrial action in the course of those negotiations.19 Breach of the prohibition on industrial action during the currency of an agreement may attract a civil penalty,20 and an employer, employee, or employee association covered by the agreement, or any person affected by the industrial action, may apply to the Federal Court or Federal Circuit Court for an injunction or interim injunction ordering that industrial action stop.21 The court may also make orders to remedy the effect of the industrial action, including an award of compensation for losses caused by the contravention.22 The legislation provides for three kinds of protected industrial action: employee claim action,23 employee response action,24 and employer response action.25 It is only employee claim action (that is, industrial action initiated by employees or an employee organisation in pursuit of a new enterprise agreement) that is subject to the requirements for a protected action ballot.26 The ballot requirements involve an application to the Fair Work Commission which stipulates the employees who are to be balloted and the questions to be put to them.27 The Fair Work Commission must grant the order within two days of the application if it complies with these requirements, and the Commission is satisfied that the applicant is and has been genuinely trying to reach an agreement with the employer.28 The ballot must be held as soon as practicable after the grant of the order. At least 50% of the employees on the voting roll must cast a vote,

14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

the Coalition, the ALP and the Regulation of Industrial Action”, in Forsyth and Stewart (eds), Fair Work: the New Workplace Laws and the Work Choices Legacy (Federation Press, 2008), pp 141-163; McCrystal, “The Fair Work Act 2009 (Cth) and the Right to Strike” (2009-2010) 23 AJLL 3. See Fair Work Act 2009 (Cth), s 415. See the definition of “workplace right” in s 341(2). See Fair Work Act 2009 (Cth), ss 408 – 414. See Fair Work Act 2009 (Cth), s 417. Fair Work Act 2009 (Cth), s 186(5)(b). Fair Work Act 2009 (Cth), s 417. The penalty is 60 penalty units (or $10,200 for an individual and $51,000 for a body corporate): see s 539 Item 14. Fair Work Act 2009 (Cth), s 417(3). See Fair Work Act 2009 (Cth), s 545(2)(b). Fair Work Act 2009 (Cth), s 409. Fair Work Act 2009 (Cth), s 410. Fair Work Act 2009 (Cth), s 411. Fair Work Act 2009 (Cth), s 409(2). Fair Work Act 2009 (Cth), s 437(3). Fair Work Act 2009 (Cth), ss 441, 443. “Genuinely trying to reach agreement” is not to be interpreted rigidly: see Total Marine Services Pty Ltd v Maritime Union of Australia (2009) 189 IR 407; [2009] FWAFB 368 at [31]-[32]. See also Mermaid Marine Vessel Operations Pty Ltd v Maritime Union of Australia [2014] FWCFB 1317 (7 March 2014, Gostencnik DP, Kovacic DP, Cloghan C).

Fair Work Act and Industrial Action

and of them, at least 50% must vote in favour of taking industrial action.29 Subsequent industrial action must conform to the particular questions in the ballot, and must commence within 30 days (or such other period determined by the Commission under is power to grant extensions).30 Employee claim action may only be taken in pursuit of claims which are reasonably believed to be about “permitted matters” and must not seek the inclusion of “unlawful terms” in an agreement (see [12.90]).31 The bargaining representative must not be engaging in “pattern bargaining”, that is, in a program of bargaining activities designed to pursue common agreements for a number of enterprises.32 This does not mean that unions cannot commence bargaining with a common log of claims for enterprises within an industry, so long as they are “genuinely trying to reach agreement” and are prepared to negotiate differentiated outcomes for individual enterprises.33 Employee claim action will also not be protected if it relates to any significant extent to a demarcation dispute (that is, a dispute between unions or other bargaining representatives as to which of them is entitled to represent the industrial interests of the employees).34 All forms of industrial action (employee claim, employee response and employer response action) will be protected only where the bargaining representative initiating the action is “genuinely trying to reach agreement”,35 has met any notice requirements,36 and has complied with any orders given by the Fair Work Commission (including orders that industrial action be suspended).37 Industrial action taken outside of the bargaining context, or without compliance to these requirements, will not be protected, and will be susceptible not only to common law sanctions, but to a statutory stop order, made under Fair Work Act 2009, ss 418 or 419. These provisions require the Fair Work Commission to order that any unprotected action that is happening, threatened, impending or probable must cease. These stop orders can be made against any industrial action that meets the definition in s 19, that is, any “performance of work in a manner different from that in which it is customarily performed”, and any work practice that results in a restriction or limitation on, or a delay in the performance of work.38 It includes all manner of work bans, but it does not include any action that is authorised or agreed to by the employer, or any action that was based on a reasonable concern for safety, in circumstances that the employer has not provided alternative work arrangements.39 So a stop order will not apply in the case of refusals to perform unsafe work. 29 30 31 32 33 34 35 36

37

38 39

Fair Work Act 2009 (Cth), s 459(1). Fair Work Act 2009 (Cth), s 459 Fair Work Act 2009 (Cth), s 409(1), (3). Fair Work Act 2009 (Cth), ss 409(4), 412. Fair Work Act 2009 (Cth), s 412(3). Fair Work Act 2009 (Cth), s 409(5). Fair Work Act 2009 (Cth), s 413(3). Fair Work Act 2009 (Cth), s 414(2) requires employees taking employee claim action to give at least three working days notice of taking action, or longer notice if such is prescribed in a protected action ballot order. Notice cannot be given before the result in the ballot: s 414(3). Employee response action need only give written notice, without any stipulated time limits: s 414(4). Employers taking employer response action must give written notice and take “all reasonable steps” to notify affected employees: s 414(5). Notice must stipulate the nature of the proposed action, and the date it will begin: s 414(6). Fair Work Act 2009 (Cth), s 414(5), (7). The Fair Work Commission has powers to suspend or terminate industrial action when parties are engaged in pattern bargaining (s 422), are causing significant harm to the economy (s 423) or endangering life (s 424) or to third parties (s 426), or to impose a “cooling off period” during drawn out industrial negotiations (s 425). In the case of employer industrial action, it includes lockouts: s 19(1)(d). See s 19(2)(c).

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The Fair Work Commission must determine applications for these stop orders within two days after the application is made.40

Controls on protected industrial action [14.40] Even where parties have met all of the requirements for protection, the industrial action may be subject to stop orders, if the Fair Work Commission or the relevant Minister determines that industrial action is causing unwarranted harm. The Minister has powers under the Fair Work Act 2009, ss 431 – 434 to make a written declaration to terminate protected industrial action if the Minister is satisfied that the industrial action is threatening to endanger life, personal safety or health, or the welfare of some or all of population, or to cause significant damage to the economy or an important part of it.41 The Fair Work Commission may also suspend or terminate industrial action on the same grounds,42 or if the action is causing significant economic harm to any of the parties themselves.43 The Commission may act on its own initiative, or upon an application by the Minister, or a relevant State or Territory Minister, or a bargaining representative for the agreement.44 If the industrial action is causing or threatens significant harm to a third party, that party may also make an application for suspension.45 Following an application by the Minister, the Fair Work Commission exercised its powers under s 424 (to deal with significant economic harm to the economy or part of it) when Qantas Airways Ltd grounded its fleet of planes at the end of 2011.46 In that case, the Commission found that threatened harm to the $24 billion-a-year inbound Australian tourism industry warranted an order terminating industrial action.47 Applications by employers to have bargaining terminated completely have rarely succeeded,48 although there are some notable cases where industrial action has been suspended.49 40 41 42 43 44 45 46

47

48

49

If the Fair Work Commission is unable to determine the matter within the two day time limit, it must issue an interim order, stopping the action: Fair Work Act 2009 (Cth), s 420(2). Fair Work Act 2009 (Cth), s 431(1). Fair Work Act 2009 (Cth), s 424. Fair Work Act 2009 (Cth), s 423. Fair Work Act 2009 (Cth), ss 423(7), 424(2). Fair Work Act 2009 (Cth), s 426(6)(a). See Section 424 Application to suspend or terminate protected industrial action: Minister for Tertiary Education, Skills, Jobs and Workplace Relations [2011] FWAFB 7444 (31 October 2011, Justice Giudice P, Watson SDP, Roe C). Section 424 Application to suspend or terminate protected industrial action: Minister for Tertiary Education, Skills, Jobs and Workplace Relations [2011] FWAFB 7444 (31 October 2011, Justice Giudice P, Watson SDP, Roe C) at [8]-[9]. The Commission subsequently made workplace determinations to resolve the bargaining disputes. See Australian Licensed Aircraft Engineers Association v Qantas Airways Ltd; Licensed Aircraft Engineers (Qantas Airways Ltd) Workplace Determination 2012 [2012] FWAFB 236 (23 January 2012, Watson VP, Boulton J, Roe C). See, for example, Transit Australia Pty Ltd v Transport Workers Union of Australia [2011] FWA 3410 (31 May 2011, Ashbury C) (concerning public transport); St John Ambulance Australia (NT) Inc v United Voice [2011] FWA 4782 (21 July 2011, Lawler VP) (patient transport by paramedics); GEO Group Australia Pty Ltd v United Voice [2011] FWA 9025 (22 December 2011, Harrison C) (escort of prisoners by corrections officers); Tyco Australia Pty Ltd (t/as Wormald) v CEPU (Qld Division branch) [2011] FWAFB 1598 (24 March 2011, Justice Boulton SDP, Ives SDP, Gooley C) (maintenance of fire protection systems). But see successful applications in Ambulance Victoria v LHMU (2009) 187 IR 119 [2009] FWA 44 (ambulance drivers); and Victoria v CPSU [2011] FWA 9245 (23 December 2011, Smith C) (child protection workers). See National Tertiary Education Industry Union v Monash University [2013] FWCFB 5982 (26 August 2013, Hatcher VP, Catanzariti VP, Lee C), where the stress and anxiety of students waiting for delayed exam results was sufficient to warrant suspension of a results processing ban during

Fair Work Act and Industrial Action

The Commission also has a power to suspend bargaining for a “cooling off” period.50

Secondary boycotts [14.50] A party affected by indirect industrial action may also pursue a complaint under the secondary boycott provisions of the Competition and Consumer Act 2010 (Cth), so long as the elements for liability under those provisions are met.51 A secondary boycott occurs when two persons act in concert to interfere with the supply or acquisition of goods or services between a third person and a fourth person (the target of the boycott), in order to cause substantial loss or damage to the target’s business. So for example, in ACCC v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union,52 a group of unions were held to have engaged in a secondary boycott when they interfered in the provision of services by Transfield to Basin Oil. The unions and their members were the first and second persons, Transfield was the third person, and Basin Oil was the fourth person target of the action.53 Section 45DB also prohibits boycotts involving three persons, where two persons must not act in concert with each other to prevent a third person from engaging in international trade or commerce. Successful secondary boycott suits depend upon demonstrating that the first and second persons are acting “in concert” with each other, and that the parties are not engaged in a primary boycott to pursue their own industrial claims.54 Consumer and environmental boycotts are explicitly excluded from the provisions.55 Picketing in order to protest, but without interfering in contracts between the third and fourth parties, will not be caught by these provisions.56

Common law injunctions [14.60] Despite some earlier authority57 that it was generally desirable for industrial disputes to be dealt with by specialist industrial tribunals rather than by common law courts, it is now generally well accepted that the availability of industrial tribunals to

50

51 52 53

54 55 56 57

enterprise bargaining by academics. Victorian nurses were also required to suspend industrial action for 90 days in Victorian Hospitals’ Industrial Association v Australian Nursing Federation [2011] FWAFB 8165 (15 December 2011, Justice Boulton SDP, Acton SDP, Lewin C). See Fair Work Act 2009 (Cth), s 425. See Mammoet Australia Pty Ltd v Construction, Forestry, Mining and Energy Union [2010] FWA 4389 (14 June 2010, McCarthy DP) for a discussion of the factors to be considered before granting an order. Competition and Consumer Act 2010 (Cth), s 45D – 45EB. ACCC v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2004] FCA 517 (30 April 2004, Gray J). See also Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v ACCC [2007] FCAFC 132 (17 August 2007, Weinberg, Bennett and Rares JJ). For earlier decisions, on earlier versions of these provisions in the Trade Practices Act 1974 (Cth), prior to amendments in 1996, see Utah Development Co v Seaman’s Union of Australia (1977) 1 ATPR ¶40-049 (tug pilot black ban targeting ships employing foreign workers); Wribass Pty Ltd v Swallow (1979) 38 FLR 92 (meat packers imposing a black ban on a wholesaler selling to supermarkets, in order to influence the supermarket trading hours); Industrial Enterprises Pty Ltd v Federated Storemen and Packers Union of Australia (1979) 2 ATPR ¶40-100 (union ban on movement of goods by subsidiary companies); Leon Laidely Pty Ltd v Transport Workers’ Union (1980) 28 ALR 589; 43 FLR 168 (tanker drivers boycotting oil deliveries); Australian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1985) 9 FCR 425 (bans preventing meat processing by hindering meat inspections). See Qantas Airways Ltd v Transport Workers’ Union [2011] 211 IR 1 at [403]-[421]. See Competition and Consumer Act 2010 (Cth), s 45DD(3). See Gisborne Garden & Building Supplies Pty Ltd v Australian Workers’ Union [1998] FCA 1323 (16 October 1998, Marshall J). Harry M Miller Attractions Pty Ltd v Actors & Announcers Equity Association of Australia [1970] 1 NSWR 614; Slattery v Public Service Board [1983] 3 NSWLR 41; Mahoney v Industrial Register of NSW [1984] 3 NSWLR 315.

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deal with disputes between the parties is not a reason for a court to refuse relief, including interlocutory injunctive relief to a party that has made out a case that it is otherwise entitled to relief.58 Thus, in National Workforce Pty Ltd v Australian Manufacturing Workers Union59 (brought under the former Workplace Relations Act 1996) the Victorian Court of Appeal noted that the emphasis of the legislation was no longer on the resolution of industrial disputes by industrial tribunals but upon their resolution by the parties themselves by means of direct bargaining. In that new context the court held there was no barrier in the way of an aggrieved employer who sought to exercise its common law rights. The Fair Work Act 2009 remedies (see [14.30] would appear to provide more convenient and reliable relief to a party who suffers loss as a consequence of unprotected industrial action than would be obtained by bringing an action in tort, given that the statutory provision does not require proof of any intention to cause harm to the claimant. Nevertheless, parties so minded may still bring a common law action in tort if they are affected by unprotected industrial action.

Statutory prohibition on payments during periods of industrial action [14.70] One further matter requires noting when considering statutory regulation of industrial action, and that is the prohibition on payment of wages for periods of industrial action. Since it is service that earns the wage, workers who go out on strike are not entitled to wages, so it may seem odd that it has been deemed necessary to specifically legislate to prohibit payment of wages during strikes. In the economic boom of the 1960s and 1970s workers, particularly in the building and construction industry, refused to return to work after a strike unless they were paid for the period during which they were on strike or payment was made to a charity or union benefit fund. The practice was first forbidden by the Workplace Relations Act 1996 (Cth), ss 187AA – AD (subsequently amended and renumbered by Work Choices as s 507) and continued with some modification under the Fair Work Act 2009 (Cth).60 The Fair Work Act 2009 provides that an employer must not make a payment to an employee (nor the employee ask or receive payment) where the employee engages in industrial action;61 similarly unions are prohibited from making such claims or threatening industrial action to force such payments.62 The definition of “industrial action”63 in the Fair Work Act 2009, s 19(2) excludes: 58 59 60

61

62

63

National Workforce Pty Ltd v Australian Manufacturing Workers’ Union [1998] 3 VR 265 at 378. National Workforce Pty Ltd v Australian Manufacturing Workers’ Union [1998] 3 VR 265. On the statutory prohibition on strike pay under the old s 187AA, see Ponzio v B and P Caelli Construction Pty Ltd (2007) 158 FCR 543; Cruse v Multiplex Ltd (2008) 172 FCR 279. As to the reach of the Fair Work Act 2009 (Cth), see [12.20]. Fair Work Act 2009 (Cth), ss 470, 473 (protected industrial action); ss 474, 475 (unprotected industrial action). Where the employer was mistaken about whether the employees were engaged in industrial action, see Australian Workers Union v BlueScope Steel Ltd [2007] NSWIRComm 1022 at [61] (heard by the NSW Commission under the referral provisions of the Industrial Relations Act 1996 (NSW), s 146A(2)). In relation to unprotected industrial action, (see [14.30]), the employer cannot pay for the period of time the employee is engaged in industrial action; if the total duration of the industrial action is less than four hours, the employer cannot pay wages for a four hour period; for four hours or more, payment cannot be made for the period of industrial action, Fair Work Act 2009 (Cth), s 474(1), (3). Special provisions apply to overtime bans, s 474(2)(2A). In relation to protected industrial action, (see [14.20]), the employer cannot pay the employee for the total duration of the industrial action, s 470(1), there is no minimum period of four hours for deductions. Fair Work Act 2009 (Cth), s 19(1) defines industrial action as meaning action of any of the following kinds: (a) the performance of work by an employee in a manner different from that in which it is customarily performed, or the adoption of a practice in relation to work by an employee, the result of which is a restriction or limitation on, or a delay in, the performance of the work; (b) a ban, limitation or restriction on the performance of work by an employee or on the acceptance of or offering for work by an employee;

Industrial Torts

1. action by employees that is authorised or agreed to by the employer; … 2. action by an employee if: (i) the action was based on a reasonable concern of the employee about an imminent risk to his or her health or safety; and (ii) the employee did not unreasonably fail to comply with a direction of the employer to perform other available work, whether at the same or another workplace, that was safe and appropriate for the employee to perform. In those situations set out above (the s 19(2) exceptions) the employer may agree to pay wages for those periods without being subject to civil penalties. If the employer authorises the conduct, the employer may be taken to have waived the right to demand full performance of the work by the employees, and may consequently be required to pay for the work performed. Where the employee’s safety is in issue and the employee refuses to undertake the work and there is no alternative suitable work available, the legislation allows (but does not require) the employer to pay the employee for the period of the refusal to undertake work. The “no work, no pay” principle suggests that an employee who does not work is not able to claim wages but could theoretically have an action for damages against the employer for breach of the contractual term to provide a safe place of work, see [6.100].64 Where the industrial action relates to overtime bans, the Fair Work Act 2009 requires that the employer specifically request employees to work overtime, that it be refused and the refusal is in breach of the employee’s obligations.65 Special provisions apply to partial work bans where employees are engaged in protected industrial action.66 The Fair Work Act 2009 provides that no deduction from pay is allowed in relation to partial work bans67 unless the employer gives the employee notice of a reduction in pay for the relevant period.68 Reflecting the position at common law, the notice may state that the employee will not be entitled to any payment at all and that the employer refuses to accept the performance of any work by the employee until such time as the employee performs all normal duties.69

Industrial Torts Introduction [14.80] The industrial torts are the torts of conspiracy (both by unlawful and by

lawful means70); inducing breach of contract; intimidation and the more general tort of interference with trade by unlawful means (which is also sometimes referred to simply as the unlawful means tort). These torts generally arise in employment and industrial law practice in one of two contexts. In the employment context, an employer who is seeking to restrain a former employee from terminating the employment prematurely to (c) a failure or refusal by employees to attend for work or a failure or refusal to perform any work at all by employees who attend for work; (d) the lockout of employees from their employment by the employer of the employees. 64 65 66 67 68 69 70

Note also the victimisation provisions, see Fair Work Act 2009 (Cth), ss 340 – 350, discussed at [13.280]. Fair Work Act 2009 (Cth), ss 470(4) (protected industrial action); 474(2) (unprotected industrial action). Defined in Fair Work Act 2009 (Cth), s 408. Fair Work Act 2009 (Cth), s 470(3); a partial work ban does not include a failure or refusal to attend work, or refusal to perform any work or an overtime ban. The reductions are expressed as a proportion and stipulated by the employer or as ordered by the Commission under Fair Work Act 2009 (Cth), s 472. Fair Work Act 2009 (Cth), s 471(4). See AED Oil Ltd v Back; Minter Ellison v AED Oil Ltd and AED Services Pty Ltd [2009] VSC 158 at [45] and Australian Wool Innovation Ltd v Newkirk [2005] FCA 290.

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take up a position with a competitor, may also seek to bring an action against the competitor for inducing the employee to breach the employment contract, for example, by terminating the employment without giving adequate notice, or by breaching restrictive covenants in the contract. In the industrial context, employers whose trade is adversely affected by strikes, boycotts or other industrial action may seek to bring an action in tort against the union organisers instigating the industrial action. The industrial torts are a sub-set of a more general category of “economic torts” which have developed to protect the economic interests of traders from a variety of unlawful competitive practices.71 Although the origin of some of these torts can be traced back to the 14th century in the English common law their substantial development took place in the 19th and early 20th century, except in the case of interference with trade by unlawful means which is of comparatively recent origin, only being expressly recognised by the House of Lords in 1983.72 The development of these torts, however, was often at the expense of general coherence in this area of tort law and at the cost of considerable continuing uncertainty as to their application. These defects appear only recently to have been addressed judicially by the decision of the House of Lords in a trilogy of cases: OBG Ltd v Allan; Douglas v Hello! (No 3); Mainstream Properties Ltd v Young.73 In that group of appeals, the House of Lords distinguished the tort of inducing a breach of contract from the tort of intentionally causing loss by unlawful means, on the basis that the first of these torts (inducing a breach of contract) was a tort of accessory liability and the second (causing loss by unlawful means) was a tort of primary liability. This means that the tort of inducing breach of contract can only be maintained upon proof of an actual breach of contract by a contracting party. The tort of causing loss by unlawful means is actionable only where the defendant has intentionally employed unlawful means to cause damage to the plaintiff’s economic interests. The significance of this distinction (although Lord Hoffmann opined in OBG v Allan that it ought not to be overstated)74 is that the principle upon which liability is based in inducing a breach of contract is accessory liability, for inciting another to commit a wrong.75 The High Court of Australia has not yet had an opportunity to consider the same general issues in the wake of this landmark decision of the House of Lords.76 In Northern Territory v Mengel,77 decided in 1995, a majority of the High Court of Australia referred to the “embryonic or emerging tort” of interference with trade or business by an unlawful act, and held that it was not necessary in the instant case to consider whether such a tort should be recognised in Australia. Nevertheless, the 71

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See Deakin and Randall, “Rethinking the Economic Torts” (2009) 72(4) Mod LR 519-553. See also Carty, “The Economic Torts and English Law: An Uncertain Future” (2006-2007) 95 Kentucky LJ 845. Merkur Island Shipping Corp v Laughton [1983] 2 AC 578. OBG Ltd v Allan; Douglas v Hello! (No 3); Mainstream Properties Ltd v Young [2008] 1 AC 1. OBG Ltd v Allan; Douglas v Hello!(No 3); Mainstream Properties Ltd v Young [2008] 1 AC 1 at [30]. Lord Hoffmann cited CBS Songs Ltd v Amstrad Consumer Electronics plc [1988] AC 1013 and Unilever plc v Chefaro Proprietaries Ltd [1994] FSR 135 as authorities for the principles for accessory liability: OBG Ltd v Allan [2008] 1 AC 1 at 36. See Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2014] VSCA 348 (19 December 2014, Maxwell P, Neave, Redlich and Beach JJA and Kaye AJA) at [31]. The High Court refused special leave to appeal this decision: see [2015] HCATrans 122. Balkin and Davis, Law of Torts (4th ed, LexisNexis Butterworths, 2009), at [21.4], take the view that the compelling logic inherent in their Lordships’ approach will encourage appellate courts in Australia to adopt their approach. Until the High Court has reason to consider the issue, lower courts are showing reluctance to adopt it. See, for example, Qantas Airways Ltd v Transport Workers’ Union (2011) 211 IR 1 at [430]. In the absence of High Court of Australia authority, Brooking J believed he was compelled to follow English authority in Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 245. Northern Territory v Mengel (1994-1995) 185 CLR 307 at 342-343.

Injunctions

Court’s analysis of the reasons for overturning Beaudesert Shire Council v Smith78 were consistent with acceptance of a tort of intentional interference in trade or business by unlawful means.79 Sanders v Snell80 was also decided without the need to confirm the existence of this tort, but the principles of the tort as now articulated by the House of Lords were applied to find that the defendant in the case had not committed the necessarily “unlawful” act to warrant liability on this basis. Part of the explanation for the hitherto persistent incoherence in the ordering of the industrial torts is the fact that industrial torts are often pleaded and relied upon only in interlocutory hearings for injunctive relief where courts do not usually need to go to the resolution of complex questions of substantive legal principle. In most industrial tort proceedings the plaintiff first seeks an interlocutory injunction restraining the defendant until the final hearing. In many such cases, the final hearing never takes place because the granting of the interlocutory injunction effectively disposes of the whole dispute since the restrained party usually lacks the resources to sustain their side of the industrial conflict.81 In this context procedural principles regarding the granting of the interlocutory injunction acquire a special significance. Industrial torts therefore cannot be fully understood or applied without reference to these procedural principles and so they are considered here. Another reason for the development of some anomalies in this field, particularly in the tort of conspiracy, is the political and industrial context in which these causes of action have developed. According to Lord Walker of Gestingthorpe, in Revenue and Customs Comrs v Total Network SL,82 the judges at the end of the 19th century shared the “deep suspicion which the governing class had, in Georgian and Victorian England, of collective action in the political and economic spheres, as potential threats to the constitution and framework of society. It is a theme from the Gordon Riots in 1780 to the Land League in Ireland a century later (see R v Parnell (1881) 14 Cox CC 508), with the conventions called by the corresponding societies in the 1790s, the Peterloo Massacre in 1819, the Tolpuddle Martyrs in 1834 and the Chartist Movement (1838-1848) and the rise of the trade unions in between”.83

Injunctions The interlocutory injunction [14.90] The established approach of Australian courts to the grant of an interlocutory injunction is that the plaintiff must prove that there is a serious question to be tried and that the balance of convenience favours the grant of an injunction.84 There is also a 78 79 80 81

82 83 84

Beaudesert Shire Council v Smith (1966) 120 CLR 145. See Northern Territory v Mengel (1994-1995) 185 CLR 307 at 342-345. Sanders v Snell (1998) 196 CLR 329 at [30]-[31]. Also the development of the substantive law is influenced by the assessment of the plaintiff’s case at the interlocutory stage at which the plaintiff must only establish that “the claim is not frivolous or vexatious, in other words that there is a serious question to be tried” or that it has “an arguable case”. In Ethicon v American Cyanamid Co [1975] AC 396 (HL) Lord Wedderburn noticed that such cases at the interlocutory stage are not meant to involve deep explanations of the substantive law but may in fact do so and decisions on interlocutory injunctions in industrial tort cases sometimes go on appeal in England even to the House of Lords and are then infused into the law generally, often expanding the tort liabilities generally even though they were found to be “merely arguable”: Lord Wedderburn, “Economic Torts”, in Dugdale (ed), Clerk & Lindsell on Torts (18th ed, Sweet & Maxwell, London, 2000), p 1265. Revenue and Customs Comrs v Total Network SL [2008] AC 1174. Revenue and Customs Comrs v Total Network SL [2008] AC 1174 at 1247, [78]. This approach adopts the tests laid down by the House of Lords in Ethicon v American Cyanamid Co [1975] AC 396 in preference to the earlier approach laid down by the High Court in Beecham Group

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relationship between these two factors. In Bullock v Federated Furnishing Trades Society of Australasia85 the Full Federal Court said that the two factors: need not be considered in isolation from each other. Thus, an apparently strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even. A more doubtful claim, (which nevertheless raises a serious question to be tried) may still attract interlocutory relief if there is a marked balance of convenience in favour of it.86

Judges differ as to the degree of enthusiasm with which they approach applications for interlocutory injunction involving industrial disputes. North J in Australian Paper Ltd v CEPU87 noted the special features of industrial disputes and concluded that on account thereof “ordinarily, justice will be best served if the court approaches the grant of an interim injunction against industrial action with particular caution”.88

The ex parte interlocutory injunction [14.100] In most cases where an employer is subject to industrial action it is relatively easy for the employer to establish that as a result of this industrial action it is suffering significant and continuing economic loss through, for example, its inability to supply customers with its product. These circumstances constitute a sufficient basis for urgency and therefore facilitate an ex parte application for a prohibitory injunction. The effectiveness of the injunction as a potent industrial weapon for employers lies not least in the fact that breach of the order may constitute contempt which attracts powerful sanctions at the discretion of the court including imprisonment.89 An employer may approach the court on an urgent basis in the absence of those against whom relief is sought seeking orders restraining them from continuing their conduct which it is claimed is causing the employer loss or damage. Where interlocutory injunctions are granted on this ex parte basis special issues arise. Ex parte interlocutory injunctions are usually only granted for a short period. Shortly before their expiration there is usually a continuation hearing at which the defendant appears for the first time having been served often with a large amount of affidavit material relied upon by the plaintiff a very short time prior to this continuation hearing. In exchange for being in the advantageous position of making an application without an opponent, the law imposes a special duty of disclosure upon applicants for ex parte injunctions. Briefly stated their duty is to disclose all matters relevant to the application, even when this is against their interests.90 That is, such material must be disclosed as would have been disclosed by your opponent if they had been present. The issue arises as to the proper sanction where the successful applicant is

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Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 that the plaintiff needed to prove that there was a prima facie case that it would be entitled to final relief at the trial and that the balance of convenience favoured the injunction being granted. The approach of the House of Lords in American Cyanamid was adopted by a Full Bench of the High Court in Murphy v Lush (1986) 65 ALR 651. Bullock v Federated Furnishing Trades Society of Australasia (1985) 5 FCR 464. Bullock v Federated Furnishing Trades Society of Australasia (1985) 5 FCR 464 at 472. Australian Paper Ltd v CEPU (1998) 81 IR 15. Australian Paper Ltd v CEPU (1998) 81 IR 15 at 24. North J also noted here the legacy of the “over-readiness” of the United States courts to grant injunctions in industrial disputes in the 1930s. This practice undermined the authority of these courts and ultimately led to the passing of the Norris-La Guardia Act, which prevented federal courts granting injunctions to restrain industrial action: at 251. Australasian Meat Industry Employees Union v Mudginberri Station (1986) 161 CLR 98, Hinch v Attorney-General (Vic) (1987) 164 CLR 15 at 49. A civil contempt involves disobedience to a court order or breach of an undertaking in civil proceedings. All proceedings for contempt, whether for civil or criminal contempt, must be seen as criminal in nature and therefore must be proved beyond reasonable doubt: Witham v Holloway (1995) 183 CLR 525. Thomas A Edison Ltd v Bullock (1912) 15 CLR 679 at 681-682 per Isaacs J.

Inducing Breach of Contract

subsequently discovered to have breached this duty of disclosure. This discovery is most likely to occur, given the limited opportunities beforehand, at the continuation hearing. This situation was considered in Visy Board Pty Ltd v AFMEP & KIU91 where Dunford J refused an application by the defendants to discharge the ex parte interlocutory injunction. In that case the plaintiff on an ex parte hearing failed to disclose to the court that on the same day the plaintiff also applied to the Australian Industrial Relations Commission for an order to stop industrial action under the former counterpart to what is now s 418 of the Fair Work Act 2009 in relation to the same dispute. Dunford J held that such a failure to disclose did not disqualify the plaintiff from obtaining injunctive relief. Moreover, his Honour, relying on an 1893 case, Bennett v Excelsior Land Investment & Building Co Ltd,92 held that since the present hearing related to an application for the continuation of the ex parte injunction “there is nothing to dissolve” and the only remedy lay in an order for costs. We now turn to consider the elements of the industrial torts. The first of the industrial torts to be considered is the action for inducing breach of contract. The action was initially known as the doctrine in Lumley v Gye,93 named after the case which established the action in its earlier form, an action for inducing breach of contract.

Inducing Breach of Contract Introduction [14.110] In its simplest form, an action for interference with contract will lie where A persuades B to break his or her contract with C. C will have an action against A for inducing breach of contract.94 In an employment law context, an employer may have an action against a rival who induced the first employer’s staff to abandon their positions in breach of notice requirements in their employment contracts, or against a rival employer who persuaded an employee to breach obligations of confidence by divulging the first employer’s trade secrets. Translated into an industrial context: a trade union official who calls out employees to take unprotected industrial action in breach of contracts of employment with their employer would, like A, commit this tort.95 An action for inducing breach of contract may be available to C (the employer) against A (the trade union official). The modern development of the action began with the decision in Lumley v Gye96 in 1853 where a theatrical entrepreneur sued for damages when an opera singer, Miss Wagner, niece of Richard, was induced to breach her contract with the plaintiff to sing at his opera house and to sing for the defendant instead. The Court of Queen’s Bench held that an action lies for maliciously procuring a breach of a contract for 91 92 93 94 95

96

Visy Board Pty Ltd v AFMEP & KIU (1999) 91 IR 88. Bennett v Excelsior Land Investment & Building Co Ltd (1893) 14 NSWR (Eq) 179 at 182. Lumley v Gye (1853) 2 E & B 216; 118 ER 749. The action is apparently not available to the party induced where there is direct persuasion: see Boulting v ACTT [1963] 2 QB 606 at 639-640 per Upjohn LJ. Note the limited immunity granted under s 415 of the Fair Work Act 2009 (Cth) and s 793 (conduct of officers, employees and agents). The union would be liable on ordinary principles of vicarious liability for the conduct of union officials within the course of authority: see Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2007] FCA 1047 (13 July 2007, Gyles J). As to whether a union will be liable for independently tortious conduct occurring in the course of industrial action, see News Group Newspapers Ltd v SOGAT [1986] IRLR 337; Thomas v National Union of Mine Workers (South Wales) Area [1985] 2 WLR 1081. And see Industrial Relations Act 1999 (Qld), s 237 (organisation or association not liable for conduct of agent acting without its knowledge where reasonable diligence could not have prevented the action). Lumley v Gye (1853) 2 E & B 216; 118 ER 749.

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exclusive services resulting in damage to the plaintiff. It extends to cases where a third party induces a breach of an employee’s implied duty of fidelity to the employer.97 The action for inducing breach of contract protects any valid and enforceable contract.98 It does not protect void contracts,99 nor does it protect the right of a plaintiff to enter into new contractual relationships.100 Originally the tort of inducing breach applied only to contracts of employment but gradually it became accepted that it applied to all contracts.101 It has been suggested that in Australia there has in recent years been “a flood of cases in which interference with contractual relations is alleged”102 and that many of these cases involved application of this tort to more general commercial dealings including a holding company inducing its wholly owned subsidiary to breach a contract.103 In the traditional formulations of the principle of Lumley v Gye, the defendant was required to procure a breach of contract. Following a number of decisions involving trade union boycotts,104 the action was extended to interference with performance of the contract.105 This line of cases developed the notion of “indirect” interference in contractual relations, to cover those circumstances where the claimant could not prove any breach of contract by the third party (for example, in picketing cases, where third parties were prevented from initiating new contracts, but were not in breach of any existing contract when they were turned away from the claimants premises106). The House of Lords decision in OBG Ltd v Allan; Douglas v Hello! (No 3), Mainstream Properties Ltd v Young,107 however, has now held that the action for inducing breach of contract should be restricted to cases involving an actual breach of contract. A case involving interference in the performance of a contract may be brought instead as a claim for causing loss by unlawful means, but only where the interference in 97

98

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101 102

103 104 105 106 107

Goodchild Fuel Distributors Pty Ltd v Holman (1992) 59 SASR 454 (defendant company persuaded the plaintiff’s employee to allow the defendant to run up a large debt with the plaintiff; this was a breach of the employee’s duty of fidelity, see [5.520]). A contract must be in existence: Williams v Hursey (1959) 103 CLR 30 at 77 per Fullagar J; Allen v Flood [1898] AC 1; McManus v Bowes [1938] 1 KB 98 at 127 (contracts lawfully terminated). An analogous action exists for inducing a breach of duty by a common carrier: James v Commonwealth (1939) 62 CLR 339 at 367 per Dixon J; Northern Territory v Mengel (1995) 185 CLR 307 at 349. Contracts void by reason of infancy, mistake, gaming contracts, contracts in restraint of trade are not protected: see Shears v Mendeloff (1914) 30 TLR 342; Said v Butt [1920] 3 KB 497; Joe Lee Ltd v Lord Dalmeny [1927] 1 Ch 300; British Motor Trade Association v Gray [1951] SC 586. Nor are contracts void as a consequence of breach of the Competition and Consumer Act 2010 (Cth): News Ltd v Australian Rugby Football League Ltd (1996) 139 ALR 193 (Full Federal Court) at 290, 352-353 (concerning the former Trade Practices Act 1974 (Cth)). The action will protect valid but unenforceable contracts: see Unident Ltd v Delong (1982) 131 DLR (3d) 223. See also SOS Kinderdorf v Bittaye [1996] 1 WLR 987 (employee liable to be summarily dismissed). Note that interference with contract by unlawful means would now be considered as giving rise to the tort of interference with trade by unlawful means, see [14.350]. Previous decisions may need to be re-interpreted in this light: see Williams v Hursey (1959) 103 CLR 30 (illegally preventing formation of a contract not actionable in an action for interference with contract). Note also Stratford & Son v Lindley [1965] AC 269 discussed below and see Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 255 (new contracts protected by action for interference with trade or business). Temperton v Russell [1893] 1 QB 715. Izzo, “The Limits of Lumley v Gye: Commercial Disputes and the Tort of Interference with Contractual Relations” (2005) 13 TLJ 188 at 188. See also Edmundson, “Sidestepping Limited Liability in Corporate Groups using the Tort of Interference with Contract” (2006) 30(1) MULR 3. Edmundson, “Sidestepping Limited Liability in Corporate Groups using the Tort of Interference with Contract” (2006) 30(1) MULR 3. See D C Thomson & Co Ltd v Deakin [1952] Ch 106; Torquay Hotel v Cousins [1969] 1 All ER 522 at 529; Merkur Island Shipping Corp v Laughton [1983] 2 AC 570 See [14.160]. See, for example, Torquay Hotel v Cousins [1969] 1 All ER 522. OBG Ltd v Allan; Douglas v Hello! (No 3) Mainstream Properties Ltd v Young [2008] 1 AC 1.

Inducing Breach of Contract

contractual performance has occurred as a consequence of some unlawful act, actionable by a third party.108 (See [14.350].) Following the House of Lords decision in OBG v Allan109 the essential elements for an action of inducing breach of contract are (1) intention to procure a breach of contract, (2) knowledge of the existence of the contract and (3) action which does induce breach of the contract. The action will not lie without a breach of contract by the third party. If OBG v Allan is to be followed in Australia, some elements listed in the description of the tort by Wells J in the Supreme Court of South Australia in Woolley v Dunford110 require some revision. That decision, based on the English decisions following D C Thomson & Co Ltd v Deakin,111 conflated the tort of inducing breach of contract with the tort of intentional interference in trade or business by unlawful means. Note points (3) to (5) below. 3. The juristic basis for the tort is – that there has been, by the defendant, a knowing and intentional interference with the plaintiff’s contractual rights without justification. 4. Subject to what may be relied on where an injunction is sought in addition to damages, or where one party is a common carrier, it must be proved that when the alleged interference took place a contract, not discharged and not yet finally performed, was in existence which was legally binding on the plaintiff and a third party. 5. The alleged interference may consist either in procuring or causing a breach of the contract, or in preventing or hindering the performance of the contract, even though the defective performance does not amount to an actual breach of the contract: Torquay Hotel case. 6. The actionable interference may be effected directly or indirectly. It may be effected directly by a procurement operating immediately on one of the parties to the contract (by, for example, persuasion, bribery, or force or threats of force) or on things or states of affairs that are in themselves essential to the performance of the contract (see, for example, G W K Ltd v Dunlop Rubber Co Ltd); or indirectly, by inducing those upon whom the plaintiff relies for the performance of his contract with the third party to break their contracts with the plaintiff so as to render performance of the principal contract either impossible or substantially more onerous than it would otherwise have been: D C Thomson & Co Ltd v Deakin. 7. Apart from conspiracy to injure, no actionable wrong is committed by a person who, by acts not in themselves unlawful, prevents another person from obtaining the performance of a contract by a third person or who induces others so to prevent that person by unlawful means. In short, the interference relied on must be unlawful: where it is direct, the persuasion, procurement, inducement, or other form of interference is regarded by the law as wrongful in itself; where it is indirect, the means by which the interference is effected must be, or include, an unlawful act, that is, an act that the defendant is not in law at liberty to commit: D C Thomson & Co Ltd v Deakin, Torquay Hotel case, and J T Stratford & Son Ltd v Lindley. Procuring a breach of contract by the plaintiff’s employees is an unlawful act in this sense. 108 109 110 111

OBG Ltd v Allan; Douglas v Hello! (No 3) Mainstream Properties Ltd v Young [2008] 1 AC 1 at [29]. OBG Ltd v Allan; Douglas v Hello! (No 3) Mainstream Properties Ltd v Young [2008] 1 AC 1. Woolley v Dunford (1972) 3 SASR 243 at 266-267. DC Thomson & Co Ltd v Deakin [1952] Ch 646.

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8. Where the defendant has interfered with the contract by procuring an act by one of the parties in circumstances in which it would not, because of an exemption clause or excuse implied by law, have been within the power of the plaintiff to insist on performance of the contract the defendant cannot rely upon the exemption clause or other excuse, if the tort is otherwise proved. 9. When the defendant does the acts complained of he must “have knowledge” of the existence of the contractual relations said to have been interfered with. 10. The interference must be “intentional”. This requirement is closely bound up with proposition 7. The commentary following assumes that the elements involving indirect interference by unlawful means where there is no breach of the contract (3 to 5) are properly treated as a description of the tort of interference with trade or business by unlawful means, discussed below at [14.350].

Intention [14.120] The tort of inducing breach of contract is an intentional tort. It requires the defendant to have the intent to persuade, procure or induce a breach of the contract. A mere negligent interference short of reckless indifference will not do.112 In Lumley v Gye the plaintiff alleged that the defendant “maliciously procured” a breach of the plaintiff’s contract with Miss Wagner. Malice in the sense of malevolence was thought to be the gist of the action on the principle that where the defendant’s sole motive was to injure the plaintiff, the defendant’s act otherwise lawful became unlawful.113 But this is no longer the position. “Malice in the sense of spite or ill will, is not an element of that tort.”114 It is sufficient that the defendant intends to cause a breach.115 Whether the requisite intention exists is a question of fact to be determined by examining the whole of the evidence.116 A defendant can hardly intend to induce a breach of the plaintiff’s contract if the defendant has no knowledge of the contract.117 An honest doubt as to the relevant facts may constitute a defence but an honest but mistaken view as to the legal result of known facts will not provide a defence.118 An offer of employment to commence as soon as the current employment 112

113 114 115 116

117 118

Northern Territory of Australia v Mengel (1996) 185 CLR 307 at 342 per Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ. LED Technologies Pty Ltd v Roadvision Pty Ltd [2012] FCAFC 3 (10 February 2012, Besanko, Mansfield and Flick JJ) at [54] stated that reckless indifference “will be negated by an honest belief, even one exhibiting a high degree of credulity. It will be established only if the facts show affirmatively that the alleged tortfeasor, faced with knowledge of at least a substantial prospect of a breach, proceeded not caring whether or not a breach, would occur.” See, for example, judgments in Bowen v Hall (1881) 6 QBD 333 at 338. Whittaker v Child Support Registrar [2009] FCA 188 (4 March 2009, Lindgren J) at [56]. See Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530 at [115]. South Wales Miners’ Federation v Glamorgan Coal Co [1905] AC 239 at 245-246. See Independent Oil Industries Ltd v Shell Co of Australia (1937) 37 SR (NSW) 394 at 420; Greig v Insole [1978] 1 WLR 302 at 337-338; Loh v Crabb (1986) 2 VIR 153; Allstate Life Insurance Company v Australia and New Zealand Banking Group Ltd (1995) 58 FCR 26 – a subjective intent is required: Lindgren J at 43. Unlike the claim for conspiracy to injure, there is no requirement that the defendant have a predominant intention to injure the plaintiff: Lonrho plc v Fayed [1990] 2 QB 479 at 488-489 per Dillon LJ; at 491-492 per Ralph Gibson LJ; at 494 per Woolf LJ and referred to without comment by the High Court in Northern Territory v Mengel (1995) 185 CLR 307 at 342 per Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ. Smith v Morison [1974] 1 WLR 659 at 677. Metropolitan Borough of Solihull v National Union of Teachers [1985] IRLR 211 (Ch D); Pritchard v Briggs [1980] Ch 338 at 413-414 per Goff LJ; at 424 per Stephenson LJ; Greig v Insole [1978] 1 WLR 302 at 337-338, 343-344; contra Short v City Bank of Sydney (1912) 15 CLR 148 at 160. The issue was left open by the Full Federal Court in News Ltd v Australian Rugby Football League Ltd (1996) 139 ALR 193 at 290.

Inducing Breach of Contract

can be lawfully terminated by appropriate notice does not give rise to liability.119 The requisite intent will be shown if the defendant is recklessly indifferent whether breach occurs or not120 but not if breach was merely a foreseeable consequence.121 If the defendant intended the party procured to bring the contract to an end by breach if there was no way of bringing it to an end lawfully, that is sufficient.122 The distinctions drawn here are often fine and sometimes subjective. For example in DC Thomson & Co Ltd v Deakin123 Lord Evershed MR drew a distinction between tortious persuasion to break a contract and advice: I appreciate that in these matters there is a difficult question of distinguishing between what might be called persuasion and what might be called advice, meaning by the latter a mere statement of, or drawing the attention of the party addressed to, the state of facts as they were.124

This distinction was applied by the trial judge in TimePlan Education Group Ltd v National Union of Teachers125 to find that the National Union of Teachers (NUT) were using “persuasion” in the sense used by Lord Evershed in D C Thomson & Co Ltd v Deakin with the intention of procuring the New Zealand Education Institute (NZEI) to breach any contract they had with the plaintiff for the continuing publication of the plaintiff’s advertisements. However, on appeal the English Court of Appeal characterised the same correspondence from the NUT as “mild”: In moderate terms it simply suggested that the NZEI “might consider it inappropriate” to carry the plaintiff’s advertising in the future.126

In these circumstances the Court of Appeal held that the NUT did not have the requisite intention to commit this tort. Nor did the Court of Appeal find any justification for the trial judge’s conclusion that the NUT had constructive knowledge of the existence of a continuing contract. It also found that there was no duty on the NUT to make inquiry to discover whether there was a contract. Before the defendant can intend to cause a breach of the plaintiff’s contract, the defendant must first have sufficient knowledge of the contract.127

Knowledge [14.130] The defendant must know of the plaintiff’s contract for liability. But this requirement rarely poses any difficulty. The courts have not insisted on detailed knowledge of the contract and its terms.128 “The relevant question is whether they had sufficient knowledge of the terms to know that they were inducing a breach of 119 120

121 122

123 124 125 126 127

128

Delphic Wholesalers Pty Ltd v Elco Food Co Pty Ltd (1987) 8 IPR 545 at 551-552. Emerald Construction v Lowthian [1966] 1 WLR 691 at 701 per Lord Denning MR; Daily Mirror Newspapers Ltd v Gardner [1968] 2 WLR 1239 at 1250; LED Technologies Pty Ltd v Roadvision Pty Ltd [2012] FCAFC 3 (10 February 2012, Besanko, Mansfield and Flick JJ) at [54]. OBG v Allan (and related appeals) [2008] 1 AC 1 at [43] per Lord Hoffmann. Emerald Construction v Lowthian [1966] 1 WLR 691 at 704; Delphic Wholesalers Pty Ltd v Elco Food Co Pty Ltd (1987) 8 IPR 545 at 553-554. Compare Sanders v Snell (unreported, Federal Court, Full Court, 9 April 1997). DC Thomson & Co Ltd v Deakin [1952] Ch 646. DC Thomson & Co Ltd v Deakin [1952] Ch 646 at 686. TimePlan Education Group Ltd v National Union of Teachers [1997] IRLR 457 CA. TimePlan Education Group Ltd v National Union of Teachers [1997] IRLR 457 at 460. Note the view put in Allstate Life Insurance Company v Australia and New Zealand Banking Group Ltd (1995) 58 FCR 26 at 43 per Lindgren J (other members of the Federal Court agreeing) that “knowledge” and “intention” are the same thing. D C Thomson & Co Ltd v Deakin [1952] Ch 646; cf at 687 per Lord Evershed MR; Allstate Life Insurance Company v Australia and New Zealand Banking Group Ltd (1995) 58 FCR 26 at 43 per Lindgren J.

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contract.”129 Constructive knowledge is sufficient.130 In Bents Brewery v Hogan131 the defendant was deemed to know that a common law duty of fidelity in respect of confidential information was an implied term of a contract of service. Similarly, in Cunard Steamship Co v Stacey132 an official of the seamen’s union was deemed to know that a seaman’s contract would conform with the Merchant Shipping Act 1894 (UK). In D C Thomson & Co Ltd v Deakin133 Lord Evershed MR went so far as to suggest that common knowledge about the way business is conducted might be sufficient.134 A liberal view of this requirement is also evident in the judgment of Winn LJ in Torquay Hotel v Cousins.135 In Torquay Hotel v Cousins the defendants imposed bans preventing the delivery of oil to the plaintiff. On the question whether the defendants had the requisite knowledge, Winn LJ136 said: once it is established that an individual or company which can only keep going by receiving, periodically, certain essential commodities, habitually receives them from a certain supplier, and this fact is well known, it is an unreal exercise to trouble to investigate how much any person knew about the precise contractual terms on which such supplies were obtained.

But the mere fact that a customer is being supplied with goods or services does not automatically give rise to the inference that there is a continuing contract.137 If the defendant “turns a blind eye”, deliberately disregarding means of knowledge, then lack of knowledge of the contract and its terms will be no excuse.138 In Carlton & United Breweries Ltd v Tooth & Co Ltd139 Young J thought it sufficient that the defendant knew there was a contract between the parties. His Honour said the defendant will be liable unless he had reasonable grounds for believing that the contract did not contain the term which is relied on, and this is a fortiori the position where (a) the term is a very common one in contracts of that type; or (b) he deliberately closes his eyes and refrains from enquiring whether the term existed or not.

In short, there is little difficulty in showing the requisite knowledge of the plaintiff’s contract. It has become a common and industrially useful tactic to seek interlocutory 129

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132 133 134

135 136

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Stratford & Son v Lindley [1965] AC 269 at 332 per Lord Pearce; at 323-324 per Lord Reid; cf at 328 per Viscount Radcliffe and see Emerald Construction v Lowthian [1966] 1 WLR 691 at 704 per Diplock LJ. Northern Territory v Mengel (1996) 185 CLR 307 at 342 per Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ. Bents Brewery v Hogan [1945] 2 All ER 570. Compare British Industrial Plastics Ltd v Ferguson [1940] 1 All ER 479, where it was held that a mistaken but honest belief that there was no breach of fidelity by a servant in revealing a secret process was a sufficient defence and that there was no actual or constructive knowledge. But see contrary authority, Metropolitan Borough of Solihull v National Union of Teachers [1985] IRLR 211, Pritchard v Briggs [1980] Ch 338, Greig v Insole [1978] 1WLR 302. Cunard Steamship Co v Stacey [1955] 2 Ll R 247. D C Thomson & Co Ltd v Deakin [1952] Ch 646 at 687. Note the argument that this will involve the courts in difficult inquiries into the way businesses are ordinarily conducted and render boundaries of the tort too vague and uncertain: Payne, “Interference with Contract” (1954) 7 CLP 94 at 101. Torquay Hotel v Cousins [1969] 1 All ER 522. Torquay Hotel v Cousins [1969] 1 All ER 522 at 538; at 531 per Lord Denning MR. See also Woolley v Dunford (1972) 3 SASR 243 at 282-283; Boral Bricks NSW v Frost (1987) 20 IR 70 at 78; Merkur Island Shipping Corp v Laughton [1983] 2 AC 570 at 607-609. Schindler Lifts v Debelak (1989) 89 ALR 275 at 293-294 per Pincus J. Emerald Construction v Lowthian [1966] 1 WLR 691 at 700-701 per Lord Denning MR; Torquay Hotel v Cousins [1969] 1 All ER 522 at 530; OBG v Allan [2008] 1 AC 1, per Lord Hoffmann at [40]-[41]. Carlton & United Breweries Ltd v Tooth & Co Ltd (1986) 7 IPR 581 at 625.

Inducing Breach of Contract

injunctions restraining interference with the plaintiff’s contract. At the interlocutory stage, notice of the terms of the plaintiff’s contract can be given to the defendants, thus ensuring they have the requisite knowledge.140 Legal advisers for this reason may give notice of the terms of the contract after a strike call. At the interlocutory stage it seems that very little evidence of the nature of existing contracts is required to support the issue of an injunction.141 The requirement that the defendant have actual or constructive knowledge of the plaintiff’s contract together with the intent to cause its breach serves as a necessary restriction on liability.142 Otherwise a defendant would be liable for breach of a contract of which the defendant was not aware. In both the English and Australian jurisdictions economic loss resulting from negligent conduct interfering with the plaintiff’s contract will rarely be recoverable.143 On the assumption that OBG v Allan will be followed in Australia, it is necessary to demonstrate interference which induces a breach of the contract.

Direct interference [14.140] The breach of contract must be brought about or procured or induced by some act which a man is not entitled to do, which may take the form of direct persuasion to break a contract or the intentional bringing about of a breach by indirect methods involving wrongdoing.144

An action for interference with contract will lie when a third party, with knowledge of the contract and the intent to interfere with its performance, directly persuades or induces one of the parties to the contract to break it or interfere with the performance of it. The intervention itself is considered wrongful.145 If the interference or breach is induced by a threat of action, it is irrelevant whether the action threatened or the threat itself is lawful or unlawful. Consequently, liability will ensue; for example, if employees employed on a day-to-day basis without breach of contract actually go on an unprotected strike or threaten to strike with the intention of inducing a breach of a contract between the employer and a third party. The intervention is actionable only at the suit of the party not in breach. In Lumley v Gye, Miss Wagner, who breached her contract with Lumley, could not maintain an action for inducing breach of contract against the party inducing the breach.146 There is, however, authority that an action should be available if the party breaching the contract is disabled from performing the contract with a third party by, for example, the defendant stealing tools, calling employees of the breaching party out on strike and 140 141

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144 145 146

Emerald Construction v Lowthian [1966] 1 WLR 691, see especially at 704 per Diplock LJ; Torquay Hotel v Cousins [1969] 1 All ER 522; Boral Bricks NSW v Frost (1987) 20 IR 70 at 88. See, for example, Union Traffic Ltd v Transport & General Workers’ Union [1989] IRLR 127 at 130 (CA): “It would be very surprising if a road haulage depot – could be closed down completely at very short notice without causing the owner to break or fail to perform any existing contract.” But courts will not always be willing to make these implications: see News Group Newspapers Ltd v SOGAT [1986] IRLR 337 (QBD). A party will not be liable for interfering in another’s contract “if it (reasonably) believes that the contract has come to an end”: Sidameneo (No 456) Pty Ltd v Alexander [2011] NSWCA 418 (21 December 2011, Beazley, Basten and Young JJA) at [134]. See generally Sappideen and Vines (eds), Fleming’s The Law of Torts (10th ed, Lawbook Co, 2011), at [30.90]; and Spring v Guardian Assurance plc [1995] 2 AC 296 (HL) (claim available for negligent employment reference). See discussion at [5.290]. D C Thomson & Co Ltd v Deakin [1952] Ch 646 at 702 per Morris LJ. D C Thomson & Co Ltd v Deakin [1952] Ch 646 at 677 per Evershed MR, and see at 694. Williams v Hursey (1959) 103 CLR 30 at 77-78 per Fullagar J (Dixon CJ concurring); Boulting v ACTT [1963] 2 QB 606 at 639-640; Camden Exhibition and Display Ltd v Lynott [1966] 1 QB 555 at 569.

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so on.147 In such circumstances the party in breach would have actions in tort for trespass and conversion, actions for breach of contract against striking employees (for what it is worth) and actions for inducing breach of contract between the plaintiff as employer and the plaintiff’s own employees.148 Such circumstances would also give rise to a claim in the tort of intentional interference in trade or business by unlawful means (see [14.350]). In determining whether the defendant’s conduct amounts to persuasion149 or inducement, it is irrelevant whether the contract breaker yields readily, or is even a willing party to the breach or interference.150 Merely holding out a temptation is not always equivalent to inducement;151 it is a question of fact in each case. It was once thought that the particular form of negotiations leading up to the breach of contract was important, that mere advice could not constitute inducement.152 A number of decisions illustrate that this is no longer so. In Woolley v Dunford153 the plaintiff employed non-union labour for shearing his sheep. The union, the Australian Workers Union, approached the plaintiff with a view to obtaining the dismissal of the two non-unionists; this was ineffective. The union then imposed a black ban on the plaintiff with the effect that the plaintiff’s wool or other produce would not be transported or handled by union labour. Dunford, the Branch Secretary of the union, then wrote to a shipping company with whom the plaintiff had a contract for the transport of his wool from Kangaroo Island to the mainland advising the company of the black ban placed on the plaintiff, and said: “I [Dunford] request that your company does not ship or transport this wool, under any circumstances, until notified by the union.” The company refused to ship the plaintiff’s wool. The plaintiff brought proceedings against Dunford and obtained an injunction restraining Dunford from continuing any act that directly or indirectly induced a breach of any contract for the carriage of the plaintiff’s wool or produce. Clearly the fact that the notice to the shipper was in the form of a request did not alter its effect as an inducement to breach.154 “The fact that an inducement to break a contract is couched as an irresistible embargo rather than in terms of seduction does not make it any the less an inducement.”155 This wide view as to what constitutes inducement or persuasion is also supported by the judgment 147

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Heydon, Economic Torts (2nd ed, 1978), p 38; and see in support Union Traffic Ltd v Transport & General Workers’ Union [1989] IRLR 127 (CA); Dimbleby & Sons v National Union of Journalists [1984] 1 WLR 427, and see comment (1984) 100 LQR 347 at 348. Losses resulting from breach of contract with the third party may be consequential upon breach of contracts by employees. Coercion is not required, mere persuasion suffices: Delphic Wholesalers Pty Ltd v Elco Food Co Pty Ltd (1987) 8 IPR 545. Picketing with the intended and successful object of inducing breaches of contract by drivers suffices: see Union Traffic Ltd v Transport & General Workers’ Union [1989] IRLR 127 (CA). D C Thomson & Co Ltd v Deakin [1952] Ch 646 at 694; Woolley v Dunford (1972) 3 SASR 243 at 290-291; Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 236-237 (strike vote by union members does not prevent a union official’s conduct amounting to inducement, at 238). Independent Oil Industries v Shell Company of Australia (1937) 37 SR (NSW) 394 at 420; and see Schindler Lifts v Debelak (1989) 89 ALR 275 at 294 per Pincus J. Distinctions were sought to be drawn between mere advice and inducement, see D C Thomson & Co Ltd v Deakin [1952] Ch 646 at 686. For criticism of this view, see Heydon, “Defence of Justification in Cases of Intentionally Caused Economic Loss” (1970) 20 U Tor LJ 139 at 168. See also Payne, “Interference with Contract” (1954) 7 CLP 94 at 103. Woolley v Dunford (1972) 3 SASR 243. See also Fabbi v Jones (1972) 28 DLR (3d) 224 at 230. Woolley v Dunford (1972) 3 SASR 243 at 289, 292. And see Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 236 (“advice” on appropriate industrial action amounted to an inducement to breach contract). Stratford v Lindley [1965] AC 269 at 333 per Lord Pearce.

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of Winn LJ in Torquay Hotel v Cousins.156 His Lordship said the terms “persuasion” or “inducement” ought to be given their ordinary meanings. His Lordship illustrated by saying that a man who writes to his mother-in-law telling her that the central heating in his house has broken down may thereby induce her to cancel an intended visit.157 If information is merely relayed to an employer, no action would lie because the necessary intent to procure a breach would not exist. But would there exist the relevant persuasion where there is a threat to resort to the legal process? It would be a curious consequence if it sufficed.158 The characterisation as “information” or “advice” provides a means of preventing liability where the defendant’s conduct would not be regarded as improper even if, in the event, it led to a breach of the contract. Usually, intention to injure is the key to liability not the form in which negotiations are conducted.159

[14.150] The persuasion or inducement will be sufficiently direct if, in the case of a limited company being the contract breaker, the intervener approaches “some person in the company who has authority on the company’s behalf to make contract”.160 Direct intervention will also occur when a union calls its members out on an unlawful strike in breach of their contracts with the plaintiff employer,161 or where a supplier or customer under contract is persuaded by union delegates to breach contracts with the plaintiff. Persuasion may take the form of a threat to call out employees on strike.162 Similarly interference is direct where the union through the agency of a third party induces a breach of contract.163 A useful definition is provided by Slade J in Greig v Insole:164 [T]he phrase “direct interference” covers the case where the intervener, either by himself or his agents, speaks, writes or publishes words or does other acts which communicate pressure or persuasion to the mind or person of one of the contracting parties themselves, while “indirect interference” refers to the case where, without actually doing any of these things, the intervener nevertheless procures or attempts to procure a situation which will result in a breach of contract.

Intervention may be direct where means other than persuasion are used.165 For example, where a contract is breached by non-performance when one of the parties to

156 157 158

159 160

161

162 163

164 165

Torquay Hotel v Cousins [1969] 1 All ER 522. Torquay Hotel v Cousins [1969] 1 All ER 522 at 537-538; Woolley v Dunford (1972) 3 SASR 243 at 290-291. James v Commonwealth (1939) 62 CLR 339 at 372-373 per Dixon J; Northern Territory v Mengel (1997) 185 CLR 307 at 351 per Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ; Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 99 ALR 735 at 773; and see Fleming, The Law of Torts (8th ed, 1992), p 697. Heydon, Economic Torts (2nd ed, 1978), p 30. D C Thomson & Co Ltd v Deakin [1952] Ch 646 at 681-682 per Evershed MR. See also Nationwide News Pty Ltd v Naidu [2007] NSWCA 337 at [41]-[56], [63], [236]-[237] as to how far acts of employees constitute acts of the company. South Wales Miners’ Federation v Glamorgan Coal Co [1905] AC 239; Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211; Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 99 ALR 735 at 770. Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 99 ALR 735 at 770. Daily Mirror Newspapers Ltd v Gardner [1968] 2 WLR 1239 as reinterpreted in Torquay Hotel v Cousins [1969] 1 All ER 522 at 530; Boral Bricks NSW v Frost (1987) 20 IR 70 at 88. As to the difficulties in determining what will constitute direct interference, see Davies v Nyland (1975) 10 SASR 76 at 99. Greig v Insole [1978] 1 WLR 302 at 334. D C Thomson & Co Ltd v Deakin [1952] Ch 646 at 678, 681 per Lord Evershed; at 695 per Jenkins LJ; cf at 702 per Morris LJ. Brooking J in Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 255 left open the question whether direct interference not involving persuasion was actionable only if the means used were unlawful.

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the contract is kidnapped, intervention is direct and therefore wrongful in itself.166 The conduct resulting in breach of contract need not be independently unlawful in order to give rise to liability.167 Direct intervention may be constituted also by entry into inconsistent contracts.168 An employer would, for example, be entitled to proceed against a third person who employed employees striking in breach of their contracts with knowledge of their employment with the plaintiff. The employer would be entitled to treat the contract of employment as continuing despite the employees’ breach.169 No action would be available, however, if an offer of employment were made in ignorance of the continuing existence of the earlier employment contract.170 A direction to terminate employment at “the earliest practicable date” or even to “sack” the plaintiff will not necessarily amount to an inducement to breach an employment contract.171

Indirect interference [14.160] In a series of English decisions beginning with D C Thomson & Co Ltd v Deakin172 the Lumley v Gye principle was extended to cover indirect interferences with contract where unlawful means were used. The House of Lords in OBG v Allan (and the two related appeals)173 took the approach that this extension confuses and obscures the proper basis for the Lumley v Gye action. In OBG v Allan (and the two related appeals)174 the principal issue for the House of Lords was whether there existed a unified theory of economic torts which treated inducing breach of contract, the Lumley v Gye principle, as one species of a more general tort of interference with economic interests. This was rejected and the House of Lords accepted that these two torts each have their own form and a fundamentally different pattern of liability reflected essentially in the difference between secondary or accessorial liability and primary liability. Whereas inducing breach of contract was seen as a tort of secondary or accessory liability requiring a breach by the other party to the contract of employment induced by the defendant, unlawful interference is a tort of primary liability which enables a plaintiff to claim against a defendant who has used unlawful means against a third party to cause damage to the plaintiff. The clear function of characterising the two torts in this way is to treat them as quite separate and distinct each with a different role and rationale. Whereas the rationale for the tort of inducing breach of contract is to afford special protection to contractual rights, the 166 167

168

169 170

171 172 173 174

Other examples are assault, battery, false imprisonment of a servant, or theft of essential tools: see D C Thomson & Co Ltd v Deakin [1952] Ch 646 at 694, 702. D C Thomson & Co Ltd v Deakin [1952] Ch 646 at 677 per Evershed MR, and see at 694; Einhorn v West Mount Investments Ltd (1969) 6 DLR (3d) 71. Brooking J in Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 255 left open the question whether direct interference not involving persuasion was actionable only if the means used were unlawful. British Motor Trade Association v Salvadori [1949] Ch 556; D C Thomson & Co Ltd v Deakin [1952] Ch 646 at 694 per Jenkins LJ; HC Sleigh v Blight [1969] VR 931; Rickless v United Artists Corporation [1987] 2 WLR 945 at 959 per Bingham LJ (employment in breach of negative covenant); cf John Michael Design plc v Cooke [1987] ICR 445 at 448 (CA). As to the effect of repudiation by one party to the contract, see Chapter 8 [8.10], [8.440]. HC Sleigh v Blight [1969] VR 931; cf John Michael Design plc v Cooke [1987] ICR 445 at 448 (CA). An action for harbouring the employee would lie if it could be shown that the second employment was continued after it was learnt that there was a prior subsisting contract of employment and it could be shown that the employee would otherwise have returned to the original employer: see Jones Bros (Hunstanton) Ltd v Stevens [1955] 1 QB 275. This latter requirement renders the action for harbouring virtually obsolete. Sanders v Snell (1998) 196 CLR 329. D C Thomson & Co Ltd v Deakin [1952] Ch 646 at 678. OBG Ltd v Allan, Douglas v Hello! (No 3), Mainstream Properties Ltd v Young [2008] 1 AC 1. OBG Ltd v Allan, Douglas v Hello! (No 3), Mainstream Properties Ltd v Young [2008] 1 AC 1.

Inducing Breach of Contract

rationale of the tort of unlawful interference with trade is to proscribe intentional infliction of economic harm by unlawful means, with no limitation on the kind of economic interest which is damaged. Lord Hoffmann recognised that uncertainties as to the scope of these two torts can be traced back to judicial failure to recognise and apply the newly emerging tort of unlawful interference with trade. Thus Lord Hoffmann suggests that one reason why the English Court of Appeal in D C Thomson & Co Ltd v Deakin first expanded the tort of inducing breach of contract or the Lumley v Gye principle to include direct and indirect interference with a contract (and in the case of the latter unlawful means had to be used), was because it had “an inadequate appreciation at the time of the scope, possibly even the existence, of the tort of causing loss by unlawful means”175 and the reasoning of the Court of Appeal proceeded on the basis that that no such tort existed. The House of Lords affirmed the original limited form of inducing breach of contract or the Lumley v Gye principle and expressly rejected the extension of this principle based on the elusive distinction between direct and indirect interference. Instead it saw extensions as properly belonging within the new tort of unlawful interference with trade. Their Lordships simply saw no need for the elaborate version of the tort of interference with contractual relations. It also followed from their reasoning that Lord Denning’s extension of the tort of interference with contractual relations to include interference with performance where there was no breach of contract in Torquay Hotels v Cousins was also unnecessary and this doctrine was expressly rejected. Lord Hoffmann held that the approach of Lord Denning was made in the context of the unified theory which treated procuring a breach as part of the same tort as causing loss by unlawful means. Once the torts are separated Lord Hoffmann concludes “one cannot be liable for inducing a breach unless there has been a breach”.176 There is “no secondary liability without primary liability”177 and hence cases in which interference with contractual relations has been treated as coming within the Lumley v Gye tort are really cases of causing loss by unlawful means. Lord Nicholls found Lord Denning’s doctrine inconsistent in the sense that it could not be reconciled with other forms of interference with trade since it made a defendant liable for intentionally caused damage by directly preventing performance whereas liability for damage caused in any other way required the use of unlawful means.178 Interference with contract according to Lord Nicholls should only create liability in tort where the elements for causing loss by unlawful means were present since their rationale was the same. The other Law Lords were in general agreement with Lords Hoffmann and Lord Nicholls on these points. Lord Hoffmann also held that the tort of intimidation is really only one variant of the broader tort of causing loss by unlawful means.179 If this approach were followed in Australia the cases involving indirect interference using unlawful means would be considered part of the wider tort of causing loss by unlawful means. This means that the secondary boycott situation in D C Thomson & Co Ltd v Deakin would then be regarded as an action for causing loss by unlawful means. There the plaintiffs, who were printers and publishers, employed non-union labour and required every person on taking up employment to give a written undertaking not to become a union member during the course of the employment. An employee was dismissed after it was learnt that he had become a member of the printers’ union (NATSOPA). The union called a strike and called on other unions to support it. The plaintiffs’ supplier of newsprint under contract, Bowater Ltd, was 175 176 177 178 179

OBG Ltd v Allan, Douglas v Hello! (No 3), Mainstream Properties Ltd v Young [2008] 1 AC 1 at 28. OBG Ltd v Allan, Douglas v Hello! (No 3), Mainstream Properties Ltd v Young [2008] 1 AC 1 at 28. OBG Ltd v Allan, Douglas v Hello! (No 3), Mainstream Properties Ltd v Young [2008] 1 AC 1 at 28. OBG Ltd v Allan, Douglas v Hello! (No 3), Mainstream Properties Ltd v Young [2008] 1 AC 1 at 188. OBG Ltd v Allan, Douglas v Hello! (No 3), Mainstream Properties Ltd v Young [2008] 1 AC 1 at 7.

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unable to deliver when members of other unions employed by Bowater Ltd indicated that they might not be prepared to load or deliver supplies to the plaintiffs. Bowater gave no direct order to load or deliver but informed the plaintiffs that they were unable to deliver in accordance with the contract. The plaintiffs sought an injunction restraining the defendants (the officers of the several unions involved) from procuring breaches of contract by Bowater Ltd. The plaintiffs’ case failed on two grounds: first, they were unable to prove that the breach of contract with Bowater was procured by unlawful means. The Court of Appeal was of the view that the conduct of Bowater’s employees did not amount to breaches of their contracts of employment – they were not given any specific orders to load or deliver.180 It was necessary to show that the defendants had procured a breach of Bowater’s contracts with their employees as the interference was indirect. The defendants did not approach Bowater directly with a view to persuading or inducing them to breach their contract with the plaintiffs. Secondly, there was no evidence of actual knowledge by the defendants of the contract between Bowater and the plaintiffs, although Lord Evershed was prepared to concede that if all other elements were fulfilled, strict proof of this might not be required and it would suffice that there was common knowledge that paper supplies were obtained from Bowater presumably under some form of contract. This of course would qualify as an action for intentionally causing loss by unlawful means. In Australia, the impetus for the development of this tort to deal with industrial disputation of this kind has been significantly diluted by the availability of statutory remedies in the secondary boycott provisions of the Competition and Consumer Act 2010 (Cth), ss 45D – 45E.181

Liability of employees and agents [14.170] If my servant acting bona fide within the scope of his authority procures or causes me to break a contract which I have made with you, you cannot sue the servant for interference with the contract; for he is my alter ego here, and I cannot be sued for inducing myself to break a contract, although I may be liable for breaking the contract.182

In D C Thomson & Co Ltd v Deakin183 Lord Evershed MR considered the position of an employee acting within authority who induces a breach of the employer’s contract with a third party. His Lordship adopted the statement by Winfield, quoted above, as representing the law.184 If the employee does not act bona fide, presumably the employee is liable on the ground that the employee has ceased to be the employer’s alter ego.185 Winfield comments that the employee though not acting bona fide may still be 180

181

182 183 184

185

See also David Jones Ltd v Federated Storemen and Packers Union of Aust (NSW) (1985) 14 IR 75 at 80 (no direction to cross picket line). Cf Stratford & Son v Lindley [1965] AC 269 and John Fairfax & Sons Ltd v Waterside Workers’ Federation of Australia [1976] Ind Arb Serv 346; Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 261-262. Formerly the Trade Practices Act 1974 (Cth). See for example Wribass Pty Ltd v Swallow (1979) 38 FLR 92; Jewel Food Stores Pty Ltd v Amalgamated Milk Vendors Association Inc (1989) 24 FCR 127; Utah Development Co v Seaman’s Union of Australia (1977) 1 ATPR ¶40-049. Winfield on Tort (7th ed, 1963), p 683. D C Thomson & Co Ltd v Deakin [1952] Ch 646 at 680-681. The unity of principal and agent is advanced as the reason for this; in support of this view, see Said v Butt [1920] 3 KB 497; Scammell v Hurley [1929] 1 KB 419 at 443; and Rutherford v Poole [1953] VLR 130. In the United States it is treated as a form of justification: see Heydon, Economic Torts (2nd ed, 1978), p 41. Alternatively the agent is performing an independent and prior contractual duty to the principal which prevails over the plaintiff’s rights: see Heydon, “Justification in Intentional Economic Loss” (1970) 20 U Tor LJ 139 at 164-165. Winfield on Tort (7th ed, 1963), p 683, adopted by Lord Evershed MR in D C Thomson & Co Ltd v Deakin [1952] Ch 646 at 681. See also TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3) [2007] FCA 151.

Inducing Breach of Contract

acting within the course of employment but “we must take it that this curious piece of metaphysics exempts the employer for vicarious responsibility for this particular tort”.186 Unions have unsuccessfully attempted to use the agency argument as a means of avoiding liability for calling out their members on strike in breach of their contracts. The principal difficulty has been the inability to prove that the union acted as agent for all the strikers.187

Interference with contract [14.180] The action for inducing breach of contract has been held not to extend to mere interference with a contract short of breach. Where unlawful means are employed, the action for the tort of interference with trade by unlawful means may be available: see [14.350].

Defences – justification [14.190] Liability can be avoided if the defendant can show justification.188 As is the case with other intentional torts, contributory negligence of the plaintiff will not provide a defence,189 although in some circumstances the plaintiff’s contributory conduct may be such that it could be said that the plaintiff caused its own loss. Regard might be had to the nature of the contract broken; the position of the parties to the contract; the grounds for the breach; the means employed to procure the breach; the relation of the person procuring the breach to the person who breaks the contract; and – to the object of the person in procuring the breach.190

Although the general test of justification quoted above has been cited with approval, in practice the defence of justification has very limited scope: No one can legally excuse himself to a man, of whose contract he has procured the breach, on the ground that he acted on a wrong misunderstanding of his rights, or without malice, or bona fide, or in the interest of himself, nor even that he acted as an altruist, seeking only the good of another and careless to his own advantage.191

In support of this view, the House of Lords in South Wales Miners Federation v Glamorgan Coal Co192 said that it was no defence to an action for inducing breach of contract that the defendants acted in bona fide pursuit of union objectives in trying to maintain present wage levels. Such a defence would have succeeded in an action for conspiracy to injure but, as the reader will see, the action for conspiracy to injure is concerned with conduct which would not be unlawful if engaged in by an individual. Self-interest is not a defence to inducing breach of contract because: 186 187 188

189 190 191 192

Winfield on Tort (7th ed, 1963), p 683. See also “Australian Development Corporation Pty Ltd v White Constructions (ACT) Pty Ltd” (1996) 12 BCL 317 at 361-362. Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 243. Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 99 ALR 735 at 770; SOS Kinderdorf v Bittaye [1996] 1 WLR 987; Qantas Airways Ltd v Transport Workers’ Union (2011) 211 IR 1 at [454]-[462]. Horkin v North Melbourne Football Club [1983] 1 VR 153; Dellabarca v Northern Storemen and Packers Union [1989] 2 NZLR 734. Glamorgan Coal Co Ltd v South Wales Miners’ Federation [1903] 2 KB 545 at 574-575 per Romer LJ. Read v Friendly Society of Operative Stonemasons [1902] 2 KB 88 at 96 per Darling J. See also Zhu v Treasurer of NSW (2004) 218 CLR 530. South Wales Miners Federation v Glamorgan Coal Co [1905] AC 239. See also Read’s Case [1902] 2 KB 732 (enforcement of union rules no defence); Bents Brewery v Hogan [1945] 2 All ER 570; Greig v Insole [1978] 1 WLR 302 at 332.

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There is no good reason for giving precedence to the defendant’s self-interest over the legally protected claim of the plaintiff to maintain an existing contract relation unimpaired by outside interference.193

In industrial cases, the courts have held that the defence of justification applies in two areas.194 The first is public policy, moral or social duty, and the second is inconsistent contracts. These areas will be discussed only in so far as they relate to an industrial context.

Public policy, social or moral duty [14.200] The scope of this defence is extremely limited. A union, its officials or members who act in good faith and honestly for the protection of union and members’ interests will not be protected by this defence.195 “There is good reason for the rarity of cases where justification has been shown. In a society which values the rule of law, occasions when a legal right may be violated with impunity ought not to be frequent.”196 The case of Brimelow v Casson197 provides one clear example of the operation of the defence of justification in this area. The defendants induced third parties to breach their contracts with the plaintiff on the ground that the plaintiff paid chorus girls employed in his theatre company “starvation wages” with the result that they resorted to immorality in order to support themselves. Russell J held that the conduct of the defendants in attempting to induce the plaintiff to pay higher wages was justified. The authority of Brimelow v Casson has been rejected outright in New South Wales in the case Independent Oil Industries Ltd v Shell Company of Australia,198 and subsequent attempts to argue that the defendant was under a moral or social duty have been rejected. Lord Lindley in South Wales Miners’ Federation v Glamorgan Coal Co199 said that although the defendant there had a duty to protect the interests of its members to secure better wages, acting in pursuance of that duty was no justification for inducing breach of contract. In contrast, in Pete’s Towing Services Ltd v Northern Industrial Union of Workers200 Speight J held that a trade union official was justified in inducing a breach of contract as the official had a duty to interfere with the plaintiff’s contract. The plaintiff company carried on the business of a bulk freight carrier. In order to keep costs to a minimum the plaintiff used mechanical equipment rather than union labour to load and unload. The Waterside Workers’ Union claimed that it was entitled, under the 193 194

195

196 197 198 199

200

Sappideen and Vines (eds), Fleming’s The Law of Torts (10th ed, 2011), at [30.100]; Zhu v Treasurer of NSW (2004) 218 CLR 530. The defence of justification has a much wider operation; however, other areas have no special relationship to an industrial context. See generally, Heydon, “Justification in Intentional Economic Loss” (1970) 20 U Tor LJ 139 at 161ff. South Wales Miners’ Federation v Glamorgan Coal Co [1905] AC 239 at 246 per Lord Macnaghten; Read v Friendly Society of Operative Stonemasons [1902] 2 KB 88 at 96-97 per Darling J; Trident Construction Pty Ltd v Australian Builders’ Labourers’ Federated Union of Workers [1984] WAR 245 at 251 per Kennedy J; Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 254 per Brooking J. Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 99 ALR 735 at 773. Brimelow v Casson [1924] 1 Ch 302. Independent Oil Industries Ltd v Shell Company of Australia (1937) 37 SR (NSW) 394 at 416; see also Simonds J in Camden Nominees v Forcey [1940] Ch 352 at 366. South Wales Miners Federation v Glamorgan Coal Co [1905] AC 239 at 255; Read v Friendly Society of Operative Stonemasons [1902] 2 KB 88 at 96-97 per Darling J; Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 99 ALR 735 at 772-775. Pete’s Towing Services Ltd v Northern Industrial Union of Workers [1970] NZLR 32 at 51. But see Northern (except Gisborne) Road Transport Industrial Union v Kawau Island Ferries Ltd [1974] 2 NZLR 617 at 623 – possible that a moral duty of the union to protect interests of members could be taken into account in considering justification.

Inducing Breach of Contract

Waterfront Industries Act 1953 (NZ) and the award made under that Act, to be paid the equivalent money in wages in respect of the loading and unloading of the plaintiff’s barge. The plaintiff refused to negotiate or talk with the unions, even though the union offered to discuss the matter and allow the plaintiff’s operations to continue. On refusal by the plaintiff, an official of the Waterside Workers’ Union told the defendant, an official of the Northern Drivers’ Union, of the dispute. The defendant approached Ready Mixed Concrete Ltd, who contracted to buy sand from the plaintiff, and told them of the existing dispute; thereupon Ready Mixed Concrete Ltd, in breach of its contract, refused to accept consignments from the plaintiff. The plaintiff sought, inter alia, damages for inducing breach of contract. His Honour, in determining whether the conduct of the defendant was justified, adopted the general principle stated by Romer LJ in South Wales Miners’ case – that the defence of justification will depend upon such considerations as the nature of the contract broken, the grounds for the breach, the means employed and the object of the procurer.201 His Honour was of the view that “justness and fairness” required that the defendant’s conduct should not engender liability.202 The conclusion was assisted by the existence of a provision under the Waterfront Industries Act 1953 giving waterside workers preference in the work of loading and unloading. The plaintiff had refused to acknowledge this right and persisted in his refusal to negotiate or discuss the matter with the unions or the appropriate conciliating authority. The case represents a clear adoption of the principle stated by Romer LJ in South Wales Miners’ case and is in direct conflict with the decision of the House of Lords in that case.203 The more liberal approach in Pete’s case, with few exceptions, has not been adopted by Australian courts.204 Can conduct in the public interest provide a basis for the defence of justification? In the United Kingdom, by analogy with the action for breach of confidence, it has been suggested that the public interest may justify conduct inducing a breach of contract. In X v Y205 the defence was held not to be available to a reporter and national newspaper who paid hospital employees to disclose confidential information in breach of an implied term of confidentiality in their contracts. The information was obtained from hospital records and concerned the HIV status of doctors working in the hospital.206

Statutory or contractual privilege [14.210] [A] person may be justified in encroaching upon another’s civil rights because of some statutory or contractual privilege, in which case [the person] can be said to be acting in accordance with a right conferred by contract or a duty imposed upon [that person] by competent authority as distinct from the mere protection of [private] interest.207 201 202

203 204 205 206

207

Glamorgan Coal Company v South Wales Miners Federation [1903] 2 KB 545 at 574-575. Pete’s Towing Services Ltd v Northern Industrial Union of Workers [1970] NZLR 32 at 51 and see Lord Denning MR in Morgan v Fry [1968] 3 WLR 506 at 517, where his Lordship said that intimidation might be justified if the organisers of the break-away union which the defendants were trying to stamp out were simply troublemakers. South Wales Miners Federation v Glamorgan Coal Co [1905] 2 AC 239. In support of this view see Latham v Singleton [1981] 2 NSWLR 843 per Nagle J in relation to conspiracy to intimidate. X v Y [1988] 2 All ER 649 at 661. But see Posluns v Toronto Stock Exchange (1964) 46 DLR (2d) 210. As to the use of the public interest defence in actions for breach of confidence, see Finn, “Professionals and Confidentiality” (1992) 14 SLR 317 at 323; Richardson and Stuckey-Clarke, “Breach of Confidence”, in Parkinson, The Principles of Equity (Lawbook Co, 1996), pp 462-467. See also Chapter 5 at [5.680]. Posluns v Toronto Stock Exchange (1964) 46 DLR (2d) 210 at 270-271.

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The plaintiff’s private interests may be subordinated to superior statutory or public duties. Consequently, in James v Commonwealth208 Commonwealth officials were not liable where they acted honestly in the enforcement of Commonwealth laws even though the statute under which they acted was later held to be invalid.209 In the case of private contractual interests, there is no good reason to give one contract priority over another contract. In Zhu v Treasurer of the State of New South Wales210 the High Court held that to rely on justification as a defence for the purpose of what appeared to be a claim of direct interference with contractual relations the defendant had to have a superior legal right which justified or made lawful the interference with the contractual rights of the defendant. This might arise from statute or some other form of superior legal right. However it was not sufficient that the defendant had contractual rights which were created earlier in time or were equal to the plaintiff’s rights under the contract. Moreover, even where the defendant’s rights satisfy this test they must also be reasonably necessary to protect those rights. Thus, in the circumstances of the case there was no reason why the defendant could not have sought an injunction to enforce the rights it claimed justified its interference with the plaintiff’s contractual rights. The privilege has very limited application. In Camden Nominees Ltd v Forcey211 the defendants induced fellow tenants to withhold rent moneys in order to force the plaintiff landlord to remedy breaches of the leasing agreements. Simonds J held that the defence of justification did not apply: The end which they sought, namely, the performance by the landlords of their obligations, was one which could be reached by process of law. If the landlords broke their contract the law gave the defendants their remedy by way of damages, or in the proper case by way of specific performance.212

This decision has evoked strong criticism:213 Resort to the courts may be difficult, slow, circular, and ultimately feeble; if self-help is permissible in some cases when two contracts are directly in conflict, why not in all? If a landlord does not carry out his obligations to his tenants, why should they not be entitled to withhold the rent and persuade other tenants to do so.

Despite this criticism, the principle established in Camden Nominees continues to prevail. These authorities raise the question whether a union would be entitled to induce a breach of contract which was inconsistent with an award or collective enterprise agreement. The Federal Court in Building Workers’ Industrial Union v Odco Pty Ltd214 considered the issue but did not find it necessary to decide whether an inconsistent award would justify an interference with contract. The existence of alternative remedies for enforcement of the award may militate against the privilege applying.215 Similarly in relation to enterprise agreements under the federal Act, the existence of a statutory remedy for loss or damage might reduce the prospect for relying on the defence of justification where there is entry into contracts which breach the agreement. It has been argued that the defence of justification should be available for 208 209 210 211 212 213 214

215

James v Commonwealth (1939) 62 CLR 339 at 373 per Dixon J. See also Scott v Gamble [1916] 2 KB 504. Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530. Camden Nominees Ltd v Forcey [1940] 1 Ch 352. Camden Nominees Ltd v Forcey [1940] 1 Ch 352 at 365. Heydon, “Justification in Intentional Economic Loss” (1970) 20 U Tor LJ 139 at 163. Building Workers’ Industrial Union v Odco Pty Ltd (1991) 99 ALR 735 at 775. See discussion in Jolly, “The Defence of Justification and Industrial Action” (1992) 5 AJLL 262 at 276-277; and Sykes, Strike Law in Australia (2nd ed, 1982), p 45. See Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 99 ALR 735 at 775.

Intimidation

inducing breach of contracts which are inconsistent with registered agreements.216 In the main, however, the defence of contractual privilege will not be available to a trade union for a variety of reasons, the principal one being that, as the party inducing breach, the union does not have an inconsistent contract which forms the basis of the defence.217

Loss of defence of justification [14.220] If the right to interfere with another’s contract is a mere privilege, then it may be argued if the defendant acts maliciously, the defence of justification will be lost.218 Proving malice is no easy task, consequently the defence of justification will rarely be lost on this ground. If the defendant has procured a breach of contract by unlawful means, on the balance of authority the defence of justification will not apply (see [14.190]). It was unsuccessfully argued in Pete’s Towing Services Ltd v Northern Industrial Union of Workers219 that the existence of an alternative remedy prevented the defendant from relying on justification. In the Australian context, the existence of industrial tribunals with powers to resolve disputes will not prevent the defendant from relying on the defence of justification.220

Intimidation Introduction [14.230] The wrong of intimidation includes all those cases in which the harm is inflicted by the use of unlawful threats whereby the lawful liberty of others to do as they please is interfered with. This wrong is of two distinct kinds, for the liberty of action so interfered with may be either that of the plaintiff himself or that of other persons with resulting damage to the plaintiff. In other words, the defendant may either intimidate the plaintiff himself, and so compel him to act to his own hurt, or he may intimidate other people and so compel them to act to the hurt of the plaintiff.221

Prior to the House of Lords’ decision in 1964 in Rookes v Barnard222 it was a matter for debate whether there was an action for intimidation. Academics, including Fleming and Salmond,223 supported its existence as a separate tort. They relied on early 17th and 18th century cases224 and general statements in Allen v Flood225 which indicated 216 217 218 219 220

221 222 223 224 225

Jolly, “The Defence of Justification and Industrial Action” (1992) 5 AJLL 262 at 274. Jolly, “The Defence of Justification and Industrial Action” (1992) 5 AJLL 262 at 274-276. Heydon, Economic Torts (2nd ed, 1978), p 223, citing Sidney Blumenthal and Co Inc v US 30 F (2d) 247 at 249 (1929). Pete’s Towing Services Ltd v Northern Industrial Union of Workers [1970] NZLR 32 at 54. The issue was referred to inconclusively in Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 99 ALR 735 at 774-775. Cf decision of Street J in Harry M Miller Attractions Pty Ltd v Actors and Announcers Equity Assn of Australia [1970] 1 NSWR 614, where his Honour rejected an application for an injunction to prevent threatened breaches of contract on the basis that the matter was presently before the NSW Industrial Commission and that was the proper forum in which to pursue the matter. Salmond, Law of Torts (1st ed, 1907), p 439. Rookes v Barnard [1964] AC 1129. Salmond, Law of Torts (1st ed, 1907); Fleming, The Law of Torts (2nd ed, 1961), pp 667-668. Garrett v Taylor (1620) Cro Jac 567; 79 ER 485; Keeble v Hickeringill (1709) 11 East 574n; 103 ER 1127; Tarleton v M’Gawley (1794) 1 Peake 270; 170 ER 153. Allen v Flood [1898] AC 1.

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that there might be an innominate action for intentionally causing loss by unlawful means. Lord Watson in Allen v Flood said:226 A person who by illegal means, that is, by means which in themselves are in the nature of civil wrongs, produces the lawful act of another, which act is calculated to injure, and does injure, a third party, commits a wrong for which he may be made answerable.

The House of Lords in Rookes v Barnard unequivocally confirmed the existence of the tort of intimidation and this has been accepted and followed in Australia,227 New Zealand and Canada. The House of Lords in Rookes v Barnard saw intimidation as essentially a tripartite situation where A coerces B by threats of unlawful conduct to act to the injury of C.228 In the usual instance where A coerces B to act to the injury of C, it will be quite clear that A intended to cause harm to C. The most typical situation in which this may occur is illustrated in the facts of Rookes v Barnard itself. The three defendant officers of the union threatened BOAC that unless Rookes (a non-unionist) was dismissed the union members employed by BOAC would be called out on strike. Rookes was dismissed after due notice. The House of Lords held that he was entitled to succeed in an action for intimidation against the defendants even though he was lawfully dismissed. The decision in the House of Lords case of OBG v Allan229 is relevant to the tort of intimidation. Lord Hoffmann in the House of Lords regarded intimidation as one variant of the more generalised tort of interference with trade or business by unlawful means (see [14.350]). What is unlawful means for purposes of this tort should also be regarded as unlawful means for purposes of the tort of intimidation.

Position of the intermediary [14.240] In Rookes v Barnard the plaintiff was lawfully dismissed but where the intermediary is guilty of unlawful conduct towards the plaintiff, this may give rise to further causes of action, such as actions for inducing breach of contract. There are conflicting views on the question whether the party coerced, the intermediary, is entitled to recover damages for intimidation. The balance of opinion is in favour of the view that the intermediary is also entitled to sue for intimidation; thus, where A coerces B by threats of unlawful conduct to act to the injury of C, both B and C may have a cause of action against A.230 In News Group Newspapers Ltd v SOGAT231 in litigation arising out of the Wapping dispute, the injunctive remedy was extended to protect individual employees against intimidatory threats. In the earlier case Thomas v National Union of Mine Workers (South Wales) Area232 proceedings were brought by miners who continued to work during the national coal miners’ strike despite picketing and harassment which was found to constitute a nuisance. Scott J in the Queen’s Bench Division granted an injunction restraining the nuisance but rejected a claim based on intimidation, simply saying that the tort of intimidation had nothing to do with the present case. One explanation for this reluctance may be that the 226 227

228 229 230 231 232

Allen v Flood [1898] AC 1 at 97-98. See its unequivocal acceptance as early as 1971 in Sid Ross Agency Pty Ltd v Actors and Announcers Equity Association of Australia [1971] 1 NSWLR 760. See also Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2014] VSCA 348 (19 December 2014, Maxwell P, Neave, Redlich and Beach JJA, Kaye AJA). The High Court refused leave to appeal from this decision: see [2015] HCATrans122. The defendant’s conduct must be aimed at causing damage to the plaintiff: Rookes v Barnard [1964] AC 1129 at 1208 per Lord Devlin; at 1183 per Lord Evershed. OBG Ltd v Allan; Douglas v Hello! (No 3); Mainstream Properties Ltd v Young [2008] 1 AC 1. Rookes v Barnard [1964] AC 1129 at 1208 per Lord Devlin; Hoffmann, “Rookes v Barnard” (1965) 81 LQR 116 at 127-128. News Group Newspapers Ltd v SOGAT [1986] IRLR 337 (QBD). Thomas v National Union of Mine Workers (South Wales) Area [1985] 2 WLR 1081 at 1107.

Intimidation

plaintiffs had not bowed to the threat (see below) but this was equally true in the News Group case. Where the conduct threatened is tortious the injunctive remedy (and a damages claim if the threat is carried out) will generally be available independently of whether the tort of intimidation can be made out; thus a plaintiff threatened with physical assault or other tortious wrongdoing may seek an injunction restraining such conduct. Where the unlawful conduct threatened is breach of contract, the party threatened may sue for anticipatory breach or the contract may be voidable by reason of economic duress.233

Two-party intimidation [14.250] Although there was initial uncertainty, it appears to be now established that where the plaintiff is coerced by unlawful threats to act to his or her own harm, an action for intimidation is available.234 An agreement entered into under economic duress may be voidable.235

The requirement of a threat [14.260] Rookes v Barnard236 also adopted Salmond’s characterisation of intimidation as involving the use of unlawful threats which cause either the plaintiff to act to the plaintiff’s own injury or some third party to act to the plaintiff’s harm. The threat may sometimes be implied from the defendant’s conduct.237 To illustrate: If A hits B without telling him why, he can hardly hope to achieve the object. Of course A might think it more effective to hit B first and tell him why afterwards. But if then B injures C, it would not be because B had been hit but because he feared that he might be hit again.238

Thus, if in Rookes v Barnard itself the union employees went on strike without express threats but their object was plain and as a result the employer, BOAC, dismissed the plaintiff, an action would still be available because the cause of the plaintiff’s injury was the implied threat of the union to continue on strike until the plaintiff was dismissed.239 It has been submitted that the action for intimidation is unnecessarily restrictive if it is limited to recovery for harm resulting from unlawful threats, that there is no special 233 234

235 236 237

238 239

See [4.250]. OBG Ltd v Allan; Douglas v Hello! (No 3); Mainstream Properties Ltd v Young [2008] 1 AC 1 at [61] per Lord Hoffmann leaving the issue open; Hadmor Productions Ltd v Hamilton [1983] 1 AC 191; Stratford & Son v Lindley [1965] AC 269 at 283, 305-306, 336; Rookes v Barnard [1964] AC 1129 at 1205 per Lord Devlin; Pete’s Towing Services v Northern Industrial Union of Workers [1970] NZLR 32 at 42; News Group Newspapers Ltd v SOGAT [1986] IRLR 337 (QBD). Cf Stratford & Son v Lindley [1965] AC 269 at 325 per Lord Reid; Latham v Singleton [1981] 2 NSWLR 843 at 849 per Nagle J; Thomas v National Union of Mine Workers (South Wales) Area [1985] 2 WLR 1081. See also Northern Territory v Mengel (1995) 185 CLR 307 at 350 per Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ; Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 265. But note the argument that breach of contract should not be sufficient in the two-party situation because it would allow remedies for a mere threat of breach of contract: but see Clerk and Lindsell on Torts (18th ed, 2000), p 1337. See [4.250]. Rookes v Barnard [1964] AC 1129. Rookes v Barnard [1964] AC 1129 at 1188 per Lord Evershed; see also Stratford & Son v Lindley [1965] AC 269 at 286 per Lord Denning MR; Latham v Federated Municipal and Shire Council Employees Union of Australia (unreported, NSW Supreme Court, Lee J, 24 February 1978). Would it be sufficient if the employer knew that to order employees to handle black-banned goods would result in the threat of strike action? See Szatmary v Federal Storemen & Packers Union of Australia (1984) 8 IR 465 at 470. Rookes v Barnard [1964] AC 1129 at 1208-1209 per Lord Devlin. This appeared to be the situation in Latham v Singleton [1981] 2 NSWLR 843 at 864 (no formal demand was made but union members would walk off the shift when the plaintiff reported for work).

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significance in the use of a “threat” as distinct from other conduct as it is merely the manner in which the loss was brought about.240 The decisions, however, reveal that the notion of a “threat” may be important for two reasons: first, that there must be a threat and the threat must be coupled with a coercive demand; and secondly, that there is a distinction to be drawn between “threats” and “information” or “mere advice”. Lord Denning MR in Stratford & Son v Lindley241 in the Court of Appeal thought that a “bare threat” made without a coercive demand could not create liability for intimidation: It [the threat] must be capable of being expressed in the form: “I will hit you unless you do what I ask”, or “if you do what I forbid you to do”. A bare threat without a demand does not to my mind amount to the tort of intimidation. If a man says to another, “I am going to hit you when I get you alone”, it is undoubtedly a threat: and an injunction can be obtained to restrain him from carrying out his threat. But the threat itself does not give rise to a claim for damages. It is only when he delivers the blow that it is actionable: and then as an assault, not as intimidation.

In reply it has been said that it is difficult to see why the threat of pointless damage should not be equally liable.242 The courts, in particular the House of Lords in Rookes v Barnard, have continued to distinguish between a “threat” on the one hand and “warnings”, “mere advice”, “information” on the other.243 Is the distinction necessary? If, for example, in the Rookes v Barnard situation union officials – for the purpose only of preserving good labour relations and without intent to cause harm to Rookes – informed BOAC of the stated intention of their members to strike if Rookes continued in their employment, the union officials would not be liable not because they merely “warned” as distinct from threatened, but because they did not intend injury to Rookes.244

Intermediary must bow to threat [14.270] Rookes v Barnard also established that the tort of intimidation will apply only where the intermediary bows to the wishes of the party threatening sanctions; the action will not lie where the intermediary resists the threat. Lord Devlin explains: If A threatens B with physical violence unless he harms C, B can either resist or comply. If he resists, B might obtain an injunction against A (as he could also in the case of a threatened breach of contract if the contract were of a kind that permitted that remedy); or if A carries out his threat, B can sue for assault and obtain damages. In neither case can C sue because he has suffered no harm.245

240 241 242 243

244 245

Hoffmann, “Rookes v Barnard” (1965) 81 LQR 116 at 120. Stratford & Son v Lindley [1965] AC 269 at 284. See also Latham v Singleton [1981] 2 NSWLR 843 at 865. Wedderburn, “Intimidation and the Right to Strike” (1964) 27 Mod LR 257 at 262. Rookes v Barnard [1964] AC 1129 at 1166, 1181-1182; cf at 1199 per Lord Hodson. And see Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 268, 269. Heydon, Economic Torts (2nd ed, 1978), p 64. This was not argued in Rookes v Barnard [1964] AC 1129, see at 1166. Rookes v Barnard [1964] AC 1129 at 1207-1208; see also Latham v Singleton [1981] 2 NSWLR 843; Stratford & Son v Lindley [1965] AC 269 at 287 per Lord Denning, cf at 292-293 per Pearson LJ. See also News Group Newspapers Ltd v SOGAT [1986] IRLR 337 (QBD) which suggests that an intermediary who has not yet succumbed to the threats can obtain an injunction restraining the threatened intimidation.

Intimidation

A leading authority has, however, illustrated the falsity of this view saying there is no valid reason for restricting the action to cases where the intermediary bows to the defendant’s threats.246 The reason, in part, why the House of Lords in Rookes v Barnard emphasised that there must be an unlawful “threat” is bound up with the doctrine of privity of contract. It has been argued that allowing a third party (C) to bring an action in intimidation for a threatened breach of contract between A and B breaches this rule, in that it allows a third party to bring an action based on breach of another’s contract. Recognition of the validity of the privity argument in this context led some members of the House of Lords in Rookes v Barnard into untenable positions. The privity argument was answered by saying that there was no breach of the privity rule because suit is brought not because of the breach of another’s contract, but because the threat to breach a contract constitutes unlawful means for the purposes of the action for intimidation but actual breach does not.247 This leads to the illogical conclusion that the threat to breach a contract constitutes unlawful means for the purposes of the action for intimidation but actual breach does not. The House of Lords in part filled this gap between threatened and actual conduct by resort to the notion of implied threat. This allowed in some circumstances actual breaches of contract to be construed as threats, for example, to continue on strike unless the intermediary responded with appropriate action.248

Unlawful conduct [14.280] The action of intimidation requires the threat of unlawful conduct. Vague threats of “union trouble” will not constitute an unlawful threat, as it may entail lawful or unlawful conduct.249 As intimidation is a variant of the genus tort interference with trade by unlawful means, what constitutes unlawful conduct for these purposes will be dealt with under the generalised tort: see [14.350]. There may be some issues that arise in relation to intimidation that do not arise in relation to the tort of interference with trade by unlawful means. The tort of intimidation involves a threat of unlawful conduct. If the intermediary succumbs to the threat, this will involve injury to the claimant but no loss to the intermediary. Lord Hoffmann in OBG v Allan250 said that unlawful means for purposes of the tort of interference with business by unlawful means, required the conduct be actionable by the third party. Intimidation is an exception to this principle: In the case of intimidation – the threat will usually give rise to no action by the third party because he will have suffered no loss. If he submits to the threat then, as the defendant

246 247

248

249 250

See Wedderburn, “Intimidation and the Right to Strike” (1964) 27 Mod LR 257 at 265. But see Barretts & Baird (Wholesale) Ltd v Institution of Professional Civil Servants [1987] IRLR 3 holding that it was arguable that a striker’s breach of contract of her or his contract of employment constituted unlawful means for the purposes of the tort of intentional interference with business by unlawful means. For critical evaluation of the argument, see Wedderburn, “Intimidation and the Right to Strike” (1964) 27 Mod LR 257 and “Right to Threaten Strikes” (1961) 24 Mod LR 572; Hoffmann, “Rookes v Barnard” (1965) 81 LQR 116 at 127; Weir, “Chaos or Cosmos? Rookes, Stratford and the Economic Torts” (1964) 22 Cam LR 225. See also Latham v Federated Municipal and Shire Council Employees Union of Australia (unreported, NSW Supreme Court, Lee J, 24 February 1978) accepting the notion of implied threat. Pete’s Towing Services Ltd v Northern Industrial Union of Workers [1970] NZLR 32 at 44-45. OBG Ltd v Allan; Douglas v Hello! (No 3); Mainstream Properties Ltd v Young [2008] 1 AC 1 at [49]. See also Lord Walker at [270], Baroness Hale at [302]; Lord Brown at [320].

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intended, the claimant will have suffered loss instead. It is nevertheless unlawful means. But the threat must be to do something which would have been actionable if the third party had suffered loss.251

The second issue relates to the essential ingredient of a threat of unlawful conduct. Rookes v Barnard established that a threat to breach a contract can constitute unlawful means for the purposes of the tort of intimidation. Will any threatened breach of contract suffice? Trivial breaches probably do not amount to coercive threats; substantial or flagrant breaches of contract will be required. Thus mere short notice of termination may not be sufficient to amount to an “unlawful” act.252 Additionally, it has been argued that the unlawful quality of the act threatened (to strike in breach of contracts of service) may not have any coercive effect on the ground that a threat to lawfully terminate employment contracts would bring about the same result.253 But as has been pointed out it hardly lies in the mouth of the wrongdoer to argue that he or she might have brought equal or more pressure to bear by adopting lawful means to achieve the objective.254 The threatened breach of contract will normally only have some coercive effect if it relates to a contract between the intimidator and the party intimidated. A threatened or continuing breach of a contract between striking employees and their union who was defendant to the proceedings would not suffice.255 A further difficulty in relying on threatened breach of contract as unlawful means may occur where an intermediary, an employer, agrees with unions that union members will not be required to handle the plaintiff’s goods.256

Defences – justification [14.290] As an intentional tort, the plaintiff’s contributory negligence or provocation is not a defence.257 It may of course be relevant to the question whether the plaintiff caused its own harm. Provocation by a plaintiff may prevent the award of exemplary damages in a suitable case.258 The question whether justification can ever operate as a defence where unlawful means are threatened or used is dealt with under the tort of interference with trade by unlawful means.

The Tort of Conspiracy [14.300] The tort of conspiracy has two forms – conspiracy to injure and conspiracy by unlawful means: 251 252 253 254 255 256

257 258

OBG Ltd v Allan; Douglas v Hello! (No 3); Mainstream Properties Ltd v Young [2008] 1 AC 1 at [49]. See also Lord Walker at [270], Baroness Hale at [302]; Lord Brown at [320]. Rookes v Barnard [1964] AC 1129 at 1218 per Lord Devlin; Morgan v Fry [1968] 3 WLR 506 at 515, 524. Morgan v Fry [1968] 3 WLR 506 at 524 per Russell LJ; and see D C Thomson & Co Ltd v Deakin [1952] Ch 646 at 688 per Lord Evershed MR. Clerk and Lindsell on Torts (18th ed, Sweet & Maxwell, London, 2000), p 1334. See Latham v Municipal and Shire Employees Union of Australia (unreported, NSW Supreme Court, Lee J, 24 February 1978). See, for example, Hadmor Productions v Hamilton [1982] 2 WLR 322 at 330. Such conduct by the intermediary while it may prevent the plaintiff from succeeding in an action for intimidation may render the intermediary liable under the provisions of the Competition and Consumer Act 2010 (Cth), s 45E. Horkin v North Melbourne Football Club [1983] 1 VR 153; Dellabarca v Northern Storemen and Packers Union [1989] 2 NZLR 734. See, for example, Fontin v Katapodis (1962) 108 CLR 177.

The Tort of Conspiracy

If two or more persons combine together for the purpose of damaging the plaintiff’s trade, business or other interests, and in furtherance of this combination the plaintiff is damaged, or if they agree to perform an unlawful act, and the plaintiff is damaged by that unlawful act, they commit the tort of conspiracy.259

Historically, the action for conspiracy to injure was of greater importance although, as will subsequently appear, it is of extremely limited significance in the modern context.

Conspiracy to injure Introduction [14.310] It was not until 1942 in Crofter Hand Woven Harris Tweed v Veitch260 that the House of Lords formulated with any certainty the tort of conspiracy to injure. Viscount Simon in that case set out the essential elements of conspiracy to injure as follows: (1) If A is damaged by the action of B, A nevertheless has no remedy against B, if B’s act is lawful in itself and is carried out without employing unlawful means. In such a case A has to endure damnum absque injuria. (2) It makes no difference to the above proposition that B in so acting had the purpose of damaging A. A bad motive does not per se turn an individual’s otherwise lawful act into an unlawful one – But if the act which damages A is not that of a single individual, but is due to a combination of two or more persons, then it is no longer possible to say that motive or purpose is immaterial. If – the real purpose of the combination is the inflicting of damage on A as distinguished from serving the bona fide and legitimate interests of those who so combine, then if damage results to A, the act is tortious.261

Prior to the Crofter case confusion was brought about by the famous trilogy of cases, Mogul Steamship Co v McGregor, Gow & Co,262 Allen v Flood263 and Quinn v Leathem.264 In Mogul Steamship v McGregor, Gow & Co, a trade cartel, with the object of monopolising the tea trade in China, undercut the plaintiff’s prices and threatened the plaintiff’s agents with boycott if they continued to deal as agents for the plaintiff. The House of Lords held that the defendants had acted with the lawful object of protecting and extending their trade and increasing their profits, and since they had not employed any unlawful means, the plaintiff had no cause of action. No emphasis was placed on the existence of the tort of conspiracy to injure in their Lordships’ judgments. The judgment of Bowen LJ in the Court of Appeal in the Mogul Steamship case is of lasting importance; his Lordship endorsed the principle that: Intentionally to do that which is calculated in the ordinary course of events to do damage, and which does, in fact, damage another in that other person’s property or trade, is actionable if done without just cause or excuse.265

It has been, and is still sometimes argued that this is the appropriate basis of liability for the industrial torts but the House of Lords in the second of the trilogy of cases, Allen v Flood, emphatically rejected this view. In Allen v Flood a demarcation dispute existed between members of a boilermakers’ union and a shipwrights’ union concerning the right of shipwrights to do iron work. 259 260 261 262 263 264 265

Street, Law of Torts (4th ed, 1968), p 350. Crofter Hand Woven Harris Tweed v Veitch [1942] AC 435. Crofter Hand Woven Harris Tweed v Veitch [1942] AC 435 at 442-443. Mogul Steamship Co v McGregor, Gow & Co [1892] AC 25. Allen v Flood [1898] AC 1. Quinn v Leathem [1901] AC 495. Mogul Steamship v McGregor, Gow & Co (1889) 23 QBD 598 at 613.

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When two shipwrights were employed on a day-by-day basis by the Glengall Iron Co, members of the boilermakers’ union threatened their employer, the Iron Co, that unless the two shipwrights were discharged, all the boilermakers would cease work. The two shipwrights were lawfully discharged at the end of the day’s work. They brought an action against the defendant, the union delegate, claiming damages for conspiracy, intimidation and coercion. The jury found that the defendant had maliciously induced the company not to engage the plaintiffs. The issue was whether the defendant was liable for threatening a lawful act – that the men who were employed from day to day would not turn up for work the next day – with the intent of causing injury to the plaintiffs. The plaintiffs could not show any unlawful threats or acts on the part of the defendant. The House of Lords was asked directly to determine whether there was a general principle that all intended harm is wrongful unless justified. The House of Lords answered in the negative and held for the defendant. A lawful act does not become unlawful simply because the defendant acted maliciously and with the intent to harm another. The decision and its subsequent interpretation are important in establishing a number of principles basic both to the law of torts and to industrial law.266 First, it is not a tort to interfere with the right of a person to dispose of his or her capital or labour as he or she desires, provided no unlawful means are used.267 Secondly, the act of an individual which is in itself lawful does not become unlawful by reason of bad motive.268 Thirdly, there exists a separate tort of conspiracy whereby an otherwise lawful act done in combination becomes unlawful if the conduct was engaged in with the intention to injure another. The last in the trilogy of cases is Quinn v Leathem.269 In this case, the plaintiff was a wholesale butcher. A number of his employees were not members of the union. The plaintiff offered to get his men to join the union but union officials rejected this offer and insisted that the non-unionists employed by the plaintiff be dismissed. In an attempt to enforce this closed shop policy the union officials induced the plaintiff’s major customer to cease dealing with the plaintiff by threats to the customer that if he continued to deal with the plaintiff his employees would be called out on strike. The House of Lords found for the plaintiff. Later authorities point out two important facets of the case; first, there was proof of combination, that is, a concerted agreement to harm the plaintiff,270 and secondly, the finding by the jury that the defendants, by their actions, intended and calculated to injure the plaintiff in his trade. The decision in Quinn v Leathem as subsequently interpreted is based on conspiracy to injure and on the “ancient superstition” of the common law that two are stronger and therefore more powerful than one, with the consequence that conduct lawful in an individual may be unlawful in combination. The fact of a concerted agreement to injure was therefore vital to the decision. Very little attention was paid to the question of whether the defendants’ conduct could be said to be lawful as being in the furtherance of trade union interests in the judgments in Quinn v Leathem; the reason advanced is that if the defendants conspired to injure the plaintiff in his trade, then their intention was not to advance legitimate 266 267

268 269 270

See Sykes, Strike Law in Australia (2nd ed, 1982), pp 178-181 for an excellent summary of the different theories pervading the judgments in Allen v Flood. Unlawful includes a combination amounting to conspiracy: see Crofter Hand Woven Harris Tweed v Veitch [1942] AC 435. Cf the United States prima facie tort doctrine, as to which see generally Tuttle v Buck 107 Minn 145; 119 NW 946 (1909); and Prosser, Law of Torts (4th ed, 1971), pp 949ff. This, however, is limited to cases where there is no concerted action: see Crofter Hand Woven Harris Tweed v Veitch [1942] AC 435. Quinn v Leathem [1901] AC 495. The fact of combination was not emphasised in the judgments; see, for example, Quinn v Leathem [1901] AC 495 at 506-507 per Lord Halsbury; at 510 per Lord Macnaghten; at 534-535 per Lord Lindley; at 525-526 per Lord Brampton; at 513 per Lord Shand.

The Tort of Conspiracy

trade union objectives.271 Subsequent authority has regarded the decision as being out on a limb,272 as it is now clear that a combination acting for the purpose of procuring 100% unionism would not be unlawful so long as the means for pursuing this goal did not breach any statutory protections of freedom of association.273 It is difficult to understand the finding that the defendants conspired to injure the plaintiff in his trade and not to advance legitimate trade union objectives; the result is to explain the case simply on the basis of the finding of the jury, that the defendants acted maliciously and with disinterested malevolence and not in pursuit of trade union objectives. Despite some earlier hesitancy, the tort of conspiracy to injure was given firm foundation in 1925 in the case of Sorrell v Smith.274 The leading judgment of Viscount Cave set out two basic propositions:275 (1) A combination of two or more persons willfully to injure a man in his trade is unlawful and, if it results in damage to him, is actionable. (2) If the real purpose of the combination is, not to injure another, but to forward or defend the trade of those who enter into it, then no wrong is committed and no action will lie, although damage to another ensues. The distinction between the two classes of case is sometimes expressed by saying that in the case of the former class there is not, while in the cases of the latter class there is, just cause or excuse for the action taken. Viscount Cave distinguished cases involving unlawful conduct where no element of combination is required.276 The judgments of the majority of the House of Lords unequivocally supported the view that combination was an essential ingredient for liability in conspiracy to injure.277 [14.320] The elements of the tort of conspiracy to injure were finally settled by the House of Lords in 1942 in Crofter’s case in the extract cited previously. Although the tort was now reasonably well defined, the range of activities which came under the umbrella of bona fide and legitimate interests were such as to rob the action of any significance. It has amounted to a judicial withdrawal from the area, at least in respect of conspiracy to injure. The reasons are best expressed by Lord Wright in Crofter’s case:278 We live in a competitive or acquisitive society, and the English common law may have felt that it was beyond its power to fix by any but the crudest distinctions the metes and bounds which divide the rightful from the wrongful use of the actor’s own freedom, leaving the precise application in any particular case to the jury or judge of fact. If further principles of regulation or control are to be introduced, that is a matter for the legislature – Actions of this character are not of everyday occurrence like actions for negligence.

This extension of what constitutes lawful purposes in the tort of conspiracy to injure may also reflect the belief that the element of combination is not a satisfactory basis for imposing liability. Unlawful objects for the purpose of conspiracy to injure have been 271 272 273

274 275 276 277 278

This may not cover the whole ground, see Crofter Hand Woven Harris Tweed v Veitch [1942] AC 435 at 442, 445 per Viscount Simon. See Crofter Hand Woven Harris Tweed v Veitch [1942] AC 435 at 473 per Lord Wright; and McKernan v Fraser (1931) 46 CLR 343 at 389ff per Evatt J. Later held to be a legitimate purpose: Reynolds v Shipping Federation [1924] Ch 28. Beware now, however, of provisions in the Fair Work Act 2009 (Cth), ss 346 – 350 prohibiting any person from taking “adverse action” against another because of their exercise of rights of freedom of association. See [13.280]. Sorrell v Smith [1925] AC 700. Sorrell v Smith [1925] AC 700 at 712. Sorrell v Smith [1925] AC 700 at 714. Sorrell v Smith [1925] AC 700 at 719. Crofter Hand Woven Harris Tweed v Veitch [1942] AC 435 at 472.

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held to include the following: where the defendant’s object in injuring the plaintiff was the “satisfaction of a personal hatred or grudge” or “revenge for some personal quarrel”, as amounts to “disinterested malevolence”.279 Lawful objects for the same purpose have been held to include freedom of trade and the protection of trade,280 the disciplining of members of professional trade organisations281 and even the blacklisting of defaulting members of a trade association.282 Evatt J in McKernan v Fraser283 identified three different types of purpose: If – the common object or motive be that of satisfaction of a personal hatred or grudge by means of the ruin or impoverishment of the plaintiff, liability is clear. If it be the protection or advancement of trading, professional or economic interests common to the defendants, there is no liability. If it be the carrying out of some religious, social or political object, the court prefers to examine the motive or object in each case before pronouncing an opinion.

Why should acts done in combination be unlawful in circumstances where the same conduct if committed by an individual would be lawful? Lord Bramwell in the Mogul Steamship case suggested several reasons for the principle:284 I think there is an obvious answer, indeed two; one is that a man may encounter the acts of a single person, yet not be fairly matched against several. The other is, that the act when done by an individual is wrong though not punishable, because the law avoids the multiplicity of crimes; de minimis non curat lex; while if done by several, it is sufficiently important to be treated as a crime.

Bowen LJ in the Mogul case285 thought the very fact of combination may show that the object was to harm the plaintiff and not to exercise one’s own rights. Viscount Simon LC in Crofter’s case286 rejected both arguments saying that the action of a single tyrant may be more potent to inflict suffering than a combination of less powerful persons. The reasons are historical and can be traced to the development of the criminal action in the Court of Star Chamber. In Lonrho Ltd v Shell Petroleum287 the House of Lords although accepting that the tort existed also doubted whether the element of combination should be sufficient to impose liability: [T]o suggest today that acts done by one street-corner grocer in concert with a second are more oppressive and dangerous to a competitor than the same acts done by a string of supermarkets under a single ownership or that a multinational conglomerate – does not exercise greater economic power than any combination of small businesses is to shut one’s eyes to what has been happening in the business and industrial world since the turn of the century.

It has been argued that with the development of a wide range of purposes declared to be lawful, in effect it will be very difficult to prove a conspiracy to injure and it should not be a tort, or Allen v Flood deciding that malevolent conduct by one alone is not actionable, was wrong.288 In McKernan v Fraser289 Evatt J canvassed the question 279 280 281 282 283 284 285 286 287 288 289

McKernan v Fraser (1931) 46 CLR 343 at 400-401, 404. Huntley v Thornton (1957) 1 WLR 321 is an example of “disinterested malevolence”. Mogul Steamship v McGregor, Gow & Co [1892] AC 25. Pratt v BMA (1919) 1 KB 244. Ware and De Freville v MTA (1921) 3 KB 40. McKernan v Fraser (1931) 46 CLR 343 at 400. Mogul Steamship v McGregor, Gow & Co [1892] AC 25 at 45. Mogul Steamship v McGregor, Gow & Co [1889] 23 QBD 598 at 616. Crofter Hand Woven Harris Tweed v Veitch [1942] AC 435 at 443-444. See also at 467-468 per Lord Wright. Lonrho Ltd v Shell Petroleum [1982] AC 173 at 188-189. Heydon, Economic Torts (2nd ed, 1978), p 28. McKernan v Fraser (1931) 46 CLR 343 at 410-411.

The Tort of Conspiracy

whether the decision in Allen v Flood should be reconsidered, and concluded that however fascinating these issues might be, it is a matter for legislative intervention, not judicial reaction. If unlawful means are used in order to inflict injury upon the plaintiff, then the limitations of the tort of conspiracy to injure will not apply.

Conspiracy by unlawful means [14.330] Few difficulties arise in respect of conspiracy by unlawful means. Two or more persons must agree to concerted action to injure the plaintiff, the conduct involving unlawful means. The action still requires that the defendants “aim” at the plaintiff. Were it otherwise, it is suggested, drivers of public transport engaging in a strike illegal by statute, or in breach of their contracts of employment, would be liable for expenses of members of the public who had to find their own way to work.290 The tort of conspiracy will be available where the conduct of the defendants is both unlawful and directed towards the plaintiff, and the defendant should know in the circumstances that injury to the plaintiff is likely and does result.291 Unlike conspiracy to injure, it is not necessary to show that the predominant purpose is to cause injury to the plaintiff.292 The unlawful conduct must not merely be incidental, it must be necessarily involved in carrying out the conduct agreed to. Unlawful means any unlawful act, including breach of a statute or criminal law, and is not limited to conduct that would be actionable in tort by the claimant.293 Unlawful means for purposes of the industrial torts are discussed in the tort of interference with trade by unlawful means, [14.350].294 A recent illustration of a claim for conspiracy by unlawful means involved the 1998 waterfront dispute. In 1998 there was a major industrial dispute on the Australian waterfront which involved the stevedoring workers and their employers.295 One primary issue was the allegation by the Maritime Union of Australia (MUA) that there was a conspiracy between Patrick Operations (Patricks) who were the employers, the National Farmers Federation (NFF) and the Workplace Relations Minister to injure the stevedoring workers. In early 1998 Patricks exercised its power to terminate the labour agreements. The administrators of the employer companies proposed to dismiss the 290

291

292

293

294

295

Sykes, Strike Law in Australia (2nd ed, 1982), p 204. It is not sufficient that the result is foreseen: Latham v Singleton [1981] 2 NSWLR 843 at 872. Consider now whether the Fair Work Act 2009 (Cth), s 545(2) (which allows any person harmed by a breach of the Act’s prohibitions on unprotected industrial action to be compensated) is wide enough to permit recovery of compensation by such public transport patrons. Canada Cement La Farge Ltd v British Columbia Lightweight Aggregate Ltd (1983) 145 DLR (3d) 385 at 399 per Estey J delivering the judgment of the Supreme Court. It was there suggested (at 399) that constructive intent is sufficient. Lonrho plc v Fayed [1992] 1 AC 448 at 468 per Lord Bridge (other members of the House of Lords agreeing). See also Canada Cement La Farge Ltd v British Columbia Lightweight Aggregate Ltd (1983) 145 DLR (3d) 385; Faccenda Chicken Ltd v Fowler [1985] 1 All ER 724 at 733-734; SSC & B Lintas New Zealand Ltd v Murphy [1986] Aust Torts Reports 80-008; Goodchild Fuel Distributors Pty Ltd v Holman (1992) 59 SASR 454 at 481. The point was conceded in Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 264. Revenue and Customs Commissioners v Total Network SL [2008] 1 AC 1174. See also Australian Wool Innovation Ltd v Newkirk [2005] FCA 290, cited with approval in AED Oil Ltd v Back; Minter Ellison v AED Oil Ltd and AED Services Pty Ltd [2009] VSC 158 at [45]. For discussion of the distinction between the meanings of “unlawful means” in conspiracy, and in the wrongful interference tort, see Sappideen and Vines (eds), Fleming’s Law of Torts (10th ed, Lawbook Co, 2011), at [30.130]. See also Sales, “The Tort of Conspiracy and Secondary Liability” (1990) 49 Cam LJ 491. See Orr, “Conspiracy on the Waterfront” (1998) 11 AJLL 159; Murray, “Australia in the Dock: The ILO’s Decision on the Waterfront Dispute” (2000) 13 AJLL 167.

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workers because the employee companies were insolvent. This proposed action led to litigation initially in the Federal Court. In the first instance North J granted interlocutory injunctions, the effect of which was to restore the status quo prior to the purported dismissals.296 North J concluded that it was arguable that Patricks and other persons had agreed to unlawful acts in breach of s 298K(1)297 of the Workplace Relations Act 1996. Patricks appealed to the Full Bench of the Federal Court which dismissed the appeal.298 Patricks then appealed unsuccessfully to the High Court.299 The two conspiracies alleged here were firstly an agreement to interfere with the existing contracts of employment by reorganising the Patricks group of companies, so that the employees’ position would be made more vulnerable for reasons which included their membership of the MUA. The second alleged conspiracy was an agreement to take action to ensure that the employees would be dismissed by the employer companies because of their membership of the MUA. Each of these alleged conspiracies involved a contravention of s 298K of the former Workplace Relations Act 1996. A majority of the High Court held that there was an arguable case that the employer companies had conspired to breach the section. If the defendants commit a specific tort against the plaintiff, then the allegation of conspiracy is unnecessary, unless the person who suffers the tort is a different person from the person at whom the combination is directed300 or recoverable damages in the specific tort are more narrowly confined. Conspiracy by unlawful means as a claim in tort offers significant advantages over a claim for breach of contract where that is available to the plaintiff.301 These advantages may include the types of damages recoverable and more liberal remoteness of damages rules (see Chapter 10).

Justification [14.340] The general principle is that unlawful acts cannot be justified; thus even though the defendant’s purpose may have been pursuit of trade objectives, the defendant is still liable.302 The defence of justification is discussed under the tort of interference with trade by unlawful means, below.

296 297 298 299

300 301 302

MUA v Patrick Stevedores No 1 Pty Ltd (1998) 153 ALR 602. The effect of this section was to prohibit a broad range of conduct by employers which had the effect of injuring employees by reason of their membership of a trade union. Patrick Stevedores Operations No 2 Pty Ltd v MUA (1998) 153 ALR 626. Patrick Stevedores Operations No 2 Pty Ltd v MUA (1998) 195 CLR 1. By a majority of 6-1 the full High Court allowed the appeal in part but awarded costs against Patricks. They found against Patricks on the main issue of the scope of North J’s orders which were held to be within power. See also Murray, “Australia in the Dock: The ILO’s Decision on the Waterfront Dispute” (2000) 13 AJLL 167. Sykes, Strike Law in Australia (2nd ed, 1982), p 204. But see Galland v Mineral Underwriters Ltd [1977] WAR 116 that if a separate tort is made out no action for conspiracy will be available at all. Wallace Constructions Specialties Ltd v Manson Insulation Inc (1993) 106 DLR (4th) 169. Thorne v MTA [1937] AC 797; Williams v Hursey (1959) 103 CLR 30 at 124 per Menzies J; Metall und Rohstoff v Donaldson Lutkin Inc [1988] 3 All ER 116 at 123 (overruled on other grounds in Lonrho plc v Fayed [1992] 1 AC 448); Dellabarca v Northern Storemen & Packers Union [1989] 2 NZLR 734 at 755. But see Latham v Singleton [1981] 2 NSWLR 843 at 867-875; and Ranger Uranium Mines Pty Ltd v Federated Miscellaneous Workers’ Union of Australia (1987) 54 NTR 6 allowing the defence of justification. In the latter case Nader J held that the defence of justification applied to actions for interference with contract, conspiracy and intimidation. In any event the protection and promotion of health and safety of the defendants and their fellow workers would be sufficient justification for actions for inducing breach of contract and conspiracy in the circumstances.

Interference with Trade or Business by Unlawful Means

Interference with Trade or Business by Unlawful Means Introduction [14.350] In the United Kingdom, it is now accepted that there is a separate tort of

interference with trade or business by unlawful conduct.303 In this section for ease of reference it may be alternatively referred to as the tort of intentionally causing loss by unlawful means. There is also considerable judicial support in Australia accepting the existence of this tort.304 Formerly the decision in Beaudesert Shire Council v Smith305 might have provided the building blocks for a broader basis of liability for causing loss by unlawful means. The High Court there said: Independently of trespass, negligence or nuisance but by an action for damages upon the case, a person who suffers harm or loss as the inevitable consequence of the unlawful, intentional and positive acts of another is entitled to recover damages from that other.306

The stated principle would have allowed recovery for unlawful conduct where there was no intention to harm the plaintiff. Consequently it had the potential to sweep away the restrictions on liability established by the economic torts which typically require the defendant to have an intention to harm the plaintiff. The Beaudesert decision has now been overruled by the High Court in Northern Territory v Mengel.307 The High Court reaffirmed the primary principle underpinning the economic torts that there can be no liability unless the defendant’s conduct is aimed at the plaintiff. Moreover where the harm is unintentional, in the absence of a duty of care, there is no liability for a defendant’s unlawful conduct which causes foreseeable harm to a plaintiff.308 Subsequently, in Sanders v Snell309 the High Court held that for the purposes of this tort an unlawful act is only constituted by an act forbidden by law rather than a lack of procedural fairness or an act that is ultra vires and void. Unfortunately, the High Court did not take the opportunity in this case to confirm the existence of this relatively new tort in Australia.310 Since Sanders v Snell311 although there has been no specific adoption of the tort at appellate court level in Australia312 some 2006 decisions of single judges of the New South Wales Supreme Court and the Tasmanian Supreme Court have proceeded on the basis that such a tort might develop in Australia.313 303

304

305 306 307 308 309 310 311 312 313

OBG Ltd v Allan, Douglas v Hello! (No 3), Mainstream Properties v Young [2008] 1 AC 1; Stratford & Son v Lindley [1965] AC 269 at 324-325; Acrow (Automation) Ltd v Rex Chainbelt Inc [1971] 1 WLR 1676; Hadmor Productions Ltd v Hamilton [1983] 1 AC 191 at 228-229 per Lord Diplock (other members of the House of Lords concurring in his judgment); Merkur Island Shipping Corp v Laughton [1983] 2 AC 570 at 609 per Lord Diplock; Dimbleby & Sons v NUJ [1984] 1 WLR 427; Lonrho plc v Fayed [1992] 1 AC 448. The Canadian position is examined by Fridman, “Interference with Trade or Business” (1993) 1 TLR 19 at 27-34. Kitano v Commonwealth (1974) 129 CLR 151 at 173-175; Sid Ross Agency Pty Ltd v Actors and Announcers Equity Association of Australia [1970] 2 NSWLR 47 at 52; Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 244ff. See also Van Camp Chocolates v Aulsebrooks Ltd [1984] 1 NZLR 354. Beaudesert Shire Council v Smith (1966) 120 CLR 145. Beaudesert Shire Council v Smith (1966) 120 CLR 145 at 156. Northern Territory v Mengel (1995) 185 CLR 307. Northern Territory v Mengel (1995) 185 CLR 307 at 343 per Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ. Sanders v Snell (1998) 157 ALR 491. Sanders v Snell (1998) 157 ALR 491. Sanders v Snell (1998) 157 ALR 491. In Deepcliffe v Gold Coast City Council [2001] QCA 342 the Queensland Court of Appeal discussed the English authorities but did not find it necessary to decide the issue. Film Financial Consultants v Becker Group Ltd [2006] NSWSC 319 per Rothman J and Argo Pty Ltd v Attorney-General [2006] TASSC 22 per Blow J.

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One of the earliest statements of principle is that of Lord Denning MR in Torquay Hotel v Cousins,314 who said: [I]f one person deliberately interferes with the trade or business of another, and does so by unlawful means, that is, by an action which he is not at liberty to commit, then he is acting unlawfully, even though he does not procure or induce any actual breach of contract. If the means are unlawful, that is enough.

In OBG v Allan,315 Lord Hoffmann described the essence of the tort as follows: (a) a wrongful interference with the actions of a third party in which the claimant has an economic interest and (b) an intention thereby to cause loss to the claimant.

The tort has been described as a “genus tort”316 and would include as a “species” the existing torts where use of unlawful means or the threat of unlawful means is essential for liability. This is the case with the torts of intimidation and conspiracy by unlawful means. If the Australian courts follow the English lead in OBG v Allan,317 what would formerly have been actions for indirect interferences with contract involving unlawful means would now be illustrations of the broader tort.318 This tort extends liability, for example, in the following situations: (1) there is no coercive threat of unlawful conduct sufficient for intimidation; (2) the interference prevents entry into new contracts making the tort of inducing breach of contract unavailable;319 (3) there is no breach of contract (4) there is no element of combination necessary for conspiracy by unlawful means.320 Actions which would previously have been regarded as illustrations of indirect interference with contract under an expanded Lumley v Gye principle (see [14.160]) are now regarded, at least in United Kingdom, as illustrations of the tort of causing loss by unlawful means.

Interests protected by the tort [14.360] Lord Hoffmann in OBG v Allan321 (and related appeals) described the rationale for the tort and the interests it protects, quoting the words of Lord Lindley in Quinn v Leathem:322 [A] person’s liberty or right to deal with others is nugatory, unless they are at liberty to deal with him if they choose to do so. Any interference with their liberty to deal with him affects him. If such interference is justifiable in point of law, he has no redress. Again, if such interference is wrongful, the only person who can sue in respect of it is, as a result, the person immediately affected by it; another who suffers by it has usually no redress; the damage to him is too remote, and it would be obviously practically impossible and highly inconvenient to give legal redress to all who suffered form such wrongs. But if the interference is wrongful and is intended to damage a third person, and he is damaged in fact – if he is wrongfully and intentionally struck at through others, and is thereby damnified – the whole aspect of the case is changed: the wrong done to others reaches him, his rights are infringed although indirectly, and damage to him is not remote or unforeseen, but is the direct consequence of what has been done. 314 315 316 317 318 319 320

321 322

Torquay Hotel v Cousins [1969] 1 All ER 522 at 530. OBG Ltd v Allan, Douglas v Hello! (No 3), Mainstream Properties v Young [2008] 1 AC 1 at [47]. Merkur Island Shipping Corp v Laughton [1983] 2 AC 570 at 610 per Lord Diplock. OBG Ltd v Allan, Douglas v Hello! (No 3), Mainstream Properties v Young [2008] 1 AC 1. See Carty, “Intentional Violation of Economic Interests” (1988) 104 LQR 250 at 264. Stratford & Son v Lindley [1965] AC 269 at 324 per Lord Reid. The English Court of Appeal has held that the new tort will be available in circumstances not covered by the existing economic torts: Lonrho plc v Fayed [1990] 2 QB 479 at 489 per Dillon LJ; at 492 per Ralph Gibson LJ. No objection was made to these views on appeal to the House of Lords Lonrho plc v Fayed [1992] 1 AC 448. OBG Ltd v Allan, Douglas v Hello! (No 3), Mainstream Properties v Young [2008] 1 AC 1 at [46]. Quinn v Leathem [1901] AC 495 at 534-535.

Interference with Trade or Business by Unlawful Means

Lord Hoffmann concluded (at [51]) that: Unlawful means – consists of acts intended to cause loss to the claimant by interfering with the freedom of a third party in a way which is unlawful as against that third party and which is intended to cause loss to the claimant. It does not – include acts which may be unlawful against a third party but which do not affect his freedom to deal with the claimant.

The action protects economic interests which can include contractual and noncontractual interests. Interference with contract by preventing or hindering performance of a contract can be protected by the action. It can apply where the action for inducing breach of contract is not available because there is no contractual breach as a contracting party is protected against liability under a force majeure or exemption clause.323 In the earliest references to the tort, Lord Reid in Stratford & Son v Lindley324 was prepared to extend the protection of the tort to non-contractual expectancies, such as the plaintiff’s ability to obtain new business and new contracts.325 In Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots,326 in proceedings arising out of the 1989 airline pilots strike, the plaintiff was held entitled to recover damages against the pilots’ union for interference with prospective contracts of carriage of passengers and the actual and prospective contracts for carriage of freight in an action for interference with trade or business by unlawful means.

Requirements for liability [14.370] Although it is now nearly 50 years since Lord Denning first sought to

establish the existence of this tort,327 its parameters are still being established. As an intentional tort, the first requirement is that the defendant must have the requisite intention.

Intention [14.380] As with the other economic torts, the defendant must intend to harm the plaintiff. This was considered in the recent House of Lords decision in OBG v Allan (and related appeals).328 On the issue of the requisite intention for the unlawful means tort both Lords Hoffmann and Nicholls found that a subjective test of intention was required but each rejected the English Court of Appeal’s approach of “targeted harm” to this test and preferred a wider test of intention which required the identification of “ends” and “means to ends” and therefore adopted a wider test of intention. Lord Hoffmann could see no merit in a wide definition of unlawful means that was traded off against “a highly specific intention, which targets the Plaintiff”.329 However, Baroness Hale appeared to still prefer to apply the traditional “targeted” approach to defining intention here and Hazel Carty in a thorough analysis of the subject concludes that “it may well be that future courts will still apply the traditional ‘targeted’ definition 323 324 325

326 327 328 329

Stratford & Son v Lindley [1965] AC 269 at 324. See also Dimbleby & Sons v National Union of Journalists [1984] 1 WLR 67. Stratford & Son v Lindley [1965] AC 269 at 324. Presumably also it extends to provide an action where a third party because of unlawful conduct did not exercise its rights under licence to show television programs produced by the plaintiff; cf Hadmor Productions v Hamilton [1983] 1 AC 181 at 223. Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 256. Torquay Hotel v Cousins [1969] 1 All ER 522 at 530. OBG Ltd v Allan, Douglas v Hello! (No 3), Mainstream Properties v Young [2008] 1 AC 1. OBG Ltd v Allan, Douglas v Hello! (No 3), Mainstream Properties v Young [2008] 1 AC 1 at 60.

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of intention to these torts”.330 It is also likely that future Australian courts will apply the traditional “targeted” definition of intention to this tort; the High Court’s decision in Northern Territory v Mengel331 which, as noted earlier in this chapter, overruled the High Court’s earlier decision in Beaudesert and affirmed the primary principle that there can be no liability in the economic torts without the defendant’s conduct being aimed at the plaintiff. There was no difficulty making this out in the airline pilots strike case, where the sole purpose of the directive to work limited hours was to cause the industry huge financial losses which would then induce them to negotiate favourable pay increases for the pilots.332 Unlike conspiracy to injure, it need not be shown that the defendant’s predominant intention was to harm the plaintiff rather than to advance the defendant’s own interests.333 It is not sufficient that injury to the plaintiff is an unavoidable by-product or reasonably foreseeable consequence of the defendant’s conduct.334

Unlawful means [14.390] The second restriction requires that the defendant’s conduct be

unlawful.335 The issue of what constitutes unlawful means for these purposes is relevant also to conspiracy by unlawful means and the tort of intimidation. If existing economic torts requiring the use, or threat to use, unlawful means are illustrations of the wider tort, then what would satisfy the requirements of unlawfulness for those torts should, as a matter of logic, also suffice for the tort of causing loss by unlawful means.336 The decisions suggest three different tests for determining what will constitute unlawful means for these purposes: (i) any conduct which a defendant is not at liberty to commit qualifies as unlawful means; (ii) only legal wrongs qualify as unlawful means; (iii) only civil wrongs should constitute unlawful means.337 The majority in the House of Lords in OBG v Allan338 (and related appeals) adopted the most restrictive view of what will qualify as unlawful means: “acts against a third party count as unlawful means only if they are actionable by that third party.”339 330 331 332 333

334 335

336

337 338 339

Carty, “The Economic Torts and English Law: An Uncertain Future” [2006-2007] 95 Ken LJ 845 at 872. Northern Territory v Mengel (1995) 185 CLR 307. Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 246 per Brooking J. Lonrho plc v Fayed [1990] 2 QB 479 at 488-489 per Dillon LJ; at 494 per Woolf LJ; at 492 per Ralph Gibson LJ and on appeal to the House of Lords Lonrho plc v Fayed [1992] 1 AC 448; and see Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 246 per Brooking J; Northern Territory v Mengel (1995) 185 CLR 307 at 342 per Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ. Barretts and Baird (Wholesale) Ltd v IPCS [1987] IRLR 3 at 10 (QBD). Barretts and Baird (Wholesale) Ltd v IPCS [1987] IRLR 3 at 10 (QBD) held that a striker’s breach of her or his contract of employment is unlawful means for this tort and that inducing a breach of statutory duty can constitute unlawful means, but it appears only if an action for breach of statutory duty would have been available. There is contrary opinion predating the HL decision in OBG v Allan (and related appeals) [2008] 1 AC 1: see Sales, “The Tort of Conspiracy and Civil Secondary Liability” (1990) 49 Cam LJ 491 at 494; Rookes v Barnard [1964] AC 1129 at 1209 per Lord Devlin (unlawful means for purposes of conspiracy may be different from that required for intimidation particularly with reference to a conspiracy to commit a breach of contract); Barretts and Baird (Wholesale) Ltd v IPCS [1987] IRLR 3 at 9 (what is unlawful for intimidation is not necessarily unlawful for tort of interference with business); Davies and Freedland, Labour Law: Text and Materials (2nd ed, 1984), p 755. Note also Clerk and Lindsell on Torts (18th ed, Sweet & Maxwell, London, 2000), pp 1347-1348. This formulation is taken from Carty, “Intentional Violation of Economic Interests: The Limits of Common Law Liability” (1988) 104 LQR 250 at 266. OBG Ltd v Allan, Douglas v Hello! (No 3), Mainstream Properties v Young [2008] 1 AC 1. OBG v Allan (and related appeals) [2008] 1 AC 1 at [49] per Lord Hoffmann. See also Lord Walker at

Interference with Trade or Business by Unlawful Means

This contrasts with the earlier views of Lord Denning who took the most liberal view of what would constitute unlawful means: if one person, without just cause or excuse, deliberately interferes with the trade or business of another, and does so by unlawful means, that is, by an act which he is not at liberty to commit, then he is acting unlawfully. He is liable in damages.340

This broad formulation would allow as unlawful means, torts, crimes, statutory breaches, breaches of contracts, breaches of trust and equitable obligations as well as breaches of confidence. It might extend even to a civil contempt of court, use of economic duress, and other conduct such as breach of the rules of natural justice.341 Lord Denning has gone so far as to suggest that interference with the freedom of the press is so contrary to the public interest that it should also constitute unlawful means.342 There is also authority that an agreement that would be void as in breach of public policy (but not unlawful) under relevant restrictive trade practices legislation also suffices.343 Blacklisting for trade purposes does not suffice,344 nor does a breach of privacy independently of trespass.345 However, the High Court in Sanders v Snell346 held that for this tort an unlawful act is only constituted by some act forbidden by law rather than a lack of procedural fairness or an act that is ultra vires and void. The authorities do not support the widest of these approaches to determining unlawfulness for the tort.347 The middle ground is that any legal wrong can give rise to the requisite unlawfulness. It would include crimes and torts and breaches of contract

340 341

342 343

344 345 346 347

[270]; Baroness Hale at [302]; Lord Brown at [320]. But see also Revenue and Customs Commissioners v Total Network SL [2008] 1 AC 1174, where the House of Lords held that conduct which was unlawful under a statute or the criminal law was sufficient to ground a claim in conspiracy by unlawful means, even where the claimant could not bring an independent action in tort against individual conspirators. Torquay Hotel v Cousins [1969] 2 Ch 106 at 139; Acrow (Automation) Ltd v Rex Chainbelt Inc [1971] 1 WLR 1676 at 1682. Action for breach of confidence: Faccenda Chicken Ltd v Fowler [1985] 1 All ER 724 at 734, not dealt with on appeal to the Court of Appeal [1986] IRLR 69; SSC & B Lintas New Zealand Ltd v Murphy [1986] Aust Torts Reports ¶80-008; Van Camp Chocolates Ltd v Aulsebrooks Ltd [1984] 1 NZLR 354 at 360; civil contempt of court: Acrow (Automation) Ltd v Rex Chainbelt Inc [1971] 1 WLR 1676; cf Chapman v Honig [1963] 2 QB 502; United Telecasters v Hardy (1991) 23 NSWLR 323 (criminal contempt); and see Rajski v Bainton (1990) 22 NSWLR 125 at 132-133; economic duress: Universe Tankships Inc of Monrovia v International Transport Workers’ Federation [1983] AC 366 at 400 per Lord Scarman and at 385 per Lord Diplock; breach of rules of natural justice: Posluns v Toronto Stock Exchange & Gardiner (1964) 46 DLR (2d) 210 at 269; Evaskow v International Brotherhood of Boilermakers (1969) 9 DLR (3d) 715; Volkswagen Canada Ltd v Spicer (1978) 91 DLR (3d) 42 at 61-62; Macksville & District Hospital v Mayze (1987) 10 NSWLR 708 at 724 per Kirby J (in relation to a Beaudesert claim). Associated Newspapers Group Ltd v Wade [1979] ICR 664 at 691. Daily Mirror Newspapers v Gardner [1968] 2 QB 762; Brekkes v Cattel [1972] Ch 105. Note the Competition and Consumer Act 2010 (Cth) (formerly the Trade Practices Act 1974 (Cth), s 76 (pecuniary penalties for contravention of Pt IV); s 82 action for damages for loss or damage suffered by a person as a result of contravention of Pt IV or V and see Galea v Cooper [1982] 2 NSWLR 411. But note the suggestion by Carty, “International Violation of Economic Interests: The Limits of Common Law Liability” (1988) 104 LQR 250 at 266-267 that this causes real difficulty when in the Mogul Steamship case [1892] AC 25, common law restraint of trade did not suffice for liability. Ware & De Freville v MTA [1921] 3 KB 40; Thorne v MTA [1937] AC 797. Byrne v Kinematograph Rental Society [1958] 1 WLR 762. Sanders v Snell (1998) 157 ALR 491. See OBG v Allan (and related appeals) [2008] 1 AC 1 at [49], [51] per Lord Hoffmann; at [270] per Lord Walker; at [302] per Baroness Hale; at [320] per Lord Brown. Contrast Lord Nicholls at [153] taking the broadest view; Rajski v Bainton (1990) 22 NSWLR 125 at 132-133. In Northern Territory v Mengel (1995) 185 CLR 307 at 336 the High Court, in relation to the overruled Beaudesert principle, was of the view that “unlawful” conduct did not extend to cover conduct not forbidden by law; consequently, it would not include simply unauthorised conduct.

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and statutory breaches such as breach of anti-strike legislation. The all-embracing inclusion of crimes and statutory breaches, as relevant unlawful conduct, is fraught with difficulties. In most cases criminal conduct will also constitute tortious conduct. Where it does not, there may be important public policy reasons why no claim exists.348 It would be a curious result if an action for interference with trade or economic interests were held to be available in those same circumstances. United Kingdom authority now accepts that unlawful conduct such as criminal conduct or statutory breach which is not actionable by a third party is not unlawful means for these purposes: It is not for the courts to create a cause of action out of a regulatory or criminal statute which Parliament did not intend to be actionable in private law.349

[14.400] In Australia there is significant authority that breaches of anti-strike

legislation or other statutory breaches350 qualify as the relevant unlawful conduct for purposes of industrial torts requiring unlawful means. It will rarely be the case that breach of the anti-strike legislation is the only unlawful conduct involved. Frequently, there will be individual breaches of contract, or threats to breach contract or to induce breaches of contract or intimidation without the need to rely on breach of anti-strike legislation as the relevant unlawfulness. In the Airline Pilots case351 breaches of the Industrial Relations Act 1988 (Cth), s 312 (inciting, encouraging breach of award or certified agreement) were relied on as relevant unlawful conduct. It has been argued that, as a matter of public policy, we should make a criminal pay for damage suffered by a person more readily when the person was meant to be hurt by the crime than where the harm was unintended but foreseeable.352 Will the broad approach adopted result in liability for what may be incidental statutory breaches so that liability moves ever closer to liability for intentional harm denied in Allen v Flood?353 A number of reasons may be advanced as to why all statutory breaches should not qualify.354 The statute may provide special remedies including compensation for breach; it may expressly declare that no civil action is available.355 We should note that breaches of 348

349 350

351 352 353

354 355

For example, in order to protect the integrity of the legal system, no tort action is available for perjury, except in South Australia in relation to civil proceedings (Civil Liability Act 1936 (SA), s 72): see Cabassi v Vila (1940) 64 CLR 130. OBG v Allan (and related appeals) [2008] 1 AC 1 at [57] per Lord Hoffmann. See also Lonrho Ltd v Shell Petroleum [1981] AC 173. See Williams v Hursey (1959) 103 CLR 30 at 108-109 per Taylor J; at 125 per Menzies J concerning the Stevedoring Industry Act 1956 (Cth), ss 44(1)(b) (breach of anti-picketing provisions) and s 44(2) (refusal to work); Coal Miners’ Industrial Union of Western Australia, Collie v True (1959) 33 ALJR 224 at 227 per Dixon J; at 380-381 per Evatt J; Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 246; Fatimi Pty Ltd v Bryant [2004] NSWCA 140, see Handley JA at [24], [27], Mc Coll JA agreeing; Giles JA at [44] (breaches of s 319, Crimes Act 1900 (Cth), conduct intended to pervert the course of justice was unlawful for the purposes of conspiracy by unlawful means); Australian Wool Innovation v Newkirk No 2 [2005] FCA 1307 at [68] (breach of Trade Practices Act 1974 (Cth), s 52, misleading and deceptive conduct – now the Australian Consumer Law, s 18). Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211. Elias and Tettenborn, “Crime, Tort and Compensation in Private and Public Law” (1981) 40 Cam LJ 230 at 232. Allen v Flood [1898] AC 1. Dworkin, “Intentionally Causing Economic Loss – Beaudesert Shire Council v Smith revisited” (1974) 1 Mon ULR 4 at 28. See also Rookes v Barnard [1964] AC 1129 at 1215 per Lord Devlin. The High Court in Northern Territory v Mengel (1995) 185 CLR 307 at 344, although overruling the Beaudesert decision, did not comment on this question. See also Hoffmann J in Associated Newspapers v Insert Media [1988] 1 WLR 509. Elias and Tettenborn, “Economic Torts and Labour Law: Old Principles and New Liabilities” (1982) 41 Cam LJ 321 at 340. This was recognised in relation to the now overruled Beaudesert principle: see Broadlex Pty Ltd v Computer Pty Ltd (1983) 50 ALR 92 at 95.

Interference with Trade or Business by Unlawful Means

regulatory statutes were held not to constitute unlawful means for the purposes of the now overruled Beaudesert principle356 and arguably a similar principle should apply to the tort of causing loss by unlawful means. These difficulties would be avoided if the third and most restrictive definition were to be adopted, that is, that unlawful means should be limited to actionable civil wrongs. This is the view of the majority of the House of Lords in OBG v Allan (and related appeals).357 If unlawful means are limited to civil wrongs, breaches of contract and torts358 at the very least would suffice. Presumably it could also include actions for breach of confidence359 but the House of Lords did not elaborate further. Would, for example, a breach of the Australian Consumer Law in Sch 2 of the Competition and Consumer Act 2010 (Cth) suffice? If the breach of the Act was actionable by the third party then arguably this is a civil wrong which would provide the foundation for an action for interference with trade or business. Even on a restricted view of what constitutes unlawful means, the tort could still significantly extend liability. For example, the tort could grant a remedy where the existing torts of conspiracy, intimidation or inducing breach of contract were unavailable such as where a single defendant (no conspiracy) in the absence of an express or implied threat (no intimidation) breached her or his contract with a third party for the express purpose of injuring the plaintiff by effectively forcing the third party to lawfully terminate its contract with the plaintiff (no contractual rights).360 Conduct that is capable of giving rise to a civil wrong if loss were suffered will satisfy this third approach. In OBG v Allan,361 it was accepted that the defendant’s conduct could constitute unlawful means for the purposes of the tort even though an action in deceit would not have been available to a third party to whom fraudulent misrepresentations were made as the third party suffered no loss in reliance on the representations. The Australian courts have not yet had an opportunity to consider the more restricted approach adopted by the House of Lords in OBG v Allan. There are strong arguments that statutory breaches and criminal conduct that do not constitute civil wrongs should not constitute unlawful means for the purposes of the tort of intentionally causing loss by unlawful means. Nevertheless, in the case of conspiracy by unlawful means, the House of Lords (in Revenue and Customs Commissioners v Total Network SL)362 has held that statutory breaches and criminal conduct will satisfy the requirement for unlawful means. 356 357 358

359 360 361

362

Grand Central Car Park Pty Ltd v Tivoli Freeholders [1969] VR 62 (criminal breach of planning regulations). OBG v Allan (and related appeals) [2008] 1 AC 1 at [49], [51] per Lord Hoffman; at [270] per Lord Walker; at [302] per Baroness Hale; at [320] per Lord Brown. These examples are given by Lord Hoffmann: see OBG v Allan (and related appeals) [2008] 1 AC 1 at [22]-[25], [49], [50] per Lord Hoffmann; and at [270] per Lord Walker; at [302] per Baroness Hale; at [320] per Lord Brown; trespass to goods: GWK Ltd v Dunlop Robber Co Ltd (1926) 42 TLR 376 (removal of plaintiff’s tyres from display vehicle); fraud: National Phonograph v Edison-Bell Consolidated Phonograph Co Ltd [1908] 1 Ch 335; Lonrho plc v Fayed [1990] 2 QB 479, on appeal Lonrho plc v Fayed [1992] 1 AC 448; interference with contract: Merkur Island Shipping Corp v Laughton [1983] 2 AC 570 and followed in Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 245, 246. The claimant might not need to rely on the tort but may be able to claim in its own right, see OBG v Allan (and related appeals) [2008] 1 AC 1. See Carty, “Intentional Violation of Economic Interests: The Limits of Common Law Liability” (1988) 104 LQR 250 at 271. OBG v Allan (and related appeals) [2008] 1 AC 1 at [49], [50] per Lord Hoffmann. See also Lonrho plc v Fayed [1990] 2 QB 479 at 489 per Dillon LJ; at 492 per Ralph Gibson LJ. No objection was made to these views on appeal to the House of Lords Lonrho plc v Fayed [1992] 1 AC 448. Revenue and Customs Commissioners v total Network SL [2008] 1 AC 1174.

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Ch 14: Industrial Action

Defences – justification [14.410] There is scant authority suggesting that the defence of justification may apply to an action for causing loss by unlawful means.363 This is contrary to the generally accepted view that unlawful means cannot be justified and this remains the position until the issue has been determined authoritatively.364

Conclusion [14.420] In OBG v Allan365 the principal issue for the House of Lords was whether there existed a unified theory of economic torts which treated inducing breach of contract, the Lumley v Gye principle, as one species of a more general tort of interference with contractual rights. This was rejected and the House of Lords accepted that these two torts each have their own form and a fundamentally different pattern of liability reflected essentially in the difference between secondary or accessorial liability and primary liability. Whereas inducing breach of contract was seen as a tort of secondary or accessory liability requiring a breach by the other party to the contract of employment induced by the defendant, unlawful interference is a tort of primary liability which enables a plaintiff to claim against a defendant who has used unlawful means against a third party to cause damage to the plaintiff. The clear function of characterising the two torts in this way is to treat them as quite separate and distinct each with a different role and rationale. Whereas the rationale of inducing breach of contract is to afford special protection to contractual rights, the rationale of unlawful interference with trade is to proscribe intention and wrongfulness with no attention to the interest which is damaged. Lord Hoffmann, who gave one of the leading judgments, recognised that uncertainties as to the scope of these two torts can be traced back to the judicial failure to recognise and apply the newly emerging genus tort of unlawful interference with trade. Their Lordships simply saw no need for the elaborate version of the tort of interference with contractual relations. It also followed from their reasoning that Lord Denning’s extension of the tort of interference with contractual relations to include interference with performance where there was no breach in Torquay Hotels v Cousins was also unnecessary and this doctrine was expressly rejected. In the case of the tort of unlawful interference with trade or as Lord Hoffmann preferred to call it, the unlawful means tort, the House of Lords also addressed the issue of uncertainty as to the proper definition of unlawful means. On this issue the House was divided. Lord Hoffmann, with the majority on this issue, took the more narrow view and restricted unlawful means to those means which are actionable by a third party: “acts intended to cause loss to the claimant by interfering with the freedom of a third party in a way which is unlawful as against the third party and which is intended to cause loss to the claimant.”366 His Lordship went on to explain also that unlawful means requires that the intention to cause loss must be such that there is an “interfering with the freedom of the third party to deal with the claimant”.367 Lord Nicholls took a 363

364

365 366 367

Rookes v Barnard [1964] AC 1129 at 1215 per Lord Devlin; Morgan v Fry [1968] 3 WLR 506 at 517; Acrow (Automation) Ltd v Rex Chainbelt Inc [1971] 1 WLR 1676 at 1682. See also Latham v Singleton [1981] 2 NSWLR 843 at 867-875; Ranger Uranium Mines Pty Ltd v Federated Miscellaneous Workers Union of Australia (1987) 54 NTR 6. It was not raised in Lonrho Ltd v Shell Petroleum Co Ltd [1982] AC 173 or Hadmor Productions Ltd v Hamilton [1983] 1 AC 191. In Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 255, Brooking J held that even if the defence were available, a view he did not share, it did not apply in that case. OBG v Allan (and related appeals) [2008] 1 AC 1. OBG v Allan (and related appeals) [2008] 1 AC 1 at 51. OBG v Allan (and related appeals) [2008] 1 AC 1.

Conclusion

wider view of unlawful means and included “all acts that a defendant is not permitted to do whether by civil or criminal law”.368 Lord Hoffmann also held that the tort of intimidation is really only one variant of the broader tort of causing loss by unlawful means.369 In the case of the tort of conspiracy the House was silent but to the extent that their Lordships’ reasoning proceeds on the basis of a search for underlying rationales and identifying the proper role for specific torts within a coherent framework, it has an implication for this tort also. As Simpson points out, the implication is that in an unlawful means conspiracy “the ambit of unlawful means for the purposes of the unlawful interference tort ought to be a relevant if not decisive consideration”.370 It is not hard to see the reasons for the House of Lords adopting an approach here which has the effect of reducing rather than expanding this area of tort liability. Lord Wedderburn by way of explanation points firstly to the fact that the new cases in the area in England have concerned “commercial activity, so that trade union liabilities were seen merely as a background, parallel as judges like to make it to commercial law liabilities”. Secondly, Lord Wedderburn refers to the contemporary fact that trade unions which inspired Lord Denning and others to develop extensions of liability in some industrial torts “do not appear in 2007 to be as dangerous an engine of power of social disturbance as they were taken to be in 1901 or in 1964”.371 Finally his Lordship refers to the following passage from the judgment of Baroness Hale in the House of Lords decision in OBG v Allan:372 [Lord Hoffmann’s reasoning] is also consistent with legal policy to limit rather than to encourage the expansion of liability in this area. In the modern age Parliament has shown itself more than ready to legislate to draw the line between fair and unfair trade competition or between fair and unfair trade union activity. This can involve major economic and social questions which are often politically sensitive and require more complicated answers than the courts can devise.

The same can be said for the law in Australia. In recent decades, the federal parliament has extensively regulated competition (through trade practices legislation) and industrial activity, through a succession of statutes culminating in the Fair Work Act 2009 (Cth). The liability and remedies provisions in these statutes do not depend on the principles developed by the courts in tort law.373 For a discussion of remedies including damages in the area of industrial torts readers should consult more specialised texts.374

368 369 370 371 372 373 374

OBG v Allan (and related appeals) [2008] 1 AC 1 at 162. OBG v Allan (and related appeals) [2008] 1 AC 1 at 7. Simpson, “Economic Tort Liability in Labour Disputes: The Potential Impact of the House of Lords’ Decision in OBG Ltd v Allan” (2007) 36 Ind LJ 468 at 475. Wedderburn, “Labour Law 2008: 40 Years On” (2007) 36 Ind LJ 397 at 408. OBG v Allan; Douglas v Hello!; Mainstream Properties Ltd v Young [2008] 1 AC 1 at 306. For a discussion of the Fair Work Act 2009’s regulation of industrial action, see McCrystal, The Right to Strike in Australia (Federation Press, Sydney, 2010). For example, Dugdale and Jones (eds), Clerk and Lindsell on Torts (19th ed, Sweet & Maxwell, London, 2006), chs 2, 29.

615

15

Anti-discrimination Law by

Belinda Smith “[T]he essence of the legal notion of discrimination lies in the unequal treatment of equals, and, conversely, in the equal treatment of unequals.” [Castlemaine Tooheys Ltd v SA (1990) 169 CLR 436 at 480 per Gaudron and McHugh JJ.]

[15.10] [15.20] [15.30] [15.30] [15.50] [15.60] [15.180] [15.200] [15.210] [15.250] [15.260] [15.300] [15.310]

Introduction ..................................................................................................... 617 Discrimination ................................................................................................. 618 Anti-discrimination Acts ................................................................................. 619 Federal and State legislation ..................................................................... 619 Regulatory framework ................................................................................ 621 Definitions of discrimination ...................................................................... 622 Exceptions and exemptions ........................................................................ 633 Harassment ................................................................................................. 635 Enforcement ................................................................................................ 637 Fair Work Act .................................................................................................. 641 Scope of anti-discrimination prohibitions ................................................. 641 Enforcement process and remedies ............................................................ 647 Conclusion ....................................................................................................... 648

Introduction [15.10] Numerous statutes across Australia regulate the employment relationship in respect of discrimination and equality. Most of these are anti-discrimination laws, such as the Sex Discrimination Act 1984 (Cth) and equivalent State and Territory laws, and these are the focus of this chapter. With the enactment of the General Protections in the Fair Work Act 2009 (Cth), further employee protections against discrimination were added, specifically a right against the taking of “adverse action” against employees because of various attributes under s 351. The two types of laws – anti-discrimination Acts and the General Protections – differ both in the nature of the obligations imposed on employers and in the enforcement regime available in respect of each. Anti-discrimination statutes provide restraints on employers and other parties designed to “eliminate, as far as possible, discrimination”1 in work and other fields. Discrimination is defined and importantly, it is defined widely, to address discrimination in its many different forms. The term is not limited to formal equality notions of direct discrimination or merely treating likes alike, but extends to imposing barriers to substantive inequality that operate indirectly to exclude people with attributes of disadvantage. While these laws have had a substantial impact on norms and thinking about prejudice and unfair exclusion, they have not been very effective at addressing all of the types of discrimination they prohibit. This is 1

Age Discrimination Act 2004 (Cth), s 3(a). Similar wording can be found in the objects of the Sex Discrimination Act 1984 (Cth), s 3(b) and Disability Discrimination Act 1992 (Cth), s 3(a).

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primarily because the enforcement regime is weak and individualistic, sitting incongruously with the structural and social nature of the problem. Limiting enforcement to an individual complaints mechanism with only compensatory remedies, there is no scope for public enforcement, responsive regulation or even punishment for egregious perpetrators. In a stark and ironic contrast, the comprehensive compliance and enforcement regime of the Fair Work Act 2009 (Cth) is available in respect of the General Protections, yet these protections are being interpreted very narrowly to cover only the most blatant and blameworthy forms of (direct) discrimination. This chapter outlines these laws in three parts. First, a summary is provided of the concept of discrimination as it is commonly understood internationally. Antidiscrimination laws are then examined, with a focus on federal legislation and a note on the complementary role of the Workplace Gender Equality Act 2012 (Cth). Finally, the protections against discrimination in the Fair Work Act 2009 (Cth) are outlined, compared and contrasted. Laws that are designed to promote equality in employment in other ways – including those providing for equal pay mechanisms, parental leave and flexible working arrangements – are beyond the scope of this chapter.

Discrimination [15.20] The concept of discrimination as we know it has developed over decades through the establishment and interpretation of international human rights conventions, bills of rights and anti-discrimination laws. The concept is a slippery one and this makes drafting and interpretation of anti-discrimination laws difficult. The concept essentially has two limbs. The first and most common understanding of discrimination is the use of irrelevant characteristics to exclude people, either consciously and intentionally, or because of unconscious bias, unquestioned practice, or making assumptions and using stereotypes to fill gaps in information about a person. However, treating people the same, as if all differences are irrelevant, can also be discriminatory. Capturing the dual nature of discrimination, Gaudron and McHugh JJ described it in Castlemaine Tooheys Ltd v SA2 as “the essence of the legal notion of discrimination lies in the unequal treatment of equals, and, conversely, in the equal treatment of unequals”. This reflects two underlying notions of equality. “Formal equality” is essentially about consistency3 or treating likes alike and ignoring differences, judging “blindly” and focussing instead on the relevant criteria for the job.4 On the other hand “substantive equality” requires the rules to be questioned and differences to be acknowledged and accommodated rather than ignored so as to enable equality of outcome or equality of opportunity, not merely equality of treatment.5 Equality advocates might start with the simple demand for same treatment, such as being allowed to vote, run for parliament, sit on the judicial bench or get married like other citizens. This demand is for an attribute, like race, sex or sexuality, to be ignored and treated as irrelevant. This allows each person to enter the race, to compete on their merits, without blanket exclusions or stereotyped assumptions about what they can, can’t or shouldn’t do. Once allowed to enter the race, however, for substantive equality to be achieved the challenge then is to identify when and how attributes should not be ignored, but acknowledged and accommodated. Canadian Supreme Court Justice Sopinka articulated this challenge almost two decades ago in interpreting a constitutional equality provision: 2 3 4 5

Castlemaine Tooheys Ltd v SA (1990) 169 CLR 436, 480 (emphasis added). Fredman, Discrimination Law (2nd ed, Oxford University Press, 2011), p 2. Graycar and Morgan, The Hidden Gender of Law (2nd ed, Federation Press, Leichhardt, 2002), pp 28-29. Fredman, Discrimination Law (2nd ed, Oxford University Press, 2011), pp 14-31.

Anti-discrimination Acts

The principal object of certain of the prohibited grounds is the elimination of discrimination by the attribution of untrue characteristics based on stereotypical attitudes … The other equally important objective seeks to take into account the true characteristics of this group … Exclusion from the mainstream of society results from the construction of a society based solely on “mainstream” attributes to which disabled persons will never be able to gain access. Whether it is the impossibility of success at a written test for a blind person, or the need for ramp access to a library, the discrimination does not lie in the attribution of untrue characteristics to the disabled individual. The blind person cannot see and the person in a wheelchair needs a ramp. Rather, it is the failure to make reasonable accommodation, to fine-tune society so that its structures and assumptions do not result in the relegation and banishment of disabled persons from participation, which results in discrimination against them. … It may be seen rather as a case of reverse stereotyping which, by not allowing for the condition of a disabled individual, ignores his or her disability and forces the individual to sink or swim within the mainstream environment. It is recognition of the actual characteristics, and reasonable accommodation of these characteristics which is the central purpose of s 15(1) in relation to disability.6

To appreciate the range of behaviours captured by the term discrimination, a kind of bifocal lens is required, looking not only at the treatment or rules but also the way rules can impact on people and indirectly act as barriers. Addressing discrimination to achieve equality in the workplace would require employers not only to allow a diverse range of people to participate by ignoring irrelevant attributes and checking stereotyped assumptions. It would also require employers to recognise when differences are actually relevant, when ignoring rather than acknowledging and accommodating them would constitute discrimination in the second sense of treating unequals in the same manner.

Anti-discrimination Acts Federal and State legislation [15.30] In Australia, there is currently a patchwork of at least 14 federal, State and

Territory anti-discrimination or equal opportunity laws7 imposing overlapping obligations on employers. Covering all of Australia there are four substantive Acts at the federal level – the Racial Discrimination Act 1975 (Cth), Sex Discrimination Act 1984 (Cth), Disability Discrimination Act 1992 (Cth), and Age Discrimination Act 2004 (Cth) – in addition to the Australian Human Rights Commission Act 1986 (Cth) which establishes the Australian Human Rights Commission (formerly the Human Rights and Equal Opportunity Commission, HREOC) and the enforcement regime for the other federal Acts. The Workplace Gender Equality Act 2012 (Cth) is the other federal Act seeking to address inequality in employment. The State and Territory Acts and bodies are listed in the following table. Act Anti-Discrimination Act 1977 (NSW) Equal Opportunity Act 2010 (Vic) Anti-Discrimination Act 1991 (Qld) Equal Opportunity Act 1984 (SA) Equal Opportunity Act 1984 (WA) 6 7

Administering body Anti-Discrimination Board of New South Wales

Determining tribunal New South Wales Civil and Administrative Tribunal

Victorian Equal Opportunity and Human Rights Commission

Victorian Civil and Administrative Tribunal

Anti-Discrimination Commission Queensland

Queensland Civil and Administrative Tribunal

Equal Opportunity Commission of South Australia

Equal Opportunity Tribunal

Equal Opportunity Commission

State Administrative Tribunal

Eaton v Brant County Board of Education [1997] 1 SCR 241 at [67] per Sopinka J (for the Court). This number does not include the Fair Work Act 2009 (Cth), State and Territory charters of rights, or related administrative Acts.

619

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Ch 15: Anti-discrimination Law Act Anti-Discrimination Act 1998 (Tas) Discrimination Act 1991 (ACT) Anti-Discrimination Act (NT)

Administering body Office of the Anti-Discrimination Commissioner Tasmania

Determining tribunal Anti-Discrimination Tribunal

Australian Capital Territory Human Rights Commission

Australian Capital Territory Civil and Administrative Tribunal

Northern Territory Anti-Discrimination Commission

Northern Territory Civil and Administrative Tribunal

The six federal anti-discrimination and equal opportunity laws were enacted primarily under the external affairs head of constitutional power and give effect to international human rights conventions that Australia has ratified in respect of eliminating discrimination and promoting equality.8 It is now generally accepted that the federal laws are constitutionally valid9 and operate in conjunction with State and Territory laws rather than in conflict.10 While federal laws apply across the country, the additional operation of State or Territory laws means that the protections offered to employees and the obligations on employers varies by location. [15.40] Before examining anti-discrimination laws, employer obligations under the Workplace Gender Equality Act 2012 (Cth) will be reviewed briefly. This Act, initially enacted in 1986, revised in 1999 and then substantially overhauled and renamed in 2012, seeks to promote gender equality in employment. Like its predecessors, the Act applies to “relevant employers”11 who are required to report to an agency, now called the Workplace Gender Equality Agency, which is empowered to determine compliance and list non-compliers (s 19(2) and (3)) who can be named in Parliament. What has changed is the nature of what they need to report, reflecting a significant change in regulatory approach.12 Under the previous Act employers were required “to develop and implement workplace programs” to eliminate discrimination against women in the workplace and report on these.13 Reporting waivers were available to many organisations and reports were not in a standardised form, so information made available to the public was not comparable or meaningful. The previous legislation appeared to have little effect. The crucial difference under the new Act is that employers are no longer required to develop or report on programs. Relevant employers are now required to produce and disclose internal data on six “Gender Equality Indicators” (GEI).14 The GEIs cover: 1. gender composition of the workforce 2. gender composition of governing bodies of relevant employers 3. equal remuneration between women and men 4. availability and utility of employment terms, conditions and practices relating to flexible working arrangements for employees and to working arrangements supporting employees with family or caring responsibilities 5. consultation with employees on issues concerning gender equality in the workplace 8 9 10 11

12 13 14

For example, the United Nations Convention on the Elimination of All Forms of Discrimination against Women (18 December 1979) 1249 UNTS 13. Koowarta v Bjelke-Petersen (1982) 153 CLR 168. University of Wollongong v Metwally (1984) 158 CLR 447. Defined as “registered higher education providers” and employers with 100 or more workers (including employees, those working under a contract for services and some trainees), but does not cover the public service (s 3(1)). Obligations continue if employee numbers drop below 100, but stay above 80 (s 3(2A)). Smith and Hayes, “Using Data to Drive Gender Equality in Employment: More Power to the People?” (2015) 28(3) AJLL 191 (“Using data to drive gender equality”). Equal Opportunity for Women in the Workplace Act 1999 (Cth), ss 6(1) and 3 (definition of “workplace program”). Workplace Gender Equality Act 2012 (Cth), s 13.

Anti-discrimination Acts

6. sex-based harassment and discrimination in the workplace.15 Reports must be lodged with the Agency annually, signed off by the chief executive officer (s 13(5)) and made accessible to employees, employee organisations and shareholders or members (s 16). The Minister has made minimum standards for compliance, but these add little, requiring large employers merely to have a policy or strategy in respect of one of the GEI areas. An employer is non-compliant if they fail to report or report but do not meet the minimum standards or show improvement over a two-year period (s 19C). Arguably the most significant aspect of this Act is that the data must be submitted every year, in a standardised form and nearly all of it is made available publicly. Further, the Agency has translated this enormous data set into benchmarks, enabling employers and stakeholders to readily access the gender performance of particular employers and to compare across industries and sectors.16 This has the potential to create a market for better performance in employment in respect of gender equality.17

Regulatory framework [15.50] Turning to anti-discrimination laws, the first thing to note is that most anti-discrimination laws across Australia adopt a similar model for preventing discrimination. Specific protected attributes are listed and then discrimination on those attributes is prohibited in a range of fields, such as work, with various exceptions listed. Any breach of these prohibitions is enforceable by the victim generally through a two-stage process (conciliation and then hearing) for compensatory remedies (see [15.210] enforcement]). Despite the similarities in regulatory model, specific details about who is covered in what circumstances and subject to which exceptions depends on the particular wording of the various Acts, with details varying significantly even across the federal Acts. The need for harmonisation becomes obvious upon even a cursory examination of this field.18 Using the federal Acts as an example and focus, the four federal Acts prohibit discrimination in employment on the following attributes: race, colour, descent or national or ethnic origin;19 sex, pregnancy and potential pregnancy, breastfeeding, marital or relationship status, family responsibilities, sexual orientation, gender identity and intersex status;20 disability;21 and age.22 Although worded in different ways each Act generally prohibits discrimination at all stages of employment, including hiring, setting terms and conditions of employment, determining promotions and termination.23 The Acts also usually extend to a general 15

16 17 18

19 20 21 22 23

Section 3 of the Workplace Gender Equality Act 2012 (Cth) sets out the first five and provides that the Minister can prescribe more. The sixth has been prescribed by the Minister in Workplace Gender Equality (Matters in relation to Gender Equality Indicators) Instrument 2013 (No 1), Sch 1. See Workplace Gender Equality Agency Data Explorer at http://www.data.wgea.gov.au. For further discussion and qualifications to this see Smith and Hayes, “Using data to drive gender equality”. The 2010-2013 process seeking to consolidate federal anti-discrimination laws saw two years of consultation, a discussion paper, multiple submissions and culminated in a bill (Human Rights and Anti-Discrimination Bill 2012 (Cth)). The process ultimately stumbled, however, on some drafting errors and a lack of solid public understanding of the existing laws or proposed changes and was terminated in March 2013, with little prospect of revival. Racial Discrimination Act 1975 (Cth), ss 9 (general), 15 (employment). Sex Discrimination Act 1984 (Cth), s 14 (discrimination in employment or in superannuation). Disability Discrimination Act 1992 (Cth), s 15 (employment). Age Discrimination Act 2004 (Cth), s 18 (employment). Racial Discrimination Act 1975 (Cth), ss 9 and 15; Sex Discrimination Act 1984 (Cth), s 14;

621

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catch-all of subjecting workers “to any other kind of detriment”.24 The Sex Discrimination Act 1984 and Disability Discrimination Act 1992 also expressly prohibit harassment in work and other fields (see [15.200]).25 Generally anti-discrimination laws cover all employers, not merely corporate ones, and this includes both federal and State public servants (although the Sex Discrimination Act 1984 is unique among the federal Acts in that it does not extend to State government employees).26 Although the focus of this book is on employment, it is notable that the regulation of discrimination in work under anti-discrimination Acts is not limited to the relationship of employment. The discrimination prohibitions usually also protect job applicants and independent contractors, and extend to partnerships, contract workers, commission agents, superannuation payments and other workrelated organisations such as qualifying bodies, registered organisations under the Fair Work (Registered Organisations) Act 2009 (Cth) and employment agencies.27 As noted above however, coverage in respect of specific attributes depends on the wording of the particular Act. Another way in which anti-discrimination laws generally extend beyond the common law of employment and other workplace statutes is the expansiveness of the vicarious liability rules. Under anti-discrimination laws, such as the Sex Discrimination Act 1984, employers are prohibited from discriminating or harassing directly, but are also liable for the actions of their employees done “in connection with the employment of the employee” unless the employer can prove it “took all reasonable steps to prevent the employee” from harassing or discriminating.28 These sections have been interpreted widely.29 Employees and other workers can also be liable for causing, instructing, inducing, aiding or permitting another person to discriminate or harass unlawfully.30

Definitions of discrimination [15.60] Australian anti-discrimination laws define discrimination in some detail and breadth. Most legislation contains a two-part definition of discrimination, encompassing both “direct” and “indirect” forms of discrimination.31 This distinction is usually described as one of treatment versus impact and, to some extent, corresponds to the two different notions of equality noted above, formal and substantive. To determine which kind of discrimination is at play the question is whether the person was excluded because they were treated differently (when they should have been treated

24 25 26 27 28 29

30 31

Disability Discrimination Act 1992 (Cth), s 15; Age Discrimination Act 2004 (Cth), s 18. Note the prohibition on family responsibilities discrimination was extended beyond dismissal to all these stages by the Sex and Age Discrimination Legislation Amendment Act 2011 (Cth). See, for example, Sex Discrimination Act 1984 (Cth), s 14(2)(d). Disability Discrimination Act 1992 (Cth), ss 35, 37 and 39; Sex Discrimination Act 1984 (Cth), Pt II, Div 3. Sex Discrimination Act 1984 (Cth), ss 12 and 13. See for example, Sex Discrimination Act 1984 (Cth), Pt II, Div 1; Disability Discrimination Act 1992 (Cth), Pt 2, Div 1. Sex Discrimination Act 1984 (Cth), s 106. See Anti-Discrimination Act 1977 (NSW), s 53 for a similar provision. See South Pacific Resort Hotels Pty Ltd v Trainor (2005) 144 FCR 402; Lee v Smith & Ors [2007] FMCA 59 and Lee v Smith & Ors (No 2) [2007] FMCA 1092. See also Hely, “Open All Hours: The Reach of Vicarious Liability in “Off Duty” Sexual Harassment Complaints” (2008) 36 FLR 173. See for example, Sex Discrimination Act 1984 (Cth), s 105 and Anti-Discrimination Act 1977 (NSW), s 52. See for example, Racial Discrimination Act 1975 (Cth), ss 9(1) and 9(1A); Sex Discrimination Act 1984 (Cth), ss 5(1) and 5(2). For discussion of this see Belinda Smith, “Rethinking the Sex Discrimination Act – Does Canada’s Experience Suggest We Should Give Our Judges a Greater Role?” in Thornton (ed), Sex Discrimination in Uncertain Times (ANU E Press, Canberra, 2010), pp 235-259 (“Canada’s Experience”).

Anti-discrimination Acts

the same) or uniform treatment impacted them differently (because manifestations of an attribute meant they were not the same). While attractively simple, the neatness of the division between treatment and impact vanishes as it is applied to real life situations in which inequality arises. In fact the issue arose in the first sex discrimination case decided by a tribunal in Australia, Ansett Transport Industries (Operations) Pty Ltd v Wardley (1984) EOC 92-002.32 A woman, young and newly married, was refused a job as a pilot and the airline argued that it did not exclude her because she was a woman but because she was likely to get pregnant and would consequentially need time off. Was this a case of treating her differently to the male applicants who had the same qualifications and experience? Or did the likelihood of her getting pregnant mean that she was not similarly situated to those men at all and thus was not sufficiently like them to be treated the same as them? She was treated the same as all job applicants who were likely to take time off (for pregnancy). Characterised in this way, the rule did not categorically exclude women but by requiring applicants to not get pregnant and thereby cost the company leave it impacted differently on women as a group. A rule against pilots “taking extended leave” might not breach the notion of formal equality so long as it is applied consistently. However, substantive equality requires examination of how the rule disproportionately impacts on women and an examination of how the rule might need to change in order to promote equal opportunity or even representation of women in the ranks of full pilots. The malleability of the notion of equality quickly becomes apparent, as does the line between direct and indirect discrimination. In seeking to interpret the statutory definition of discrimination the courts have questioned the distinction between direct and indirect discrimination on a number of occasions over the years. In 2005, however, the High Court of Australia took an approach which clarified and reinforced that direct and indirect discrimination were to be treated as distinct.33 This is in contrast to the approach taken in other jurisdictions where such a distinction has been characterised as artificial and abandoned, with the focus instead on whether the conduct or policies unfairly exclude disadvantaged attribute groups.34 The federal Acts prohibit both direct and indirect discrimination in respect of all protected attributes, other than the attribute of family responsibilities which is currently limited to direct discrimination only. All state and territory Acts similarly use the dichotomous definition of discrimination, except the Northern Territory Act which does not differentiate between direct and indirect discrimination.

Direct discrimination [15.70] Direct discrimination corresponds most closely with the common understanding of discrimination whereby likes are not treated alike. Using the metaphor of a running race this formal notion of equality requires open entry, permitting everyone to start the race (if they can). At its most simple, direct discrimination is about rejecting someone for a job or promotion by reason of their race, sex, religion etc. A summary is provided before looking closely at the legislative test. There are different ways in which direct discrimination can manifest itself. The first and most blatant example is that of categorical or blanket exclusion. This would include the “whites only” signs seen decades ago. Modern examples are requirements that applicants be Australian citizens, or “under 60 years of age”, or excluding all job 32 33 34

This is examined in Smith, “From Wardley to Purvis – How Far has Australian Anti-Discrimination Law Come in 30 Years?” (2008) 21 AJLL 3 (“Wardley to Purvis”). Purvis v New South Wales (Department of Education and Training) (2003) 217 CLR 92. For discussion see Smith, “Wardley to Purvis”. See Smith, “Canada’s experience”.

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applicants who are diabetic. All applicants with those attributes are excluded under such a categorical rule. This wide definition of discrimination is tempered by exceptions which permit specific cases of discrimination, such as hiring junior workers because they can be paid youth rates of pay.35 As will be explained at [15.100], [15.110], in addition to the blanket exclusions, direct discrimination also covers different treatment that reveals more subtle use of attributes in decision-making, such as stereotyping or making assumptions. An example of this would be where an employer treats less favourably an applicant who is a new mother either because the employer believes that new mothers should not be working full time, or because the employer assumes the applicant is not likely to be able to undertake overnight business trips, but makes neither sort of judgement about the applicant who is a new father. It is the application of the gendered value judgement about who should care for babies or the assumption about who will care for a baby that amounts to the less favourable treatment. It is the inconsistent treatment on the attribute of sex of otherwise similarly qualified applicants that amounts to direct discrimination. Note that if the job does actually require full time hours or overnight business trips, then the employer might not fall foul of direct discrimination rules if it consistently, regardless of sex, asks every applicant about their capacity to perform these requirements and consistently responds by excluding all applicants who say they cannot. (Such a rule, however, would need to be reasonable to survive a challenge of indirect sex discrimination.) Turning to the legislative definitions of discrimination, most Australian Acts36 use a definition of direct discrimination akin to the one found in the Sex Discrimination Act 1984: 5 Sex discrimination (1) For the purposes of this Act, a person (in this subsection referred to as the discriminator) discriminates against another person (in this subsection referred to as the aggrieved person) on the ground of the sex of the aggrieved person if, by reason of: (a) the sex of the aggrieved person; (b) a characteristic that appertains generally to persons of the sex of the aggrieved person; or (c) a characteristic that is generally imputed to persons of the sex of the aggrieved person; the discriminator treats the aggrieved person less favourably than, in circumstances that are the same or are not materially different, the discriminator treats or would treat a person of a different sex.

Summarising this section, direct discrimination is commonly described as (i) treating someone (ii) less favourably than a similarly situated comparator (iii) because of a protected attribute, such as sex. Treatment

[15.80] What can constitute “treatment” links to the prohibitions in the Act and reflects different kinds of detriment in the workplace. The Sex Discrimination Act 1984, for instance, prohibits discrimination in employment in the following way: 14 Discrimination in employment or in superannuation

35 36

Age Discrimination Act 2004 (Cth), s 25 (exemption for youth wages). Contrast the model of “unfavourable treatment” used in Discrimination Act 1991 (ACT), s 8 and Equal Opportunity Act 2010 (Vic), s 8.

Anti-discrimination Acts

(1) It is unlawful for an employer to discriminate against a person on the ground of the person’s sex [or other attributes]: (a) in the arrangements made for the purpose of determining who should be offered employment; (b) in determining who should be offered employment; or (c) in the terms or conditions on which employment is offered. (2) It is unlawful for an employer to discriminate against an employee on the ground of the employee’s sex [or other attributes]: (a) in the terms or conditions of employment that the employer affords the employee; (b) by denying the employee access, or limiting the employee’s access, to opportunities for promotion, transfer or training, or to any other benefits associated with employment; (c) by dismissing the employee; or (d) by subjecting the employee to any other detriment.

This makes clear that the possibly discriminatory “treatment” can range from formal decisions (about who is hired, promoted, disciplined, terminated, etc), other decisions about what terms and conditions are offered to an employee (pay, hours, benefits, car, window office, etc) and less formal decisions about recruitment arrangements and work arrangements (such as the allocation of tasks, provisions of rewards, and determinations of leave requests). The catchall category of “any other detriment” means that employers can even be liable for the sum of minor or diffuse occurrences in workplaces that can constitute a hostile workplace culture.37 Comparator

[15.90] The test requires an objective comparison of the treatment of two different employees (or applicants); one being the complainant and the other an actual or hypothetical employee. First, the comparator must not possess the specific attribute that has allegedly been used unlawfully to discriminate. For attributes that have multiple categories, like race and sex, the comparator will be of a different race or sex to the complainant. For asymmetrical attributes, such as disability, the comparator may be someone without any disability or someone without the complainant’s specific disability.38 Secondly, the comparator must be in the same, or not materially different, circumstances. Identifying the appropriate comparator in this sense is not easy, although the High Court has provided some guidance on this. In the case of Purvis v New South Wales (Dept of Education and Training)39 a student with multiple disabilities was expelled from a school because of anti-social and aggressive behaviour that was a manifestation of his disability. The student brought a claim of direct discrimination under the Disability Discrimination Act 1992, relying on a definition that at the time was similar to the one set out above. He argued that in being expelled because of his behaviour he had been treated differently to non-disabled students. The court accepted that the claimant’s behaviour was a manifestation of his disability and therefore a “disability” under the Act. The question of different treatment turned on 37

38 39

Horne and McIntosh v Press Clough Joint Venture (1994) EOC 92-556 at 92-591; Hill v Water Resources Commission (1985) EOC 92-127; Freestone v Kozma (1989) EOC 92-249; Bennett v Everitt (1988) EOC ¶92-244; Hutchinson v Smirlis & Co Shoe Manufacturers (1986) EOC 92-152; Lowen v Ivanov (1986) EOC 92-169. See for example, Nojin v Commonwealth (2012) 208 FCR 1; [2012] FCAFC 192 at [126]-[127] per Buchanan J, at [241] per Katzmann J. Purvis v New South Wales (Dept of Education and Training) (2003) 217 CLR 92.

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what “circumstances” were attributed to the comparator: with whom should the student be compared – a non-disabled student who was well behaved or one who shared the same behavioural problems? The court chose the latter and found that the school had not discriminated because it treated this disabled student the same as it would treat all students who behaved the same way. The majority explained its reasoning in this way: [224] The circumstances referred to in s 5(1) are all of the objective features which surround the actual or intended treatment of the disabled person by the person referred to in the provision as the “discriminator”. It would be artificial to exclude (and there is no basis in the text of the provision for excluding) from consideration some of these circumstances because they are identified as being connected with that person’s disability. There may be cases in which identifying the circumstances of intended treatment is not easy. But where it is alleged that a disabled person has been treated disadvantageously, those difficulties do not intrude. All of the circumstances of the impugned conduct can be identified and that is what s 5(1) requires. Once the circumstances of the treatment or intended treatment have been identified, a comparison must be made with the treatment that would have been given to a person without the disability in circumstances that were the same or were not materially different.40

The final element is noted, before implications of this case are discussed. By reason of an attribute [15.100] The complainant must prove that the different treatment was taken “because of” or “by reason of” a prohibited attribute. The reason need not be the only or even the dominant reason for the different treatment.41 Courts have described this element as asking: what was the “true basis”42 for the decision? The majority in Purvis elaborated: the central question will always be – why was the aggrieved person treated as he or she was? If the aggrieved person was treated less favourably was it “because of”, “by reason of”, that person’s disability? Motive, purpose, effect may all bear on that question. But it would be a mistake to treat those words as substitutes for the statutory expression “because of”.43

The evidence might be statements, including direct statements of categorical exclusions, although these are now quite rare. Alternatively, evidence might include statements disclosing an assumption, prejudice or animus from which it can be inferred that the attribute was at least one of the reasons. Intention and motive might be relevant, but need not be proven. All the circumstances surrounding decision-making can be considered, not only the direct evidence of the decision-maker. [15.110] The Purvis decision has a number of implications for the scope of direct discrimination (and consequently also for whether conduct is framed as direct or indirect discrimination).44 It makes clear that all the objective circumstances, even behaviour or conduct that relates integrally to the particular attribute, can be taken 40 41

42

43 44

Purvis v New South Wales (Dept of Education and Training) (2003) 217 CLR 92 (Gummow, Hayne and Heydon JJ). See, for example, Sex Discrimination Act 1984 (Cth), s 8; Anti-Discrimination Act 1977 (NSW), s 4A; Equal Opportunity Act 1984 (WA), s 5; Anti-Discrimination Act 1998 (Tas), s 14(3); Discrimination Act 1991 (ACT), s 4A(2); Anti-Discrimination Act (NT), s 20(3). Section 16 of the Age Discrimination Act 2004 (Cth) was amended to remove the “dominant reason” test by the Disability Discrimination and Other Human Rights Legislation Act 2009 (Cth). A few Acts require it to be a “substantial” reason: Anti-Discrimination Act 1991 (Qld), s 10(4); and Equal Opportunity Act 2010 (Vic), s 8. Australian Iron & Steel Pty Ltd v Banovic (1989) 168 CLR 165 at 176-177 per Deane and Gaudron JJ, at 184 per Dawson J, at 208 per McHugh J; Waters v Public Transport Corporation (1991) 173 CLR 349 at 359 per Mason CJ and Gaudron J, at 400 McHugh J. Purvis v New South Wales (Dept of Education and Training) (2003) 217 CLR 92 at [236] per Gummow, Hayne and Heydon JJ. Smith, “From Wardley to Purvis”.

Anti-discrimination Acts

into account and attributed to the comparator. This means that to comply with the direct discrimination prohibition, employers must avoid categorical exclusions, assumptions and stereotyping as these would not represent consistent treatment on the basis of objective circumstances like behaviour. But they are permitted to treat alike all employees who behave the same way, regardless of the reason or cause of that behaviour. So, for example, an employee who is late (due to pregnancy, disability or family responsibilities) need only be treated in the same way as all latecomers. As a corollary, there is no obligation under the standard direct discrimination definition to provide accommodation to those with protected attributes. A related implication is that direct discrimination provisions do not prevent employers from using criteria that very closely connect or overlap with traits that are protected by anti-discrimination laws. For example, while an employer may be prohibited from applying a blanket exclusion of women, direct discrimination provisions allow the employer to choose the candidate who can work 24/7, can do overtime on short notice, will not take extended leave, will not take their entitlement to carer’s leave, pass a fitness test based on male physiology, or any other criteria that may have a gendered element but is not expressly “sex”. So, for instance, in determining whether a woman who has taken maternity leave and is consequently demoted has been treated less favourably than a comparator, the comparator must be male and also have taken equivalent leave.45 If such a man would also have been demoted for taking leave, then the different treatment element of a sex discrimination claim would not be made out. However, over the past few decades it has becoming increasingly clear that unconscious or implicit bias, reflecting prejudice and stereotyping, can infect decisions and, in fact, is pervasive.46 If an assumption or stereotype about a person’s attribute is used in decision-making, this will constitute less favourable treatment than a comparator because the assumption or stereotype is not made about the comparator. Such bias is often not obvious and can be very difficult to prove. It can even be difficult for decision-makers to detect and is certainly posing a challenge for organisations to address. Such discrimination may be pervasive, but it is often so subtle and systemic that it goes unnoticed and thus unchallenged.

Indirect discrimination [15.120] Indirect discrimination is concerned with the impact of uniform treatment. Uniform treatment can be understood as failing to acknowledge and accommodate differences when they are relevant. For this type of discrimination, the question is thus not simply whether a requirement has been applied consistently, but whether the requirement excludes particular groups disproportionately and whether this is fair. Specifically, indirect discrimination concerns the disproportionate impact of an apparently neutral rule on a protected group because of their shared attribute.47 If a requirement, condition or practice operates to exclude a group, even if it does not exclude every member of that group, the law of indirect discrimination requires employers to examine whether the requirement is reasonable in all the circumstances. Requiring the rule to be reasonable implies that at least some degree of accommodation must be made by employers to avoid unquestioned, arbitrary or otherwise unjustifiable exclusion. One of the most significant changes to the original model of Australian antidiscrimination law has been in respect of the “reasonableness” of rules or requirements: 45 46

47

See Thomson v Orica Australia Pty Ltd [2002] FCA 939 at [121]. See, for example, Jost et al, “The Existence of Implicit Bias is Beyond Reasonable Doubt: A Refutation of Ideological and Methodological Objections and Executive Summary of Ten Studies That No Manager Should Ignore” (2009) 29 Res Organ Behav 39. Hunter, Indirect Discrimination in the Workplace (Federation Press, Leichhardt, 1992).

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in most Acts the onus in respect of this element is now on the respondent employer to prove that the requirement is reasonable rather than requiring the complainant employee to prove that it is not. While the federal,48 Victorian and ACT Acts have incrementally changed to this new model,49 some older legislation retains the original formulation and onus.50 Depending on the specific wording of the indirect discrimination provisions there are generally three or four parts to the test: a condition or requirement; that disproportionately impacts on or disadvantages a protected group; an inability by the complainant to comply; and reasonableness. The original model with four elements can still be found in the New South Wales Act’s definition of indirect (sex) discrimination: A person (“the perpetrator”) discriminates against another person (“the aggrieved person”) on the ground of sex if the perpetrator: … (b) requires the aggrieved person to comply with a requirement or condition with which a substantially higher proportion of persons of the opposite sex, or who do not have a relative or associate of that sex, comply or are able to comply, being a requirement which is not reasonable having regard to the circumstances of the case and with which the aggrieved person does not or is not able to comply.51

Illustrating the new model, the federal Sex Discrimination Act 1984 defines indirect sex discrimination as: 5 Sex discrimination … (2) For the purposes of this Act, a person (the discriminator) discriminates against another person (the aggrieved person) on the ground of the sex of the aggrieved person if the discriminator imposes, or proposes to impose, a condition, requirement or practice that has, or is likely to have, the effect of disadvantaging persons of the same sex as the aggrieved person. (3) This section has effect subject to sections 7B and 7D [which provide reasonableness as a defence].

Condition or requirement

[15.130] The first element under either formulation of indirect discrimination is a

“condition or requirement”. It can be explicitly or implicitly imposed.52 It also must be apparently neutral rather than making reference to the protected group, otherwise it would constitute direct discrimination. To illustrate this, a requirement that applicants be under 25 specifies an age group and thus would constitute direct age discrimination, subject to exceptions. Alternatively, a requirement that applicants have recently graduated from university is facially neutral as to age and, although it would disproportionately impact on older people, it would not categorically exclude them. Examples include requirements to: • work full-time, long hours, rotating shifts, overtime without notice, or on Saturdays;

48 49

50 51 52

Except the Racial Discrimination Act 1975 (Cth). Sex Discrimination Act 1984 (Cth), ss 7B and 7C; Age Discrimination Act 2004 (Cth), s 15(2); Disability Discrimination Act 1992 (Cth), s 6(4); Equal Opportunity Act 2010 (Vic), s 9(2); Discrimination Act 1991 (ACT), s 8. See for example, Racial Discrimination Act 1975 (Cth); Anti-Discrimination Act 1977 (NSW). Anti-Discrimination Act 1977 (NSW), s 24(1) (emphasis added). Waters & Ors v Public Transport Corporation (1991) 173 CLR 349 at 360 per Mason CJ and Gaudron J (citing Australian Iron & Steel Pty Ltd v Banovic (1989) 168 CLR 165).

Anti-discrimination Acts

• comply with a behaviour, conduct or dress code; • participate in client entertainment functions or travel outside of regular work hours; • be a minimum or maximum height or weight; • be able to lift certain weights, climb stairs, drive, stand all day or perform other physical activities; • speak, read or write a specific language, to a particular level of proficiency or with a particular accent; and • have specific qualifications, training or experience. While the condition or requirement needs to be framed with some precision, this element has traditionally been interpreted very widely.53 In 2004, however, the High Court interpreted the term narrowly in a case brought by public school teachers under the New South Wales Act. Under their enterprise agreement, permanent teachers were afforded a higher pay scale than casual teachers (even long-term casuals). The casual teachers claimed that this distinction in pay scales could be characterised as a requirement to be permanent in order to access the higher pay scale. The claimants lost because the High Court majority held that the Department of Education had merely adopted a distinction (between casuals and permanents) that was established in legislation and affording each group different pay scales did not amount to a requirement. The High Court held that there was no requirement because the distinction was dictated by the legislation, even though the legislation had not dictated the industrial conditions that should attach to each group of teachers.54 In his dissent, Justice Kirby lamented that this decision reflected an increasingly narrow or technical approach to anti-discrimination laws taken by Australian courts.55 Inability to comply

[15.140] The traditional formulation of indirect discrimination explicitly requires the complainant to prove that the requirement or condition is one with which the complainant “does not or is not able to comply”. The Age Discrimination Act 2004 and Sex Discrimination Act 1984 do not expressly require this to be proven, but probably because there would not likely be any harm on which to base a claim if there was compliance. This element generally has not been an onerous one to prove as the courts have taken a relatively liberal approach to its interpretation. The leading authority is one from the United Kingdom of Mandla v Dowell Lee.56 It was a case of a Sikh boy arguing that the requirement to not wear any headress (such as a turban) to school was indirectly discriminatory. The House of Lords held that while the boy could theoretically remove his turban and attend school, the interpretation should instead be a practical one. In this way, the question becomes one of whether the person can comply while also preserving the very status that is ostensibly being protected by the legislation. Hence, in cases of requirements that impact those with family responsibilities for instance, the court does not rigorously inquire as to whether a complainant could comply if they found alternative care arrangements57 because in a sense it is the right to provide that care personally that is being protected. Under the Disability Discrimination Act 1992 the Full Federal Court has approached the element as one of whether the complainant 53 54 55 56 57

Australian Iron & Steel Pty Ltd v Banovic (1989) 168 CLR 165 at 185. New South Wales v Amery (2006) 230 CLR 174. New South Wales v Amery (2006) 230 CLR 174 at 214-215 per Kirby J. Mandla v Dowell Lee [1983] 2 AC 548. Amery & Ors v New South Wales [2004] NSWCA 404 at [129]-[135] per Beazley JA, at [176] per Hodgson JA.

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would suffer “serious disadvantage” even if they could comply.58 So a deaf student who could “cope” with instruction in English was still able to prove that she could not comply with a requirement to be taught without Auslan assistance because she suffered “serious disadvantage” in educational terms of not being able equally to achieve her full potential. Matters of practicality and dignity are also to be considered.59 Disproportionate impact or disadvantage

[15.150] In some States60 and originally as the federal formulation, the disproportionate impact element required the claimant to prove that “a substantially higher proportion” of people without the complainant’s trait could comply with the requirement or condition. From the outset this posed significant interpretational and evidentiary difficulties. The High Court sought to provide early guidance, articulating that the comparison had to be between proportions or fractions within each group rather than simply the number in each group.61 There remains confusion about how to identify the appropriate pools to use for the calculations, what degree of difference constitutes “substantially higher” and how the element can be proven if statistics are unavailable for such mathematical calculations.62 The difficulty of proving or even understanding this element was one of the prompts for its reform in some jurisdictions. This led to the language now found in most federal Acts which requires the complainant merely to prove that the requirement or condition has the “effect of disadvantaging” members of the complainant’s group. The language is simpler and clearly suggests that statistics and specific proportions are not required. If actual figures are available about the impact of a requirement or a condition, this would still be the best evidence to prove the element, but the courts have been willing to take less specific evidence and even take judicial notice of disadvantage. Examples of this include the now fairly well-established line of indirect sex discrimination cases in which judicial notice has been taken that the requirement to work full time hours has the effect of disadvantaging women, at least those with young children (because women disproportionately bear child caring responsibilities).63 Similarly, a court might take judicial notice that stairs disadvantage wheelchair users, while the effect of performance requirements on a person with a particular mental health condition might require specific evidence of disadvantage.64 Reasonableness

[15.160] A condition that disproportionately impacts on a protected group will only amount to unlawful discrimination if it is not “reasonable” in the circumstances. In essence this is a defence of justification and differentiates indirect from direct discrimination which has no such general defence. There are various ways in which this element can be conceived. A shorthand way to consider it is whether the requirement is “legitimate and proportionate”, a question that covers both the ends and the means. So the courts will consider the reason why the requirement has been imposed, asking 58 59 60

61 62 63

64

Hurst v Queensland (2006) 151 FCR 562 at [134]. Access for All Alliance (Hervey Bay) Inc v Hervey Bay City Council [2004] FMCA 915 at [9]; Travers v New South Wales (2001) 163 FLR 99; [2000] FCA 1565 at [60]. Equal Opportunity Act 1984 (WA); Anti-Discrimination Act 1977 (NSW); Equal Opportunity Act 1984 (SA); Anti-Discrimination Act 1991 (Qld). Cf Equal Opportunity Act 2010 (Vic); Discrimination Act 1991 (ACT); Anti-Discrimination Act 1998 (Tas). Australian Iron & Steel Pty Ltd v Banovic (1989) 168 CLR 165 at 186-189 per Dawson J. Hunter, Indirect Discrimination in the Workplace (Federation Press, Leichhardt, 1992), ch 13. Hickie v Hunt & Hunt [1998] HREOCA 8 at [6.17.10]; (1998) EOC ¶92-910; Escobar v Rainbow Printing Pty Ltd (No 2) [2002] FMCA 122 at [33] and [37]; Mayer v ANSTO [2003] FMCA 209 at [69]-[73]. See for example, Jones v State of NSW [2008] FMCA 832 at [69].

Anti-discrimination Acts

whether it is for the purpose of achieving a legitimate business goal.65 But courts will also consider whether the means of achieving that goal through the requirement or condition is efficient, effective, appropriate and adapted to the activity, and whether there is a less discriminatory alternative way of achieving the goal that would not impose excessive harship on the employer;66 some accommodation is expected. Reasonable is to be understood as “reasonable in all the circumstances of the case”.67 Factors which might be relevant include: the maintenance of good industrial relations; the observance of health and safety requirements, the existence of competitors; and the financial situation of the respondent and cost of alternative measures or accommodations.68 The test is objective, so subjective preferences are not determinative69 and “the test of reasonableness is less demanding than one of necessity, but more demanding than a test of convenience”.70 In essence, the indirect discrimination obligation on employers is to ensure that the requirements they impose are both rationally connected to the goals of the workplace and, if they do disproportionately impact on particular groups, considering whether there are feasible alternative ways of achieving the same goal by changing the requirement or allowing some accommodation. An example of revising the requirement is where an employer asks job applicants about their citizenship or visa status for a legitimate reason of wanting to know if they are legally able to work in the country. This question could be narrowed so that it is more tailored to the particular goal and instead asking whether the applicant is legally entitled to work (and possibly noting that this is not limited to citizens and permanent residents). In this way the employer gets the specific information it needs without casting the net too widely and possibly excluding (or suggesting exclusion of) otherwise qualified job applicants who are not Australian citizens. Alternatively, a requirement that employees take their lunch break between 12 and 1pm might have been imposed for no particular business or regulatory reason and could be relaxed to enable a parent to take their break at 2pm in order to quickly collect their child from pre-school and take them to afternoon care rather than exclude this worker with caring responsibilities.71 The traditional formulation of indirect discrimination – still found in the Racial Discrimination Act 1975 and some State Acts – requires complainants to prove that the requirement or condition is not reasonable. There is now, however, a clear trend at least at the federal level toward the formulation first adopted in the Sex Discrimination Act 1984 which shifts this burden to the respondent, providing reasonableness instead as a defence.72 The Sex Discrimination Act 1984, although oddly not the other federal Acts, also provides a list of matters that the court must take into account in determining reasonableness.73 The list reflects some of the jurisprudence noted above on the question of reasonableness: 7B(2) The matters to be taken into account in deciding whether a condition, requirement or practice is reasonable in the circumstances include: 65 66 67 68 69 70 71 72 73

This is not as strict as the United States’ requirement of “business necessity”: see section 703, Civil Rights Act of 1964 (US) 42 USC § 2000e-2(k)(1)(A)(i). Waters v Public Transport Corporation (1991) 173 CLR 349 at 378 per Brennan J. See also Secretary, Department of Foreign Affairs v Styles (1989) 23 FCR 251 at 263 per Bowen CJ and Gummow J. Waters v Public Transport Corporation (1991) 173 CLR 349 at 410, 411 per McHugh J. Waters v Public Transport Corporation (1991) 173 CLR 349 at 395-396 per Dawson and Toohey JJ. Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission (1997) 80 FCR 78 at 110-111 per Sackville J. Secretary, Department of Foreign Affairs v Styles (1989) 23 FCR 251 at 263 per Bowen CJ and Gummow J. Song v Ainsworth Game Technology Pty Ltd [2002] FMCA 31. Sex Discrimination Act 1984 (Cth), ss 7B and 7C; Age Discrimination Act 2004 (Cth), s 15(2); Disability Discrimination Act 1992 (Cth), s 6(3) and (4). Equal Opportunity Act 2010 (Vic) also has a list, see s 9(3).

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(a) the nature and extent of the disadvantage resulting from the imposition, or proposed imposition, of the condition, requirement or practice; and (b) the feasibility of overcoming or mitigating the disadvantage; and (c) whether the disadvantage is proportionate to the result sought by the person who imposes, or proposes to impose, the condition, requirement or practice.

In summary, the reformulation of the test of indirect discrimination to simplify the element of disproportionate impact and shift the reasonabless burden onto the respondent is a small but significant step toward promoting substantive equality. It does this by making more explicit that employers need to be able to justify their workplace rules and make some accommodation or adjustments to facilitate equality.

Failure to provide reasonable adjustments [15.170] It is arguable that any prohibition on indirect discrimination imposes an implicit obligation on employers to provide adjustments or accommodation in respect of each protected attribute because it requires requirements or conditions to be “reasonable”. Some Acts have now been amended to make such an obligation explicit.74 At the federal level, in response to the Purvis decision, this obligation was imposed in 2009 in respect of people with disability under the Disability Discrimination Act 1992.75 In very awkward drafting, the obligation was imposed by extending the definition of direct and indirect discrimination to the case where “reasonable adjustments” are not provided. Direct discrimination, under s 5(2) now extends to include: (a) the discriminator does not make, or proposes not to make, reasonable adjustments for the person; and (b) the failure to make the reasonable adjustments has, or would have, the effect that the aggrieved person is, because of the disability, treated less favourably than a person without the disability would be treated in circumstances that are not materially different. This means that in respect of people with disability, employers are required to provide reasonable adjustments. As the term suggests “reasonable” adjustments are those that balance the costs and benefits of providing adjustments for employers, employees and other affected people. An adjustment is defined as reaonable if it does not impose an “unjustifiable hardship” on the provider,76 with relevant factors listed in s 11 of the Act. Significantly, while s 5(1) was interpreted by the High Court in Purvis as being concerned only with formal equality or about same treatment, this new s 5(2) takes a more susbtantive equality approach by focussing on “the effect or outcome of not accommodating the needs” of a person with disability, or not treating them appropriately differently by providing adjustments.77 Unlike the traditional direct discrimination provisions that require causation or a reason to be proven (see [15.100]), this section has been interpreted otherwise to require only a failure to provide reasonable adjustments that has “the effect” of treating the person with a disability less favourably than a comparator.78 Section 5(3) now provides that the fact a 74 75 76 77 78

See, for example, Equal Opportunity Act 2010 (Vic,) ss 19 (responsibilities as a carer), 20 (disability). Disability Discrimination and Other Human Rights Legislation Act 2009 (Cth). Disability Discrimination Act 1992 (Cth), s 4. Watts v Australian Postal Corporation [2014] FCA 370 at [244]-[246]. Watts v Australian Postal Corporation [2014] FCA 370 at [241], [257]. Cf Sklavos v Australasian College of Dermatologists [2016] FCA 179 at [131]-[136] per Jagot J.

Anti-discrimination Acts

person needs adjustments cannot constitute a material difference. This means the comparison is to be between the complainant and someone without the disability who does not require adjustments. Under the indirect discrimination provision in s 6(2), an employer is now obliged to make reasonable adjustments to eliminate the disadvantage created by the requirement, condition or practice imposed.

Exceptions and exemptions [15.180] The Acts prohibit discrimination in employment but some apparently discriminatory conduct will not be unlawful if it is permitted by a defence, exception or exemption. Regardless of the label, these all operate as defences in that the onus is generally on respondents to prove them as conduct not falling within the scope of unlawful conduct. The nature and scope of the exceptions differ across the statutes, but there are a few categories that are worth noting. The first exception is the one just dealt with, reasonabless of indirect discrimination. As noted at [15.160], this is a justificatory type of defence which allows all the circumstances of the case to be weighed up and balanced to justify standards that disparately impact on a protected group. There is no similar general justificatory defence for direct discrimination. A second type of exception is “genuine occupational qualification” or requirement which is a general exception but only available under some Acts. The Sex Discrimination Act 1984, for instance, allows sex to be used as the basis for selecting employees, commission agents or contract workers for “a position in relation to which it is a genuine occupational qualification to be a person of” a particular sex.79 Examples provided include cases of authenticity for dramatic performances and privacy and decency (body searches and clothes fitting).80 Other Acts, such as the Racial Discrimination Act 1975, do not include such a general exception. A third and related type of exception is that of “inherent requirement” of the position. This defence is available federally in respect of disability and age discrimination.81 It permits an employer to exclude an applicant if they cannot perform the “inherent requirements” of the particular work even if they cannot do this because of their disability or age. A clear example would be excluding someone without sight from a bus driving position. However, it is important to note that this exception under the Disability Discrimination Act 1992, is not available absolutely but requires an assessment of whether the person could perform the inherent requirements with “reasonable adjustments”, which the employer is under an obligation to provide.82 The High Court has interpreted “inherrent requirements” to mean “something that is essential to the position” and this is not limited to being able physically to perform the job (of flying a plane, for instance) but can also take into account capacity to comply with a roster and allocation of duties.83 Justice Gaudron formulated this test as a question: “ask whether the position would be essentially the same if that requirement were dispensed with”.84 Employers are permitted to look beyond the person’s technical ability to consider whether they can perform the inherent requirements safely, but the 79 80 81 82 83

84

Sex Discrimination Act 1984 (Cth), s 30(1). Sex Discrimination Act 1984 (Cth), s 30(2). Disability Discrimination Act 1992 (Cth), s 21A; Age Discrimination Act 2004 (Cth), 18(4). Disability Discrimination Act 1992 (Cth), ss 21A and B. The reasonable adjustments obligation is noted at [15.85]. QANTAS Airways Limited v Christie (1998) 193 CLR 280 at 294 per Gaudron J and 318 per Gummow J. X v Commonwealth (1999) 200 CLR 177. See also McDermott, “Age Discrimination and Employment Law: The Sky’s the Limit” (1998) 11 AJLL 144. QANTAS Airways Limited v Christie (1998) 193 CLR 280 at 295 per Gaudron J.

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safety risk must be considered in light of the person’s individual circumstances and characteristics rather than assumptions based on stereotypes and must be balanced against the real likelihood of that risk eventuating.85 Exceptions that operate in a blanket way, excepting special bodies or workers from coverage, constitute a fourth category. Examples of these include partnerships with fewer than six partners86 under the Sex Discrimination Act 1984, and employment in private households, small business or “private educational authorities” under the New South Wales Act in respect of many different attributes including sex, marital status, and disability.87 This type of exception can represent a balancing of competing rights but might also reflect a political compromise. [15.190] Discrimination is also permissible if it is performed in order to comply with another law.88 Very significantly this exception has traditionally extended to industrial awards and enterprise agreements registered or certified under labour laws. In 1994 New South Wales amended its provision so that compliance with awards and agreements was no longer an official defence under the Act. It became clear, however, through the Amery litigation89 that the dictates of awards and agreements (having been issued or certified by specialist industrial tribunals) would continue to have a significant bearing on the courts’ determination of whether conduct was unlawful under anti-discrimination legislation. With the enactment of the Fair Work Act 2009 (Cth), the exemptions for compliance with statutory authority in the federal Acts has been amended in a significant way. While compliance with an industrial instrument under the Fair Work Act 2009 is still an exemption under the Sex Discrimination Act 1984, this defence does not apply to provisions in awards and agreements that have “no effect”.90 This appears to relate to the provisions in the Fair Work Act 2009 that make discriminatory provisions in awards and agreements of no legal effect (see [15.290] below).91 Therefore compliance with industrial instruments is no longer a blanket defence but invites an assessment of whether the instrument itself is discriminatory. This represents a significant blurring of the traditional separation between anti-discrimination and industrial laws. Two final categories of exceptions are slightly different in nature. The “special measures” exception allows employers to identify disadvantaged groups and provide them with preferential treatment, even quotas, in order to promote substantive equality.92 This notion of special measures may be referred to as positive discrimination or affirmative action and reflects the need to do more than merely treat everyone in the same way when there has been a history of prejudice and exclusion in recruiting, establishing occupations and professions, designing workplaces and developing career and wage systems. Indigenous workers have traditionally been underrepresented in managerial positions for these reasons. Therefore, under the special measures exception, it would be open to an employer to set a quota for Indigenous applicants or use 85 86 87 88 89 90 91 92

Vickers v Ambulance Service of NSW [2006] FMCA 1232 at [46]-[49]. Sex Discrimination Act 1984 (Cth), s 17; fewer than three partners under the Disability Discrimination Act 1992 (Cth), s 18. See for example, Anti-Discrimination Act 1977 (NSW), ss 25(3) (sex), 40(3) (marital or domestic status) and 49D (disability). See for example, Age Discrimination Act 2004 (Cth), s 39 (direct compliance with laws, orders, etc); Sex Discrimination Act 1984 (Cth), s 40; Anti-Discrimination Act 1977 (NSW), s 54. New South Wales v Amery [2003] NSWADTAP 16; Amery v New South Wales [2004] NSWCA 404; New South Wales v Amery (2006) 230 CLR 174. Sex Discrimination Act 1984 (Cth), s 40(1)(g). See also Age Discrimination Act 2004 (Cth), s 39(8) and Disability Discrimination Act 1992 (Cth), s 47(1). cf Racial Discrimination Act 1975 (Cth) s 10. Fair Work Act 2009 (Cth), ss 153(1) read in conjunction with s 136(2)(a) (modern awards); ss 194(a) and 195 read in conjunction with 186(4) (enterprise agreements). See for example, Racial Discrimination Act 1975 (Cth), s 8; Gerhardy v Brown (1985) 159 CLR 70.

Anti-discrimination Acts

modified selection criteria so as to address this inequality without breaching the law against race discrimination. Similarly quotas or other special measures could be used to get more women into traditionally male occupations, such as construction, engineering or mining.93 The special measures exception would operate as a defence to a claim by a man that he was thereby treated less favourably because of his sex.94 Generally the special measures tests encompass four elements that the respondent would need to prove: inequality must exist, warranting special measures; the measure needs to be introduced for the purpose of addressing inequality; the measure must be capable of addressing the inequality, and not be disproportionate in its scope; and the measure must be temporary and not continue after the goal has been achieved.95 Finally, under most Acts96 “temporary exemptions” can be applied for and granted.97 For their specified length of time these exemptions can provide greater certainty for employers. In the federal sphere applications are made to the Australian Human Rights Commission which then generally invites comments and submissions from interested parties before determining the application. The determinations are public and reviewably by the Administrative Appeals Tribunal.

Harassment [15.200] The Sex Discrimination Act 1984, along with all State and Territory anti-discrimination Acts, makes it unlawful to sexually harass a person in work relationships.98 Sexual harassment is defined as unwelcome conduct of a sexual nature that could cause the victim to feel offended, humiliated or intimidated. For example, the Sex Discrimination Act 1984 frames it as follows: 28A Meaning of sexual harassment (1) For the purposes of this Division, a person sexually harasses another person (the person harassed) if: (a) the person makes an unwelcome sexual advance, or an unwelcome request for sexual favours, to the person harassed; or (b) engages in other unwelcome conduct of a sexual nature in relation to the person harassed; in circumstances in which a reasonable person, having regard to all the circumstances, would have anticipated the possibility that the person harassed would be offended, humiliated or intimidated. (1A) For the purposes of subsection (1), the circumstances to be taken into account include, but are not limited to, the following: (a) the sex, age, sexual orientation, gender identity, intersex status, marital or relationship status, religious belief, race, colour, or national or ethnic origin, of the person harassed; (b) the relationship between the person harassed and the person who made the advance or request or who engaged in the conduct; (c) any disability of the person harassed; (d) any other relevant circumstance.

93 94 95 96 97 98

Sex Discrimination Act 1984 (Cth), s 7D. See for example, Jacomb v ASU [2004] FCA 1250. See Justice Crennan’s interpretation of s 7D of the Sex Discrimination Act 1984 (Cth) in Jacomb v ASU [2004] FCA 1250 at [62]-[65]. Not the Racial Discrimination Act 1975 (Cth). See Sex Discrimination Act 1984 (Cth), s 44 – 47; Disability Discrimination Act 1992 (Cth), ss 55 – 58; Age Discrimination Act 2004 (Cth), ss 44 – 47. Sex Discrimination Act 1984 (Cth), s 28B.

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(2) In this section: conduct of a sexual nature includes making a statement of a sexual nature to a person, or in the presence of a person, whether the statement is made orally or in writing.

Under this section “conduct” is defined non-exhaustively and has been interpreted very widely. The Australian Human Rights Commission’s has sought to provide guidance to employers in its publication, Effectively Preventing and Responding to Sexual Harassment: A Code of Practice for Employers.99 Sexual conduct has been interpreted to include: • sexual comments, including questioning about sexual life, propositions and comments about a person’s body, appearance or clothing; • exposure to sexually explicit magazines, posters, recordings, emails or SMS messages; • sexually suggestive jokes or obscene language; • intrusive invitations to go out socially or requests for sex; • sexual touching, including hugging, kissing, squeezing and massaging; and • conduct that could also be a criminal offence, including assault, indecent exposure and stalking.100 The conduct is not limited to interaction between men and women. Although the majority of cases are brought by women against men, sexual conduct covers conduct of a sexual nature between members of the same sex. There is clearly a subjective element to the test because the conduct must be “unwelcome”. The courts, however, have held that this element must be interpreted in the context and, in contrast to earlier cases,101 it is now clear that the circumstances are to be taken into account in determining whether the complainant needed to verbalise this expressly and directly to the perpetrator.102 Subsection 28A(1A), inserted in 2011,103 makes explicit specific circumstances that can be considered in determining this and other aspects of the test. Generally if conduct is uninvited or unsolicited it will satisfy the test of being unwelcome.104 So, in cases of a great power difference between the parties, or a first occurrence, a claim will not fail simply because the victim did not have a chance to tell the perpetrator that they did not welcome the groping, suggestiveness or advances. The test requires that the sexual conduct be in circumstances in which a “reasonable person” would have anticipated “the possibility” that the victim could have been offended, humiliated or intimidated.105 By framing the requirement this way, objectively, the question is not whether the particular perpetrator did anticipate this type of response but whether he (or she) should have, given the circumstances. Put another way, the intention or motive of the alleged harasser is not determinative. Again, the circumstances listed in s 28A(1A) are to be considered Ultimately whether any conduct amounts to sexual harassment will depend on the context of the particular case. This is acknowledged by the repeated references to 99 100 101 102 103 104 105

Published in 2008, see http://www.humanrights.gov.au/our-work/sex-discrimination/publications/ effectively-preventing-and-responding-sexual-harassment-0. Australian Human Rights Commission, Effectively Preventing and Responding to Sexual Harassment: A Code of Practice for Employers (2008), p 5. O’Callaghan v Loder (1984) EOC ¶92–022 at 92–023, 92–024. Hall v A & A Sheiban Pty Ltd (1989) 20 FCR 217 at 250-251 per Wilcox J; Font v Paspaley Pearls Pty Ltd [2002] FMCA 142; Elliott v Nanda (2001) 111 FCR 240. Sex and Age Discrimination Legislation Amendment Act 2011 (Cth). Aldridge v Booth (1988) EOC ¶92-222 at 77, 091. The section was revised in 2011 to add “the possibility” and the list of factors in (1A): Sex and Age Discrimination Legislation Amendment Act 2011 (Cth).

Anti-discrimination Acts

“circumstances” in the legislation. While this creates some uncertainty in litigation, the uncertainty could encourage employers to be particularly cautious when developing workplace conduct protocols and monitoring workplaces for sexual harassment to reduce the incidence of harassment and manage the risks of liability. While harassment can also constitute direct discrimination in respect of any attribute,106 the sexual harassment prohibition extends beyond the discrimination protections in key ways. First, by specifically prohibiting unwelcome sexual conduct it removes the need for a complainant to prove that the perpetrator treated them less favourably than a comparator; a manager who harasses both men and women might not be discriminating but will still be harassing. Second, the legislation makes clear that the prohibition on sexual harassment applies not only to employers in respect of employees (and applicants), but to all “workplace participants” in respect of each other, including fellow employees, contract workers, commission agents and partners.107 In addition to the direct liability of the sexual harasser, employers can also be held vicariously liable for the actions of their employees in connection with employment and agents unless the employer can establish that they took “all reasonable steps to prevent” the conduct.108 Finally, the sexual harassment provisions are also wider than the discrimination protections in that there are no exceptions or defences. Respondents can contest each element, and employers can seek to avoid vicarious liability by arguing that they took all reasonable steps to prevent the perpetrator’s conduct, but there are no exceptions such as those for small business, voluntary organisations, or private educational authorities. Federally, the Disability Discrimination Act 1992 similarly specifically prohibits disability harassment in work109 although the term is not defined in the legislation. Relying on dictionary definitions, an element of repetition has been read into the term in the few cases that have arisen.110

Enforcement [15.210] Although embedded in statute, anti-discrimination law rights across Australia are like civil common law rights in that they are enforceable only by the person who has suffered the harm against the perpetrator, not by a prosecutor, ombudsman or other agency.111 Consistent with this the remedies available are generally compensatory, being provided by the wrongdoer directly to the victim to compensate for the harm rather than punish or set an example. However, in contrast to common law litigation, the statutory regime for determining claims under anti-discrimination laws is reasonably 106 107

108

109 110 111

See for example, Daniels v Hunter Water Board (1994) (homosexuality harassment constituted direct discrimination). Sex Discrimination Act 1984 (Cth), s 28B. Note that in respect of harassment between different categories of workers, such as an employee and a contract worker, s 28B(6) referring to all “workplace participants” will be applicable, and is limited to conduct that occurs “at a place that is a workplace of either or both of those persons”. “Workplace” is defined widely in s 28B(7) to mean “a place at which a workplace participant works or otherwise carries out functions in connection with being a workplace participant” and this second limb was interpreted widely by the majority in Vergara v Ewin [2014] FCAFC 100 at [123]-[128] per North and Pagone JJ, and extended to the bar across the road from the workplace because the complainant only went there “to deal with [an earlier] incident of harassment”. Sex Discrimination Act 1984 (Cth), s 106. The AHRC has provided guidance on what would constitute “all reasonable steps”: see Australian Human Rights Commission, Effectively Preventing and Responding to Sexual Harassment: A Code of Practice for Employers (2008). Disability Discrimination Act 1992 (Cth), s 35. McCormack v Commonwealth [2007] FMCA 1245 at [75]; Penhall-Jones v State of NSW [2008] FMCA 832 at [39]. Note some additional powers granted to the Victorian Equal Opportunity and Human Rights Commission under Equal Opportunity Act 2010 (Vic), Pt 9; ss 139, 144, 159, 160 and see Allen, “Legislative Note: Victoria Paves the Way to Eliminating Discrimination” (2010) 4 AJLL 318.

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accessible, foregoing technical forms, statements of claim or pleadings and with virtually no fees, at least at the first stage (although legal costs can still be prohibitive for complainants proceeding to a hearing). Given the similarity of the regulatory model used across the Commonwealth, the federal agency and process will be described here. The dispute resolution process

[15.220] An employee or job applicant who believes they have been discriminated against must initiate the action but generally there are no prescribed forms – the complaint need only be in writing112 – and there are no fees. Federally, complainants have 12 months from the time of the conduct to lodge their complaint113 and the complaint is to be lodged with the Australian Human Rights Commission. The respondent is the person or party alleged to have discriminated against (or harassed) the complainant, or the employer of the alleged perpetrator. The Commission is charged with investigating the complaint and seeking to resolve it through conciliation.114 The investigation may involve little more than checking that there is some basis for a claim alleged in the complaint and that the complaint is covered by federal legislation. At this or any stage the President of the Commission is permitted to terminate the complaint by issuing a Notice of Termination for a range of reasons including: the complaint being outside of jurisdiction, lodged beyond the time limit, or “trivial, vexations, misconceived or lacking in substance”; the matter has been or should be dealt with adequately in another forum; or, that “there is no reasonable prospect of the matter being settled by conciliation.”115 If the matter proceeds to conciliation, the conciliation can take a number of forms including a series of letters or telephone conversations between the conciliator and the parties, a face-to-face conference between the parties with the conciliator, shuttle negotiations or a combination of all of these. Conciliation is compulsory, in that the Commission can compel attendance by the parties,116 and private, which means that the names of parties, allegations, admissions and resolutions are not made available by the Commission to the public.117 This restriction on the publication of such information has been critiqued heavily by equality advocates for its lack of transparency and the way in which it characterises discrimination as merely an interpersonal dispute to be resolved privately.118 Parties are free to disclose these details, unless they have agreed otherwise (for example, in the conciliation process or a confidentiality clause in a deed of settlement). If the conciliation is successful it is common for the parties to set out their agreement in writing although there is no scope for this agreement to be registered or enforced 112 113

114 115 116

117 118

Australian Human Rights Commission Act 1986 (Cth), s 46P(1). While 12 months is the norm (New South Wales, Western Australia, South Australia, Queensland, Victoria and Tasmania), it is only six months in the Northern Territory and two years in the Australian Capital Territory. Australian Human Rights Commission Act 1986 (Cth), s 46PF; see generally Australian Human Rights Commission Act 1986 (Cth), Pt IIB, Div 1. Australian Human Rights Commission Act 1986 (Cth), s 46PH(1). Australian Human Rights Commission Act 1986 (Cth), ss 46PJ and 46PL. Failure to attend a compulsory conciliation when directed or provide information requested by the AHRC is punishable by a fine of up to 10 penalty units, currently $1800: ss 46PL and 46PM, respectively. Providing false or misleading information is punishable by up to six months in prison: s 46PN. Similar provisions can be found in State Acts, for example, Anti-Discrimination Act 1977 (NSW), s 91A(3). Australian Human Rights Commission Act 1986 (Cth), s 49. See for example, Chapman, “Discrimination Complaint-Handling in NSW: The Paradox of Informal Dispute Resolution” (2000) 22 SLR 321; Thornton, “Equivocations of Conciliation: The Resolution of Discrimination Complaints” (1989) 52 Mod LR 733.

Anti-discrimination Acts

under the federal statutory scheme.119 If the agreement takes the form of a contract or, more commonly, a deed (of release), then it would be enforceable but only by a separate action in a State court. If the conciliation is unsuccessful or the President of the AHRC has issued a Notice of Termination for another reason, the complainant can then seek to have the matter determined by a court, either the Federal Circuit Court or Federal Court of Australia. (The tribunal that determines such matters in each State and Territory is listed in the table in [15.30].) The complainant has 60 days from the date of the Notice of Termination to make this application to the court.120 The usual rules of evidence apply in the federal courts, including the “balance of probabilities” standard of proof,121 although the courts are directed to “not be bound by technicalities or legal forms”.122 Either federal court can grant interim injunctions at any time after the complaint is lodged with the Commission. These can be used to maintain “the status quo, as it existed immediately before the complaint was lodged; or the rights of any complainant, respondent or affected person”.123 Remedies

[15.230] If a claim is not resolved by conciliation and the court has determined that unlawful discrimination has occurred, the court then has power to issue a range of orders. At the federal level this power appears to be very wide because of the introductory words that state: “the court may make such orders … as it thinks fit”.124 However, this power has generally been interpreted in a narrow way to limit orders to remedial or compensatory ones, using torts principles as a starting point.125 The list of possible orders available to the federal courts includes: • a declaration that the respondent’s conduct is discriminatory and must not be repeated or continued; • an order requiring the respondent to take action “to redress” or pay the complainant damages “by way of compensation for” any loss or damage suffered by the complainant; • an order requiring the respondent to employ or re-employ the complainant; • an order requiring the respondent to vary the termination of a contract or agreement “to redress” any loss or damage suffered by the complainant; and • an order declaring that it would be inappropriate for any further action to be taken.126 119

120 121

122 123 124 125 126

Some States do allow agreement registration and enforcement. For example, Anti-Discrimination Act 1977 (NSW), s 91A(5) – (9) which provides that agreements can be registered and enforced as orders of the tribunal. Australian Human Rights Commission Act 1986 (Cth), s 46PO(2). There has been some confusion about whether the test in Briginshaw v Briginshaw (1938) 60 CLR 336 applied in a way that heightened the standard of proof faced by the complainant, but the Full Federal Court has resolved this, holding that the usual rules of evidence apply and s 140 of the Evidence Act sets out the correct approach: Qantas Airways Ltd v Gama [2008] FCAFC 69 at [139] per Branson J (French and Jacobson JJ agreed). Section 140 requires the court to take account of three factors when deciding whether something has been proven: the nature of the cause of action or defence, the nature of the subject matter of the proceeding, and the gravity of the matters alleged. Australian Human Rights Commission Act 1986 (Cth), s 46PR. Australian Human Rights Commission Act 1986 (Cth), s 46PP. Australian Human Rights Commission Act 1986 (Cth), s 46PO(4). Hall v A & A Sheiban Pty Ltd (1989) 20 FCR 217 at 239 per Lockhart J, at 256 per Wilcox J, at 281 per French J. Australian Human Rights Commission Act 1986 (Cth), s 46PO(4).

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Despite the wide introductory words and this being a non-exhaustive list, the remedial interpretation has generally excluded orders that might be seen as punishing the respondent, such as punitive or “exemplary” damages.127 In Clarke v Catholic Education Office, Madgwick J asserted unequivocally: “Damages are compensatory and no more.”128 Some respondents who have acted inappropriately in the litigation process thereby causing further harm to the complainant have been ordered to pay “aggravated” damages, but the courts have generally been quick to note that these are also compensatory not punitive.129 However, the question of whether exemplary damages can be awarded is still an open one. In response to an assertion that exemplary damages were not available under the Act, the Full Federal Court recently stated, without determining the matter: “We note that, while s 46PO(4) refers only to orders for damages of a compensatory nature, there is no exclusion of other orders that may be made.”130 As the list above illustrates, the court can order respondents to act in a way that rectifies the discriminatory harm or to pay money as a way of compensating for the harm. This harm may be economic, as in lost income for not having been awarded the job or promotion. Evidence of such loss must be provided by the complainant to enable such loss to be quantified for damages to be calculated. Compensation can also be awarded for pain and suffering, but it has been much more difficult to quantify this kind of non-economic loss. Faced with this difficulty the courts have, on a number of occasions, asserted that awards for such loss should be restrained but not so low as to “trivialise or diminish respect for the public policy” of the legislation.131 Despite this admonition, awards for pain and suffering on average have been remarkably modest, generally ranging from $8,000 – $20,000,132 with a few notable exceptions.133 However, 2014 saw a milestone judgment of the Full Federal Court reflecting a substantial change in this approach. In Richardson v Oracle the court rejected an approach of awarding general damages for discrimination and harassment within a conservative and established range.134 The court found that community standards “now accord a higher value to compensation for pain and suffering and loss of enjoyment of life than before” but awards for anti-discrimination matters had failed to keep up with these “community standards”.135 In this case the award of $18,000 was found to be manifestly inadequate and “out of step with the general standards 127 128 129 130 131 132

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134 135

Cf Font v Paspaley Pearls Pty Ltd [2002] FMCA 142 at [162]. Raphael FM awarded $7500 exemplary damages for the respondent’s inappropriate conduct during the litigation. Clarke v Catholic Education Office (2003) 202 ALR 340 at 360 [83]. Elliott v Nanda (2001) 111 FCR 240 at 297 [180] per Moore J; Hughes v Car Buyers Pty Ltd (2004) 210 ALR 645. Employment Services Australia Pty Ltd v Poniatowska [2010] FCAFC 92 at [133] per Stone and Bennett JJ. May LJ in Alexander v Home Office [1988] 2 All ER 118 cited with approval in Hall v Shieban (1989) 20 FCR 217 at 256 per Wilcox J. Ronalds, Discrimination Law and Practice (3rd ed, Federation Press, Leichhardt2008), p 223. See Australian Human Rights Commission, Federal Discrimination Law (2010), ch 7, for lists of damages that have been awarded under the federal Acts up to October 2011. Gama v QANTAS Airways Ltd (No 2) [2006] FMCA 1767, upheld on appeal: QANTAS Airways Ltd v Gama [2008] FCAFC 69 (claimant was awarded $40 000 for non-economic loss for racial discrimination); Poniatowska v Hickinbotham [2009] FCA 680, upheld on appeal: Employment Services Australia Pty Ltd v Poniatowska [2010] FCAFC 92 (an award of $90 000 for pain and suffering due to sex discrimination in work); Lee v Smith [2007] FMCA 59 (order for $100 000 to be paid for pain and suffering of sexual harassment). Richardson v Oracle Corporation Australia Pty Ltd (No 2) [2014] FCAFC 139 at [78]-[81], [117] per Kenny J (Besanko and Perram JJ agreed [119]). Richardson v Oracle Corporation Australia Pty Ltd (No 2) [2014] FCAFC 139 at [96], [109] per Kenny J.

Fair Work Act

prevailing in the community”, and was increased to $100,000.136 This “more equitable and expansive approach” to assessing damages for sexual harassment has not been limited to the federal jurisdiction,137 although some jurisdictions have limited total damages by imposing a cap, such as New South Wales ($100,000),138 Northern Territory ($60,000)139 and Western Australia ($40,000).140 Costs

[15.240] In federal anti-discrimination matters the traditional litigation rule applies that costs follow the event. Under this rule the unsuccessful party is ordered to pay the litigation costs of the successful party, with some qualifications.141 The Federal Court and Federal Circuit Court do have some general discretion142 in this and can deviate from the default in some circumstances. In contrast, generally State and Territory matters are dealt with by tribunals on a no-cost basis, which means that each party is required to bear its own costs.143 In these jurisdictions there is usually some discretion for the tribunal to award costs but they will only do so in exceptional circumstance.144

Fair Work Act [15.250] Arguably the most significant change in the field of workplace antidiscrimination regulation in the last decade is the expansion of anti-discrimination protections within the mainstream labour law, the Fair Work Act 2009 (Cth).145 While unlawful termination provisions prohibiting discriminatory dismissal were introduced in 1994 (see [13.10]), in 2009 these protections were substantially extended beyond termination to all stages of employment.146 This rule does not necessarily expand protections offered by anti-discrimination laws (see discussion at [15.280]), but its inclusion in the national workplace law means the substantial and expanded enforcement regime of the Fair Work Act 2009 is now also available to address discriminatory conduct. Notably this includes the Fair Work Ombudsman’s enforcement powers and the Fair Work Act’s civil penalty regime.

Scope of anti-discrimination prohibitions [15.260] The Fair Work Act 2009 prohibits discrimination by employers, on 13 different attributes, against employees and potential employees throughout the employment relationship. It does this in a way that is different to anti-discrimination 136 137

138 139 140 141 142 143 144 145

146

Richardson v Oracle Corporation Australia Pty Ltd (No 2) [2014] FCAFC 139 at [118] Kenny J. Collins v Smith (Human Rights) [2015] VCAT 1992 at [111] (Jenkins J surveyed Victorian and federal cases and noted a “gradual and ongoing reassessment of the approach to damages” at [133] and awarded Collins $180,000 in general damages, $332,280 in total damages for sexual harassment). Anti-Discrimination Act 1977 (NSW), s 108(2)(a). From 1977 to 2009 this cap was set at $40,000. Anti-Discrimination Regulations (NT), reg 2. Equal Opportunity Act 1984 (WA), s 127(b)(i). For a more detailed discussion of costs principles in federal anti-discrimination matters, see Australian Human Rights Commission, Federal Discrimination Law (Online Subscription Series, 2011), ch 8. Federal Court of Australia Act 1976 (Cth), s 43(2) and Federal Circuit Court of Australia Act 1999 (Cth), s 79(3). See for example, Civil and Administrative Tribunal Act 2013 (NSW), s 60(1). See for example, Civil and Administrative Tribunal Act 2013 (NSW), s 60(2). For further commentary see Smith, “Fair and Equal in the World of Work: Two Significant Federal Developments in Discrimination Law” (2010) 23 AJLL 199; and Andrades, “Intersections Between “General Protections” under the Fair Work Act 2009 (Cth) and Anti-Discrimination Law: Questions, Quirks and Quandaries” (Working Paper No 47, Centre for Employment & Labour Relations Law, University of Melbourne, December 2009). The unlawful termination provisions are retained in s 772(1)(f) of the Fair Work Act 2009 (Cth).

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legislation. First, what it prohibits (as a “General Protection” in Pt 3-1 of the Act) is “adverse action” “because of” 13 attributes, subject to some exceptions. Section 351,147 entitled “Discrimination” provides that, subject to exceptions: (1) An employer must not take adverse action against a person who is an employee, or prospective employee, of the employer because of the person’s race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

As explained in some detail in [13.240], “adverse action”, defined in s 342(1), covers a broad range of circumstances. In respect of employees these include: (a) dismissing the employee; (b) injuring the employee in his/her employment; (c) altering the position of an employee to their prejudice; and (d) discriminating between an employee and other employees. In respect of prospective employees adverse action includes: refusing to employ the person; and discriminating with respect to terms and conditions on which employment is offered. In both cases, it also includes threatening to or organising to take such action.148 However, it does not include: action authorised under the Fair Work Act 2009, another Commonwealth law or a State or Territory law prescribed by the Fair Work Regulations 2009;149 or standing down an employee who is engaged in protected industrial action and is employed under a contract that provides for this type of stand down.150 The reference to “discriminating” within s 342 is odd. As was noted earlier (see [15.20]), discrimination has come to be understood as a detriment inflicted because of an attribute (either by inappropriately taking an attribute into account or ignoring relevant differences). In this way, s 351 can be understood as an anti-discrimination provision as it prohibits the infliction of a detriment because of various attributes. Including “discriminating between” employees as a particular type of detriment is circular and adds another layer of interpretive complexity. It may also add further scope for arguing that the General Protections cover indirect discrimination. Justice Gordon while on the Federal Court in Klein v Metropolitan Fire and Emergency Services Board151 held that without prescriptive legislative provisions to suggest otherwise, “discriminating” in s 342 should be interpreted widely as it has been in other countries that use general and open terms. As noted in [13.250], establishing this particular type of adverse action does involve a comparison, unlike the others.

[15.270] The drafting of s 351 allows for a wide interpretation of the protection to cover discrimination as it is understood internationally, but the courts generally have not taken this approach. The scope of s 351 and the other General Protections has come down to the meaning of “because of” and how to prove, or rather disprove, that an adverse action was taken because of a prohibited reason. The possible breadth is sketched out in the following paragraphs before considering how the courts have limited the general protections. The term “discrimination” is not defined in the Act, requiring the courts to choose an interpretation of the open-textured terms of s 351 that best achieves the section’s purpose.152 The section heading, “Discrimination”,’ which forms part of the 147 148 149 150 151 152

Note the equivalent protection (but against dismissal only) primarily for non-national system employees in s 772: see [13.340]. Fair Work Act 2009 (Cth), s 342(2). Fair Work Act 2009 (Cth), s 342(3). Fair Work Act 2009 (Cth), s 342(4). Klein v Metropolitan Fire and Emergency Services Board (2012) 208 FCR 178; [2012] FCA 1402 at [88]-[102]. Acts Interpretation Act 1901 (Cth), s 15AA.

Fair Work Act

Act153 suggests the purpose of the section is to address discrimination, and is not limited to different treatment. The Act’s objects (s 3) include promoting “social inclusion”, “the prevention of discrimination” and “providing workplace relations laws that … take into account Australia’s international labour obligations”154 which also suggest a wide interpretation of the discrimination provision, consistent with international law. Without a dichotomy between direct and indirect discrimination entrenched in the statute, the complications and limitations of this distinction might have been avoided.155 The High Court in early anti-discrimination legislation cases held that protections against detriment or “less favourable treatment” because of an attribute would be interpreted to include what has come to be known as indirect discrimination unless a statutory section expressly provided for discrimination of that kind as a separate action.156 Further, the long-standing and similar unlawful termination provisions were interpreted to cover both direct and indirect discrimination.157 In issuing guidance notes, the Fair Work Ombudsman (FWO) made clear that it would interpret the term to cover both direct and indirect discrimination.158 Unlike anti-discrimination laws, a shifting burden of proof is applicable to s 351 (and the other General Protections). For both the long-standing unlawful termination provisions and the new General Protection provisions a burden-shifting mechanism applies which means that the claimant need only prove adverse action and the objective facts which provide the basis for the reason before the respondent is called upon to persuade the court that the action was not taken for a prohibited reason, such as an attribute in s 351.159 The mechanism is framed as a presumption, with the prohibited reason being presumed unless the respondent can prove otherwise. A similar sort of mechanism is standard in anti-discrimination legislation in other jurisdictions and many commentators have criticised Australian anti-discrimination law for the absence of such a provision.160 It is through the interpretation by the High Court of this rebuttable presumption in s 361 that the scope of the General Protections has been substantially limited. The court was called upon to interpret the section in respect of general protections of adverse action “because of” industrial activity under s 346 (and s 347) in Board of Bendigo Regional Institute of Technical and Further Education v Barclay (Barclay),161 with the 153 154 155 156 157

158

159 160

161

Acts Interpretation Act 1901 (Cth), s 13. Objects for Pt 3-1 also include s 336(1)(d), “to provide protection from workplace discrimination” and (d) “to provide effective relief for persons who have been discriminated against”. Smith, “Fair and Equal in the World of Work: Two Significant Federal Developments in Discrimination Law” (2010) 23 AJLL 199. See Gordon J’s summary of this in Klein v Metropolitan Fire and Emergency Services Board (2012) 208 FCR 178; [2012] FCA 1402 at [88]-[102]. Sapevski v Katies Fashions (Australia) Pty Ltd [1997] IRCA 219. It was significant in that case that the unlawful termination provisions were implementing international conventions and thus the legislative provisions should be interpreted consistently with them. The general protections provisions are not explicitly underpinned by the wide external affairs head of constitutional power, relying instead on a combination of other heads. Fair Work Ombudsman, FWO Discrimination Policy: Guidance Note 6, 17 December 2009 (updated 21 December 2012), at [5.4]. This Policy has subsequently been withdrawn, supposedly replaced by the FWO Compliance and Enforcement Policy (2015), but without mention of how specific provisions will be interpreted. Fair Work Act 2009 (Cth), ss 361 and 783. See, for example, Hunyor, “Skin-deep: Proof and Inferences of Racial Discrimination in Employment” (2003) 25 SLR 535; Rees, Rice and Allen, Australian Anti-discrimination Law (2nd ed, Federation Press, Leichhardt, 2014), pp 142-152. Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; (2012) 248 CLR 500.

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approach affirmed in CFMEU v BHP Coal Pty Ltd.162 The facts and High Court approach are set out in [13.300]. Briefly, adverse action was taken against Barclay because of an email he sent to fellow union members (and consequential conduct). The protection in s 346 is against adverse action taken because of union membership or industrial activity. Barclay’s conduct was clearly motivated by his role as a union delegate and would have been characterised by him as “industrial activity”. The court, however, did not interpret the protection to cover adverse action taken because of conduct characterisable as industrial activity. Instead it limited the prohibition only to action taken by a decision-maker who themselves characterises or understands the activity in this way. As long as the decision-maker can provide credible evidence that they understood their decision-making to be because of a non-prohibited reason, such as employment-related misconduct, then they will be able to rebut the presumption. Their legitimate reason will, in effect, crowd out the presumed illegitimate reason. This question is one of fact, … [and] direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer even though an employee may be an officer or member of an industrial association and engage in industrial activity.163

It was significant that the decision-maker in the Barclay case “would have taken the same action in similar circumstances against a person who was neither a member nor an officer of the” union.164 By implication, employers arguably are free to not consider whether an activity or behaviour is a manifestation of an attribute. This is illustrated in the case of Victoria v Grant.165 After developing a mental illness, Grant’s performance as a solicitor declined and his employment was consequently terminated. His claim that this constituted adverse action because of “mental disability” under s 351 was upheld by the Federal Magistrates Court but overturned on appeal. While the trial judge found that Grant’s conduct “arose wholly out of his medical condition” and it was “obvious” that Grant’s ill health played a part in the termination decision, the Full Federal Court held (at [50]) that the decision-maker’s denial that “Grant’s medical condition played any part in his decision” should have been accepted as rebutting the presumption in s 361. Knowledge of the mental illness and details supplied in medical reports did not sufficiently “link the misconduct and the illness”. The Full Federal Court asserted “it is possible for there to be a close association between the proscribed reason and the conduct which gives rise to the adverse action and for the decision-maker to satisfy the Court that no proscribed reason actuated the adverse action” (at [57]). Considering the two limbs of the concept of discrimination – treating differently or ignoring relevant differences and treating the same – it becomes clear that the protections do not necessarily extend to the second limb. If the decision-maker acts on behaviour alone and does not characterise it as a manifestation or part of an attribute, treating the person like all others who behave that way should be exculpatory. In this way, only a narrow form of discrimination – intentional, categorical exclusion – falls under s 351, not unintentional or indirect discrimination of imposing requirements uniformly and ignoring relevant differences. (It is possible that the courts have read s 351(1) narrowly out of concern regarding the practical implications for employers of a wider interpretation, although this seems to ignore or deny the substantial limits that are already imposed by exceptions in s 351(2), discussed at [15.280].) 162 163

164 165

CFMEU v BHP Coal Pty Ltd [2014] HCA 41. Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 at [45] per French CJ, Crennan J (emphasis added). The other judges also accepted that direct evidence from the decision-maker which is accepted as reliable is capable of discharging the burden on the employer: Gummow and Hayne JJ at [128]-[132] and Heydon J at [141]. Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 at [28] per French CJ, Crennan J. Victoria v Grant [2014] FCAFC 184.

Fair Work Act

The Barclay approach clearly limits the scope of s 351, but it does not thwart it entirely. It still clearly provides protection against categorical treatment, adverse treatment of all workers who fall into particular attribute categories. This includes policies of yesteryear like “only employing men as pilots”166 and versions that persist, such as “it is the policy of the Company that we do not employ any staff that attains the retirement age which … is 65 years”.167 With less blatant exclusions, based on assumptions or stereotyping, the case can be harder to prove and might require a judge to sift carefully through the evidence to find that adverse action has been taken “because of” an attribute.168 Utilising the most basic formal equality arguments, the protection requires that the status of sex, race, etc should be ignored and other qualities, such as qualifications, skills and knowledge should be used to assess candidates. Similarly, within employment it would require actual behaviour to be used to assess performance, blind to attributes. In anti-discrimination law terms, this amounts to protection against direct discrimination, that is, being treated unfavourably (or less favourably than a comparator) because of a protected attribute. The Barclay and BHP cases were not about claims under s 351, so there may still be scope for a court to interpret s 351 purposively as an anti-discrimination provision.169 However, the approach taken by the High Court does stand as precedent for what is required to rebut a presumption of adverse action being taken “because of” a prohibited reason. As is noted in [13.300] this line of authority developing around the General Protections limits the prohibitions to conscious and deliberate victimisation of employees. [15.280] The scope of s 351(1) is further limited by exceptions listed in s 351(2). Reflecting the old and continuing exceptions in the unlawful termination provisions of the Act, discrimination is not unlawful: if it is taken because of the inherent requirements of the particular position;170 or if it is taken in “good faith” in “an institution conducted in accordance with the doctrines, tenets, beliefs or teachings of a particular religion or creed” in order “to avoid injury to the religious susceptibilities of adherents of that religion or creed”.171 A third exception is less straightforward and highlights the complex interaction between the prohibition in s 351 and State anti-discrimination laws. Section 351(2)(a) provides that the prohibition on adverse action does not apply to action that is “not unlawful under any anti-discrimination law in force in the place where the action is taken”.172 This means that the only discrimination prohibited under this Fair Work Act 2009 provision is discrimination that is already unlawful under an anti-discrimination law.173 In this way s 351 does not expand the groups of employees who have protection against discrimination; it merely provides the protected employees with more options to enforce those rights using either anti-discrimination laws or the Fair Work Act 2009 enforcement regime (outlined at [15.300]). In effect the General Protections provide additional procedural protections for existing anti-discrimination rights. Despite the 166 167 168

169 170 171 172 173

Ansett Transport Industries (Operations) Pty Ltd v Wardley (1984) EOC 92-002 at 75,260. FWO v Theravanish Investments Pty Ltd & Ors [2014] FCCA 1170 at [15]. Sayed v Construction, Forestry, Mining and Energy Union [2015] FCA 27 (Mortimer J found adverse action had been taken because of political opinion). See also Chapman, “Judicial Method and the Interpretation of Industrial Discrimination” (2015) 28 AJLL 1-32. Picking up Gordon J’s purposive approach in Klein v Metropolitan Fire and Emergency Services Board (2012) 208 FCR 178; [2012] FCA 1402 at [88]-[102]. Fair Work Act 2009 (Cth), s 351(2)(b); QANTAS Airways Limited v Christie (1998) 193 CLR 280. Fair Work Act 2009 (Cth), s 351(2)(c). The relevant federal, State and Territory anti-discrimination Acts are listed in s 351(3). The history of s 351 suggests that a narrower meaning was intended – to permit positive discrimination or special measures that were authorised by anti-discrimination laws. The wording of s 351(2) in the Fair Work Bill 2008 was: “subsection (1) does not apply to action that is (a) authorised by, or under, a State or Territory anti-discrimination law”.

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claims of the Fair Work Act 2009 being a national system, the rights of employees under s 351 depend on their location and what discrimination their State or Territory has already proscribed. The unlawful termination provisions are not so limited. This interpretation of the s 351(2)(a) exception was supported in the recent case of a journalist, Scott McIntyre, whose employment had been terminated for politically inappropriate tweets on ANZAC Day.174 Under s 723 the unlawful termination protections175 are not available to a claimant who “is entitled to make a general protections” application in relation to the conduct. McIntyre had originally lodged a claim alleging breach of the General Protection under s 351, claiming adverse action had been taken because of “political opinion”. However, he was based in New South Wales where anti-discrimination laws do not prohibit political opinion discrimination, so conceded that the s 351(2)(a) exception would apply. He then successfully argued that this thereby made him ineligible to claim protection under s 351(1) and thus entitled to lodge an unlawful termination claim.176 The provision in s 723 is designed primarily to direct national system employees to the General Protections provisions, but allow non-national system employees who are excluded from the General Protections to still have access to the unlawful termination provisions which apply to all employees. However, as the McIntyre case demonstrates it can also capture employees who allege discrimination but are excluded by the General Protections exception relating to “action not unlawful under antidiscrimination law” which is not replicated for unlawful termination. Similarly, for example, an employee in New South Wales alleging dismissal because of religious belief might need to rely on the unlawful termination provisions because religious discrimination is “not unlawful under anti-discrimination law” in New South Wales and thus might be exempted under the General Protections provisions of s 351(2)(a). In contrast, such an employee in Victoria could use s 351 because religious discrimination is outlawed in that State. [15.290] Importantly, under the Fair Work Act 2009 an employer is not able to defend discriminatory action by arguing that it was complying with an award or enterprise agreement; compliance with these is not an official, permissible exception. The Act now makes clear that modern awards and enterprise agreements must not contain discriminatory terms and any such terms are of no effect.177 In this way, the Fair Work Act 2009 not only constrains discriminatory employer conduct but can also provide an avenue for challenging discriminatory rules, conditions and practices that have been reflected in awards and agreements over the years but have been immune to challenge under anti-discrimination laws.178 The Australian Human Rights Commission Act 1986 (Cth) provides a mechanism by which allegations can be made of discriminatory acts under industrial instruments. If the President of the Commission forms the opinion that the allegation is made out, the President must refer the industrial instrument to the Fair Work Commission for review.179 This mechanism was used to obtain a review of a long-standing provision in the coal mining industry award that limited the redundancy payments for older workers. The Fair Work Commission heard the matter as part of a four-yearly award 174 175 176 177 178 179

McIntyre v Special Broadcasting Services Corporation [2015] FWC 6768. Fair Work Act 2009 (Cth), s 772. McIntyre v Special Broadcasting Services Corporation [2015] FWC 6768 at [30]-[38] per Cambridge C. Fair Work Act 2009 (Cth), ss 153(1) read in conjunction with s 136(2)(a) (modern awards); ss 194(a) and 195 read in conjunction with s 186(4) (enterprise agreements). Owens, Riley and Murray, The Law of Work (2nd ed, Oxford University Press, Melbourne, 2010), pp 447-452. Australian Human Rights Commission Act 1986 (Cth), s 46PW.

Fair Work Act

review and found the provision to be discriminatory on the ground of age, declared that it had therefore never had any legal effect, and varied the award to remove it.180

Enforcement process and remedies [15.300] The enforcement provisions for s 351 are set out in the discussion of remedies for General Protections in [13.310]. The processes are briefly outlined here, with a few additional points made to compare and contrast anti-discrimination laws. While the new General Protection provisions are not limited to termination of employment, the Fair Work Act 2009 does distinguish between dismissal and other kinds of adverse action in the setting of complaint time limits and the process for resolving disputes. In respect of claims made about discriminatory dismissals under the General Protections provisions,181 the claimant has 21 days from the date the dismissal took effect to lodge a claim with the Fair Work Commission182 and Fair Work Commission must seek to resolve the dispute and can conduct a private case conference to do so.183 If such efforts are unsuccessful the Commission will issue a certificate noting this.184 The claimant has 14 days then to apply to a federal court (the Federal Court of Australia or the Federal Circuit Court of Australia) to have the matter heard and determined185 or, if the parties agree, to request arbitration by the Fair Work Commission.186 In contrast, for employees and prospective employees claiming that an employer has taken non-dismissal kinds of adverse action, the time limit appears to be six years187 and the Commission will only hold a conference if both parties agree.188 This means that the claimant could proceed directly to the court for a hearing; Fair Work Commission arbitration is not an option. If a General Protection claim proceeds to hearing and the court finds a contravention the court is empowered to make “any order the court considers appropriate” (s 545(1)) including damages and reinstatement (s 545(2)). Importantly, and in stark contrast to the anti-discrimination law regime, the court can also make penalty orders of up to 60 penalty units for an individual (ss 546 and 539) and 300 penalty units for a corporate respondent (s 546(2)(b)). The court can also issue injunctions to prevent adverse action.189 Generally, parties bear their own litigation costs,190 again in contrast to anti-discrimination proceedings.

180

181 182 183 184 185 186 187 188 189

190

Black Coal Mining Industry Award 2010 [2015] FWCFB 2192. Justice Buchanan had earlier assessed the lawfulness of an identical provision in an enterprise agreement and found it to be a discriminatory term (s 195) and therefore unlawful (s 194): Centennial Northern Mining Services Pty Ltd v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 136. Fair Work Act 2009 (Cth), s 365. Fair Work Act 2009 (Cth), s 366. Fair Work Act 2009 (Cth), s 368. Fair Work Act 2009 (Cth), s 369. Fair Work Act 2009 (Cth), s 371(1). Fair Work Act 2009 (Cth), s 371(2). Fair Work Act 2009 (Cth), ss 372, 544. Fair Work Act 2009 (Cth), s 374. Fair Work Act 2009 (Cth), s 545(2). See Jones v Queensland Tertiary Admissions Centre Ltd (2009) 190 IR 218; [2009] FCA 1382 (an interlocutory injunction was issued to prevent termination on basis of alleged adverse action). See [13.320] for more detailed discussion of this power. Fair Work Act 2009 (Cth), s 570.

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Of potentially great significance to the enforcement of these provisions is that the claims can be brought not only by the affected employee but alternatively by the Fair Work Ombudsman191 who has considerable inspection and enforcement powers and resources.192

Conclusion [15.310] Discrimination in the workplace has been regulated in Australia for over 40 years now, starting with State legislation and then the Racial Discrimination Act (Cth) in 1975. Over this period anti-discrimination law protections have been extended incrementally to additional groups of people, while the regulatory model has remained fairly constant. The human rights underpinnings of this legislation meant that it established a regulatory regime that applied to workplaces but was separated from the mainstream labour and industrial laws.193 On the one hand this meant that it was free of many of the limitations of these laws, applying to a wider array of work relationships not merely employment and, at the federal level, not being restrained by either the conciliation and arbitration power or the corporations power in the Constitution. On the other hand, establishing a separate human rights system for dealing with discrimination has arguably inhibited the development of awareness that discrimination and equality are workplace or industrial issues. It largely left unchallenged discrimination that was embedded in the industrial awards and enterprise agreements and often the courts interpreted anti-discrimination laws as secondary to labour laws and even the common law guarding managerial prerogative.194 Anti-discrimination laws have evolved incrementally to focus not only on the simple notion of discrimination – the inappropriate consideration of attributes when equal treatment is required – but also the more complex notion of acknowledging and accommodating relevant differences to enable substantive equality. The first sign of this was redefining discrimination to explicitly include indirect discrimination. More recent developments include: changes to the test of indirect discrimination that require the respondent to prove that requirements and conditions that disproportionately exclude protected groups are reasonable in the circumstances; and the explicit obligation to provide reasonable adjustments in the Disability Discrimination Act 1992 (Cth) (and Victorian legislation in respect of disability and carers responsibilities). The introduction of anti-discrimination provisions as General Protections in the Fair Work Act 2009 reflects greater recognition of discrimination as an industrial issue and as an aspect of workplace fairness. Their inclusion in the Fair Work Act 2009 provides many employees with yet another avenue for pursuing discrimination claims beyond State and federal anti-discrimination Acts and one that might be attractive because of the shifting burden of proof, support of the Fair Work Ombudsman as inspector or prosecutor, and a wider range of remedies including uncapped damages and civil penalties. The Fair Work Commission might also provide speedier passage to conciliation and resolution than that provided under the human rights regimes of anti-discrimination Acts. However, the scope of these protections is limited by the 191 192

193 194

Fair Work Act 2009 (Cth), s 539 (table item 11). Fair Work Act 2009 (Cth), Pt 5-2, Div 3. Hardy, Howe and Cooney, “Less Energetic but More Enlightened? Exploring the Fair Work Ombudsman’s Use of Litigation in Regulatory Enforcement” (2013) 35 SLR 565. For discussion see Smith, “What Kind of Equality Can We Expect from the Fair Work Act?” (2011) 35(3) MULR 545. Adams, “Indirect Discrimination and the Worker-Carer: It’s Just Not Working”, in Murray (ed), Work, Family and the Law (Federation Press, Leichhardt, 2005), pp 18-44.

Conclusion

exceptions in s 351(2) and by judicial interpretations that limit the Fair Work Act’s discrimination provisions to a very narrow understanding of discrimination as only intentional different treatment. The expansion of anti-discrimination provisions in the Fair Work Act 2009 – in the form of General Protections and the ban on discriminatory provisions in awards and agreements – suggested a significant blurring of the traditional line between human rights laws and labour laws in Australia.195 It is clear, however, that the cross-over has been halting and limited. The enactment of anti-discrimination provisions in the Fair Work Act 2009 clearly adds more law, but it does not necessarily make the legal response to discrimination more effective. The anti-discrimination laws alone represent a complex web of varied and inconsistent federal and State rules and avenues that have proven too difficult to consolidate.196 Laws promoting social change, such as these, are often contentious but in Australia their duplication, complexity and inconsistency exacerbates this problem. The anti-discrimination provisions in the Fair Work Act 2009 have arguably added to the confusion without significantly helping employers or employees address discrimination.

195

196

Arguably freedom of association is also a “human right” and this has a long history in Australian workplace laws, dating back federally to the Commonwealth Conciliation and Arbitration Act 1904 (Cth), s 9(1): see Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500 at [73]ff. As noted earlier, a recent attempt to consolidate federal anti-discrimination laws took almost three years (2010-2013) and involved considerable resources, but ultimately failed with little immediate prospect of revival.

649

Index A Academics enterprise bargaining by, ........................... [14.40] Acceptance — see Offer and acceptance Adverse action actions permitted by law, ........................ [13.240] definition, .................................................. [13.240] discrimination, ............................................ [13.40] employees, between, ......................... [13.240] less favourable treatment, .......... [13.250] terms and conditions of employment, ................................................... [13.250] former provisions, ................................... [13.240] freedom of association — see Freedom of association injury or prejudicial alteration of position of employee, ...................................... [13.240] commercial transactions of employer, ......................................................... [13.250] contracting out work, ........................ [13.250] less congenial shifts, .......................... [13.250] training opportunities, denied, ........ [13.250] wage increase, denial, ........................ [13.250] meaning of, ............................................... [13.240] overview, ........................................................ [1.10] reasons and reverse onus, ....................... [13.300] balance of probabilities, ................... [13.300] express denial of allegation, ............ [13.300] objective assessment, ........................ [13.300] threatening to take, or organising, any action, ......................................................... [13.240] workplace rights — see Workplace rights Affirmative action positive discrimination, ............................. [5.190] Age discrimination on grounds of, ................. [15.50] Agencies — see Labour hire arrangements Agency worker injury to, ...................................................... [3.150] property damage by agency, liability, ..................................... [3.220] client (host business), to, .................... [3.240]

third party injury or damage, ................... [3.230] vicarious liability, ........................................ [3.230] Amalgamation companies, of, ............................................ [9.310] Annual leave cashing out, ............................................... [12.190] casual employees, ..................................... [12.190] minimum entitlements, ........................... [12.190] shift workers, ............................................ [12.190] Anti-discrimination laws — see Discrimination Apprenticeships minors’ contracts, ........................ [4.170], [4.180] Arbitration dispute resolution, ................................... [13.310] Assault employee, by, on fellow workers, ............ [8.320] Association freedom of — see Freedom of association Australian Building and Construction Commission (ABCC), ................. [1.40] Australian Business Number (ABN) requirement for businesses to have, ....... [2.210] taxation purposes, for, .............................. [2.280] Australian Constitution conciliation and arbitration power, .......... [1.20], [12.20], [15.310] constitutional corporations, ..... [12.20], [13.380] corporations power, .................... [12.20], [13.10] influence of, .................................................. [1.20] labour power, ............................... [12.20], [13.10] overseas trade power, ................................ [13.10] Australian Human Rights Commission discrimination application to, .................. [12.70] establishment, ............................................. [15.30] referral of matter to Fair Work Commission, ......................................................... [12.150] Australian Industrial Relations Commission harsh, unjust or unreasonable dismissal, ........................................................... [13.10]

652

Index Australian Industrial Relations Commission — cont

scale of payments determined by, ........ [12.250] unfair dismissal jurisdiction, .................. [13.140] Australian workplace agreements work choices reforms, ................................. [1.20] Awards allowable award matters, ............................. [1.20] annual leave — see Annual leave bargaining service fee, prohibition, ........ [12.70] community service leave — see Community service leave compassionate leave — see Compassionate leave damages for breach, ................................ [12.320] compensation for loss, ...................... [12.320] expectation-based, ............................. [12.320] discrimination, prohibition, ..................... [12.70] enterprise agreements — see Enterprise agreements express terms of employment contracts, ......................................................... [12.320] hours of work — see Hours of work implied contractual terms, ...................... [12.290] individual flexibility arrangements, ......... [12.70] better of overall, requirement, .......... [12.70] genuine agreement, ............................. [12.70] termination, .......................................... [12.70] interpretation, ........................................... [12.120] long service leave — see Long service leave matters covered in award, ......................... [12.60] model flexibility clause, ............................. [12.70] National employment standards (NES) — see National employment standards (NES) no work, no pay principle, ........................ [5.110] non-performance of duty, ................. [5.110] overtime worked, ................................. [5.110] times worked, ....................................... [5.110] notice of termination — see Notice of termination objectionable terms, .................................. [12.70] old industrial awards, comparison, ......... [12.60] outworker terms, ........................................ [12.60] parental leave — see Parental leave pecuniary penalties for breach, .............. [12.320] public holidays — see Public holidays Re Modern Awards Review 2012 – Award Flexibility, ......................................... [12.70] remedies for breach, ................................ [12.320] reinstatement orders, ........................ [12.320] safety net, .................................................... [12.60] “safety net contractual entitlements”, ......................................................... [12.300] union rights of entry to workplace, ....... [6.610], [12.70] wages — see Wages

B Bailment relationship, ................................................ [2.390] taxi drivers, .................................................. [2.390] Bankruptcy employees of Crown, ................................ [9.300] employer, of, ............................................... [9.300] partner, of, .................................................. [9.330] Bargaining bargaining service fees, prohibition, ....... [12.70] collective — see Collective bargaining good faith, ................................................... [12.80] representatives, appointment, .................. [12.80] Boycotts — see Secondary boycotts Breach of contract award terms, ............................................. [12.320] damages, .................................................... [10.120] account for gains, .............................. [10.120] breach of duty of fidelity, ................ [10.120] fiduciary duty, breach, ....................... [10.120] negligent in carrying out employment, ......................................................... [10.120] restrictive work covenants, breach, ......................................................... [10.120] unprotected industrial action, .......... [10.120] wasted expenditure, ........................... [10.120] work bans or strike action, ............... [10.120] declaration — see Declaration employee breaches, .................................. [10.120] account for gains, .............................. [10.120] duty of fidelity, ................................... [10.120] fiduciary duty, ..................................... [10.120] negligent in carrying out employment, ......................................................... [10.120] restrictive work covenants, ............... [10.120] unprotected industrial action, .......... [10.120] wasted expenditure, ........................... [10.120] work bans or strike action, ............... [10.120] employer breaches, ....... [5.260], [5.270], [6.330], [10.130], [10.140] disciplinary procedure, ..................... [10.210] discretionary payments, ........................................ [10.160]–[10.170] performance appraisals, ..... [6.210], [10.150] wrongful dismissal, ........................... [10.130], [10.180]–[10.250] inducing — see Inducing breach of contract injunction — see Injunction intention to no longer be bound, .............. [8.10] recovery of wages — see Recovery of wages repudiation, ....................................... [8.10], [8.20] specific performance — see Specific performance

653 Breach of contract — cont

wrongful dismissal — see Wrongful dismissal Breach of statutory duty work injuries, ................................................ [6.70] elements of cause of action, ............... [6.70] private right of action, .......................... [6.70] Breastfeeding discrimination on grounds of, ................. [15.50] Bribes and secret commissions criminal offences, ....................................... [5.810] dismissal of employee, .............................. [5.810] fidelity and good faith, breach, ................ [5.810] Bullying cyber-bullying, ............................................ [8.330] workplace — see Workplace bullying

C Capacity corporations, .............................................. [4.150] Crown contracts, ........................................ [4.140] diplomats, .................................................... [4.140] minors, .......................................... [4.160]–[4.180] Casual employment characterisation, ........................................... [2.90] continuous service, and, ............................. [2.90] disadvantages, ............................................... [2.90] full-time employment, stepping stone to, ............................................................. [2.90] high levels of, ................................................ [2.80] insecurity, ....................................................... [2.90] lack of bargaining power, ........................... [2.90] Certified agreements enterprise agreements, ................................ [1.20] formal procedures set out in, ................ [12.290] statutory nature of, .................................. [12.340] Change of duties and work methods distinction between, .................................. [5.510] express or implied terms, ......................... [5.510] general job description, ............................ [5.510] mutual consent, .......................................... [5.510] new contract of employment, as, ............ [5.510] repudiation of contract, ........................... [5.510] variation of contract, .... [5.510], [9.360], [9.370] Change of workplace, ................................. [9.360] Children — see Minors Coercion compulsion, as, ........................................... [4.250]

concept of, .................................................. [4.260] damages, claiming, ................................... [14.310] duress, in, .................................................... [4.250] workplace rights, to exercise, ................. [13.270] Collective bargaining Fair Work Act 2009 (Cth), .............. [1.10], [1.20], [12.80] Common law dismissal, ....................................................... [2.40] injunctions, ................................... [11.10], [14.60] source of law, ............................................... [1.10] Community service leave jury service, ............................................... [12.210] permanent employees, ............................ [12.210] ordinary base rate of pay, ................. [12.210] reasonable absences from work, ........... [12.210] state and territory laws, application, ..... [12.210] Company directors — see Directors Company restructures redundancy, ................................................. [9.170] transfer or termination of employment, ............................................. [3.50], [10.370] Compensation — see also Damages pain and suffering, ................................... [15.230] redundancy, ................................... [5.510], [9.370] reinstatement, in lieu of — see Reinstatement workers, for — see Workers’ compensation Compassionate leave accrued leave entitlements, .................... [12.200] adverse action, .......................................... [12.200] casuals, ........................................................... [2.90] entitlement, ............................................... [12.200] illness and family emergencies, .............. [12.200] notice of employee’s intention, ............. [12.200] paid, ........................................................... [12.200] permanent employees, ............................ [12.200] unpaid, ....................................................... [12.200] Conciliation and arbitration — see also Arbitration abolition of traditional process, .............. [12.60] Constitution, in, ............. [1.20], [12.20], [15.310] interstate industrial disputes, .................... [12.20] States, in, ....................................................... [1.20] Confidential information breach of duty of confidence, ................. [5.710] confidentiality agreements, ....................... [5.650] damages, ...................................................... [5.690] elements of breach, ................................... [5.680] employees, of

654

Index Confidential information — cont

“know-how”, ........................................ [5.665] stock of knowledge and experience, ........................................................... [5.660] equitable duty of confidence, .................. [5.680] executive and managers, ..................... [5.650] express covenants protecting employer’s interests, ............................ [5.610], [5.690] commercially sensitive information, ........................................................... [5.690] disadvantage to employees, ................ [5.700] relevant considerations, ...................... [5.690] trade secrets, ......................................... [5.690] fidelity and loyalty, ....................... [5.530], [5.570] implied duty of loyalty, ............... [5.660]–[5.670] information in public domain, ................ [5.660] injunctions to restrain breach, ................ [5.680], [5.690] misuse or disclosure, ................................. [5.670] non-compete covenants, ........................... [5.640] public interest disclosure, ......................... [5.710] consumer protection legislation, ....... [5.710] criminal conduct, ................................. [5.710] environmental disaster, ....................... [5.720] iniquity, .................................................. [5.720] unsubstantiated allegations, ............... [5.720] welfare, safety or security of public, ........................................................... [5.720] relevant factors, .......................................... [5.660] trade secrets, ................................. [5.660], [5.690] whistleblowers — see Whistleblowers Consideration common law, .............................................. [4.130] existing duty, performance, ...................... [4.130] industrial legislation, .................................. [4.130] unregistered collective agreements, ........ [4.130] vague, uncertain or illusory, ..................... [4.130] valuable, ....................................................... [4.130] variation of employment contract, ......... [4.130] Conspiracy, ....................................... [14.20], [14.80] justification, .............................................. [14.340] overview, ................................................... [14.420] Conspiracy to injure tort of, ....................................... [14.300], [14.310] acts done in combination unlawful in circumstances, .............................. [14.320] bona fide and legitimate interests, ......................................................... [14.320] closed shop policy, ............................ [14.300] concerted agreement to harm, ........ [14.310] intention to cause damage, .............. [14.310] lawful purposes, ................. [14.310], [14.320] principles, ............................................ [14.310] threatening lawful acts, ..................... [14.310] unlawful means, ....................... [14.300], [14.310] breach of statute, ............................... [14.330] crimes, ................................................. [14.330]

incidental unlawful conduct, ............ [14.330] 1998 waterfront dispute, .................. [14.330] unlawful objects, ...................................... [14.320] Constitution — see Australian Constitution Constitutional corporations, ..... [12.20], [13.380] Constructive dismissal breach of trust and confidence, ............. [5.510], [8.90] common law, ................................................. [8.80] employer, by, ................................................. [8.80] Fair Work Act, under, ................................... [8.80] notice of termination, ................................. [8.90] resignation in response to repudiation, ................................................. [8.80], [8.90] statutory unfair dismissal provisions, ....... [8.90] Contract for services — see Independent contractors Contract of employment benefits, ......................................................... [2.50] breach — see Breach of contract classification of workers, and, ................... [2.40] commencement, ........................................... [4.30] “contractualisation” of employment relationship, ...................................... [2.40] declaration — see Declaration dismissal, and, ............................................... [2.40] express terms — see Express terms formation — see Formation of contract higher status workers, .................................. [2.40] illegal workers, .............................................. [4.20] implied terms — see Implied terms industrial regulation, and, ........................... [2.40] intention to enter legal relationship, ......... [4.50] legislative background, .................... [2.20]–[2.30] licensing and registration, ........................... [4.20] lower status workers, ................................... [2.40] master-servant legislation, .......................... [2.40] multi-factor test, ........................................... [2.70] overview, ........................................................ [4.10] professionals, managers and clerks, .......... [2.40] restraint of trade — see Restraint of trade restricted employment, ............................... [4.20] rights and duties, .......................................... [2.50] “safety net contractual entitlements”, ......................................................... [12.300] specific performance, ................................ [11.10] statutory obligations, incorporation by reference, ...................................... [12.310] statutory prohibitions, ................................. [4.20] termination — see Termination of contract terms of contract — see Express terms — see Implied terms unlawful contracts — see Unlawful contracts unlawful no-citizens, .................................... [4.20]

655 Contract of employment — cont

valid, prerequisites for, ................................ [4.40] variation of agreement, ............................ [9.340] duties, change, ......... [5.510], [9.370]–[9.380] method of work, change, ..... [5.500], [9.390] wages, change, ........................ [9.400]–[9.410] workplace, change, ................ [5.510], [9.360] wage-dependent labour, .............................. [2.40] “working with children” check clearance, ............................................................. [4.20] Contractor dependent — see Dependent contractors independent — see Independent contractors Contractual capacity corporations, .............................................. [4.150] Crown contracts, ........................................ [4.140] diplomats, .................................................... [4.140] minors, .......................................... [4.160]–[4.180]

employees, by, ............................................. [8.320] summary dismissal, .................................... [8.320] unsafe working conditions, ...................... [6.620] Criminal record discrimination against person with, ........ [4.210] prior, questions about, .............................. [4.210] Crown contracts of service, .................................. [4.140] holders of public office, relationship with, ........................................................... [2.410] royal prerogative, ......................................... [7.20] Custom and practice industries, of, .............................................. [4.350] Cyber-bludging, ............................................ [8.330] Cyber-bullying, .............................................. [8.330]

Contractual duties of employee — see Employee’s duties Contributory negligence employee, by, .............................................. [6.110] workers’ compensation, .............................. [6.30]

Cyber-loafing, ................................................. [8.330]

D

Control test employment, of, ............................. [2.140], [3.60] Corporations amalgamation and dissolution, ................ [9.310] capacity to contract, .................................. [4.150] classes of, .................................................... [4.150] constitutional, ............................ [12.20], [13.380] directors — see Directors legislation governing, .................... [1.60], [4.150] Costs discrimination complaints, ..................... [15.240] Fair Work Commission, orders, .............. [13.50] Criminal conduct duty of confidentiality, .............................. [4.310] public interest disclosure, ......................... [5.710] safety of workers at risk from, ................ [6.490] tortious conduct, ..................................... [14.390] Criminal liability agency worker, injury to, ........................... [3.150] bribes and secret commissions, ............... [5.810] employer indemnifying employee against, ........................................................... [5.360] Work health and safety, ................ [6.80], [6.340], [6.370] Criminal offences breach of statutory duties, ....................... [6.620] bribes and secret commissions, ............... [5.810]

Damages aggravated and exemplary damages, ....... [10.90] Australian Consumer Law, under, ............. [10.370] breach during the employment, ............ [10.140] commissions, bonuses, severance payments, ............................................. [5.50], [10.160] common law restrictions, ........................... [6.90] defamation, ............................................... [10.370] employee breaches, .................................. [10.120] account for gains, .............................. [10.120] breach of duty of fidelity, ................ [10.120] fiduciary duty, breach, ....................... [10.120] negligent in carrying out employment, ......................................................... [10.120] restrictive work covenants, breach, ......................................................... [10.120] unprotected industrial action, .......... [10.120] wasted expenditure, ........................... [10.120] work bans or strike action, ............... [10.120] employer breaches, .................................. [10.130] breach of contract, ............................ [10.140] disciplinary procedure, breach, ....... [10.210] discretionary payments, ........................................ [10.160]–[10.170] performance appraisals, .................... [10.150] wrongful dismissal, ............... [5.60], [10.130], [10.180]–[10.250] exemplary damages, ................................... [10.90] Fair Work Act, under, ............................... [10.370] fraudulent misrepresentation, ................ [10.370]

656

Index Damages — cont

lost wages, ........................... [5.50], [7.80], [10.20] measure of damages, .............................. [10.100] industrial action, .................................. [10.70] liquidated damages, ........................... [10.110] repudiation by employer, .................. [10.100] summary dismissal, ........................... [10.100] wasted expenditure, ........................... [10.100] negligence, ................................................ [10.370] psychiatric illness, ..................... [6.210], [10.260], [10.290]–[10.330] physical injury, ....... [6.100]–[6.310], [10.260] remoteness of damage, ............................. [10.80] Hadley v Baxendale, ................................ [10.80] statutory duty, breach, ................. [6.70], [10.370] suspension or stand-down not authorised by statute, award or agreement, .......... [5.60] unfair dismissals, ...................................... [10.240] workers’ compensation legislation, .......... [6.30], [10.370] wrongful dismissal — see Wrongful dismissal Death frustration of contracts employee, of, .......................... [9.240], [9.260] employer, of, ......................................... [9.260] partnership, dissolution of, ...................... [9.270] Deceit physical injury from, ............................... [10.370] tort of, ......................................... [4.210], [10.370] Declaration advantages, ................................................ [11.150] discretionary nature, ................................ [11.110] legal position, ........................................... [11.110] limitations, ................................................ [11.140] master and servant cases, ....................... [11.110] serve a useful purpose, requirement, .... [11.130] special circumstances, ............................. [11.120] statutory schemes of employment, ...... [11.110] wrongful dismissal, .................................. [11.110] Deemed employees, ......................... [2.120], [6.30] Defamation damages, .................................................... [10.370] defamatory references, liability for, ........ [5.290] defence of qualified privilege, ................. [5.290] employee’s action for damages, ............. [10.370] Delegation contracted work, of, .................................. [2.260] what qualifies as, ........................................ [2.260] Dependent contractors attribute of an employee, ......................... [2.110] economic dependence, ............................. [2.110] lower skilled occupations, ......................... [2.110]

taxation legislation, .................................... [2.110] unequal bargaining position, .................... [2.110] Deregulation labour markets, of, ....................................... [1.10] Directors best interests of corporation, .................... [1.70] breach of statutory duties, .......... [1.70], [5.580], [6.570] business judgment defence, ....................... [1.70] controlling shareholder as, ....................... [2.380] definition, ...................................................... [1.70] diligence, duty, ............................... [1.70], [6.590], dual status, as officer and employee, ...... [2.380] duty of care, .................................. [1.70], [6.590], duty of good faith, ...................................... [1.70] employees, as, ............................................. [2.380] fiduciaries as work health and safety, ..... [5.540], [6.590] managing director, ..................................... [2.380] pecuniary penalty orders, ............................ [1.70] powers, ........................................................ [2.380] senior employees’ duties, ............................ [1.70] Disability discrimination on grounds of, ................. [15.50] Disclosure information, of — see Confidential information Discrimination adverse action, protection, ..................... [13.230] attribute, by reason of, ............................ [15.100] evidence, ............................................. [15.100] objective circumstances, consideration, ......................................................... [15.110] onus of proof, ................................... [15.100] comparator, identification, ....................... [15.90] different treatment, ............................. [15.90] objective comparison, ......................... [15.90] complaint lodgement, ............................. [15.220] Australian Human Rights Commission, ......................................................... [15.220] conciliation, compulsory, ................. [15.220] investigation, ...................................... [15.220] notice of termination, ...................... [15.220] publication restrictions, .................... [15.220] court proceedings application for determination, ......... [15.220] compensation for pain and suffering, ......................................................... [15.230] costs, .................................................... [15.240] equitable and expansive approach to damages, ....................................... [15.230] exemplary damages, exclusion, ........ [15.230] interim injunctions, ........................... [15.220] orders the court thinks fit, ............... [15.220]

657 Discrimination — cont

rectification of discriminatory harm, ......................................................... [15.230] rules of evidence, .............................. [15.220] time limit for application, ................. [15.230] definitions, .................................... [15.60], [15.70] direct discrimination prohibition, .......... [15.60], [15.70] assumptions, ......................... [15.70], [15.110] categorical or blanket exclusion, ...... [15.70], [15.110] comparator, .......................................... [15.90] compliance with, ................................ [15.110] gendered value judgments, ................. [15.70] hiring, promotion, discipline, ............ [15.80] prohibited attribute, .......................... [15.100] sex, ......................................................... [15.80] stereotypes, ........................... [15.70], [15.110] unconscious or implicit bias, ........... [15.110] disability discrimination, .......... [15.90], [15.140] discriminatory dismissal proceedings “any order the court considers appropriate”, ......................................................... [15.300] application to court, .......................... [15.300] Fair Work Commission certificate, ......................................................... [15.300] Fair Work Ombudsman, claims by, ......................................................... [15.300] injunctions, ......................................... [15.300] penalty orders, .................................... [15.300] time limit for application, ................. [15.300] enforcement of laws, .............................. [15.210] equal treatment of unequals, ................... [15.20] exceptions and exemptions, ................... [15.180] affirmative action, ............................. [15.190] awards and enterprise agreements, ......................................................... [15.190] compliance with other laws, ............ [15.190] Fair Work Act, under, ......................... [15.190] genuine occupational qualification, ......................................................... [15.180] inherent requirement, ....................... [15.180] positive measures, .............................. [15.190] reasonableness of indirect discrimination, ......................................................... [15.180] special measures exception, ............. [15.190] temporary exemptions, ..................... [15.190] voluntary bodies, ............................... [15.180] Fair Work Act, under, ............................... [15.250] adverse actions, ................. [15.260], [15.270], [15.280] “any order the court considers appropriate”, ......................................................... [15.300] burden shifting mechanism, ............ [15.270] compliance with award or enterprise agreement, .................... [15.290], [15.310] conscious and deliberate victimisation, ......................................................... [15.270] damages, .............................................. [15.300]

discriminating between employees, ......................................................... [15.260] discriminatory dismissals, ................. [15.300] enforcement process, ........................ [15.300] exceptions, ......... [15.260], [15.280], [15.310] Fair Work Ombudsman, claims by, ......................................................... [15.300] General Protections, ......... [15.260], [15.310] intentional, categorical exclusion, ......................................................... [15.270] international labour obligations, ..... [15.270] legitimate reasons for discrimination, ......................................................... [15.270] lodgement of claim, .......................... [15.300] national system employees, .............. [15.280] non-national system employees, ..... [15.280] reinstatement, ..................................... [15.300] scope of prohibitions, ...................... [15.260] social inclusion, promotion, ............ [15.270] state and territory laws, ..................... [15.280] federal and state legislation, ..................... [15.30] formal equality, ........................................... [15.20] gender equality in employment, .............. [15.40] Gender Equality Indicators (GEI), ......... [15.40] gender identity, ........................................... [15.50] employers, reporting, .......................... [15.40] minimum standards of compliance, ........................................................... [15.40] publication, ........................................... [15.40] reports, lodgement, ............................. [15.40] indirect discrimination prohibition, ....... [15.60], [15.120] condition or requirement, ................ [15.130] disproportionate impact or disadvantage, ......................................................... [15.150] failure to provide reasonable adjustments, ......................................................... [15.170] impact of uniform treatment, ......... [15.120] inability to comply, ............................ [15.140] legitimate and proportionate, .......... [15.160] onus, .................................................... [15.120] reasonableness, .................................. [15.160] reformulation of test, ....................... [15.160] industrial instruments, under, ................ [15.290] Fair Work Commission, review, ...... [15.290] overview, ..................................... [15.10], [15.310] Pt 3-1 Fair Work Act, ............................... [13.290] pregnancy, ................................................... [15.50] protected attributes, .................... [15.50], [15.80] prohibitions against discrimination, ........................................................... [15.50] racial discrimination, ............................... [15.160] sex discrimination, ..... [15.50], [15.80], [15.120], [15.160] sexual harassment — see Sexual harassment state and territory laws, ............................... [1.80] statutory protections against, ................ [13.290] substantive equality, ................................... [15.20] terms and conditions of employment, ........................................................... [15.50]

658

Index Discrimination — cont

treatment, .................................................... [15.80] differently, ............................................. [15.60] hiring, promotion, discipline, ............ [15.80] less favourable, ................................... [15.110] uniform treatment impacted them differently, ....................................... [15.60] two limbs, .................................................... [15.20] unlawful termination — see Unlawful termination vicarious liability, ........................................ [15.50] Disguised employment courts, approach, ....................................... [2.100] bargaining power of parties, .............. [2.100] context of the whole agreement, ...... [2.100] totality of relationship, ....................... [2.100] independent contractor, ........................... [2.100] misrepresentation of employment relationship, ........................................................... [2.100] sham contracting provisions, ................... [2.100] Fair Work Act, prohibitions, ............... [2.100] Dismissal constructive — see Constructive dismissal summary — see Summary dismissal unfair — see Unfair dismissal wrongful — see Wrongful dismissal Dispute resolution arbitration, ................................................ [13.310] certificate that dispute unresolved, ....... [13.310] conference in private, .............................. [13.310] mediating or conciliating dispute, ......... [13.310] orders, ........................................................ [13.310] Drug and alcohol testing employees, of, ............................... [5.400], [6.500] Duress actual or threatened violence, .................. [4.250] common law, .............................................. [4.250] compulsion or absence of choice, .......... [4.250] economic, .................................................... [4.250] Fair Work Act, ............................................. [4.250] illegitimate pressure, .................................. [4.290] vitiation of consent, .................................. [4.250] workplace rights, protection, ................... [4.250] Duties change of — see Change of duties directors, of — see Directors employees, of — see Employee’s duties employers, of — see Employer’s duties

employment contract, ......................... [6.250] implied limitation or qualification, .... [6.250] Koehler v Cerebos, .................................... [6.250] variation of duties, .............................. [6.250] contributory negligence of employee, ........................................................... [6.110] mere inadvertence, .............................. [6.110] employers, ................................................... [6.100] owed to each worker, .......................... [6.120] foreseeable risks of injury, ......... [6.100], [6.130] implied term of employment contract, ........................................................... [6.100] inattention or misjudgement, ................... [6.140] non-delegable duty of care to employees, ........................................................... [6.110] obvious risk, ............................................... [6.140] psychiatric injury — see Psychiatric injury reduce or eliminate risk, ........................... [6.140] safe place of work, .................................... [6.180] safe plant and appliances, ......................... [6.190] hidden defects, ..................................... [6.190] system of inspection, .......................... [6.190] safe system of work, ................... [6.110], [6.160] bullying, harassment and racial vilification, ........................................................... [6.200] co-ordination of duties, ...................... [6.200] physical safety, ...................................... [6.200] standard of care, ........................................ [6.150] exercise of due care and skill, ............ [6.150] unnecessary risks of injury, ........ [6.110], [6.140] warnings of unusual or unexpected risks, ........................................................... [6.110] Duty of fidelity and good faith breach of, .................................................... [5.810] employee, of, .............................................. [4.460] good faith, weather mutual duty, ............. [5.170] Duty of trust and confidence Barker’s case in High Court, .................... [5.160] implied Australia, position, ............................... [5.160] United Kingdom, position, ............... [5.140], [5.150]

E Earnings definition, ...................................... [12.40], [13.80] Economic duress, ......................................... [4.250]

Duty of care accident prevention, .................................. [6.150] competent staff, ........................... [6.170], [6.200] contractual obligations, effect, ................. [6.250]

Economic loss employees, to, duty to avoid, .................... [5.300] industrial action, due to, ......................... [14.100]

659

Email employer codes, ......................................... [5.400] Employee assault on fellow workers, .......... [6.140], [8.320] Australia, position, ....................................... [2.30] Britain, in, ...................................................... [2.30] classification, .......................................... [2.30] manual work, .............................. [2.20], [2.30] non-manual work, ...................... [2.20], [2.30] self-employment, ................................... [2.30] concept, ......................................................... [2.20] contract of service, ................................... [2.130] deemed, ....................................................... [2.120] direction and control by employer, ......... [2.130] discrimination between, .......................... [13.240] less favourable treatment, ................ [13.250] terms and conditions of employment, ......................................................... [13.250] indemnification against liability, ............... [2.50], [5.350]–[5.380] independent contractor, distinction — see Independent contractor master-servant legislation, .............. [2.20], [2.30] Australia, in, ............................................ [2.30] Britain, in, ............................................... [2.30] fines and imprisonment, ....................... [2.30] minimum labour standards, ..................... [12.30] misconduct by — see Employee misconduct recovery of wages — see Recovery of wages rights and duties, ............. [2.50], [5.410]–[5.840] surveillance of, ........................................... [5.400] technology, misuse of, ............................... [8.330] unfair dismissal — see Unfair dismissal unlawful dismissal — see Unlawful dismissal Employee’s duties account for property, ................................ [5.820] received in course of employment, ........................................................... [5.820] bribes and secret commissions criminal offences, ................................ [5.810] dismissal of employee, ........................ [5.810] fidelity and good faith, breach, .......... [5.810] change of duties, ....................................... [5.510] change of work methods, distinction, ........................................................... [5.510] express or implied terms, ..... [5.510], [9.390] general job description, ...................... [5.510] mutual consent, .................................... [5.510] new contract of employment, as, ..... [5.510] repudiation of contract, ..................... [5.510] variation of contract, ............ [5.510], [9.340] co-operation, .................... [5.10], [5.190], [5.230] commenting adversely about employer, ........................................................... [5.770] lawful and reasonable directions, ...... [5.770] media policies, ...................................... [5.770] competing businesses, establishment, .... [5.600]

diverting customers and business opportunities, ................................. [5.600] implied, .................................................. [5.600] lists of customers for future use, ...... [5.600] restrictive covenants, ............. [5.600], [5.610] confidential information — see Confidential information confidentiality agreements — see Confidential information contractual duties, ...................................... [5.590] competing businesses, establishment, ........................................................... [5.600] diverting customers and business opportunities, ................................. [5.600] implied, .................................................. [5.600] lists of customers for future use, ...... [5.600] restrictive covenants, ............. [5.600], [5.610] Corporations Act 2001, under, .... [4.340]–[4.430], [5.580] best interests of the corporation, ..... [5.580] breach of fiduciary duty, .................... [5.580] duty of confidence, ............................. [5.580] duty of loyalty, ....................... [5.580], [5.665] good faith, ............................................. [5.580] improper use of information, ........... [5.580] improper use of position, .................. [5.580] officers, .................................................. [5.580] equitable duty of confidence, .... [5.570], [5.680] exclusive service clause — see Exclusive service clause express covenants, ..................................... [5.610] confidential information, ................... [5.610] executive and managerial level employees, ........................................................... [5.610] no-compete covenants, ....................... [5.610] soliciting of clients, ............................. [5.610] wrongful repudiation of employment contract, and, .................................. [5.620] fidelity and loyalty, ......... [5.140], [5.180], [5.600] attending for work on time, ............... [5.520] confidential information, ..... [5.530], [5.570] disclosure, ............................................. [5.530] obeying reasonable and lawful orders, ........................................................... [5.520] performing work in a competent manner, ........................................................... [5.520] fiduciary obligations, ................................. [5.540] business opportunities, ......... [5.550], [5.560] company directors, .............................. [5.550] contractual arrangements, .................. [5.540] no conflict rule, .................................... [5.540] no profit rule, ......................... [5.540], [5.550] senior academics, ................................. [5.550] senior employees and managers, ....... [5.540] trust and confidence, .......................... [5.550] good faith, .......... [5.10], [5.160]–[5.180], [5.530] honesty concerning employment, ........... [5.850] disciplinary offences, ........................... [5.850] dishonest responses, ............................ [5.850] dismissal of employee, ........................ [5.850]

660

Index Employee’s duties — cont

refreshing memory, ............................. [5.850] self-incrimination, ................................ [5.850] statutory duty, ....................................... [5.850] work health and safety legislation, .... [5.850] implied duty of trust and confidence Australia, position, ............................... [5.160] United Kingdom, position, ............... [5.140], [5.150] inventions and intellectual property — see Inventions and intellectual property non-compete covenants, ........... [5.600], [5.610], [5.630] confidential information, ................... [5.640] enforceability, ....................................... [5.640] purpose, ................................................ [5.640] restraint is reasonably necessary, requirement, ..................... [4.420], [5.630] obey all lawful and reasonable commands, ........................................................... [5.410] email and internet usage policies, ...... [5.410] outside the work place, ....................... [5.420] reasonableness, requirement, ............. [5.420] poaching of employees — see Poaching of employees privacy, ......................................................... [5.400] reasonable care, .......................................... [5.430] relocation, ................................................... [5.500] implied term, .......................... [5.500], [9.360] job mobility, .......................................... [5.500] reasonableness, ..................................... [5.500] transfer to workplace, ........... [5.500], [9.360] variation of contract, .......................... [5.500] reporting derelictions defection and poaching, ..................... [5.840] directors and senior staff, ................... [5.830] employee’s own misdeeds, ................. [5.830] misdeeds of others, ............................. [5.840] prospective employees, ....................... [5.830] status — see Employee status statutory duties, .......................................... [5.580] tenant, as, .................................................... [2.400] tortious wrongdoing — see Tort liability wages-work bargain — see Wages-work bargain whistleblowers — see Whistleblowers Employee misconduct awards and enterprise agreements, under, ........................................................... [8.360] bribery, ......................................................... [8.310] condonation and waiver by employer, .... [8.370] criminal offences, ....................................... [8.320] cyber-bullying, ............................................ [8.330] dishonesty, ................................................... [8.300] drunkenness and drug taking, .................. [8.280] duty to disclose, ............... [4.200], [5.830][8.350] failure or refusal to attend or perform work, ........................................................... [8.260] immorality, .................................................. [8.290]

industrial action, ......................................... [8.260] insulting or objectionable language, ....... [8.270] nature of business, .................................... [8.250] out of hours, .............................................. [8.340] social media, on, ........................................ [8.330] summary dismissal, .................................... [8.250] unprotected strike action, ......................... [8.260] Employee status determination, .................. [2.70], [2.140], [2.160] business expenditure, .......................... [2.340] control, .................................................. [2.220] delegate or subcontract work, ........... [2.260] express declaration of intent, ............ [2.350] goodwill or saleable assets, ................. [2.330] holidays, sick leave and other payments, ........................................................... [2.310] Hollis v Vabu, ............ [2.200], [2.220], [2.250] “in business on their own account”, ........................................................... [2.210] incorporation, ....................................... [2.360] integration, attachment and commitment, ........................................................... [2.370] joint employment, ................. [2.190], [3.250] mutuality of obligation, ...................... [2.180] performance of work for others, ...... [2.230] personal relationship, .......................... [2.170] profession, trade or calling, ................ [2.320] provision and maintenance of tools and equipment, ...................................... [2.250] public liability insurance, .................... [2.370] remuneration or paid by result, ......... [2.290] representation as part of employer’s business, .......................................... [2.270] separate place of work and advertises services, ........................................... [2.240] suspension or dismissal, ..................... [2.300] taxation, ................................................. [2.280] totality of relationship, ....................... [2.200] training, provision, .............................. [2.370] Employer adverse action — see Adverse action duties — see Employer duties duty of reasonable care — see Duty of care theft from, ................................................... [8.320] tortious wrongdoing by employees — see Tort liability vicarious liability — see Vicarious liability Employer’s duties, .......................................... [1.10] bribes and secret commissions — see Bribes and secret commissions co-operate, ........................ [5.10], [5.190], [5.230] economic losses to employees, ................ [5.300] employer not to act capriciously, arbitrarily or unreasonably, .................................. [5.220] discretionary pay schemes, ................. [5.230] variation of policies and procedures, ........................................................... [5.250]

661 Employer’s duties, [1.10] — cont

Wednesbury reasonableness, ............ [5.220], [5.240] good faith, ........................ [5.10], [5.160]–[5.180] honesty and reasonableness in performance, ........................................................... [5.220] implied duty of trust and confidence Australia, position, ................ [5.160], [5.330] United Kingdom, position, ............... [5.140], [5.150] indemnity, .................................................... [5.350] criminal acts by employees, ................ [5.360] employee expenses, ............................. [5.350] negligence and non-criminal wrongs, ........................................................... [5.370] officers of a corporation, ................... [5.380] investigative and disciplinary processes employee references, ............ [5.280], [6.210], [6.310], [6.540] fairness, ................................................. [5.260] reasons, .................................................. [5.270] medical assistance, ..................................... [5.390] negligent, misleading or defamatory references, ........................................................... [5.290] obligation to provide work, ...................... [5.310] Australia, position, ............................... [5.330] commission, payment, ........................ [5.320] common law, ........................................ [5.320] entertainment industry, ....................... [5.320] garden leave, ............ [4.400], [5.800], [5.340], [9.140], [10.220] impossible or impracticable, .............. [5.340] “special and unique” positions, ......... [5.330] suspension on full pay, ........................ [5.340] theatrical performance, ....................... [5.320] United Kingdom, position, ................ [5.320] privacy, ......................................................... [5.400] wages-work bargain — see Wages-work bargain Employment change in pattern of work, ......................... [2.70] disguised — see Disguised employment executive employment, ................................ [1.60] joint — see Joint employment permanent, .................................................. [9.230] rights and duties, .......................................... [2.50] temporary — see Temporary employment transfer of, ..................................................... [3.50] common law rule, .................................. [3.50] complete dominion and custody over servant, .............................................. [3.60] qualified operators, ................................ [3.60] temporary transfer, ................................ [3.60] Employment relationship casual employment — see Casual employment changes to traditional patterns of work, ............................................................. [2.80] company directors, .................................... [2.380]

contract for service, ..................................... [2.20] control test, ................................................. [2.140] scope for control over incidental matters, ........................................................... [2.140] specialist skills and knowledge, ......... [2.140] Stevens v Brodribb Sawmilling, ................ [2.140] disguised employment — see Disguised employment employee — see Employee employer — see Employer legislative background, ................................ [2.30] “live in” workplace, ................................... [2.400] mobility of work force, ............................... [2.80] nature and diversity, ..................................... [2.70] office holders, ............................................. [2.410] organisation test, ........................................ [2.150] overview, ............................. [1.10], [2.10], [2.430] partnership, ................................................. [2.420] protective and punitive legislation, ............ [2.30] relationship of service, ............................... [2.40] rights and duties, .......................................... [2.50] social welfare legislation, ............................. [2.30] Statutory regulation, .................................... [1.10] taxi drivers, .................................................. [2.390] tenancy, ........................................................ [2.400] Enterprise agreements annual leave — see Annual leave better-off-overall-test, ................ [12.60], [12.80], [12.90] community service leave — see Community service leave compassionate leave — see Compassionate leave content, ....................................................... [12.90] dispute resolution clause, ................... [12.90] flexibility term, ..................................... [12.90] permitted matters, ............................... [12.90] employers refusal to make, ....................... [12.80] hours of work — see Hours of work implied contractual terms, ...................... [12.290] interpretation, ........................................... [12.120] long service leave — see Long service leave majority of employees cast a valid vote, ........................................................... [12.80] majority support determination bargaining orders, ................................ [12.80] enterprise agreements, ........................ [12.80] good faith bargaining obligations, .... [12.80] petitions and surveys, .......................... [12.80] notice of termination — see Notice of termination parental leave — see Parental leave Pt 3-3 Fair Work Act, ................................. [12.80] prior negotiation, ....................................... [12.80] protected industrial action, ....................... [12.80] public holidays — see Public holidays redundancy — see Redundancy terms implied into contracts, ................. [12.350] Transfer of Business provisions, .......... [12.100]

662

Index Enterprise agreements — cont

transfer of enterprise agreement, ......... [12.100] wages — see Wages Equal opportunity federal and State legislation, ......... [1.80], [15.30] laws, .............................................................. [15.30] Equitable remedies — see Injunctions — see Specific performance Estoppel doctrine of, ................................... [4.150], [4.280] equitable estoppel, ..................................... [4.290] promissory, ................................................. [9.410] unconscionable conduct and, .................. [4.280] European Union non-discrimination principle, ................... [3.260] temporary agency workers, ...................... [3.260] Excessive workloads — see also Hours of work breach of implied term, ............................ [5.150] psychiatric injury, ........... [6.100], [6.230], [6.300] contractual duties, carrying out, ........ [6.300] Exclusive service clause acting outside of his or her duties, principles, ........................................................... [5.800] confidential information, protection, ..... [5.800] direct competition with employer, .......... [5.800] government and semi-government employees, ........................................................... [5.800] outside employment, prohibition, ........... [5.800] paid work outside their employment, ..... [5.800] technical staff and executives, ................. [5.800] theatrical or entertainment industries, .... [5.800] unreasonable restraint of trade, .............. [5.800] Executive service contracts Australian Stock Exchange Listing Rules, ............................................................. [1.60] corporations legislation, .............................. [1.60] hedging remuneration package, ........... [1.60] indemnification of corporate directors, ............................................... [1.60], [5.380] termination benefits, ............................. [1.60] Exemption clauses benefits, ....................................................... [5.490] growing use of, ........................................... [5.490] Express terms award, incorporation, .............................. [12.290] above award provisions, ................... [12.330] award terms, ....................................... [12.320] wages in excess of minimum provisions, ......................................................... [12.330]

duty to obey orders, .................................. [4.460] employee’s duty of fidelity and good faith, ............................................. [4.460], [5.520] enterprise agreement terms, incorporation, ......................................................... [12.340] general information and advice, distinction, ........................................................... [4.470] implied by law, ............................................ [4.460] implied terms — see Implied terms incorporated from other documents/instruments, .............. [4.480] company manuals, handbooks and codes, ........................................................... [4.480] company policies and procedures, .... [4.480] conditions of employment, ............... [4.490] content at the discretion of one party, ........................................................... [4.490] descriptive or aspirational clauses, .... [4.490] enterprise agreement or award, ........ [4.480], [12.290], [12.320]–[12.350] intention of parties, ............................ [4.480] letter of offer, ...................................... [4.480] unregistered collective agreement, ......................................................... [12.390] work rules, ............................................ [4.480] interpretation, ............................................. [4.470] objective intention of parties, .................. [4.470] oral, .............................................................. [4.460] post contractual conduct, relevance, ...... [4.570] estoppel, ................................................ [4.570] labour hire agreements, ...................... [4.570] United Kingdom, ................................. [4.570] range and content of duties, .................... [4.460] surrounding circumstances, ..................... [4.470] words and conduct, ................................... [4.480]

F Facebook employees’ privacy, .................................... [5.400] Fair Pay Commission, ................................... [1.40] Fair Work Act 2009 (Cth) adverse action, ................ [1.10], [6.600], [7.100], [13.240] collective bargaining, ....................... [1.10], [1.20] constructive dismissal, ................................ [8.80] corporations power, ...................... [1.20], [12.20] coverage of Act, ........................................ [12.20] constitutional corporations, ............... [12.20] state and territory laws, and, ................ [1.90] damages, .................................................... [10.370] discrimination — see Discrimination Disguised employment, prohibition, ...... [2.100]

663 Fair Work Act 2009 (Cth) — cont

enterprise agreements — see Enterprise agreements freedom of association — see Freedom of association high income employees, ........................... [12.40] mandatory terms and conditions of employment, ....................... [1.30], [12.60] modern awards — see Awards notice of termination — see Notice of termination recovery of wages — see Recovery of wages redundancy — see Redundancy referral powers, ............................................ [1.20] reinstatement or re-employment, ............ [11.10] “safety net contractual entitlements”, ......................................................... [12.300] sham contracts, .......................................... [2.100] stand down, .................................... [7.10], [7.100] states and territories, ................................... [1.20] exclusion of state laws, ....................... [12.50] referral of powers, ................................. [1.20] statutory minimum wages, ....................... [10.50] unfair dismissal, ............................. [1.30], [13.50] unfair dismissal — see Unfair dismissal unlawful termination — see Unlawful termination Work Choices Case, ....................................... [12.20] workplace rights — see Workplace rights Fair Work Australia overview, ........................................................ [1.40] Fair Work Commission “a fair go all round”, ................................. [13.50] administrative power, .................... [1.40], [13.50] AHRC, referral of matter by, ................ [12.150] Boilermaker’s doctrine, ............................ [1.40] anti-bullying jurisdiction, ........................ [13.370] appeal against, ............................................ [13.50] case-by-case basis, ...................................... [13.50] compensation in lieu of reinstatement, ........................................................... [13.50] conciliation, ................................................... [1.40] costs, orders, ............................................... [13.50] discriminatory dismissals arbitration, .......................................... [15.300] lodgement of claim, .......................... [15.300] private case conference, .................... [15.300] equal remuneration orders, ......................... [1.30] General Protections application, ............ [13.40], [13.310] time limit, ............................................ [13.310] majority support determination bargaining orders, ................................ [12.80] enterprise agreements, ........................ [12.80] good faith bargaining obligations, .... [12.80] petitions and surveys, .......................... [12.80] Minimum Wage Panel, ................................ [1.40] minimum wages, setting, ............................ [1.30]

multiple actions, ......................................... [13.40] acceptable alternative remedies, ........ [13.30] non-dismissal dispute resolution Fair Work Ombudsman, claims by, ......................................................... [13.310] mediation and conciliation, .............. [13.310] notification and consultation requirements, ......................................................... [13.350] non-compliance of employers, ....... [13.350] review of awards minimum wages, ................................ [12.140] overtime and penalty rates, .............. [12.150] unfair dismissal dispute arbitration, .......................................... [13.310] certificate that dispute unresolved, ......................................................... [13.310] conference in private, ....................... [13.310] mediating or conciliating dispute, ......................................................... [13.310] orders, .................................................. [13.310] unlawful termination dispute arbitration of dispute, ....................... [13.340] certificate issued if matter not resolved, ......................................................... [13.340] orders, .................................................. [13.340] private conference, ............................ [13.340] reinstatement, ............. [1.40], [11.10], [13.50] unprotected industrial action, .................. [14.30] stop orders, ........................................... [14.30] threatened or impending, ................... [14.30] workplace bullying, intervention, ............ [13.70] application by worker, ....................... [13.370] bullying order, contravention, ......... [13.410] conference, ......................................... [13.370] orders to prevent future harm, ....... [13.370], [13.410] Pt 6-4B Fair Work Act, ........................ [13.70] penalties, ............................................. [13.410] redress, ................................................ [13.370] workplace determinations, ......................... [1.30] Fair Work Ombudsman (FWO), ................ [1.40] non-dismissal disputes, ........................... [13.310] False or misleading representations advantages of statutory claim, ................. [4.240] Australian Consumer Law, ....................... [4.240] Fair Work Act, ............................................. [4.230] sham contracting, ...................................... [2.100] workplace rights, ........................................ [4.230] Family responsibilities discrimination on grounds of, ................. [15.50] Federal Court discrimination proceedings application for determination, ......... [15.220] compensation for pain and suffering, ......................................................... [15.230]

664

Index Federal Court — cont

costs, .................................................... [15.240] equitable and expansive approach to damages, ....................................... [15.230] exemplary damages, exclusion, ........ [15.230] interim injunctions, ........................... [15.220] orders the court thinks fit, ............... [15.220] rectification of discriminatory harm, ......................................................... [15.230] rules of evidence, .............................. [15.220] time limit for application, ................. [15.230] discriminatory dismissal proceedings “any order the court considers appropriate”, ......................................................... [15.300] application, ......................................... [15.300] Fair Work Commission certificate, ......................................................... [15.300] Fair Work Ombudsman, claims by, ......................................................... [15.300] injunctions, ......................................... [15.300] penalty orders, .................................... [15.300] time limit for application, ................. [15.300] fair work divisions, ....................................... [1.40] unfair dismissal proceedings compensation, .................................... [13.310] injunctions, ......................... [13.310], [13.320] penalties, ............................................. [13.310] Pt 4-1 Fair Work Act, ......................... [13.310] reinstatement, orders, ....... [13.310], [13.320] unlawful termination proceedings relief under Pt 4-1 Fair Work Act, ........................................ [13.310], [13.340] Fidelity and loyalty, ........................ [5.140], [5.180] attending for work on time, ..................... [5.520] confidential information, ........... [5.530], [5.570] disclosure, ................................................... [5.530] obeying reasonable and lawful orders, ........................................................... [5.520] performing work in a competent manner, ........................................................... [5.520] Fiduciary obligations business opportunities, ............... [5.550], [5.560] company directors, .................................... [5.550] contractual arrangements, ........................ [5.540] Corporations Act 2001, under, .................... [5.580] act in good faith in the best interests of the corporation, .................................... [5.580] duty of confidence, ............................. [5.580] duty of loyalty, ..................................... [5.580] improper use of information, ........... [5.580] improper use of position, .................. [5.580] no conflict rule, .......................................... [5.540] no profit rule, ............................... [5.540], [5.550] senior academics, ....................................... [5.550] senior employees and managers, ............. [5.540] trust and confidence, ................................. [5.550]

Formation of contract agreement to start employment, ................ [4.30] Australian Consumer Law, ....................... [4.230] misleading and deceptive conduct, ........................................................... [4.230] contractual capacity — see Capacity duress — see Duress false or misleading representations — see False or misleading representations intention to enter legal relationship, ......... [4.50] minors — see Minors misleading and deceptive conduct — see Misleading and deceptive conduct misrepresentation — see Misrepresentation mistake — see Mistake offer and acceptance — see Offer and acceptance terms of contract — see Express terms — see Implied terms unconscionable conduct — see Unconscionable conduct undue influence — see Undue influence unlawful contracts — see Unlawful contracts valid contract, prerequisites, ....................... [4.40] valuable consideration, ............................. [4.130] vitiating factors, .......................................... [4.190] withdrawal of accepted offer, .................... [4.30] Fraud summary dismissal, .................................... [8.320] third party, on, during working hours, ........................................................... [8.320] Fraudulent misrepresentation, ................ [4.210], [10.370] Freedom of association acceptance of enterprise agreement, .... [13.280] adverse action, protection, ..... [13.230], [13.280] coercing industrial activity, ..................... [13.280] inducing membership if industrial association, ......................................................... [13.290] lawful industrial activities, ...................... [13.280] membership of industrial association, ......................................................... [13.280] Pt 3-1 Fair Work Act, ............... [12.260], [13.280] prohibition against adverse action, ....... [13.280] refusal or failure to join industrial action, ......................................................... [13.280] representation by industrial association, ......................................................... [13.280] Frustration or impossibility death employee, of, .......................... [9.240], [9.260] employer, of, ......................................... [9.260] dissolution of partnership by death, ...... [9.270] entire contracts, .......................................... [9.240] Frustrated Contracts Acts, ....................... [9.240]

665 Frustration or impossibility — cont

illness, .......................................................... [9.290] implied condition, ...................................... [9.240] imprisonment, ............................................ [9.250] onus of proof, ............................................ [9.240] restitution, ................................................... [9.240] “self-induced frustration”, ....................... [9.250] unjust enrichment, ..................................... [9.240] war, ............................................................... [9.280]

G Garden leave long periods of, ............................ [4.400], [5.800] overview, ..................................... [9.140], [10.220] Gender gender equality in employment, .............. [15.40] Gender Equality Indicators (GEI), ......... [15.40] gender identity, ........................................... [15.50] General protections adverse action, and, — see Adverse action constitutional basis, ................................. [13.230] court proceedings Pt 4-1 Fair Work Act, ......................... [13.310] discrimination — see Discrimination dispute resolution — see Dispute resolution Fair Work Commission — see Fair Work Commission freedom of association — see Freedom of association non-dismissal dispute resolution Fair Work Ombudsman, claims by, ......................................................... [13.310] mediation and conciliation, .............. [13.310] workplace rights — see Workplace rights Goods and services tax (GST) independent contractors, .......................... [2.280]

H Harassment — see Sexual harassment — see Workplace bullying Head hunters, ................................................ [3.130] Health and safety law Approved Codes of Practice, .................. [6.340] breach of duties, ........................................ [6.340]

compliance, ................................................. [6.620] criminal manslaughter, ........................ [6.340] enforceable undertakings, .................. [6.660] incident notification, ........................... [6.640] policy approaches, ............................... [6.630] prohibition and improvement notices, ........................................................... [6.650] Safe Work Australia, ............................ [6.630] contractors and subcontractors, duties of ....................................................... [6.570] enforcement category 1, 2 and 3 offences, ............. [6.670] mitigation, ............................................. [6.680] penalties, ................................................ [6.680] Interpretive Guidelines, ............................ [6.340] work, determination, ........................... [6.400] key definitions, ........................................... [6.360] labour hire, ................................... [6.390], [6.450] legislative framework, ................................ [6.340] 1972 Robens Committee Report, ........... [6.350] non-delegable duty – jointly owed, ......... [6.450] labour hire workers, ............................. [6.450] related companies, ............................... [6.450] overview, ..................................................... [6.340] persons conducting a business or undertaking (PCBU) — see Persons conducting a business or undertaking (PCBU) physical health, ........................................... [6.500] plants or structures, ................................... [6.560] designers, ............................................... [6.560] hazards and risks, elimination, ........... [6.560] importers, .............................................. [6.560] installers, ................................................ [6.560] lifecycle of plant, duties, ..................... [6.560] PCBUs, .................................................. [6.560] upstream duty holders, ....................... [6.560] primary duty of care, ................................ [6.480] breach, ................................................... [6.520] psychological health, ................................. [6.500] bullying, ................................................. [6.500] fatigue, ................................................... [6.500] stress, ..................................................... [6.500] reasonably practicable measures to avoid harm, ........................................................... [6.420] psychological health, ........................... [6.500] specialist contractors, .......................... [6.440] state of knowledge, ............................. [6.430] steps to be taken, ................................. [6.430] risk management, duties, .......................... [6.460] control measures, maintenance, ........ [6.460] monitoring, ........................................... [6.460] PCBUs to take specific steps, ............ [6.470] periodic review, .................................... [6.460] risks to health and safety, ........... [6.510]–[6.520] at work in the business or undertaking, ........................................................... [6.530] breach of duty, ..................................... [6.520] entry and exit of workplace, .............. [6.550] fixtures, fittings or plant, .................... [6.550] management or control, ..................... [6.550]

666

Index Health and safety law — cont

work environment, .............................. [6.540] substances designers, ............................................... [6.560] hazards and risks, elimination, ........... [6.560] importers, .............................................. [6.560] lifecycle of substance, duties, ............ [6.560] PCBUs, .................................................. [6.560] suppliers, ............................................... [6.560] unsafe working conditions — see Unsafe working conditions volunteers duties, ....................................... [6.570] work, definition, ......................................... [6.400] worker, definition, ..................................... [6.390] workers duties, ............... [6.390], [6.570], [6.580] acts or omissions, ................................ [6.580] bullying fellow workers, ...................... [6.580] compliance with reasonable instruction, ........................................................... [6.580] co-operate with reasonable policy or procedure, ....................................... [6.580] personal protective equipment, ......... [6.580] reasonable care, .................................... [6.580] workplace, definition, ................................ [6.410] High income employees definition, .................................................... [12.40] high income threshold, ............................. [13.80] modern awards not applying to, .............. [12.40] Hours of work averaging of hours, ................................. [12.170] awards and enterprise agreements, ....... [12.170] contract of employment, ....................... [12.170] excessive workloads, .................................. [6.300] flexible working hours, ........................... [12.170] parents or carers of children, .......... [12.170] National Employment Standards, ......... [12.170]

I Illegal contracts — see Unlawful contracts Illegal immigrants — see also Unlawful non-citizens contracts of employment for work, ....... [4.320] special immunities and contractual restrictions, ........................................................... [4.140] Implied terms arbitrary or perverse exercise of contractual right, prevention, ........................... [4.560] duty of good faith, .................................... [4.560] enterprise agreement terms, .................. [12.350] exclusion by express terms, ...................... [4.540]

fact, implications, ......................... [4.510], [4.520] analogy with statutory protections, ........................................................... [4.520] business efficacy, ................... [4.510], [4.520] contracts of employment, .................. [4.520] express terms, contradiction, ............. [4.520] “individualised gap fillers”, ................ [4.520] necessity, ................................................ [4.520] reasonable and equitable, ................... [4.520] redundancy payment, rights, .............. [4.510] fair hearing prior to dismissal, ................ [4.510], [5.260] implications of law, ................................... [4.500] “default rules”, ..................................... [4.510] duties owed by parties, ........................ [4.510] exclusion by express terms, ................ [4.550] necessity, ................................................ [4.510] reasonable care for safety of employees, ........................................................... [4.510] industry custom and practice, .................. [4.530] company policy changes, .................... [4.530] contrary to express terms of agreement, ........................................................... [4.530] enterprise agreements, ........................ [4.530] flexi days, ............................................... [4.530] ignorance of existing custom, ........... [4.530] paid penalty rates for Sunday work, ........................................................... [4.530] particular workplace, ........................... [4.530] pre-contractual prior course of dealing, ........................................................... [4.530] “privileges”, removal, .......................... [4.530] question of fact, .................................. [4.530] “uniform, notorious, reasonable and certain”, ........................................... [4.530] Impossibility — see Frustration and impossibility Imprisonment most serious offences, for, ....................... [6.660] sentence of, ................................................. [9.250] Incompetence summary dismissal, .................................... [8.150] representation of competence, ......... [8.160] standard of skill, .................................. [8.180] unskilled employees, ............................ [8.170] Incorporated terms of contract company manuals, handbooks and codes, ........................................................... [4.480] company policies and procedures, .......... [4.480] conditions of employment, ..................... [4.490] content at the discretion of one party, ........................................................... [4.490] descriptive or aspirational clauses, .......... [4.490] enterprise agreement or award, ............... [4.480] intention of parties, ................................... [4.480]

667 Incorporated terms of contract — cont

letter of offer, ............................................. [4.480] work rules, .................................................. [4.480] Incorporation employment relationship, and, ................ [2.360] statutory obligations, of, by reference, ......................................................... [12.310] terms, of, from unregistered collective agreements, ................................... [12.390] Indemnity, ....................................................... [5.350] criminal acts by employees, ...................... [5.360] employee expenses, ................................... [5.350] negligence and non-criminal wrongs, ..... [5.370] officers of a corporation, ......................... [5.380] Independent contractor advantages of status, ................................. [2.130] contract for services, ..................... [2.20], [2.130] deemed employee, ..................................... [2.120] dependent contractors — see Dependent contractors disadvantages of status, ............................ [2.130] disguised employment, ............................. [2.100] employee, distinction, .... [2.130], [2.70], [2.140], [2.160] business expenditure, .......................... [2.340] control, .................................................. [2.220] delegate or subcontract work, ........... [2.260] express declaration of intent, ............ [2.350] goodwill or saleable assets, ................. [2.330] holidays, sick leave and other payments, ........................................................... [2.310] Hollis v Vabu, ............ [2.200], [2.220], [2.250] “in business on their own account”, ........................................................... [2.210] incorporation, ....................................... [2.360] integration, attachment and commitment, ........................................................... [2.370] joint employment, ............................... [2.190] mutuality of obligation, ...................... [2.180] performance of work for others, ...... [2.230] personal relationship, .......................... [2.170] profession, trade or calling, ................ [2.320] provision and maintenance of tools and equipment, ...................................... [2.250] public liability insurance, .................... [2.370] remuneration or paid by result, ......... [2.290] representation as part of employer’s business, .......................................... [2.270] separate place of work and advertises services, ........................................... [2.240] sham contracts, .................................... [2.100] suspension or dismissal, ..................... [2.300] taxation, ................................................. [2.280] totality of relationship, ....................... [2.200] training, provision, .............................. [2.370] unconscionable contracts, .................. [4.300] employer, advantages to, ............................. [2.50]

Odco contract, ............................... [3.100]–[3.110] standard provisions, ............................ [3.100] terms of contract, ............................... [3.110] unfair dismissal claims, ....................... [3.100] Odco model, ......................... [3.20], [3.30], [3.100] control or direction, ............................ [3.100] payment, ................................................ [3.100] worker as independent contractor, .... [3.20], [3.30], [3.100] professionals, .............................................. [2.130] self-employed, ............................................ [2.130] sham contracting arrangements, ............ [2.100], [12.30] “substitution clause”, .................................. [2.50] terms and conditions of work, .............. [12.280] tradespersons, ............................................. [2.130] unconscionable conduct, protection, ..... [4.300] business transactions, .......................... [4.300] “contract for services”, requirement, ........................................................... [4.300] courts, jurisdiction, .............................. [4.300] harsh or unfair contract, determination, ........................................................... [4.300] Independent Contractors Act 2006 (Cth), ........................................................... [4.300] “requisite constitutional connection”, ........................................................... [4.300] unfair work contracts provisions, .... [4.300], [12.280] Inducing breach of contract, .... [14.80], [14.110] direct interference, ................................... [14.140] black ban, ............................................ [14.140] disabled from performance, ............ [14.140] inconsistent contracts, entry, ........... [14.150] striking employees, ............ [14.140], [14.150] threat of action, ................ [14.140], [14.150] unprotected strike, ............................. [14.140] implied duty of fidelity to employer, .... [14.110] indirect interference, ............... [14.110], [14.160] intimidation, ....................................... [14.160] Lumley v Gye, ...... [14.110], [14.140], [14.160] intent to persuade, procure or induce, ......................................................... [14.120] persuasion and advice, distinction, ........................................ [14.120], [14.140] question of fact, ................................ [14.120] intentional tort, ........................................ [14.120] interlocutory injunctions, ....................... [14.120] justification, .............................................. [14.190] bona fide pursuit of union objectives, ......................................................... [14.190] inconsistent contracts, ...................... [14.190] loss of defence, .................................. [14.220] moral or social duty, ......... [14.190], [14.200] public policy, ...................... [14.190], [14.200] statutory or contractual privilege, ......................................................... [14.120] knowledge of contract, requirement, ......................................................... [14.130]

668

Index Inducing breach of contract, [14.80], [14.110] — cont

recklessly indifferent, ........................ [14.130] “turns a blind eye”, ........................... [14.130] liability of employees and agents, ......... [14.170] mere interference with contract, distinction, ......................................................... [14.180] negligent interference insufficient, ....... [14.120] overview, ................................................... [14.420] statutory or contractual privilege, justification, ......................................................... [14.210] award or collective agreement, inconsistency, ......................................................... [14.210] enforcement of Commonwealth laws, ......................................................... [14.210] private interests, subordination, ...... [14.210] trade unions, ............................................. [14.110] unprotected industrial action, ................ [14.110] void contracts, .......................................... [14.110] Industrial action — see also Strikes airline pilot’s dispute, ................ [14.20], [14.400] ban on strike pay, ..................................... [12.270] common law injunctions, ......................... [14.60] interlocutory relief, .............................. [14.60] direct bargaining, ....................................... [14.60] inducing breach of contract — see Inducing breach of contract industrial torts — see Industrial torts intimidation — see Intimidation overtime bans, ............................................ [14.70] protected — see Protected industrial action “right to strike”, ......................................... [14.20] secondary boycott provisions, ................. [14.50] Competition and Consumer Act 2010 (Cth), ........................................................... [14.50] international trade and commerce, ........................................................... [14.50] supply or acquisition of goods and services, interference, .................................... [14.50] stop orders by Fair Work Commission, ........................................................... [14.30] Industrial activity engaging in, .............................. [13.230], [13.280] regulation of, ............................................ [14.420] Industrial disputes conciliation and arbitration, ....................... [1.20] Industrial relations system overview, ........................................................ [1.10] referral of state powers, .............................. [1.20] reforms, ............................................. [1.10], [1.20] work choices, ................................................ [1.20] Industrial torts conspiracy — see Conspiracy contractual relations, interference, .......... [14.20]

inducing breach of contract — see Inducing breach of contract interference in performance of contract, ......................................................... [14.110] interference with trade or business by unlawful means — see Interference with trade or business by unlawful means interlocutory injunctions, ........... [14.80], [14.90] ex parte, ............................................... [14.100] intimidation — see Intimidation overview, ................................................... [14.420] Inequality of bargaining power, ................. [2.40] Information — see Confidential information Injunction Australian cases, ......................................... [11.70] continuation of employment contract, ........................................................... [11.70] courts, discretion, ................................ [11.70] special circumstances, ......................... [11.70] breach or termination of employment contract, ............................................................. [5.50] common law, ................................ [11.10], [14.60] continuation of employment contract, ............................................. [11.60], [11.70] contractual rights, protection, .................. [11.50] Fair Work Act, under, ................... [11.10], [11.90] compliance with National Employment Standards, ....................................... [11.90] discrimination, ...................................... [11.10] general protections provisions, ......... [11.10] interim injunctions, ............................. [11.90] prevent or stop contravention, .......... [11.90] termination of employment, against, ........................................................... [11.10] illegal restraint of trade, ............................ [11.50] interim, ........................................................ [11.60] negative covenants, enforcement, ........... [11.10] employment in any other business, ........................................................... [11.30] express negative stipulations, ............. [11.30] justice, equity and balance of convenience, ............................................. [11.10], [11.50] special services, ........ [11.20], [11.30], [11.40] overview, ................................................... [11.100] personal services, ....................................... [11.10] specific performance, as, ........... [11.20], [11.60], [11.70] unlawful notice of dismissal, ................... [11.60] damages inadequate remedy, .............. [11.60] special exception to rule, .................... [11.60] sufficiency of confidence, .................. [11.60] Injuries conspiracy to injure — see Conspiracy to injure physical injury, .......................................... [10.260]

669 Injuries — cont

psychiatric — see Psychiatric illness work injuries — see Work injuries Innocent misrepresentation, ..................... [4.210] Insurance employer insured, ...................................... [5.450] policy held by employer, ........................... [5.370] professional indemnity, .............. [2.370], [4.210], [4.520] public liability, ............................................. [2.370] work experience and internships, .............. [4.50] Intellectual property — see Inventions and intellectual property Intention to enter legal relationship essential contractual element, .................... [4.50] Fair Work Act, ............................................... [4.50] ministers of religion, ................................... [4.50] prisoners, ....................................................... [4.50] surrounding circumstances, ........................ [4.50] trial employment, ......................................... [4.50] unregistered agreements, ........................ [12.370] Interference with trade or business by unlawful means, ............. [14.20], [14.80], [14.110] acts forbidden by law, ............................. [14.350] Australia, ................................................... [14.350] conduct aimed at plaintiff, ..... [14.350], [14.380] contractual and non-contractual interests, ......................................................... [14.360] economic interests, .................................. [14.360] genus tort, ................................................. [14.350] intention, requirement, ........................... [14.380] subjective test, .................................... [14.380] targeted harm, .................................... [14.380] interests protected, .................................. [14.360] justification, .............................................. [14.410] overview, ................................................... [14.420] United Kingdom, ..................................... [14.350] unlawful, intentional and positive acts, ......................................................... [14.350] unlawful means anti-strike legislation, breach, .......... [14.400] Australia, position, ............................ [14.400] breach of contract, ............................ [14.400] tests for, .............................................. [14.390] Intimidation agreements entered under economic duress, ......................................................... [14.250] bare threat without coercive demand, ......................................................... [14.250] compensatory damages, ......................... [14.240] implied threats, ......................................... [14.260] individual employees, .............................. [14.240] injunctions, ............................................... [14.240]

intermediaries must bow to defendant’s threat, ..... [14.270] position of, ......................................... [14.240] justification, .............................................. [14.290] provocation, ....................................... [14.290] “mere advice”, distinction, ..................... [14.250] nature of threat, ....................................... [14.250] physical assault, ........................................ [14.240] threat of unlawful conduct, ................... [14.230] breach of contract, ............................ [14.280] coercive effect, ................................... [14.280] vague threats, ...................................... [14.280] trade unions, ............................................. [14.230] two-party intimidation, ........................... [14.250] economic duress, ............................... [14.250] unlawful threats act to own harm, ......................................................... [14.250] “warnings”, distinction, .......................... [14.250] Inventions and intellectual property contractual clauses, .................................... [5.790] employment contract, ......................... [5.790] workplace policies, ............................... [5.790] employees, created by, ............................... [5.780] after leaving employment, .................. [5.780] benefit of invention, ........................... [5.780] in the course of employment, ........... [5.780] specific duty to invent, ........................ [5.780] unsupported or unfunded theoretical research, .......................................... [5.790] ownership, .................................... [5.780], [5.790]

J Joint employment, .......................................... [3.90] advantages, .................................... [2.190], [3.250] common law, .............................................. [3.250] multiple employers, ................................... [3.250] United States, ............................................. [3.250] vicarious liability, ........................................ [3.250] Jury service, .................................................. [12.210]

L Labour hire arrangements advantages, .................................................... [3.30] allocation of responsibilities, ..................... [3.20] client (host business) as employer, ........... [3.20], [3.120] converting employees to agency workers, ............................................... [3.70], [3.110]

670

Index Labour hire arrangements — cont

employee consent, requirement, .......... [3.70] Fair Work Act, breaches, ........................ [3.70] definition of labour hire, ............................ [3.20] disadvantages, ............................................... [3.30] dismissal workers, ...................................... [3.140] doctrine of temporary employment, ........ [3.60] control test, ............................................. [3.60] vicarious liability, .................................... [3.60] employee services model, ........................... [3.20] agency as employer, ............................... [3.90] directions, supervision and instruction, ............................................................. [3.90] divided control, ...................................... [3.90] joint employment, .................................. [3.90] multi-factor test, ..................................... [3.90] ultimate control, ..................................... [3.90] employment, relationship agency as employer, ................... [3.20], [3.90] control or direction, ............................ [3.100] leave and entitlements, ........................ [3.100] payment, ................................................ [3.100] recruitment services, ............................. [3.20] worker as independent contractor, .... [3.20], [3.30], [3.100] Fair Work Act, ................................. [3.30], [12.30] “head hunter” no contractual relationship, ................ [3.130] referrals to potential employers, ........ [3.130] independent contractors, ............................ [3.20] conversion of employees, ..................... [3.70] injury to workers, ....................................... [3.150] agency liability, ..................................... [3.170] client worksite, ..................................... [3.180] client’s worksite, ................................... [3.160] day to day control, ............................... [3.210] duty to coordinate, .............................. [3.200] occupier liability, .................................. [3.190] work health and safety, ....................... [6.390] joint employment — see Joint employment labour hire, definition, ................................. [3.20] overview, ......................................... [3.80], [3.260] prevalence of, ............................................... [3.40] property damage by agency worker agency, liability, ..................................... [3.220] client (host business), to, .................... [3.240] third party injury or damage, ............. [3.230] vicarious liability, .................................. [3.230] protection for workers, ............................... [3.30] statistics, ........................................................ [3.30] transfer of employment, ............................. [3.50] common law rule, .................................. [3.50] complete dominion and custody over servant, .............................................. [3.60] qualified operators, ................................ [3.60] temporary transfer, ................................ [3.60] vicarious liability, .......................................... [3.60] joint employment, ............................... [3.250] temporary employment, ....................... [3.60] third party injury or damage, ............. [3.230]

Work Choices legislation, ............................... [3.30] work health and safety legislation, ........... [3.20], [3.30], [6.390] worker’s compensation, .............................. [3.30] Labour market regulation conciliation and arbitration, ....................... [1.20] overview, ........................................................ [1.10] reforms, ............................................. [1.10], [1.20] work choices, ................................................ [1.20] Leave annual — see Annual leave community service — see Community service leave compassionate — see Compassionate leave garden — see Garden leave long service — see Long service leave parental — see Parental leave Long service leave, ....................................... [12.70] awards and agreements, .......................... [12.220] NES, under, .............................................. [12.220] state and territory laws, ........................... [12.220]

M Managerial prerogative common law guarding, ........................... [15.310] employer, of, ............................................... [4.460] meaning of, ................................................. [4.490] Managing director appointment of director as, ..................... [2.380] employee, as, ............................................... [2.380] Marital status discrimination on grounds of, ................. [15.50] Master and servant Australia, in, .................................................. [2.30] declaratory remedies, .............................. [11.110] law, ................................................................ [1.110] social welfare legislation and, ..................... [2.30] United Kingdom, in, ................................... [2.30] Maternity leave special, ....................................................... [12.180] Mediation dispute resolution, ................................... [13.310] Medical assistance provision by employer, ............................. [5.390]

671

Migrants exploitation, vulnerability to, ................... [4.330] unlawful contracts, .................................... [4.320] Minister of religion contracts of employment, .......................... [4.50] Minors contracts for the minor’s benefit, ........... [4.180] contractual capacity, .................... [4.160]–[4.180] Minors (Property and Contracts) Act 1970, ........................................................... [4.180] presumptively binding, .............................. [4.180] supply of necessaries, ............................... [4.170]

Modern awards — see Awards Mortgagee in possession termination of employment, ................... [9.320] Mutual trust and confidence damages for breach, .................................. [1.110] implied term, .............................................. [5.150] United Kingdom, in, ................................. [5.150]

N

Misconduct bribery, .......................................... [5.810], [8.310] condonation and waiver by employer, .... [8.370] criminal offences, ....................................... [8.320] cyber-bullying, ............................................ [8.330] dishonesty, ................................................... [8.300] drunkenness and drug taking, .................. [8.280] duty to disclose, ........................... [5.830], [8.350] employee, by — see Employee misconduct failure or refusal to attend or perform work, ........................................................... [8.260] immorality, .................................................. [8.290] industrial action, ......................................... [8.260] insulting or objectionable language, ....... [8.270] nature of business, .................................... [8.250] out of hours, .............................................. [8.340] social media, ............................................... [8.330] summary dismissal, .................................... [8.250] awards and enterprise agreements, under, ........................................................... [8.360] unprotected strike action, ......................... [8.260]

National employment standards (NES) annual leave, ............................... [12.60], [12.190] community service leave, ......... [12.60], [12.210] compassionate leave, ................................. [12.60] contract of employment, and, ................... [2.40] Fair Work Information Statement, ................. [12.60] flexible working arrangements, ............... [12.60] list of standards, ........................................ [12.60] long service leave, ..... [12.60], [12.170], [12.220] maximum working hours, ......................... [12.60] notice of termination, .................. [9.20], [12.60], [12.240] parental leave, ........................................... [12.180] personal/carer’s leave, .............. [12.60], [12.200] public holidays, .......................... [12.60], [12.230] redundancy, .................. [9.160], [12.60], [12.250] safety net, ...................................................... [1.30] severance pay, entitlement, ....................... [9.160] unpaid parental leave, ................................ [12.60]

Misleading and deceptive conduct advantages of statutory claim, ................. [4.240] Australian Consumer Law, ......... [4.230], [4.240] prohibition, ................................................. [4.230]

National system employers constitutional corporations, ..................... [12.20] corporations power, .................................. [12.20] definition, .................................................... [12.20] National Employment Standards — see National Employment Standards

Misrepresentation, ........................................ [4.210] advantages of statutory claim, ................. [4.240] effect of, ...................................................... [4.210] fraudulent, ................................................... [4.210] innocent, ..................................................... [4.210] negligent, ..................................................... [4.220] promises prior to commencement of employment, ................................... [4.230] sham contracts, .......................................... [2.100] statutory remedies, .................................... [4.230] Mistake disclosure to employer, ............................. [5.830] doctrine of, ................................................. [4.200] failure to disclose information to employee, ........................................................... [4.200] identity of other party, as to, ................... [4.200]

Natural justice right to, ........................... [2.410], [5.260]–[5.270] rules of, ......................... [2.410], [8.100], [14.390] Negligence contributory — see Contributory negligence damages, .................................................... [10.370] employer, of, claim for psychiatric injury, ........................................................... [6.210] Negligent misrepresentation, ................... [4.220] No work, no pay principle — see also Wages-work bargain apportionment, .......................................... [5.100] awards, ......................................................... [5.110]

672

Index No work, no pay principle — cont

non-performance of duty, ................. [5.110] overtime worked, ................................. [5.110] times worked, ....................................... [5.110] banned work must be performed, ............ [5.80] defective performance, ............................... [5.70] Fair Work Act, under, ................................. [5.120] statutory prohibition on payments, ............................................. [5.120], [14.70] industrial instruments, .............................. [5.110] additional payments for overtime, .... [5.110] shift penalties, ....................................... [5.110] overview, ..................................................... [5.130] protected industrial action, ....................... [5.100] suspension, .................................................... [5.90]

valid notice awards and enterprise agreements, ..... [9.50] clear and unambiguous, ........................ [9.50] oral notice, .............................................. [9.50] received by the person to whom it is directed, ............................................. [9.50] requirements, .......................................... [9.50] variation of notice, .................................... [9.130] garden leave, ......................................... [9.140] withdrawal of notice, ...................... [9.70], [9.90] after emotional upset, ......................... [9.100] effect, ..................................................... [9.120] notice not yet commenced, ................ [9.110] unilateral withdrawal, ............................ [9.90]

Non-citizens — see Unlawful non-citizens Non-compete covenants, ............ [5.600], [5.610], [5.630] confidential information, .......................... [5.640] enforceability, ............................................. [5.640] purpose, ....................................................... [5.640] restraint is reasonably necessary, requirement, ............................................. [4.420], [5.630] Notice of termination casual employees, ..................................... [12.240] contractual notice period, ...................... [12.240] contractual right to terminate, ................... [9.10] effect of notice, ............................................ [9.60] fixed term employees, ............................. [12.240] forfeiture in lieu, ........................................ [9.150] implied term as to reasonable notice, ....... [9.30] assessment of reasonableness, ............ [9.40] inadequate notice, ........................................ [9.80] unilateral withdrawal, ............................ [9.80] invalid notice, ................................................ [9.80] damages, assessment, ............................ [9.80] relevant considerations, ........................ [9.40] unilateral withdrawal, ............................ [9.90] length of notice, ........................................... [9.20] National Employment Standards, ....... [9.20] minimum periods, ........... [8.10], [9.20], [12.240] less than 1 year of service, ............... [12.240] more than 5 years of service, .......... [12.240] non-acceptance, ........................................... [9.70] notice period not stipulated, .................. [12.240] overview, ........................................................ [8.10] Pt 3-2 of Fair Work Act, application, .... [12.240] payment in lieu of notice, ............. [9.10], [9.20], [9.150], [12.240] summary dismissal, ............................. [9.150] terms of contract, ............................... [9.150] redundancy — see Redundancy restraint clauses, ........................................... [9.60] statutory minimum, ..................... [9.20], [12.240] Fair Work Act, under, ............................. [9.20] penalties, non-compliance, ................... [9.20] unfair dismissal — see Unfair dismissal

O Obligation to provide work, ....................... [5.310] Australia, position, ..................................... [5.330] commission, payment, .............................. [5.320] common law, .............................................. [5.320] entertainment industry, ............................. [5.320] garden leave, ............................................... [5.340] impossible or impracticable, .................... [5.340] “special and unique” positions, ............... [5.330] suspension on full pay, .............................. [5.340] theatrical performance, ............................. [5.320] United Kingdom, position, ...................... [5.320] Occupational health and safety — see also Health and safety law breach of duties, ........................................ [6.340] core concepts, ............................................ [6.360] duties concerning, ...................................... [6.340] key definitions, ........................................... [6.360] laws dealing with, ........................... [1.90], [6.340] model legislation, ....................................... [6.350] Occupiers liability controller of worksite, ................ [3.190], [6.550] Odco contract, .................................. [3.100]–[3.110] standard provisions, .................................. [3.100] terms of contract, ...................................... [3.110] unfair dismissal claims, ............................. [3.100] Odco model, ........................... [3.20], [3.30], [3.100] control or direction, .................................. [3.100] payment, ...................................................... [3.100] worker as independent contractor, .......... [3.20], [3.30], [3.100] Offer and acceptance communication acceptance, of, ...................................... [4.100]

673 Offer and acceptance — cont

offer, of, .................................................. [4.70] conditions on acceptance, .......................... [4.70] express or implied acceptance, ................ [4.110] informal offers, ............................................ [4.80] invitation to treat, ........................................ [4.70] lapse of offer, ............................................... [4.70] sufficiently definite terms, .......................... [4.90] unqualified acceptance, ............................. [4.100] withdrawal of offer, ...................... [4.70], [4.120] Office holder employee, distinguished, ........................... [2.410] Official manager appointment, effect of, ............................. [9.320] employees’ contracts of employment, ........................................................... [9.320] Overseas students exploitation, vulnerability to, ................... [4.330] Overtime bans, ............................................................. [14.70] overtime worked, ....................................... [5.110] rates, ............................................ [12.60], [12.150] requirements to work, ............................. [15.130]

P Parental leave awards, ....................................................... [12.180] enterprise agreements, ............................ [12.180] General Protections against discrimination, ......................................................... [12.180] long term casuals, .................................... [12.180] natural or adopting parents, ................... [12.180] paid, ........................................................... [12.180] “paid no safe job” leave, ......................... [12.180] restructuring and genuine redundancy, ......................................................... [12.180] return to work, right, .............................. [12.180] safe job, transfer, ...................................... [12.180] special maternity leave, ........................... [12.180] temporary replacements, ........................ [12.180] unpaid, ....................................................... [12.180] Partnership bankruptcy of partner, ............................. [9.330] definition, .................................................... [2.420] dissolution, other than by death, ............. [9.330] legislation governing, ................................ [2.420] Penalty rates, ................................................ [12.150] Personal employment contracts, ................ [2.70] Persons conducting a business or undertaking (PCBU) breach of duty

failure to guard dangerous machinery, ........................................................... [6.520] non-workers “put at risk”, ................. [6.520] possibility of danger, .......................... [6.520] risks to health and safety, ................... [6.520] carrying on of a business, ........................ [6.370] contractors, and, ........................................ [6.380] definition, .................................................... [6.370] directors and officers, duties, ................... [6.590] definition of officer, ........................... [6.590] due diligence, ........................................ [6.590] liability, ................................................... [6.590] positive workplace safety duties, ....... [6.590] reliance on the information of others, ........................................................... [6.590] domestic premises, .................................... [6.410] exclusions, ............................................. [6.380] duty to notify regulator of serious injury, ........................................................... [6.370] Interpretive Guidelines, ............................ [6.370] liability, ......................................................... [6.490] multiple locations, ...................................... [6.380] plant or structures duty owed, ............................................ [6.560] install, construct or commission, ...... [6.560] primary duty of care, ................................ [6.480] breach, ..................................... [6.480], [6.520] compliance with safety measures, ..... [6.480] facilities for welfare at work, .............. [6.480] hazard avoidance, ................................ [6.520] health and safety of workers and non-workers, .................... [6.480], [6.510] instruction and training, ..................... [6.480] proactive measures, ................................... [6.480] compliance audits, ............................... [6.480] criminal conduct, risks, ....................... [6.490] equipment inspection, ......................... [6.480] maintenance protocols, ....................... [6.480] police officers, ...................................... [6.490] reasonably practicable measures to avoid harm, ................ [6.420], [6.440], [6.460], [6.510] state of knowledge, ............................. [6.430] risk management duties, ........................... [6.470] formal documented risk assessment, ........................................................... [6.470] possibility of danger, .......................... [6.520] risks to health and safety, ........... [6.510]–[6.520] at work in the business or undertaking, ........................................................... [6.530] entry and exit of workplace, .............. [6.550] fixtures, fittings or plant, .................... [6.550] management or control, ..................... [6.550] work environment, .............................. [6.540] safety of work environment, ................... [6.480] self-employed persons, ............................. [6.480] substances duty owed, ............................................ [6.560] Plants or structures health and safety law, ................................. [6.560]

674

Index Plants or structures — cont

designers, ............................................... [6.560] hazards and risks, elimination, ........... [6.560] importers, .............................................. [6.560] installers, ................................................ [6.560] lifecycle of plant, duties, ..................... [6.560] PCBUs, .................................................. [6.560] upstream duty holders, ....................... [6.560] Poaching of employees anti-poaching/non-recruitment covenants, ........................................................... [5.750] Californian IT industry, ...................... [5.760] research and development, ................ [5.760] restraint must be reasonable, ............. [5.760] retention of stable trained workforce, ............................................. [5.750], [5.760] breach of duty of fidelity, ........................ [5.740] contractual duty of loyalty, ....................... [5.740] duty to report approaches, ....................... [5.740] “hostage” swap, .......................................... [5.760] mass defections to competitors, .............. [5.740] Police officers Crown liability for torts committed by, ........................................................... [2.410] psychiatric illness, ...................................... [6.240] public officers, ............................................ [2.410] work health and safety, ............................. [6.490] Pregnancy discrimination on grounds of, ................ [15.50], [15.80] Prisoner contract of employment, ............................ [4.50] Privacy employees, of, ............................................. [5.400] legislation, ................................................... [5.400] no implied term of, ................................... [5.400] Privilege self-incrimination, against, ....................... [5.850] Privity of contract, ....... [5.490], [12.360], [12.380] Protected industrial action “cooling off” period, ................................. [14.40] employee claim action, .............................. [14.30] bargaining representative, ................... [14.30] Fair Work Commission, role, ............. [14.30] genuinely trying to reach agreement, ........................................................... [14.30] new enterprise agreement, ................. [14.30] pattern bargaining, .............................. [14.30] protected action ballot, ....................... [14.30] employer response action, ........................ [14.30] genuinely trying to reach agreement, ...... [14.30]

immunities from suit, ................................ [14.30] “industrial action”, definition, ................. [14.70] exclusions, ............................................. [14.70] non-compliance with requirements, ....... [14.30] overtime bans, ............................................ [14.70] overview, ......................................... [1.10], [14.10] partial work bans, ....................................... [14.70] Pt 3-3 Fair Work Act, ................................. [14.10] “right to strike”, distinction, .................... [14.20] secondary boycott provisions, ................. [14.50] Competition and Consumer Act 2010 (Cth), ........................................................... [14.50] international trade and commerce, ........................................................... [14.50] supply or acquisition of goods and services, interference, .................................... [14.50] statutory collective enterprise agreement, bargaining, ...................................... [14.20] civil penalties, ....................................... [14.30] limitations, ............................................ [14.30] prohibitions, ......................................... [14.30] statutory prohibition on payment of wages, ........................................... [12.270], [14.70] stop orders against industrial action, ...... [14.30] suspension or termination economic harm to economy, ............. [14.40] Fair Work Commission, ...................... [14.40] minister, ................................................. [14.40] significant harm to third party, .......... [14.40] unprotected industrial action — see Industrial action Psychiatric injury disciplinary proceedings, .......................... [6.310] defects in processes leading to dismissal, ........................................................... [6.330] statutory regimes, ................................. [6.320] unreasonable management action, .... [6.310] employer’s negligence a proximate cause, ........................................................... [6.210] excessive workloads, .................................. [6.300] contractual duties, carrying out, ........ [6.300] failure to take reasonable measures, ....... [6.210] foreseeability, .............................................. [6.230] bullying, ................................................. [6.230] employees to advise employer of risks to their health, ..................................... [6.230] excessive workloads, ............................ [6.230] harassment, ........................................... [6.230] known vulnerability, ............................ [6.230] stress at work, ........................ [6.230], [6.240] sudden traumatic event, ...................... [6.230] health and safety laws, ............................... [6.500] reasonably practicable measures to avoid harm, ............................................... [6.500] negligence of employer, ........................... [6.210] reasonable foreseeability, .......................... [6.210] reasonable management action, ............. [6.210], [6.240], [6.310]

675 Psychiatric injury — cont

reasonable response to foreseeable risk, ........................................................... [6.240] counselling and mediation, ................ [6.240] friction between supervisor and employee, ........................................................... [6.240] police officers, ...................................... [6.240] recognised psychiatric illness, .................. [6.210] stress, resulting from, .................. [6.230], [6.240] susceptibility, .............................................. [6.220] what qualifies as, ........................................ [6.220] workplace bullying, .................................... [6.260] persistent pattern of conduct, ........... [6.260] risk to health and safety, ..................... [6.260] Public holidays absence from work, ................................. [12.230] employer’s “reasonable requests” to work, ......................................................... [12.230] penalty rates of pay, ................................ [12.230] state public holidays, ............................... [12.230] Public interest disclosure confidential information, .......................... [5.710] consumer protection legislation, ....... [5.710] criminal conduct, ................................. [5.710] environmental disaster, ....................... [5.720] iniquity, .................................................. [5.720] unsubstantiated allegations, ............... [5.720] welfare, safety or security of public, ........................................................... [5.720] whistleblowers, ..................................... [5.730] Public officers contract of employment, ........... [1.100], [2.410] Public policy contracts contrary to, ................................ [4.330] meaning of, ................................................. [4.330] Public sector workers contract of employment, ........... [1.100], [2.410]

Q Quantum meruit, ............................ [10.10], [10.40] unjust enrichment, ..................................... [10.40]

R Racial discrimination attribute, by reason of, ........... [15.100]–[15.110] comparator, ................................................. [15.90]

condition or requirement, ...................... [15.130] costs, .......................................................... [15.240] direct discrimination, ................................ [15.70] disproportionate impact or disadvantage, ......................................................... [15.150] reasonableness, .................................. [15.160] enforcement, ............................ [15.210]–[15.220] exceptions and exemptions, ........................................ [15.180]–[15.190] failure to provide reasonable adjustments, ......................................................... [15.170] Fair Work Act, prohibitions, ........................................ [15.260]–[15.290] enforcement, ...................................... [15.300] inability to comply, .................................. [15.140] overview, ................................................... [15.310] remedies, ................................................... [15.230] treatment, .................................................... [15.70] Recovery of wages broken periods of work, ............ [10.30], [10.40] divisible contracts, ..................................... [10.30] enterprise agreements, .............................. [10.30] Fair Work Ombudsman, ........................... [10.10] frustration of contract, ............................. [10.40] industrial action, ......................................... [10.20] Fair Work Act, ....................................... [10.20] obligation to co-operate, .......................... [10.20] overview, ..................................................... [10.10] quantum meruit, .......................... [10.10], [10.40] unjust enrichment, ............................... [10.40] refusal to render lawfully required service, ........................................................... [10.20] statutory minimum wages, ....................... [10.50] enforcement mechanism, ................... [10.50] Fair Work Act, ....................................... [10.50] termination clause, .................................... [10.20] wages-work bargain, ...................... [5.20], [10.20] wrongful dismissal, action, ....................... [10.40] Redundancy closure of business, ................................... [9.170] definition, .................................................... [9.170] Fair Work Act award protection, ................................. [9.190] severance pay, entitlement, ................ [9.160], [9.180] genuine redundancy based on operational requirements, ......................................................... [13.140] definition, ............................................ [13.140] enterprise agreement provisions, compliance, .................................. [13.140] modern award provisions, compliance, ......................................................... [13.140] reasonable retraining, consideration, ......................................................... [13.140] reasonableness of redeployment, ......................................................... [13.140] notice of termination, .... [9.10], [9.160], [9.180]

676

Index Redundancy — cont

minimum standards, ............................ [9.200] notification and consultation, ................ [13.350] Centrelink, .......................................... [13.350] dismissal of 15 or more employees, ......................................................... [13.350] industrial associations, ...................... [13.350] minimum notice requirement, ......... [13.360] National Employment Standards, ......................................................... [13.360] national system employees, ............. [13.350], [13.360] non-compliance, ................................ [13.350] Pt 4-1 Fair Work Act, ......................... [13.360] pay in lieu of notice, ......................... [13.360] requirement to give notice to employee, ......................................................... [13.360] severance pay entitlement, ............... [13.360] written notice of intended dismissals, ......................................................... [13.350] redundancy policy, ....................................... [9.10] Redundancy Test Case, ................................ [12.250] severance pay clause, .................................................... [9.170] entitlement — see Severance pay technological or organisational change, ........................................................... [91.70] Termination Change and Redundancy case, ................ [9.170], [9.180], [9.190], [9.200] Reference defamatory, ................................................. [5.280] no duty to give, .......................................... [5.280] Reinstatement akin to an injunction, .............................. [13.210] compensation in lieu of, ........ [12.260], [13.200], [13.220] assessment of amount, ..................... [13.220] circumstances of case, ...................... [13.220] enforcement of orders, .................... [13.220] mitigation of loss, ............................. [13.220] remuneration lost, ............................. [13.220] shock, distress and humiliation, ...... [13.220] Sprigg formula, .................................. [13.220] taxation, impact, ................................ [13.220] Fair Work Act, under, ................ [11.10], [12.260] no valid reason for dismissal, ................ [13.210] objection of employer, ........................... [13.220] loss of trust and confidence, ........... [13.210] payment of remuneration lost, .............. [13.210] protection from unfair dismissal, .......... [13.200] undue harm to employer, ....................... [13.210] Relocation of employee implied term, .............................................. [5.500] job mobility, ................................................ [5.500] reasonableness, ........................................... [5.500] transfer to workplace, ............................... [5.500] variation of contract, .................. [5.500], [9.360]

Remedies declaration — see declaration injunction — see Injunction recovery of wages — see Recovery of wages specific performance — see Specific performance unfair dismissal — see Unfair dismissal unlawful termination — see Unlawful termination Repudiation of contract acceptance must be unequivocal, .............. [8.40] “without prejudice”, .............................. [8.40] automatic termination rule, ........................ [8.30] constructive dismissal, .................... [8.80]–[8.90] declaration — see Declaration definition, ...................................................... [8.20] effect, ............................................................. [8.30] election to continue contract, ........ [8.30], [8.40] employer’s options, ...................................... [8.60] manifest unwillingness or inability to perform, ............................................................. [8.20] misconduct, ...................................... [8.20], [8.40] objective test, ................................................ [8.20] overview, ........................................................ [8.10] practical considerations, .............................. [8.40] question of fact, ........................................... [8.20] refusal to accept, .......................................... [8.40] summary dismissal — see Summary dismissal wages reduction without employee’s consent, ............................................................. [8.20] wrongful dismissal of employee, .............. [8.30], [8.50] right to wages, ........................................ [8.50] Resignation circumstances of, ......................................... [9.50] constructive dismissal and, ......................... [8.80] duress, submitted under, ........................ [13.110] employer’s request for, ................................ [8.90] repudiation by employer, following, ......... [8.80] withdrawal of, ................................... [8.90], [9.90] written notice of, .......................................... [9.50] Restraint of trade contractual duty to report approaches by competitors, .................................... [4.410] covenant not to terminate the contract, ........................................................... [4.380] creativity and productivity, impact, ......... [4.450] “exclusive service” agreement, ................ [4.350] executive and managerial employment contracts, ........................................................... [4.340] confidential information, use, ........... [4.340] geographical area, ................................ [4.340] garden leave, ............................................... [4.400] benefits to employer, ........................... [4.400] implied duty to provide work, .......... [4.410], [5.340]

677 Restraint of trade — cont

post-employment restraints, .............. [4.400] protection of employer’s interests, ........................................................... [4.400] injunction restraining breach of restraints, ........................................................... [4.440] long notice periods, ................................... [4.390] non-compete covenant, ............. [4.350], [4.370], [5.630] protectable interests, ................................. [4.370] confidential information, ................... [4.370] customers and staff, ............................ [4.370] public interest, contrary to, ...................... [4.340] reasonable protection of employer’s interest, ............................................. [4.340], [4.420] repay retention payments, ........................ [4.410] severance of offending clauses, ............... [4.430] Restraints of Trade Act 1976 (NSW), ........................................................... [4.430] third parties, imposition, .......................... [4.360] validity of restraint, determination, ........ [4.420] bargaining position of parties, .......... [4.420] character of the business, ................... [4.420] employee and customer, relationship, ........................................................... [4.420] Restrictive covenants, .................... [5.600], [5.610] breaching, .................................................... [14.80] injunctions to restrain breaches, ............. [4.440], [11.20] wrongful dismissal, .................................... [4.420] Restructures — see Company restructures Retirement compulsory, ................................................ [9.220] payment of benefits in connection with, ........................................................... [2.380] Risk(s) health and safety, ......................... [6.510]–[6.520] at work in the business or undertaking, ........................................................... [6.530] breach of duty, ..................................... [6.520] entry and exit of workplace, .............. [6.550] fixtures, fittings or plant, .................... [6.550] management or control, ..................... [6.550] work environment, .............................. [6.540] Risk management duties, ........................................................... [6.460] control measures, maintenance, ........ [6.460] monitoring, ........................................... [6.460] PCBUs to take specific steps, ............ [6.470] periodic review, .................................... [6.460]

S Safe place of work, ....................................... [6.180] Safe plant and appliances, .......................... [6.190] hidden defects, ........................................... [6.190] system of inspection, ................................ [6.190] work health and safety, ............................. [6.550] Safe system of work, ..................... [6.110], [6.160] bullying, harassment and racial vilification, ........................................................... [6.200] co-ordination of duties, ............................ [6.200] physical safety, ............................................ [6.200] Salary sacrifice, ............................. [12.40], [12.160] Secondary boycotts Competition and Consumer Act 2010 (Cth), ........................................................... [14.50] international trade and commerce, ......... [14.50] supply or acquisition of goods and services, interference, .................................... [14.50] Secret commissions — see Bribes and secret commissions Severance pay, ..................... [9.10], [9.160], [9.180] contract, statute or award, under, ............ [9.190] custom and practice, basis, ....................... [9.190] enforcement as contractual debt, ............ [9.180] express term of contract, ......................... [9.180] Fair Work Act, ............................... [9.160], [9.180] implication of term, .................................. [9.190] modification, .............................................. [9.190] National Employment Standards, ........... [9.160] scale of payments, ................................... [12.250] small business employers, exemption, ......................................................... [12.250] Sex discrimination attribute, by reason of, ........... [15.100]–[15.110] comparator, ................................................. [15.90] condition or requirement, ...................... [15.130] costs, .......................................................... [15.240] definition, .................................................... [15.70] direct discrimination, ................................ [15.70] disproportionate impact or disadvantage, ......................................................... [15.150] reasonableness, .................................. [15.160] employment, ............................................... [15.80] enforcement, ............................ [15.210]–[15.220] exceptions and exemptions, ........................................ [15.180]–[15.190] failure to provide reasonable adjustments, ......................................................... [15.170] Fair Work Act, prohibitions, ........................................ [15.260]–[15.290]

678

Index Sex discrimination — cont

enforcement, ...................................... [15.300] hiring, promotion and discipline, ............ [15.80] inability to comply, .................................. [15.140] indirect discrimination, ........................... [15.120] marital status, .............................................. [15.80] overview, ................................................... [15.310] pregnancy, ................................................... [15.80] remedies, ................................................... [15.230] terms and conditions of employment, ........................................................... [15.80] treatment, .................................................... [15.70] Sex workers exploitation, vulnerability to, ................... [4.330] Sexual harassment circumstances to be taken into account, ......................................................... [15.200] conduct of a sexual nature, .................... [15.200] context of case, ........................................ [15.200] Effectively Preventing and Responding to Sexual Harassment: A Code of Practice for Employers, ....................................... [15.200] meaning, .................................................... [15.200] onus of proof, .......................................... [15.200] sexual favours, .......................................... [15.200] subjective element, .................................. [15.200] uninvited or unsolicited, ......................... [15.200] unwelcome sexual advance, ................... [15.200] vicarious liability of employer, .............. [15.200] workplace participants, ........................... [15.200] Sexual orientation discrimination on grounds of, ................. [15.50] Sham contracts overview, ..................................................... [2.100] prohibition, ................................... [2.100], [12.30] protection against, ................................... [13.230] Shift workers annual leave, ............................................. [12.190] Sick leave casuals, for, ................................. [2.310], [12.190] entitlements, ............................................... [2.310] personal/carer’s leave, ............................ [12.200] Small business employer, definition, ................................. [13.70] exemption, .................................................. [13.70] minimum period of employment, .......... [13.70] NES redundancy entitlements, exemption, ......................................................... [12.250] number of employees, ................ [12.90], [13.70] unconscionable contracts, remedies for, ........................................................... [4.300] unfair dismissal proceedings

exemption, ............................................ [13.20] minimum period of employment, .... [13.70] Small Business Fair Dismissal Code, .... [13.20], [13.130] Social media conduct on, ................................................. [8.330] usage codes, ................................................ [5.400] Solicitation customers, of, ................. [4.470], [5.600], [5.640] key employees, of, ...................................... [5.760] non-solicitation clauses, ............................ [4.370] what constitutes, ........................................ [5.750] Specific performance contract of employment, .......... [11.10], [11.20], [11.60], [11.70] discretion, .................................................... [11.10] express negative stipulations, ................... [11.30] injunction amounting to specific performance, ............................................. [11.60], [11.80] negative covenants, enforcement, ........... [11.20] overview, ................................................... [11.100] personal services contracts, ...... [11.10], [11.50], [11.70] relevant considerations, ............................ [11.80] special circumstances, ............................... [11.70] special services, .......................................... [11.40] Stand down — see also Suspension “all or nothing” rule, ................................... [7.10] award, under, .................................. [7.90], [7.100] grounds justifying stand down, ......... [7.120] usefully employed, ............................... [7.110] common law, at, ............................... [7.10], [7.90] express or implied term of contract, ........ [7.90] Fair Work Act, under, ..................... [7.10], [7.100] adverse action, ...................................... [7.100] lawful dismissal, ........................................... [7.90] liability of employer to pay wages, ............ [7.90] national system employer, ........................ [7.100] remedies for unlawful, .............................. [7.130] statutory provisions, .................................. [7.100] unilateral decision of employer, .............. [7.100] Standard of care employers, of, ............................................. [6.150] exercise of due care and skill, .................. [6.150] work health and safety, ............................. [6.350] States and territories conciliation and arbitration, compulsory, ............................................................. [1.20] discrimination statutes, ............................... [1.80] employment conditions, laws about, ........ [1.20] exclusion of State laws, ............................. [12.50] Fair Work Act, .............................................. [1.30]

679 States and territories — cont

exclusion of laws, ................................ [12.50] non-excluded matters, ......................... [12.50] referral of powers, ................................. [1.20] industrial law, definition, ........................... [12.50] laws dealing with other matters, ................ [1.90] non-excluded matters, ............................... [12.50] referral of powers, ....................................... [1.20] work choices reforms, ................................. [1.20] constitutional challenges, ...................... [1.20] Statutory collective enterprise agreements bargaining, .................................................. [14.20] civil penalties, ............................................. [14.30] limitations, ............................................ [14.30] prohibitions, ......................................... [14.30] protected industrial action, ........ [14.20]–[14.30] Stress psychiatric illness, ......... [6.110], [6.130], [6.150], [6.210] work, at, ........................................ [6.110], [6.130] workplace as stressful environment, ....... [6.210] Strikes — see also Industrial action airline pilot’s dispute, ................ [14.20], [14.400] anti-strike legislation, .............................. [14.400] ban on strike pay, ..................................... [12.270] breach of contract, actions for, ............. [10.120] no work, no pay, ......................................... [5.130] readiness and willingness to work, .......... [10.70] refusal to obey lawful order as preliminary step, ........................................................... [8.200] repudiation of contract, ........................... [8.260] right to strike, ............................... [14.10], [14.20] standing down employee, ........... [7.100], [7.120] unprotected action, in breach of contract, ........................................................... [8.260] unsafe work conditions, ............. [6.600], [8.260] wages, no entitlement to, ........... [5.120], [10.70], [14.70] Summary dismissal after acquired knowledge, ........................ [8.130] breach of express or implied terms, ....... [8.110] breach of the requisite gravity, ................ [8.120] common law remedy, ................................ [8.100] criminal offences committed at work, .... [8.320] fair hearing, ................................................. [8.100] grounds, ....................................................... [8.140] incompetence, ............................................ [8.150] representation of competence, ......... [8.160] standard of skill, .................................. [8.180] unskilled employees, ............................ [8.170] lawful exercise of power, .......................... [8.110] misconduct, ................................................ [8.250] awards and enterprise agreements, under, ........................................................... [8.360] bribery, ................................................... [8.310] condonation and waiver by employer, ........................................................... [8.370]

criminal offences, ................................ [8.320] cyber-bullying, ...................................... [8.330] dishonesty, ............................................ [8.300] drunkenness and drug taking, ........... [8.280] duty to disclose, ................................... [8.350] failure or refusal to attend or perform work, ........................................................... [8.260] immorality, ............................................ [8.290] industrial action, .................................. [8.260] insulting or objectionable language, ........................................................... [8.270] nature of business, .............................. [8.250] out of hours, ........................................ [8.340] social media, on, .................................. [8.330] unprotected strike action, ................... [8.260] natural justice, ............................................. [8.100] neglect, ........................................................ [8.240] forgetfulness, ........................................ [8.240] trivial acts, ............................................. [8.240] notice, and, .................................................. [8.100] requirements for, ....................................... [8.110] wilful disobedience of lawful orders, ..... [8.190] lawfulness of order, ............................ [8.200] mistaken view of terms, ..................... [8.220] reasonableness of order, .................... [8.210] refusal must be repudiation of contract, ........................................................... [8.220] single act, ............................................... [8.230] Superannuation advice on, obtaining, ................................. [5.300] compulsory contributions, ........... [1.110], [2.50] discrimination in, ....................................... [15.80] entitlements, .... [8.50], [9.190], [10.250], [11.10], [12.90] negligence claims, ...................................... [5.300] non-payment of, ........................................ [2.310] State laws dealing with, ..... [1.90], [3.30], [12.50] Surveillance employees, of, ............................................. [5.400] secret or covert, ......................................... [5.400] workplace, of, ................................. [1.90], [5.400] Suspension — see also Stand down “all or nothing” rule, ................................... [7.10] industrial awards, and, ........................... [7.10] common law, at, ............................... [7.10], [7.20] conflict of authorities, .......................... [7.30] contractual rights, .................................. [7.10] Crown’s Royal prerogative, .................. [7.20] exclusion from the workplace, ............. [7.30] express or implied agreement, ............. [7.10] “no work as directed, no pay”, ............ [7.30] defiance of employer’s directions, ............ [7.30] lawful suspension, effect, ............................ [7.40] misconduct, ...................................... [7.10], [7.50] warranting dismissal, ............................. [7.50] public sector employment, ......................... [7.10] unlawful suspension, ................................... [7.30]

680

Index Suspension — cont

common law action for wages or damages, ............................................................. [7.80] effect, ....................................................... [7.60] improper exercise of suspension power, ............................................................. [7.50] remedies, ................................................. [7.70] union work bans, ................................... [7.60] wages, entitlement, ................................ [7.60] without pay, ....................................... [7.10], [7.20]

T Taxation businesses subject to, ................................ [2.210] deduction from employees’ salaries and wages, ........................................................... [2.280] dependent and independent contractors, ........................................................... [2.110] legislation, ..................................................... [2.60] minimising, through partnerships and corporate structures, ....................................... [2.130] Taxi drivers bailment, ...................................................... [2.390] employment, relationship, ........................ [2.390] Technology employee misuse of, .................................. [8.330] Temporary employment control test, ................................................... [3.60] doctrine of, .................................................... [3.60] vicarious liability, .......................................... [3.60] Tenancy employee as tenant, ................................... [2.400] residential tenancies legislation, ............... [2.400] Termination contract, of — see Termination of contract notice of — see Notice of termination unlawful — see Unlawful termination Termination of contract agreement to terminate, ............................ [9.340] bankruptcy employees of Crown, and, ................. [9.300] employer, ............................................... [9.300] company amalgamations or dissolution, ........................................................... [9.310] constructive dismissal — see Constructive dismissal effluxion of time, ...................................... [9.210] compulsory retirement, ...................... [9.220]

permanent employment, .................... [9.230] employee, by, ................................................ [8.70] constructive dismissal, .......................... [8.80] resignation, .............................................. [8.80] frustration or impossibility, ...................... [9.240] death of employee, ............... [9.240], [9.260] death of employer, .............................. [9.260] dissolution of partnership by death, ........................................................... [9.270] entire contracts, .................................... [9.240] Frustrated Contracts Acts, ................. [9.240] illness, .................................................... [9.290] implied condition, ............................... [9.240] imprisonment, ...................................... [9.250] onus of proof, ...................................... [9.240] restitution, ............................................. [9.240] “self-induced frustration”, ................. [9.250] unjust enrichment, ............................... [9.240] war, ......................................................... [9.280] general protections, ..................................... [8.10] notice — see Notice of termination overview, ........................................................ [8.10] partnerships, dissolution, .......................... [9.330] receivers, appointment, ............................. [9.320] redundancy — see Redundancy repudiation — see Repudiation of contract summary dismissal — see Summary dismissal unfair dismissal, redress, ............................. [8.10] variation of agreement, ............................ [9.340] duties, change, ........................ [9.370]–[9.380] method of work, change, ................... [9.390] wages, change, ........................ [9.400]–[9.410] workplace, change, .............................. [9.360] Termination payment executives, to, .................................... [1.50], [1.60] Terms of contract express terms — see Express terms implied terms — see Implied terms industry custom and practice, .................. [4.530] other documents, incorporated from, ............................................. [4.480], [4.490] Theft employer, from, .......................................... [8.320] Torts exclusion clauses, ....................................... [5.490] employee, protection, .......................... [5.490] Insurance Contracts Act 1984, ................ [5.490] privity of contract, .............................. [5.490] express indemnity clauses given by employees, ........................................................... [5.480] indemnity, .................................................... [5.460] contribution by employee, ................. [5.440] Insurance Contracts Act 1984, ................ [5.450] insurance of employer, ....................... [5.450] negligent or intentional damage, ....... [5.460]

681 Torts — cont

serious and wilful misconduct, ......... [5.460], [5.470] liability, .............................. [5.440], [6.20]–[6.330] statutory protection, .................................. [5.460] vicarious liability — see Vicarious liability Trade secrets, ................................... [5.660], [5.690] Trade unions boycotts, .................................................... [14.110] enterprise bargaining, ................................ [12.80] log of claims, serving, ................................. [1.20] objectives, ................................................. [14.310] payment of fees to, .................................... [12.70] permitted role of, ......................................... [1.10] rights and responsibilities, ........................ [12.70] Transfer of employment agreement of employees, ............................ [3.50] consent, ......................................................... [3.50] temporary transfer, ...................................... [3.60]

U Unconscionable conduct Australian Consumer Law, ....................... [4.290] compensation for loss or damage, .... [4.290] doctrine of estoppel, and, ........................ [4.280] economic duress, ....................................... [4.290] equitable estoppel, ..................................... [4.290] illegitimate pressure, .................................. [4.290] independent contractors, .......................... [4.300] business transactions, .......................... [4.300] “contract for services”, requirement, ........................................................... [4.300] courts, jurisdiction, .............................. [4.300] harsh or unfair contract, determination, ........................................................... [4.300] Independent Contractors Act 2006 (Cth), ........................................................... [4.300] “requisite constitutional connection”, ........................................................... [4.300] unfair work contracts provisions, ..... [4.300] setting aside contract, ................................ [4.280] special disability, ........................... [4.280], [4.290] statutory unconscionability, ..................... [4.290] unconscientious advantage, ...................... [4.280] unequal bargaining position, .................... [4.280] Undue influence actual or presumptive, ............................... [4.250] delay in allegation, ..................................... [4.270] domination, ................................................ [4.270] presumptive relationships, ........................ [4.270]

trust and confidence, ................................. [4.270] Unfair contracts jurisdiction, ................................................. [4.300] remedies for, ............................................... [2.110] review, ............................. [1.90], [12.50], [12.280] Unfair dismissal annual rate of earnings below threshold, requirement, ................................... [13.60] application for unfair dismissal, ............. [13.40], [13.310] lodgement out of time, ...................... [13.50] time limit, .............................................. [13.50] compensation in lieu of reinstatement, ........................................................... [13.50] continuity of service, ................................ [13.70] court proceedings for General Protections compensation, .................................... [13.310] injunctions, ......................... [13.310], [13.320] penalties, ............................................. [13.310] Pt 4-1 Fair Work Act, ......................... [13.310] reinstatement, orders, ....... [13.310], [13.320] enterprise agreement applies, .... [13.60], [13.80] Fair Work Commission arbitration, .......................................... [13.310] certificate that dispute unresolved, ......................................................... [13.310] conference in private, ....................... [13.310] mediating or conciliating dispute, ......................................................... [13.310] orders, .................................................. [13.310] time limit on application, ................. [13.310] General Protections application, ............ [13.40], [13.310] genuine redundancy — see Redundancy harsh, unjust or unreasonable, ................ [13.50], [13.150] capacity or conduct of employee, ......................................................... [13.150] “fair go all round”, ............................ [13.150] matters for Fair Work Commission to consider, ........................................ [13.150] notification of reason, ...................... [13.150] statutory prescription, ....................... [13.150] unsatisfactory performance, ............ [13.150] high income threshold, ............................. [13.80] earnings, ................................................ [13.80] non-monetary benefits, ...................... [13.80] notional values to non-salary benefits, ........................................................... [13.80] legislative background, .............................. [13.10] minimum employment period, ................ [13.60] casual employees, ................................. [13.70] period of continuous service, ............ [13.70] regular and systemic basis, ................. [13.70] small business employer, .................... [13.70] transfers of employment, ................... [13.70] unauthorised absence, ......................... [13.70] unpaid leave, ......................................... [1.370]

682

Index Unfair dismissal — cont

modern award covers person, ................. [13.60], [13.80] national system employee, requirement, ........................................................... [13.60] notice of reason and opportunity to be heard, ........................................ [13.150], [13.170] capacity and conduct of employee, ......................................................... [13.170] procedural fairness, ........................... [13.170] representative present at meeting, ......................................................... [13.170] other matters, ........................... [13.150], [13.190] catch-all provision, ............................ [13.190] length of service, ............................... [13.190] personal and economic situation of employee, ...................................... [13.190] size of employer’s enterprise, .......... [13.190] overview, ......................................... [1.10], [13.10] persons taken not to have been “dismissed”, ......................................................... [13.120] completion of specified employment task, ......................................................... [13.120] demotion, ............................................ [13.120] seasonal employment, ....................... [13.120] specified period of employment ceases, ......................................................... [13.120] training arrangement, ........................ [13.120] protection from unfair dismissal, ............ [13.80] reinstatement — see also Reinstatement small business employers, ......................... [13.70] Small Business Fair Dismissal Code, .... [13.130] terminated at employer’s initiative, ...... [13.100], [13.110] forced to resign, ................................. [13.110] perform different duties, direction, ......................................................... [13.110] reduced hours of work, .................... [13.110] resignation submitted under duress, ......................................................... [13.110] “unfairly dismissed”, determination, ...... [13.90] valid reason, ................................ [13.150], [13.60] abandonment of employment, ....... [13.160] breach of company policy, ............... [13.160] capacity or conduct of employee, ......................................................... [13.160] dishonesty, .......................................... [13.160] drunkenness, ...................................... [13.160] factual matrix, consideration, .......... [13.160] harassment of fellow employees, .... [13.160] misuse of work information, .......... [13.160] sound, defensible or well founded, ......................................................... [13.160] warning of unsatisfactory performance, ........................................ [13.150], [13.180] genuine opportunity for employee to respond, ........................................ [13.180] pro forma warnings, .......................... [13.180] Work Choices reforms, ................................ [13.20] workplace rights — see Workplace rights

Unions — see Trade unions Unlawful contracts contrary to public policy, ............ [4.310], [4.330] agreement to commit crime or tort, ........................................................... [4.330] immoral purposes, ............................... [4.330] restraint of marriage, .......................... [4.330] restraint of trade — see Restraint of trade unenforceable at common law, .......... [4.330] employment contracts, ............... [4.310], [4.320] illegal consideration, .................................. [4.310] illegal purpose, ........................................... [4.310] severance, .................................................... [4.310] statutory breach, ........................................ [4.310] statutory illegality, ...................................... [4.320] labour hire agencies, ............................ [4.320] licensing requirements, ....................... [4.320] Migration Act 1958, ............................... [4.330] performance in illegal manner, .......... [4.320] unlawful non-citizen, .......................... [4.320] working with children, ........................ [4.320] statutory purpose test, .............................. [4.320] void and unenforceable, ........................... [4.310] Unlawful non-citizens — see also Illegal immigrants employing, ................................................... [4.320] illegal workers, .............................................. [4.20] offence of working, ................................... [4.320] restricted employment, ............................... [4.20] Unlawful termination application court, ..................................................... [13.40] Fair Work Commission, ..... [13.40], [13.340] time limit, ............................................ [13.340] Fair Work Commission arbitration of dispute, ....................... [13.340] certificate issued if matter not resolved, ......................................................... [13.340] orders, .................................................. [13.340] private conference, ............................ [13.340] Federal Court proceedings remedies under Pt 4-1 Fair Work Act, ......................................................... [13.340] General Protections application, ............. [13.20] court, ..................................................... [13.40] Fair Work Commission, ...................... [13.40] freedom of association, ...................... [13.30] legislative background, .............................. [13.10] multiple actions, ......................................... [13.40] onus on employer, ................................... [13.340] overview, ..................................... [13.10], [13.330] prohibited grounds, ................................. [13.340] constitutional basis, ........................... [13.340] limited defences, ................................ [13.340] protection against discrimination, ........... [13.20] referral of state powers, ............................ [13.30]

683 Unlawful termination — cont

Work Choices reforms, ................................ [13.20] workplace rights — see Workplace rights Unregistered agreements common law deeds, ................................. [12.360] contract of employment, incorporation, ........................................ [12.360], [12.390] enforcement, ............................................ [12.360] intention to create legal relations, ......... [12.370] privity of contract, .................. [12.360], [12.380] validity at common law, .......................... [12.360] Unsafe working conditions criminal offences, ....................................... [6.620] right of entry civil penalties, ....................................... [6.610] Fair Work permit, ................................ [6.610] hinder or obstruct, .............................. [6.610] inspection of employee records, ....... [6.610] permit holders, ..................................... [6.610] union officials, ...................................... [6.610] written notice of entry, ....................... [6.610] right to cease work, ................................... [6.600] adverse action, ...................................... [6.600] imminent risk, ...................................... [6.600] serious risk to health and safety, ........ [6.600]

V Vicarious liability, ............................. [2.50], [5.440] conduct during the course of employment breach of implied term of service, ........................................................... [5.440] contribution from employee, ............. [5.440] injuries to fellow workers or customers, ........................................................... [5.440] labour hire arrangements, ........................... [3.60] joint employment, ............................... [3.250] temporary employment, ....................... [3.60] third party injury or damage, ............. [3.230] work injuries, ................................................ [6.60] abuse of children, .................................. [6.60] actual or apparent authority, ................ [6.60] disobeying instructions, ........................ [6.60] ignoring safety procedures, .................. [6.60] intentional and criminal wrongdoing, ............................................................. [6.60] negligent performance of work, ......... [6.60] pranks in the workplace, ....................... [6.60] torts, ......................................................... [6.60] Victimisation employee, of, prosecution for, ................. [5.270] unlawful, ...................................................... [5.280]

W Wages award, under, ............................................ [12.130] conditional on performance, ..................... [5.30] consideration for payment of wages, ....... [5.40] contract of employment, ............................ [5.20] entitlement to wages, ................................... [5.20] interdependence of service, ........... [5.50], [5.90] minimum wages, ...................................... [12.140] review of award, ................................ [12.140] overtime and penalty rates, .................... [12.150] review of award, ................................ [12.150] payment money, in, requirement, .................... [12.160] otherwise than by cash, ...................... [4.330] recovery actions — see Recovery of wages salary sacrifice arrangements, ................ [12.160] “principally for the employee’s benefit”, ......................................................... [12.160] till shortages, deductions, ....................... [12.160] work expenses, ......................................... [12.160] wrongful dismissal, ...................................... [5.50] Wages-work bargain banned work, ................................................ [5.80] employer’s insistence on full performance, ............................................................. [5.80] defective performance, ................. [5.70], [5.130] acquiescence by employer, ................... [5.70] full performance waived, ...................... [5.70] partial performance, .............................. [5.70] safety or allocation of work compromised, ............................................................. [5.70] entitlement to wages, ................................... [5.20] no work, no pay principle — see No work, no pay principle overview, ..................................................... [5.130] performance related payment contracts, ............................................................. [5.60] readiness and willingness to work, ........... [5.40], [5.50], [5.130] damages, and, ......................................... [5.50] injunctive relief, ...................................... [5.50] service earns remuneration, ........... [5.30], [5.40] suspension, .................................................... [5.90] time-service contracts, ................................ [5.60] unlawful suspension, ..................... [5.90], [5.130] Watson’s case, ..................................... [5.30], [5.40] Wednesbury reasonableness, ...... [5.220], [5.240] Whistleblowers Australia, position, ..................................... [5.730] corporations law, breach, .......................... [5.730] industrial instruments, breach, ................ [5.730] public sector employees, ........................... [5.730] statutory protection from liability, .......... [5.730]

684

Index Whistleblowers — cont

United Kingdom, position, ...................... [5.730] Wilful disobedience of lawful orders summary dismissal, .................................... [8.190] lawfulness of order, ............................ [8.200] mistaken view of terms, ..................... [8.220] reasonableness of order, .................... [8.210] refusal must be repudiation of contract, ........................................................... [8.220] single act, ............................................... [8.230] Winding up compulsory, ................................................ [9.310] voluntary, ..................................................... [9.310] Without prejudice correspondence, on, .................................... [8.40] Work definition, .................................................... [6.400] high levels of mobility, ................................ [2.80] hours of — see Hours of work obligation to provide — see Obligation to provide work traditional patterns, changes to, ................. [2.80] work methods, change of — see Change of duties and work methods Work choices Australian workplace agreements, ............. [1.20] constitutional challenge, ............................. [1.20] covering the field, ........................................ [1.20] major reforms, .............................................. [1.20] minimum terms and conditions of employment, ..................................... [1.20] states and territories, ................................... [1.20] unlawful dismissal, ..................................... [13.20] Work health and safety — see Health and safety law Work injuries breach of statutory duty, ............................ [6.70] elements of cause of action, ............... [6.70] private right of action, .......................... [6.70] common employment rule, ........................ [6.50] common law compensation claims, .......... [6.90] limitations, ............................................... [6.90] direct liability of employer, ........................ [6.40] adequate training, ................................... [6.40] dangerous condition of workplace, .... [6.40] safe place of work, ................................ [6.40] duty of care — see Duty of care employer’s liability for negligent conduct, ............................................................. [6.20] labour hire arrangements, ......................... [3.150] agency liability, ..................................... [3.170] client worksite, ..................................... [3.180]

client’s worksite, ................................... [3.160] day to day control, ............................... [3.210] duty to coordinate, .............................. [3.200] occupier liability, .................................. [3.190] non-delegable duties, ................................... [6.50] duty of care to employees, ................... [6.50] independent contractors, .......... [6.50], [6.60] overview, ........................................................ [6.10] psychiatric injury — see Psychiatric injury statistics, ........................................................ [6.10] vicarious liability, .......................................... [6.60] actual or apparent authority, ................ [6.60] disobeying instructions, ........................ [6.60] ignoring safety procedures, .................. [6.60] intentional and criminal wrongdoing, ............................................................. [6.60] negligent performance of work, ......... [6.60] pranks in the workplace, ....................... [6.60] torts, ......................................................... [6.60] Work Health and Safety Acts, .................... [6.80] compensation, ........................................ [6.80] criminal liability of employer, .............. [6.80] worker’s compensation — see Workers’ compensation Worker definition, .................................................... [6.390] Worker’s compensation compulsory, ................................................... [6.30] contributory negligence, ............................. [6.30] death or permanent impairment, .............. [6.30] deemed employees, ...................................... [6.30] dependants of workers, .............................. [6.30] employees, ..................................................... [6.30] injury or work-related disease, ................... [6.30] intentional self-inflicted injury, .................. [6.30] labour hire workers, ..................................... [6.30] limited no fault compensation, .................. [6.30] medical and health costs, ............................ [6.30] psychiatric illness, ......................................... [6.30] serious or wilful misconduct, ..................... [6.30] Workforce high levels of mobility, ................................ [2.80] traditional patterns, changes to, ................. [2.80] Workplace change of, ..................................... [5.500], [9.360] definition, .................................................... [6.410] rights — see Workplace rights stressful environment, ............................... [6.210] surveillance of, ............................... [1.90], [5.400] Workplace bullying anti-bullying jurisdiction, .......... [6.260], [13.370] preventative measure, ....... [13.370], [13.390] bullying behaviour, definition, ............... [13.390] Codes of Practice, ..................................... [6.270]

685 Workplace bullying — cont

compensation, ............................................ [6.280] common law claims against employer, ........................................................... [6.290] disciplinary proceedings, ........................ [13.390] Fair Work Commission, intervention, ......................................................... [13.370] application by worker, ....................... [13.370] bullying order, contravention, ......... [13.410] conference, ......................................... [13.370] orders to prevent future harm, ....... [13.370], [13.410] penalties, ............................................. [13.410] redress, ................................................ [13.370] non-compensatory remedies, ................... [6.270] Pt 6-4B Fair Work Act, ............................ [13.370] performance appraisals, ............ [6.310], [13.390] psychiatric illness, ...................................... [6.260] persistent pattern of conduct, ........... [6.260] risk to health and safety, ..................... [6.260] reasonable management action, exclusion, ......................................................... [13.390] review of duties and remuneration, ..... [13.390] Safe Work Guide to bullying, .................. [6.260] single incidents, .......................... [6.260], [13.390] social media, via, ...................................... [13.400] Work Health and Safety Act 2011, .............. [6.270] “worker” definition, .................. [6.390], [13.380] exceptions, .......................................... [13.380] Workplace rights adverse action, protection, ..... [13.230], [13.260] coercion to exercise or not to exercise, ......................................................... [13.270] entitled to the benefit of industrial instrument, ......................................................... [13.260] contingent or prospective, ............... [13.270] outsourcing operations, and, ........... [13.270] misrepresentation of, .............................. [13.270] Pt 3-1 Fair Work Act, ............................... [13.260] prohibition against adverse action, ....... [13.260] protected industrial action — see Protected industrial action punishment of conscientious and deliberate victimisation, ................................ [13.300] reasons and reverse onus, ....................... [13.300] balance of probabilities, ................... [13.300] express denial of allegation, ............ [13.300]

objective assessment, ........................ [13.300] undue influence or undue pressure, ..... [13.270] workplace law complaint or inquiry under, ............. [13.260] definition, ............................................ [13.260] participate in process or proceedings under, ......................................................... [13.260] “workplace right”, meaning, .................. [13.260] Wrongful dismissal damages, .................................................... [10.190] disciplinary procedure, breach, ...... [10.180], [10.210] fixed term employment contract, ......................................................... [10.230] general principles, .............................. [10.200] injured feelings, ................. [10.270]–[10.280] loss of benefits, ................................. [10.250] mitigation, .......................... [10.350]–[10.360] pay in lieu of notice, breach, ........... [10.220] psychiatric illness, ............................. [10.260], [10.290]–[10.330] readiness and willingness to perform employment, ................................... [10.70] taxation, .............................................. [10.340] trust and confidence, breach, ......... [10.280], [10.290], [10.300], [10.320] declaration, ............................................... [11.110] disciplinary procedure, breach, ...... [10.180], [10.210] fixed term employment contract, ......................................................... [10.230] general principles, .............................. [10.200] injured feelings, ................. [10.270]–[10.280] loss of benefits, ................................. [10.250] mitigation, .......................... [10.350]–[10.360] pay in lieu of notice, breach, ........... [10.220] psychiatric illness, ............................. [10.260], [10.290]–[10.330] readiness and willingness to perform employment, ................................... [10.70] taxation, .............................................. [10.340] trust and confidence, breach, ......... [10.280], [10.290], [10.300], [10.320] recovery of wages, ..................................... [10.40] repudiation of contract, ................. [8.30], [8.50] right to wages, ........................................ [8.50]