Anthony Balsdon v Murray Irrigation

APPLICANT / RESPONDENT ON NOTICE OF MOTION Mr J W Nolan of counsel Solicitor: Mr N Rolfe Nicholas W J Rolfe & Assoc LEGAL REPRESENTATIVES: RESPONDENT / APPLICANT ON NOTICE OF MOTION Mr R Moore of counsel Solicitor: Mr D Grant Francis Kelly & Grant

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

Application under s 106 Industrial Relations Act 1996 INTERLOCUTORY JUDGMENT [2003] NSWIRComm 251 1 On 30 December 2002 Anthony James Balsdon filed a summons under s 106 of the Industrial Relations Act 1996 seeking relief against Murray Irrigation Ltd ("MIL"). Mr Balsdon had been dismissed from his employment with MIL on 14 January 2002 on the grounds of alleged gross misconduct. Mr Balsdon sought various orders including orders as follows: 1. An order declaring void in whole or in party or varying in whole or in part either from its commencement or from some other times the contract of employment or arrangement made between the Applicant and the Respondent under which the Applicant performed work in the irrigation industry in NSW.

An order declaring the contract of employment or arrangement made between the Applicant and the Respondent under which the Applicant performed work in the irrigation industry in NSW unfair, harsh and unconscionable and against public interest.

An Order that the contract or arrangement be varied from its commencement or from some other time to include the following terms: (a) Termination of employment

Termination of your employment will not be harsh, unjust or unreasonable. In the event that any complaint arises concerning your conduct you will not be dismissed unless and until a full inquiry is conducted by Murray Irrigation Limited into all of the facts and circumstances of any complaint made against him, during which time you will be entitled to be provided with legal advice and assistance at the expense of Murray Irrigation Limited. Any period of suspension shall be on full pay and only in circumstances where there is cogent evidence which would satisfy a court or tribunal that you may have been guilty of any misconduct. In the event that you are dismissed or suspended from duty, contrary to the above term, you will be immediately restored to duty and all back pay owing to you will be paid with interest including any other expenses borne by you.

Unless you have been dismissed for bona fide reasons or made redundant, at your election, you will be entitled to another two year contract on the same or improved terms from April 2003.

An order restoring the Applicant to his employment on and from the date of his dismissal and directing the Respondent to treat him as though he had never been dismissed and entitling him to another contract from April 2003 to April 2005.

An order that the Respondent pay to the Applicant an amount representing the amount of wages lost by him on and from his dismissal by the Respondent.

In the alternative, an order that the Respondent pay to the Applicant such amount as would represent the amount that the Applicant would have earned had he remained in employment with the Respondent until April 2005.

2 Mr Balsdon's application for relief under s 106 of the Act followed an earlier application by him on 31 January 2002 for relief from unfair dismissal under s 84 of the Act. The unfair dismissal application was discontinued by Mr Balsdon in August 2002. 3 On 30 January 2003 MIL moved the Court for an order that Mr Balsdon's summons for relief under s 106 be dismissed on the ground that the orders sought by Mr Balsdon in his summons were beyond the Court's jurisdiction to grant by reason of the operation of s 109A of the Act. On 17 June 2003 Mr Balsdon filed a notice of motion seeking to have MIL's motion dismissed with costs.

4 Section 109A of the Act provides: 109A. Exclusion of certain contracts in connection with unfair dismissals (1) This Division does not apply to a contract of employment that is alleged to be an unfair contract for any reason for which: (a) an application has been or could have been made by the employee under Part 6 (Unfair dismissals), or (b) such an application could have been made but for the provisions of section 83 that exclude the employee from making an application under that Part. (2) In this section: "contract of employment" means any contract or arrangement under which work is done by a person in the capacity of an employee, and includes a related condition or collateral arrangement with respect to such a contract. "dismissal" has the same meaning that it has in Part 6.

5 Mr Balsdon had been employed by MIL and its predecessor for some 32 years. At the time of his dismissal Mr Balsdon was employed as the maintenance manager. In July 2001 information was conveyed to MIL concerning the conduct of Mr Balsdon. MIL advised the Police and following an investigation Mr Balsdon was charged with two offences under s 249 of the Crimes Act 1900.

6 In December 2001 MIL had requested Mr Balsdon to respond to a number of serious concerns regarding his conduct. Mr Balsdon did not respond. On 14 January 2002 MIL wrote to Mr Balsdon advising him that it was satisfied of his guilt relating to eight allegations of fraud and mismanagement. Mr Balsdon was advised that his employment was terminated forthwith on the grounds of gross misconduct. On 19 April 2002 the Police withdrew the charges against Mr Balsdon. As I have already observed, Mr Balsdon applied for relief under s 84 of the Act but later discontinued those proceedings.

7 Mr R Moore of counsel appeared for MIL on the motion. Mr Moore's principal contention was that Mr Balsdon's unfair contracts claim was really an unfair dismissal claim in disguise and, therefore, s 109A operates to exclude jurisdiction: Beahan v Bush Boake Allen Australia Limited (1999) 93 IR 1 at 41-42. Mr Moore submitted that the claim was of the kind considered by Schmidt J in Bell & Berg v Macquarie Bank Limited (2003) 117 IR 281 at pars[278] to [283]. Further, it was contended that part of the relief sought by Mr Balsdon involved restoring the contract of employment. Any order to such effect, it was submitted, was akin to a reinstatement order and beyond the jurisdiction of the Commission under s 106: see Reich v Client Server Professionals of Australia Pty Limited (Administrator Appointed) (2000) 99 IR 69 at par [31].

8 As to whether the proceedings should be disposed of prior to conciliation, Mr Moore submitted that Mr Balsdon's claims were "on all fours" with the consideration of Peterson J in McGowan v Australian Broadcasting Corporation [2001] NSWIRComm 49. On that basis the present proceedings may be distinguished from Younan-Sedrak v State of New South Wales [1999] NSWIRComm 371.

9 Mr Moore submitted that Mr Balsdon's claims were "manifestly groundless or faulty" and that to allow the pleadings to stand would involve useless expense; the summons ought be dismissed and an order for costs made in MIL's favour.

10 Mr J W Nolan of counsel appeared for Mr Balsdon. Mr Nolan's principal contention was that a peremptory dismissal was an extraordinary step which is only seriously entertained in circumstances where there is a clear and obvious objection to jurisdiction made good. To succeed on a peremptory motion the applicant on the motion "must demonstrate that no order could be made which would be within jurisdiction": per Kirby P in Majik Markets v Brake and Service Centre Drummoyne (1991) 28 NSWLR 443 par 446-7 cited with approval in Nagle (T/as W D and J L Nagle & Sons) v Tilburg (1993) 51 IR 8. That cannot be demonstrated in this case. The applicant's case must be "taken at its highest" for this purpose.

11 Mr Nolan submitted that to the extent Schmidt J departed from the decision in Bush Boake in Bell & Berg her Honour was in error. It was further submitted that the ordinary practice is that the Commission will not intervene by way of an interlocutory order prior to conciliation of the matter: Younan-Sedrak; Taudevin v Egis Consulting Australia Pty Limited and the Commonwealth (No 2) [2002] NSWIRComm 6. McGowan is distinguishable given the constitutional issue involved in that case.

12 Mr Nolan submitted that where some part of the claim for relief seems capable of surviving a jurisdictional challenge then it is not appropriate to dismiss the proceedings peremptorily.

13 The issue in these proceedings is whether Mr Balsdon's claims for relief under s 106 of the Act are unfair dismissal claims in disguise and, therefore, by virtue of the operation of s 109A beyond the Court's jurisdiction to grant. The approach to be taken to a threshold challenge to jurisdiction was considered by the Full Court in Nagle (T/as W D and J L Nagle & Sons) v Tilburg (1993) 51 IR 8 at 10-11 where it was said: The principle to apply by a court entertaining a challenge to jurisdiction in a preliminary or threshold way was considered by the Supreme Court of New South Wales, Court of Appeal in Majik Markets Pty Limited v. Brake and Service Centre Drummoyne Pty Limited (1991) 28 NSWLR 443; 39 IR 169. Kirby P observed (at 446; 170): "Such a course if often a sensible one where a party has a substantial threshold argument which, if it succeeds, will knock out the claim and save the costs and inconvenience that attend a protracted hearing of proceedings on the merits. But, as with any threshold relief of this kind, it must be conserved to a clear case where it is plain that the invocation of the jurisdiction impugned is wholly misconceived or, upon analysis, lacks an arguable legal foundation. Necessarily, refusal of relief at the threshold will not finally determine that jurisdiction exists for any order which the Commission might make between the parties. This is because, to secure relief, the claimants must demonstrate that no order could be made which would be within jurisdiction. This burden, which is a heavy one, was accepted by the claimants."

14 The Full Court in Nagle v Tilburg continued at 11-12: We would draw from those authorities the proposition that whilst it is desirable for a case to be determined at an early stage it is only open to do so at the appropriate stage of the proceedings, that is, where the facts, either established by evidence or plainly agreed in terms, enable the Court to determine what the contract or arrangement is or, at least, the parameters of the contract or arrangement. In other words, it seems to us, unless the facts are sufficiently established to enable the Court to be satisfied it has the necessary material to reach a clear and final decision on the question then the appropriate stage has not been reached for such a determination to be made.

15 The judgment in Nagle v Tilburg was recently referred to with approval by Wright J, President and Walton J, Vice President (Schmidt J not dissenting) in Euphoric Pty Limited v Ryledar Pty Limited and Anor (2002) 117 IR 1 where, after referring to the passages quoted above from Nagle v Tilburg their Honours said at pars [9] to [14]: 9 This approach has been followed and adopted in numerous cases in both the Court Session and the Commission. The analysis of that judgment which was essayed in Virtue v New South Wales Department of Education and Training (1999) 92 IR 428 at 447 - 448 has been cited and followed in a number of subsequent judgments; see, for example, Heath Group Australasia Pty Ltd v Pengly [2001] NSWIRComm 241; Hall v Strathfield Group Ltd [2001] NSWIRComm 266 (subject to appeal); Alsford v Castech Pty Ltd [2001] NSWIRComm 259. 10 The applicable principles were set out in Virtue in this way at 447 - 448: (1) The discretion of a court to determine a case at an early stage, when appropriate, has been repeatedly accepted.

(2) As a general rule it is desirable that an objection to jurisdiction be determined as early as circumstances will conveniently admit so that the tribunal does not embark on a hearing which it lacks authority to conduct. The course of a court entertaining a challenge to jurisdiction in a preliminary or threshold way is often a sensible one where a party has a substantial threshold argument which, if it succeeds, will knock out the claim and save the costs and inconvenience that attend a protracted hearing of proceedings on the merits. (3) However, a further general proposition is that all issues arising should be dealt with in the substantive proceedings unless the basis for a challenge, either on jurisdictional grounds, or for lack of a reasonable cause of action, be clearly demonstrated. (4) Threshold relief of the kind sought here must be conserved to a clear case where it is plain that the invocation of the jurisdiction impugned is wholly misconceived or, upon analysis, lacks an arguable legal foundation. (5) Necessarily, refusal of relief at the threshold will not finally determine that jurisdiction exists for any order which the Court might make between the parties. This is because, to secure relief, the claimants must demonstrate that no order could be made which would be within jurisdiction. The resulting burden is a heavy one. (6) Accordingly, whilst it is desirable for a case to be determined at an early stage it is only open to do so at the appropriate stage of the proceedings. That is, where the facts, either established by evidence or plainly agreed in terms, enable the Court to determine what the contract or arrangement is or, at least, the parameters of the contract or arrangement. In other words, unless the facts are sufficiently established to enable the Court to be satisfied it has the necessary material to reach a clear and final decision on the question then the appropriate stage has not been reached for such a determination to be made. (7) Similarly, the jurisdiction to terminate an action summarily for want of a cause of action is to be sparingly employed and ought not to be used save where the lack of the cause of action was clearly demonstrated. 11 In order to succeed in a motion to dismiss on a preliminary basis a summons for want of jurisdiction, a respondent must demonstrate that there is no power in the Commission to grant any relief sought in the application. 12 However, as indicated in the fifth proposition cited above from Virtue "refusal of relief at the threshold [that is on a basis of a preliminary point or motion] will not finally determine that jurisdiction exists for any order which the Court might make between the parties". In other words, it remains open to a respondent unsuccessful on a preliminary motion to maintain its arguments as to lack of jurisdiction for the purposes of the final hearing. 13 Further, as observed in the seventh proposition and notwithstanding the public interest in having struck out at an early stage proceedings for which there is no jurisdiction, "the jurisdiction to terminate an action summarily for want of a cause of action is to be sparingly employed and ought not to be used save where the lack of the cause of action [is] clearly demonstrated". 14 The jurisprudence of this Court represented by the judgment of the then Full Industrial Court in Nagle v Tilburg , and the cases which have followed it, has been important in controlling a practice which had developed in the jurisdiction of some respondents too readily raising jurisdictional arguments at an early stage, at times with at least the appearance of a forensic tactic or an attempt to place logistical difficulties in the way of a less well-resourced applicant. The decision in this matter should not be seen as, or become, a basis for the rigour which has hitherto been exercised in the jurisdiction to be lessened. These observations are made only to emphasise the decision in this matter has depended on the very particular and relatively rare set of circumstances raised by these proceedings. It should not be interpreted or considered by those who practice in the jurisdiction as signifying any lessening of the stringency with which the approach in Nagle v Tilburg will be adhered to.

16 I note, of course, the judgment of Mason and Jacobs JJ (with whom Barwick CJ and Stephen J agreed) in Stevenson v Barham (1976-7) 136 CLR 190 at 201: We have been told that the Commission follows the practice of permitting questions of jurisdiction to be argued without requiring a party to elect not to call evidence. There is much to commend this approach. As a general rule it is desirable that an objection to jurisdiction be determined as early as circumstances will conveniently admit so that the tribunal does not embark on a hearing which it lacks authority to conduct.

. . . The discretion of a court to determine a case at an early stage, when appropriate, has been repeatedly asserted (see Young v Rank [1950] 2 KB 510; Ramsden v Ramsden [1954] 2 All ER 623 at 624; Union Bank of Australia Limited v Puddy [1949] VLR 242; Sampson v Edwards [1949] VLR 6). 17 I consider that, taking Mr Balsdon's case at its highest the facts are sufficiently established to enable me to be satisfied I have the necessary material to reach a clear and final decision on what is a relatively narrow jurisdictional point.

18 The judgment of Hungerford J in Younan-Sedrak, relied upon by MIL in these proceedings, represents something of a refinement of the approach in Nagle v Tilburg to the extent that his Honour concluded that it was not appropriate in that case for a jurisdictional question to be determined before conciliation had been attempted. His Honour observed: Section 109 of the Industrial Relations Act makes provision for the conciliation of applications to be attempted first; I emphasise the use in the section of the word " first". Sub-section (1) provides that the Court must endeavour, by all means it considers proper and necessary, to settle a matter by conciliation and sub-s.(2) provides that where, in the opinion of the Court, all reasonable attempts to so settle the matter have been made but have been unsuccessful, the Court is to determine the matter. Having in mind those sub-sections, and as the heading of the section makes clear, it is my view that before a matter is determined the process of conciliation must first be attempted to the point where it may reasonably be said it has been unsuccessful. If it were otherwise, then, it seems to me to be clear, the whole statutory purpose and intent of s 109 would be lost. The point may be illustrated in this way: if the present Motion were argued successfully then the claims to which it was directed would be determined by being effectively dismissed, and that would occur without there first being attention to conciliation as required by the section. I emphasize, in expressing this view, that at this point of time the claims are properly before the Court and there has been no determination one way or the other as to whether they are within or outside jurisdiction. As such, being before a superior court of record, they properly stand for consideration with no assumption they are beyond power so as to remove them, but as the respondent suggested was the case, from the scope of the requirement for conciliation before determination. Against conciliation being attempted prior to the Notice of Motion being heard, a large part of the opposition was based upon the proposition that conciliation would require additional expense being incurred by the parties in preparing for it, expense which otherwise may not be necessary. I disagree. The whole purpose of conciliation, in my view, is an alternative cost effective and efficient way in which parties may have their dispute dealt with; indeed, so much is clear from the terms of s.109 which require conciliation to be attempted first . It is not necessary, in my view, in preparing for an effective conciliation for there to be the preparation of affidavits and other material as if the matter were to proceed to a substantive hearing. Appropriate steps may be adopted to enable conciliation to proceed in a cost effective way. Even if all of the issues not be settled, a large part of them might be so that that in itself will mean the conciliation process has resulted in at least a containment of the claims thus representing a saving in costs. For the reasons given, I am of the view that it is appropriate, indeed it is a requirement of s 109, for the whole of this matter to proceed to conciliation first in order to see if it may be resolved. It follows that the Notice of Motion filed by the respondent should be stood over to a date to be fixed. I make orders accordingly. Whether the Motion should be heard as a preliminary matter rather than as part of the whole proceedings, if the conciliation be unsuccessful, will be determined later.

19 In Taudevin (No 2) Wright J, President considered the submission that there was no warrant for the Commission to proceed to conciliate a matter which may be without jurisdiction. It was put to his Honour that a firmly held view by one party that a matter is outside jurisdiction may be a substantial obstacle to any conciliation and a conciliation then would run counter to the "general rule" that jurisdictional questions be determined as early as circumstances conveniently admit. At pars[35] to [37] Wright J stated: 35 The initial consideration as to this aspect of the present issues is the significance and the strength of the observations of Hungerford J in Younan-Sedrak noting, however, that a different approach was taken on this issue by Peterson J in McGowan v Australian Broadcasting Corporation [2001] NSWIRComm 49 at [15] where his Honour held: I conclude that s 109 does not compel conciliation of a matter which is contended to be beyond the Commission's jurisdiction. This means that whether a matter goes to conciliation or not first will be a matter for the Court at first instance to determine in the exercise of its judicial discretion, on the facts of the particular case. 36 The differing approaches raise an important issue as to a fundamental aspect of the Court's jurisdiction and practice. The importance of the obligation on the Commission under s 109 to conciliate should not be underestimated: the requirement did not exist in the counterparts to s 106 in the 1940 and 1991 statutes, and the 1996 legislative intention to encourage and facilitate settlement of s 106 proceedings appears to have been vindicated by the very great proportion of applications resolved by the operation of s 109. See also the consideration, albeit in a different context, by a Full Bench of the Commission in Shop, Distributive and Allied Employees' Association, New South Wales v Librus Pty Ltd, t/as Dymocks Parramatta (2001) 103 IR 394 at 395 - 398 of the interrelationship between the conciliation and determination of proceedings and the significance of conciliation in the functioning of this jurisdiction even where it is alleged that there was an absence of power to determine the proceedings. 37 However, because of the firm conclusion I have reached on the respondents' strike-out applications, it is not necessary for this difference to be resolved in these proceedings as they may be satisfactorily finalised otherwise. In other words, as I have concluded that the motions are to be dismissed, the apparent mandate in s 109 as to conciliation prior to determination will be observed. Nevertheless, it may be observed that the considerations referred to in the judgment in Younan-Sedrak serve to emphasise the stringency with which the approach in the line of cases represented by the judgment in Nagle v Tilburg is to be applied in these proceedings.

20 In McGowan, after referring to the judgment in Younan-Sedrak, Peterson J observed: 14 It may be seen that the facts in Younan-Sedrak were very different to those arising in the Metrocall case before Schmidt J. The objection to jurisdiction in the former case was confined to only parts of the matter and it followed that conciliation was necessarily to occur in relation to those matters to which objection was not taken. In those circumstances, there is no lack of logic in the proposition that the matter should first proceed to conciliation. I do not understand Hungerford J to have been expressing, nor indeed the Full Bench to have adopted, the view that s.109 imposes a duty to conciliate all matters which come before the Commission purporting to be matters raised under the unfair contract provisions of the Act. It would, in my view, be quite illogical to construe s.109 as though it were intended to operate in relation to all matters whether they are within the Commission's jurisdiction or outside it. The phrase "settle a matter under this Division" in s.109(3) must be taken to refer to claims properly arising under the Division. While, as Hungerford J said in Younan-Sedrak , matters are not to be assumed to be beyond power, once a jurisdictional objection is taken there is equally no warrant to assume power in the face of the objection. Another well-recognised principle then operates: a court has an duty, particularly where an issue is raised, to satisfy itself that its proceedings do involve a proper exercise of jurisdiction. This is not to preclude the possibility that conciliation may be accepted, even in the presence of a jurisdiction point, to be the most efficient and least expensive way to resolve a claim, whether within or without power. However, there can be no proper purpose in the Court seeking to bring to settlement parties who are not properly before it. It goes without saying that a respondent who objects on a strong basis to the jurisdiction of the Commission to deal with a claim brought under s106 is likely to be an unwilling party to conciliation and obviously is under no obligation to conciliate as an act of generosity.

21 Peterson J concluded as follows: 15 Therefore, I conclude that s.109 does not compel conciliation of a matter which is contended to be beyond the Commission's jurisdiction. This means that whether a matter goes to conciliation or not first will be a matter for the Court at first instance to determine in the exercise of its judicial discretion, on the facts of the particular case. 16 That course will not visit upon applicants under s.106 a necessarily unfair procedural regime. If the objection to jurisdiction is taken first and found to be without substance, the matter will proceed to conciliation with the applicant in the substantive proceedings presumably having the benefit of an order for costs of the motion. If, on the other hand, the objection to jurisdiction is valid and complete, then it is in the interests of justice that finality be attained at the earliest opportunity. 17 I propose to treat the question of the suitability of the timing not as an obstacle to the hearing of the motion as a threshold question but as an issue of substance in the motion itself. In so doing, I am satisfied the Court has before it sufficient by way of evidence to permit the determination of the motion at this stage.

22 I agree, with respect, with the observations and conclusion reached by Peterson J. Other than in the circumstances dealt with by Hungerford J in Younan-Sedrak v State of New South Wales, I cannot see how a member of the Commission, with the power to deal with an application under s 106 by conducting conciliation proceedings, can assume jurisdiction to do so when a party squarely raises a jurisdictional objection to the matter proceeding and where on the face of the pleadings and any available evidence there is a serious issue of jurisdiction to be considered.

23 In the present case, Mr Balsdon originally sought relief under the unfair dismissal provisions of the Act. It was claimed that the dismissal was harsh, unreasonable and unjust. Mr Balsdon sought reinstatement. Mr Balsdon later discontinued his unfair dismissal claim and made the claim under s 106 of the Act.

24 The summons does not specifically state why it was that the contract of employment was unfair. The unfairness alleged appears to derive from: (a) A failure by MIL to take into account Mr Balsdon's 32 years of "long and unblemished record of loyal service with MIL and its predecessors"; (b) Mr Balsdon's dismissal from employment prior to the dismissal of criminal charges against him and prior to any "thorough and proper investigation being undertaken by the Respondent into the allegations." (c) A failure "to test each of the allegations against known or readily known facts which would have cast serious doubt upon each of the allegations"; (d) The depression Mr Balsdon experienced following the allegation of fraud and mismanagement; (e) The nil prospect of gaining alternative employment in a small regional town.

25 The substantive relief sought by Mr Balsdon was: (a) A variation to his contract of employment that termination shall not be "harsh, unjust or unreasonable" and to the effect that he should be accorded procedural fairness; (b) A variation to the effect that unless he is dismissed for bona fide reasons or made redundant he would be entitled to another two year contract; (c) An order restoring him to his employment and for him to be treated as though he had never been dismissed and entitling him to a new two year contract; (d) An order that MIL pay him an amount representing the amount of lost wages; (e) In the alternative, an order that MIL pay him such amount as would represent the amount that he would have earned had he remained in employment with MIL for two years.

26 The operation of s 109A arose for consideration in Beahan. In that case the Full Bench made the following observations at 41-42: In our opinion, it is central to the operation of s.109A that an excluded contract of employment is one where it is alleged that it is unfair for any reason for which an unfair dismissal claim could have been made. In other words, and as Mr. Hannaford observed during the second reading debate in the Legislative Council, "if somebody wants to argue that the terms of his contract are unfair, unconscionable or harsh, he will still be able to achieve a variation of the contract by an application" under s.106; and, as Ms. Kirkby said in the same debate, an applicant "will still be able to plead an unfair contract case but this will be on the terms of the contract and not on whether the termination of the contract was unfair". The answers given by the Attorney-General to the concerns expressed by Ms. Kirkby provide further insight, we are satisfied, into the purpose of the amendment having in mind that the intention as to the operation of s.106 was to "circumscribe it to a limited extent" so that "cases that do not essentially involve dismissal will still be able to be agitated under the general umbrella of the unfair contracts provisions". In minimising concern that the amendments were "not as drastic as some might think", the Attorney-General gave clear guidance to the real intent of the amendments when he said that "only the case which is really disguised as an unfair dismissal (in context, we think this clearly should read, as both counsel acknowledged, as "unfair contract") case is to be prohibited under these sections".

It is palpably clear, then, that s.109A has the purpose of removing from the unfair contracts jurisdiction those claims which are in truth or essentially involve unfair dismissals. In a very real sense, and having in mind the way in which this jurisdiction developed, such an approach is unexceptional. It is consistent with the views expressed by the Court and the former Industrial Commission in Court Session in cases such as Huskisson R.S.L. Sub-Branch Club v. Sullivan and BNY Australia v. James , as developed in the later cases of Westfield v. Helprin and Harcourt Brace v. Cory . Consistent with the approach there adopted are the decisions of the Court of Appeal, as earlier outlined, in Incitec v. Industrial Court , Walker v. Industrial Court and Rothmans Distribution Services v. Industrial Court . Indeed, the opening words of the explanatory note to the Bill as to its object "to remove the possibility of unfair dismissal claims being dealt with ... under provisions relating to unfair contracts" make that plain.

In short, our view is that s.109A operates to exclude a contract of employment from the operation of s.106 only where the unfair contract claim is an unfair dismissal claim in disguise and where essentially it is of the nature of an unfair dismissal. Where a claim challenges the terms or operation of a contract of employment by genuine, not superficial or coloured, reasons related to the contract itself then, in our view, it is a claim properly within s.106 and s.109A has no operation in relation to it. A review of the allegations made in the present case, we are satisfied, discloses allegations directed to the contract of employment and not to the applicant's dismissal. It is properly within s.106. Accordingly, the grounds supporting the motion have not been made out.

27 Mr Moore relied on the judgment of Schmidt J in Bell & Berg v Macquarie Bank (the judgment is under appeal). In that case Schmidt J considered whether a claim by Mr Berg for relief under s 106 was, in reality, an unfair dismissal claim in disguise. At pars [278] to [283] her Honour came to the conclusion that Mr Berg's complaint was essentially a complaint that his employer had failed to accord him procedural fairness and that such a complaint was properly available in unfair dismissal proceedings under s 84, had the section applied to Mr Berg. Her Honour decided that this aspect of Mr Berg's complaint under s 106 was precluded by s109A: 278 Here, correctly in my view, complaint as to the unfairness of the decision to dismiss Mr Berg was expressly eschewed, as falling within the provisions of s109A. The complaints as to the procedural failure to refer the decision to dismiss to the Executive committee before it was implemented, were however pursued. Undoubtedly, on its face that complaint was concerned with the contract of employment. The question which must be answered however, is whether in reality the complaint advanced was concerned with the failure to abide by the procedural step which applied to Mr Berg in any event, under the applicable policy, absent any contractual term to that effect. 279 As the majority in Abboud observed at p50, 'the issue of whether considerations of a procedural nature are pertinent to a determination of whether the dismissal of an employee was unfair, has, of course, regularly been visited in the context of claims for unfair dismissal'. Those cases were accepted as providing 'guidance when dealing with a claim under s106 that the contract has become unfair primarily as a result of the actions of the respondent in terminating it.' Section 109A has however now been enacted and requires consideration. 280 It follows from the judgment in Beahan, that s109A requires that consideration here be given as to whether the complaint advanced in relation to the failure to abide by the applicable procedure, is not one for which an application could have been made for unfair dismissal. That is, is this aspect of the complaint, in reality, an unfair dismissal claim in disguise? 281 Given the provisions of s84, permitting applications to be made in the event that the employee claims that dismissal is harsh, unreasonable and unjust and the many cases which have decided that failure to follow an applicable procedure in relation to dismissal, even if not contractual, may provide a proper basis for the conclusion that the dismissal was so tainted, it must follow that the particular complaint advanced here, failure to follow the procedure provided in the applicable guidelines, is a complaint not available to be brought under s106. This, in my view, follows particularly from the discussion of the Full Bench of the Commission in Antonakopolous v State Bank of New South Wales (1999) 91 IR 385 at pp387 to 390, where it was concluded: 'While the findings of the Commission in Buckman focus on the issue of warnings, the observations apply also to broader tenets of procedural fairness contemplated in s88 and to matters such as those raised in these proceedings. We agree that there is no obligation in the Act to follow any particular procedure when effecting a dismissal. However, a failure by an employer to adopt appropriate procedures when effecting a dismissal, or a failure to follow procedures prescribed in an industrial instrument, or in procedures laid down administratively by an employer, may be properly taken into account by the Commission as part of the consideration of an application brought under s84. Further, as we have noted, where procedures are specified in an industrial instrument or by administrative action, a failure by an employer to apply, or to properly apply, those procedures may in appropriate cases, of itself, support a finding that the dismissal was harsh, unreasonable or unjust. An example of this approach being taken is Johnson v Catholic Education Office, Diocese of Parramatta (1998) 87 IR 57 at 64 where a Full Bench ( Cahill J, Vice-President, Schmidt J and Tabbaa C) granted relief to an employee on appeal on the basis that she had been denied the procedural opportunity to respond to the matters on which the decision to dismiss rested.' 282 Here, there was no doubt that the guidelines relied upon had been laid down administratively by Macquarie. They applied to Mr Berg's employment. There was a failure to adhere to them. That failure was plainly a matter about which complaint was properly available in unfair dismissal proceedings under s84, had the section applied to Mr Berg. Applying the approach of the Full Court in Beahan , it follows that this aspect of the claim was precluded by s109A, together with any other complaints as to the unfairness of the decision made to dismiss him.

283 In my view, failure to follow applicable procedures administratively laid down by an employer, since the enactment of s109A, is not a proper basis for complaint that the contract is relevantly unfair, pursuant to s106 of the Act.

28 As explained below, Mr Balsdon's complaint also involved a lack of procedural fairness on the part of MIL in coming to its decision to terminate Mr Balsdon's employment. As Schmidt J found in Bell & Berg v Macquarie Bank the failure to accord procedural fairness is "plainly a matter about which complaint was properly available in unfair dismissal proceedings under s84". Whether the employer's failure to observe fair procedures attracts the provisions of s 109A will depend on the circumstances of each case. In the present proceedings, however, as it will be seen, it is more than simply a lack of procedural fairness that has led me to the view that I have no jurisdiction to deal with Mr Balsdon's application under s 106 of the Act.

29 As I have already noted, in Beahan the Full Bench said at 42: Where a claim challenges the terms or operation of a contract of employment by genuine, not superficial or coloured, reasons related to the contract itself then, in our view, it is a claim properly within s.106 and s.109A has no operation in relation to it.

30 The question, therefore, is whether Mr Balsdon's claim challenges the terms or operation of his employment contract by genuine reasons related to the contract itself. Unlike the summons considered by the Full Bench in Beahan the summons in the present proceedings did not specify why it was that the contract of employment was unfair. It seems to me, however, that Mr Balsdon was not attacking the terms or operation of his employment contract as being unfair but rather his focus was the unfairness of his employer's conduct in dismissing him from his employment prior to the dismissal of criminal charges against him and prior to any "thorough and proper investigation being undertaken by the Respondent into the allegations." In other words, the core of Mr Balsdon's complaint was that he was not accorded procedural fairness by the employer in coming to its decision to terminate his employment. That is, the decision to dismiss was unfair because of a lack of procedural fairness.

31 True it is that Mr Balsdon sought a variation of his employment contract. But I do not consider this fact reflects a genuine challenge to the terms of the contract. The variation sought was, firstly, that termination of employment will not be "harsh, unjust or unreasonable." I note that s 84 of the Act provides that if an employee claims that a dismissal was "harsh, unreasonable or unjust" he or she may apply to the Commission for relief. Section 105 of the Act on the other hand, defines an unfair contract as one which is "unfair, harsh or unconscionable". It might be said that there is a fine distinction between the two definitions of unfairness but Mr Balsdon's choice of the trilogy of words used in relation to dismissal tends to indicate that the subject matter is termination of employment and not unfair contract. Secondly, the proposed variation in claim 3(a) included a procedure to be followed in the event of a complaint being made about Mr Balsdon's conduct as well as a claim for reinstatement.

32 The proposed variations deal exclusively with the subject matter of termination of employment - the circumstances leading to dismissal, the act of dismissal and the remedies for dismissal. These matters are peculiarly matters appropriate to be dealt with under Ch 2 Pt 6 of the Act; they relate to a claim that could have been made under the unfair dismissal provisions. Moreover, if I were to conclude that, by merely seeking a variation of the employment contract in the terms proposed, this reflected a genuine challenge to the terms of the contract, it seems to me that any claim that was in reality an unfair dismissal claim could be too easily dressed up as an unfair contract claim.

33 The relief sought by Mr Balsdon in claim 3(b) of the summons for relief is for an order varying the employment contract to the effect that if he is dismissed other than for "bona fide reasons", or made redundant at his election, he will be entitled to another two year contract on the same or improved terms from April 2003. The claim is based on the premise arising from the order sought in claim 3(a) of the summons that Mr Balsdon would be "restored to duty". This is an order akin to an order for reinstatement. An order for reinstatement is not an order authorised by s 106 of the Act. It is not an order avoiding or varying the contract nor an order for the payment of money under s 106(5). If no order for reinstatement can be made under s 106 then the claim for roll over of the contract does not arise for consideration.

34 Claim 4 in the summons seeks an order restoring Mr Balsdon to his employment and directing MIL to treat him as though he had never been dismissed. As I have already stated, such an order is akin to an order for reinstatement and is not an order authorised by s 106 of the Act. 35 As to claim 5 in the summons for an order that MIL pay to Mr Balsdon an amount representing wages lost by him on and from his dismissal, such an order is an order of the type available under s 89(3) of the Act. The alternative order in claim 6, that MIL pay to Mr Balsdon an amount representing the amount he would have earned if he had remained in employment with MIL until April 2005, is essentially an order which seeks to compensate Mr Balsdon for the loss of his employment. Section 106 is not concerned with compensating an employee for the loss of his or her employment contract: Beahan at 35, quoted with approval in Reich in 99 IR at 86.

36 I have come to the conclusion for the reasons expressed above that Mr Balsdon's claim has all the hallmarks of an unfair dismissal claim and, in my opinion, should be treated as such. I find that the Court does not have jurisdiction to entertain Mr Balsdon's claim for the reason that pursuant to s 109A of the Act the claim could have been made under Ch 2 Pt 6 (Unfair dismissals) of the Act. Indeed, initially Mr Balsdon did lodge an unfair dismissal application but discontinued the claim. No reason was given for discontinuing but I note that MIL had contended Mr Balsdon was excluded from the Commission's unfair dismissal jurisdiction by virtue of the operation s 83(1)(b) of the Act because his conditions of employment were not set by an industrial instrument and his annual remuneration exceeded the relevant amount prescribed by the regulations.

1 The summons for relief in this matter filed on 30 December 2002 by Anthony James Balsdon is dismissed. 2 The notice of motion filed on 17 June 2003 by Anthony James Balsdon is dismissed. 3 Anthony James Balsdon shall pay the costs of Murray Irrigation Limited as agreed or, failing agreement, as assessed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.