Aveling v UBS Capital Markets Australia Holdings Ltd - [2004] NSWIRComm 261 - NSWIRComm 2004 case summary — Zoe

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Aveling v UBS Capital Markets Australia Holdings Ltd

[2004] NSWIRComm 261

Industrial Relations Commission (NSW)|2004-10-15|Before: Wright J, Walton J, Marks J, Boland J, Staff J

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Court

Industrial Relations Commission (NSW)

Decision date

2004-10-15

Before

Wright J, Walton J, Marks J, Boland J, Staff J

Catchwords

07/30/2004 DATE OF JUDGMENT: 09/15/2004

Source

Original judgment source is linked above.

Catchwords

07/30/2004 DATE OF JUDGMENT: 09/15/2004

Judgment (77 paragraphs)

[1]

Industrial Relations Commission of New South Wales in Court Session

[2]

CITATION : Aveling v UBS Capital Markets Australia Holdings Ltd [2004] NSWIRComm 261 revised - 15/10/2004 APPLICANT: Anthony Aveling PARTIES : RESPONDENT: UBS Capital Markets Australia Holdings Ltd FILE NUMBER: IRC 3419 of 2003 CORAM: Wright J President; Walton J Vice-President; Marks J; Boland J; Staff J Unfair contract - Reference to Full Bench - Whether applicant whose salary package exceeds salary cap under s 108A precluded from bringing proceedings pursuant to s 106 of Industrial Relations Act 1996 - Held, application precluded - Nature of power under s 106 - Statutory interpretation - Reference determined - Orders made. CATCHWORDS : Statutory interpretation - Unfair contract - Reference to Full Bench - Whether applicant whose salary package exceeds salary cap under s 108A precluded from bringing proceedings pursuant to s 106 of Industrial Relations Act 1996 - Held, application precluded - Nature of power under s 106 - Reference determined - Orders made. Industrial Relations Act 1996 s 105 s 106 s 108A s 108B s 193 LEGISLATION CITED : Industrial Relations Amendment (Unfair Contracts) Act 2002 Interpretation Act 1987 s 5 s 30 s 33 s 34 Abbott v Minister of Lands [1895] AC 425 Attorney-General (Qld) v Australian Industrial Relations Commission (2002) 213 CLR 485, (2002) 76 ALJR 1502 Bowker v Software Engineers Australia (NSW) Pty Limited [2003] NSWIRComm 213 Browne v Commissioner for Railways (1935) 36 SR (NSW) 21 Burgess v Mount Thorley Operations Pty Ltd (1999) 100 IR 260 Collector of Customs v Albany International Pty Limited (1991) 31 FCR 194 Commander Australia Limited v Kerr [2004] NSWIRComm 74 Commonwealth v SCI Operations Pty Limited (1998) 192 CLR 285 Continental Liqueurs Pty Limited v G F Heublin and Bro Inc (1960) 103 CLR 422 Crowe v UCS Developments Pty Ltd [2003] NSWIRComm 234, (2003) 130 IR 266 Director of Public Works v Ho Po Sang [1961] AC 901 Dossett v TKJ Nominees Pty Limited (2003) 78 ALJR 161 Esber v The Commonwealth (1992) 174 CLR 430 Fisher v Madden (2001) 54 NSWLR 179 Free Lanka Insurance Co Ltd v Ranasinghe [1964] AC 541 CASES CITED : Gerrard v Mayne Nickless Ltd (1996) 135 ALR 494 Hamilton Gell v White [1922] 2 KB 422 Heath v Hanning [1999] NSWSC 719 Kennedy v Contract Transport Solutions Pty Ltd [2003] NSWIRComm 158 Larsen v Ondeo Nalco Australia Pty Ltd [2004] NSWIRComm 123 Mathieson v Burton (1971) 124 CLR 1 Maxwell v Murphy (1957) 96 CLR 261 Mullins v Peoplebank Australia Pty Ltd [2003] NSWIRComm 457 New South Wales Aboriginal Land Council v Minister Administering the Crown Lands (Consolidation) Act and the Western Lands Act (1988) 14 NSWLR 685 R v Judges of Commonwealth Industrial Court, Ex parte Amalgamated Engineering Union Australian Section (1960) 103 CLR 368 Resort Management Services Limited v Noosa Shire Council [1997] 2 Qd R 291 Robertson v City of Nunawading [1973] VR 819 Shaw v Minister for Immigration and Multicultural Affairs (2003) 78 ALJR 203 Taudevin v Egis Consulting Australia Pty Limited and the Commonwealth (No 1) [2001] NSWIRComm 340 Wright v Hale (1860) 6 H & N 227 Yrttiaho v The Public Curator of Qeensland (1971) 125 CLR 228 HEARING DATES: 03/26/2004; 07/30/2004 DATE OF JUDGMENT: 09/15/2004

[22]

The relevant statutory provisions 8 It is convenient to set out the terms of the statutory provisions upon which the present proceedings turn, that is, ss 108A and 108B of the Industrial Relations Act, the provisions inserted in 2002. Those sections are in the following terms: 108A Employment contracts in respect of which applications cannot be made (1) An application cannot be made for an order under this Division if the application relates to a contract of employment under which: (a) a remuneration package that exceeds the remuneration cap is paid or received (or is payable or receivable) during the period of 12 months immediately before the application is made (or, if the application concerned relates to a contract that has been terminated, immediately before the termination), or (b) a remuneration package is paid or received (or is payable or receivable) during a period of less than 12 months immediately before the application is made (or, if the application concerned relates to a contract that has been terminated, immediately before the termination) that would, if the remuneration package had been paid or received (or been payable or receivable) for a period of 12 months, have exceeded the remuneration cap. (2) An application cannot be made for an order under this Division by a person who is a partner carrying on a business if: (a) the application relates to a contract between that partner and the other persons carrying on that business in partnership, and (b) the share of the net profits, or payments contingent on the net profits, of the business that are paid to or received by (or payable to or receivable by) the applicant during the period of 12 months immediately before the application is made (or, if the application relates to a contract that has been terminated, immediately before the termination) exceed: (i) $200,000, or (ii) if an amount is prescribed for the purposes of paragraph (b) of the definition of "remuneration cap" in subsection (3) - that amount. (3) 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. employment benefit means a benefit provided to an employee at the cost of his or her employer (being a benefit of a private nature) and, without limitation, includes: (a) contributions payable to a superannuation scheme by an employer in respect of the employee, including any liability of that employer to make any such contributions or to pay costs associated with that scheme, or (b) the provision by an employer of a motor vehicle for private use by the employee, or (c) any other benefit prescribed by the regulations for the purposes of this definition. monetary remuneration includes any performance-related bonus or incentive payment. remuneration cap means: (a) $200,000, except as provided by paragraph (b), or (b) any greater amount prescribed by the regulations (being a regulation that increases the amount by reference to increases in the amount referred to in section 83 (1) (b)). remuneration package means the total value of monetary remuneration and employment benefits payable or receivable under a contract of employment. 108B Time for making application (1) An application for an order under this Division in relation to a contract that has been terminated must be made not later than 12 months after the termination of the contract. (2) The Commission does not have jurisdiction to extend the time for making any such application or to accept an application made after the time prescribed by subsection (1).

[30]

[37] Regard should also be paid to the important observations of Kirby J in that case (at [74] - [77], footnotes omitted): [74] Amendment and repeal of legislation are inherent features of the representative democracy established by the Constitution. Such changes have an impact upon rights and obligations expressed in the law as it previously stood. A question commonly arises as to how pre-existing rights and duties are to be accommodated to the new law. This is the question raised by the five appeals before the Court in these proceedings. [75] The primary rule for resolving such questions is that, if the new legislative requirements are valid, the decision-maker must obey and give effect to them according to their terms. When the new law is clear there is no problem. Thus, provisions in the new law may deal with transitional cases explicitly. However, it is often suggested that the new law has failed to address transitional cases, or at least to do so clearly. In such circumstances, subject to any contrary indication, both the common law and statute have established principles to help decision-makers reconcile any continuing effect of the repealed law with the duty of obedience to the law that has taken its place. [76] The reconciliation of the applicable rules, and the derivation of the consequences they mandate in a particular case, are often matters of doubt and uncertainty. They have resulted in divisions of opinion within this Court and differences in judicial views in federal and State appellate courts. Such differences of approach have arisen between successive members and Full Benches of the Australian Industrial Relations Commission ("the Commission"), concerning the requirements of a supervening law as it affects the powers and duties of the Commission. It now falls to this Court, in the context of the present appeals, to resolve some of the points of difference. [77] Two important but potentially conflicting principles of statutory construction are involved. The first concerns the extent to which legislation will be construed in accordance with a presumption that, in the absence of very clear language, amendments and repeals do not alter legal entitlements that accrued before the amendment or repeal in question took effect. The second concerns the duty of a court to uphold the stated command of the Parliament, expressed in valid legislation, clearly designed to achieve important legislative objectives.

[37]

17 The Full Bench in Commander Australia Limited v Kerr described the statutory scheme relevant to the proceedings as follows: [30] It may be observed that the legislature has imposed a particular limit on the jurisdiction of the Commission in relation to s 106 proceedings and has done so in, relatively speaking, peremptory terms. Significantly, the limitation is expressed not in respect of the capacity or power of the Commission to hear, or to hear and determine, or to make orders in, proceedings under s 106. Rather the limitation is specified on the basis that applications of a certain class or of certain classes "cannot be made"; that is, applications cannot be made which seek orders under the relevant Division of the statute; that is, relevantly, applications for orders under s 106. [31] The prohibited class of applications includes those where the application relates to a contract of employment where (specific to the present proceedings) the contract of employment is one under which "… a remuneration package that exceeds the remuneration cap is paid or received (or is payable or receivable) during the period of 12 months immediately before the application is made (or, if the application concerned relates to a contract that has been terminated, immediately before the termination) …". [32] The question that then arises is the nature or character of a contract of the prescribed class. The key phrases or expressions are "contract of employment", "remuneration package", "monthly remuneration" and "remuneration cap". The phrase "remuneration cap" does not raise any present issue since the way in which it is defined provides sufficient precision for present purposes. The contentious expressions are those defined as "contract of employment", "monthly remuneration" and "remuneration package". The question then is: is the contract the subject of the proceedings one which, during the relevant period, has a remuneration package, that is paid or received or that is payable or receivable, which exceeds the remuneration cap? Because of the interlocking nature of the relevant definitions, conceptually the enquiry commences with the definition of "remuneration package" which is defined as meaning the total value of the "monetary remuneration" and the "employment benefits payable or receivable under a contract of employment". [33] The expression "monetary remuneration" is, in turn, defined to include any performance related bonus or incentive payment and the expression "employment benefits" is relevantly defined to mean a benefit provided to an employee at the cost of the employer, provided it is a benefit of a private nature. These benefits, without limitation to the breadth of the words so defined, include superannuation contributions made by an employer; provision of a motor vehicle for private use (presumably this means to the extent that the vehicle is provided for private use) and any other prescribed benefit. [34] The next aspect to be noticed is the way in which the remuneration package is related to the contract of employment. The way in which this relationship is framed by the statute or framed in the statute is significant. The words used involve a degree of repetition. It seems to us that the intention of the legislature in using language which is both broad and somewhat circular is to emphasise the already plain intention to cover a relevant field and to prescribe, with some particularity, and in a way which is not capable of ready avoidance or evasion, prohibitions on the making of applications under s 106.

[38]

18 Their Honours observed that it was not necessary for the purpose of the proceedings to refer in detail to the relevant approach to statutory construction except for the following principles which were described as "clear-cut": [35] ... First, to paraphrase what was said in the recent Full Bench judgment of this Court in Crowe v UCS Developments Pty Ltd [2003] NSWIRComm 234 at [63], albeit in respect of another part of the 2002 amending legislation (s 108B), the operation of the relevant provision is a question which, as with any issue of construction, may often be resolved by ascertaining the intention of the legislature from the express words of the instrument viewed in their context. [36] Second, a statutory provision must not be construed in isolation but in the context in which it appears as part of the whole instrument. Third, courts are obliged by statutory injunction to prefer a construction which would promote the purpose of a statute to one which would not. Fourth, the requirement to look to the purpose or object of the statute transcends the former obligation to adopt the traditional mischief or purpose rule in preference to the literal rule of construction because the earlier rule required the identification of an ambiguity or inconsistency before the court could have regard to purpose. Further, if the language of the statute or statutory provision is not ambiguous or uncertain, the court will apply its ordinary and grammatical meaning unless to do so will give the statute an operation that was obviously not intended: Mills v Meeking [(1990) 169 CLR 214] at 223. [37] The approach that is now required does not presuppose the existence of ambiguity or inconsistency; rather, it permits and requires the court to consider the purpose of the Act in determining whether there is more than one possible construction. In that respect, the context in which the relevant provision appears must be considered as part of the process of interpretation itself, and not merely at some later stage when ambiguity might be thought to arise. Finally, the reference of context is to be taken in its wider sense to include such matters as the existing state of the law and the mischief which, by reference to permissible extrinsic material such as explanatory memoranda and law reform reports, it might be discerned that the statute was intended to remedy: see, for example, CIC Insurance Limited v Bankstown Football Club (1997) 187 CLR 384 at 408; Mills v Meeking at 223; Police Association of New South Wales v Commissioner of Police (2002) 123 IR 301 at 312 - 317; Re Club Employees (State) Award and other Awards (2002) 122 IR 272; Fox v GIO Australia Limited [2002] 56 NSWLR 512; (2002) 120 IR 410 at [45] to [47]; Mitchforce Pty Ltd v Starkey (No 2) [2003] NSWIRComm 458 at [104]; Construction, Forestry, Mining and Energy Union (New South Wales Branch) v Delta Electricity [2003] NSWIRComm 135 at [44] to [46]; and Re Crown Employees (New South Wales Fisheries Salaries and Conditions of Employment) Award [2003] NSWIRComm 405 at [66]. [38] Section 33 of the Interpretation Act provides that: In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object. We shall approach the construction of s 108A accordingly.

[39]

[39] In Crowe v UCS Developments Pty Ltd the Full Bench referred to the Explanatory Memorandum to the Industrial Relations Amendment (Unfair Contracts) Act 2002. It is plain that reference to extrinsic material, such as parliamentary debates and papers, is permissible in the process of statutory interpretation: see s 34 of the Interpretation Act 1987. The intention of the Bill and of the Explanatory Memorandum to the Bill was considered in Crowe v UCS Developments Pty Ltd at [34] in the following way: Section 108B was enacted as a part of the amendments made to the Industrial Relations Act by the Industrial Relations Amendment (Unfair Contracts) Act 2002 which took effect on 24 June 2002. The intention of the amending Act in relevant respects is reasonably plain on its face. It was intended that applications seeking orders directed towards contracts of certain identified types and satisfying certain conditions, should be removed from the scope of the unfair contracts provisions of the Act; namely, those applications which seek to vary or avoid contracts (as defined) providing a remuneration package that exceeds an identified "remuneration cap", or those which seek an order to vary or avoid the terms of certain kinds of partnership agreements. The amending Act also required that any application for an order under s 106(1) be brought within 12 months of the termination of the relevant contract or arrangement. Those observations seem to be confirmed by the objects of the amending Act, identified in this way in the Explanatory Memorandum to the Bill: (a) to prevent an application being made to set aside or vary a contract of employment by the making of an unfair contract order if the remuneration package paid or receivable under the contract during the 12 months preceding the application (or, if paid or receivable for a shorter period, that would have been paid or receivable if converted to an annual basis) exceeds $200,000 (or a greater indexed amount), and (b) to prevent an application being made to set aside or vary a contract between partners in a partnership by the making of an unfair contract order, and (c) to require the Commission to take into account whether or not an applicant (or person on behalf of whom an application is made) took any action to mitigate loss in assessing the amount of money payable in connection with a contract that is set aside or varied by an unfair contract order, and (d) to require an application for an unfair contract order in relation to a contract that has been terminated to be made within a period of 12 months after termination. [40] The intention of the Bill was stated in the Second Reading speech which introduced the relevant Bill into the Legislative Council on 11 April 2002 as addressing the issue of "the unfair contracts jurisdiction [having been] utilised overwhelmingly as a means of obtaining compensation in connection with the termination of employment of highly paid executives" (at 1398). The Minister for Mineral Resources, and Minister for Fisheries, speaking on behalf of the relevant Minister, the Hon John Della Bosca MLC, then said, at 1399: By narrowing the application of the unfair contracts provisions of the Industrial Relations Act 1996, greater certainty will be introduced into their operation, and the more extravagant and speculative claims will be prevented. The Industrial Relations Amendment (Unfair Contracts) Bill 2002 will introduce the following limitations on the operation of the existing unfair contracts provisions. An employee earning an annual remuneration package in excess of $200,000 will not be able to make an application under the unfair contracts provisions. "Remuneration package" will be defined to mean the total value of the monetary remuneration and employment benefits that are payable or receivable under a contract of employment. Bonuses and other performance-related or incentive payments will be included in the meaning of monetary remuneration. "Employment benefits" will mean all those benefits of a private nature that are provided to an employee at the cost of his or her employer. The bill spells out that this includes superannuation contributions and motor vehicles, but makes it clear that this is not an exhaustive list. The bill also empowers the making of regulations to prescribe any new types of employment benefits that might emerge. The $200,000 cap on applicants will be annually indexed by reference to the percentage increase from year to year of the cap on access to the unfair dismissal provisions. The unfair dismissal cap increases on an annual basis by reference to the increase in the Federal unfair dismissal cap. That increase is worked out on the basis of increases in weekly earnings, as published by the Australian Statistician.

Aveling v UBS Capital Markets Australia Holdings Ltd

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Cases Cited (35)