Burgess & Ors v Mount Thorley Operations Pty Limited - [2002] NSWIRComm 106 - NSWIRComm 1993 case summary — Zoe

NSWNSWIRComm

Burgess & Ors v Mount Thorley Operations Pty Limited

[2002] NSWIRComm 106

Industrial Relations Commission (NSW)|1993-11-29|Before: Schmidt J, Phillips J, Wilcox J

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At a glance

Source facts

Court

Industrial Relations Commission (NSW)

Decision date

1993-11-29

Before

Schmidt J, Phillips J, Wilcox J

Source

Original judgment source is linked above.

Judgment (104 paragraphs)

[1]

The application also seeks the interpretation of cl 37(a) of the Agreement.

[2]

"That upon the true meaning of Clause 37(a) of the Agreement, it cannot be said that the Respondent is not operating as a viable and reliable coal company merely because the Respondent is not expected to make a profit or meet a target of profit for the current year in circumstances where the Respondent has gone from a situation at the commencement of the Agreement of a substantial loss for the Respondent to a present situation of less than half the loss for the current year."

[3]

34 The respondent and the intervening Minister argued that clause 37(b) of the EA was not valid, because it was a provision that the AIRC was not empowered to certify under the 1988 Act. Moore J accepted the correctness of these submissions, concluding that the clause could not have been certified under s170MC of that Act, accordingly it was not a valid provision of a certified agreement and no order of interpretation could be made regarding it. (At p376) 35 Moore J concluded as to clause 24 of the Production and Engineering Award, at pp381-382, that: 'The form of order proposed by the CFMEU does not reflect what I view as the proper construction of cl 24. It must be said, however, that during the hearing the CFMEU moved from a position of not contending the operation of cl 24 was confined to retrenchments to a position where it submitted it applied only to compulsory retrenchments, that is retrenchments of the type I earlier discussed. The narrowing of the area in which it was submitted cl 24 operated was not reflected in any amendment to the order sought. Consistent with the views I have expressed the appropriate order may be: "The Court orders and declares, that on the true construction of cl 24 of the Coal Mining Industry (Production and Engineering) Interim Consent Award September 1990 an employer, in the absence of agreement with the appropriate union, must apply the principle "the last to come the first to go" as the means of identifying the employees it will retrench in the respective classes of work according to the length of service at the mine." However the parties have not been given an opportunity to address this form of order and there may be vices in it that I presently do not appreciate. Accordingly, I propose to make an order declaring that this is the meaning of cl 24 but on the basis that the order will operate from 12 noon, Friday 31 October 1997. I will give the parties liberty to apply so that between the time this judgment is given and the time the order takes effect, a party can approach the Court to have the matter relisted. That can be done to enable submissions to be made about the form of order. If the liberty to apply is not exercised then the order will take effect at the nominated time.'

[63]

The evidence 43 Each of the applicants gave evidence and evidence was also called from Mr Colley, an official employed by the CFMEU, as to why he doubted that the respondent was in a position in 1997, which triggered the provisions of Clause 37 Security of Employment of the EA. Various of the respondent's employees and former employees were called to give evidence in its case. Expert evidence was called from Mr Lonergern as to the respondent's position in 1997. A substantial number of documents were also tendered. 44 Each of the applicants gave evidence about their own understanding of what had led to their redundancy, as well as evidence of their background and experience and the consequences of their redundancies for their personal circumstances. There was evidence of distress about the treatment received, disruption to personal life and financial hardship, as long-term employment with significant income was replaced, in some cases by less secure forms of employment at lower salaries, and in other cases, unemployment. Evidence as to efforts to find alternative employment was also given, which in some cases has been successful and others not. 45 The evidence led for the respondent concerned the steps it had taken in relation to the negotiation of the EA; the position which then existed in terms of the mine's financial performance; the changes which had taken place after the EA was approved, which had led it to consider downsizing its workforce in 1997; the steps it had taken to try and reach agreement with the unions and its employees about these matters and when it failed to do so, what was done in order to implement the decisions which it then made, which had led to the termination of the applicants' employment. 46 It is convenient to deal at this point with the evidence called from Mr Poulsom, the respondent's Manager of Projects. Cross-examination revealed that a substantial part of his affidavit evidence had been directly copied from the affidavit evidence given by Mr Isles, the respondent's former General Manager - Operations, in the Federal Court proceedings before Moore J earlier referred to. The source of the evidence was not referred to in Mr Poulsom's affidavit, indeed he appeared unaware of where it had originated from. The explanation given by Mr Poulsom in cross-examination was that he understood the evidence had been prepared by someone at Freehills. His evidence in cross examination demonstrated that he had no knowledge or understanding of various of the topics dealt with in that affidavit, let alone the accuracy of what was there said. 47 Given that evidence, it must be observed that the approach adopted by the respondent's solicitors to the preparation of this evidence was, to put it mildly, deficient. Mr Poulsom's approach was similarly problematic. It is difficult to see any proper basis for the way in which the respondent sought to place this material before the Court. Of necessity, were it necessary to deal with the merits of these claims, this approach would have resulted in a position where Mr Poulsom's evidence would have needed to be treated with real caution. It would also undoubtedly have affected the respondent's resistance of the claims brought in these proceedings. 48 The affidavit sworn by Mr Isles in the Federal Court proceedings also became an exhibit in these proceedings and Mr Isles was cross-examined about it. On his evidence, the matters which he dealt with in his affidavit were within his knowledge, although the affidavit had been put together for him by Freehills from various source documents and contained material originally prepared by others. For example, the information contained in his affidavit as to the results produced by the mine in 1996 and 1997, came from information originally prepared by the marketing department of Coal and Allied, which had the responsibility for preparing such information for the mine management which Mr Isles then headed. 49 I could find nothing remarkable in such information being contained in Mr Isles' affidavit. The evidence was that such information was provided to him regularly during the course of his employment and he then relied upon its accuracy, having no cause to doubt it. That such arrangements were in place for Mr Isles to be provided with complex accounting information was hardly surprising. Nor was it surprising, given his position and responsibilities, that he accepted what he was so provided with and did not look behind it during his employment. That such information was then later gathered for inclusion in his affidavit was also unremarkable. 50 By way of contrast, that approach was entirely different to the circumstances in which Mr Poulsom's affidavit was prepared and sworn by him, given his position and responsibilities and his consequential lack of understanding of the matters dealt with in his affidavit. Unlike Mr Isles, the matters which were copied into Mr Poulsom's affidavit were plainly not within his knowledge or area of responsibility. Given that Mr Isles was to be called in the proceedings by the respondent, it is difficult to understand why Mr Poulsom was called to give evidence about such matters at all.

[65]

For the applicants 52 For the applicants, Mr Howells, appearing with Ms Bornstein, submitted that a system of seniority based on service at the mine in particular classifications, reflecting experience, as provided in the Award had operated as a part of the applicants' contracts of employment and other arrangements. The EA also formed a part of the applicants' contracts of employment or comprised a collateral arrangement. It provided assurances about security of employment and did not disturb the other, ongoing seniority arrangements. 53 It followed that each of the applicants' contracts of employment incorporated the practices reflected in Clause 24 of the Award. This provision and the employees' experience in relation to seniority at the mine, it was submitted, gave rise to a legitimate expectation on their part that the system would be applied to them. This was also understood and accepted by the respondent, evidenced by its later application to vary the Award in order to remove Clause 24. 54 It was further submitted that while awards and agreements do not automatically become part of a contract of employment, here it would be accepted that there was express agreement to incorporation of the terms relied upon. This flowed from the written contracts, relevant conversations and the parties' later conduct, about which the applicants' evidence would be accepted. 55 Detailed submissions were advanced as to the circumstances in which the EA was entered and the respondent's later conduct in relation to it. It was submitted that the consideration for the agreement there reached was an agreement by employees, including the applicants, to forego existing local agreements; to allow the introduction of contractors to perform work which would otherwise be performed by employees; allowed for the 'softening' of some award entitlements and an agreement to work harder, in order to deliver productivity improvements. In return, the applicants understood that they would receive enhanced job security and the prospect of pay rises. 56 It was argued that had the seniority system been applied to the employees, none of them would have been retrenched in November 1997. It followed that the respondent's failure to apply seniority involved a serious breach of each of the applicants' contracts of employment, as well as evidencing conduct which was grossly unfair, unconscionable and unreasonable in the circumstances. 57 When the respondent's managers were directed to reduce employee numbers in all classifications in 1997, they did not do so by reference to the Award seniority arrangements or consistently with the EA requirements. The process adopted was unfair, because no rational method for retention was selected; the system adopted was not applied consistently and was carried out in an unnecessarily humiliating way, with the result that the applicants were further damaged. The behaviour of the respondent and its managers was unconscionable, also rendering the contracts unfair in the relevant sense. 58 Detailed submissions were made as to the alleged deficiencies of the evidence given by Mr Poulsom, Mr Boland, Ms Spencer and Mr Isles. Mr McPhee's evidence was also submitted to be deficient, because he was not in a position to answer relevant questions and Mr Lonergan was submitted to have been partisan, not expert. The applicants, by way of contrast were submitted to have given largely unchallenged evidence about relevant matters. 59 It was submitted that the evidence demonstrated that the mine was conducted in a practical sense as a part of the coal mining business conducted by Coal and Allied and Rio Tinto. The evidence as to these matters raised the question as to whether there was in reality a need for these retrenchments in 1997. Detailed submissions as to this and whether the respondent's position then satisfied the requirements of Clause 37 of the EA were advanced. 60 In the alternative, it was argued that if it were not accepted that seniority was an express term of the contracts, it would be accepted that seniority was imported into the contracts on one of two bases. The first was as the result of custom or usage (see Byrne v Australian Airlines Ltd (1995) 185 CLR 410 and also Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Limited (1986) 160 CLR 226 at pp236 to 238, the second on the business efficacy test (see BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266). 61 The applicants had independently given consistent evidence as to the operation of the seniority system at the mine and in the coal mining industry over many years. The system operated when retrenchments were made and applied on other occasions during the applicant's employment. Some of the applicants had been retrenched from other workplaces on that basis, which they had accepted without demur. The evidence demonstrated a well established custom and practice. 62 It was also submitted that here the evidence demonstrated the reasonableness of the term. It was a provision of long standing acceptance in the industry, many incidents of employment depended upon it or assumed its operation. The evidence also demonstrated that everyone at the mine assumed its existence. 63 Again, in the alternative, it was submitted that the Court would vary the contracts to insert a seniority provision, if the view were taken that the provision did not form a part of the contract and arrangements here in question. This followed in part, so it was submitted, because the EA, unlike an award, operated at common law, even though it had statutory significance for certain purposes (see Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission and Another (2000) 103 IR 473). In the further alternative, it was submitted that each contract would be varied to incorporate various 'key terms', including: '(a) a term to the effect that where there is a reduction of hands retrenchments will be allocated on the basis of seniority;

[72]

(d) a term that the employer would not seek to undermine the employees by means of undue pressure, misleading information, or any form of harassment. 67 It was accepted that in the case of two of the applicants, Mr Brown and Mr Smith, such seniority would not have given rise to continuation of their employment. Nevertheless, given the respondent's breach of the seniority arrangements and the unfairness to which they were each subjected on the evidence, particularly the flawed deselection process adopted, it was argued that the relief sought for them too would follow. 68 Detailed submissions were advanced as to the unfairness of the respondent's conduct; that it was inconsistent with the EA provisions and that the respondent had damaged the applicants as a result of its conduct. 69 It was further argued that the evidence demonstrated that the applicants were employed as a part of the respondent's management structure, albeit at the lower end. For many years production workers were managed by a single individual manager of staff, who was accountable to more senior managerial staff, often titled superintendents. They also often had significant responsibility for safety matters. The evidence demonstrated that the applicants took these responsibilities seriously and identified with the management of the respondent. 70 It was submitted that the respondent was not entitled to unilaterally vary the applicants' contractual rights. The approach the respondent had adopted was designed to lead them to an acceptance of the extinguishment of those rights. The respondent never fully disclosed its intentions, so that the applicants could have sought their own advice. They were eventually selected for 'project work' and not told that this would lead to redundancy. If the contracts permitted this conduct, they were thereby unfair. 71 It was also argued that it was incumbent on the respondent not to wrongfully damage the applicants' reputations, particularly given their need to continue working in the industry and to live in the community. If such a term was not incorporated in their contracts, it should be, by order of the Court in these proceedings. The evidence was that each applicant considered his reputation to have been damaged as the result of the respondent's conduct towards him. A detailed analysis of these matters was made, especially in relation to the evidence of efforts to find alternative employment, including evidence that they had later been entirely excluded from working on any Rio Tinto mines, a factor which exacerbated the damage which the applicants had suffered, given the evidence that Rio Tinto had acquired a significant number of mines in the Hunter Valley. 72 As to the applicable legal principles, it was submitted that they were well settled. The entitlements to notice, severance and retrenchment pay which flowed to the applicants under their contracts, the Award and the EA were, it was submitted, on any view minimum entitlements and it was permissible in these proceedings for the employees to seek more - Kilminster v Sun Newspapers Ltd (1931) 46 CLR 284. No question of inconsistency between the awards sought and the Award and the EA arose as a result. 73 The EA, operating at common law as it did, constituted an arrangement or collateral arrangement within the meaning of s106 (see Legal & General Assurance Society Limited v Stock (1993) 49 IR 464). The Court was entitled to have regard to all of the circumstances surrounding the contract at the time it was entered, while it operated and on termination, as well as the employer's conduct. 74 The Court had a broad discretion, to provide a proper balance or division of advantage or disadvantage as between the parties. Regard would be had to the parties' conduct, their ability to appreciate the bargain they had entered and their comparative bargaining strengths. Its exercise did not depend upon lawfulness of the contract or conduct concerned. Fairness must be determined in the particular circumstances, including in circumstances of notice and redundancy, as well as breach of a contractual term, which breach itself involved unfairness. (Reich v Client Server Professionals of Australia Pty Ltd (Administrator Appointed) (2000) 99 IR 69). Even a general scheme which complied with contemporary industrial standards upon redundancy could be subject to variation by order of the Court. (Payne v Foxboro L & N Pty Ltd and Anor (1998) 81 IR 404 at p409 and Newton v Goodman Fielder Mills Ltd (1998) 81 IR 227). 75 In the alternative variation to achieve a fixed term contract was sought, because of the operation of the terms as to seniority and security. Payment to retirement at age 65 was sought, on the basis of final average salary, bonus allowances and collateral benefits, plus superannuation foregone. 76 While it was accepted that allowance could be made in money orders for earnings received and expected, a comparison should be made of the nature, suitability and convenience of the employment obtained in each case and any hardship experienced should also be taken into account. Termination payments already made could also be taken into account, but only evidence which indicated a likely pattern of future earnings should be considered. Any other evidence of contingencies would have to be established by the respondent. 77 It was further submitted that no assumption should be made that if seniority had applied, any of the applicants would have been dismissed, particularly given that the security of employment provision of the EA applied. Furthermore, no account would be taken of any alteration to the Federal Act and the Award, when the seniority provision was later removed, because the relevant contractual provisions predated the relevant provision of the Federal Act and were, in any event, separate from the legislative scheme. 78 In addition, reparation for gross unfairness was sought, for failure to abide by the terms of the contract and for harm done to the applicant's future prospects, their work reputation and health, particularly in the absence of any apology.

[74]

83 The section had application here. Section 152 required that the provision of the EA and the Award be given full and free operation. (See Ansett Transport Industries (Operational) Proprietary Limited v Wardley (1980) 142 CLR 237 at 287-8, applied in ICI Australia Operations Pty Limited v Hutton (1993) 47 IR 288.) 84 Inconsistency arose where the effect of the State law would be to '…destroy or vary the adjustment of industrial relations established by the award with respect to the matters formerly in dispute'. Inconsistency also arose if the State law 'would alter, impair or detract from the operation of a law of the Commonwealth Parliament'. 85 Even if it was possible to obey both the Federal and State laws, inconsistency arose if the State law imposed an obligation greater than that provided for in the Federal law. (Telstra Corporation Limited v Worthing [1999] 73 ALJR 565 at pp570-571. A State power may not be exercised so as to affect the operation of a Federal law, or to destroy or detract from a right conferred by the Federal law. (Attorney General v Minister for Aboriginal Affairs (1989) 90 ALR 59 at 75). 86 The power conferred by s106, to alter the contracts here in question, gave rise to the need to consider inconsistency, not what might result from the exercise of the power. (See ICI Australia Operations Pty Limited v Hutton, Hudson v Qantas Airways (1985) 10 IR 331; Fabros v Hotel Intercontinental Sydney (1993) 53 IR 193). 87 Here both the Award and the EA expressly dealt with termination of employment across a range of circumstances, including redundancy following upon organisational restructure. Both the conduct required of the respondent in such circumstances was prescribed, as were the payments to be made to employees, in the event of termination of employment. The redundancy provisions reflected the AIRC's decision in Termination, Change and Redundancy Test Case (1984) 8 IR 34; (1984) 9 IR 115. It followed that those provisions dealt exhaustively with the subject matter of redundancy (see Fabros). 88 It would also be concluded that the Award and EA provisions covered the field, thereby precluding the Court from dealing with the same subject matters in these proceedings (see Hudson at 336-7). 89 When the respondent determined to make redundancies in 1997, the applicants through their union, the ACSA, opposed forced redundancies pursuant to clause 37 of the EA and claimed that the seniority provisions of clause 24 of the Award applied. Proceedings were initiated in the AIRC to prevent the respondent from acting inconsistently with these views. Discussion, negotiations and industrial action were also pursued. The claims now advanced in the amended summonses pursued the same views and dealt directly with the termination of the applicants' employment, contrary to requirements of the Award and EA and the payments made to the applicants in accordance with them. It followed that the claims sought to add to those obligations and to impair and detract from the Award and EA obligations, as to the manner in which the applicants' employment might be terminated. The claims advanced were fundamentally concerned with the applicants' complaints that the respondent had failed to comply with applicable provisions of the Award and the EA. 90 The effect of the money orders sought, was to increase the payments made to the applicants by various amounts, in addition to what the respondent had already paid in accordance with its EA and Award obligations. The applicants' characterisation of the claims did not alter their true nature or identity. (See Hudson at 336 and McGowan v ABC [2001] NSWIRComm 49.) 91 It followed that the making of the orders sought in the summonses would alter, impair or detract from the operation of the Award and the EA and would destroy or vary the adjustment of industrial relations which they established. It followed that the orders sought would be invalid, pursuant to s152 of the 1988 Act and s109 of the Constitution. 92 It was submitted that even if s152(1A) of the WROLA Act arose for consideration, it did not defeat the direct inconsistency here arising. Section 106 of the Act did not deal with harsh, unreasonable or unjust termination of employment, but unfair contracts. (See Beahan v Bush Boake Allen Australia Limited (1999) 93 IR 1 at p35.) 93 It was also submitted that the various new claims advanced for the applicants for the first time in final submissions would not be entertained by the Court, they having never been pleaded in the summonses. To do so would work an injustice upon the respondent. In any event, those claims gave rise to similar problems of inconsistency and if such orders were made, they too would be invalid. 94 As to the views expressed by Marks J in the interlocutory judgment, it was submitted that his Honour's views were expressed without reference to the orders sought and on an incorrect premise, contrary to the views advanced by the parties, that s1760LZ(1) of the Workplace Relations Act 1996 was not applicable. 95 As to clause 24 of the Award and clause 37 of the EA, it would not be concluded that they formed a part of the applicants' contracts of employment (see Byrne at p421). There was no warrant for identical contractual rights being created by order under s106, nor was there a need to imply those terms in the contracts, in order to give them reasonable and effective operation (see Byrne at p422). A claim as to an existing custom and practice advanced the matter no further (see Byrne at pp423-4). The claims arose because of the existence of the Award and EA provisions, not any such custom. 96 Here, there could be no finding that there had been an express incorporation of these terms in the contracts. (BHP Iron Ore Pty Ltd v Australian Workers' Union & Ors (2000) 171 ALR 680.) There was no material difference between the wording of the contracts there under consideration, to those here in question. It was also of relevance that despite the ACSA claim in 1986 that seniority provisions should be incorporated in the EA in 1986, the respondent rejected that claim. 97 The evidence as to the respondent's consultation with its employees, as well as with their unions, in relation to the EA, evidenced the respondent's compliance with the requirements of the applicable provisions of the 1988 Act, as to consultation. The vote conducted by the unions did not have the result of incorporating the contents of the EA into individual contracts of employment. Individual employees were not a party to the EA. It was an agreement between the unions and the respondent, although employees were bound by it, as the result of operation of the 1988 Act. 98 That the EA might have effect at general law, could not alter the effect of any order under s106, which varied or detracted from the terms of the EA, it having statutory effect under Federal legislation. 99 Even if the provisions of the Award and the EA were incorporated in the contracts of employment, all the relevant terms would be so incorporated, including, for example in relation to notice and redundancy payments. 100 If the Court were to entertain variation of the contracts to insert the provisions relied upon, the discriminatory provisions of the clauses would arise for consideration. Having in mind the requirement that the Court have regard to the principles of the Anti-Discrimination Act 1977, (s146(2) and s169(1)), the Court would decline to make such orders. The age discrimination inherent in the clause could not be overlooked. (See Anti-Discrimination Act 1977 s49ZYA and 49ZYB). The evidence demonstrated that the clause was both directly and indirectly discriminatory on the basis of age. 101 It was also argued that it appeared from the evidence that the applicants were seeking to enforce provisions of the Award and the EA in these proceedings. Enforcement of such instruments is dealt with exclusively by Federal legislation (see Byrne at pp425-6). In any event, the respondent denied any breach, having in mind particularly the evidence as to the reorganisation of its operations. The reduction of hands here in question did not breach the Award provisions. 102 Detailed submissions were directed in the alternative, to the merits of the claim, having regard to the evidence. I do not detail those here. Detailed submissions were also advanced as to the position of each employee, their treatment and the payments made to them on termination, ranging from 75 weeks' pay to 19 weeks, depending upon their years of service. It was submitted that these were fair and reasonable payments on redundancy by reference to general minimum industrial standards (see Lavings v Barclay Mowlem Construction (NSW) Ltd (2000) 99 IR 247). 103 It was also submitted that there was no evidence that the applicants had been targeted on account of their union activities; that the evidence demonstrated that the mine had been overmanned and that various attacks made upon the witnesses called by the respondent and the evidence which they had given would not be accepted.

[75]

The applicants' reply 104 Detailed submissions were advanced in response for the applicants. Reference was made to the submissions earlier made in the proceedings before Marks J. It was submitted that the respondent had failed to specify the relevant field in its submissions, as to which inconsistency would be considered. It was also argued that s170HA of the Workplace Relations Act 1996 was relevant, it contemplating the existence of State legislation entitling aggrieved persons to secure awards or orders in relation to the termination of their employment. So Marks J had concluded. 105 It followed that in so far as the Federal Act evinced an intention to cover the field, it was a narrow one. Here, neither the Award nor the EA evinced an intention to cover the field as to the matters raised in the summonses. The Award and the EA did not purport to deal with matters contained in the applicants' contracts of employment. 106 The respondent had accepted before Marks J that the matters raised in the summonses were wider than any field occupied by either the Award or the EA. It was open to assess inconsistency by reference to s170LZ, because it was open to conclude that the EA was a certified agreement, as defined. 107 The orders sought in the amended summonses, would not fall within the description of matters over which a certified agreement would have prevalence (s170LZ(1)). It followed that no direct collision or inconsistency arose, having regard to a variety of factors, including that the Award and the EA were overwhelmingly minimum conditions and that the EA did not specify a power to terminate. 108 There were also detailed submissions put as to other parts of the respondent's case, particularly as to how various parts of the evidence had been oversimplified and misrepresented, which I will not here detail, given the conclusions which I have reached. 109 It was submitted that the complaint that the applicants had sought to advance claims not advanced in the summonses, would not be entertained. It was argued that they were not new claims, but particulars only of the broadly framed claims in the summonses, of which the respondent had never sought particulars. 110 It was relevant that the applications were brought before the precise terms of the contracts were evidenced at hearing, especially in relation to alleged representations. The Court's rules and the relevant forms did not require specification of the claims in the manner now asserted by the respondent. The affidavits filed had made the contractual and representational claims plain. 111 It was also argued that there was no endeavour in these proceedings to seek to enforce any clause of either the Award or the EA. Rather, the applicants relied upon the respondent having dishonoured their contractual entitlements by its unconscionable conduct. Submissions were also directed to establishing that the seniority provisions of the Award had no unlawfully discriminatory effect.

[77]

115 It is convenient to deal with this issue at the outset. It has now been held by this Court in a number of different contexts, that cases advanced under s106, must be determined on the claims advanced by the applicant in the summons. Summonses are often amended after filing, particularly after conciliation under s109 of the Act has failed. That was the case here. Very late applications for leave to amend a summons are on occasions received by the Court. Whether leave is granted in such a case, depends upon whether any injustice might be visited upon a respondent as a result. No application for such leave was here made. 116 In O'Brien v Australian Native Landscapes Pty Ltd and Ors (2001) 105 IR 409 at 415-8 Hungerford J refused such leave, after referring to the approach of the High Court in Clough and Rogers v Frog (1974) 48 ALJR 481 and Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 at pp152-153)). Amongst other things, his Honour there touched upon the potential question arising under s109 of the Act, as to whether further conciliation might be required, before an amended claim could be determined against a respondent. I discussed similar issues in Harmer v Caltex Petroleum Pty Ltd& Ors [2002] NSWIRComm 43. 117 In Bourke Air Charter v Easton (2001) 109 IR 443, the Full Court has recently considered a case where at first instance, relief was granted in relation to a claim for payment of overtime, an order not sought in the summons, nor there otherwise pleaded or particularised. In that case the claim had first been raised by the trial judge in questioning of witnesses at the hearing, over the objections of the respondent's counsel. The claim was then pursued by the applicant's counsel in closing submissions. 118 The Full Court upheld the appeal, concluding at p455 that a claim must be particularised in the summons and that it is not sufficient if reference to a claim is made in affidavits filed by the applicants or in transcript. If such a claim is to be pursued, the summons must be amended to make it clear what order is sought, as well as the basis upon which it is advanced. This approach is entirely in accordance with the requirements of s106 itself, as well as with the Court's Rules and the form there provided, which requires that the orders sought and the grounds of the application, be specified. The approach of the Full Court in Bourke Air was similar to that earlier taken by another Full Court in Vision Publishing Pty Limited v PK Lane Holdings Pty Limited and Others (1998) 84 IR 277. 119 Section 106 permits an unfair contract, as defined, to be declared void or varied by order of the Court and for money orders in connection with such orders also to flow. Both as a matter of natural justice and in accordance with the Court's Rules, a respondent must be put on notice as to the orders sought, including the terms of any variation to the contract claimed. The grounds must detail the basis upon which those orders are sought, including how any money order is connected to the orders of avoidance and variation sought, that is the unfairness alleged must be identified. How the money sums sought are calculated must also be explained. Applicants cannot depart from the claims so made, without the Court's leave, in the absence of consent. An applicant advancing relief in final submissions on a basis which has not been claimed in the summons, is no more permissible than for relief to be granted on a basis raised by a trial judge at hearing, if that claim was not advanced in the summons upon which the hearing proceeded. 120 The formulation of a claim in the summons is a different matter to how any money orders might ultimately be framed by the trial judge, who is at that point not confined to the precise terms of the orders sought in the summons. Depending upon the approach which the parties adopt to the litigation, formulation of such final relief can be a difficult process. It was held, for example, by the Full Court in Barclays Australia Investment Services Limited & Ors v Nordby (1995) 99 IR 258 at p279 that: 'The task of assessing a "just" monetary amount is one which, not infrequently, involves the exercise of a broad judgment without the assistance of defined and identifiable parameters or heads of loss or damage.'

[79]

The claims made in the summonses 123 I turn then to the claims advanced in each of the applicants' summonses. They were concerned with the payments made to the applicants upon the termination of their employment. On the evidence the payments then made to the applicants had flowed from the respondent's compliance with the requirements of the Award and the EA in each case. Apart from seeking orders that the contracts were void, the other orders sought in the summonses, including orders of both variation and declaration, concerned the various payments to be made to the applicants on the termination of their employment. Those payments related to matters such as notice of termination and redundancy pay. Orders were also sought as to the discussions to be undertaken before employment was terminated, for performance related issues (Order 5). 124 It is convenient to deal with this last claim immediately. There was no evidence that the employment of any of the applicants was terminated for reasons connected with their conduct or performance. This aspect of the claims made sat most uncomfortably with various Award and EA provisions earlier referred to. Had they been pressed, it would have been necessary to consider resulting questions of inconsistency. The real position was, however, that this aspect of the applicants' summonses were not seriously pressed. It was common ground that the applicants had been made redundant as a result of the restructuring earlier described. I therefore do not propose to deal further with this aspect of the claims. 125 Various alternative money claims were advanced, each of which involved an improvement on the entitlement to payments which the applicants had on termination, under the EA or the Award. One alternative was explained as being based on a new requirement that each applicant be employed to age 65. This also involved an obvious removal of the respondent's right to terminate the applicants' employment upon the giving of notice as provided in the Award and EA. The basis of the other alternative was somewhat more obscure. 126 Nevertheless, as I have noted, a fair consideration of the cases advanced for the applicants in the summonses cannot escape the fact that the orders sought were advanced on the premise that the contracts in question had incorporated into them the provisions of the Award and the EA, either expressly or as a matter of implication. No order varying the contracts so as to incorporate such terms were sought in the alternative. An order of variation, seeking to preclude the respondent from otherwise terminating the applicants' employment, inconsistently with notions of seniority, was also not sought. 127 As earlier noted, the Award and EA already made extensive provisions as to the consultation required if the respondent determined to introduce change, including in relation to production, organisation or structure, likely to have significant effects on employees, including changes in hours of work or restructuring of jobs and redundancies (Clauses 29 and 30 of the Award). Any dismissal of individual employees, was not to be "harsh, unjust or unreasonable", (clause 5 (f) Unfair dismissals of the Award) and any dispute about such dismissal was to be discussed and if not resolved, referred to the AIRC. The arguments advanced for the applicants could not be understood other than as asserting that these Award and EA requirements had not been observed by the respondent.

[80]

Did the Award and EA terms form a part of the applicants' contracts? 128 I turn then to consider whether or not the Award and EA terms formed a part of each contract. That is a question of fact. On the evidence in each case, that question must be answered contrary to the case advanced by the applicants. This conclusion follows for a variety of reasons. 129 The High Court's approach in Byrne to questions of this kind cannot be overlooked. There the High Court was concerned with an argument that the award in question had been incorporated into employees' contracts of employment. That argument was rejected. At pp419-420 for example, it was observed: "The appellants relied upon the observations of Dixon J, who was in the majority in this Court, in the following passage (57): "The right to payment of award wages is really a term imported by statute into the contract of employment, and imported independently of the intention of the parties ... The distinction between express promise and obligation imputed by statute relates only to the juristic source of the obligation. It does not touch the character of the sum sued for nor the purpose of the proceeding." However, we do not understand Dixon J to be saying in that passage that "a term imported by statute into the contract of employment" loses its statutory character and becomes incorporated in the contract as one of its terms. On the contrary, he recognises the distinction between an obligation originating in a statute and an obligation arising from a contract. In his view, the distinction was not of importance in that case, but it is crucial in the present one. No doubt there are terms which are incorporated by statute in contracts of a particular kind so that the ordinary remedies for breach of contract are available in relation to them (eg, the Sale of Goods Act). And apart from statute, a term may be implied by law as an incident of a particular class of contract (See Lister v Romford Ice & Cold Storage Co Ltd [1957] AC 555 at 576; Liverpool City Council v Irwin [1977] AC 239; Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 345-346), but we do not understand the appellants to be submitting that any such implication arises here. They rely upon the statutory force given to the award and say that, because the relationship between the parties is contractual, the provisions of the award - or at least some of them including cl 11(a) in this case - become terms of the contract enforceable by the use of contractual remedies as well as the remedies provided by statute.'

[81]

130 The High Court emphasised the distinction which exists between award provisions which are imported into an employment relationship by statute and the incorporation of award provisions as a term of the contract which created that relationship. It follows that the conclusion which the applicants here urged cannot be determined in their favour, without proper consideration being given to the question of whether or not the parties agreed to incorporate the EA and the Award as terms of the employment contracts here in question. Like the circumstances considered in Byrne, the evidence in these proceedings did not support the view that there was such an agreement, in any case. 131 Dealing firstly with the EA, the evidence was that the making of the agreement was a matter upon which various employees of the respondent, including only some of the applicants, were addressed by both representatives of the CFMEU, the ACSA and the respondent, at a meeting in Singleton in 1996. Not all of the employees present at the meeting voted in favour of the agreement, but the majority of those present did. The parties thereafter acted in accordance with that vote, executed the agreement and then applied successfully to have it certified by the AIRC. Thus it was that the agreement was one which bound the parties to it at common law, as well as by force of statute. By force of the same statute, it also applied to the employment of each of the applicants. 132 The Federal Court later concluded that the AIRC had no power to certify what had been agreed in clause 37(b) of the EA. That had an obvious consequence for the effect which that provision had on the respondent's employees, given that this aspect of the EA no longer had statutory force. That decision did not alter the fact that the respondent had entered into an agreement with the unions which contained that provision. Nor did the decision lead to the result that thereby, the EA, or even clause 37(b), was incorporated into these employment contracts. 133 The evidence about the September meeting revealed that it was, undoubtedly, a part of the consultative process pursued by the unions and the respondent in relation to their negotiation of an enterprise agreement, which they proposed to have certified under the 1988 Act. The employees were given a copy of the proposed EA and an explanation of it by the various speakers. Those who voted in favour of its adoption, were undoubtedly voting in favour of the named parties, including the CFMEU, the ACSA and the respondent, entering such an agreement, which was then to be certified by the AIRC in accordance with the provisions of the 1988 Act. 134 The evidence did not, however, permit the conclusion that either the applicants, or the respondent, thereby intended that when the EA was made, the applicants' contracts of employment would also thereupon be varied, so as to incorporate into each of them the terms of the EA. The evidence did not even permit the conclusion that this was something to which either the respondent, or any of the applicants, turned their minds at the time, not even those who attended the Singleton meeting and voted in favour of the EA. 135 That those who so voted might have been influenced to do so by their understanding of the provisions of Clause 37 of the EA, as to security of employment, or by the assurances which they understood the respondent's representatives were giving employees about such security, is entirely understandable. That, however, is not a basis upon which it may properly now be concluded that such employees intended anything other than voting in favour of the proposed parties to the EA entering that agreement and seeking its certification under the relevant legislation. Such employees might have appreciated that once this occurred, the agreement would bind them, given the provisions of the applicable legislation. Nothing in the evidence leads to the conclusion, however, that they thereby intended to also vary their contracts of employment, to incorporate such terms. Nor was there evidence that the respondent had such an intention. 136 That the EA also operated as an agreement binding upon its parties at common law once it was entered, as well as in accordance with the 1988 Act once certified, cannot lead to any different conclusion. When operating at common law such an agreement binds the parties which made it and no one else, unless of course it be adopted by others in some effective fashion. There was no evidence of such an adoption by the parties to the employment contracts here in question. 137 While the applicants relied upon the approach of Phillips J of the Victorian Supreme Court in Ajax Cooke Pty Ltd v Nugent (unreported, 29 November 1993), I am unable to take the view that the conclusions there reached by his Honour are available here. His Honour concluded that the terms of the redundancy agreement there in issue, made between the employer and a number of unions, became a part of the applicant's terms and conditions of employment, even though he was not a party to the agreement, or even a member of any of the union parties. There was no suggestion that this agreement was one certified under the relevant legislation. Had it been, presumably the question dealt with by Phillips J would never have arisen, because the agreement would thereby have applied to the applicant. 138 His Honour's conclusion flowed from the view which he took, that by giving its employees notice of the terms of the new redundancy agreement, the employer had made an offer to the applicant, which he had accepted by continuing in employment until he was retrenched. It was concluded that the applicant's continued employment, after notice of the new redundancy agreement, was the consideration necessary to make the agreement enforceable by the applicant. 139 I have a number of reservations about this decision, all of which are unnecessary to explore. The negotiation of the EA by the parties to it, with the intention that it be certified under the 1988 Act, which then in fact occurred is one important point of distinction between the circumstances where here arise. The applicants' membership of the ACSA is another. The later approach of the High Court in Byrne, in my view also precludes the approach adopted by Phillips J being followed in this case. Here, the EA applied to the applicants' employment by operation of Federal legislation. There was no evidence of any desire on the part of the parties to the employment contracts here in question, to vary those contracts so as to incorporate the terms of the EA into them. Indeed, there was no need for such a variation at the time, given the very provisions of the 1988 Act, which had the effect that the EA applied to the employment in question. As the High Court observed, this was an 'insuperable obstacle' in the way of the argument that the terms of the EA were implied into these contracts. 140 Similar conclusions must follow in relation to the claimed incorporation into these contracts of the Award terms. The evidence was that the applicants were all employed at different times and in a variety of classifications. In some cases the Award, or its predecessors, did not apply when the applicants were originally employed at the mine. It later came to apply to them when they were appointed to positions to which the Award applied. In each case however, on termination of their employment, they were employed in a position to which the Award did apply. 141 Various references were made in letters of appointment to awards. Not all of them were predecessors to the Award. None of those references can be read as evincing an intention that any award provisions would thereby be incorporated in the contract of employment. For example, Mr Jones' original letter of appointment in 1981 from RW Miller & Company Pty Ltd ('RW Miller') referred to employment under the Colliery Mechanics Award. His later letter of appointment of 22 March 1991 from RW Miller, when he was appointed to the position of Mechanical Maintenance foreman, provided relevantly: 'Your employment classification is Group K - Engineer in accordance with the Coal Mining Industry (Supervision & Administration) Interim Consent Award, 1990). … Your appointment is made in terms of this letter and we confirm that there are no other arrangements between us, oral or written, regarding your appointment. Should alterations be made subsequently by agreement with you, they will be likewise be confirmed in writing.'

[86]

143 None of the letters of appointment made specific reference to the seniority provisions of the Award here in question. Coincidentally, no reference was made to the EA in any of those letters, or in any other correspondence concerning the contracts of employment. 144 As observed by the High Court in Byrne, (see for instance at p421), all that the references in these letters to the applicable awards pointed to, was an appreciation of the fact that the applicable award attached to the employment which the parties had created by their contract, given the operation of the applicable statute and that as a result, the award conditions applied. From neither the applicants' point of view, nor that of the entity which employed them, was there any need to convert such award rights and obligations, into contractual rights and obligations. 145 Nor can it be concluded that the Award or EA were implied terms of these contracts. As to the Award provision in relation to seniority, there was evidence that seniority was a concept of longstanding operation, both at the Mt Thorley mine and elsewhere in this industry. Various of the applicants gave evidence, for example, that they had experienced the operation of the Award reduction in hands clauses at other mines at which they had been employed in the past. Others had experienced the operation of the clause while employed at this mine. 146 Such experiences were entirely consistent with the fact that the clause was an award obligation, which was not only binding upon the respondent and predecessor operators of the mine, but also upon the unions party to the Award and their members, such as the applicants. It was also an award provision part of a long history of award regulation as to such matters in this industry. Wilcox J was called upon to consider the true construction of the reduction of hands clause in the Coal Mining Industry (Production and Engineering) Consolidated Award 1997, in Cumnock No 1 Colliery Pty Ltd v Construction, Forestry, Mining & Energy Union (unreported, 23 March 1998). At p6, his Honour referred to the Illawarra Colliery Employees' Association v The Southern Colliery Proprietors' Association [1902] AR 70, when the Court of Arbitration introduced a clause adopting 'the last to come first to go' principle for redundancies. 147 At p7, Wilcox J observed that 'by 1983, the type of clause inserted in the Illawarra award had become common in the mining industry'. His Honour then went on to consider various decisions applying and interpreting the redundancy provisions of a number of mining awards. 148 Even during World War 2, Drake-Brockman J inserted such seniority provisions in the then Coal Mining Industry Award under the war emergency powers conferred on the Court by the National Security (Industrial Peace) Regulations, for the period of the war. (See The Australian Coal and Shale Employees Federation v J. & A. Brown and Abermanin Seaham Collieries Ltd & Ors (1940) CAR 757.) 149 The Collieries Staff Award 1973 was in evidence. It did not contain a seniority provision, but included a savings provision, in clause 24, for customs and practices reflected in agreements between the parties, except in so far as the award expressly interfered with them. The Collieries Staff Award 1984 contained Clause 17 Reduction of Hands, which made provision for seniority, in terms not significantly different to the Award. It also contained a provision, in clause 32, which contemplated that agreements substituting and/or trading off and/or setting off award provisions, could be agreed between employers and employees, with prior approval of the ACSA and the Coal Industry Tribunal. Existing customs and practices and agreements, were again protected in clause 37, but there was no evidence of any other relevant custom and practice, which this award provision protected. The Award, made in 1990 to replace the 1984 Award, again contained clause 37, seniority here relied upon. 150 It follows that the evidence the of applicants' experience of the respondent's past compliance with the relevant Award obligations, does not provide a basis for conclusion that another custom and practice was operating as to seniority. Indeed, such a conclusion would be contrary to the case advanced by the applicants, which was that the Award seniority provision was an express term of the contracts. 151 The High Court in Byrne observed at p422 that the relevant test, as to whether a term be implied into a contract, is that discussed in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at p283. One of the requirements there described is the need for the implication, in order to give 'business efficacy' to the contract. No term will be implied if a contract is effective without it. The discussion of Deane J in Hawkins v Clayton & Ors (1988) 164 CLR 539 at p573, was also approved: "The most that can be said consistently with the need for some degree of flexibility is that, in a case where it is apparent that the parties have not attempted to spell out the full terms of their contract, a court should imply a term by reference to the imputed intention of the parties if, but only if, it can be seen that the implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case. That general statement of principle is subject to the qualification that a term may be implied in a contract by established mercantile usage or professional practice or by a past course of dealing between the parties".

[87]

152 At p423, the High Court in Byrne made it clear that the 'fact that the inclusion of such a term would, if it were breached, support an action for damages by the employees, is no ground for saying that the terms necessary for the reasonable or effective operation of the contract. 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.' 153 Applying these approaches to this case, it becomes apparent that there are insuperable difficulties in the way of a conclusion that the provisions of the EA and Award here in issue, including the seniority provision, were implied into the applicants' contracts. Each of these employment contracts was capable of operating reasonably and effectively in the absence of such terms, which were not necessary for their business efficacy, given the Award and EA provisions themselves. Those provisions, after all, had force of law by operation of statute. A similar conclusion, I note, was reached by the Full Federal Court in BHP Iron Ore Pty Ltd at p701. Even though that conclusion has the consequence that the claims here made in the applicants' summonses cannot be advanced, it cannot be overlooked that the legislation regulating observance of the Award and the EA, also provides remedies for any breach of the Award and the EA by the respondent. That such remedies are different, or more limited than those available under s106, is not to the point. 154 Nor can it be concluded that the provisions of the Award or the EA were implied into these contracts as the result of any custom or practice or course of past dealing between the parties. The problems with such a conclusion in the case of the EA are immediately obvious, given the time and circumstances of its making. In the case of the Award, the customs asserted in relation to seniority and the understanding of the applicants of how seniority operated in practice, were consistent with past observance of the Award obligations by the respondent and predecessor owners of the mine and other employers operating in this industry. 155 Like the conclusion reached by the High Court in Byrne, evidence that the Award requirements have been observed in the past by the respondent and its predecessors at the mine, does not permit the conclusion that this flowed from an implied or presumed intention between each of the applicants and their employer, that they contracted on the basis of the inclusion of the Award terms in their contracts (see pp423-4).

[92]

Inconsistency 164 I turn then to deal with the arguments in relation to inconsistency. This was a further, and in my view insurmountable, difficulty with the claims advanced in the applicants' cases. That is, no matter how the claims advanced for the applicants are viewed, the upshot remains that the final relief sought, directly deals with the same subjects with which the Award and the EA deal - namely, termination of employment and the money required to be paid to the applicants by the respondent, on such termination. 165 The Award and the EA together dealt in the most comprehensive way imaginable with termination of employment. Unfair dismissal was expressly dealt with and a regime for dealing with disputes about dismissal contrary to those obligations was also established. The notice to be given on termination, or the payment to be made in lieu of such notice were dealt with, as were the payments to be made in the event of redundancy; what notice of restructuring of the respondent's operations was to be given to employees and unions and how that was to be discussed with them, prior to implementation of decisions made. The requirements flowing from the AIRC's Termination, Change and Redundancy Test Case were plainly improved upon in those provisions. The EA provided additional entitlements in relation to security of employment, which impacted upon the time at which any notice of termination of employment might have lawfully been given to the applicants and required the respondent to take various steps before such terminations were implemented. The respondent was also obliged to have regard to considerations of seniority, in selecting for redundancy. 166 It is undoubted that these were all minimum entitlements and that parties to awards and agreements such as those here in question, are free to agree with each other as to contractual terms which are more generous to the employees than those which are there provided. That, however, is quite a different matter to this Court varying such more generous agreements, once made, under s106, or itself varying the employment contracts to insert more generous provisions, if the parties have not themselves agreed to such terms, if the end result is that the Court's order is inconsistent with what is required by the Award or EA, in the circumstances with which they deal. That is the nub of the jurisdictional point which here arose for consideration. 167 The starting point of any consideration of whether inconsistency arises from the intersection of State and Federal statutes, is s109 of the Constitution. In the case of awards and agreements made or certified by the AIRC under Federal legislation, the provisions of the relevant Federal statute, also arise for consideration. In the Metal Trades Industry Association of Australia v Amalgamated Metal Workers' & Shipwrights' Union (1983) 48 ALR 385 at p389; (1983) 4 IR 284 at p293, Mason, Brennan and Deane JJ, said as to this: '… it has been accepted in the cases to which we have referred and in Ansett Transport Industries (Operations Pty. Ltd. v. Wadley (1980) 142 C.L.R. 237, at pp. 260-261, 277-280, that s. 65 is to be regarded as evincing a statutory intention that an award made pursuant to the Act is to operate to the exclusion of any State law. So much is made evident by the inclusion in s. 65 of the words not found in s. 109 which relate to the operation of a State law which "deals with a matter dealt with in" an award.

[95]

169 There the parties had agreed, as they were entitled to do as a matter of contract, that the applicant would take leave without pay for a period. The applicant sought to attack that agreement under s88F, but was refused relief by the Court, because the result would have been to make the respondent liable to pay more than what was prescribed by the award as being payable in the circumstances in question. Thus, it was concluded that the orders there sought pursuant to s88F were concerned with, in effect, the same matters dealt with in the award, and the relief sought was refused (at pp336-337). 170 Here, the applicants' argument, that in making the orders sought, the Court would not be interfering with the Award or the EA, but rather would be confining itself to the contractual terms agreed between the parties, the Award and EA having been incorporated into each contract and breached by the respondent, was no doubt a novel extension of the concepts discussed by the majority in Reich. It cannot, however, properly permit the reality of the claim as giving rise to inconsistency being ignored. 171 While the Court is given power by s106 to deal with unfair contracts, as defined, that power is a statutory interference with the parties' right to contract as they wish. The award making powers of the AIRC and the power to certify agreements, thus giving them the force of award, are also statutory powers which interferes with contractual agreements parties have otherwise made or might be free to make. While the parties to a contract of employment which attracts the terms of such an award or agreement, may still have the right to agree to more generous arrangements than those provided in such Federal instruments, this Court does not have the jurisdiction to require such parties to adhere to more favourable terms which it, not they, determine, if the end result be 'an interference with the adjustment of industrial relations established by the award with respect to the matters formerly in dispute'. (See Metal Trades Industry Association of Australia & Ors v The Amalgamated Metal Workers Shipwrights' Union & Ors (1983)152 CLR 632 at pp642 -3.) 172 The argument here advanced for the applicants, that in so exercising the statutory power under s106, this Court would not be interfering with the Award or the EA, but only the parties' contract, must fail, given the conclusion which I have reached as to the claim that the contracts in question incorporated those terms. Even if that conclusion were wrong, the resulting conflict between the outcome of the two statutory regimes if the orders sought were made, could not be avoided. That conclusion too must lead to the result that even if the applicants were to be permitted to amend their summonses in accordance with the claims advanced in closing submissions, they must fail. 173 The summonses, in their terms, were each concerned with a claim that the contracts in question contained as a term the Award and EA provisions. It was claimed that such terms had been breached and that such breach, together with the respondent's unconscionable conduct in relation to representations made as to security of employment and in how it selected employees for redundancy, ignoring its obligation to give effect to the Award seniority provisions, would lead to orders requiring various payments. Those payments related to termination of employment and other matters expressly dealt with in the Award and EA and would be in addition to the payments already made by the respondent to satisfy its obligations thereunder. 174 Notice would be increased, for example in Mr Burgess' case, from 5 weeks to 30 months and severance and retrenchment pay would be increased from a total of 3 weeks pay per year of service, to 4 weeks per year of service, at salary packaged, rather than base rates of pay. Various additional payments for superannuation would also flow, in one case for the 30 weeks' notice period and in the other, until retirement at age 65. 175 It cannot be doubted that the parties were entirely free to agree on such terms, considerably more generous than those provided in the Award and the EA, had they wished to do so. They did not. On the applicants' case, at its highest, they had only agreed to the incorporation of the Award and EA provision into their contracts, nothing more generous. The inescapable result of the granting of the orders sought would be that the respondent, by order of this Court rather than the parties' agreement, would be required to pay more to the respondents than the Award and EA required upon termination of employment in relation to the matters there dealt with. The resulting conflict is inescapable. 176 In the alternative, it was argued that the contracts of employment would be varied to insert the Award and EA provisions. Were these claims to be entertained, this too could only lead to the same result. The reality of the claim, so pressed, was that it was pursued because the legislative enforcement scheme which applied to any breach of the Award and the EA, did not provide for the type of relief which s106 of the Act grants in respect of unfair contracts. I am far from convinced that this would be a proper basis for a finding of unfairness in relation to these contracts, even were the summonses amended to permit such claims to be advanced. The observations of the High Court in Byrne were directly to the point in relation to this difficulty. 177 The same result flows in relation to the various claims advanced in relation to unfair conduct. The Award expressly required that dismissal not be harsh etc. It is difficult to see that the claim as to the respondent's unconscionable conduct towards the applicants in selecting them for dismissal was not, in truth, a claim that this Award requirement had been breached. The Award also made express provision as to how such disputes were to be dealt with. That was a different mechanism for dealing with such a dispute, to a claim which might be brought under the unfair dismissal provisions of the Federal legislation in relation to those same matters. Breach of that Award provision, like a claim for any other award breach, was nevertheless, one for which provision was made in the Workplace Relations Act 1996. The Federal legislative scheme in the context of these Award and EA provisions, simply leaves no room for the exercise by this Court of the s106 jurisdiction, in the manner here sought. 178 Two other alternative forms of money order were advanced. They were inserted into the summonses by way of amendment after the judgment given by Marks J. Compensation of $250,000 was claimed in Mr Burgess' case and different sums in the other applicants' summonses. How that sum was arrived at in each case was not made clear in the summonses.

[96]

179 Order 2 in Mr Burgess' summons provided: 'In the alternative the Applicant claims the sum of $250,000 by way of compensation and/or the payment of money consequent upon the making of claimed orders 1 and 2 in paragraph A hereof.' 180 In closing submissions, Mr Howells explained that this had regard to payment until age 65, as fair payment in respect of termination of employment in the circumstances which here arose, where there was a legitimate expectation of employment to age 65, subject to a number of potential exigencies not identified in detail, but including the possibility of an earlier retirement date. This, it was explained, was an appropriate basis for the monetary reparation sought, given the assurances in relation to seniority and job security which were contained in the Award and EA. 181 Order 3 in Mr Burgess' summons provided: 'In the further alternative the Applicant claims the sum of $250,000 by way of compensation and/or the payment of money pursuant to claimed orders 3 and/or 6 and/or 7 in paragraph A hereof.' 182 This, it was explained, referred to the claims made in paragraphs 3, 6, and 7 of the summonses. It was designed to meet the respondents' inconsistency arguments and had regard to the unusual contractual arrangement relied upon, which included the seniority provision and assurances about job security, contained in the Award and EA. The claim was said to have regard to the Court's wide discretion under the section to craft money orders, just in the circumstances of the case. It also included an interest component. 183 The alternative claims so advanced suffered from various difficulties, including the case of those applicants whose employment would not have continued, had the Award seniority provision been applied. Even more fundamentally however, the power to make money orders under s106(5), is a wide one, but must be exercised in accordance with the jurisdiction and in any event, as the High Court has observed, on a cautious basis. As Peterson J observed recently in McGowan v ABC: However, as I understand s.106, there remains an obstacle which must defeat the summons. That is, by s.106(5), the power to make an order for the payment of money depends upon an underpinning order which affects "any contract declared wholly or partly void, or varied . . .". If the Court is unable, as the result of the constitutional protection afforded to a determination of the ABC, to make an order voiding in whole or in part or varying the contract, no order for a money payment can be made (See Reich at 83.1). Accordingly, conduct unfairness can, in a case such as this, give rise to no remedy.

[97]

184 In my view, those alternative claims, advanced on the basis explained, could not overcome the problems of inconsistency here arising. The first alternative effectively entirely removed the Award and EA rights to terminate employment, prior to age 65. That has an obvious discriminatory impact, as well as being startlingly inconsistent with the Award and EA provisions as to termination of employment. The second alternative, even though more difficult to understand, led to no different result. Obscurity cannot provide a basis for the view being reached that inconsistency is thereby avoided. Nor can it be ignored that this order too seeks payment of a considerable sum in addition to the money already paid in order to satisfy the Award and EA obligations. As a matter of discretion an award could not be made on such a basis. 185 Finally, I deal with the applicants' argument that the question of inconsistency would be approached, by the Court, in accordance with the approach of Marks J in the interlocutory judgment. There his Honour observed, by reference to the arguments advanced before him, that it had been 'vigorously' submitted for the applicants that the Court's consideration of inconsistency was premature, 'unless and until any order was made by this Court under s106'(at p 16). His Honour also referred to the decision of the Court of Appeal in Majik Markets v Brake and Service Centre (1991) 28 NSWLR 443, where at 465-6 and 468, the Court of Appeal had concluded that it was necessary for a party submitting that the Federal law in question intended to cover the particular area to the exclusion of State law. His Honour thus determined at p 16 that: 'Accordingly, it was only necessary that I consider for the purpose of disposing of these interlocutory proceedings whether or not Mr Dixon had succeeded in demonstrating that the industrial agreement was framed in such a way that there was a clear intention to exclude not only any State law but also the exercise by this Court of its jurisdiction based upon the manner in which the summonses in these proceedings were framed.'

[99]

187 In so approaching the question, the respondent here argued that his Honour had fallen into error. It was not disputed by the applicants before me, that this approach was inconsistent with the basis of the case put to Marks J by both parties at the interlocutory hearing. Nevertheless, at the hearing before me, it was argued for the applicants that his Honour's view was open and would be preferred, even though it was an approach inconsistent with other cases later decided. 188 Marks J concluded that at the stage the proceedings had reached before him, it was impossible to determine whether any direct inconsistency arose, for various reasons, including the provision of s170LZ (at p22). His Honour also took the view that at that stage, there was no certainty that the EA was 'under attack' in the orders sought (at p23). He concluded that questions of direct inconsistency would arise later for determination. 189 His Honour also concluded that indirect inconsistency could not at that stage be discerned. Again, Marks J had regard to s170LZ in so deciding, (see pp32-33), concluding that "the mere existence of jurisdiction under s106 does not, in my opinion, give rise within s170LZ(1) to any question of inconsistency. And I cannot construe s170LZ (1) as justifying an intention by the legislature to support the exclusive or exhaustive operation of a certified agreement except in the limited circumstances set out in that sub section." 190 His Honour postulated that the orders made in these proceedings might not "impact upon the terms and conditions of employment of the applicants applying to the termination of their employment". He also postulated that such orders "may well represent a hollow victory for the applicants and that such orders would be "circumscribed by relevant provisions of" the EA, as provided for by s170LZ(1). Nevertheless, his Honour did not discern from the terms of the EA any intention that the jurisdiction of the Court under s 106 would be excluded (at p34). 191 In State Rail Authority Fire-fighters' Award 2000 [2001] NSWIRComm 310, Grayson DP was called upon to consider an application for the making of a new award. Agreements certified under the 1988 Act applied to the employment there in question. They were 'certified agreements' and 'awards' as defined for the purposes of that Act. Section 152 of the 1988 Act provided: 'Where a State law, or an order, award, decision or determination of a State industrial authority, is inconsistent with, or deals with a matter dealt with in, an award, the latter prevails and the former, to the extent of the inconsistency or in relation to the matter dealt with, is invalid.'

[102]

195 These were decisions which were not considered by Marks J, no doubt given the time that the interlocutory judgment was given. It is difficult to see how any conclusion contrary to that reached by French J, Marshall J and Grayson DP, in relation to the continued operation of s152 of the 1988 Act is now properly available in this case. Indeed, I agree with their reasons and conclusions. It follows that it must be concluded that s170LZ of the Workplace Relations Act 1996, does not here arise for consideration in connection with the EA. 196 Even were I to have reached a different view, I am far from convinced that the inconsistency identified would have thereby been resolved. This conclusion confirms me in the view which I have reached in relation to the inescapable inconsistency between the orders here sought, the provisions made in the Award and the EA and also with the enforcement provision for award breaches contained in the Federal legislation. I cannot see how an application brought under this Act can properly be used to circumvent that scheme, especially having regard to the observations of the High Court in Byrne. 197 Of relevance too is the fact that the summonses considered by Marks J were later amended by the applicants. As I have found, those summonses and the case which the applicants finally pressed at hearing, demonstrated the direct inconsistency which arose between the orders sought and the provisions made in the EA and the Award. It cannot be doubted that if made, the orders here sought would impose obligations upon the respondents greater than those imposed by the Award and the EA in connection with the termination of the applicants' employment and the payments to be made to them on such termination. The orders sought cannot be regarded as simply supplementary or cumulative upon those obligations (see Telstra Corporation Ltd v Worthing). It is difficult to see how the Award and EA obligations, particularly when consideration is given as to how they operate together, were not intended to provide a 'complete statement' as to the obligations imposed upon the respondent, when seeking to exercise its contractual rights of termination of the applicants' employment. 198 In my view the resulting inconsistency between the orders here sought and the EA and Award is direct and unavoidable. The type of conclusion reached by the High Court in Wardley, is not available in this case. Here, it is not simply the powers conferred by s106 of the Act upon the Court which arises for consideration, but the way in which the Court is asked to exercise those powers, in the applicants' summonses. Those claims are not alien from the purpose and subject matters of the Award and the EA, but expressly deal with the same matters, such as the notice to be given of termination, the considerations which then arise, the consultation which is required and the payments which must be made thereupon. 199 This is not a case where s106 may simply be regarded as a readily discernable background part of the general law of the land, such as the rights and obligations generally imposed upon employers and employees by long service leave or anti-discrimination legislation. Indeed, the claim here advanced itself raises problems of conflict with such anti-discrimination legislation. Rather, s106 empowers the Court to interfere with particular kinds of contracts and arrangements, including employment contracts, if relevant unfairness be found. While awards have general application to the classes of employees with which they are concerned, cases brought under s106 typically involve only the parties to the individual contract of employment brought before the Court for consideration. That the Court, in such an application, might be asked to exercise its powers in respect of the contractual process governing termination of employment, is not surprising, but immediately points to the potential intersection between the results of the two statutory schemes in question, if the Federal award already deals with that matter. This potential increases when the applicants' case involves an assertion that the award in question has been breached by the respondent's conduct and that the Court's order is required to redress the resulting unfairness flowing from such breach. In this case, the conclusion that inconsistency resulted, was unavoidable.

Parties

Applicant/Plaintiff:

Burgess & Ors

Respondent/Defendant:

Mount Thorley Operations Pty Limited

Legislation Cited (6)

Constitution Federal Court of Australia Act 1976(Cth)

Industrial Relations Act 1988(Cth)

Industrial Relations Reform Act 1993(Cth)

Workplace Relations Act 1996(Cth)

Judiciary Act 1903(Cth)

Federal Court of Australia Act 1976(Cth)

Cases Cited (41)

Discrimination in employment - orders sought under unfair contract provision in relation to provisions directly and indirectly discriminatory on account of age Anti-Discrimination Act 1977 Constitution Federal Court of Australia Act 1976 (Cth) Industrial Relations Act 1996 LEGISLATION CITED : Industrial Relations Act 1988 (Cth) Industrial Relations Reform Act 1993 (Cth) Judiciary Act 1903 (Cth) Workplace Relations Act 1996 (Cth) Workplace Relations and Other Legislation Amendment Act 1996 Ajax Cooke Pty Limited v Nugent (Supreme Court of Victoria, unreported, Phillips J, 29 November 1993) Ansett Transport Industries (Operational) Proprietary Limited v Wardley (1980) 142 CLR 237 Attorney General v Minister for Aboriginal Affairs (1989) 90 ALR 59 at 75 Australian Education Union v Department of Training and Employment and Others (1999) 94 IR 386 Barclays Australia Investment Services Limited & Ors v Nordby (1995) 99 IR 258 Beahan v Bush Boake Allen Australia Limited (1999) 93 IR 1 BHP Iron Ore Pty Ltd v Australian Workers' Union & Ors (2000) 171 ALR 680 Bourke Air Charter v Easton (2001) 109 IR 443 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 Clough and Rogers v Frog (1974) 48 ALJR 481 Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Limited (1986) 160 CLR 226 Construction, Forestry, Mining and Energy Union v Mount Thorley Operations Pty Limited (1997) 76 IR 364 Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission and Another (2000) 103 IR 473 Cumnock No 1 Colliery Pty Ltd v Construction, Forestry, Mining & Energy Union (unreported, Wilcox J, 23 March 1998) Fabros v Hotel Intercontinental Sydney (1993) 53 IR 193 Harmer v Caltex Petroleum Pty Ltd& Ors [2002] NSWIRComm 43 Hawkins v Clayton & Ors (1988) 164 CLR 539 Hudson v Qantas Airways (1985) 10 IR 331 ICI Australia Operations Pty Limited v Hutton (1993) 47 IR 288 Illawarra Colliery Employees' Association v The Southern Colliery Proprietors' Association [1902] AR 70 CASES CITED : Kilminster v Sun Newspapers Ltd (1931) 46 CLR 284 Lavings v Barclay Mowlem Construction (NSW) Ltd (2000) 99 IR 247 Legal & General Assurance Society Limited v Stock (1993) 49 IR 464 McGowan v ABC [2001] NSWIRComm 49 Majik Markets v Brake and Service Centre (1991) 28 NSWLR 443 Metal Trades Industry Association of Australia v Amalgamated Metal Workers' & Shipwrights' Union (1983) 48 ALR 385, (1983) 4 IR 284 Metal Trades Industry Association of Australia & Ors v The Amalgamated Metal Workers Shipwrights' Union & Ors (1983)152 CLR 632 Mt Thorley Operations Pty Limited v Burgess & Ors (2001) 103 IR 184 Mount Thorley Operations Pty Limited v Raymond Gordon Wills & Others (unreported, Wright J President, Walton J Vice-President, Glynn J, 2 November 1999) Newton v Goodman Fielder Mills Ltd (1998) 81 IR 227 O'Brien v Australian Native Landscapes Pty Ltd and Ors (2001) 105 IR 409 Origin Energy v Smith [2001] NSWIRComm 308 Payne v Foxboro L & N Pty Ltd and Anor (1998) 81 IR 404 Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 State Rail Authority Fire-fighters' Award 2000 [2001] NSWIRComm 310 Telstra Corporation Limited v MacBean & Ors (2000) 98 IR 10 Telstra Corporation Limited v Worthing [1999] 73 ALJR 564 Termination, Change and Redundancy Test Case (1984) 8 IR 34, (1984) 9 IR 115 The Australian Coal and Shale Employees Federation v J. & A. Brown and Abermanin Seaham Collieries Ltd & Ors (1940) CAR 757 Reich v Client Server Professionals of Australia Pty Ltd (Administrator Appointed) (2000) 99 IR 69 Vision Publishing Pty Limited v PK Lane Holdings Pty Limited and Others (1998) 84 IR 277 Westfield Holdings v Adams [2001] NSWIRComm 293 HEARING DATES: 05/14/2001; 05/15/2001; 05/16/2001; 05/17/2001; 05/18/2001; 05/23/2001; 05/24/2001; 05/25/2001; 05/28/2001; 05/29/2001; 05/30/2001; 05/31/2001; 06/01/2001; 06/18/2001; 06/19/2001; 06/20/2001; 06/21/2001; 08/28/2001; 08/29/2001; 11/27/2001; 11/28/2001; 11/29/2001; 02/01/2002 DATE OF JUDGMENT: 05/21/2002

(1980) 142 CLR 237

(1989) 90 ALR 59

(1999) 94 IR 386

(1995) 99 IR 258

(1999) 93 IR 1

(2000) 171 ALR 680

(2001) 109 IR 443

(1977) 180 CLR 266

(1995) 185 CLR 410

(1974) 48 ALJR 481

(1986) 160 CLR 226

(1997) 76 IR 364