Byrne & Frew v Australian Airlines Ltd

Industrial Relations Commission (NSW)|2012-06-28|Before: Boland J

DECISION 1The Liquor & Hospitality Division of United Voice ("the applicant") has made application for an "interpretation, application and operation of specified clauses" in the Crown Employee (Household Staff - Department of Education and Training) Wages and Conditions Award ("the Award") pursuant to s 175 of the Industrial Relations Act 1996 ("the Act"). 2The application, which is opposed by the respondent, follows the unsuccessful conciliation of an industrial dispute between the applicant and the Department of Education and Communities ("the respondent") concerning the application of cll 3.7 and 17.2 of the Award. 3Clause 3.7 of the Award is in the following terms: "Normal Work" means the duties and responsibilities relevant to the statement of duties or position description of an employee or employees. 4Clause 17.2 is in the following terms: 17.2Stand Down - 17.2.1When schools are in recess and it is necessary to stand down staff, employees employed in such schools shall be paid half ordinary pay for the period during which they have been stood down, provided that they have been continuously employed for the school term immediately preceding and for the school term immediately following the period of recess. 5The interpretation sought by the applicant was set out in the application: 1.That "normal work" as stated at Clause 3.7, Crown Employee (Household Staff - Department of Education and Training) Wages and Conditions Award does not include the performance of work by employees, for or associated with, conferences during traditional recess periods for non residents of the residential agricultural high school. 2.That the performance of work by employees, for or associated with, conferences for non residents of the residential agricultural high school while the school is in recess, is not normal and/or traditional work as contemplated by Clause 17.2, Crown Employee (Household Staff - Department of Education and Training) Wages and Conditions Award. 3.That the performance of work by employees, for or associated with, conferences for non residents of the residential agricultural high school while the school is in recess does not disenfranchise employees from the receipt of stand down pay (being half ordinary pay for the period during which they have been stood down) 4.That the performance of work by employees, for or associated with, conferences for non residents of the residential agricultural high school while the school is in recess is correctly paid at a casual hourly rate of pay, separate and distinct from the stand down pay. 5.That it is incorrect to interpret Clause 17.2 Crown Employee (Household Staff - Department of Education and Training) Wages and Conditions Award as operating to compel employees to performance (sic) work, for or associated with, conferences for non residents of the residential agricultural high school while the school is in recess and only requiring remuneration for such work at ordinary (in session) rates of pay. 6.That the voluntary offering of availability by employees, for the performance of work, for or associated with, conferences for non residents of the residential agricultural high school while the school is in recess, and the payment of casual rates, is a long standing condition of employment. 6The grounds and reasons in support of the application were as follows: 1.The performance of work, for or associated with, conferences for non residents of the residential agricultural high school while the school is in recess has historically been performed by employees who have offered themselves as available during the stand down period due to the school recess. 2.Such employees have always been paid at a casual hourly rate for the performance of work, for or associated with, conferences for non residents of the residential agricultural high school while the school is in recess. 3.Employees have always received a separate Group Certificate for the wages associated with performance of work, for or associated with, conferences for non residents of the residential agricultural high school while the school is in recess. Employees were paid from the conference charges and not by the Department of Education. 4.In correspondence (copy attached) dated 25 February 1999, from R Aldersey, Manager Industrial Awards and Conditions to Susan McGrath, Secretary, Australian Liquor Hospitality & Miscellaneous Workers Union, the practice and the procedure of performance and remuneration for work, for or associated with, conferences for non residents of the residential agricultural high school while the school is in recess, is recognised and affirmed by the Department of Education. 5. Job Descriptions independently prepared by the employer, commence with the role statement that recognises "students and staff" as the recipients of their labour. A copy of the job descriptions for Dorothy Russell and Peter Kisir are attached as examples.

Background 7The Award covers all Household Staff, employed under the Public Sector Employment and Management Act 2002 ("PSEM Act") in a Residential Agricultural High School in five "Household staff" classifications. Grade 1 covers persons employed as a Kitchenhand, Useful, Cleaner, Room Attendant, Dining Room Attendant, Laundry Attendant and Stores Steward. Grade 2 covers persons employed in the following classifications: Butcher (casual) and Cook (unqualified). Grade 3 covers persons employed in the following classifications: Laundry Supervisor, Dining Room Supervisor, Housekeeper/Cleaning Supervisor and Cook (qualified). Grade 4 covers persons employed in the classification of First Cook (qualified). Grade 5 covers persons employed in the classification of Catering Supervisor. 8The "Residential Agricultural High School" means Farrer Memorial Agricultural High School, Hurlstone Agricultural High School or Yanco Agricultural High School or any other school classified as such by the Director-General: cl 3.10 of the Award. 9Under cl 17.2 of the Award, when schools were in recess (vacation periods in the School Calendar) and it was necessary to stand down staff, employees employed in the schools were entitled to be paid half ordinary pay for the period during which they have been stood down, provided that they have been continuously employed for the school term immediately preceding and for the school term immediately following the period of recess. 10The original dispute arose out of a complaint by the applicant that Household Staff at Hurlstone Agricultural College were being invited to work during the School's recess for their normal ordinary pay only, when for many years they had received half ordinary pay for the period of the recess in accordance with the Award, plus casual rates of pay for the time they worked during the recess. 11The invitation to work during the recess arose out of the fact that during school vacation the School uses its boarding facilities for conferences or seminars for commercial purposes. The running of the boarding facilities for the purpose of private conferences during school vacations has been performed by Household Staff on a voluntary basis. 12Whilst the respondent conceded that in the past volunteers who worked during the recess to cater for these private conferences were paid their half pay for being stood down and casual rates for time worked, it was contended the School could not sustain this arrangement. It wishes to depart from the practice whereby the conference work undertaken by the staff is regarded as a necessary part of the school's operation and, therefore, during those times it is not necessary to stand them down. It was contended that departure from the practice was consistent with the terms of the Award. 13Farrer and Yanco Agricultural High Schools do not have a practice of implementing a stand down of employees during recess periods. Both Schools utilise the absence of pupils as an opportunity for major maintenance and cleaning programs. 14Both Schools do, however, host private paying clients although on much less frequent occasions than Hurlstone. At neither School are the employees remunerated beyond their ordinary hourly rate of pay. That is, they do not receive their stand down pay plus payment for time worked. 15The applicant contended that the respondent's interpretation of the Award in respect of all three Schools was erroneous. It was the applicant's contention that the performance of work by employees for, or associated with, conferences during traditional recess periods for non-residents of the residential agricultural high school was not "normal work" for the purpose of cl 3.7 of the Award. Accordingly, it was submitted employees working in these circumstances during the stand down period were entitled to their stand down pay (half pay) in accordance with cl 17.2 of the Award, plus casual rates of pay for time worked during the recess period.

Evidence 16The applicant's evidence was in the form of witness statements by the following individuals: (a) Ms Ann Makeham, employed by Yanco Agricultural High School for about 28 years and who is classified under the Award as Household Grade 4 (Head Cook). (b) Ms Dorothy Russell, employed by Hurlstone Agricultural High School since about 1996 as Catering Supervisor. (c) Ms Margaret Drew, employed by Hurlstone Agricultural High School since about 1995 as Hostel Supervisor. (d) Mr Paul James Lawrence, employed by Farrer Agricultural High School for 19 years as Stores Steward. (e) Mr Paul Leslie O'Brien, employed by Farrer Agricultural High School for 22 years as Catering Supervisor. 17The effect of the evidence of Ms Russell and Ms Drew was that the school has currently about 106 students that are boarders at the school. These boarders stay at the school in dormitory style accommodation. When the School is in recess no boarders remain in the school. 18Ms Drew and Ms Russell indicated that it has been a practice at the school since about 1996 for private clients to pay for the use of the school facilities, for the purpose of holding conferences/seminars. These conferences involve the clients using the accommodation and dining facilities to house and feed attendees of the conference/seminar. 19Ms Russell said in her statement: It is my recollection that such conferences were staffed as follows; a)Hurlstone Agricultural High School employees', were asked if they wished to work in respect to the conference. This was done by a notice being put up on the notice board by the catering supervisor. b)No staff was ever rostered by the School to work in respect to the conference. c)Any employees that worked were paid a casual hourly rate for the time that they worked. d)Apart from the casual payment for working the conference, the employees STILL received their stand down pay of half ordinary pay. 20Ms Drew made similar statements. Both persons indicated that they received separate Group Certificates each year, one from the Department and one from the School. Ms Russell explained: I have each year received a Group Certificate for tax purposes, of my earnings for working such conferences. A group certificate was issued to me by the School. Examples of such group certificates (sic - income tax assessments] are attached.... The group certificates that I received from the School were separate to those that received from the Department of Education, for my work as a catering Supervisor at the School. Examples of these are attached ... The Department of Education was not responsible for paying me my wages for this conference work. The School paid me for this work out of the client's payment. 21Ms Russell and Ms Drew also stated: In 1999 I recall a dispute arising with the Department of Education, which included the matter of remuneration for working at such conferences. It was resolved between the parties that the observed rate of remuneration for working such conferences would be the casual rate for the employees' grade/level. It was never agreed that the remuneration would be in lieu of receiving stand down pay. It was understood and accepted that the casual remuneration was separate to the stand down pay. 22Both witnesses asserted that nowhere in their Job Descriptions was it ever a component of their "normal duties" that they were required to work at conferences/seminars for private clients using school facilities. 23Ms Makeham indicated in her statement that at Yanco there are approximately 360 students boarding at the school. There are no day students. The School does not observe a stand down of staff during recognised school vacation periods during the year. 24Ms Makeham explained that during these vacation periods staff continue working in their usual areas of employment. A detailed clean up is conducted of work areas. 25Ms Makeham further explained that the respondent pays for work during the recess periods and it is then recouped from the School. Household Staff receive the same hourly rate as when they work during the school term. The Staff are not stood down during the recess/vacation periods throughout the year, as there is work available to be done. 26Ms Makeham said the School has always catered for outside functions (with and without students and staff), like retirement dinners, rotary conferences and weddings. If catering staff are not on leave they are required to work at these functions. 27Mr O'Brien stated that at Farrer during the school terms there is approximately 355 students boarding at the school. During the school holiday periods, the school does not stand down staff, but engages in activities for the maintenance and upkeep of facilities. 28Mr O'Brien indicated that during the year the school is the base for different types of camps, such as sporting camps. The largest type of private accommodation each year that the school is used for is the annual Tamworth Country Music Festival in January. School employees are used to provide meals and accommodation at all camps. 29Mr O'Brien indicated that working such camps was voluntary, and if employees have leave it can be taken, but there is an expectation that employees will work the larger camps. He said the rate of pay received for the working of such camps is the same rate of pay paid to employees for work during the school term. Mr O'Brien stated that the respondent pays the wages to employees who work such camps and other private bookings. 30Mr Lawrence's statement was in similar terms to that of Mr O'Brien. 31For the respondent, two witness statements were relied upon: Ms Kerrie Wratten, Principal of Hurlstone Agricultural High School; and Mr Mark Andrew Philip, the respondent's Director, Industrial Relations. 32Ms Wratten confirmed that during school vacation the School uses its boarding facilities for conferences or seminars for commercial purposes. Household Staff have performed the running of the boarding facilities on a voluntary basis for the purpose of private conferences during school vacations as only a small number of staff are required. 33Ms Wratten also confirmed that, to date, when the School hosts private conferences during school vacations, staff continue to be remunerated on the basis of stand down pay (at half pay), plus casual pay for time worked. Ms Wratten stated: The school cannot sustain this arrangement and wishes to depart from this practice whereby the conference work undertaken by the staff is regarded as a necessary part of the school's operation and therefore during those times it is not necessary to stand them down. ... The revenue raised from hosting the conferences is retained by the school to cover operation costs of the conference and the upkeep of school facilities. 34Mr Philip outlined the history of award/agreement coverage of Household Staff. Mr Philip stated that the stand down provisions in the instruments have all included the two limb requirement that: the school must be in recess (i.e during the school vacation), and that it must be necessary to stand down staff. 35Mr Philip explained that up until 2000, Household Staff were deemed ministerial employees appointed under the Education Reform Act 1990 or the Constitution Act 1901. However in December 2000, the making of the Crown Employees (Household Staff - Department of Education and Training) Wages and Conditions Award, which applied to all Household Staff, resulted in: Household staff being employed pursuant to the Public Sector Management Act, 1988 making household staff members of the Public Service as opposed to Ministerial Employees. Wage increases New classification structure New role statements Inclusion of the award on the schedule of the Crown Employees Wages Staff (Rates of Pay) Award to receive public sector wide wage adjustments The introduction of a definition of 'normal work' for the purpose of the Dispute Resolution Clause. 36Mr Philip stated that Household Staff conditions of employment are in line with public service standards. He also stated that: Notwithstanding the provisions of sub clause 17.2 - Stand Down, a full time household staff member accrues full leave entitlements in the course of the standard school year. This means for example that a full time Household Staff member accrues 20 days recreation leave for 40 weeks service as opposed to 52 weeks service. 37Mr Philip confirmed that when Household Staff perform work of a commercial nature at Hurlstone, they are remunerated at half of their ordinary rate of pay as if stood down, plus casual rates for the work so performed. He also confirmed that Farrer and Yanco do not stand down permanent staff during school vacations. When conferences are held at these two Schools, staff perform the same duties they perform when students are present. This involves cleaning and preparing meals. When no conferences are held, staff perform a more thorough cleaning of the facilities which is not otherwise possible when students are present. 38Mr Philip referred to correspondence in 1999 when the applicant's predecessor asked the reasons why Household Staff at Hurlstone received two sets of Group Certificates. The reply was that: The work performed by household staff during school vacations which is related to conferences, etc held at the school is treated as separate employment to the term time employment. Staff volunteer for this additional work and are paid the casual rates under the Award as well as continuing to receive stand down pay during school vacations. If the school vacation work was treated as part of their normal employment then they would be paid at the standard weekly rates of pay and would not receive stand down. Therefore current practice is to the advantage of the staff. 39Each of the persons who made witness statements were required for cross-examination.

Power 40The matter the Commission has before it is an industrial dispute in relation to the entitlement of Household Staff whilst performing work associated with conferences and related activities for non-residents of the School while the School was in recess. 41In order to resolve the dispute the applicant has sought an interpretation of the Award pursuant to s 175 of the Act. Section 175 provides: 175 Powers of interpretation The Commission may, for the purpose of exercising its functions in connection with a matter before it, determine any question concerning the interpretation, application or operation of any relevant law or instrument (including the industrial relations legislation and any industrial instrument). The Award is an industrial instrument: s 8 of the Act. 42The approach to be taken to the interpretation of awards is well settled in this jurisdiction. In Director of Public Employment (by her agent the Commissioner of NSW Fire Brigades) and New South Wales Fire Brigades Employees' Union [2008] NSWIRComm 158; (2008) 180 IR 170 at [37] to [46] the Full Bench identified four principles to be applied in connection with the interpretation of an award, which may be interpolated as follows: (1) award construction must involve a purposive approach. That is to say, a construction that would promote the purpose or object underlying the award (whether or not that purpose or object is expressly stated in the award) shall be preferred to a construction that would not promote that purpose or object. However, in interpreting an award a tribunal must determine what was meant by the words used, not what the framers of the award intended to say. What is involved is the search for an objective intention of the framers of the award, not their subjective intention; (2) it is the context to be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and context is used in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means one may discern the award was intended to remedy; (3) extrinsic materials may be considered for certain specified purposes in ascertaining the meaning of legislation: see s 34 of the Interpretation Act 1987. However, the content of any extrinsic material cannot be used to simply rewrite the terms of the statutory provision; (4) whilst awards are instruments to be construed according to the terms of the Interpretation Act, consideration should be given to the differences between statutes and awards. "[I]t must be remembered that awards are made for the various industries in the light of the customs and working conditions of each industry, and they frequently result, as this award in fact did, from an agreement between parties, couched in terms intelligible to themselves but often framed without that careful attention to form and draughtsmanship which one expects to find in an Act of Parliament": George A Bond & Co Ltd (in liquidation) v McKenzie [1929] 28 AR (NSW) 498 at 503. 43At [47] the Full Bench stated: [47] ... In interpreting the provisions of an award the intention of the drafters must be ascertained by reference to the actual words used (and those words should be given their plain, ordinary meaning), thereby disclosing the underlying purpose or object of the award and its context, using that term in its broadest sense, including extrinsic material. Thus, attention must at all times be given to the meaning and effect of the award as it appears from the plain and ordinary meaning of the words used: see Zoological Parks at [43]. It is not permitted to attach to a provision of an award a meaning which the words of the award cannot reasonably bear: Cooper Brookes (Wollongong) Pty Ltd v The Commissioner of Taxation of the Commonwealth of Australia [1981] HCA 26; (1981) 147 CLR 297 at 321 (per Mason and Wilson JJ).

Status of employees, employer 44Having regard to the foregoing principles, a convenient starting point is to consider the status of the Household Staff who are the subject of the application and to identify the employer. The applicant conceded, and properly so, the employees were at all times employed by the Department of Education and Communities or predecessors of that Department. That is to say, the employees were employees of the Government of New South Wales (see ss 4B, 4C and Schedule 1 of the PSEM Act) and at no time were the employees employed by the residential school. 45The PSEM Act in s 7(1) provides for three categories of employment. They are: (a) officers-being persons employed in chief or senior executive positions or other staff positions in the Department, (b) temporary employees-being persons employed to carry out work in the Department on a temporary basis, (c) casual employees-being persons employed in the Department on a casual basis. 46The usual basis for the employment of staff in a Department is to be the employment of officers: s 7(3). 47Clause 3.4 of the Award defines "Employee" as: [A] person employed in any capacity under the provisions of the Act as Household Staff. 48Clause 3.3 defines a "Casual Employee" as: [A]ny employee engaged as such who is not an officer or temporary employee. 49The practice at the School for many years has been that when Household Staff worked during the school recess periods in connection with conferences and other activities for non-residents of the School, they received half ordinary pay for the period of the recess in accordance with cl 17.2.1 of the Award, plus casual rates of pay for the time they worked during the recess. 50Whilst the employees were paid a casual rate there was no evidence they were "engaged" as casuals for the purpose of performing work during the School recess. Indeed, they could not be, given they were employed on a permanent full-time basis in the Government Service under the PSEM Act and the only basis upon which that could occur was as officers. There was no evidence that their contracts of employment as permanent full-time officers were terminated and that they were re-employed as casuals for the recess period, then that casual employment was terminated at the expiration of the recess period and a new full-time contract offered and accepted. No inference to that effect is available. 51Mr Philip's evidence referred to 1999 correspondence indicating that the work performed during school recess and paid at casual rates was treated as separate employment to the term employment. If by that it was meant as dual employment as a full-time officer and a casual employee, it cannot be right. A casual employee cannot at the same time be an officer: cl 3.3 of the Award and s 7(1), Pt 2.3 of Ch 2 and s 38 of the PSEM Act. 52There was also evidence of a practice by the School (as distinct from the Department) of providing Household Staff with separate group certificates at the end of each financial year in respect of work performed during recess periods. However, in light of the concession - properly made - that the Household Staff were at all times employees of the Department, the fact that separate group certificates were provided by the School cannot be taken as an indication that the Staff were employees of the School when performing work during recess periods.

Normal work 53The applicant relied on the definition in the Award quoted earlier in this decision of "normal work" to contend that such work did not include the performance of work by employees, for or associated with, conferences during recess periods for non-residents of the School. Therefore, if I understood the submission correctly, if the work in recess periods was not normal work, but was work additional to what employees were normally required to perform, it should attract an additional rate, namely the casual rate, which had been recognised as the practice for many years. 54The purpose of the reference to "normal work" in the Definitions clause of the Award was to make it clear what normal work meant for the purpose of cl 26 - Dispute and Grievance Resolution Procedures. "Normal work" does not appear in any other clause of the Award. Normal work, that is, the "duties and responsibilities relevant to the statement of duties or position description of an employee or employees", is to continue whilst the disputes procedure under the Award is being followed. 55Nevertheless, assuming the definition of "normal work" has more work to do beyond cl 26, the work the Household Staff perform to cater for private conferences and the like at the School during recess periods for non- residents, is the same work they perform during term for residents. The Staff use the same set of skills, knowledge and experience in both situations. In other words, the Staff are performing their normal work catering for private conferences during recess periods. The only difference is the identity of the persons they are catering for, but that different identity has no impact on the nature of the work being carried out, be it the work of a Kitchenhand, Cleaner, Cook, Dining Room Supervisor or Catering Supervisor.

Stand down 56Clause 17.2.1 of the Award was earlier quoted and relevantly provides that when schools are in recess and it is "necessary to stand down staff", employees employed in such schools shall be paid half ordinary pay for the period during which they have been stood down. It is not "necessary" to stand down staff if normal work is available and normal work includes catering and accommodation for persons and organisations that hire (whether for a fee or otherwise) the School's facilities during school recess periods. 57Clause 17.2.1 could have simply stated that when schools are in recess staff will be stood down on half pay. Instead, by use of the word "necessary", the provision contemplates staff working during the recess period. If the work being offered is normal work, and there is no necessity to stand employees down, the employer is entitled to require employees to undertake the work at the employees' normal rate of pay.

Use of School facilities by community 58The applicant contended that nowhere in the Award did it support or recognise the proposition that Household Staff were a pool of employees for "private ventures engaged in by the School with paying clients who are NON school students". Such work, it was submitted, was not "direct or incidental to their primary function of providing services to the school's students" and that neither the School nor the Department had power to direct Household Staff to perform work for "private paying clients of the school". 59Tendered in evidence by the Department was a "Community Use of School Facilities Policy" ("the Policy"). The Policy relevantly states: In this policy schools are encouraged to make their facilities available for use by their community outside of school hours for appropriate purposes, provided this does not interfere with the school's provision of quality learning programs for its students. ... 1.8 With the exception of certain groups and organisations identified in the Implementation Procedures accompanying this policy whose use of school facilities will not attract a fee, schools will, at least, recover costs associated with community use of school facilities such that the funds provided to schools for the provision of education will not subsidise community use activities. 1.9 While the majority of applications for community use of school facilities can be approved by the school Principal, certain classes of community use activities, which involve a major commitment of department and other resources over an extended period of time, will require consultation and approval at regional and state office level. These are described in the Implementation Procedures accompanying this policy. ... 2.1 This Policy applies to all schools. 2.2 The policy relates to the broad range of community use of school facilities including both commercial and not-for-profit uses. ... 3.1 Schools are valuable facilities which belong to the community. While their prime function is to serve as places of learning for young people, there are many times when the buildings and grounds are not in use. 3.2 The Department of Education and Training encourages members of the community and education groups to use school facilities when they are available. This is a way of sharing a significant resource, and strengthening the partnership between schools and local communities. ... 60It is apparent from the Policy that use of school facilities by the community, including both commercial and not-for-profit use, is to be encouraged. The practice of the School in making available its facilities to the community during school recess periods is completely consistent with the Policy. Given my view about "normal work" there is nothing in the Award that is inconsistent with the Policy.

Custom and practice 61I raised with the respondent the fact that it has been a longstanding practice at the School for employees who work during the recess periods to be paid casual rates of pay for the time they work in addition to the half pay prescribed by cl 17.2.1. I suggested that a question that arises is whether this practice is an implied term of the employees' contracts of employment. Counsel for the respondent submitted that the practice was the result of a mistaken understanding of what the Award required. 62It is trite law that a common law contract of employment may not be inconsistent with an industrial instrument made pursuant to statute. The Award in this case was made pursuant to the Industrial Relations Act. The Award prescribes minimum entitlements for employees: s 406(1). Whilst the provisions of a contract of employment do not have effect to the extent that they provide an employee with a benefit that is less favourable to the employee than the benefit to which the employee is entitled under an industrial instrument (s 406(2)), a contract of employment may provide more favourable benefits. 63In the present case, the payment of half ordinary pay plus casual rates for time worked provides a more favourable benefit to Household Staff than ordinary pay for time worked. Therefore, in my opinion, no inconsistency exists. 64Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14; (1986) 160 CLR 226 at 236 is authority for the proposition that a term will be implied on the basis of custom where there is evidence that the custom "is so well known and acquiesced in that everyone making a contract in that situation can be reasonably be presumed to have imported that term into the contract". 65Con-Stan was referred to in Byrne & Frew v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410. At 422 Brennan CJ, Dawson and Toohey JJ stated: The existence of a custom or usage that will justify the implication of a term into a contract is a question of fact and there must be evidence of its acceptance such that it is "reasonable to assume that the parties contracted on the basis of the custom, and that it is therefore reasonable to import such a term into the contract". 66In Byrne, McHugh and Gummow JJ stated at 440: The question is always whether the general notoriety of the custom makes it reasonable to assume that the parties contracted with reference to the custom so that it is therefore reasonable to import such a term into the contract. Where there is such an established usage, "the courts are spelling out what both parties know and would, if asked, unhesitatingly agree to be part of the bargain" (Liverpool City Council v Irwin [1976] UKHL 1; (1977) AC 239 at 253). Because the importation of the term rests on the presumed intention of the parties, it must yield to the actual intention embodied in express terms of the contract, whether the contract be written or oral. Further, whilst it is not essential that the custom be universally accepted, it must be so well known and acquiesced in that persons making a contract in that situation reasonably can be presumed to have imported it into their contract ... 67The evidence was that since at least 1996 it had been the practice of the School to pay Household Staff half pay in accordance with cl 17.2.1 of the Award and, in addition, casual rates of pay for time worked during the school recess periods. This practice was confirmed in a letter to the applicant in February 1999 from the "Personnel Directorate" of the Department of Education and Training. The work performed during the vacation periods was treated by the Department as "separate employment", which could not have been the case for the reasons earlier expressed. 68Ms Russell stated in her evidence: Since my commencement in 1996, a number of Service manager (sic) have all observed the procedures I have outlined above for the staffing of conferences and the casual rates of pay (excluding stand down pay). These service managers included Robert Hughes, Dorothy Russell / Carol Clark, Joe Murray, John Reddington, Leslie Bebe, Gilbert Flores, Glen Vandenburg, Danielle Krix, Paul Date (current) The principals during the period (Michael Kidd, John Norris) also endorsed the practices as outline by me. In 1999 I recall a dispute arising with the Department of Education, which included the matter of remuneration for working at such conferences. It was resolved between the parties that the observed rate of remuneration for working such conferences would be the casual rate for the employees grade / level. It was never agreed that the remuneration would be in lieu of receiving stand down pay. It was understood and accepted that the casual remuneration was separate to the stand down pay. 69In her evidence Ms Drew stated: In about 1996, I recall the school conducting private conferences for private clients. I recall that the Catering supervisor - Leslie Evans would put up on the notice board a document with the details of the conference. Any employees interested I (sic) working the conference would place their names on the notice. Those employees that were chosen would work the duration of the conference. Each engagement I worked in this manner I was required to complete a tax declaration for secondary employment as a casual employee. In each tax year I would receive 2 separate Group certificates. One was from the Department of Education for my earnings as a permanent employee of the School. The other was from the School for my earnings as a casual working the conferences. ... In 2005 when I was promoted to Hostel Supervisor, I was still involved in working for conferences. Any employees that worked at these conferences were still required to volunteer for such work, no employee was ever rostered to work. In my elevated role I became more involved in the planning, costing as well as still working the conferences. I was involved in preparing the rostering, working out the costs for the staffing for such conferences. I then worked as team leader during the conferences supervising and directing staff. In 1999 I recall a dispute arising with the Department of Education, which included the matter of remuneration for working at such conferences. It was resolved between the parties that the observed rate of remuneration for working such conferences would be the casual rate for the employees grade / level. It was never agreed that the remuneration would be in lieu of receiving stand down pay. It was understood and accepted that the casual remuneration was separate to the stand down pay. Since my commencement in 1996, a number of Service manager (sic) have all observed the procedures I have outlined above for the staffing of conferences and the casual rates of pay (excluding stand down pay). These service managers included Robert Hughes, Dorothy Russell / Carol Clark, Joe Murray, John Reddington, Leslie Bebe, Gilbert Flores, Glen Vandenburg, Danielle Krix, Paul Date (current). The principals during the period (Michael Kidd, John Norris) also endorsed the practices as outline by me. 70The Department also knew about the practice and confirmed it as being the correct practice by its letter of February 1999. 71However, I think the difficulty in accepting that the practice of paying casual rates in addition to half pay should be regarded as an implied term in the employment contracts because of the doctrine of custom and practice, is that the doctrine rests on the presumed intention of the parties. In Produce Brokers Company Ltd v Olympia Oil & Cake Co Ltd [1916] 1 AC 314 Lord Atkinson stated at 324: The language expressing a trade custom is taken to be imported into the language used by the contracting parties, whether written or verbal, because it is presumed that they had the usage in their minds when they made their contract ... See also Con-Stan at 237. 72There is no evidence that in adopting the practice the School and Household Staff had in their minds a custom or practice that was "so well known and acquiesced in that persons making a contract in that situation reasonably can be presumed to have imported it into their contract...." 73Accordingly, the doctrine of custom and practice does not apply in this case.

Implied term 74An alternative consideration is that the School introduced the practice as an overaward arrangement in order to provide an incentive for Household Staff to work during vacation periods and that the practice may, therefore, as a matter of fact, be an implied term of the employment contracts. However, there was no evidence this was the case. 75In any event, it was held in Hawkins v Clayton [1988] HCA15; (1988) 164 CLR 539 per Deane J at 573 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. (cited with approval in Byrne at 422 by Brennan CJ, Dawson and Toohey JJ. See also Byrne at 442 per McHugh and Gummow JJ.) 76One could not conclude that the practice of paying half pay plus casual rates for work performed during vacation periods was necessary for the reasonable or effective operation of the employment contracts of the Household Staff. To find otherwise would be tantamount to finding the terms of the Award, which are observed at the other residential schools, were unreasonable or ineffective and such a finding is not open. 77It would appear from the Department's letter of February 1999 that the practice of paying half pay plus casual rates for work performed during vacation periods may have been introduced on the basis of a belief that work during those periods was not part of the Staff's normal work and that it was necessary to establish a separate contract of employment. Insofar as the current Award is concerned that was a wrong interpretation of the Award. Whether it was correct in 1999 or earlier when the practice was first adopted I do not know because I was not taken to the awards that applied at those times or to the relevant legislation under which the employees were employed.

Conclusions 78The applicant has submitted that the correct interpretation of cl 17.2.1 of the Award is that: (a)during recess periods if an employee cannot be provided with work that is either directly or incidentally related to providing service to the school's students, then it will be deemed to be necessary to stand down the employee and the employee shall be stood down and paid half pay for the recess period. (b)if the school chooses to enter into an arrangement with a private paying client to utilise the school's facilities during such recess periods, such an arrangement is outside of the employment relationship between the employee and the school. 79For the reasons given the Commission does not accept the applicant's interpretation as being correct. 80The inference to be drawn from cl 17.2.1, when construed in its proper context, is that unless it is necessary to stand down Household Staff during a period of recess such Staff may be required to perform their normal work. Normal work includes work performed during the recess period that falls within the definitions in cl 5 of the Award regardless of whether the work is performed in connection with the use of the School's facilities by community groups or private organisations. 81The application to vary the Award to remove what the applicant contended was an ambiguity so that the Award could be construed in the terms proposed by the applicant is refused. Such an ambiguity does not exist for the reasons given in this decision. The Commission so orders.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 August 2012

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (12 paragraphs)

Parties

Cases Cited (9)

Cited By (1)