IAN JOHNSON CEO OF THE DEPARTMENT OF CORRECTIVE SERVICES

Jurisdiction : WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Citation : IRELAND v IAN JOHNSON CEO OF THE DEPARTMENT OF CORRECTIVE SERVICES [2009] WAIRC 00123

Industrial law - Appeal against decision of the Full Bench of the Western Australian Industrial Relations Commission - Claim for benefits denied under a contract of employment - Whether prisoner an employee

Industrial Relations Act 1979 (WA)

Prisons Act 1981 (WA)

Prisons Regulations 1982 (WA)

Australian Woollen Mills Pty Ltd v The Commonwealth [1954] HCA 20; (1954) 92 CLR 424

BHP Billiton Iron Ore Pty Ltd v Construction, Forestry, Mining & Energy Union of Workers [2006] WASCA 49

Cody v J H Nelson Pty Ltd [1947] HCA 17; (1947) 74 CLR 629

Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95

Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21

Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16

1 This appeal turns on whether the appellant was employed by the respondent under a contract of employment when he carried out work at Hakea Prison, first as a remand prisoner and later as a sentenced prisoner.

2 The appellant was a remand prisoner at Hakea Prison between 16 November 2005 and late September or early October 2007. The appellant was then sentenced to a term of imprisonment and transferred to Wooroloo Prison. He remained in that prison as a sentenced prisoner until his release on 15 July 2008. During the time he was in prison the appellant was engaged in work. He first did cleaning work at Hakea Prison. He then did work in the prison kitchen. At Wooroloo Prison he worked in the kitchen.

3 After his release from prison the appellant applied to the Western Australian Industrial Relations Commission (Commission) for an order in respect of his claim that he had not been allowed a benefit to which he was entitled under his contract of employment. The appellant claimed that he had been entitled to benefits under a contract of employment with the respondent who is the Commissioner, Corrective Services of the Department of Corrective Services. The appellant's particulars of claim did not specify the contractual benefits which he claimed to have been denied. The respondent filed an answer in which he submitted that the applicant was under the custody of the Commissioner, Department of Corrective Services and at no time was there a contract of employment between the applicant and the respondent. The respondent submitted that the Commission lacks the jurisdiction to hear and determine the application.

4 The Commission then issued a notice requiring the applicant to show cause why his application should not be dismissed pursuant to s 27(1) of the Industrial Relations Act 1979 (the Act) on the ground that the Commission does not have jurisdiction to hear the matter. The Commissioner stated that in order to ground jurisdiction for his claims the applicant must establish that at the material times he was an employee employed under a contract of employment with the respondent.

5 The Commission dismissed the applicant's application on the grounds that there was no contract of employment between the appellant and the respondent and the appellant was not an employee of the respondent.

6 The appellant appealed to the Full Bench of the Commission. The Full Bench dismissed the appeal. The Acting President, with whom the other members of the Full Bench agreed, found that there was no contract of employment between the appellant and the respondent because there was no intention to create legal relations and because there was no consideration. The Acting President found that the relationship between the appellant and respondent was a prison authority-prisoner relationship and the applicant was not an employee.

7 The appellant now appeals against the decision of the Full Bench. The appellant says that there was a contract of employment between him and the respondent and that he was an employee of the respondent. Before considering the grounds of appeal it is convenient to refer to the decision of the Full Bench and the appellant's argument in support of his appeal to this court. The finding of the Acting President was based upon the status of the appellant as a prisoner and the statutory provisions governing that relationship. I will outline some of the important statutory provisions governing the relationship between the appellant and the respondent.

8 Section 16(1) of the Prisons Act 1981 (WA) (Prisons Act) provides that every prisoner is deemed to be in the custody of the chief executive officer. Section 16(4) provides that a 'prisoner on remand shall be treated in the same manner as other prisoners except in so far as regulations provide otherwise'.

9 Part IX of the Prisons Act, which includes s 95, is presently headed 'Prisoner wellbeing and rehabilitation'. Part IX of the Prisons Act complements s 7(1) which provides that, subject to the Prisons Act and to the control of the Minister, the chief executive officer is responsible for the management, control and security of all prisons and the welfare and safe custody of all prisoners. The present s 95 commenced on 4 April 2007. Accordingly both the present and former s 95 of the Prisons Act applied to the appellant during the relevant time he was a prisoner. There is no material difference between the present s 95 and the former s 95. For convenience, I will refer only to the present s 95.

10 Section 95(1) provides that the chief executive officer may arrange for the provision of services and programmes for the wellbeing and rehabilitation of prisoners. Section 95(2) provides that in particular, services and programmes may be designed and instituted with the intention of:

...

(b) enabling prisoners to acquire knowledge and skills that will assist them to adopt law abiding lifestyles on release; and

...

(f) providing opportunities for prisoners to utilise their time in prison in a constructive and beneficial manner by means of educational and occupational training programmes and other means of self improvement; and

(g) providing opportunities for work, leisure activities and recreation.

A prisoner cannot be compelled to use, or participate in, the services or programmes provided under s 95 except that s 95(4) provides that as long as a prisoner is medically fit the prisoner may be required to work.

11 It is a minor prison offence for a prisoner to disobey a lawful order of a prison officer or officer having control or authority over him. It is a specific offence for a prisoner to be idle, negligent or careless in his work. A minor prison offence is subject to the penalties prescribed in s 77 which include cancellation of gratuities for a period not exceeding 14 days.

12 Section 110(1) of the Prisons Act provides that the Governor may make regulations:

(f) regulating the custody classification, separation, diet, instruction, health, employment, discipline, medical and other treatment of prisoners; and

...

(h) making provision for the classification of labour performed by prisoners; and

(i) prescribing the gratuities that may be credited to prisoners and the conditions upon which gratuities may be so credited; and

...

(u) regulating the treatment of prisoners on remand.

...

13 Regulation 43 of the Prisons Regulations 1982 (WA) (Prisons Regulations) provides:

(1) Subject to subregulation (2), a prisoner who is able to work may be employed as the superintendent directs.

(2) A prisoner on remand shall not be required to work.

(3) A prisoner on remand may apply in writing to the superintendent to work and, if such application is granted, the prisoner may, be employed in the prison in which he is confined, and be credited with gratuities accordingly.

14 Whilst he was a remand prisoner the appellant applied to work as provided for in reg 43(3). The appellant completed an application in form C101. The form had the subheading 'Application for Remand Prisoners to be Employed at Prison'. It included:

I HEREBY MAKE application to be put to such employment as may be approved by the Superintendent.

I understand that such employment will not alter any status as a Remand Prisoner, and the application is made so that I may be paid gratuities, and occupy my time in prison.

...

I understand that I may be required to be employed in the capacity of general worker ... or as directed by any Officer of the prison.

Should this application be approved I shall remain in employment during the period of my imprisonment at the prison. A further election not to work must be made to the Superintendent in writing on a form C101.

15 Regulation 40 requires a prisoner to obey an order given to him by a prison officer and to obey the rules and standing orders of the prison. Regulation 44 provides that labour performed by prisoners is to be classified by the chief executive officer according to the specified levels. The levels distinguish between work requiring different levels of skill, aptitude and diligence. The level at which work is classified is at the discretion of the chief executive officer.

16 Regulation 45 provides the rates of gratuities in relation to the levels of labour performed by prisoners. Regulation 45A provides that a prisoner shall be allocated such level of labour as is determined by the chief executive officer. Regulation 45B provides that in certain circumstances a prisoner shall not be allocated any work and shall not be credited with any gratuity. The circumstances include where the superintendent, in the interests of the preservation of prison security or prison property, has directed that a prisoner is not to work, where a prisoner consistently refuses to work or where a prisoner is undergoing a penalty of confinement in his sleeping quarters or separate confinement in a punishment cell. Regulation 45B(2) provides that where a prisoner's gratuities are cancelled for a period not exceeding 14 days under pt VII of the Prisons Act, which is the part dealing with prisoner offences, that prisoner shall for that period continue to perform work. Regulation 45D provides for the proportionate payment of gratuities where a prisoner is not allocated a particular level of work for a whole week and where the prisoner has not performed work on a public holiday. Regulation 45E provides that the chief executive officer may at his or her absolute discretion determine that the gratuity to be credited to a prisoner shall be higher than the rate prescribed under the Prisons Regulations in relation to the level of work performed by the prisoner or if the chief executive officer is of the opinion that a prisoner is not carrying out the duties of a particular level of work in a satisfactory manner, shall be at a lower rate than the level prescribed in relation to the level of work normally performed by the prisoner. Regulation 47 regulates what a prisoner may spend gratuities on and how. Regulation 49 authorises the chief executive officer to order a deduction from the gratuities of a prisoner to defray the costs of property damaged or destroyed by the prisoner.

17 The Acting President considered the relationship between the appellant and the respondent including the statutory regime governing that relationship. The Acting President found that the word 'employment' in s 110(1)(f) of the Prisons Act means 'the state of being employed' and 'employed' in turn refers to 'to use the services of ... keep busy or at work'. That is, the Acting President held that 'employed' in this context refers to engagement to do work in the absence of a contract. The Acting President held that the word 'employed' in subregulations 43(1) and 43(3) has the same meaning. The Acting President accepted that when the appellant was a remand prisoner he was not required to work and that it was a matter of choice that he became employed on work in the prison. Having regard to the terms of the form C101 completed by the appellant and the statutory regime the Acting President found that there was no intention to create legal relations both when the appellant was on remand and when he was a sentenced prisoner. The Acting President found that the arrangement between the appellant and the respondent did not involve mutual consideration which is a necessary element of an enforceable contract.

18 The Acting President commenced his analysis by saying that the appeal to the Full Bench turned 'upon whether the Commissioner erred in deciding the appellant was not the employee of the respondent'. The Acting President concluded that there was no employment contract between the appellant and the respondent. The term 'employee' is defined in s 7(1) of the Act. The definition is not confined to a person engaged under a contract of employment. However, an employee may only bring a claim under s 29(1)(b)(ii) of the Act if he has not been allowed by his employer a benefit where he is entitled to the benefit under his contract of employment. That is, an employee does not have standing to bring a claim for denied contractual benefits unless he was employed by his employer under a contract of employment. Accordingly, in this case it is necessary for the appellant to establish that he was employed by the respondent under a contract of employment.

19 The appellant submits that when he was on remand he was not required to work. He applied to work and his application was granted. The appellant accepts that when he was a sentenced prisoner he was required to work but nevertheless submits that he was an employee during the time he was a sentenced prisoner as well as when he was on remand.

20 In accordance with the regulations the appellant was credited with gratuities which, in accordance with the regulations, depended on the labour performed by the prisoner and classified by the respondent according to specified skill levels. The appellant underwent training to carry out the work he performed. He was supervised in carrying out his work. The appellant submitted that in carrying out his work in prison he was required to observe health and safety requirements.

21 The appellant says that his relationship with the respondent has all the hallmarks of an ordinary employer-employee relationship. The appellant says that he was trained, he was supervised, he performed duties which involved skill and initiative. He was paid. He was paid for his work at different levels depending upon the amount of skill involved. He was required to comply with a variety of occupational health and safety requirements. The appellant submits, in effect, that having regard to the indicia of a contract of employment referred to by the High Court in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 and Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 the relationship between the appellant and the respondent is properly to be seen as that of employer and employee.

22 Section 90(1) of the Act provides that an appeal lies to this court from a decision of the Full Bench on the grounds set out in [(a)], [(b)] and [(c)] of that subsection but upon no other ground. None of the appellant's grounds of appeal fall within [(a)] or [(c)] of s 90(1) of the Act. Section 90(1)(b) of the Act provides that an appeal lies to the court from any decision of the Full Bench:

on the ground that the decision is erroneous in law in that there has been an error in the construction or interpretation of any Act, regulation, award, industrial agreement or order in the course of making a decision appealed against.

23 The appellant's notice of appeal contains four grounds of appeal. During the hearing of the appeal the appellant was granted leave to amend his grounds of appeal to add a further ground of appeal which I will refer to as ground 5.

The Commission erred in law when it failed to take into account that the appellant's common law rights were not extinguished in law and he was able to enter into legal agreements with the prison authorities whilst a remand prisoner, and a sentenced prisoner.

The Commission erred in law when it failed to take into account of the supporting documents, and the legal contents of said documents, as the documents support the fact that a prisoner cannot be forced to work as a sentenced prisoner, unless the prisoner agrees, having signed the relevant documents as these documents are of a legal nature and can be used in evidence in a court of law.

The Commission erred in law when it did not take an objective assessment of the state of affairs between the parties and of the meaning of the word management in the Prisons Act.

27 An appeal does not lie to this court on any of these grounds. None of them raise a ground specified in s 90(1) of the Act as the only grounds on which an appeal may be brought to this court.

The Commission erred in law when it failed to apply the proper meaning to the word 'employment' and 'employed' in the Prisons Act 1981 (WA) s 110(1)(f) and Prisons Regulations 1982 (WA) reg 43 and the form C101.

29 The respondent says that the decision of the Full Bench did, in part, turn on the interpretation of the terms 'employed' and employment' in the Prisons Act and Regulations and it is arguable that this court has jurisdiction to hear appeal ground 2 pursuant to s 90(1)(b) of the Act. The respondent submits that this ground of appeal turns on whether, if a prisoner is 'employed' under the regulations pursuant to the power to make regulations for 'employment' of prisoners, a prisoner is subject to a 'contract of employment' for the purposes of s 29(1)(b)(ii) of the Act.

30 The Acting President, with whom the other members of the Full Bench agreed, reviewed the relationship between the appellant and the respondent. The Acting President had regard to the Prisons Act and the Prisons Regulations.

31 The Acting President correctly said that in their natural and ordinary meaning the words 'employment' and 'employed' are not confined to a person being engaged under a contract of service. The meaning of 'employment' includes the state of being employed and the meaning of 'employed' includes 'to use the services of or to keep busy or at work'. Words take colour from their surroundings and words of wide signification may be limited by their context. However, such a limitation must be demonstrated. If general words are used, they should be given their plain and ordinary meaning unless the contrary is shown: Cody v J H Nelson Pty Ltd [1947] HCA 17; (1947) 74 CLR 629, 647 Dixon J. There is nothing in the context of s 110 of the Prisons Act to show that the word 'employment' is to be given less than its full meaning.

32 In reg 43(3) the context in which the word 'employed' appears shows that the word means 'engaged in work' and is not confined to work under a contract of service. The regulation says that the prisoner may be employed in the prison if he has applied in writing to work and the application is granted. Similarly, the context in which the word 'employed' appears in the form C101 does not show that it has the narrow meaning of employed under a contract of service.

33 The Acting President made no error in construing or interpreting the relevant provisions of the Prisons Act and the Prisons Regulations. Ground 2 is not made out.

34 Ground 5 of the appeal is to the effect that the Full Bench erred in law in that it erred in the construction or interpretation of the Act in that it failed to find that the appellant was an employee within the meaning of s 29(1)(b)(ii) of the Act and that there was a contract of employment between the appellant and the respondent within the meaning of s 29(1)(b)(ii) of the Act.

35 The respondent does not dispute that ground 5 raises a ground of appeal that is within the jurisdiction of the court. The primary facts are not in dispute. The appellant's case is that on those facts the Full Bench should have found that he was an employee within the meaning of the Act and that there was a contract of employment between the appellant and the respondent within the meaning of s 29(1)(b)(ii) of the Act. The appellant's case is that in failing to find that the appellant was an employee employed by the respondent under a contract of employment the Full Bench erred in law in that it misconstrued the words 'employee' and 'contract of employment' in s 29(1)(b) of the Act.

36 The appellant's case is that the appeal falls within s 90(1)(b) of the Act because the Full Bench wrongly construed the provisions of the Act relating to 'employee' and 'contract of employment' by wrongly determining that the statutory criteria were not satisfied. The appellant did not put his submissions in those words but that is the effect of his case. There is some doubt whether an appeal on that basis necessarily raises an error of law in the construction or interpretation of the Act. Some grounds of appeal asserting that the Full Bench erred in law in finding that a person was not an employee of another person may be on the ground that there has been an error in the construction or interpretation of the word 'employee' in the Act but not all appeals on the ground that the Full Bench erred in finding that a person was not an employee are appeals on the ground that there has been an error in the construction or interpretation of 'employee' in the Act: see BHP Billiton Iron Ore Pty Ltd v Construction, Forestry, Mining & Energy Union of Workers [2006] WASCA 49.

37 It is not appropriate to decide that matter in this appeal for two reasons. First, the matter was not addressed by the parties in argument. Second, I have come to the view that the Full Bench was correct in finding that there was no contract of employment between the appellant and the respondent.

38 In Hollis v Vabu and Stevens v Brodribb the High Court set out the common law principles for distinguishing between an employee and a contractor. These principles rely on a test which involves the consideration of a number of established factors or indicia, some of which are characteristic of a contract of service and others of which suggest a principal-contractor relationship. The task of the court, which must assess the employment status of a worker, is to consider the parties' relationship in light of each of these indicia and to determine, on balance, into which legal category the relationship falls. The test applied in Hollis v Vabu and Stevens v Brodribb is a test generally applied to determine whether a contractual relationship is a relationship of employer and employee or a relationship of principal and contractor or, to put the same matter another way, whether the contract is a contract of service (or employment) or a contract for services. That is not the issue in this case. The question is whether there is any relevant contract between the appellant and the respondent.

39 The Acting President found that there was no contract of employment, and implicitly that there was no contract at all, between the appellant and the respondent for three interrelated reasons. The first is that the relationship between the appellant and respondent was that of prison authority and prisoner. The second is that the respondent did not intend to enter into contractual relations with the appellant. The third is that the arrangement, to use a neutral word, between the appellant and the respondent did not involve mutual consideration.

40 It is convenient to consider the position of the appellant when he was working as a sentenced prisoner before considering the position when he was a remand prisoner.

41 Work performed by the appellant as a sentenced prisoner has a number of unique features that distinguish it from work performed in the free labour market. First, the appellant did not perform prison work voluntarily. The effect of s 95 of the Prisons Act and reg 43 of the Prisons Regulations is that the appellant was obliged to work. Second, in carrying out prison work the appellant was required to carry out work and in the manner in which he was directed to do so by a prison officer. To disobey an order, including an order in relation to performing work, was a minor prison offence. Third, the performance of work by the appellant as a sentenced prisoner was regulated by the Prisons Act, the Prisons Regulations, rules and standing orders. A prisoner's life, including the performance of work, is closely and completely controlled by the prison system in which they are incarcerated: see C Fenwick 'Regulating Prisoners' Labour in Australia: A Preliminary View' (2003) 16 AJLL 284.

42 It is of the essence of a contract that there is a voluntary assumption of a legally enforceable duty: Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, [24] (Gaudron, McHugh, Hayne and Callinan JJ); Australian Woollen Mills Pty Ltd v The Commonwealth [1954] HCA 20; (1954) 92 CLR 424, 457 (Dixon CJ, Williams, Webb, Fullagar and Kitto JJ).

43 When he was a sentenced prisoner the appellant could not voluntarily enter into a contract of employment with the respondent to work because the legislation which governed his imprisonment required him to work at the discretion of, and under the supervision and control of, the respondent.

44 The appellant could not, and did not, bargain with the respondent about his pay, in the form of gratuities, and working conditions, nor did any organisation on his behalf. Those matters were determined by the State through the operation of the Prisons Act, the Prisons Regulations and rules.

45 Whilst the appellant was a remand prisoner he was not required by the Prisons Act or the Prisons Regulations to work. The appellant voluntarily applied to work. However, that was the only choice that he made. Having applied to work and having had his application granted the relationship between the appellant and the respondent was governed by the Prisons Act, the Prisons Regulations, rules and standing orders and not by any contract freely negotiated and freely entered into by the appellant. Whilst carrying out work the appellant was required to obey orders of prison officers and subject to the discipline of the prison system. The relationship between the appellant and the respondent was not governed by any contract or arrangement freely entered into by the appellant, it was regulated by the Prisons Act, the Prisons Regulations, the rules and standing orders. There was no scope for the appellant to enter into any contract with the respondent concerning what work he would carry out, the hours of his work, the conditions under which he would work or what he would be paid for performing his work.

46 The Acting President was correct to find that the relationship between the appellant and the respondent was that of prison authority and prisoner. That relationship arose from the appellant's status as a prisoner and the Prisons Act, Prisons Regulations, rules and standing orders that govern their relationship.

47 There is no legally enforceable contract unless the parties intended to create contractual relations. In Ermogenous v Greek Orthodox Community Gaudron, McHugh, Hayne and Callinan JJ explained:

Although the word 'intention' is used in this context, it is used in the same sense as it is used in other contractual contexts. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened. It is not a search for the uncommunicated subjective motives or intentions of the parties [25].

The enquiry whether the parties intended to create contractual relations may take account of the subject matter of the arrangement, the status of the parties to it, their relationship to one another and other surrounding circumstances. The search for the 'intention to create contractual relations' requires an objective assessment of the state of affairs between the parties: Ermogenous v Greek Orthodox Community; Gaudron, McHugh, Hayne and Callinan JJ [25].

48 The evidence in this matter does not establish any intention to create contractual relations. There is no basis for a conclusion that the respondent intended to enter into a contractual relationship with the appellant. To the contrary, the appellant was deemed to be in the custody of the respondent. The respondent was responsible for the appellant's welfare and safe custody. In discharging his statutory responsibilities the respondent provided work for the appellant. The status of the appellant and the respondent, their relationship to one another and the statutory framework which regulated that relationship are inconsistent with any intention to create contractual relations whilst the appellant was a sentenced prisoner or when he was on remand.

49 For those reasons, the Full Bench was correct to find that there was no contract of employment between the appellant and the respondent. Ground 5 is not made out.