Costopoulos v Hansen Yuncken Pty Limited

Costopoulos v Hansen Yuncken Pty Limited - [2003] NSWIRComm 335 - NSWIRComm 1993 case summary — Zoe

FILE NUMBER: IRC3868 of 2001 CORAM: Kavanagh J CATCHWORDS : Section 106 claim - Federal Award and Certified Enterprise Partnership Agreement exist covering labourers in construction industry - Employee terminated after 23 years' service with no notice payment - employee on holiday pay when terminated - Employer asserts employee served out Notice while receiving holiday pay - question as to breach of Annual Holidays Act - Statutory entitlements of Federal Award and Agreement allow statutory relief if breached - No inconsistency between State and Federal statutory rights - Federal status of Award and Agreement but variation of some of employee's terms and conditions under his contract of employment - Contract of employment stands alone - Facts reveal employment category and notice part of employee's contract of employment therefore attract relief under s106 of the State Act- Relief under s106 allowed - Orders as to just compensation - Section 109A not applicable - Matter raises issues as to the term of and conduct of the employment contract rather than claim essentially an unfair dismissal claim - Orders made. Industrial Relations Act 1996 LEGISLATION CITED : Workplace Relations Act 1996 Annual Holidays Act 1944 Colvin v Bradley Bros Pty Ltd (1943) 68 CLR 151 Amalgamated Collieries of WA Ltd v True (1938) 59 CLR 417 George Albert Byrne & George Mortimer Frew v Australian Airlines Ltd (1995) 185 CLR 410 BHP Iron Ore Pty Ltd v Australian Workers Union (2000) 102 FCR 97 Burgess & Ors v Mount Thorley Operations Pty Limited (2002) 115 IR 13 Thornthwaite v Australian National Credit Union Ltd (2002) 116 IR 438 Clyde Engineering v Cowburn (1926) 37 CLR 466 Victoria v The Commonwealth (1937) 58 CLR 618 CASES CITED : Telstra Corp Ltd v Worthing (1999) 197 CLR 61 Metal Trades Industry Association of Australia v Amalgamated Metal Workers and Shipwrights' Union (1983) 152 CLR 632 Hudson v Qantas Airways Ltd (1985) 10 IR 331 Barry v Incitec Ltd (1991) 45 IR 143 Stonham v Speaker of Legislative Assembly (2000) 97 IR 325 State of New South Wales v Health and Research Employees Association of New South Wales (unreported, Fisher CJ, Bauer and Hill JJ, 31 March 1993 Westfield v Adams (2002) 114 IR 241 Davis v General Transport Development Pty Ltd [1967] NSW AR 371 Hogan v Employment National (Administration) Pty Ltd [2000] NSWIRC Comm47 Abboud v The State of New South Wales (Department of School Education) (No 2) (2000) 99 IR 299 HEARING DATES: 05/12/2003; 05/13/2003; 05/20/2003; 05/27/2003 DATE OF JUDGMENT: 11/06/2003

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3 The applicant by way of an Amended Summons pleads: 16. The contract was and is unfair and the conduct of the Respondent was and is unfair in that: (a) At all material times, the Applicant was in his dealings with the Respondent in a position of inferior and unequal bargaining power and that position was taken advantage of by the Respondent such that: (i) Although a permanent employee of 24 years standing, the Applicant was required to take annual leave as a matter of course whenever a downturn in work occurred and such that at termination, he had 3 hours annual leave outstanding; and (ii) Although the Applicant had sustained work related injuries, the Applicant was terminated in circumstances he otherwise might have had access to his considerable period of accumulated sick leave to assist with his clearly declining physical capacity for work; (b) Representations made to the Applicant by the Respondent were untrue or became untrue in respect of the Applicant returning to work on 15 January 2001; (c) The contract operated in a manner to enable the Respondent to deprive the Applicant of sick leave which the Applicant was otherwise entitled to by terminating the contract; (d) In relation to the possible termination of the contract: (i) The contract operated in a manner to deny the Applicant an opportunity of having discussions with the Respondent and negotiations relating to the conditions applicable to the Applicant in a situation of redundancy; (ii) The contract permitted termination of the contract without a period of notice which is reasonable and appropriate in the circumstances of the Applicant; (iii) The contract operated in a manner to deny the Applicant the knowledge of the intention of the Respondent concerning the future of the contract; (iv) The contract operated in a manner to defeat the Applicant's legitimate expectations to be involved in deliberations about the future of the contract; (v) The contract operated in a manner to enable the Respondent unilaterally determine the amount to be paid to the Applicant at the time of termination.

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4 Arising from a finding of alleged unfairness the applicant seeks: 1. An order declaring the contract of employment between the Applicant and the Respondent is an unfair contract pursuant to s106 of the Industrial Relations Act, 1996. 2. An order declaring void in whole or in part ab initio, or at some later date (except as to moneys and other benefits allowed already or due thereunder to the Applicant, the contract between the Applicant and the Respondent under which the Applicant performed work for the Respondent as a labourer in the building and construction industry. 3. Further and in the alternative to 2, an order varying from its commencement, or at some later date, the contract by inserting the following provisions: (a) The contract shall not be terminated without the consent of the Applicant except for serious misconduct unless the Respondent gives the Applicant 12 months notice in writing or pays the Applicant and amount in lieu thereof equal to 12 months remuneration payable under the contract. (b) The contract shall not be terminated without the consent of the Applicant for reasons of redundancy unless the Respondent gives the Applicant an amount of money equal to 4 weeks remuneration for each year of employment or part thereof, calculated by reference to the total remuneration paid under the contract for the period of 12 months immediately prior to the date of termination of the contract. Such payment shall be in addition to the notice provisions set out in paragraph (a) above. (c) The contract shall not be terminated for reasons relating to the Applicant's conduct or performance unless: (i) The Respondent shall give the Applicant notice of any intention to terminate the contract and provide to the Applicant reasons for the proposed decision and adequate factual material in relation to the reasons; (ii) The Applicant has been given an opportunity to defend himself against any allegations made in relation to his conduct or performance; (iii) The Respondent has undertaken a thorough investigation of the allegations made in relation to the Applicant's conduct or performance and any matters presented by the Applicant in his defence; (iv) The Respondent shall make any decision to terminate the contract reasonably having regard to: A. the Applicant's personal circumstances; B. the satisfactory (or otherwise) performance by the Applicant of his obligations under the contract. 4. An order that the Respondent pay the Applicant such sums of money in connection with the contract as the Commission considers just in the circumstances of the case. 5. An order for payment of interest on sums of money ordered to be paid by the Commission. 6. Such further and other orders as the Commission deems fit. 7. An order that the Respondent pay the costs of the proceedings.

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7 The applicant at the time of termination in February 2001 was in receipt of remuneration from the respondent of $41,835.00 plus allowances of $3,258.00. The applicant also received a superannuation payment of $3,120.00 p.a. ($60 per week) which was paid to a Trust nominated in the National Building Industry and Construction Award (NBCI Award). 8 On or about 9 October 1997, the applicant suffered a work related injury to his back, shoulder and arm and was absent from work for approximately one week. In late 2000, the applicant suffered a further aggravation of the injury and had a further week off work. 9 The applicant worked on a number of projects over his 23 years of employment with the respondent always as a labourer. In the latter part of 2000, the respondent experienced a downturn in work. The applicant met with Mr Wilson, the Construction Manager of the respondent, on about 20 October 2000 at the Bondi Residential Development building site where the applicant was working at the time. Mr Wilson outlined to the applicant the work situation of the respondent and raised the possibility of not being able to provide ongoing employment to the applicant when the Bondi Residential Development project came to an end. 10 The respondent recommended to the applicant he take a period of annual leave. He began this period of annual leave towards the end of October 2000 but, shortly after, a labouring position became available on a project at North Sydney Olympic Pool. The respondent contacted the applicant to offer him this position and he resumed work. A few days later another position arose on the Wollongong Hospital Redevelopment and the applicant agreed to transfer. 11 On or about 14 December 2000, the company held a meeting with their construction employees on the Wollongong building site where the applicant was working. Mr Wilson, Mr Tom Ussia, the Project Manager, and Mr Mick Parker, the Site Manager, attended representing the company. The applicant attended the meeting. He was one of about six construction employees employed by the respondent on the site. At that meeting, the employees were informed that with the imminent completion of the major works on the Wollongong Hospital site and, given the downturn in the respondent's forward work position, it was not possible to nominate what project employees would be placed in work in the New Year. Employees were advised if the work position for the company did not improve it would be necessary for retrenchments to occur. The employees were told if there was no work they would be offered the option of taking extended annual leave after the usual Christmas break. 12 Between 22 December 2000 and 15 January 2001, the applicant took annual leave in accordance with arrangements previously made with the respondent. 13 The applicant's daughter, Ms Patricia Nicolis, gave evidence. She recalled she spoke to Mr Wilson on 18 January 2001, as to her father's return to work. This conversation occurred after the applicant's annual leave was completed. I accept Mr Wilson said to her: . . . Ring me in three or four weeks time. He will be paid whilst he is off, but when his entitlements run out we will have to consider other options. 14 Mr Wilson stayed in touch with Ms Nicolis. Each time contact was made she was advised there was no work available for her father, the applicant, Mr Costopoulos.

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18 On 22 March 2001, one month later, Mr Wilson contacted the applicant to advise him a position was available on a Parramatta project. Ms Nicolis took over the telephone call. Mr Wilson asserted he offered the applicant full time work but Ms Nicolis' recollection was Mr Wilson said her father would be a new employee on a casual basis. She was cross examined as to whether Mr Wilson used the words "casual" and "new employee": Q. I put it to you Mr Wilson did not say "casual"? A. He did Q. He did not say new employee? A. He did say that. He was not going to continue following the years he had been working, he would start benefits from the beginning as if he was a new employee. That was my first question. Q. I put to you what Mr Wilson said was "A position has come up on a project." Mr Wilson was offering that position to your father? A. They were not the exact words. Q. He did not use the word "casual" at all did he? A. I recall that he did. Q. That was perhaps your interpretation, but he did not say "casual" at all? A. That is what I remember. Q. In fact Mr Wilson said, "The position is available immediately," and that your father would rejoin the company under an enterprise agreement? A. No. 19 Mr Wilson was also cross examined about the decision to terminate the applicant and how the decision was taken. He discussed the termination with the State Manager, Mr Simon Oliver, and at meetings of project managers. He was asked: Q. Do you know why Mr Costopoulos was terminated in lieu of other persons who were labourers? A. Yes, the project on which Mr Costopoulos had been working had reached a stage of completion that didn't enable us to offer him further work. Q. So there was no work on that particular project, is that why he was terminated, is it? A. That's the primary cause, yes. Q. Have a look at paragraph 10.1(f)? A. Yes Q. Where do I find the criteria that there is no work on a particular project as being the basis for termination in those two sentences? A. I believe the explanation is quite clear in that clause. Q. There was work available that Mr Costopoulos could do, wasn't there? A. Not unless other persons were terminated. Q. Yes, I understand that, but there was work available that Mr Costopoulos could do, wasn't there? A. I believe I have answered the question. Q. And you have no doubt about his suitability to that work, or some of it? A. That is correct. Q. And you didn't have any problems with his individual work performance? A. That's absolutely correct. Q. And he was a good worker, wasn't he? A. Yes. Q. And did you have regard to his seniority? A. Yes. Q. What regard did you have to it, did you give it a lot of weight or no weight? A. I think, as I added earlier, we don't have a weighting for individual units. It is one of the considerations. Q. He was easily the most senior of the builder's labourers in terms of service, wasn't he? A. Yes. Q. How much more senior than the others was he? A. I would have to check our records, but he probably had at least seven years' more service than any other builders' labourer. Q. I put this to you: that when you decided to terminate Mr Costopoulos you didn't apply the provisions of section 10.1(f), did you? A. No, I reject that claim absolutely. Q. But you do agree that there was work available that he could do? A. I have answered that question by saying other persons would have had to have been terminated. Q. And they would have been persons less senior than the applicant? A. Yes. Q. And he was terminated because the work that he was doing on a particular project ended, is that right? A. That was one of the considerations. Q. I thought you said that was the consideration, five minutes ago? A. No, I'm relying on sub-clause (f) of 10.1.

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The Certified Enterprise Partnership Agreement ("EA") 20 During the latter period of the applicant's employment, the respondent was party to a series of Federally Certified Enterprise Partnership Agreements ("EA") covering the employment of construction employees. The first of these was negotiated in about 1992. In late 1998 the respondent entered into negotiations with the Construction Forestry Mining and Energy Union, Construction & General Division, New South Wales Branch ("the CFMEU") for a further agreement. The CFMEU were representing the employees of the company. The employees were involved in the negotiation. They participated in a number of meetings to discuss the terms of the proposed Certified Enterprise Partnership Agreement. They were each provided with access to a copy of the final form of the Certified Enterprise Partnership Agreement and the document was explained to them by the respondent and by the Union representative. A vote then took place. The employees voted to accept the Certified Enterprise Partnership Agreement. 21 The applicant was part of this process and, in common with the other employees, he was given the opportunity, in a meeting at which Mr Wilson recalls the applicant was present, to participate in discussion and ask any questions or raise any objection. 22 The Certified Enterprise Partnership Agreement between the respondent and the Construction Forestry Mining and Energy Union (NSW Branch) known as the Hansen Yuncken Pty Ltd NSW/CFMEU Partnership Agreement 1998 ("the 1998 Agreement") was struck under the WorkPlace Relations Act 1996, Part VIB, Div 2. This Certified Enterprise Partnership Agreement was certified on 21 January 1999. This was the Certified Enterprise Partnership Agreement in force at the termination of the applicant's employment. 23 Relevantly the Certified Enterprise Partnership Agreement states: 4.1 TITLE This Agreement shall be known as the Hansen Yuncken Pty Ltd NSW/CFMEU Partnership Agreement. 4.2 PARTNERS * Hansen Yuncken Pty Ltd ("The Company") in its Building Operations in respect of its employees covered by Clause 9 in this operation in New South Wales. * The Construction Forestry, Mining, Energy Union (CFMEU) NSW construction division ("The Union"). 4.3 DURATION OF AGREEMENT 2 years from the date of signing by the partners. Certification to occur in accordance with the Workplace Relations Act 1996. 4.4 NO DISADVANTAGE It is the intention of this agreement that no employees will be disadvantaged by its operation in relation to relevant laws or legislative requirements. 4.5 RELATIONSHIP TO THE AWARD This agreement is to be read in conjunction with the parent Award: the National Building and Construction Industry Award (NBCIA) (December 1996). Where the agreement is silent on rates of pay and conditions, allowances and other matter pertaining to employment, the Award will apply. Where there is conflict between the agreement and the Award, the provisions of the agreement will apply to the extent of any inconsistency. . . . 4.7 SINGLE BARGAINING UNIT The union, which is party to this Agreement, shall constitute a single bargaining unit in all dealings relating to this Agreement with Hansen Yuncken. To this end, the union commits itself to: (a) Resolving any demarcation issues between members of the single bargaining unit internally and without recourse to industrial action, and (b) Supporting a single position in dealings with the company in respect of any claims or needs. 4.8 UNION PARTICIPATION The Company and the union will continue to work positively to continue the momentum of reform through the enterprise agreement process. The Company recognises a constructive role played by the union will have a positive impact on this agreement and the delivery on its objectives. The Company recognises the union as the accredited representatives of their members covered by this Agreement. . . . 5.0 CONSULTATIVE PROCESS The Company has in place consultative mechanisms through site based building meetings and an active Company Consultative Committee. These forums provide the opportunity for all employees to become more aware of the issues affecting their individual sites, and ensuring, on a company basis, communication from company management, through the Consultative Committee to the workforce. Records and meeting minutes are kept which are circulated to all sites and to Union representatives. . . . 6.0 DISPUTE RESOLUTION 6.2 Procedures Relating to Disputes between the Company and its Employees . . . (d) While a procedure is being followed, normal work must continue without recourse to any form of industrial action Unresolved matters shall be formally submitted to the appropriate tribunal by either party or their representatives, with the decision of that Tribunal being accepted as the full and final resolution of the dispute. . . . 10.0 EMPLOYMENT RELATED MATTERS 10.1 RECRUITMENT, PROBABTIONARY PERIODS AND TERMINATION To help minimise misunderstandings and differences of interpretation the parties agree to the following employment procedures: (a) . . . (b) . . . (c) . . . (d) . . . (e) New Employees shall be engaged on daily hire (8 hours) for a qualifying period of four weeks from the commencement of employment, after which the Employee may be offered an ongoing position with Hansen Yuncken. This offer, at the discretion of the Company, will be on weekly hire basis. (f) Employment consideration shall be determined by work availability, suitability to the task(s) and an individual work performance. Seniority shall not be the sole determining factor, but rather included as part of those considerations. 10.2 TERMINATION OF EMPLOYMENT (a) For employment periods of up to four weeks, one days notice of termination of employment shall be given on either side or one days pay shall be paid or forfeited. For employees on weekly hire (after four weeks) one week's notice of termination of employment shall be given on either side or one week's pay shall be paid or forfeited. The Company reserves the right to withhold payment for failing to follow these requirements. (b) Subject to the termination provisions of Clause 24 of the NBCIA notice given at or before the usual starting time of any ordinary working day, shall be deemed to expire at the completion of the day's work. (c) The Company shall provide to the Employee, a written statement specifying the period of his/her employment and the classification of, or the type of work performed. (d) Nothing in this clause shall effect the right of the Company to dismiss an employee without notice, for serious or wilful misconduct. (e) (i) A termination of employment by the Company shall not be harsh, unjust or unreasonable. (ii) Without limiting the above, except where a distinction, exclusion or preference is based on the inherent requirements of a particular position, termination on the ground of race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction and social origin shall constitute a harsh, unjust or unreasonable termination of employment. (iii) Any dispute, or claim arising out of sub-paragraphs (i) and (ii) above, shall be dealt with in accordance with the dispute provisions and settlement clause 6 of this Agreement. 10.3 SUPPLEMENTARY LABOUR . . . 11.1 WAGE CONSIDERATION . . . 11.2 PRODUCTIVITY ALLOWANCE . . . 11.3 SUPERANNUATION . . . 11.4 REDUNDANCY The Company will continue to meet its obligations in respect of redundancy payment as defined in Clause 38A [now clause 16.2] of the NBCIA by retaining its membership of the ACIRT Redundancy Trust, contributions shall increase to $45.00 per employee per week from 13th January 1999 and to $50.00 per employee per week 13th January 2000. ACIRT for apprentices shall be in accordance with the ACIRT Trust Deed of the Fund. 11.4 THE DRUG AND ALCOHOL FOUNDATION . . . 11.6 ACCIDENT INSURANCE . . . 11.7 FARES AND TRAVELLING ALLOWANCE . . . 11.8 ON GOING PRODUCTIVITY AND EFFICIENCY . . . 11.9 NO FURTHER CLAIMS The parties to this agreement undertake not to pursue any further claims as to wage increases or improvements to terms or conditions of employment whether they are Awarded over Award agreement, over agreement, during the life of the agreement.

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The Award ("A") 26 The respondent is a party to a Federal Award (now known as the National Building & Construction Industry Award 2000 - the NBCI Award) in respect of the employment of construction employees. The respondent has been a party to the Award's predecessors since 1974 (AIRC, CNo2861/74). 27 The NBCI Award became Federal Law by virtue of the Workplace Relations Act 1996 (Cth). In Colvin v Bradley Bros Pty Ltd (1943) 68 CLR 151, Williams J said of a Federal Award (at 163): The Award is not of course a law of the Commonwealth, ... but once the Award is made its provisions become part of the law of the Commonwealth by virtue of the Commonwealth Conciliation and Arbitration Act 1904-1934. 28 The following are relevant provisions of the NBCI Award: 6. COVERAGE OF AWARD 6.1 Scope The scope of this Award shall be in three parts as follows: . . . 6.1.1(a) In relation to the Tradesperson classifications in 18.1.2 and 19.3.1, subject to the exceptions and modifications contained herein, this Award applies to the employment of persons engaged on construction work (as defined) (emphasis added). . . . 6.1.2 Labourers classifications 6.1.2(a) In relation to the Labourer classifications contained in 18.1.2 and 19.3.1 of this Award, this Award applies in the States of Victoria, Tasmania, Western Australia, New South Wales, South Australia and Queensland (subject to 6.2 - Locality of this Award), in respect of the employment of persons as builders' labourers about any building. . .(emphasis added). 6.1.3 Operators classifications 7. PARTIES BOUND This Award shall apply to and be binding upon: 7.1 The Construction, Forestry, Mining and Energy Union and its officers and members employed by employers respondent to this Award; and 7.2 The Australian Workers' Union in respect of carpenters and joiners who are employed by Crown or local government authorities respondent to this Award in the States of New South Wales (excluding the County of Yancowinna), South Australia, Tasmania and Victoria only; and 7.3 The employers and organisations of employers, respondent to this Award in respect of their employees or employees of their members within the classifications contained in this Award whether members of the organisation mentioned in 7.1 hereof or not. . . . 9. RELATIONSHIP WITH OTHER AWARDS In relation to the employment of employees subject to this Award, this Award shall supersede the National Building and Construction Industry Award 1990, provided that no employee shall be reduced in status or position nor have their rate of remuneration reduced merely as a consequence of the making of this Award. . . . 10. ENTERPRISE FLEXIBILITY 10.1 Where an employer or employees wish to pursue an agreement at the enterprise or workplace about how the Award should be varied so as to make the enterprise or workplace operate more efficiently according to its particular needs the following process shall apply: 10.1.1 A consultative mechanism and procedures appropriate to the size, structure and needs of the enterprise or workplace shall be established. 10.1.2 For the purpose of the consultative process the employees may nominate the union or unions bound by this Award to represent them. Where it is known that a union party to this Award has membership in an enterprise or workplace, the employer shall notify the union prior to commencing negotiations for an agreement. 10.1.3 Where agreement is reached an application to vary the Award shall be made to the Commission. . . . 11. DISPUTE RESOLUTION PROCEDURE 11.1 Settlement of disputes 11.1.1 In the event of any dispute or claim arising between an employer and an employee such dispute or matter shall be dealt with in the following manner: 11.1.1(a) In the fist instance the dispute or claim shall be taken up with the foreperson or supervisor by the employee or employees concerned or the duly appointed union representative. 11.1.1(b) . . . 11.1.1(c) . . . 11.1.1(d) . . . 11.1.1(e) . . . 11.1.1(f) If settlement cannot be reached through the above procedures then either party may refer the matter to the locally organised Board of Reference/Disputes Board (where these have been established by agreement between the parties) and/or the Australian Industrial Relations Commission. . . . 11.1.2 11.1.3 11.1.4 Provided however, that where a separate disputes settlement procedure has been agreed between the parties as part of an on-site agreement, and this has been endorsed by the Commission, that procedure shall prevail over the above. . . . 13. EMPLOYMENT CATEGORIES 13.1 Weekly hire - operators 13.1.1 The following provisions shall apply to the Operator classifications contained in 18.1.2 and 19.3.1 of this Award: . . . 13.1.2 Casual labour . . . 13.2 Daily hire - tradespersons and labourers 13.2.1 The following provisions shall apply to the Tradesperson and Labourer classifications contained in 18.1.2 and 19.3.2 of this Award: 13.2.1(a) One day's notice of termination of employment shall be given on either side or one day's pay shall be paid or forfeited. 13.2.1(b) Subject to the termination provisions of clause 36 of this Award notice given at or before the usual starting time of any ordinary working day shall be deemed to expire at the completion of that day's work. . . . 15.2 However if the services of any employee are not required by reason of inclement weather then the provision of clause 21 - Inclement weather - tradespersons and labourers of this Award, shall apply. 16. REDUNDANCY 16.1 Definition Redundancy means a situation where an employee ceases to be employees by as employer, respondent to this Award, other than for reasons of misconduct or refusal of duty. Redundant has a corresponding meaning.

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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. (Emphasis added) And at [171]: 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.) 36 However, Haylen J, in an interlocutory application where there was a challenge to the jurisdiction of the Industrial Relations Commission of New South Wales to hear a claim under s106 similarly for orders for a variation to reflect just compensation by way of Notice and Redundancy payment on the termination of an employment contract and where there was an alleged relevant Federal Award and Enterprise Agreement (certified), expressed a different view to that of Schmidt J in Burgess. Haylen J in Thornthwaite v Australian National Credit Union Ltd (2002) 116 IR 438 stated [at 80]: 80 Nor can I ignore the effect of the judgment in Byrne v Australian Airlines Ltd. Contrary to what might have been the understanding of industrial lawyers for many years, it is now clearly established that the contract of employment operates separately from an Award or certified agreement and is not automatically subsumed into the contract of employment . Orders made under s 106, especially for the payment of money, are not in the nature of an Award or the provision of an agreement. As the discussion in Westfield v Adams discloses, while concepts from the general law and general industrial standards may be relevant in reaching a determination on what money amount is just in the circumstances of the case, the result is not to order damages, nor does it simply amount to restitution or, for that matter, can it be considered the equivalent of making an "Award" for the payment of more money. . . . As pointed out in Westfield v Adams, it is a mistake to treat the considerations which inform the determination of a money order which is "just in the circumstances of the case" as resulting in the Court ordering, in some strict legal sense, for example, damages in lieu of reasonable notice. Tests and approaches from various areas of the law may be utilised in the task of determining a money order. However, it masks the true nature of the exercise to simply equate those matters with an order "for notice" or "due to redundancy" or "for severance pay". The focus will always remain on the unfairness demonstrated to be associated with the contract impugned. 81 Approached on the basis of the judgments in Byrne v Australian Airlines Ltd, it may be said that the Award alone (or certified agreement) is not the contract of employment. Section 106 deals with unconscionability associated with the contract of employment or any related arrangement, using that term broadly. It is for this reason, in my view, that orders made under s 106 of the Act would not usually be inconsistent with a law of the Commonwealth, namely the provisions of a certified agreement or Award. His Honour also held at [83]: 83 A further matter to be considered in light of recent legislative developments is the nature of Federal Award regulation. While it was appropriate for the court in the Metal Trades Industry Association case to describe, in 1982, the Awards of the Federal Commission as being comprehensive in nature and regulating terms and conditions of employment in a detailed fashion, that description is no longer apt. The Workplace Relations Act 1996 brought about a most significant change. Section 89A limited, in a decisive way, the matters which may be contained in an Award of the Commission. One of the principal objects of the Act was to ensure that the primary responsibility for determining matters affecting the relationship with employers and employees rested with the employer and employees at the workplace or enterprise levels. Awards were not only no longer to be comprehensive but were relegated to safety net arrangements to be supplemented by enterprise arrangements. In that context and having regard to the minimum rates nature of both the agreement and the Award relied on by the respondent in these proceedings, it is not possible to say that there is a legislative intent that those instruments are to cover the field in relation to every subject matter with which they deal. Section 152 of the Workplace Relations Act will, therefore, not assist the respondent's argument. Amendments to s 152 made in 1996 and 1997 (and particularly the introduction of ss1A) suggest that the field of exclusive coverage of federal Awards has been considerably narrowed in comparison with the operation of s 65 of the Conciliation and Arbitration Act. Further, s152 will not apply when the State law deals with a different matter, namely, the contract of employment at common law.

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37 From the authorities and facts before me, I accept there is a Federal Award and a Certified Enterprise Partnership Agreement which covers the employment of labourers working on construction sites. I accept the relevant Award and Certified Enterprise Partnership Agreement have a statutory force and statutory remedies are available in the breach. I further accept the contract of employment operates separately from the Award and Certified Agreement and their terms are not automatically inferred into the contract of employment as the implication of their terms is not necessary for the efficient operation of the Award and Agreement. There was no evidence of the parties' intention to expressly incorporate any term of the Award and Agreement into the contract of employment. Inconsistency 38 An inconsistency arises under s109 of the Constitution if there is an inconsistency between "a law of a State" and a "law of the Commonwealth". Plainly enough, s106 of the Industrial Relations Act, 1996 is a "law of a State". The appropriate test for inconsistency outlined in Victoria v The Commonwealth (1937) 58 CLR 618 was refined from the words of Isaacs J in Clyde Engineering v Cowburn (1926) 37 CLR 466 (at 641): a State law is inconsistent, and is therefore invalid, so far as its effect, if enforced, would be to destroy or vary the adjustment of industrial relations established by the award with respect to the matters formerly in dispute. In Victoria v The Commonwealth (1937) 58 CLR 618, Dixon J stated (at 630): When a State law, if valid, would alter, impair or detract from the operation of a law of the Commonwealth Parliament, then to that extent it is invalid. Moreover, if it appears from the terms, the nature or the subject matter of a Federal enactment that it was intended as a complete statement of the law governing a particular matter or set of rights and duties, then for a State law to regulate or apply to the same matter or relation is regarded as a detraction from the full operation of the Commonwealth law and so as inconsistent.

[36]

In the more recent decision of the High Court in Telstra Corp Ltd v Worthing (1998-1999) 197 CLR 61 comment was made on these two propositions at [28]: The second proposition may apply in a given case where the first does not, yet, . . ., if the first proposition applies, then s109 of the Constitution operates even if, and without the occasion to consider whether, the second proposition applies. 39 The High Court in Metal Trades Industry Association of Australia v Amalgamated Metal Workers and Shipwrights' Union (1983) 152 CLR 632 (at 641), in the joint judgment of Gibbs CJ, Wilson and Dawson JJ, discussed the position of a Federal Award : . . . They are not themselves laws of the Commonwealth and without more could not attract the operation of s109 of the Constitution so as to override inconsistent State laws or awards. However, the Parliament has made specific provision in this regard in s65 of the Commonwealth Act, which reads as follows: 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. In Hudson v Qantas Airways Ltd (1985) 10 IR 331 the Full Bench of the Commission, in relation to these arguments, stated (at 333-334): In the light of the many authorities concerning the question of inconsistency where a Federal award is involved, (see, in particular, Metal Trades Industry Employers Association v Amalgamated Metal Workers Union (1983) 4 IR 284; 48 ALR 385 and the cases there discussed), it cannot be said that, as a general rule, inconsistency would arise simply because a Federal award regulates a particular employment in respect of which an order may be sought under s 88F(1) avoiding or varying the contract of employment or any collateral contract or arrangement, or, under Section 88F(2), to rectify or adjust, by the payment of money sums, any unfairness or the like which may have been suffered. Apart from the need to examine the declaration or orders which might be made under s 88F in the light of what is embraced by the particular award and the settlement achieved by it, the special nature and purpose of Section 88F makes inconsistency potentially unlikely to arise, especially where an alleged unfair situation relates to aspects of the employment relationship extraneous to the specific subject matters regulated by the award.

[38]

In the case of an Award which deals with a dispute between parties whose relations apart from the Award are ordinarily governed by State law including the common law, the existence of the State law is for the most part assumed and this assumption will be relevant to discerning any inconsistency (cf Wardley, per Wilson J (1980) 142 CLR, at pp 287-288). The contract of employment itself is the most obvious illustration. To the extent that it is not varied by the Award, its obligations will ultimately be derived from State law. The question will often be whether the Award provisions are intended to supplement or modify rather than supplant State law. 41 The applicant in answer to the respondent's assertion the Federal law (read Award and Agreement) must prevail relies on the reasoning of Haylen J in Thornthwaite at [77] where his Honour enunciated a number of matters to "provide guidance as to any court's consideration of whether there was an inconsistency": (a) first, take the law or Award with which the State law is allegedly inconsistent and discern precisely the matter which it is the intent of the Parliament or the Commonwealth arbitrator are to be exhaustively determined thereby; (b) where an Award is involved dealing with a dispute between parties whose relations apart from the Award are ordinarily governed by State law including the common law, the existence of the State law is for the most part assumed and the assumption will be relevant to discerning any inconsistency; The contract of employment itself is the most obvious illustration - to the extent it is not varied by the Award its obligations will ultimately be derived from State law; (c) the distinction between the right to dismiss and the machinery for termination may be material; (d) the industrial agreement and the State Act may deal with entirely disparate subject matters - an industrial agreement is confined narrowly to employment relationships determined in settlement of an industrial dispute while legislation may deal with a separate and distinct matter dealing with a general social question of equality; (e) the critical question is - what is the conduct or matter with which the relevant Award deals?; (f) even where there are comprehensive Awards there may be some matters which are left to the operation of State laws; (g) Awards usually operate in the context of the general law both State and federal. Where an Award fails to deal with a matter provided for by Statute, unless the Award exhibits an intention there is to be no benefit of that kind or alternatively that the benefit for which it provides are to be a complete and exclusive statement of the employee's entitlement in the relevant area, there will be no inconsistency. Such an intention cannot be ascribed lightly to an Award; (h) generally statutory rights have been treated as standing outside the matters dealt with by Awards unless a specific provision is made with respect to them; (i) as a general rule inconsistency will not arise simply because the federal Award regulates a particular employment in respect of which an order may be sought under s 88F(1) varying the Award or under s88F(2) rectifying or adjusting the arrangements by payment of a money sum; (j) the special nature of s 106 is such that it is highly unlikely that there would be inconsistency with the federal Award; (k) the federal Award is to be examined to see if it operates regardless of State law; (l) Awards are not to trespass on alien areas remote from its purpose and subject matter; (m) while an Award may be broadly similar in coverage of the engagement and dismissal, it may be essentially dissimilar in character and general content to a statutory provision; the Award may not be a general industry Award dealing exhaustively with the respective rights of the employer and employee and claiming an unfettered right of dismissal - in such circumstances there is room for the operation of the general law; (n) seldom will an Award lend itself to the covering of the field test on the subject of the contract of employment; (o) inconsistency depends upon the intention of the paramount legislature to express by its enactment completely, exhaustively or exclusively, what shall be the law governing the particular conduct or matter to which attention is directed.

[49]

EA10.0 EMPLOYMENT RELATED MATTERS 10.1 RECRUITMENT, PROBABTIONARY PERIODS AND TERMINATION To help minimise misunderstandings and differences of interpretation the parties agree to the following employment procedures: (a) . . . (b) . . . (c) . . . (d) . . . (e) New Employees shall be engaged on daily hire (8 hours) for a qualifying period of four weeks from the commencement of employment, after which the Employee may be offered an ongoing position with Hansen Yuncken. This offer, at the discretion of the Company, will be on weekly hire basis. (f) Employment consideration shall be determined by work availability, suitability to the task(s) and an individual work performance. Seniority shall not be the sole determining factor, but rather included as part of those considerations. 10.2 TERMINATION OF EMPLOYMENT (a) For employment periods of up to four weeks, one days notice of termination of employment shall be given on either side or one days pay shall be paid or forfeited. For employees on weekly hire (after four weeks) one week's notice of termination of employment shall be given on either side or one week's pay shall be paid or forfeited. The Company reserves the right to withhold payment for failing to follow these requirements. (b) Subject to the termination provisions of Clause 24 of the NBCIA notice given at or before the usual starting time of any ordinary working day, shall be deemed to expire at the completion of the day's work. (c) The Company shall provide to the Employee, a written statement specifying the period of his/her employment and the classification of, or the type of work performed. (d) Nothing in this clause shall effect the right of the Company to dismiss an employee without notice, for serious or wilful misconduct. (e) (i) A termination of employment by the Company shall not be harsh, unjust or unreasonable. (ii) Without limiting the above, except where a distinction, exclusion or preference is based on the inherent requirements of a particular position, termination on the ground of race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction and social origin shall constitute a harsh, unjust or unreasonable termination of employment. (iii) Any dispute, or claim arising out of sub-paragraphs (i) and (ii) above, shall be dealt with in accordance with the dispute provisions and settlement clause 6 of this Agreement. 10.3 SUPPLEMENTARY LABOUR . . .

[75]

Her Honour in Abboud then considered the reasoning of Bauer and Hungerford JJ in Thomas Nationwide Transport Ltd v Thomas & Anor (1990) 34 IR 378 as to what was an appropriate order for interest. She also, in consideration as to money orders under s88F, adopted the reasoning of Barwick CJ in Brown v Rezitis (1971) 127 CLR 157. Barwick CJ adopted the principle (at 165) that orders should ". . . effect wholly or partially the restitution of the parties to their former position upon the variation or avoidance of the contract or arrangement". Her Honour in Abboud then held at [49]: Here, the question which now arises is whether the express provision for a minimum of two weeks notice was unfair, where misconduct warranting summary dismissal has not been established, in the circumstances outlined. I take the view that the proper approach in the circumstances of this case is to make an order as to the payment of money "just in the circumstances of the case", which requires that interest should flow from the date of application and no earlier. While there undoubtedly have and will be cases brought under s106 where the issue is notice and where a proper basis for making an order in relation to interest calculated from a date earlier than the date of application will be established, there was nothing advanced in evidence or submissions in this case, which would provide a proper basis for going beyond that date. 82 The Full Bench of the Commission has adopted her Honour's reasoning as to interest (Abboud). The circumstances of this case persuade me there is reason to adopt the view of Barwick J to effect partially at least the restitution of the applicant to his position from the date of termination. As Schmidt J acknowledged, this is a case where the issue is Notice and the calculation should, I find, be made from the date of termination. 83 Interest is to be paid on the amount ordered from the date of termination, namely, 20 February 2001, in accordance with s94 of the Supreme Court Act 1970 as amended. ORDERS 1. The contract of employment between the applicant and the respondent be varied and the respondent pay to the applicant 12 month's payment as to Notice calculated at his full salary package rate from 20 February 2001.

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