In this case the necessary pre-condition for payment of the redundancy package under the Policy Directive was not met - the Appellant did not terminate any of the employee's employment. No position was deleted (with the possible exception of Ms Rabie and Ms Alzamora).
91By reference to grounds 6 and 11 of the notice of appeal, the appellant contended that, if an entitlement to voluntary redundancy could arise under a contract, the trial judge erred in concluding that the August correspondence and the correspondence withdrawing the offer of voluntary redundancy (on either 28 or 29 September) constituted an offer which was capable of acceptance and accepted by the appellant. It was submitted that his Honour erred in concluding that each employee accepted an offer to enter into an agreement "to take voluntary redundancy", thereby giving rise to an entitlement to a redundancy payment. In short, it was contended that the trial judge erred in finding that, on acceptance, there came into effect a binding contractual agreement for the termination of the employment of the employee at a given time in return for payment of a voluntary redundancy package.
92The appellant contended, in this respect, that the trial judge's reasoning was not correct because:
(a) " the offer " and " acceptance " analysis applied by his Honour was inappropriate;
(b) even if appropriate the offer was conditional upon the employee's position being excess to staffing requirements and acceptance of the offer was an acceptance of the offer upon that condition. " Withdrawal " of the " offer " indicated non-fulfilment of that condition;
(c) the true offer (assuming the contractual analysis to be correct) was the employee's " acceptance of offer of voluntary redundancy ". That communication was the mechanism by which each employee advised the Appellant that no objection would be taken to a termination of their employment on the appointed day. This offer was not accepted.
93The respondent submitted that the Policy Directive did not constitute a 'fixation' by the Director-General and that the "plain wording" of the Policy Directive conferred an entitlement to a redundancy package upon an employee who accepted an offer of voluntary redundancy. The 'Expression of Interest' document completed by the employees enquired why their positions were surplus. The appellant considered their responses, determined positions to be surplus and made offers accordingly. The August correspondence was predicated upon the positions being surplus and stated that the offers were made on the grounds that the positions of the subject employees were excess to staffing requirements. No condition was attached to the August correspondence that the positions of the subject employees must be surplus in order for the voluntary redundancy to be given effect.
Was there a binding contract between the subject employees and the appellant?
94The first question raised by these contentions was whether a binding contract came into existence between the appellant and each of the subject employees for, as the trial judge found, a "voluntary redundancy package".
95I agree with the appellant that classical theory of contract based on offer and acceptance is not easily applied in the circumstances of this matter (see the observations of McHugh JA in Integrated Computer Services Pty Ltd v Digital Equipment Corporation (Australia) Pty Ltd [1988] unreported, BC8801158 at (16) and Heydon JA in Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSW LR 153 at [71] to [81]). Further, the transactions between the parties, occurring as they did against a background of the Policy Directive, and the relative ambiguity of the notion of a voluntary redundancy, complicated the resolution of the contractual question.
96Nonetheless, I have formed the view that there was a binding contract entered between each of the subject employees and the appellant. I do not accept the appellant's contention that no agreement was formed because the Memorandum, in fact, constituted "an offer" by the subject employees which was not accepted by the appellant (by various means earlier described including the written withdrawal of offers made by the appellant).
97In broad terms, I agree with the judgment of the President in this respect. Whether a contract has come into existence must depend "on a true construction of the relevant communications which have passed between the parties and the effect (if any) of their actions pursuant to those communications": British Steel Corp v Cleveland Bridge Engineering Co Ltd [1984] 1 AII ER 504 at 509.
98Here the parties entered into an executory contract upon the mutual promises that the subject employees would accept voluntary redundancy (as that concept was understood in the Policy Directive) for certain severance payments, each of which was to occur (in specified circumstances) at a future date. The employees accepted they would terminate their services at future specified dates in return for certain payments made at or about that time. The terms of that agreement were sufficiently complete and certain to form a contract, having regard to the terms of the August letter and the Memorandum, when read in the light of the Policy Directive.
Was there a repudiation of the contract?
99I consider, however, the trial judge erred in concluding that the contract, so formed, was repudiated in the case of the subject employees (save as to Ms Alzamora and Ms Rabie) and that his Honour, accordingly, erred in making declarations in favour of the subject employees (save, again, as to Ms Alzamora and Ms Rabie).
100As the appellant submitted, "the true offer (assuming the contractual obligations to be correct) was the employees' acceptance of 'voluntary redundancy'". Voluntary redundancy had a particular meaning in the context of communications between the parties which formed the contract. The Memorandum was the medium by which each employee advised the appellant that no objection would be taken to the termination of their employment on an appointed day. The 'offer' or promise by the appellant, consistently with that consideration, was made conditional upon the employees' position being excess to staffing requirements and acceptance of that offer was based upon that condition. That much was implied by the very notion of voluntary redundancy upon which the contract was predicated (either generally or specifically in the terms of the Policy Directive) and, as I will discuss below, was an express condition contained in the August correspondence. The withdrawal of the 'offer' (at least by the letter of 28 or 29 September 2009) indicated the non-fulfilment of that condition, except, again, in the cases of Ms Alzamora and Ms Rabie.
101The respondent contended, and the trial judge accepted, that no such condition arose because of the express terms of the August correspondence and the context in which that correspondence was sent. Reliance was placed, in that respect, upon the words "This offer is made on grounds that your position is excess to the staffing requirements of the Sydney West Area Health Service". It was contended that the offer was made on the ground that a decision had been made that the employees' position was excess prior to making the offer.
102The respondent also contended that this approach was consistent with the course of conduct of the parties. The subject employees had submitted an Expression of Interest Form and in doing so, upon request by the appellant, indicated why they considered their position was surplus and could be deleted. It was based upon that information, it was submitted, that the appellant made the offers of voluntary redundancy.
103The sentence, "This offer is made on the grounds that your position is excess to the staffing requirements of the Sydney West Area Health Service", is slightly inelegant and does give rise to some ambiguity. However, the language used is equally consistent, in my view, with the "offer" conveying a condition. The words "made on grounds that" are capable of conveying such a meaning, particularly when the document was not drawn in a formal fashion. When regard is had to the reference, in the August correspondence, to cl 12 of the Policy Directive, and the conditions for voluntary redundancy stated at herein, the offer, in my view, conveyed that it was made "upon the foundation of" the positions of the subject employees being surplus or "upon the foundation that" the positions they occupied were excess to staffing requirements.
104In any event, the offer in the August correspondence needs to be understood in the context of all of the communications between and actions of the parties and in the broader industrial or employment context in which it arose.
105I accept the following submission of the appellant in this respect:
This construction ignores the context in which the condition appeared. The terms of the letter of 27 August 2009 referred to " redundancy " the very nature of which contemplates termination of employment in circumstances where the employee's position has become surplus to the employer's requirements. A condition of accepting the offer of redundancy was that the severance payment be refunded in the event that the employee was re-employed. Again the context repeats that an entitlement to payment depended upon no work being available for the employee in a position. Further, the conditional nature of the offer, one whereby it is accepted on the grounds that the position is excess to staffing requirements is to be understood in the context of the Policy Directive (as referred to above).
106Both the Expression of Interest Form and the August correspondence make clear that the offer arose because the employee's position was no longer required by the appellant. It was not the subject employees, as natural persons, who were redundant to the service of the appellant. This is entirely consistent with the context in which the offer is made. The August correspondence makes express reference to the Policy Directive. This document makes clear that offers of voluntary redundancy are made only where the "positions" held by employees are excess or, to use the language of the Policy Directive, the positions were "deleted". Whether the Policy Directive had statutory force or was a policy, it relevantly, in an employment context, governed the circumstance under which the offers were made and established a context which left, in my view, no other available reading of the August correspondence than it was made conditional upon the requirement that the positions of the employees were no longer required. It is inconsistent with the Policy Directive, and, hence, the context in which the offers arose, that the conditions in the August correspondence should be construed as merely a statement or record of the state of affairs ( vis vis excess positions) as at the date the correspondence issued. The policy required the position to be vacant or excess in order for the policy to apply, such that, the existence of the vacancy was a condition for its fulfilment.
107Further, the arrangement made between the parties also arose in an industrial or employment context, albeit one that has as its epicentre the public sector or public health sector.
108The term 'redundancy' has a meaning in an industrial context, even if it may not necessarily be a term of art or law when used in particular circumstances. The term, when properly understood, means that the 'job' or 'position' held by an employee has come to an end. The focus is not upon whether the worker has become redundant: Amcor Limited v Construction Forestry Mining and Energy Union (2005) 222 CLR 241 at [43], [44] and [54]. Thus, the concept of redundancy would not ordinarily attach itself to the factual circumstances of this matter where the job positions of the subject employees (save for Ms Alzamora and Ms Rabie) had not, in fact, come to an end (due, ironically, to the industrial intervention of the respondent).
109The finding of the High Court in Amcor is a useful illustration of this point. In that matter, the issue was whether a clause of an agreement which provided for severance payments when a position became redundant (and an employee was subsequently retrenched) would apply in circumstances where the former employees of Amcor (where fresh employment arose after the particular company of a group that carried on two kinds of businesses was split so that each business would be conducted separately), nonetheless, carried out the same work under the same conditions in the same style of business as before. The fact that the employee had a new employer did not result in an affirmative answer to questions raised by that issue (see at [14] per Gleeson CJ and McHugh J and at [57] per Gummow, Hayne and Heydon JJ).
110I agree with the submission of the appellant that the expression "voluntary redundancy" is, in a sense, a misnomer. The entitlement to payments under the Policy Directive (or under the mutual promises of the parties) is an entitlement that arises on the termination of employment (where an employee has accepted voluntary redundancy). In the context of the Policy Directive (or the broader industrial or employment usage of the expression 'redundancy' or 'retrenchment'), voluntary redundancy is to be understood as an employee's agreement to forgo continuing employment in exchange for a special payment. This has a particular relevance in an employment context where an employer wishes to reconfigure or restructure the workplace without the industrial and other difficulties associated with compulsory terminations or redundancy.
111A declaration which would result in substantial payments to an employee for accepting voluntary redundancy where the employee's position ultimately remains extant or the employee has initiated a termination (in the knowledge that the position and employment conditions attached to it remain extant) is inconsistent with the notion of voluntary redundancy in the Policy Directive, the general notion of redundancy (whether voluntary or otherwise) and ultimately the offer contained within the August correspondence.
112Those conclusions are not applicable, however, to the applications brought by the respondent on behalf of Ms Alzamora and Ms Rabie. In my view, the evidence is sufficiently clear to enable an conclusion (without the need for a remitter) that former employees of the appellant ceased their employment with the appellant so as to give rise to an obligation to pay redundancy under contract. I have found that an executory contract was made between those persons and the appellant. That contract was executed by them, in accordance with its terms, by the termination of their employment in circumstances where their former positions were vacant and excess to the requirements of the appellant. Ms Alzamora terminated her employment at a date which constituted an agreed extension to the proposed date for termination under the contract. Ms Rabie resigned at a time contemporaneous with the date specified for termination ( vis vis voluntary redundancy). The contract bound the appellant to make payments to them in accordance with the terms of the August correspondence and the Memorandum. The suspension of or withdrawal from voluntary redundancy by the appellant with respect to Ms Alzamora and Ms Rabie constituted a repudiation of that contract.
113What should be done then in the disposition of the application for leave to appeal and appeal brought by the appellant?
114In my view, there is ample basis to grant leave to appeal. The proceedings raise important questions going to the declaratory powers of the Court under s 154 and executory employment contracts. The matter also raises important questions about the terms of the Policy Directive which has wide implications for the public health sector.
115As to the merits of the appeal, the trial judge erred in concluding that the appellant repudiated its obligations under contracts with the subject employees, save for Ms Alzamora and Ms Rabie, and erred in declaring that the subject employees were entitled to voluntary redundancy payments under the contracts, save for Ms Alzamora and Ms Rabie. Nonetheless, I do not consider that the decision at first instance can be sustained in part ( albeit for different reasons) in this case because of my finding regarding Ms Alzamora and Ms Rabie. This is because I consider that the orders made by Marks J are bad in form either because they do not purport to declare the rights of the parties in any respect or do not declare rights under the contract as found by the trial judge (or the contract found to exist in this judgment). Accordingly, the appeal must be upheld.
116It is sufficient, for present purposes, that the orders of Marks J should be set aside and orders substituted so as to make declarations of right in favour of Ms Alzamora and Ms Rabie in accordance with this judgment. The parties should bring in draft orders, in that respect, and orders will be made accordingly.
117Given the partial success of the respondent, I will reserve the question of costs.
ORDERS
118I would make the following orders:
- Leave to appeal is granted.
- The appeal is upheld.
- The decision and orders made by Marks J in Matter No IRC 163 of 2010 are set aside.
- Orders for declarations shall be made upon the application made by the respondent on behalf of Miriam Alzamora and Amal Rabie in accordance with this judgment.
- The appellant shall file and serve draft orders reflecting this judgment within seven days and the respondent shall have a further seven days to file and serve any disputed version of those draft orders. If the form of orders remains in contest, the matter shall be listed for further hearing in that respect.
- Costs are reserved.
JUDGMENT OF HAYLEN J
APPEAL
119The Crown in Right of the State of New South Wales (Director-General NSW Department of Health) in respect of Sydney West Area Health Service seeks leave to appeal and to appeal the judgment of Marks J wherein his Honour made a declaration that certain nurses employed in the Sydney West Area Health Service ("SWAHS") were entitled to redundancy pay calculated in accordance with an offer made to them by the SWAHS (see NSW Nurses' Association v Crown in Right of the State of New South Wales (Director General, NSW Dept of Health) in respect of Sydney West Area Health Service [2010] NSWIRComm 125).
BACKGROUND
120The declaration was sought by the NSW Nurses' Association ("the Association") following dispute proceedings. The Application for Declaration stated that the applicant Association was an industrial organisation registered under the Industrial Relations Act 1996 and had constitutional coverage of persons employed in nursing positions established within the SWAHS. It was acknowledged that persons employed in nursing positions within the Area Health Service were employed in the Health Service of New South Wales for the purposes of Ch 9 of the Health Services Act 1997.
121The application identified some 28 employees of the SWAHS who were members of the Association and in respect of whom a declaration was sought as to their right to receive a redundancy payment. None of those matters were challenged before Marks J. His Honour succinctly described the nature of the application in [1] of his judgment:
In essence, the proceedings are brought by the applicant on behalf of a number of its members, all of who were or are employed by the respondent in nursing positions within the Health Service of New South Wales operated by the Sydney West Area Health Service. Each of the persons concerned received a communication from persons representing the respondent offering them the ability to terminate their employment on the basis of voluntary redundancy and to be paid certain moneys on termination of employment. It was said by the applicant that the employees concerned accepted these offers of voluntary redundancy. However, before the date fixed for the termination of their employment, the respondent purported to withdraw the offer of voluntary redundancy. In these proceedings, the applicant seeks declarations that will, in effect, require the respondent to make payment to those of the employees who have left the respondent's service and to require such payment to be made for those employees who terminate their employment within a fixed period of time.
122His Honour noted that the precise factual circumstances applying to each employee were not identical in all respects. Common to them all, however, was that they had each received a letter offering them the opportunity to express interest in applying for voluntary redundancy and/or to apply for voluntary redundancy.
123Upon analysis of the evidence relating to each of the employees named in the application, his Honour discerned the existence of three classes. The first class comprised a number of employees who acted upon the notification that they had been accepted for voluntary redundancy with a nominated final date of service, with some seeking and obtaining other employment and leaving the SWAHS on approximately 9 October 2009 or by agreement on some other date close to 9 October 2009.
124The second class of employees were on long service and/or annual leave when the offer of voluntary redundancy was made. Expressions of interest were forwarded to the SWAHS when they discovered that there was an opportunity for voluntary redundancy - they were ultimately accepted for voluntary redundancy. The members of this class did not return to work after 9 October 2009, but relied upon the notice they had received as to their selection for redundancy.
125The third class of employees, which his Honour described as consisting of the majority of persons affected, although having accepted the offer of voluntary redundancy and offer of payment of the package, remained working for the SWAHS after the purported withdrawal of the offer by the SWAHS. Some people in this category indicated that they could not retire without the redundancy payment.
126The offer of voluntary redundancy, mostly made in letters dated 27 August 2009 by the SWAHS, contained details of a package whereby considerable sums were available, especially to long-serving employees. Briefly put, the package offered: four weeks' notice or four weeks' pay in lieu of notice; an additional one week's notice or pay in lieu for employees aged 45 years and over with five or more years of completed service; accrued annual leave loading, including pro rata (or shift penalties if applicable) in respect of leave accrued at the date of termination; an additional severance payment component at the rate of three weeks' per year of continuous service with a maximum of 39 weeks with pro rata payments for incomplete years of service calculated on a quarterly basis; an additional voluntary redundancy acceptance payment where the offer was accepted within two weeks of being made with an extension of up to four weeks; reimbursement of approved expenses associated with re-training in accordance with policy documents; long service leave entitlements where eligible; and, additional superannuation benefits that may be allowable as a contribution to a retirement fund.
127It is worthy of note that the offer also stated that, if voluntary redundancy was accepted within two weeks of the offer being made and termination of employment was within the time nominated by the employer, the following additional payments would be made: for persons with less than one year's service, two weeks' pay; for service between one year and less than two years, four weeks' pay; for service of two years and less than three years, six weeks' pay and for three years' service and over, eight weeks' pay. Clearly, employees were being encouraged to make a speedy decision to accept voluntary redundancy when it was offered.
128A condition of acceptance of the offer of redundancy was that, should the employee obtain employment in any capacity in the New South Wales Public Sector within the period during which the severance payment applied, they were to refund to the SWAHS that portion that applied to the period of re-employment prior to commencing employment with a new Public Sector organisation.
129The respondent Association, in written submissions on the appeal, provided a summary of the background facts that was not controversial. It is convenient, therefore, to reproduce that summary:
(a) In or around late June or early July 2009, the Area Health Service sought expressions of interest for voluntary redundancy from staff within the Area Health Service. Employees who were interested in being considered for an offer of voluntary redundancy were invited to complete an expression of interest form.
(b) By letters dated 27 August 2009, offers of voluntary redundancy were made to the individual employees concerned under the hand of Kevin Gillies, Area Manager, Human Resources Services and Policy for the Area Health Service. The offers of voluntary redundancy commenced with the words: " As a result of your expression of interest in voluntary redundancy and recent discussions with the Area Health Service, I would like to offer you the opportunity to take voluntary redundancy". The correspondence then set out the components of the voluntary redundancy package that was on offer.
(c) In two instances, the letters containing offers of voluntary redundancy were made by letter of a different date. An offer of voluntary redundancy was made to Margit Kent by letter dated 17 August 2009. An offer of voluntary redundancy was made to Siew Khim Seow by letter dated 29 September 2009. The letters were in identical terms to the letters of 27 August 2009 other than that the dates proposed for the termination of employment were different.
(d) Employees wishing to accept the offer of voluntary redundancy were required to sign and return a pre-prepared document entitled "Confidential Memorandum - Acceptance of Offer of Voluntary Redundancy". The memorandum included the following:
I declare that:
I wish to accept the Voluntary Redundancy offer as attached and to voluntarily terminate my services with the Sydney West Area Health Service.
I acknowledge that my last day of service with the Sydney West Area Health Service will be 9 October 2009.
I acknowledge that I have been offered the following redundancy payments by Sydney West Area Health Service:
- four weeks notice of four weeks pay in lieu of notice ;
- pro rata annual leave loading in respect of leave accrued at the date of termination ;
accrued annual leave loading;
additional severance payment component at the rate of three (3) weeks per year of continuous service, with a maximum of 39 weeks, with pro-rata payments for incomplete years of service to be on a quarterly basis;
additional voluntary redundancy acceptance payment where the offer of voluntary redundancy is accepted within 2 weeks of the offer being made, or with extension of up to 4 weeks at discretion of the employer;
reimbursement of approved expenses associated with retraining (as detailed under Section 12.8 of PD2007_085);
long service leave entitlement (if any);
the benefit allowable as a contributor to a retirement fund.
(e) The individual employees all completed the memorandum and returned to the Area Health Service accepting the offer of voluntary redundancy on the following dates: Caterina Scarazza, Amal Rabie, Michelle Roach, Peck Waldon - 3 September 2009; Katherine Turner - 4 September 2009; Mirian Alzamora, Sandra McDermott - 7 September 2009; Margaret Kirkley, Cheryl Hunter - 9 September 2009; Cornelia Jongsma - 10 September 2009; Anne Brady - 11 September 2009; Dongmei Lu, Grace Mazi - 14 September 2009; Lorraine Bateman - 16 September 2009; Julianne Brisbane, Miriam Panol - 18 September 2009.
(f) On 4 September 2009, the Area Health Service published a communication known as a "Broadcast". The "Broadcast" indicated that:
As an outcome of a dispute notification lodged in the NSW Industrial Relations Commission by the NSW Nurses Association and the Health Services Union staff need to be advised that the progressing of any further voluntary redundancies is on hold until such time as the dispute is resolved.
(g) The majority of employees either did not see the "Broadcast" or became aware of the "Broadcast" only after they had returned the memorandum accepting the offer of voluntary redundancy, including Miriam Alzamora, Lorraine Bateman, Anne Brady, Cornelia Jongsma, Marlene Lawler, Margaret Kirkley, Dongmei Lu, Grace Mazi, Miriam Panol, Amal Rabie, Michelle Roach, Caterina Scarazza, Katherine Turner and Peck Waldon.
(h) The Area Health Service continued to provide information in relation to the offers of voluntary redundancy and to receive and acknowledge acceptances of the offers that were provided. For example, Miriam Alzamora was provided with a payout figure on 16 September 2009. Lorraine Bateman was provided with a payout figure on 15 September 2009. Julianne Brisbane was provided with a payout figure on or around 15 September 2009 and advised by a Human Resources officer, Jeanette McKenzie, on the same date to return her acceptance. Margaret Kirkley received a payout figure on 23 September 2009. Sandra McDermott was advised on or around 7 September 2009: " Don't worry, put the application in, we are still accepting all the paperwork."
(i) By letters dated 28 September 2009 or 29 September 2009, the Area Health Service purported to withdraw the offers of voluntary redundancy contained in the letters of 27 August 2009. The correspondence, again under the hand of Mr Gillies, stated as follows:
This letter is to confirm the telephone advice you received from a representative of SWAHS Human Resources Department regarding your offer of voluntary redundancy.
The Director General of Health has advised that voluntary redundancies involving frontline clinical staff are not to be further progressed.
On that basis, the offer of voluntary redundancy made to you by SWAHS is now withdrawn.
(j) In some (but not all) instances, employees had received verbal advice shortly prior to receipt of the letters of 28 or 29 September 2009 informing them that the Area Health Service intended to withdraw the offers of voluntary redundancy.
(k) Some of the employees left their employment on or around 9 October 2009 in accordance with the letters of offer or did not return to work thereafter, including Miriam Alzamora, Dongmai Lu, Amal Rabie, Michelle Roach and Katherine Turner. Grace Mazi subsequently terminated her employment in or around 30 March 2010.
(l) The remainder of the individuals concerned continued their employment under protest. The Association wrote to the Area Health Service by letter dated 2 October 2009 indicating that the Association proposed to examine the contractual position of its members who had been offered and accepted redundancy packages and stating as follows:
Nurses who were offered voluntary redundancies by the Area were given a cessation date for employment. During this period of examination of particular nurses' contractual rights any work performed by nurses who hold contractual rights with the Area does not constitute a rejection of the contract already entered into with the Area.
(m) A number of individual employees also wrote to the Area Health Service indicating that their continuation of employment was without prejudice to their contractual rights and that the purported withdrawal of the offers was disputed, including Margartet Kirkley, Dongmei Lu, and Peck Waldon.
ARGUMENTS AND DECISION BELOW
130Before his Honour the Association asserted that, based on the facts, there was a completed contract whereby the employees became entitled to the payment of the redundancy package calculated in terms of the offer. The issue was one of an industrial nature over which the Commission might otherwise have jurisdiction and, therefore, it was open for the Court to make a declaration.
131The Association's case was primarily resisted on the basis that there was no concluded contract and that, to the extent there was an offer of redundancy pay, it had been effectively withdrawn. The appellant also relied upon Policy Directive documents setting out the circumstances in which voluntary redundancy may be offered to employees and that such a possibility was limited to the situation where the position of staff members had been deleted and when there was no likelihood of re-deployment or where the skills of the displaced staff members were not in demand. This document was relied upon to argue that the offer and any agreement by the employee was, nevertheless, conditional upon the respondent determining that the employee's position remained "surplus to requirements." His Honour rejected these arguments, noting that the offer of voluntary redundancy contained in the letter of the SWAHS dated 27 August 2009 contained the following statement:
This offer is made on the grounds that your position is excess to the staffing requirements of the Sydney West Area Health Service.
132In rejecting the arguments for the appellant, his Honour held that there was a binding contract that resulted in the employees having a right to the payment of the redundancy package and that their positions had been in excess of the employer's requirements. His Honour also found that the purported withdrawal of the offer after the contract was concluded constituted a repudiation of the obligations of the SWAHS under the contract, but that the employees concerned were entitled to elect, if they wished, to terminate that contract and sue for breach or to elect to keep the contract on foot. He concluded on the evidence that none of the employees accepted the repudiation by the SWAHS. Many of the employees had remained in employment and had continued to assert their right to the payment of the redundancy package.
133His Honour relied upon the judgment in Peter Turnbull and Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd [1954] HCA 25; (1954) 90 CLR 235; (1954) 28 ALJR 162 for the proposition that a party to a contract, who refuses to carry out contractual obligations and persists in that refusal until a time has arrived at which performance of the contract was due, is prohibited from relying on effluxion of time to deny the innocent party the right to enforce the contract. Having satisfied himself that there was jurisdiction to grant the declaration, his Honour then considered discretionary issues, but ultimately determined that a declaration should be made in favour of the employees.
134His Honour requested the parties to confer as to the appropriate terms of a declaration that reflected his judgment. As a result of an exchange of correspondence there was no disagreement between the parties as to the terms of the declaration to be made in accordance with his Honour's findings although, clearly, the SWAHS reserved the right to challenge the correctness of his Honour's decision.
135In accordance with those arrangements, his Honour made the following declaration:
- That the offers of voluntary redundancy made by letters dated 17 August 2009, 27 August 2009 and 29 September 2009 constituted binding contractual agreements upon acceptance and the Sydney West Area Health Service was not entitled to withdraw the offers of voluntary redundancy.
- That the following employees are immediately entitled to payment of a redundancy payment calculated on the basis set out in the letters addressed to each employee from the Sydney West Area Health Service offering voluntary redundancy:
Miriam Alzamora
Amal Rabie
Michelle Roach
Katherine Turner
Dongmei Lu
Marlene Lawler
Grace Mazi
Siew Khim Seow
- That the following employees are entitled to have their employment terminate within 28 days of date of judgment on the basis they receive a package of redundancy payments calculated on the basis set out in the letters addressed to each employee from the Sydney West Area Health Service offering voluntary redundancy.
Margit Kent
Daira Polis
Margaret Kirkley
Corazon Bautista
Caterina Scarazza
Kasthuri Santhariah
Julianne Brisbane
Robyn Rafton
Lorraine Bateman
Miriam Panol
Jennifer Mellor
Anne Brady
Fay Smith
Cheryl Hunter
Sandra McDermott
Peck Waldon
Cornelia Jongsma
Joanne Rogerson
Ljubica Repic
Jacqueline Jefferson
- That the redundancy payments payable to each employee under Order 2 or Order 3 are to be calculated on the basis of their period of service as at the date their employment terminated or terminates.
NEW EVIDENCE
136On appeal, the appellant raised substantially different and new points. By majority, the Court received new evidence filed by the appellant but in the first instance, limited that evidence to the issue of whether or not leave to appeal should be granted. The new evidence received on that basis was an affidavit of Ms Deborah Oong, Acting Director, Corporate Government and Risk Management Branch, of the New South Wales Department of Health. The new evidence was directed to the following matters: the statutory basis by which the employees concerned were employed under Pt 1, Ch 9 of the Health Services Act ; how the Sydney West Area Health Service, as a condition of receiving a subsidy from the New South Wales Government, was obliged to follow New South Wales Health Policy Directives including Managing Displaced Staff of the New South Wales Health Service published in November 2007; and that employees concerned were entitled to voluntary redundancies in accordance with the terms and conditions of the managing of displaced staff of the New South Wales Health Services Directive identified as PD 2007_085.
137The appellant conceded that the material had not been put forward on the same basis as before Marks J, but advanced no reason as to why that had not occurred. It was said that the new evidence was "... of a kind of re-characterising an argument that was put before the Court below." It was frankly conceded that it was neither evidence that was not available nor reasonably available to the appellant at the time of proceedings before Marks J. The evidence was, however, supplementary evidence to that already before the Court and placed that evidence "into a better context."
GROUNDS FOR LEAVE
138In relation to the application for leave to appeal, it was submitted that it was in the public interest that leave be granted as the appeal raised substantial issues of principle and law that had wide implications for the jurisprudence of the Court and went to the administration of justice. The appeal was said to raise the following issues:
(a) the operation of s 154 of the Industrial Relations Act and the power of the Court to make declarations/consequential orders;
(b) the power of the Court to make binding declarations on people who are not parties to the proceedings;
(c) the operation of a Managing Displaced Staff of the New South Wales Health Service Policy Directive that affects the delivery of the Health Service in New South Wales;
(d) the legal basis of any employee's entitlement to voluntary redundancy as an employee of the Crown, and in particular, whether it arises under statute or contract;
(e) the relationship of any contractual right to the statutory regime for voluntary redundancy in respect of the employees concerned.
These grounds were considerably elaborated upon in what was described by Senior Counsel for the appellant as a multi-layered argument.
ESTABLISHED SCOPE OF DECLARATORY ORDERS IN INDUSTRIAL COURT
139Before considering ground (a) and remaining grounds upon which leave to appeal may be granted, it is appropriate to refer to the legislative provision. Section 154 is in the following terms:
154 Declaratory jurisdiction
(1) The Commission in Court Session may make binding declarations of right in relation to a matter in which the Commission (however constituted) has jurisdiction. The Commission in Court Session may do so, whether or not any consequential relief is or could be claimed.
(2) Proceedings before the Commission in Court Session are not open to objection on the ground that a declaration of right only is sought.
140The operation of the equivalent of s 154 of the Act has been considered at Full Bench level as long ago as the case of the Public Service Board (NSW) v The Public Service Association (NSW) (1986) 14 IR 445. Having regard to the similarity of the provision to s 75 of the Supreme Court Act 1970 and taking into account the industrial context in which s 154 of the Industrial Relations Act appears, the Court has been guided by the principles established in the Supreme Court, the Federal Court and the High Court in relation to granting declaratory relief. As shown in the following pages, the present appeal presents no new or novel issue that warrants a consideration or re-consideration of the scope of the s 154 power. Significantly, it was not argued before Marks J that there was some new or important issue at stake in relation to the operation of s 154 arising from this case. The following passages indicate the scope and operation of declaratory orders in the context of the Industrial Relations Act and predecessor legislation and the general flexibility of this form of relief.
141It was implicit in the argument for the appellant that, where individual employee rights were concerned, it was at least highly unlikely, if not impossible, for a union to be the applicant for a declaration especially where the issue was contractual. This argument was based upon the proposition that only those who are parties to the contract can enforce it. There are a number of difficulties with this proposition. As already indicated, the question of the standing of a union to apply for a declaration under the equivalent of s 154 of the Industrial Relations Act then appearing as s 30A(2) of the Industrial Arbitration Act, 1940, was considered by a Full Bench in PSB(NSW) v PSA(NSW) . In that case the PSA had successfully applied for a declaration that a member had not been dealt with in a disciplinary inquiry in accordance with the provisions of the Public Service Act 1979.
142Having failed at first instance, the PSB raised a number of issues about the standing of unions to bring applications for declaration arguing that whether or not the Public Service Board had failed to exercise its functions legally pursuant to the Public Service Act and the Regulations was not an industrial matter but purely a judicial matter and was, therefore, a matter for the Supreme Court. Further, it was argued that, if there was a breach of the applicable award, the proper remedy was for proceedings for enforcement under s 92 of the Industrial Arbitration Act. It was also submitted that the employee affected was not an applicant in the proceedings and under the then provisions of the Industrial Arbitration Act, could not bring proceedings and, therefore, had no standing. An argument was then raised that the matter before the Commission was, in effect ,an order sought by an industrial union that had no direct interest in the individual's right to payment or alleged payment of his salary. The Government Insurance Office or the Crown, as the employer, was not joined and could not be bound by the order.
143In dismissing the appeal, the Full Bench noted that there was no question that the powers of the Commission under a variety of provisions involved making decisions of a judicial nature, determining the extent or nature of existing rights and providing appropriate relief where required. Those powers and functions existed side-by-side with quasi-legislative functions normally associated with an administrative tribunal. While the Commission was also involved in award making in relation to industrial matters, it was nevertheless constituted as a Superior Court of Record. In relation to the declaratory power, the Full Bench stated at 448-449:
The new power to make declaratory orders is couched in language which is consistent with that used in the Supreme Court Act , clearly demonstrating an intention that the Commission is to be vested with a discretionary power to make declaratory orders similar to that of the ordinary courts. ... There can be little room to question in the present case, which concerns an employee in the Public Service whose rate of salary is regulated by an industrial award made under the Industrial Arbitration Act , that the new power is intended to be exercised in a situation in which a question arises whether or not the employee has been lawfully deprived of his entitlement to salary, either as a consequence of some alleged incorrect application of award provisions, or of the terms of his contract of employment or some applicable statutory prescription, in this case the Public Service Act .
144Generally, the Full Bench accepted the PSA argument that, on the authority of Burwood Cinema Ltd and ors v Australian Theatrical and Amusement Employees Association [1925] HCA 7; (1925) 35 CLR 527; (1925) 31 ALR 282 an organisation of employees was recognised as standing in the place of and representing members and did not act as an agent. At the time of the decision of the Full Bench, the Industrial Arbitration Act gave only limited rights to individuals to commence proceedings and the standing of a registered organisation, therefore, had particular significance. In this context, the Association had argued that it had sufficient interest in the matter and therefore locus standi to bring the proceedings: applying the principles laid down by the High Court in Australian Conservation Foundation Inc v The Commonwealth [1980] HCA 53; (1980) 146 CLR 493; (1980) 45 LGRA; (1980) 28 ALR 257; (1980) 54 ALJR 176 as a registered organisation, the Association had a special interest in the employment relationship between its members and the Crown under the Public Service Act .
145The Full Bench went on to consider the utility of the declaratory order under industrial legislation noting that, in an earlier decision (where it had held that there was no power under the relevant contracts of employment or under the common law for an employee to be suspended by his employer) such a case was suitable for declaratory relief as not only providing an appropriate remedy but also eliminating the possible need for further litigation of the issues that arose in a collective situation which was the more usual position in industrial dispute cases.
146The Full Bench, at 450, continued:
We think also that further illustrations cited by Mr Handley, where declaratory orders were made to deal with suspensions under statutory provisions contained in United Kingdom legislation, are very much in point (see Barnard v National Dock Labour Board [1953] 2 QB 18; Vine v National Dock Labour Board [1957] AC 488), although as we follow Mr Cullen's argument he did not contest that the validity of the suspension procedures were reviewable before the Supreme Court as opposed to the Commission.
Where s 30A is said to be deficient as the basis for making a similar order on his argument is rather that the administration of the Public Service Board is said to be something which should be reviewable by the Supreme Court and not the Commission. In the light of the obvious intent of the new provision and its terms we see no basis for that contention. Alternatively, it is claimed that the power is not open in arbitral proceedings dealing with industrial matters. The illustrations discussed above demonstrate that it is in that very context that s 30A must clearly be contemplated as exercisable, although it is in relation to powers of a judicial nature that it is to be applied and not in the establishing of future rights and obligations under the Commission's quasi-legislative powers.
There is likewise no substance in the contention that the case should have been processed under the recovery provisions of the Act. One of the purposes of such a declaratory order is to avoid the need for such processes. That consequence, however, and the identity of the parties who would be involved in recovery proceedings, points up another aspect of the Board's argument to which we must turn.
It is essential that the prerequisites to the making of a declaratory order be observed. In that respect, what was said by Gibbs J (as he then was) in the Jododex case is very much in point. We refer in particular to what was said in the following passage from his Honour's judgment:
It is neither possible nor desirable to fetter the broad discretion given by s 10 (of the Equity Act ) by laying down rules as to the manner of its exercise. It does, however, seem to me that the Scottish rules summarised by Lord Dunedin in Russian Commercial and Industrial Bank v British Bank of Foreign Trade Ltd [1921] 2 AC 438 at 448, should in general be satisfied before the discretion is exercised in favour of making a declaration:
The question must be a real and not a theoretical question; the person raising it must have a real interest to raise it; he must be able to procure a proper contradictor, that is to say someone presently existing who has a true interest to oppose the declaration sought.
Beyond that, however little guidance can be given. As Lord Ratcliffe said in Ibeneweka v Egbuna [1964] 1 WLR at 225:
After all, it is doubtful if there is more of principle involved than the undoubted truth that the power to grant a declaration should be exercised with a proper sense of responsibility and a full realisation that judicial pronouncements ought not to be issued unless there are circumstances that call for their making. Beyond that there is no legal restriction on the award of a declaration.
147It is to be noted that, at 451, the Full Bench concluded that this was a case where it was not necessary to have the individual employee joined as a party but accepted that there would be situations where it would be both "expedient and necessary" for individual employers or employees to be joined as parties where a declaratory order was made. In that case the PSA had submitted that, once the registered organisation applying for a declaration had opened the jurisdictional gate, it was also open to then have individuals joined. As the present matter progressed before Marks J the appellant raised none of these issues and so the occasion did not arise for the Association or his Honour to consider whether or not it was appropriate for the individuals to be joined. For reasons that will be developed later in this judgment, the appellant should not be allowed now to raise these issues on appeal when it was not only content for the matter to proceed without joinder of the individuals before his Honour, but also where it had the opportunity to raise the matter when the parties were directed to frame orders that reflected his Honour's decision and again, failed to do so.
148The approach of the Full Bench in that seminal PSB case has been continued in relation to s 154. In Tempo Services Ltd v Strezouski [2005] NSWIRComm 329 ; (2005) 146 IR 411 the Full Bench of the Commission in Court Session made some general observations about the availability and use of declaratory relief under s 154 of the Act, stating at [43]:
The power to grant declaratory relief under s 154 is provided only to the Commission in Court Session although the power is expressed in extremely wide terms and may be exercised in respect to any matter 'in which the Commission (however constituted) has jurisdiction.' That phrase means that the Court Session may grant declaratory relief in respect of any matter in which the Court Session of the Industrial Relations Commission has jurisdiction.
149In Ford v SAS Trustee Corporation [2000] NSWIRComm 92; (2000) 98 IR 444 , Hungerford J spoke of the scope of s 154 at [76]:
The fundamental nature of the declaratory power in s 154 of the Industrial Relations Act is, in the opinion I hold, based on the existence of a matter about which the Commission (either as the Commission or sitting as the Court) has jurisdiction and even though no consequential relief is or could be claimed. In other words, a declaration of right may be made once there be identified a matter otherwise within the Commission's or the Court's jurisdiction, regardless whether any proceedings exist as to that matter, provided the declaration as sought relates to it. In Atlantis Relocations (NSW) Pty Ltd v Department of Industrial Relations (Inspector O'Regan) [1997] NSW IRComm 185, the majority of the Full Bench ( Glynn and Maidment JJ, Marks J concurring) put it, in a manner I would respectfully adopt, in this way (at 4):
The declaratory jurisdiction arises "in relation to a matter" in which the Commission has jurisdiction whether or not any consequential relief is or could be claimed (s 154(1)). The declaratory power is therefore not contingent upon the existence of proceedings which are otherwise within jurisdiction as the power arises in relation to a matter as opposed to proceedings.
150The history of the power to grant declaratory relief originating in s 30A of the Industrial Arbitration Act 1940 was referred to by the Full Industrial Court in Public Employment Industrial Relations Authority v Public Service Association of New South Wales (re Scorzelli and ors) (1993) 49 IR 169 at 195-6:
The second reading speech of the then Minister for Industrial Relations (the Hon. P.D. Hills) in dealing with the 1985 amendment to the 1940 Act said:
Third, it is proposed that the Act be amended to
confer jurisdiction on the Industrial Commission to
make a declaratory order or award. The Government
considers that the declaratory remedy, which is
already available to the commercial community,
should also be available to the industrial
community. This will enable the Commission when
dealing with a large number of applications, all
depending upon the same facts and legal
considerations, to make a finding about the matter
once and for all.
The language used by the then Minister reflected that
used by Sheppard J. in the AIS Bricklayers Case [1972] AR 285 which had in turn referred to the great value of the
declaratory jurisdiction of the Supreme Court to which
Barwick CJ. had referred in Commonwealth v. Sterling
Nicholas Duty Free Pty. Limited (1972) 126 CLR 297 where his Honour said at 305:
The jurisdiction to make a declaratory order
without consequential relief is a large and most
useful jurisdiction. ... Of its nature, the jurisdiction includes the power to declare that conduct which has not yet taken place will not be in breach of a contract or a
law. Indeed, it is that capacity which contributes
enormously to the utility of the jurisdiction.
151Under the Industrial Arbitration Act , as amended, s 30A(2) provided:
No proceedings before the Commission shall be open to objection on the ground that a merely declaratory order or award is sought thereby, and the Commission may make binding declarations of right whether or not any consequential relief is, or could be, sought.
152It is of interest that in the PEIRA case, the Full Industrial Court drew attention to the fact that under the 1991 Act the Commission and the Court were separated and whatever powers the Court could exercise by way of declaratory orders (which they held to be not available) declarations were definitely not available in the Commission. Against that background it can be said that s 154 was drawn in wider terms to ensure that the court could grant declaratory relief so long as there was any matter within the jurisdiction exercised by the Commission or the Court. Thus, in Crewdson v Department of Community Services and anor [2002] NSWIRComm 121 Boland J was moved to state at [64]:
It is evident from the terms of s 154 of the Act that it is not necessary that a claim for a declaratory relief be based on a cause of action. The applicant has not identified a cause of action but I consider, nevertheless, the Court has jurisdiction in relation to the matter. Such jurisdiction may be invoked under various provisions of the Act including Pts 1 and 2 of Ch 3 (industrial disputes), Pt 6 - Unfair Dismissals of Ch 2 or Div 2 of Pt 9 of Ch 2 (unfair contracts), ss 210, 213 (victimisation) and Pt 2 of Ch 7 (recovery of remuneration).
I would respectfully agree with that statement of his Honour.
153The special standing of a union such as the Association is recognised in s 366 and s 369(1)(b) of the Industrial Relations Act . These provisions permit the union to make an application for the recovery of, inter alia, over-award amounts payable under a contract "relating to the employment of the person" where their members have not been paid those entitlements. Those provisions require the consent of the person: in the proceedings before Marks J the evidence was that each of the employees seeking the payment of the redundancy package were members of the Association and had provided affidavits in support of their claim that became evidence in the proceedings. In those circumstances, there is no reason to doubt that the proceedings for a declaration were taken with their consent. The union could have proceeded under the provisions of s 366 and s 369 of the Act, but the circumstances of the members presented a classic example of the simplicity and utility of obtaining a declaration over commencing other types of proceedings. This benefit was particularly noted by the Full Bench in the PSB v PSA . It might also be noted that the issue of non-payment of the redundancy package was first raised in dispute proceedings under Ch 3 of the Industrial Relations Act and may well have been raised in unfair contracts proceedings brought under Pt 9, Ch 2 of the Act, at the very least in relation to "an arrangement."
154Importantly, these provisions, as well as a variety of other provisions (including dispute proceedings) provide the Commission, however constituted (as that term is used in s 154), with a wide jurisdiction to deal with industrial, employment and employee contractual issues in which it is envisaged that a registered union would be expected to be a party even where individuals may also be parties. Once that status of a registered union is understood, the provisions of s 154 allow a union that is able to demonstrate an interest in the matter to seek a declaration whether or not any consequential order could be made. Such a declaration would be binding between the union and the respondent. It may be possible for such an applicant union to seek consequential orders. In the present case, employees such as Ms Alzamora were provided with a final payout figure calculated in accordance with the provisions of the Policy Directive. Any failure of the respondent to abide by that declaration might lead to the matter being relisted and a consequential order or series of orders made to that effect and that particular individual employees are entitled to the payment of the money amount provided to them by the employer as representing the calculation of redundancy pay. The arguments for the respondent on appeal fail to recognise these options.
155In the present proceedings the Association clearly took the proceedings on behalf of its members in seeking a declaration under the terms of the Industrial Relations Act . The Industrial Relations Act has long recognised the special status of registered organisations to act for their members and that is the context in which the power to make declarations is to be exercised. In Electric Light and Power Supply Corporation Ltd v Electricity Commission of New South Wales [1956] HCA 22; (1956) 94 CLR 554; (1956) 1 LGRA 206; [1956] ALR 614; (1956) 30 ALJR 166, the High Court stated:
When the legislature finds that a specific question of a judicial nature arises but that there is at hand an established court to the determination of which the question may be appropriately submitted, it may be supposed that if the legislature does not mean to take the court as it finds it with all its incidents including the liability to appeal, it will say so. In the absence of express words to the contrary or of reasonably plain intendment the inference may safely be made that it takes it as it finds it with all its incidents and the inference will accord with reality.
In industrial matters brought under the provisions of the Industrial Relations Act the registered organisation has locus to move the Commission and the Court as a party in its own right. That is the context in which the s 154 power was granted to the Industrial Court.
156The Court has previously dealt with applications by registered unions (or through the union secretary) for declaratory relief (for example, see Beattie (o/b CBOA) v Commonwealth Bank [2006] NSWIRComm 238; (2006) 155 IR 295; Police Association (NSW) v Commissioner of Police [2002] NSWIRComm 126; (2002) 123 IR 301 ). In the Police Association case , Wright P at [71] stated:
It is to be observed that the grant of declaratory relief carries with it the grant of liberty to apply to seek further relief should the declaration granted not resolve the issues between the parties: see Royal Insurance Company Limited v Mylius (1926) 38 CLR 477 at 497 per Isaacs J (with whom Knox CJ and Starke J agreed) and Quin v Attorney General New South Wales (1988) 28 IR 244 at 249, 261.
157The width of the power to make declaratory orders under s 154 and the circumstances in which the exercise of the jurisdiction would be appropriate was further commented upon by the Full Bench in State of New South Wales (Department of Public Works and Services and Department of Education and Training) v WorkCover Authority of New South Wales (Inspector Page) [2000] NSWIRComm 124; (2000) 101 IR 131 where, in proceedings against an offence against the Occupational Health and Safety Act 2000, the Court noted at [20]:
We interpose the observation that it may have been open to the applicant to seek from this Court declaratory orders under s 154 of the Industrial Relations Act as against the respondent in relation to the right of the applicant to be free from prosecution in its emanation as separate government departments and as to its privilege from self-incrimination in resisting the production of documents. ... We mention it, however, because the Industrial Relations Act affords what is a most useful facility in the declaratory jurisdiction in the resolution of legal issues between parties and we would not wish to be seen as ignoring such mechanism for an appropriate case in the future.
158There are other examples that demonstrate that an industrial organisation has a sufficient interest to apply for a declaration in circumstances where the terms and conditions of their members' employment are affected. Thus, in Shop Distributive and Allied Employees' Association v The Minister for Industrial Affairs for the State of South Australia [1995] HCA 11; (1995) 183 CLR 552; 129 ALR 191; (1995) 69 ALJR 558; [1995] 9 Leg Rep 2; (1995) 60 IR 11 the High Court held that the union had locus standi to apply for a declaration because its members, who were shop assistants, had a special interest in the trading hours of shops in which they were employed and any alteration to those hours would necessarily affect the terms and conditions of their employment.
159In the SDA case, the Minister proposed to change retail industry trading hours to permit general Sunday trading in the Adelaide city centre. The changes were brought about by the Minister issuing certificates of exemption to a number of specified shops under the provisions of shop hours legislation . The union sought declarations that the certificates of exemption would, if issued, be invalid and also sought an injunction restraining the Minister from issuing those certificates. The High Court rejected contentions that the change in shopping hours would tend to affect the whole community in various ways and that the shop assistants concerned had no special interest in that subject matter that would give them standing to make the applications. There was no suggestion that, because the union was not a party to the contracts of employment, it had no standing to seek a declaration. To similar effect is the decision of Ryan J in Australian Nursing Federation v Alcheringa Hostel Inc [2004] FCA 375; (2004) 136 FCR 530; (2004) 138 IR 122 where the union and members applied for declarations concerning the respondent Hostel's standing under Victorian Regulations.
160The approach, referred to above, is not unusual. In a different context the interests of a union to make an application under the Administrative Decisions (Judicial Review) Act 1977 (Cth) was recognised in Australian Institute of Marine and Power Engineers v Secretary, Department of Transport (1986) 13 FCR 124; (1986) 12 ALD 138; (1986) 71 ALR 73; (1986) 18 IR 431. In that case Gummow J, then sitting in the Federal Court, declared that the union was entitled to make a request for reasons from the Department because it had a sufficient interest to constitute the applicant as an aggrieved person within the meaning of the Judicial Review Act .
161In reaching that conclusion his Honour considered the position of an aggrieved person under the general law: locus standi involved the concept of grievance as providing standing in relation to the rules that controlled the issue of writs of certiorari. At [132] his Honour noted that what needed to be emphasised was that, even at common law, it was by no means apparent that "grievance" necessarily involved injury to property or present legal interests or "special damage" in any technical sense: nor was it essential that the aggrieved person be a party to the administrative decision sought to be quashed by certiorari if he otherwise had sufficient standing. The result was that there was a measure of broad agreement as to locus standi for both legal and equitable remedies in public law. The position is a fortiori in relation to s 154 of the Industrial Relations Act.
LACK OF PRIVITY OF CONTRACT NO BAR TO DECLARATION
162It appears to be the situation that, if the present declaration is required to be enforced, there is no barrier to the Association exercising its implied right to relist the matter in order to perfect the orders if that course was thought to be desirable. While it has been held that only parties to a declaration can enforce it, once a registered organisation is properly a party to such an application because of its special interests in the subject matter then it is a party capable of having the declaration enforced. The submissions for the appellant confuse the usual rule that only a party to a contract can enforce the contract with the special considerations that have to be applied where a declaration is involved: an application for a declaration does not require the moving party to be privy to the contract and a third party may have a relevant interest that permits it to be an applicant: this was the case in Aussie Airlines Pty Ltd v Australian Airlines Ltd and ors (1996) 68 FCR 406; (1996) 139 ALR 663.
163The issue in the Aussie Airlines case concerned arrangements whereby two established airlines, Qantas and Ansett, were granted long-term leases to enable each of them to develop terminal facilities essential for their operations. The leases contained provisions compelling both airlines to provide sub-leases to new entrants to the domestic aviation industry - the entire arrangement was designed to bring about de-regulation in the industry. Aussie Airlines was incorporated for the purposes of operating a domestic airline service but at the relevant time was not conducting any business in the aviation industry, had only a small issued capital and had no business premises although one of its directors had considerable experience in the airline industry. Aussie Airlines requested the head lessee to grant it a sub-lease but that application was refused. Aussie Airlines then applied to the Federal Court for a declaration that it was a new entrant to the domestic aviation industry within the leasing arrangements and with the rights attached to such an entity. A declaration was made at first instance and was confirmed on appeal by the Full Court of the Federal Court.
164For present purposes it is of significance that, on the appeal, it was argued by Qantas that at first instance the trial judge had not dealt with an argument that Aussie Airlines had no privity of contract with Qantas or the head lessor and therefore, having no rights under the head leases, had no standing to sue. In dismissing the appeal, Lockhart J (with whom Spender and Cooper JJ agreed) addressed the question of necessary standing to obtain a declaration and stated at 414:
For a party to have sufficient standing to seek and obtain the grant of declaratory relief it must satisfy a number of tests which have been formulated by the courts, some in the alternative and some cumulative. I shall formulate them in summary form as follows:
The proceeding must involve the determination of a question that is not abstract or hypothetical. There must be a real question involved, and the declaratory relief must be directed to the determination of legal controversies: Re Judiciary and Navigation Acts (1921) 29 CLR 257. The answer to the question must produce some real consequences for the parties.
The applicant for declaratory relief will not have sufficient status if relief is "claimed in relation to circumstances that [have] not occurred and might never happen": University of New South Wales v Moorhouse (1975) 133 CLR 1 at 10 per Gibbs J: or if the Court's declaration will produce no foreseeable consequences for the parties: Gardner v Dairy Industry Authority (NSW) (1977) 52 ALJR 180 at 180 per Mason J and at 189 per Aickin J.
The party seeking declaratory relief must have a real interest to raise it: Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 437 per Gibbs J and Russian Commercial & Industrial Bank v British Bank for Foreign Trade Ltd at 448 per Lord Dunedin.
Generally there must be a proper contradictor: Russian Commercial & Industrial Bank at 448; and Ainsworth at 596 per Brennan J.
The relevant principles are laid down by the High Court in Ainsworth , in particular in the joint judgment of Mason CJ, Dawson, Toohey and Gaudron JJ at 581-582. Their Honours made the point that "[it is now accepted that superior courts have inherent power to grant declaratory relief"; and "[ilt is a
discretionary power which ' it is neither possible nor desirable to fetter . . . by laying down rules as to the manner of its exercise' " (a reference to a passage from the judgment of Gibbs J in Jododex at 437). See also Oil Basins Ltd v Commonwealth at 649 per Dawson .
These are the rules that should in general be satisfied before the Court's discretion is exercised in favour of granting declaratory relief.
This Court has undoubted power to grant declaratory relief whether or not any consequential relief is or could be claimed: s 21 of the Federal Court of Australia Act 1976 (Cth); and Ainsworth per Mason CJ, Dawson, Toohey and Gaudron JJ at 581-582. See also Commonwealth v Sterling Nicholas Duty Free Pty Ltd (1972) 126 CLR 297 at 305 per Barwick CJ; Telstra Corporation Ltd v
Australian Telecommunications Authority (1995) 133 ALR 417 at 424-425 per Lockhart J; and Young on Declaratory Orders (2nd ed, 1984) p 74.
165In Edwards v Santos Ltd (2011) HCA 8, the High Court at [38] spoke of Aussie Airlines as providing an example of how a person could have standing to obtain a declaration and how a court could have jurisdiction to grant the declaration even though the applicant did not have rights under the head leases enforceable against the head lessee. Specific mention was made of the fact that Lockhart J had found that the question was not hypothetical and that it was of real and practical importance to the applicant, that the applicant had a real commercial interest in the relief, that the head lessee was plainly a contradictor and there was obviously a real controversy. The High Court noted that, whether or not the plaintiffs in Edwards and Santos Ltd had enforceable rights against the petroleum defendants, the question whether the authority to prospect was valid was not hypothetical but was of real practical importance to the plaintiffs because they had a real commercial interest in the relief - the defendants were plainly contradictors and it was obviously a real controversy.
166As the appellant developed the argument, grounds (a) and (b) became intertwined and overlapped. The fundamental issue raised by the appellant was that a declaration concerning contractual relationships, in an employment context, could not be made unless the parties to the contract were also parties to the proceedings. It was submitted that there were two necessary elements for such a declaration to be made: firstly, only parties who were privy to the contract could apply for a declaration as to their rights and thereby achieve res judicata and/or issue estoppel in relation to the rights so established; and secondly, if the person seeking the declaration was not establishing their rights it was necessary for those whose rights were being affected to be party to the proceedings and so be bound by the order. The consequence of that approach was that the nurses claiming a right to the redundancy package individually had to be parties to the proceedings before Marks J. The requirement for personal involvement of the contracting parties was said to flow from the fact that a declaration established in the parties res judicata or issue estoppel as a result of the proceedings. In the present case, the industrial union representing nurses was the only moving party but it was not privy to the contract alleged to exist.
167Unfortunately, as earlier noted, these issues were not addressed at the trial before Marks J and no opportunity was provided to the Association and its members to consider the consequences of proceeding without the joinder of individuals claiming a right to the redundancy package. It was further argued by the appellant that no declaration could be made in such circumstances on the application of the Association alone as the Association could only raise a hypothetical question because it could not establish res judicata or issue estoppel against the employer. Cases such as Aussie Airlines demonstrate the error in that approach as does the proceeding discussion.
168There is further longstanding authority against the type of restrictions sought to be imposed on the making of declaratory orders as reflected in the appellant's submissions. In P W Young QC, Declaratory Orders, 2nd ed (1984) Butterworths at [205] and [206] it was stated: