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[2007] FCAFC 120
Federal Court of Australia (Full Court)
2007-08-07
Sachs J, Black CJ, Jessup JJ
Original judgment source is linked above.
Background 170 The nature of the appellant's business was nowhere shortly stated - either in the considerable affidavit material relied upon at trial or in the reasons of the trial Judge. It was as though the appellant was well-enough known for that circumstance to be obvious. However, one may infer a little about the subject from a listing of the appellant's services which is set out in the first chapter of a substantial document produced by the appellant called "Working With Us" ("WWU") which was given to the respondent at the time he took up his employment. Some of those services are corporate advice, mergers and acquisition advice, underwriting, analysis and portfolio management, advising private clients as to their investments and superannuation and retirement planning. 171 On 15 May 2000 the respondent accepted a written offer of employment from the appellant dated 4 May 2000. He was initially employed as an associate investment adviser, but on 1 July 2001 he was upgraded to the position of investment adviser. In that role, he was required to provide investment advice to existing clients of the appellant, and to develop new client relationships. The respondent worked in the appellant's Canberra office, and reported to the Canberra branch manager, Rod Sutherland. The respondent received a base salary, together with incentive payments calculated by reference to the nature and extent of the fees which he earned for the appellant. 172 The terms of the contract which the trial Judge held the appellant had breached were established, according to his Honour, upon the respondent's acceptance of the appellant's offer of employment on 15 May 2000. There were two documents which were provided to the respondent at about that time: a formal letter of offer dated 4 May 2000 and WWU. The critical terms were in WWU. Although the appellant accepted that the terms of the letter of offer were contractual, it resisted the suggestion that the terms of WWU were contractual. His Honour held that they were, and that holding is challenged in this appeal. It will be necessary, therefore, to consider the terms of the letter and of WWU, and the circumstance in which those documents were provided to the respondent by the appellant and (in the case of the letter) executed by the respondent.
The offer of employment 173 By its letter dated 4 May 2000, the appellant offered the respondent employment as an associate investment adviser in its Canberra office. The letter opened by confirming the appellant's verbal offer of employment to the respondent in the position of associate investment adviser in the Canberra office. After a brief reference to the appellant's position in the finance and securities industry, the letter stated: Upon commencement we will require your signature on our copy of this letter confirming your acceptance of the details and conditions of employment as outlined below. The letter referred to the respondent's remuneration package and to the appellant's incentive schemes in which it was expected that the respondent would participate. 174 Under the heading "Employee Securities Investment and Transactions", the letter referred to, but did not set out in terms, a policy which the appellant had as to employees undertaking investments in their own names, and like transactions. The second paragraph under that heading read as follows: All securities transactions for yourself and associates are to be processed through J B Were & Son. Stock Exchange regulations require that all financial securities transactions undertaken by employees of stockbroking organisations, and their associates, must be transacted though the employer organisation. You may not knowingly buy or sell securities for an employee or associate of another broker. You are required to read and sign the Company's Staff Transactions April 2000 Policy. 175 The next heading in the letter was "Intellectual Property and Duties of Confidentiality". Immediately beneath that heading, the following appears: Your execution of and adherence to these terms is a condition of your employment with Were Holdings Limited. Terms are as follows: It was provided that inventions, discoveries etc were to be the exclusive property of the appellant; that the respondent assigned to the appellant all proprietary rights, and similar rights, in any inventions; and that confidential information was to be delivered to the appellant immediately upon termination of employment. The letter then set out a number of restraints in connection with trade secrets, confidential information, and the like. 176 Under the heading "General Instructions" it was stated: From time to time the Company has issued and will in the future issue office memoranda and instruments with which it will expect you to comply as applicable. If you have any queries at any time about which memoranda and instructions apply to you, you should raise that question with me or with Colin. 177 The letter was signed by the Human Resources Services Manager of the appellant. Beneath that again, there was provision for a counterpart of the letter to be signed by the respondent, by which he stated, in the printed terms of the letter: "I hereby accept your offer of employment as detailed in the above letter." The respondent signed that counterpart on 15 May 2000. 178 The trial Judge found that WWU was sent to the respondent by the appellant together with his letter of offer on 4 May 2000. In the appeal, there was some suggestion that the evidence may not have sustained such a finding, but, in its Second Amended Defence dated 7 April 2006, the appellant alleged that the respondent was given a copy of WWU when he was offered employment. In my view, the appellant should not be permitted to resile from this allegation, in which circumstances his Honour's finding in this respect must stand.
The content of "working with us" 179 As its name suggests, WWU was a document which contained information about many aspects of employment within the appellant's organisation. Indeed, the opening chapter, entitled "Welcome to JBWere" concluded with the following paragraph: We trust the following information will assist you in gaining an understanding of JBWere. We take an active personal interest in all our people and will make every effort to guide and direct your career aspirations towards a successful goal. It would, however, be an oversimplification, and something of an inaccuracy, to say that WWU contained information only. It also contained statements of obligations which employees were expected to accept, rules with which employees were required to comply, advice and helpful suggestions for the assistance of employees and policies and procedures followed within the appellant's organisation of which employees were expected to be aware. Although WWU was provided to the respondent as a prospective new employee, it seems that it was also a document with which existing employees were expected to be familiar, and to which existing employees might turn if in need of information about procedures, obligations etc from time to time. 180 WWU was amended from time to time as necessary. The version which was tendered in the proceeding before the trial Judge was marked "Version Number 9, May 2002". If that version was introduced in May 2002, manifestly it was not the version that was sent to the respondent with his offer of employment in May 2000. The latter document was not in evidence. Rather, the parties conducted their cases on the basis that it would be safe to assume that the version of WWU which was sent to the respondent in May 2000 was relevantly indistinguishable from version 9. In any event, since this was a document of the appellant, not having put the earlier version of the document into evidence, it could not be heard to contend that that version was different from the one on which the respondent relied. 181 Although the trial Judge said that WWU contained "six substantive chapters", there were ten chapters in the version sent to the respondent in May 2000. I have already referred to the first - "Welcome to JBWere". 182 The next chapter (consisting of a single page) was entitled "JBWere Team Purpose - Culture in Practice. It contained a list of categories under which the appellant's "culture" would, apparently, be given specific expression, namely, Client First, Market Driven, Innovation and Flexibility, Respect and Courtesy, One Team and Personal Leadership. 183 The next chapter (of 16 pages) was entitled "Overview of Our Main Services". As the name suggests, the chapter was chiefly concerned to identify the kind of services which the appellant provided in the different sectors in which it operated. 184 The next chapter was a single page, entitled "Steps to Creating Client Value". On this page was set out what were described as "Seven General Skills to Creating Client Value". As a generalisation, those "skills" left the reader of WWU in no doubt but that the appellant placed the interests of its clients ahead of all other considerations. This was the "culture" of the organisation with which the respondent took up employment in May 2000. 185 The next chapter was entitled "Code of Conduct". A general impression of the subjects covered by that chapter may be seen from a listing of the internal headings: Chinese Walls Confidentiality Conflict of Interest Electronic Mail and Internet Protocol Employee Securities Transactions Equal Employment Opportunity Gifts Harassment Insider Trading Integrity Media Comments Mobile Phones Other Employment Professional Conduct Proper Authority Protection of Intellectual Property Taped Telephone Conversations Welcoming Diversity & Preventing Discrimination JBWere's Leaders on Diversity and Preventing Discrimination His Honour referred to this chapter as containing "numerous rules to be followed by employees". I would not regard everything in the chapter as properly described as "rules". In many respects the chapter referred to what I would call standards of organisational behaviour and conduct which would find practical expression by way of instinctive and acquired behaviour patterns rather than by way of conscious obedience to specific "rules". 186 Within this chapter, the following appeared under the heading "Conflict of Interest": It is important that you avoid any situation where personal interests may conflict with the interests of the firm or its clients. If you are involved in any financial, political or civic activities you are free to exercise your individual rights, but should avoid and conflict of interest between your outside activities and your position within the firm. The following appeared under the heading "Harassment": The JBWere culture and 'family' approach means each person is able to work positively and is treated with respect and courtesy. It is within the context of our culture that all people within the JBWere team will work together to prevent any unwelcome, uninvited and unwanted conduct which makes another team member feel offended, humiliated or intimidated in any work related situation and where that reaction is reasonable in the circumstances. The professional behaviour and conduct of each team member is important. It is a reflection of the person, the firm and our client service attitude. Further information may be obtained by Human Resources. The following appeared under the heading "Integrity": Integrity is a core value of the firm. It means we are open and honest, and we honour our obligations and commitments to each other, our clients, the people we do business with and the community. Always remember that you are a representative of the firm, therefore you cannot advise friends or social contacts without a proper authority. If you feel that you are placed in a situation that makes you feel uncomfortable, consider asking yourself the following questions:
Circumstances leading to the litigation 211 When he commenced employment with the appellant, the respondent was given a list of clients for whose business he was responsible. Other names were given to him from time to time, and he himself added names. At this time (and until about mid 2002) the appellant was singly responsible for the business of the clients on his list. 212 As a result of an initiative in late 2001 by Mr Sutherland, the concept of a "partnership approach" was introduced into the work of investment advisers in the appellant's Canberra office. Under this concept, a small group of investment advisers (in each case referred to in the evidence, three) would share a single list of clients for whose business they were jointly responsible. The concept was said to have a number of advantages over the existing system in which each adviser had his or her own list. In practice, and as explained by Mr Sutherland to the other advisers at the time, what was required was that financial advisers who proposed to form a "partnership" should draw up a "business plan" to which they agreed, and which dealt with the way their partnership would work in practice, the way clients' needs would be serviced by the members of the partnership, and how the total revenues of the partnership would be allocated as between those members (eg for the purposes of the appellant's incentive-based remuneration). Mr Sutherland himself entered into a partnership with two other investment advisers in the Canberra office. This was referred to as the "RSL Partnership". 213 In 2002, the respondent and two other investment advisers, Ms Dal Bon and Mr Keogh, decided to form their own partnership, which became known as the "DKN Partnership". They drew up a business plan and showed it to Mr Sutherland. The DKN Partnership commenced operation on 1 July 2002. 214 In the discussion paper originally presented by Mr Sutherland on the partnership concept in December 2001, there was a "frequently asked questions" section. One of the questions was: "what if a member of the team wants to leave the partnership?" Mr Sutherland's response was that the exit of a member from a partnership was "highly discouraged". He said that a partnership was similar to a marriage, in that it was a long-term commitment. He added: In the rare case that a partner insists on leaving the partnership, that partner will leave his/her clients behind with the partnership, with the exception of any clients who insist on dealing with the exiting partner. In the business plan drawn up for the DKN Partnership, the respondent and his colleagues had agreed on the following "exit strategies": The decision to enter into a team arrangement has not been taken lightly. Under the team arrangement, if a team member decides to exit the partnership, then all clients will remain within the team structure with subsequent revenue to be spread 50:50. 215 On about 2 May 2003, Ms Dal Bon announced that she would leave the employ of the appellant on 30 June 2003. This development squarely raised the question of the allocation of the existing clients of the DKN Partnership. The respondent and Mr Keogh accepted that they would be unable to provide a proper service to all the clients who had been on their combined list with Ms Dal Bon. According to the respondent, there was a suggestion, with which Mr Sutherland initially agreed, that some "relatively inactive family groups" should be transferred to an online service operated by the appellant. After some further development of that proposal, however, Mr Sutherland changed his mind and, on 10 June 2003, announced that a large number of high-value clients would be transferred out of the DKN Partnership. There followed an acrimonious conversation between the respondent and Mr Sutherland. According to his Honour - Mr Sutherland made a number of critical and offensive comments, including telling [the respondent] he was 'disgusted' with his 'greed', that he was 'lazy' and whingeing'. [The respondent] claimed in evidence that he felt Mr Sutherland had a conflict of interest, being both the person allocating clients and a member of team RSL, and that he suggested Mr Sutherland appoint an independent person to mediate the dispute over allocation. When the respondent told Mr Sutherland that he would speak to Paul Heath (the Manager, NSW Private Clients, of the appellant) about the matter, Mr Sutherland replied "you speak to Paul Heath and you will get nothing". 216 The respondent and Mr Keogh did speak to Mr Heath. They complained to him of Mr Sutherland's decision to reallocate a good many of the higher value clients away from the DKN Partnership. According to a file note made by Mr Heath, the concerns of the respondent and Mr Keogh were, first, that they did not understand the reasons for the reallocation policy; that they did not feel that the reallocation was in the best interests of the clients; and that they were concerned about their relationship with Mr Sutherland, particularly insofar as Mr Sutherland had called them "greedy". They did not offer any solutions to Mr Heath, who made it clear to them that he did not want to interfere with Mr Sutherland's right to run the Canberra office, and that he would not offer an opinion without asking Mr Sutherland's point of view. Before Mr Heath could speak to Mr Sutherland, the former received an email from Mr Keogh, explaining his difficulty with Mr Sutherland's change in client allocation policy, and concluding with the following paragraph: I am not aware of any intention of Rod to speak with you on this issue following our discussion with him. My view on the matter is that unfortunately reason has not won the day which is disappointing however we did decide before going ahead with talking with you, that we would accept any decision as final and we have to accept that. If you think that any issue needs to be raised as a result of our discussions with you please feel free to do so as everything is now out in the open otherwise I guess it is a closed matter. When Mr Heath did speak to Mr Sutherland, the latter said that "the issue has now been sorted out", and the former said that he had told the respondent and Mr Keogh that he did not want to interfere, but that he would have been concerned if Sutherland had said to them "don't call Paul". He told Sutherland that "we will always support you however you must not shut down the staff". 217 It seems that the concluding paragraph of Mr Keogh's email was not an accurate representation of the respondent's position. At a meeting on 8 July 2003, at which Mr Sutherland announced the distribution of the new client lists, he (Sutherland) said: "if I become aware of any adviser having had previous contact with clients without my authorisation there will be trouble". While saying this, Mr Sutherland looked directly at the respondent and Mr Koegh, and used a very intimidating tone. 218 Two days later, on 10 July 2003, there was a discussion between the respondent and Mr Sutherland about the latter's allegation that the former had had contact with a previous client without the latter's authority. Mr Sutherland told the respondent that he was "tired of seeing you drag your feet around the office". The respondent told Mr Sutherland of the adverse financial impact which he and his family would suffer as a result of the reallocations, and Mr Sutherland replied: "I am not responsible for your financial situation, I am not your father, and if you have problems at home you shouldn't bring them to work." 219 On 28 July 2003, the respondent wrote to the human resources section of the appellant. He said that he wrote with "a considerable degree of trepidation" to express his concern over issues that had occurred in the Canberra office. He said that those issues had caused him a significant degree of "angst". He recited at length the events which had followed Ms Dal Bon's announcement of her imminent departure. He complained about the reallocation of clients away from the DKN Partnership. He referred to the statements made by Mr Sutherland on 8 and 10 July 2003. He referred to Mr Sutherland's aggressive statements and demeanor. He implied that Mr Sutherland had reallocated clients, at least in some cases, to his own advantage. He said that he viewed Mr Sutherland's remarks and behaviour at the meeting on 8 July 2003 as "extremely intimidating and threatening". He said: Upon further investigating the JB Were Career Mentor Program - Your Role as Manager in Career Development - quoting 'since discussions will take place about personal issues, including doubts an individual may have about their future direction or about personal weakness, the role demands sensitivity to the individual feelings. The individual needs to have a relationship of trust and confidence'. Unfortunately, my trust and confidence in Rod is non-existent. 220 The respondent said that he had found Mr Sutherland's comments and actions "both threatening and disturbing", and that he felt "a considerable" degree of anxiety, stress and discomfort" and was "reluctant to accept the decision as final". He enclosed with his letter a copy of an item extracted from the Australian Financial Review of 22 July 2003 headed "Bully Bosses a Health Risk for Workers". The burden of that article was that bullying by bosses in the workplace can affect employees' blood pressure, and increase the chance of heart attack or stroke. The respondent said that the item reinforced his view that "Canberra Management in recent weeks has displayed a considerable number of these traits." He added: "It has become apparent that Rod has given little consideration to the success of advisers outside of the RSL team as the situation appears to be stained with nepotism". The respondent asked for his letter to remain confidential. 221 The respondent's correspondence came to the attention of Gina Jowett, the appellant's Human Resources Manager based in Sydney. She immediately telephoned the respondent and made arrangements to speak at a time when he was not in the office. They had a lengthy telephone conversation on 6 August 2003. According to a file note made by Ms Jowett, the respondent told her that he wanted something done by management about what he viewed as "a case for discrimination and intimidation". Ms Jowett said that there were two issues - the client distribution issue and the behavioural issue in the office. The respondent disputed that, saying that intertwined there was one situation only, not separate issues. He said he was not happy, and was stressed. The environment was not conducive to allow him to do his job appropriately, and management had done nothing about it. He said that the only way forward was for Mr Sutherland to be removed from his role, and that he would not be satisfied until that step had been taken. Ms Jowett said that, as that was the first discussion which they had had, it was an opportunity for him to elaborate on his concerns. She acknowledged the respondent's feelings, and said that they needed to "work through" the matter. She explained the appellant's complaint process to the respondent. The respondent indicated that they would "just wait and see" and that, for him, there was only one option to resolve the matter. Ms Jowett said that she would investigate the situation. 222 Ms Jowett telephoned the respondent about two days later. Again, the respondent said that it was up to the appellant to make decisions surrounding client allocation. He said that Mr Sutherland had become aggressive and intimidating, and was "demonic" and "on fire" and in no mood to negotiate. The respondent said that he could see the whites of Mr Sutherland's eyes, and that he had never seen anyone that far out of control before. 223 Although the timing of the steps next taken by Ms Jowett is unclear, it does appear as though a period of about at least two weeks passed before she did anything else in relation to the respondent's complaint. In a conversation which Ms Jowett put as "towards the end of August", she discussed the matter again with Mr Heath. Mr Heath said that he and another member of the appellant's staff identified only as "Chris" were working with Mr Sutherland to have him step aside. Apparently he said there were numerous discussions occurring in the background which would result in Mr Sutherland stepping aside. 224 Ms Jowett contacted Mr Sutherland, and arranged for him to meet her at the appellant's Sydney office on 27 August 2003. It was then that she showed Mr Sutherland the respondent's letter of 28 July 2003 for the first time. Mr Sutherland denied most of the respondent's substantive allegations, but agreed that morale was bad in the Canberra office. Ms Jowett told Mr Sutherland that at a minimum some of his comments had been unprofessional, and that he needed to make sure that he did not put himself or the appellant in "this position" again. Mr Heath joined the discussion, and told Mr Sutherland that lack of transparency and consistency of decision making had caused a loss of trust and confidence in his management style, and he needed to consider his position carefully. Mr Sutherland said that he found his role difficult, and that he would think about that feedback carefully. 225 Although there is no specific record of what passed, it seems that Ms Jowett and the respondent had a number of telephone conversations about the respondent's complaint in the months of August, September and October 2003. In his affidavit, the respondent said there were six to eight such conversations. 226 On 10 October 2003, Ms Jowett arranged for the respondent to fly to Sydney, and on 15 October 2003 he did so, and there met Ms Jowett and Mr Heath. Ms Jowett told the respondent that Mr Sutherland was stepping aside from his role as Canberra manager. To her surprise, the respondent indicated that he already knew that fact. He raised a new complaint about Mr Sutherland, namely, that one of his clients, a Mr Alan Barter, had been manipulated by Mr Sutherland to discontinue receiving service from the respondent, and to commence receiving service from Mr Sutherland. There was some discussion about that new complaint. 227 At this meeting, there was also discussion about the respondent's original complaint. According to Ms Jowett's file note, she and Mr Heath told the respondent that, without knowing what his expectations were, it was difficult to work towards an outcome. He said he was too stressed to think about the situation, that he had not been feeling well, and that one option would be for the appellant to allow him some time off work. Ms Jowett said that he was welcome to take time off work, either as holidays or (with a medical certificate) as sick leave. The respondent said he was frustrated about the whole situation, and that when he came into the office each morning (according to Ms Jowett's notes) "he felt sick, he actually hated [Mr Sutherland] and hated the sight of him - just looking at him made him feel ill". Ms Jowett said that that was a concern to her, and referred to the appellant's employee assistance program. She explained the availability of a confidential counselling service provided by an outside organisation and available to the respondent. A few days after this meeting, Ms Jowett completed an authorisation form for that counselling service to be provided to the respondent, at the expense of the appellant. 228 As mentioned in the meeting on 15 October 2003, Mr Sutherland stood aside from the position of Manager of the Canberra office in that month. He was replaced by another investment adviser, Mr Dorian Bontempelli. Ms Jowett discussed the respondent's new complaints regarding Mr Barter's account with Mr Bontempelli. When the matter was put to Mr Sutherland, he said that it was Mr Barter himself who had decided to take his account away from the respondent. 229 Some time in November 2003, Ms Jowett telephoned the respondent to advise him of the outcome of his complaint. She said that his concerns had been taken seriously, and that she had investigated the situation raised by his complaint, as well as the incident relating to Mr Barter. She said that Mr Heath had instructed Mr Sutherland that any transfers of clients between staff members in the Canberra office would in future be referred to Mr Bontempelli. She said that Mr Bontempelli and Mr Heath "would investigate further the situations and make decisions around that". The respondent reacted to this news with disbelief. He asked: "what else are you going to do?" Ms Jowett said that she felt that the situation had been addressed in the most appropriate way. She said that the combination of Mr Sutherland moving from the role of Manager, and the instructions that had been given to him, "were the most appropriate course of action in this point in time". The respondent said that the issues had been "swept under the carpet", and became quite hostile over the telephone. He said he wished to see the response in writing as soon as possible, and that he was not satisfied. 230 On 1 December 2003, the respondent attended at the rooms of his General Practitioner, Dr Jamieson. According to a letter which Dr Jamieson wrote to the respondent's solicitors on 15 April 2005, the respondent presented in a most distressed state, and related a six month history of workplace conflict. He told Dr Jamieson that the conflict was of such a degree that his career in the industry as a whole was compromised, and that it had had a very serious effect on his mental state, on his marriage and on his family life. Dr Jamieson said the respondent presented with symptoms of a major depressive disorder, ie depressed mood, poor self esteem, an extremely poor view of his future, a great sense of failure and withdrawal. Dr Jamieson prescribed anti-depressant medication. On the same day (1 December 2003), the respondent commenced a period of sick leave, and remained on leave until 2 January 2004. 231 In a letter to the respondent dated 1 December 2003, but not sent until 8 December 2003, Ms Jowett said: I have now completed an investigation into your complaints. Following my review of the issues you have raised, I acknowledge that an apparent lack of transparency and failure by Rod to clearly communicate his decisions regarding the allocation of client accounts has contributed to the issues you have raised in your complaints concerning your relationship with Rod. However, I confirm that it was necessary and appropriate for Rod in his position as the Canberra Manager to make decisions regarding the operations of the Canberra office. Rod's decisions regarding the allocation of client accounts following the resignation of Gabrielle Dal Bon were appropriate having regard to the needs of the firm's clients and the operations of the Canberra office. Although, I accept that you have felt distressed and upset on occasions as a result of the issues giving rise to your complaints, I am satisfied that Rod has not attempted to intimidate you or cause you stress during his discussions with you about the allocation of client accounts. As you are aware, Rod has stepped down from the position of Canberra Manager and is now employed in the position of Investment Adviser in the Canberra office. Dorian Bontempelli has subsequently been appointed to the role of Canberra Manager. In your letter dated 10 October 2003 you make a complaint in relation to the transfer of the Barter account to Mark Keogh. Following my investigation, I have found no evidence to support your claim that the confidential complaint made by you against Rod has been discussed by him with any clients or that Barter's decision to transfer its account to Mark was related in any way to your complaint against Rod. 232 The respondent did not accept the resolution of his complaint by Ms Jowett. He required the matter to be referred further up the line, as a result of which it was dealt with by Ms Diane Jacobs, the Group Manager, Human Resources, of the appellant. Although she did not give evidence, a file note made by Ms Jacobs of a meeting with the respondent on 17 March 2004 was admitted into evidence. According to that note, the respondent said that the "key points were around the allocation of clients". He felt his job was under threat. He said he was "off his rocker" and that he would not "go there now". Ms Jacobs noted that the respondent looked "as if he would cry". He felt that no one was listening to him. He alleged that Mr Sutherland had stepped down for family reasons, not because of his complaint. He felt his complaint was being ignored. He explained that, in December 2003, he was very stressed, he sought counselling, he was referred to his doctor, he was put onto medication, he was "suicidal", he could not face going to work, he was on medication during the day and on sleeping pills at night, and he felt isolated and not supported. Mr David Evans (the Managing Director - Retail for NSW of the appellant), who was at the meeting, told the respondent that he had been through a lot, and apologised. He said that it was not the case that the matter had not been treated seriously by the appellant. He said that the feedback given by the respondent to Mr Heath had been considered "and formed a real part of the decision regarding [Mr Sutherland] not continuing in the role of Manager." Ms Jacobs herself said that it was handled in the way it was to help the respondent "retain confidentiality and dignity". 233 On 29 March 2004, Mr Evans wrote to the respondent with a financial offer, being a minimum bonus payment of $100,000 for the six months to 30 September 2004. The respondent did not accept that offer. Instead, he sought financial compensation for what he said was a loss of $300,000. Further, he wanted the appellant to rectify the impact of Mr Sutherland's reallocation of clients. He said that the obvious "method" would be "to undo the unfair distribution and re-transfer clients with annual brokerage/fee revenue totalling $300,000 to my adviser code … as at 1 July 2004." He further sought that the RSL Partnership (of which Mr Sutherland was a member) be dissolved and its members relocated to other dealing desks. 234 At the conclusion of a further meeting held on 22 June 2004, Mr Evans handed the respondent a letter which referred to his rejection of the offer contained in the letter of 29 March 2004, which contained a denial that the appellant was liable to compensate the respondent as proposed by him, which said that the matter was now "closed and no further offers of assistance will be made", and which stated that, if the respondent were fit for work, he would be expected to carry out his full range of duties and responsibilities. 235 On 9 July 2004, the respondent saw a Clinical Psychologist, Mr O'Neill, on reference from Ms Jowett. In the concluding section of a lengthy report written by Mr O'Neill that day, he said that the respondent met the criteria for a major depressive episode by December 2003, and that the symptoms which he displayed definitely interfered with his ability to function both at work and at home. The respondent still (ie in July 2004) had signs of a low grade depression consistent with a dysthymic disorder. Mr O'Neill said that the respondent was convinced that he had been unfairly treated by Mr Sutherland, and was highly sensitive about how his concerns were being dealt with by the appellant, and his perception that Mr Sutherland had been able to get away with some unacceptable, unprofessional behaviour. 236 The respondent commenced sick leave again on 6 August 2004. On 31 August 2004, his sick leave entitlement expired. He was paid salary for the next two weeks, and then had two weeks' leave without pay. He then used accrued annual leave until 30 November 2004, when that too expired. From 1 to 6 December 2004, the respondent was on leave without pay. 237 On about 1 December 2004 (when the respondent had used up all his leave), the appellant wrote to him, seeking an indication as to his intentions to return to work and resume normal duties. The respondent replied by way of a letter from his solicitors dated 6 December 2004. It was said that the respondent had for some time been unwell because of various actions taken by the appellant. It was said that, if the respondent were to return to work at that time, it would have an adverse consequence for his health. The appellant responded by letter dated 7 December 2004, indicating that, in the circumstances which obtained, it regarded the respondent's employment as having terminated. The trial Judge treated this letter, correctly I consider, as a termination of the respondent's employment by the appellant. 238 The respondent was subsequently seen by four different psychiatrists. His solicitors referred him to Dr Lucas, who saw the respondent on 20 April 2005. Dr Jamieson referred the respondent to Dr Lowden, who saw him on eight occasions commencing on 26 April 2005 and concluding on 23 December 2005. Solicitors for the appellant or its insurer referred the respondent to Dr Samuell, who saw him on 6 September 2005 and 6 April 2006. They also referred the respondent to Dr Synott, who saw him on 24 October 2005 and on 31 March 2006. Each of these practitioners provided a written report as to the respondent's condition - and in some cases answered specific questions on such matters as causation - but none of them gave evidence before the trial Judge. The parties proposed, and his Honour accepted (initially with some reservations, it would seem) a procedure whereby the written reports of the practitioners were handed to his Honour as a joint exhibit. Based only upon those reports, his Honour was obliged to identify the medical evidence which he would accept.
Claims and defences 239 In his Second Amended Statement of Claim dated 4 April 2006 ("the Statement of Claim"), the respondent alleged that there were certain express terms of his contract of employment, including a term that he "acknowledge receipt of the respondent's policies and comply with procedures as set out in the respondent's document entitled 'Working With Us'." The appellant denied that allegation. In par 8A of the Statement of Claim, the respondent made further allegations as follows: It was an express term of the Applicant's contract of employment and subsequent promotions that the Respondent would not, by its servants or agents treat the Applicant other than in accordance with the Respondent's policies as amended from time to time including the Respondent's document headed "Working With Us". In par 10 of its Second Amended Defence ("the Defence") the appellant responded to par 8A of the Statement of Claim as follows: (a) the Applicant was required to comply with the policies and procedures set out in the "Working With Us" document, however the "Working With Us" document did not constitute a term or condition of the Applicant's contract of employment; (b) when the Applicant was offered employment with the Respondent, he was given a copy of the "Working With Us" document; (c) when the Applicant was offered employment with the Respondent, he was asked to sign off on specific policies and procedures contained in the "Working With Us" document but was not asked to sign off on the document itself; (d) the "Working With Us" document expressly states that the Respondent "reserves the right to vary, change or cancel from time to time the information stated in this booklet"; and (e) otherwise denies the allegations in paragraph 8A. 240 The respondent alleged that it was an express term of his contract of employment that the appellant "would comply with its grievance handling procedure", and that thereby it was implied that the appellant would "act in a timely manner", and would provide the respondent with "procedural fairness", including keeping him informed that an investigation was taking place and of the nature of the investigation, interviewing him during the investigation, informing him of the responses or explanations advanced by Mr Sutherland, permitting him the opportunity to respond to any such explanations and enabling him to put forward proposals to remedy the breach of the DKN Partnership Business Plan which had been effected by Mr Sutherland. The appellant denied those allegations. 241 The respondent alleged further terms of his contract of employment (in par 33A of the Statement of Claim), as follows: Further, or in the alternative, it was an implied term of the Applicant's acceptance of the offer of employment, contract of employment and subsequent promotions that the Respondent would not, by its servants or agents: (i) intimidate or personally vilify the Applicant; (ii) subject to the Applicant to demeaning, harassing or abusive conduct or threats of such conduct; (iii) and that the Respondent would, so far as was reasonably practicable, protect the Applicant from any such harassing or bullying conduct occurring in the course of his employment. The appellant denied all the allegations in par 33A. 242 There were two respects in which the respondent alleged that the introduction of the partnership concept in the appellant's Canberra office had legal consequences which were relevant in the circumstances which obtained. First, the respondent referred to Mr Sutherland's presentation, in December 2001, at which the concept was announced to the appellant's financial advisors. The respondent alleged that this presentation included representations by Mr Sutherland, including a representation that he (Sutherland) would distribute all new business flowing from the office to advisers not involved in the RSL Partnership, with the exception of new business generated through the direct activities of other members of that partnership, and a representation that, if a partner left a partnership, the clients of the departing partner would remain with the partnership in question. The respondent alleged that he relied upon these representations to participate in the establishment of the DKN Partnership, and expected to share in an anticipated partnership revenue of about $1,900,000 in the following year, from which he would derive benefits by way of commission. The appellant joined issue with these allegations. 243 Secondly, the respondent alleged that the adoption of the business plan for the DKN Partnership, and its effective approval by the appellant, gave rise to an alteration of the then existing terms of his contract of employment, implicitly contending that the agreement between himself, Ms Dal Bon and Mr Keogh, by which that partnership was constituted, became incorporated into that contract. These allegations were denied by the appellant. The respondent also alleged that the appellant made a series of representations to him at about the time of the establishment of, and in relation to the operation of, the DKN Partnership. Those representations were said to be that the respondent could perform his duties through participation in the DKN Partnership, that the business plan for the DKN Partnership was approved, that the business plan formed part of the respondent's terms and conditions of employment, that the respondent could perform his duties under the contract of employment through the business plan, that the terms of the business plan would be enforced and that, in the event of the resignation of any member of the partnership, that person's clients would be redistributed, on a 50:50 basis, to the remaining two members of the partnership. The respondent alleged that those representations were misleading or deceptive, or likely to mislead or deceive, contrary to ss 52 and 53B of the TP Act. The respondent added a claim in negligence, the alleged breach of duty being constituted by the appellant's failure to exercise reasonable care to ensure that these representations were true and correct in every particular. 244 The respondent alleged that the appellant had acted otherwise than in good faith, and had thereby been in breach of his contract of employment, by failing to allow the remaining members of the DKN Partnership to retain the clients previously served by Ms Dal Bon. 245 The respondent alleged that, as a result of the reallocations of clients by Mr Sutherland, there were "several altercations" which resulted in the respondent suffering "anxiety and stress" and in his relationship with Mr Sutherland "deteriorating substantially". The respondent alleged that he sought to resolve the issue with Mr Sutherland, but Mr Sutherland refused to adhere to the terms of the business plan of the DKN Partnership; and in negotiations, Mr Sutherland "was aggressive, intimidating and threatening" towards the respondent. The respondent alleged that he sought to implement the appellant's grievance handling procedure, that he wrote to the appellant's Human Resources Department about Mr Sutherland's conduct, that the appellant did not respond to his request for assistance adequately or comply with his request to have a formal response in writing, that the appellant never gave the respondent an explanation for "the five month delay in responding to his grievance" and that he was never provided with the opportunity to respond to "any assertions or explanations provided by Mr Sutherland (if any) for his conduct in re-allocating clients from Team DKN". 246 The appellant mostly denied the respondent's allegations to which I have referred. In relation specifically to the respondent's allegations of a procedural failure (or procedural delays) in the handling of his grievance, the appellant alleged that Ms Jowett telephoned the respondent promptly upon receiving his letter of 28 July 2003, spoke to the respondent on numerous occasions between August and December 2003, flew the respondent to Sydney on 15 October 2003 to facilitate a discussion of his complaints, consulted Mr Evans, Mr Heath, Mr Sutherland, Mr Bontempelli and others on numerous occasions for the purpose of carrying out her investigation, kept the respondent informed of the progress of that investigation, and informed the respondent in writing of the outcome of the investigation. 247 The respondent alleged that the termination of his employment by the appellant on 7 December 2004 was unlawful as having been done for a reason prohibited by s 170CK(2)(f) of the WR Act. Although not referred to in his Statement of Claim, the prohibited reasons upon which he relied at trial were that set out in par (2) of the subsection - temporary absence from work because of illness or injury - and one of those set out in the list in par (f) of the subsection - physical or mental disability.
Judgment of the Trial Judge 248 Having referred to the primary evidence in the case, the trial Judge devoted a section of his reasons to the subject "findings about the evidence". He divided that section up five ways. First, his Honour considered whether the principle in Jones v Dunkel (1959) 101 CLR 298 might apply in relation to certain persons in the appellant's camp who had not been called as witnesses. Secondly, his Honour dealt with certain credibility issues which arose. 249 Thirdly, his Honour dealt with the subject "the handling of [the respondent]'s complaints". This was an important part of his Honour's reasons, the content and significance of which needs to be appreciated for later parts of the reasons, dealing directly with questions of breach of contract, properly to be understood. 250 His Honour commenced by agreeing with counsel for the respondent that the appellant's handling of the respondent's complaint was "extremely inept". He said that that conclusion arose "irresistibly" from the evidence of the appellant's own witnesses, and contemporaneous letters and file notes. His Honour said that there was "an inherent conflict of interest" in a system under which an office manager has the task of allocating clients amongst financial advisers, of whom he himself was one. He held that it should have been obvious to the appellant's senior officers "that it was essential to develop and enforce a client-allocation protocol which left no room for the office manager to favour himself or his own team, or be perceived to be doing so". Knowing that there was no such protocol in place, Mr Evans and Mr Heath should, according to his Honour, have been particularly sensitive to any complaint "whether justified or not" that Mr Sutherland had abused his power of allocation. His Honour noted that Messrs Evans and Heath failed to act upon the respondent's complaint that that is what had happened in relation to the reallocation of Ms Dal Bon's clients; indeed, he said that these men "seemingly failed to comprehend" that complaint. 251 His Honour referred to three allegations which had been made by the respondent in his letter of 28 July 2003, namely: (i) Mr Sutherland's final reallocation decision was a reprisal for the action of [the respondent] and Mr Keogh in raising their concerns with Mr Heath; (ii) A majority of the 'A' Clients taken away from team DKN were 'allocated to the RSL team'; and (iii) Contrary to previous assurances that he would not benefit personally, Mr Sutherland had 'quarantined numerous valuable clients for himself and will also benefit from a majority share of business written of those clients transferred to RSL'. His Honour said that it was "possible to say" that the allegations in (ii) and (iii) overstated the situation. He said that he was not able to make a finding about the allegation, going on to say that that allegation "may have been incorrect". His Honour said that it did not matter. His point was that "these were all serious allegations warranting investigation, yet there was no effective investigation." On the subject of an investigation, his Honour continued that "it might have been thought" that the respondent's letter of 28 July 2003 would have resulted in a "senior person immediately travelling to Canberra and conducting a series of one-to-one meetings with members of the Canberra staff". His Honour said that that would not have been "a large task". In response to the suggestion that it would have been difficult for Ms Jowett to conduct confidential meetings in the Canberra office, his Honour said "she surely could have arranged a room elsewhere in the city". He said that everybody in the office would have known that meetings were being held, "but they all must anyway have known of the conflict between Mr Sutherland and [the respondent]". 252 In response to the submission that, at the relevant time, Ms Jowett knew that Mr Heath was discussing the possibility of Mr Sutherland stepping down as Canberra manager, his Honour said that Mr Sutherland's removal "would not have reversed the allegedly unfair reallocation decision". He said that it would have remained necessary for Ms Jowett to investigate that decision "and, if it was wrong, take action to rectify the position". He concluded: "In any event, it was not reasonable for Ms Jowett to delay for three months, while Mr Sutherland considered his position." 253 His Honour set out a fairly lengthy passage from the evidence of Mr Evans, and which his Honour himself addressed a number of questions to the witness. That evidence was as follows: Well, if you saw his letter it would have been obvious to you that what he was saying and rightly or wrongly was, in effect, that Mr Sutherland had allocated on the basis that took into account his own self interest rather than fairness to other people, that's perhaps putting fairly mildly what he was complaining about, is that right?---That's right. Now, doesn't that complaint go to the real heart of the system that Goldman Sachs operated whereby it had branch managers who were already financial advisers and had to trust their integrity to do the right thing in allocations, does it not?---That's correct. Now, what I don't understand … why weren't there red lights flashing in your mind and in the mind of those like Mr Heath who had responsibility, to say, hang on, what's Mr Sutherland doing and I add to that, this at the very time when you were developing your own very serious doubts about Mr Sutherland's performance?---Look, in hindsight, I should have got more involved. I did leave it to Mr Heath at the time. You're absolutely right, sir, that we do place a lot of emphasis on integrity of the manager. What happens in client allocations is if an adviser knows and has a relationship with that client that may be looked after by another client adviser in the office, that when that client adviser leaves for smoothness of the relationship that it goes to one of those other or the adviser that has the existing relationship. Well, I understand that, but one of the arguments in favour of partnerships is that advisers can cover for each other?---Correct. When, for any reason, they're away?---Yes. So that instead of everybody having, if you like, a one person relationship with a particular client, although no doubt that's the person the client primarily asks for when they ring up. If they ring up X, they also know that if X is away to ask for Y or Z?---Absolutely, your Honour. And Y or Z get to know something about those clients, that's the whole argument in favour of partnerships, isn't it?---Yes, it is, absolutely. So why doesn't the logic of that mean that if X leaves, at least within the limit of their capacity to service, Y and Z are the people who take over those clients?---Yes, look, without the knowledge that Paul Heath who was involved in this has on how the allocation was done, I really can't answer the question. But what worries me is that I would have thought that after that letter of July, somebody would have gone down to Canberra, it's easy enough to get to, and spend a day in the office and said "I want to look at the way that Dal Bon's clients have been allocated" - - -?---I suspect that did happen, I don't know.
Incorporation of WWU into contract of employment 277 The appellant's first main ground of appeal was that the trial Judge erred in upholding the contention in par 8A of the Statement of Claim that it was an express term of the contract of employment that the appellant would not treat the respondent other than in accordance with WWU. It sought to identify six categories of error said to have been made by his Honour. 278 First, the appellant contended that the trial Judge had relied upon the "subjective intention" of the parties, including (in the case of the appellant itself) some of the managers who had given evidence. I referred briefly to this aspect of his Honour's reasons at par 261 above. The respondent contended, and I accept, that his Honour's references to the views of certain witnesses as to the binding effect of WWU were confirmatory of the decision which he reached, rather than deliberative in the primary sense. In the appeal, the respondent did not seek to rely upon subjective intention as a basis for supporting the inference which his Honour drew. 279 Secondly, the appellant contended that the trial Judge had placed undue reliance upon the view that many of the provisions in WWU related to matters which one would normally expect to find covered by a contract of employment. It pointed out that there was no evidence before his Honour sufficient to justify such a generalisation. It pointed out that, if custom were to be relied upon, the content of the employer's customary obligations, particularly with matters of occupational health and safety, was significantly different from that stated in WWU. It followed, according to the appellant, that the general custom of which the trial Judge was prepared, in effect, to take judicial notice fell short of the contractual obligation which his Honour distilled from WWU. 280 I have referred to the relevant passage in his Honour's judgment at par 262 above. While his Honour identified different categories of statement made by the appellant in WWU, it is not clear which statements he would place in which category. One category is that of "obligations customarily found in employment contracts". If that is a reference to the provisions of WWU which gave quantitative expression to common employment entitlements, such as those relating to various kinds of leave, I would agree that the provision of statements in those terms to the respondent, contemporaneously with the letter offering him employment, would reasonably have been regarded by him as intended to constitute part of the consideration offered by the appellant, and that the provisions in question would, therefore, be contractually binding upon the respondent's acceptance. Another category in this passage of his Honour's judgment is that which consists of "the explicit promises" made by the appellant in WWU. If by "explicit" his Honour intended a reference to the specifically quantified entitlements of the kind to which I have just referred, I would respectfully agree with him. If, however, by the expression "explicit promises" his Honour intended a reference to that part of his reasons in which he described provisions of WWU commencing "we will…" (and the like) as promissory, I could not, with respect, accept that such language alone, and without consideration of the context otherwise, would always be apt to give contractual force to the relevant provision. 281 Thirdly, the appellant pointed to the provision in WWU (to which I have referred at par 216 above) under which it reserved to itself the right to vary, change or cancel the information stated in WWU. It contended that for one party to be at liberty unilaterally to alter the terms in which its obligations to the other party are stated would be fundamentally inconsistent with the notion that a contract existed between them. However, the respondent's case was not that the particular provisions of WWU as they existed at the time of the offer of employment were incorporated into his contract of employment; rather, the term alleged was that the appellant would not treat him other than in accordance with its policies as amended from time to time, including those set out in WWU. This way of putting things effectively sidestepped the appellant's submission. The prospect of amendment from time to time was not only permitted by the term which the respondent alleged: it was specifically contemplated. 282 Fourthly, the appellant contended that the trial Judge had erred in failing to identify what was described as a secure basis for incorporation. It pointed out that the only document which the respondent had signed was his letter of offer, and that that document said nothing about WWU. It followed, according to the appellant, that there was simply no satisfactory point of anchorage, as it were, between the contract of employment and WWU. 283 There are two levels at which I would deal with this submission. At the general level, I would reject the proposition that the absence of any specific reference to WWU in the respondent's letter of offer should of itself have been fatal to the respondent's case in this respect. The question which his Honour had to decide was what the parties intended. That question was to be answered from a consideration of all of the relevant circumstances. It was, I consider, a most relevant circumstance (as his Honour pointed out) that WWU had been sent to the respondent with his letter of offer. Even without reference in the letter of offer, had there been a single page attachment specifying particular entitlements (leave, superannuation, incentive payments etc), there could have been little doubt but that such provisions were intended by the sender of the letter to be incorporated into any contract arising from acceptance. On the facts of the present case, simple issues such as these have been clouded by the size and heterogeneity of WWU itself, but, at base, the contractual analysis remains the same. In my view, the contemporaneous provision of WWU was a circumstance proper to be taken into account in drawing the inference with which his Honour was concerned. 284 There is, however, a second level at which the appellant's submission should be considered. There was one provision of the letter of offer which, according to his Honour, provided a link to WWU. It was the paragraph to which I have referred at par 176 above. It formed the basis of a submission made by the respondent that the facts were analogous to those which came before the Full Court in Riverwood, and that a like result, in point of contract, should follow. The appellant submitted that the statement in the letter of offer that it would issue office memoranda and instructions (or had done so) was insufficient to establish incorporation of WWU. I agree, and I consider that his Honour was wrong to apply Riverwood in the circumstances of the present case. 285 In Riverwood the trial Judge had found, and the Full Court (by majority) agreed, that a term entitling the respondent to a redundancy payment in certain events was incorporated into the contract of employment between the appellant and himself. The incorporation was the result of the express agreement of the parties, albeit that, as a matter of evidence, it was necessary to infer the making of that agreement. As I read the reasons of their Honours in the majority, there were two circumstances of critical importance to the conclusion that such an agreement should be inferred: first, the strong predominance of provisions beneficial only to the employee in the appellant's Policies and Procedures Manual; and secondly, the scope for the word "abide" in the respondent's contract of employment to convey also the meaning that he would accept the benefits to which he was entitled under the manual and that, correspondingly, the appellant itself would comply with the provisions of the manual, at least to the extent that they purported to grant those benefits. 286 As I indicated in par 262 above, the trial Judge considered that there was "not much difference" between the wording in the contract in Riverwood and the wording in the respondent's letter of offer in the present case and that the secondary document in both cases purported to impose obligations on the employer, some of which were of a kind customarily found in employment contracts. Thus his Honour held that the "approach" taken in Riverwood was applicable in the present case. 287 With respect to his Honour, I would have no difficulty following the approach which was taken in Riverwood. That approach was to consider all the facts and circumstances surrounding the making of the contract in question, including the content of the documents which were controversial, for the purpose of considering whether the term contended for by the respondent had been established as a matter of inference. Beyond that, I read Riverwood as a judgment which turned entirely on its own facts. Little is to be gained, I consider, by picking apart the factual matrix in Riverwood with a view to lining up selected elements thereof with individual elements of the matrix in the present case thought to be corresponding in some sense. Riverwood was decided the way it was because their Honours in the majority agreed with the trial Judge that the parties intended a particular provision to be a term of the contract of employment. Necessarily, they arrived at that conclusion after considering every fact and circumstance that had the potential to assist in the process of inference. It would be quite inappropriate, I consider, for a later court to seize upon individual elements of their Honours' fact-finding reasoning as though, somehow, they would have some binding or even persuasive impact upon the fact-finding process in which it was itself engaged. 288 A significant respect in which the facts of the present case differ from those in Riverwood is that, here, the secondary document upon which the respondent relies was given to him at the time he was offered employment, whereas there the appellant's manual was not, at least specifically, given to the respondent employee. Necessarily, in Riverwood the "abide by" term was not only important: it was critical. Without it, the respondent's case for express incorporation would have been very different. In the present case, the respondent has the benefit of the circumstance that the appellant provided him with a copy of WWU at the very time it was offering him employment on stated terms. On the other hand, I could not accept a process of reasoning that started with the superficial similarity between the two cases constituted by the existence of a formal letter and a secondary document, that held there to be not much difference between "abide by" and "comply with", and that concluded with the view that Riverwood was an applicable authority in favour of the respondent in the present case. I do not suggest that his Honour below necessarily took that approach, but we were invited to do so by counsel for the respondent. The approach would, I consider, be to subordinate a proper consideration of all the relevant circumstances in the present case to the kind of cherry-picking exercise which I criticised above. 289 I will conclude my consideration of Riverwood by returning to the two critical circumstances in that case which I sought to identify in par 285 above. If it should be necessary to distinguish Riverwood, I consider that it is proper to do so with respect to each of those circumstances. Manifestly, WWU could not be described as predominantly concerned to specify benefits or entitlements of the employee: it does specify many such entitlements, but it contains numerous directions and requirements which might be considered burdensome for the employee and/or beneficial for the employer. Indeed WWU cannot be categorised as either predominantly this or predominantly that. While it does contain "office memoranda and instructions", it likewise contains many provisions which could not be so described. As to the suggestion that the kind of reasoning which their Honours in the majority in Riverwood applied to the term "abide by" might likewise be applied to the term "comply with" the relevant policies and practices in the present case, I need do no more than refer to the contrast between these very terms which appears in the reasons of Mansfield J (177 ALR at 222 at [146]). As his Honour pointed out, that "abide by" meant no more than that the respondent "comply with" was the very contention of the appellant in that case: a contention which was unsuccessful. 290 Returning to the provision of the respondent's letter of offer to which I have referred in par 176 above, I am bound to say that I think it came to occupy a position much closer to centre stage than its true importance warranted. This may have been because the respondent's advisers saw in the provision the potential to obtain leverage from Riverwood. However that may be, I regard the provision as entirely neutral to the resolution of the question whether any - and if so which - of the provisions of WWU should be regarded as contractually binding. I cannot think that the hypothetical new employee reading the provision for the first time - and without an antenna keenly tuned to signals emitted by cases decided by the Federal Court - would do otherwise than take the provision as an unsurprising statement that his or her future employer had issued, and would in the future issue, office memoranda and instructions with which he or she would be expected to comply as and when they were applicable. It is in the kind of provision that would be unsurprising in any similar letter written on behalf of any intending employer in virtually any industrial situation. 291 Fifthly, the appellant submitted that the trial Judge failed to have regard to the whole of WWU. If such regard had been had, his Honour would have noticed that large parts of WWU were purely informational, and that others spoke in terms of goals, values, aspirations or general policies. It was said that WWU as a whole could not be regarded as promissory or otherwise as giving rise to contractual obligations, and that the more likely interpretation of the parties' reasonable intentions was that the whole document stood outside the contract of employment. 292 It is not clear that the trial Judge held that the whole of WWU was incorporated into the respondent's contract of employment. I have referred to the way his Honour did approach this subject at par 263 above. It would be wrong to say that his Honour did not take account of the whole document: indeed, as I have pointed out, his Honour did recognise that some provisions of WWU made a stronger, or at least a more obvious, claim for incorporation by nature of their subject matter. On the other hand, I am disposed to agree with the appellant that the terms of WWU are heterogeneous - both in content and in style - to such an extent as to render any attempt to classify them either as wholly contractual or as wholly non-contractual highly artificial. At one extreme WWU was the means by which the appellant apparently set out many - if not all - of what his Honour regarded (correctly in my respectful view) as quite commonplace conditions of employment in the nature of entitlements, such as leave of various kinds. At the other extreme, WWU contained many sections which were manifestly informational only, as well as others which urged upon employees the adoption of a way of thinking, and a general pattern of behaviour, that conformed to the appellant's culture. The appropriate course, in my view, is to consider each of the particular obligations which, according to his Honour, were imposed upon the appellant by WWU, and to ask whether his Honour fell into error in those respects. There is little to be gained, I consider, by further wrestling with the question whether WWU should be regarded either as wholly contractual or as wholly non-contractual. 293 It is also significant that the respondent was asked to sign off only on certain specific aspects of WWU. Those aspects were not simply selected from various parts of the body of WWU: they were collected in a separate chapter specifically addressed to new employees which opened with an unambiguous message as to the importance, and relevance, of them. The limited nature of the formal sign-offs which the respondent was asked to execute, and which he did execute, was, I consider, a significant circumstance for the purposes of inferring what the parties intended on the question of which parts of WWU would be binding as part of the contract of employment. His Honour did not refer to those sign-offs at all. I consider that he was in error in that regard, not because a consideration of them would necessarily have led to a different result, but because, when approaching the resolution of a question of fact by a process of inference, he denied himself the assistance of facts which had been established as a matter of direct evidence and which bore centrally on the question to be resolved. 294 Sixthly, the appellant contended that the trial Judge was in error in treating the language of WWU as promissory. It pointed to many instances in which the language could not be so described, and to others in which passages superficially connoting obligation actually went no further than to provide information about an employer's duty arising otherwise (eg under statute). As with the previous point, this submission cannot be dealt with in the broad. The significance of the particular terms in which the appellant expressed itself in WWU should be considered separately with respect to each of the specific areas in which his Honour held WWU to be contractually binding. 295 I propose next to turn to those specific areas. The trial Judge held that the provisions of WWU concerning behavioural standards, such as those relating to health and safety, harassment and the grievance procedure, should be regarded as contractually binding on the appellant. His Honour said that the appellant "trumpeted" those behavioural standards as reflecting its values and culture. Given that WWU appeared to impose legal obligations on the appellant in relation to other matters, his Honour saw no reason to doubt that it also did so in relation to "those provisions of the document that contain express promises about behavioural standards". He held that the appellant might be held liable in breach of contract where it could be shown that, on no view of its conduct, had it responded to a problem or complaint in the manner "promised or assumed" in WWU. 296 Approaching the matter in this way, his Honour dealt with four respects in which the respondent proposed that the appellant was in breach of a contractual norm derived from WWU. The first related to "conflict of interest", in which respect his Honour held in favour of the appellant, and the subject does not arise on this appeal. The remaining three related to health and safety, harassment and grievance procedures, and his Honour dealt with those matters in that order. For reasons which will become clear, I propose to consider first harassment, then grievance procedures, and finally health and safety. For the present, it will be sufficient if I say that I commence with harassment because the respondent's allegations in that respect focused on the primary conduct of Mr Sutherland which, in effect, was the precursor of the other acts and omissions on the part of the appellant of which the respondent complained.
Harassment 297 His Honour identified the harassment allegations made by the respondent as those set out in par 33A of the Statement of Claim (par 241 above). As his Honour pointed out, items (i) and (ii) related to the actions of Mr Sutherland directly, whereas item (iii) related to the inactivity of Ms Jowett and Mr Heath. As to the first two items, his Honour held that the appellant was vicariously liable for Mr Sutherland's conduct. Strictly speaking, this was not a case of vicarious liability: the respondent's case was that the appellant had made a direct promise that it would not, by its servants or agents, intimidate the respondent (etc). If any servant of the appellant intimidated the respondent, the appellant was thereby in breach of contract, according to the respondent's case. In the hearing of the appeal, counsel for the respondent confirmed that his client's harassment allegations should be so understood. 298 Looking first at the harassment provisions of the "Code of Conduct" chapter in WWU, I cannot agree that they are relevantly promissory. A significant factor, in my view, is that they are to be found in a chapter entitled "Code of Conduct", which carries the suggestion that the provisions in it specify the conduct required of employees, rather than make promises to those employees about the behaviour of other employees. Further, the actual terms of the paragraphs in question simply do not bespeak promissory intent. They seek to convey to the new employee something which is at once more fundamental and less normative than the specific conduct-based term which his Honour identified. As the words themselves make clear, the paragraph is concerned to identify the "culture" of the appellant. These were words of information, encouragement and perhaps education. At most they involved, at the highest level of generality, a kind of instruction to the new employee as to the standards which the appellant expected of him or her. 299 In my opinion, these paragraphs provide no scope for the inference, drawn by the trial Judge, that the parties intended the terms identified in the first two subparagraphs of par 33A of the Statement of Claim to be terms of the respondent's contract of employment. 300 But the matter should not rest solely upon the terms of the two paragraphs to which I have just referred. The section in the "Sign Off" chapter of WWU headed "Procedures for Harassment - Concerns or Complaints" should also be taken into account. His Honour did not refer to that section. It was significant for two reasons. First, no relevant sign-off form, executed by the respondent, was in evidence before his Honour. Thus, although WWU itself contemplated that new employees may be asked to sign some kind of acknowledgement about the appellant's harassment policies (the exact terms of which did not appear), there was no evidence that the respondent had ever done so. The respondent's case was not, therefore, assisted by this added element of definition, and formality, which existed in the case of some other subjects dealt with by WWU. 301 Secondly, the existence and terms of the appellant's procedures for harassment - contained in the sign-off chapter of WWU - should, I consider, have been taken into account at the point of drawing an inference about the parties' contractual intentions. The relevant provisions, in my view, are quite inconsistent with the notion that the appellant made an absolute promise that no employee would be harassed by another employee. They substantially duplicated the two general paragraphs to which I have already referred, but went further. To have "an environment free from harassment and its consequences" was listed as one of "the aims of our harassment procedures". That "each member of the team is treated with courtesy and respect" was referred to as a "guiding principle". In the procedures themselves, the first step was for the putative victim to tell the putative harasser that his or her behaviour was unacceptable, and to ask him or her to stop. It may be, and the procedures imply that, ideally, it should be, that a complaint of harassment would be successfully resolved at that first level. If so, could it be suggested that, at the same time, the appellant itself would be contractually liable in damages because the initial act of harassment was something which it had promised would not occur? I think not. Likewise, it will be seen that the procedures contemplated that the putative victim's complaint might be resolved at a higher level up the chain. Here too, the existence of a procedure which assumed the existence of a harassing party and a victim, and which allowed for the former's complaint to be resolved (indeed, had the objective of achieving that end) would sit most uncomfortably alongside a contractual term by which the appellant, as employer, made an absolute promise that no harassment would occur in the first place. The procedures concluded with a listing of the "possible outcomes", including an apology, agreed behaviour, dismissal of the person instigating the harassment, leave for either person, counselling support and/or increased awareness of the firm's harassment policy. I cannot accept that a new employee would have any reasonable basis for reading into the document an implicit promise by the appellant that harassment would not occur under any circumstances. Rather, I consider that, when read fairly and objectively, the relevant provisions of WWU recognise that harassment - however regrettable - might occur from time to time and were concerned to provide a means of resolution that was both effective and conscious of the interpersonal sensitivities commonly involved in such matters. 302 In the circumstances, I consider his Honour ought to have rejected the proposition that the terms set out in subpars (i) and (ii) of par 33A of the Statement of Claim were terms of the respondent's contract of employment. 303 The third subparagraph of par 33A of the Statement of Claim relates to the appellant's own conduct in protecting its employees from harassing or bullying conduct on the part of other employees. By reason of the provisions of WWU to which I have referred above, it is, I consider, impossible to find that the parties intended the appellant's obligation in this regard to be any different from that set out in the procedures document in the sign-off section to which I have referred. Clearly the protection of employees from harassing or bullying conduct on the part of their colleagues was a central aim of the appellant's procedures. That the appellant would, beyond making those procedures available in appropriate cases, itself "protect" the respondent from harassing or bullying conduct (even where such an obligation is said to be limited to steps that were "reasonably practicable") is, I consider, a proposition beyond anything stated in WWU. 304 For the above reasons, I would hold that the case which the respondent sought to make out in par 33A of his Statement of Claim should have been rejected.
Concerns or grievances 305 The provisions of WWU upon which the trial Judge relied to identify a contractual term on the subject of procedures for handling grievances are set out at par 196 above. They are to be found within the chapter entitled "JBWere Team Support Package". That chapter deals with a miscellany of topics, brought together, it seems, by reason of the common thread that they all, in one way or another, relate to ways in which the appellant "supports" its staff. In some parts of the chapter one finds clear statements of entitlement, for example, "you are entitled to 20 days paid Annual Leave per year of service". I agree with his Honour that, by reason of the nature of the subject-matter, the precision of the entitlement and the use of the word "entitled", expressions such as this are prima facie contractual. One remove from this situation are the instances in the chapter where entitlements are stated, but are subject to approval, or the like, by the appellant before having concrete operation in the case of a particular employee. Various aspects of the support which the appellant provides for the undertaking of additional study or training are in this category. I think it would be appropriate to regard these provisions of the chapter as contractual, but where the receipt of the benefits contracted for is subject to conditions or to the exercise of some discretion. 306 On the other hand, many provisions of the chapter should be regarded as no more than the provision of information about the ways in which the appellant supports its staff, and stop short of making promises, express or implied. The provision of summary details about the appellant's professional development program, about the links on the appellant's web site to encourage creative thought and contribution, about security facilities in the various buildings which the appellant occupies and about practical steps to avoid deep vein thrombosis, for example, are in this category. 307 The provisions upon which the respondent relies in presently relevant respects are to be found under the sub-heading "Concerns or Grievances" in a section of the chapter headed "Support for Personal Issues". The sub-section in question follows one headed "Feeling Uncomfortable?" and precedes others headed "Integrity", "Privacy", "Welcoming Diversity" and "Employee Assistance Program Providers". The only text under the sub-heading "Integrity" is a note referring the reader to another chapter in WWU. There is also a sub-heading about equal opportunity and the prevention of harassment, but there is no text beneath that sub-heading. 308 Even within this limited section of the chapter, the nature of each subject dealt with, and the language in which it is expressed, make generalisations about contractual appropriateness difficult. Under "Privacy", a fairly detailed policy is set out which deals with the collection, maintenance and disclosure of personal information about employees and others. Here some rather fine distinctions are made (such as between a statement that the appellant will comply with the policy in relation to contractors, consultants and unsuccessful job applicants and a following statement that it will "endeavour to adhere to" the policy in relation to employees). There is an apparently comprehensive listing of those internal departments and external organisations to which personal information may be provided in certain circumstances. In many places here, the language is what his Honour would describe as promissory - the appellant repeatedly states that it "will" do certain things, for instance. I can well understand that a reasonable reader in the position of a new employee joining the appellant's staff would regard such statements as promises forming an element of the consideration passing to him or her in return for entering into the appellant's service. 309 By contrast, the text appearing under the sub-heading "Feeling Uncomfortable?" contains no statement by the appellant of what it will or will not do. It is almost entirely advisory with respect to support facilities which are available within the appellant's organisation, and then only in very broad terms. For example: "…often the best first step is to talk it over with someone who can provide confidential advice and support." There is an emphasis upon the sensitivity of the subjects with which the sub-section is implicitly concerned, and upon the need for confidentiality. Because of the approach which his Honour took to similar words in the sub-section on grievances and concerns, the following sentence may be significant: "we are committed to make sure that anyone who has a genuine concern will be supported, and the issue will be handled with discretion". In context, this cannot, I consider, be treated as a promise intended to have contractual effect. It is a statement of fact - none the less so because the fact with which it is concerned is the appellant's commitment to provide support to an employee in a difficult and potentially embarrassing situation. 310 Turning to the "Concerns or Grievances" sub-section itself, on no view could any statement in the first, second or fourth paragraphs be regarded as conveying a promise by the appellant to the hypothetical, reasonable, new employee. Those paragraphs flow naturally from the subject-matter of "Feeling Uncomfortable?" and inform the reader of a general organisational culture which might best be described - without in any sense implying trivialisation - as caring and sharing. Indeed, the very thrust of the four paragraphs strikes me as intended to convey to the reader an idea of the culture of the organisation which he or she is about to join. References to wide-open doors and to the "family" way of operating are, on my reading of the paragraphs, graphic and striking metaphors which are quite at odds with the suggestion that contractual promises are either express or implied. 311 Critical to the approach of the trial Judge in this part of the case was the sentence in the third paragraph: "We are committed to make sure that anyone who makes a genuine complaint will be able to discuss the concern confidentially, will be supported by the firm and is not penalised in any way." His Honour held that that was a promise, ie that the appellant intended to say, "We promise that anyone who makes a genuine complaint will be supported by the firm". With respect to his Honour, I do not so read the sentence, at least literally. It is a statement of fact: the appellant's commitment. If the state of someone's mind is no less a matter of fact than the state of his or her digestion (Edgington v Fitzmaurice (1885) 29 CH D 459, 483 per Bowen LJ), I cannot see why the commitment of a person or, as here, a firm should be placed in any different category. Is it either appropriate or desirable to move beyond the literal and to recognise in these words a more powerful secondary message that the appellant would in fact do the things to which it stated a commitment? In context, I do not think so. The notion of a non-promissory commitment is quite familiar in everyday language. That the appellant should be prepared to express itself only in terms of its commitment should not, I consider, be viewed with scepticism by a court, or be implicitly treated as though meaning so little in practice as to justify an implication that something more specific, and more contractually binding, must surely have been intended. WWU is the appellant's document, and if it chose to express itself only as having a particular commitment, I do not believe that a court should in effect stretch that statement beyond its actual terms into the realm of contractual promise. 312 That the third paragraph should be read according to its actual terms, and not as involving a promise is, I consider, strongly supported by the context. This sub-section of the chapter is dealing with issues of a variety which the drafters of WWU could scarcely have hoped to anticipate. Of their nature, issues of the kind that the sub-section appears to contemplate may well be sensitive to the individual and embarrassing to the organisation. That the appellant should be committed to providing support to an employee with a genuine complaint, while stopping short of promising to do any particular thing, is, I consider, at least as obvious a reading of the third paragraph as that favoured by his Honour. That reading is favoured by the statement in the fourth paragraph that the appellant's way of operating is a "family" one. Although used metaphorically, that word specifically calls up an image of the paradigm case of a relationship in which statements are not generally intended to have contractual effect. It reinforces the concept of "commitment" which I favour. In a family environment one can well imagine a parent telling a son or daughter of a commitment - even a firm commitment - to provide him or her with a quality education. That would reasonably be received by the prospective student as a statement of an existing state of mind, not as a promise. Unless the terminology of WWU is to be dismissed as mere puffery - something which has never been suggested - I believe that the "family" metaphor provides a useful context within which to approach the task of the construction of the third paragraph. 313 Finally, a significant circumstance in the mix of considerations available to assist the court in drawing an inference as to the parties' intentions about the grievance procedure term is the lack of definition in the words used in the third paragraph in the sub-section. That the appellant might have intended to make a promise that a genuine complainant would be "supported by the firm" is, I consider, most unlikely. What would such a promise mean in practice? What content would the notion of "support" have? Would it mean that the firm would necessarily take the complainant's side as it were? One could give content to a promise that a complainant would not be penalised for making a complaint, but the same could not be said of the bare promise to provide support. There is nothing in the sub-section that would permit one to identify exactly what act or omission on the part of the appellant would give rise to a breach of such an assumed promise. If, on the other hand, the expression of commitment is read as it stands and not stretched into the realm of contract, these issues do not arise. 314 Thus I would not infer that the third paragraph of this sub-section should be read as a promise - intended to be contractually efficacious - by the appellant in the circumstances posited. I consider, with respect, that the trial Judge was wrong to have done so. 315 But his Honour did not leave the matter there. An irony, perhaps, of the way his Honour dealt with the matter of identifying the relevant term of which he found the appellant in breach may be seen in the circumstance that the conversion of the third paragraph into a contractual promise corresponding with its actual terms was not sufficient for the purpose, for the very reason that I canvassed two paragraphs ago in these reasons. In order to give practical utility to the promise which he identified, his Honour was obliged to take a further step, and to hold that more specific promises were necessarily implied. The trial Judge held that the promise of support "necessarily includes … an implied promise to carry out an adequate and timely investigation into the merit of any complaint or grievance, and to endeavour to achieve a result that will resolve the problem …". With respect to his Honour, I believe that the articulation of such a term perhaps owed more to the presentation of the facts of the present case before him at trial than to a construction of WWU as it stood at the time, and against the circumstances existing, when the respondent accepted the appellant's offer of employment. I shall, however, deal with the case for the implication of such a term according to conventional tests. 316 Approaching the matter in a way which is broadly conformable with the respondent's position, and treating his letter of offer and WWU as together providing comprehensive written terms of his contract of employment, the question whether additional terms should be implied may be considered by reference to the tests inBP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, 283. With respect to the second of their Lordships' conditions - business efficacy - the argument that that condition is satisfied in the present case would necessarily be based on the proposition that a contractual term under which the appellant did no more than to promise to support a genuine complainant was ineffective. Here arises the irony to which I earlier referred: his Honour inferred that the parties agreed to include into their contract an express term that would be ineffective. However, if they had overtly agreed upon such a term, I agree that it should be regarded as ineffective without elaboration or further detail. In that sense, if the point is reached where the term is inferred, I would regard the second condition in BP Refinery as having been satisfied. 317 Turning to their Lordships' third condition, I could not hold that the inclusion of the term proposed by his Honour was so obvious that it went without saying. Obviousness, of course, must be considered as at the time when the contract was made, and not with the benefit of hindsight provided by particular facts which have subsequently become controversial. If the intelligent informed bystander had wondered, at the relevant time, what was obviously intended by the assumed promise of support, I think that he or she might have contemplated a number of possibilities. He or she might have said: "Well, it will depend on the circumstances. In some situations a period of absence from work might be called for; in others a re-configuration of duties; in others a confidential reconciliation meeting between the people concerned; in others a referral to a professional counselling service." He or she might have thought also that the personal circumstances of one of the parties immediately involved might be such as to point to the wisdom of a particular approach: if the putative harasser, for example, were in the advanced stages of pregnancy and about to commence a period of maternity leave, the bystander might think a rather obvious approach would be to avoid troubling her with the complainant's accusations until a later stage. At the end, I consider that the bystander would be quite incapable of formulating an alternative, more specific, variant of the assumed promise to provide support, and I can think of no reason why he or she would regard his Honour's terms as any more obvious than others which might cross the contemplative mind. 318 As to the fourth condition in BP Refinery - the necessity for clear expression - I accept, of course, that his Honour's term is stated in a way that is clear as a matter of denotation. I do not, however, think that the fourth condition should be regarded as having been satisfied by that circumstance alone. The whole point of implying a term in the circumstances is to provide clarity and definition to the written terms of the contract in a concrete situation - ie as a matter of connotation. If the term proposed to be implied does not achieve this, then one is not solving the problem sought to be addressed by the process of implication. In the present case, I consider that the term formulated by his Honour raises as many questions as it answers. It introduces qualitative elements in the requirement that the investigation be "adequate and timely". It incorporates much uncertainty by the concept of the appellant "endeavouring" to achieve a resolution. With respect to his Honour, save for the limitation of the promise to the conducting of an investigation, it is hard to see that his implied term would more than marginally add to the clarity with which the assumed express term is expressed. I do not consider that the implied term would satisfy the fourth condition in BP Refinery. 319 As to the fifth condition in BP Refinery, at first glance it does not appear that the term proposed by his Honour would be in contradiction of any express term in the contract. But, upon examination, the question is not, I consider, so easily resolved. As is clear from the third paragraph under the heading "Concerns and Grievances", one factual context to which it was contemplated that the paragraph would potentially apply was that of harassment. The respondent's own complaint on 28 July 2003 was in one of its two main dimensions concerned with harassment. WWU in fact contained a procedure under which complaints of harassment would be dealt with. The respondent was informed of the existence of that procedure at the same time as he read the provisions of WWU presently under discussion. At this point it is necessary to identify a particular aspect of the respondent's case. In par 33A of his Statement of Claim, the respondent alleged that it was a term of his contract of employment that he would not be intimidated or harassed (or the like) and that the appellant would protect him from such conduct. I have dealt with that allegation in the previous section of these reasons. He made no allegation which in terms at least, sought to call up the appellant's "Procedures for Harassment - Concerns or Complaints". On the other hand, in par 33 of his Statement of Claim he alleged that it was an express term of his contract that the appellant would comply with its "grievance handling procedure", and in that respect would "act in a timely manner". If there were any such procedure in evidence it was not referred to by his Honour, and is not to be found in WWU. One thus has the curious situation in which, if the Statement of Claim and his Honour's reasons are a reliable guide, the respondent did not rely on (and his Honour did not refer to) the procedure which did exist, while the respondent made allegations based on (and his Honour implied) a procedure which did not exist. 320 Insofar as the respondent's complaint of 28 July 2003 was concerned with Mr Sutherland's reallocation, I can find nothing in WWU which required the appellant to conduct "an adequate and timely investigation". Importantly in the present context, insofar as the complaint was concerned with harassment and similar issues, I consider that the harassment procedure contained in the sign-off section of WWU should be regarded as the relevant, and specific, focus of the appellant's organisational (if not contractual) responsibilities. In other words, as a matter of internal construction, I do not think that the general "commitment" expressed in the short passage in WWU headed "Concerns or Grievances" provided a sufficient basis for implying a procedure different from that set out in the procedure specifically concerned with harassment and the like. 321 The procedure for dealing with complaints of harassment becomes an investigation only after the first four steps have been completed (see par 205 above). In the third of those steps, the "contact person" is required to "listen … clarify the complaint … provide you with information". Even later in the procedure, the language is that of conciliation and reconciliation. By contrast, relying upon the concerns and grievances provisions of WWU, his Honour's proposed term would require the appellant to give priority to the adequacy and timeliness of its investigation. At one level, those features of any investigation may be regarded as unexceptionable, but, in the context of a harassment complaint, timeliness of the investigation as such may not be the priority. I consider that his Honour's proposed term would have the potential to cut across the stepwise operation of the harassment procedures in WWU and should not - at least in a context such as that of the present case - be implied. 322 I recognise, of course, that the strict application of the conditions in BP Refinery is not always appropriate, especially in a case in which the parties have not made "a formal contract which was complete upon its face": Hawkins v Clayton (1988) 164 CLR 539, 571. However, even in a case such as the present, … considerations of what is "reasonable", necessary to give business efficacy to the contract" and "so obvious that 'it goes without saying'" (BP Refinery (Westernport) Pty. Ltd.; The Moorcock; Shirlaw v Southern Foundries (1926) Ltd.) may be of assistance in ascertaining the terms which should properly be implied in the contract between the parties. (164 CLR at 571-572 per Deane J) I do not apply the conditions in BP Refinery to the question whether a term should be implied into the respondent's contract of employment because I consider them to be an inflexible template by reference to which that question must be answered. I do so because they represent a sensible, conventional and well-accepted approach - at least as a starting-point - to the matter of implication. As it happens, even given the prospect that the respondent's letter of offer and the relevant provisions of WWU might not constitute the whole of the terms of the contract in question, I think that the fact that the circumstances of the present case fall short of satisfying three of the conditions referred to in BP Refinery is significant in resolving the question whether the contract contained a term of the kind which the trial Judge implied. 323 In the result with respect to the matter of concerns or grievances, I consider that the specific term which the trial Judge formulated as a result of inference and implication went beyond anything to which the parties actually agreed and anything which it would be proper to imply in the circumstances.
Health and safety 324 Although the trial Judge did not consider separately whether the "health and safety" provisions of WWU were in themselves contractual, upon a consideration of all aspects of the case there are good reasons why the opening statement thereof should be so regarded. Fundamental to those reasons is the nature of the subject matter with which the provisions were dealing. That an employer is under an obligation, imposed by law, to take reasonable care for the safety of employees is well-established. There is no shortage of authority for the proposition that a source of that obligation is a term which the law implies into all contracts of employment, notwithstanding that the obligation arises also under the law of tort: see eg Matthews v Kuwait Bechtel Corporation [1959] 2 QB 57; Wright v TNT Management Pty Ltd (1989) 85 ALR 442. 325 In Lister v Romford Ice and Cold Storage Co Limited [1957] AC 555, 587, Lord Radcliffe said: The existence of the duty arising out of the relationship between employer and employed was recognized by the law without the institution of an analytical inquiry whether the duty was in essence contractual or tortious. What mattered was that the duty was there. A duty may exist by contract, express or implied. Since, in any event, the duty in question is one which exists by imputation or implication of law and not by virtue of any express negotiation between the parties, I should be inclined to say that there is no real distinction between the two possible sources of obligation. But it is certainly, I think, as much contractual as tortious. Since in modern times the relationship between master and servant, between employer and employed, is inherently one of contract, it seems to me entirely correct to attribute the duties which arise from that relationship to implied contract. It is a familiar position in our law that the same wrongful act may be made the subject of an action either in contract or in tort at the election of the claimant, and, although the course chosen may produce certain incidental consequences which would not have followed had the other course been adopted, it is a mistake to regard the two kinds of liability as themselves necessarily exclusive of each other. Lister was, of course, a case which involved the employee's duty of care towards the employer, but it is, I consider, impossible to propound a satisfactory reason why the employer's duty should not be described in corresponding terms, at least as a matter of legal analysis. It is true also that Lord Radcliffe was in dissent in Lister, but the passage which I have set out was cited with approval by the Privy Council in Tai Hing Cotton Mill Limited v Lui Chong Hing Bank Limited [1986] AC 80, 107, and their Lordships' opinion, in turn, was relevantly treated as applicable to the employment context by Lord Bridge (delivering a speech with which the others of their Lordships concurred) in Scally v Southern Health and Social Services Board [1992] 1 AC 294, 303. 326 The employer's contractual duty arising at common law to provide a safe system of work etc is a duty to take that degree of care which is reasonable in all the circumstances and thus, in point of content, corresponds with the like duty arising under the law of tort: Glass et al, The Liability of Employers, 2nd ed, 1979, pp 1-2. The actual wording used in WWU departs somewhat from the terms in which common law obligation (whether in contract or in tort) would be expressed. At common law, the employer's obligation is to take all reasonable steps to protect the safety of employees. Under WWU, the appellant has said that it will take "every practicable step" to provide a safe environment. Subject to that difference (to which I shall return) the fact is that the health and safety provisions of WWU open with a broad statement of what the appellant will do which corresponds closely with its common law obligations. In relevant respects, therefore, WWU must be regarded as operating within a context in which the common law imposed legal obligations on employers of which the appellant must be assumed to have been conscious. There is no reason why the appellant, in these provisions of WWU, should not be treated as providing specific articulation of those obligations, and as ensuring that those who entered its service well understood the nature and extent of them. 327 The next matter which I consider significant is the fact that the respondent signed off on the appellant's health and safety statement. I have referred to the sign-off form at par 202 above, and to the health and safety statement itself at par 206. These matters were not mentioned in his Honour's reasons, but I consider that they support his conclusion that the health and safety provisions of WWU were contractual. It is significant that the respondent was asked to state that he had read and understood the health and safety statement, and to acknowledge, in effect, that it outlined his obligations as a team member in the employ of the appellant. Where one party draws a document, provides it to the second party for his signature and includes a statement manifestly laying the groundwork for the second party later to be held to his knowledge and understanding of the document, there would rarely be any doubt but that the first party was intending the document to have contractual operation, if otherwise the context were appropriate. Because of that specific sign-off procedure, I prefer to identify the question which arose as whether the health and safety statement contained in the sign-off chapter to WWU was contractually binding on the appellant, rather than whether the more general provisions of the text of WWU were so binding. As it happens, there is little difference between the two and, I consider, no difference of any materiality in the present circumstances. 328 In the health and safety statement, there is a list of eight things which the appellant itself will do, seek to achieve, or the like. It is true that some are expressed more generally than might be ideal in a contract identifying hard and precise obligations. However, the common law contractual obligation itself finds expression in the broadest possible terms, and I do not think that the absence of a hard and specific edge to the language used in WWU ought to be disqualifying in this respect. Importantly, in my view, there follows a list of some nine things which the appellant's "team members" must do, or should seek to achieve. Some of these too are expressed in a general way, but again, I would not regard that as disqualifying. These two lists have the appearance of mutuality about them. There are some things which the appellant will do, and there are some things which its employees will do. Consistently, it is said that the health and safety of all people within the appellant's operation "is a shared responsibility of the firm, and each team member". In order for these health and safety measures to be efficacious, the appellant was entitled to expect that its employees would treat the matters set out on the relevant list in the health and safety statement as obligations of theirs. Indeed, the sign-off form so described them in terms. Correspondingly, a new employee in the position of the respondent would, I consider, reasonably regard the identification of the things which the appellant itself would do as constituting a component of the consideration which moved from the appellant to him or her under the contract of employment. 329 Finally, I take account also of the ostensibly promissory nature of the language used in the opening words of the health and safety statement, and elsewhere therein. It is said that the appellant "will take every practicable step"; that the appellant "has a duty to provide and maintain"; and that the appellant "will ensure the effective implementation of health and safety procedures". Although, in a document such as WWU, grammatical indications such as these would not, of their own, be sufficient to convey contractual intent, in context, and together with the other considerations to which I have referred above, they provide some confirmation of the conclusion which I would otherwise be inclined to reach, namely, that the health and safety statement should be regarded as contractual.
Compliance with health and safety statement 330 The next question is whether, in its treatment of the respondent, the appellant was in breach of so much of the respondent's contract of employment as was constituted by the health and safety statement in WWU. At this point, it is necessary to return to par 8A of the Statement of Claim. There, the respondent alleged that it was an express term of the contract that the appellant would not treat him other than in accordance with its policies, including WWU, as amended from time to time. Although the terms of WWU as at the date when the contract was entered into were relevant for my consideration of the question whether those terms were contractually binding, at the point of considering whether the appellant was in breach of contract, it is necessary to look to the relevant terms of WWU in the form that they took when the breach is alleged to have occurred. That is the consequence of the ambulatory nature of the term alleged in par 8A of the Statement of Claim. 331 I have set out the terms of the health and safety statement contained in the sign-off chapter of WWU, at May 2002, in par 206 above. According to this evidence before his Honour, by mid-2003 (when, according to the respondent, the appellant failed to comply with the health and safety term), the corresponding provisions of the health and safety statement in WWU were as follows: JBWere will take every practicable step to provide and maintain a safe and healthy work environment for all people. Responsibilities The health and safety of all people within JBWere is a shared responsibility of the firm, and each team member. In fulfilling this responsibility, the firm has a duty to provide and maintain, so far as is practicable, a working environment that is safe and without risk to health. This includes: - maintain the workplace in a condition that is safe and healthy - provide adequate facilities to protect the welfare of all people - provide and maintain safe systems of work - provide information and support to enable people to work in a safe and healthy manner. The Firm We recognise and accept our responsibilities to protect the health and safety at work of all members of the JBWere team. The Management of JBWere will endeavour to: - provide and maintain a working environment (including equipment, machinery and systems of work) that is safe for all team members and without risk to your health - provide adequate facilities for your welfare at work - ensure that the use, handling, storage or transport of equipment, machinery or substances is safe and without risk to your health - provide, in appropriate languages, information, instruction, training and supervision to enable you to perform your work in a manner that is safe and without risk to your health and the health of your colleagues - observe all required responsibilities under the Acts and Regulations which apply to the finance industry. Team Leaders and Managers We believe the most efficient and effective way to create and maintain a safe and healthy work environment is to integrate OHS policies and procedures, particularly OHS risk management practices, into our management systems and workplace operations. Our managers and team leaders play a pivotal role in making our OHS risk management policies and procedures actually work and ensuring they are effective. This includes putting in place procedures to monitor the health and safety of team members for whom they are responsible. Accordingly, managers and team leaders are responsible to ensure workplace and work systems are safe and without risk to the health of their team and will therefore encourage all team members to discuss any occupational health and safety problems they encounter. Our team leaders and managers will: - consult with you on relevant health and safety issues in team meetings - review specific responsibilities so that they are consistent with the firm's health and safety objectives, including OHS responsibilities in all position descriptions - conduct quarterly walk-through surveys to ensure the safety of your work environment (see Hazard Management below) - ensure team members are performing their roles safely - report all incidents and accidents and forward reports to Human Resources so that health and safety standards can be monitored, using the incident/accident report form (see Hazard Management below) - assist and encourage rehabilitation following an injury or illness (see Return to Work and Rehabilitation Program below) - provide access to First Aid - assist with health care for overseas business travel and expatriates. JBWere Team Members As team members, you have a responsibility to notify your team leader or manager of any potential hazards. In addition, you are also be required to: - comply with the firm's health and safety procedures and directions - effectively support and use items or facilities provided in the interests of health, safety and welfare - report potential and actual hazards using the - store materials and equipment properly - ask for assistance rather than risk an accident. You must ensure that you don't take any action, or fail to take any action, that creates a risk - or increases an existing risk. - support rehabilitation processes through positive involvement - provide details on personal medical conditions of which the firm should be aware - use equipment supplied to complete any required tasks in a safe and proper manner, in accordance with any instructions provided - take appropriate care and comply with procedures whilst on business travel The firm is committed to regularly review these procedures to ensure they operate effectively, comply with Occupational Health and Safety legislation and that changes to health and safety issues are reflected. The Group-Manager - Human Resources, in conjunction with each Administration Manager, is responsible for this review. It will be observed that, in point of detail, this statement is quite different from the one which existed in May 2002. For example, the reference to the appellant "striving" to maintain the workplace in a condition that is safe and healthy etc has been replaced with a statement that the maintenance of the workplace in a condition that is safe and healthy is "included" within the appellant's duty to provide and maintain, so far as is practicable, a working environment that is safe and without risk to health. Many of the specific obligations cast by the statement upon the appellant's team members are similar to those of May 2002, but the appellant's statement of its own obligations has been considerably recast, and introduced by a short paragraph in which the appellant states that it recognises and accepts is responsibilities, and says that management "will endeavour to" take the steps and implement the measures referred to in that section of the statement. Additionally, a new section within the statement sets out the particular responsibilities of "team leaders and managers" as a discrete group with particular responsibilities. 332 The mid-2003 health and safety statement differed from that of May 2002 in another respect. After the passage which I have set out above, the statement contained an additional section headed "Hazard Management". It refers to the appellant's hazard management system, the aim of which is said to be "to eliminate or reduce the risk of injuries and illness associated with work". It is said to involve "a process of hazard identification, risk assessment, risk control and evaluation of control measures". The reader is referred to an outline of the hazard management system, the details of which are set out in the main body of WWU. Those details depict schematically a stepwise process for the identification of "all situations or events that could give rise to the potential of injury or illness". The word "hazard" is defined as "the potential to cause injury or illness", while the word "risk" is defined as "the likelihood or [sic] injury or illness arising from exposure to any hazards". 333 Despite these differences between the May 2002 and the mid-2003 versions of WWU, it is significant for present purposes that the latter has retained the statement by the appellant, printed in bold, that it would take every practicable step to provide and maintain a safe and healthy work environment for all people. Nothing in the detailed content of the mid-2003 version of the health and safety statement in WWU rendered this stark proposition any less promissory, or any less contractual, than was the case in May 2002 (and, on the assumptions to which the parties were working, at the time when the respondent entered into the employ of the appellant). It was this statement that the appellant would take every practicable step etc which formed the basis of the trial Judge's conclusion that the appellant was in breach of its contractual obligations to the respondent insofar as they related to the matter of health and safety. 334 That brings me to consider the link between the appellant's contractual obligation to take every practicable step etc and the concrete acts and omissions of the appellant which his Honour held to give rise to a breach of that obligation. His Honour's findings about the latter have been summarised in par 250 above. At the core of those findings was his Honour's conclusion that the appellant's handling of the respondent's complaint was "inept". Although contained within a section of his Honour's reasons headed "Findings about the evidence", that conclusion was not, I consider, a finding of fact either directly or by inference - but was rather in the nature of a value judgment about the acts and omissions of the appellant. It is to those acts and omissions that one must turn to discern what it was that, according to his Honour, amounted to a failure to take the steps required by the health and safety statement in WWU. 335 Although probably not tied directly to the appellant's health and safety obligations, it is necessary first to refer to the way his Honour dealt with the respondent's allegation that the appellant had been in breach of a duty which it owed to him in its substantive disposition of his complaint made by his correspondence dated 28 July 2005. As I have noted in par 251 above, his Honour found that the allegations made in that correspondence were (or were "possibly") overstated or were (or "may have been") incorrect. In a later section of his reasons concerned with the question whether the appellant had been in breach of contract, his Honour found that the "conflict of interest" provisions of WWU did not apply to the kind of internal conflict which his Honour held to be inherent in Mr Sutherland's position. In the result, neither because of that conflict nor because of the substantive decision which the appellant made about the respondent's complaints did his Honour find that the appellant breached any contractual norm which was relevant to the cause of action upon which the respondent relied. 336 The appellant submitted in the appeal that this was a case in which its breaches of duty as found by his Honour were entirely procedural. That appears to be so. If one reads that part of his Honour's reasons in which he deals with the appellant's handling of the respondent's complaint, he commences, as I have said, with the view that that handling was "extremely inept". At the risk of some little repetition, I paraphrase the findings and conclusions which follow in his Honour's reasons: · That, because of the inherent potential for conflict of interest, it should have been obvious to the appellant's senior officers that it was essential to develop and enforce client-allocation protocol. · That, in the absence of such a protocol, Mr Evans and Mr Heath should have been particularly sensitive to any complaint, whether justified or not, that Mr Sutherland had abused his power of allocation. · That Mr Evans and Mr Heath seemingly failed to comprehend, and certainly failed to act upon, the respondent's complaint. · That, upon receipt of the respondent's letter of 28 July 2003 the appellant should have arranged for a senior person to travel immediately to Canberra and conducted a series of one-to-one meetings with staff members - if need be at a room elsewhere in the city. · That Ms Jowett was not justified in waiting to see if Mr Sutherland would stand down from his position, since that would not have reversed the allegedly unfair allocation decision. · That, in any event, it was not reasonable for Ms Jowett to delay for 3 months, while Mr Sutherland considered his position. · That Ms Jowett ought not to have allowed nearly a month to elapse before showing the respondent's letter to Mr Sutherland. · That Ms Jowett should have interviewed the other members of the Canberra staff who were named in the respondent's letter of complaint. · That Ms Jowett acted inappropriately in treating the meeting with the respondent on 15 October 2003 as a counselling session about his stress rather than responding to his plea for justice. · That, in her formal response to the respondent, Ms Jowett missed the main point of the respondent's complaint and failed to deal with his allegations of abuse of power except by the bland statement that Mr Sutherland's decisions were appropriate having regard to the needs of the appellant's clients, a matter about which she had made no enquiry. · That, upon referral of the respondent's complaint further up the line, Mr Evans and Ms Jacobs made no investigation at all, but again set about counselling the respondent. 337 From the foregoing it is evident that the trial Judge made no finding against the appellant as to the merits of the respondent's allocation complaints. His Honour's concern was wholly with the process by which the appellant handled those complaints. Key aspects of his findings against the appellant were those which related to delay, to the lack of an investigation into the merits, and to the appellant's focus upon the respondent's own personal situation (largely the stress from which he was suffering) rather than upon the correctness of Mr Sutherland's actions. These findings are, of course, consistent with the heading to this part of his Honour's reasons - the handling of the respondent's complaints - but it remains to consider how his Honour linked them to his later conclusion that the appellant had failed to take every practical step to provide and maintain a safe and healthy work environment for the respondent. 338 His Honour made that link in the section of his reasons where, having held that the obligation to take every practical step etc was contractual, he considered whether that obligation had been breached. His Honour noted that counsel for the respondent had focused their submissions on the conduct of Ms Jowett - see par 265 above. That focus, and his Honour's general acceptance of that approach, shows that the appellant's failure to take every practical step etc was constituted by Ms Jowett's shortcomings in her treatment of the respondent's complaint. It was only in the short extract from counsel's submissions which I have set out at par 265 above - and with which his Honour said he agreed - that his Honour came to the circumstance which was most obviously part of the respondent's "work environment", namely, "the potentially injurious conduct by Mr Sutherland and the effect it was having on [the respondent]". Then followed par 275 of his Honour's reasons, which I have set out at par 266 above. 339 In the appeal, counsel for the appellant submitted that it was wrong for the trial Judge first, to have admonished their client for its handling of the respondent's complaint according to an unidentified legal standard, and, secondly, to have "jumped" to the conclusion that the appellant had breached its contractual health and safety obligation by the omissions referred to in par 275 - omissions which, in terms at least, did not themselves line up with any particular obligation arising under WWU. Although I would accept that there is some substance in this submission, I consider it something of an oversimplification to say that his Honour merely jumped from the admonishment to the legally significant conclusion. If his Honour was to deal with the submission that the appellant had failed to take every practicable step, he necessarily had to identify what steps might have been taken in the circumstances. That is how I read the identification of the four omissions on the part of the appellant which his Honour identified in that paragraph of his reasons. They were steps which might have been taken, but which were not. In short, those steps were:
Conclusion 371 I consider that the appeal should be allowed, the orders made by the trial Judge should be set aside, and in place thereof it should be ordered that the respondent's application be dismissed.
Costs 372 Since it is the opinion of a majority of the court that the appeal, to the extent that it concerns substantive matters, should be dismissed, I shall consider the question of costs on the basis that the respondent rightly succeeded at first instance. One of the orders made by the trial Judge was that the appellant pay the respondent's costs of the proceeding. His Honour did not advert to s 170CS of the WR Act, which (as it existed at the relevant time) provided that a party to a proceeding under s 170CP not be ordered to pay costs incurred by any other party to the proceeding unless certain presently irrelevant exceptions applied. Section 170CP(1) was the provision under which the respondent applied for relief in respect of his allegation that the appellant had contravened s 170CK(2)(f). The appellant argued before us that the proceeding as a whole was covered by s 170CS, and that costs could not be ordered in favour of the respondent notwithstanding that he succeeded on a point which arose in the accrued jurisdiction of the court. 373 Section 170CS of the WR Act was the descendant of s 170EHA of the Industrial Relations Act 1988 (Cth) ("the IR Act") introduced by the Industrial Relations and Other Legislation Amendment Act 1995 (Cth). Subsection (1) of s 170EHA provided as follows: If, in relation to a matter referred to the Court under section 170ED, the Court is satisfied that a party to the proceeding has caused any other party to the proceeding to incur costs because of an unreasonable act or omission of the first-mentioned party in connection with the conduct of the proceeding following the referral, the Court may order the first-mentioned party to pay all or part of the costs incurred by that other party. The provision referred to as s 170ED was that under which a claim for relief in relation to the termination of the employment of an employee was required to be referred to the court by the Industrial Relations Commission in circumstances where it had not been possible to resolve the claim by conciliation. One type of claim which was covered by this procedure was that the termination had been unlawful because it was done for one or more of the reasons later covered by s 170CK(2)(f) of the WR Act. It will be noted that the primary operation of s 170EHA was to give the court (then the Industrial Relations Court of Australia) a power to award costs. It having been decided by the legislature that the court should have such a power in the circumstances to which the subsection referred, a specific grant of power was necessary because of the then terms of s 347 of the IR Act, subs (1) of which provided as follows: A party to a proceeding (including an appeal) in a matter arising under this Act shall not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause. In a proceeding to which s 170EHA of the IR Act applied, therefore, there was a general embargo upon an award of costs, as provided by s 347, but there were two exceptions: first, under s 347 itself, where the proceeding was instituted vexatiously or without reasonable cause; and secondly, under s 170EHA, in relation to unreasonable acts or omissions as therein referred to. 374 Under the regime referred to in the previous paragraph, the primary prohibition upon an award of costs (in a proceeding of the kind which was before the trial Judge in the present matter) depended upon whether the proceeding in question was "a proceeding … in a matter arising under" the IR Act. There was Full Court authority which dealt with the question whether the prohibition in s 347 applied only to so much of a single proceeding as related to statutory claims under the IR Act itself, or whether the prohibition applied to all claims in the proceeding, including those made in the accrued jurisdiction of the court: Poulos v Waltons Stores (Interstate) Limited (1986) 68 ALR 537; Thompson v Hodder (1989) 21 FCR 467; Bostik v Gorgevski (1992) 36 FCR 439; and Byrne v Australian Airlines Limited (1994) 47 FCR 300. On each occasion on which the question arose, it was held that s 347 stood in the way of an award of costs in relation to claims made in the accrued jurisdiction. However, in the penultimate authority to which I referred, Bostik, Sheppard J (with the assent of Heerey J) limited his conclusion to that effect to the situation then before the court, namely, one in which the claim in the accrued jurisdiction was based upon an instrument made under federal law, the direct enforcement of which gave rise to the court's statutory jurisdiction. He took the view that the same conclusion would not, or at least would not necessarily, apply in the case of a claim which, although part of a single "matter" in the Fencott v Muller (1983) 152 CLR 570 sense, was legally independent of federal law. In such a case, Sheppard J said that "the court would have jurisdiction to make an order providing for at least part of the … costs …." (36 FCR at 444). The other member of the court, Gray J, held that the prohibition in s 347 applied to all claims which were properly before the court in the accrued jurisdiction, on the basis that they came within the same "matter" as that which arose under the court's statutory jurisdiction, and that the section operated expressly by reference to the "matter". Of the five members of the court who decided Byrne, three (Keely, Beaumont and Heerey JJ) followed Bostik, referring both to the judgment of Sheppard J and to that of Gray J, without distinction (47 FCR at 351). 375 None of the authorities to which I have referred directly involved a claim in the accrued jurisdiction which did not rely upon the content of the relevant federal law. Grout v Gunnedah Shire Council (No 3) (1995) 59 IR 248 was, however, such a case. That was a judgment of a single member of the Industrial Relations Court of Australia (Moore J) in a proceeding referred to the court under s 170ED of the IR Act. However, it is apparent from earlier reports of the same case - Grout v Gunnedah Shire Council (1994) 57 IR 243 and Grout v Gunnedah Shire Council (No 2) (1995) 58 IR 67 - that the whole proceeding was, in effect, played out in the accrued jurisdiction. The questions which arose were, it seems, wholly contractual, the relevant terms of the contract of employment having no basis in federal law. Ultimately, the successful applicant sought his costs, arguing that s 347 of the IR Act did not apply. Moore J recognised the difference between the approach of Sheppard J and the approach of Gray J in Bostik to which I have referred (59 IR at 253). If my understanding of the approach of Sheppard J is correct, and assuming that Moore J would regard himself as obliged to follow the Full Court in Bostik (notwithstanding that it was a different court), costs should have been available to the successful applicant in Grout. However, Moore J held to the contrary. In the course of a detailed consideration, his Honour focused upon the word "proceeding" as it appeared in s 347. He said that the word was a reference to - … the entire proceedings constituting the trial of a statutory claim or application and any related claim in the associated jurisdiction … (59 IR at 260). He concluded (at 261) that the expression "proceeding in a matter arising under the Act" comprehended "not only the trial of the statutory claim but also the trial of the common law claim brought in the associated jurisdiction." 376 In 1996, the IR Act was renamed the WR Act by the Workplace Relations and Other Legislation Amendment Act 1996 (Cth). That Act also repealed s 170EHA, and introduced s 170CS, which governed the question arising in the present case. Subsection (1) of s 170CS was as follows: (1) Subject to this section, a party to a proceeding under section 170CP must not be ordered to pay costs incurred by any other party to the proceeding unless the court hearing the matter is satisfied that the first-mentioned party: (a) instituted the proceeding vexatiously or without reasonable cause; or (b) caused the costs to be incurred by that other party because of an unreasonable act or omission of the first-mentioned party in connection with the conduct of the proceeding. At the same time, s 347 was amended such that it no longer applied to an application under s 170CP. Section 347(1) then read as follows: A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 170CP) shall not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause. Relevantly to the present question, the effect of the 1996 amendment was to constitute the new s 170CS as a free-standing provision applicable to proceedings under s 170CP, without the involvement of s 347. 377 What is curious is that, in enacting s 170CS in 1996, the legislature did not repeat the established formula then found in s 347(1): "a proceeding … in a matter arising under this Act …." Rather, the legislature adopted the new wording "a proceeding under s 170CP …." The Explanatory Memorandum accompanying the introduction of subs (1) of s 170CS was unhelpful. In part, it merely restated the terms of the subsection. In part also, it read as follows (par 7.86): The provision for costs resulting from unreasonable acts or omissions goes further than the costs provisions which were previously available to the Court under section 347 of the IR Act. While literally true, that statement gave the impression that legislative reform had been involved in the enactment of s 170CS. That impression was without foundation: the ability of the court to award costs in the event of a party's unreasonable acts or omissions was, as pointed out above, part of the previous law, under s 170EHA as introduced in 1995. More relevantly for present purposes, the Explanatory Memorandum said nothing about the minor, but probably significant, change in wording effected by the incorporation into the new s 170CS of the primary prohibition upon the award of costs hitherto found only in s 347. The situation is, it may be thought, made the more curious by the relative currency, apropos the 1996 amendments, of the Full Court judgments in Bostik and Byrne: those judgments were given in 1992 and 1994 respectively. The legislature appears not to have discerned the significance, as disclosed in those judgments, of the reference to "a matter arising" in s 347. 378 However these considerations may be, there are sound reasons for giving s 170CS the same construction, relevantly to matters arising in the accrued jurisdiction, as was traditionally given to s 347. No substantive law reform was effected by the repeal of s 170EHA, and the provisions with which it was associated, in 1996. At least relevantly to the kind of claim which was previously covered by s 170DF of the IR Act (termination of employment for reasons of race, colour, sex, etc), the provisions in question were effectively re-enacted (the primary prohibition thereafter to be found in the new s 170CK(2)(f)). If s 170CS was intended to mark out a substantive departure from the previous no-costs regime set up by s 347, it was a departure which went unremarked in the parliamentary materials accompanying the amendment. Save in relation to the wording of the primary prohibition, the new s 170CS was effectively the same as a combination of the repealed s 170EHA and the unchanged s 347, albeit perhaps expressed in terms more in harmony with modern legislative drafting. 379 In my view, the 1996 legislature must be assumed to have been aware of the existence of the accrued jurisdiction of the court, and of the potential, to say the least, for non-statutory causes of action to be litigated in proceedings where the court had a statutory jurisdiction which arose under particular provisions of the WR Act. I do, with respect, agree with Moore J as to the connotation of the word "proceeding" in provisions such as s 347. I think that the legislature must be taken to have had it in contemplation that a single proceeding might have involved claims arising directly under s 170CK(2)(f) (or some other relevant provision) as well as claims in the accrued jurisdiction. That being so, it is a simple matter to read the word in s 170CS "a proceeding under s 170CP" as a reference to a proceeding which had its statutory basis under that section. The section was concerned with proceedings under s 170CP, not merely with claims under that section. A proceeding might well have involved claims in the accrued jurisdiction, and I can think of no reason why s 170CS should not be construed accordingly. 380 For the above reasons, like Moore J in Grout, I take the view that the prohibition on costs in s 170CS(1) extended to every part of a proceeding whose statutory basis was s 170CP of the WR Act, including claims in the accrued jurisdiction which, save for being part of a single "matter" in the constitutional sense, were unrelated to rights and obligations arising under federal statutory law. In the present case, the powers of court to award costs to the successful respondent were, in my view, blocked by s 170CS of the WR Act. I would allow the appeal against the costs orders made the trial Judge. 381 That leaves the question of the costs of the appeal. Here the parties were in furious agreement that s 170CS of the WR Act does not apply, on the basis that the proceeding - ie the appeal - is not "a proceeding under s 170CP". I think that the court should give effect to that agreement. We were referred to no judgment which has considered the operation of s 170CS in the context of an appeal challenging only so much of the disposition of a proceeding originally brought under s 170CP as involved the exercise of the court's accrued jurisdiction. 382 If s 170CS does not apply to the appeal, the question arises whether the appeal should be regarded as a proceeding "in a matter arising under this Act (other than an application under s 170CP)" within the meaning of s 347 of the WR Act. If so, the court would be prevented, by that section, from ordering costs. Because of the specific reference to an appeal in s 347, clearly the "proceeding" mentioned therein includes an appeal from a judgment given in a proceeding, notwithstanding that the appeal would otherwise be regarded as a proceeding in its own right. The authorities on which the appellant relied to challenge his Honour's order for costs at first instance, and which the respondent accepted so far as they went but sought to distinguish, sustain the proposition that the whole of the proceeding before his Honour was "in a matter arising under this Act". The proceeding before his Honour was an application under s 170CP, with the result that s 347 did not apply. But, was the appeal such an application? 383 In my view, the second parenthetical phrase in s 347 - "other than an application under s 170CP" - is a reference to the provision of "this Act" under which the "matter" arises for the purposes of the section. Not only the whole of the original proceeding, but, because of the specific reference to an appeal, any appeal from a judgment given in that proceeding, should be regarded as being in the matter which so arises. Construed in this way, it is clear that the manifest intention of the parenthetical phrase is to render inapplicable the embargo on costs orders to all proceedings, including appeals, which arise under the WR Act where the source of the court's statutory jurisdiction is s 170CP of that Act. 384 It follows that there are no statutory impediments to the exercise of the court's normal jurisdiction to award costs in the appeal. Nothing was put to us which would make it appropriate to depart from the usual practice whereby costs follow the event. The appellant succeeded only on its argument that the trial Judge had no power to award costs to the respondent. This was a small but important part of the appeal. I consider that the appellant's limited success in this respect would be appropriately acknowledged if we were to order that it pay 90% of the respondent's costs of the appeal.
I certify that the preceding two hundred and seventeen (217) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.
Counsel for the Appellant: J Gleeson SC & A Coleman
Counsel for the Respondent: B Hodgkinson SC & K Nomchong
Solicitor for the Respondent: Pamela Coward & Associates
Date of Hearing: 23 November 2006, 15 February 2007, 5 March 2007
Goldman Sachs JBWere Services Pty Limited
Nikolich
REMOTENESS 70 The appellant argued that the primary judge erred in failing to conclude that the psychiatric injury suffered by the respondent was too remote to sound in damages. It says that to have found otherwise "effectively overturn[s] the principle that damages are not available for disappointment and distress in breach of contract cases." In support of this "principle", the appellant cited the judgment of Spigelman CJ in State of New South Wales v Paige (2002) 60 NSWLR 371, [132] - [139]. Paige, however, was a negligence case in which the Chief Justice was concerned with psychiatric injury (not mere disappointment and distress) resulting from the manner in which an employee was dismissed. His Honour referred to the decision of the House of Lords in Johnson v Unisys [2003] 1 AC 518, in which their Lordships had denied liability in both contract and tort for psychiatric injury arising from the manner of an employee's dismissal. The Chief Justice explained that the earlier House of Lords decision in Malik v BCCI [1998] AC 20, where there was recovery for injury to reputation caused by an employer's breach of an implied term in the employment contract, was distinguished in Johnson on the basis that the earlier case "was not a manner of dismissal case." This case is distinguishable from Paige for precisely the same reason. 71 Mere disappointment and distress do not ordinarily sound in damages but the primary judge considered it to be "strongly arguable" that the present case came within the exception to that rule expressed in Baltic Shipping Company v Dillon (1993) 176 CLR 344 because, he said, the "very object" of the relevant promises in WWU was to provide peace of mind. As there was no suggestion, however, that the respondent was merely disappointed or distressed, it was unnecessary for the primary judge to reach a final view on this issue. It was unchallenged, at least on appeal, that the respondent had suffered a psychiatric injury. The appellant's reliance on Paige is misplaced. 72 Damages may be awarded for psychiatric injury caused by a breach of contract, including a breach of a contract of employment: Gogay v Hertfordshire County Council [2000] IRLR 703 (Court of Appeal, Hale LJ with whom May and Peter Gibson LJJ agreed); see also Johnson, where this appears to have been assumed by the House of Lords. Given the content of the terms implied in employment contracts by the common law and their close - if not complete - correlation in relevant respects with the duty of care in tort, it would have been anomalous had damages been unavailable for psychiatric injury caused by a breach of an employment contract when they undoubtedly would be available in tort: see Koehler v Cerebos (2005) 222 CLR 44; Barber v Somerset County Council [2004] 1 WLR 1089. I would add that there is no novelty in the proposition that damages may be awarded against an employer whose failure to respond appropriately to bullying or harassment in the workplace causes psychiatric injury to an employee: see Naidu v Group 4 Securitas [2005] NSWSC 618 (contract); Waters v Commissioner of Police of The Metropolis [2000] 1 WLR 1607 (see especially per Lord Hutton at 1615 - 1616 where his Lordship observed that the relevant duty arises both under the contract of employment and under the common law principles of negligence); New South Wales v Mannall [2005] NSWCA 367 (negligence). 73 The appellant's other contention about remoteness was that the primary judge had found that only distress (which is not an injury that ordinarily sounds in damages) was foreseeable as the result of the appellant's breach and not psychiatric injury (which is). Therefore, it said, the primary judge should have held that the psychiatric injury which the respondent suffered was too remote. 74 The relevant passage of the primary judge's reasons only need be set out to see the error of this submission: "It must be taken to have been within the contemplation of the parties that, if the obligations were not fulfilled, the particular employee to whom the obligations were owed might become upset, stressed and disturbed. It is notorious that stress and disturbance of mind may lead to a psychological disability. It may be unusual for disturbance of mind to lead to a psychological condition as severe as that suffered by Mr Nikolich; there is no evidence on the point. However, that is a statement about the extent of the injury, not its type. This is not a case, as in Rowe v McCartney, of a mental disability arising out of irrational guilt feelings that had only a tenuous connection with the plaintiff's cause of action. This is a case of a mental disability that was a particularly severe manifestation of the very type of detriment that the WWU promises were designed to prevent."(Emphasis added). 75 It is thus evident that the primary judge did consider that psychological injury was a foreseeable consequence of the appellant's failure to fulfil its obligations as set out in WWU.
84 There is no suggestion that sub-sections (a) or (b) of s 170CS(1) were applicable here. 85 The respondent's proceeding was brought, in part, under s 170CP. In awarding costs to the respondent the trial judge made no reference in his reasons to s 170CS and the question on appeal is whether such an order was precluded by the section even though Mr Nikolich's claim had three quite distinct bases, only one of which was s 170CP. 86 The WRA, as it then was, also had a general "no costs" provision. This was s 347 (see now s 824), a provision with a long history: there was a comparable provision in s 347(1) of the Industrial Relations Act 1988 (Cth) and earlier in s 197A of the Conciliation and Arbitration Act 1904 (Cth). It is well settled that s 347 (and now s 824) of the WRA limits the award of costs not only in respect of a claim brought in reliance upon the WRA but also in respect of other claims joined in the same proceeding, including common law claims in the accrued jurisdiction of the Court. The authorities were collected and discussed by Nicholson J in Maritime Union of Australia v Geraldton Port Authority [2000] FCA 16. 87 The decisions about the application of s 347 in circumstances where a proceeding includes a claim made otherwise than "under" the WRA turn to a large extent upon the reference in s 347 to "a matter arising" under the WRA. Thus it was argued by the respondent that "a proceeding under" s 170CP is a narrower concept than "a proceeding in a matter" under the Act, particularly if "matter" is used in its constitutional sense. This may be accepted and it is a point of distinction between s 347 and its more specific counterpart in the "termination of employment" division of Part VIA of the WRA. 88 It would, of course, be anomalous if different principles in relation to multiple causes of action applied in the application of s 347(1) on the one hand and its more specific counterpart in s 170CS on the other. The anomaly might seem all the greater if, as may well be the case, the narrower language of s 170CS simply reflects the fact that this provision was drafted in terms to embrace one specific section of the WRA and not, as with s 347, every type of proceeding that might be brought under the Act and, on the authorities, more. 89 The question is whether in a proceeding founded on multiple causes of action, of which s 170CP is only one, the expression "a proceeding under s 170CP" refers to the whole of the proceeding or only to that "part" of the proceeding that is brought pursuant to the provision. 90 The answer, as a matter of language, is not clear but the question can be resolved by appropriate reference to the objects of the relevant provisions. 91 The policy debate about the respective merits of regimes in which costs follow the event and 'no-costs' regimes is wide ranging and of long-standing. In relation to s 170CS in its application to s 170CP, the reason for the policy choice in favour of a no-costs regime seems plain enough. Section 170CP(1) gave a right to apply to the Court to an employee who claims to have been the subject of an unlawful termination of employment. In some circumstances, an inspector, a trade union or a trade union officer could apply under s 170CP in respect of an alleged contravention but the primary focus was upon the employee. 92 The application of a 'no-costs' regime in such circumstances suggests that the object was to facilitate the exercise of an employee's right to apply for an order under s 170CR in respect of an alleged contravention. Without the threat of a potentially disabling cost penalty, an employee may feel better able to assert the rights given to him or her by the WRA. 93 It is not difficult to envisage circumstances in which an employee might bring proceedings in the Federal Court consequent upon the termination of employment in which causes of action in addition to those arising under the unlawful termination provisions of the WRA might be relied upon. Consistently with the broad policy of litigation that multiple proceedings relating to the one matter are to be avoided, there is good reason to conclude that the overall policy of s 170CS would be advanced by interpreting that section in the same way as s 347 has been interpreted in its broader context. It would be a very strange result if a person whose employment had been terminated unlawfully would be protected from an adverse costs order by s 170CS in a proceeding not instituted vexatiously or without reasonable cause, and yet would be deprived of that protection if, perfectly reasonably, a related common law claim in the accrued jurisdiction of the Court were joined in the same proceeding. 94 I therefore conclude that the object of s 170CS would be advanced by giving it the same operation as s 347, such that the whole of a proceeding of the present character is to be characterised as a proceeding under s 170CP. The circumstance that this might possibly permit a colourable application under s 170CP for the purpose of providing a protective cloak over a common law action does not point against this conclusion. Abuses of that nature do not appear to have emerged in relation to s 347 and, in any case, improperly joined proceedings can be severed and there may also be potential for the operation of the provisos. 95 In these circumstances, I conclude that the learned primary judge was in error in awarding costs in favour of Mr Nikolich. Although the 'no-costs' regime in Division 3 had a policy objective that primarily favoured the rights of employees, it naturally worked both ways so that an employer who was a party to a proceeding within a no costs regime likewise had the benefit of it. GSJBW was such a party.
MARSHALL J 99 Peter Nikolich worked for Goldman Sachs JBWere Services Pty Limited (Goldman), formerly Were Holdings Limited, as an Associate Investment Adviser and an Investment Adviser from May 2000 until December 2004. In December 2004, Goldman terminated Mr Nikolich's employment because it considered that he did not intend to, or was not able to, return to work in the foreseeable future or at all. Mr Nikolich had been absent from work as a consequence of a psychological injury incurred in his employment. 100 This appeal raises for consideration the issue of whether Goldman breached the contract of employment between it and Mr Nikolich by reference to provisions contained in a document given to Mr Nikolich by Goldman when it sent to him his letter of offer of employment. 101 A few months after the termination of Mr Nikolich's employment, he commenced a proceeding in this Court claiming that Goldman had terminated his employment in contravention of s 170CK(2)(f) of the Workplace Relations Act 1996 (Cth) (WR Act), as it then stood. 102 Mr Nikolich amended his application to rely on grounds in addition to the contravention of the WR Act. He claimed further that Goldman had: · breached ss 52 and/or 53B of the Trade Practices Act 1974 (Cth); and/or · made negligent misstatements; and · breached the contract of employment. 103 His Honour Justice Wilcox heard the matter at first instance (see Nikolich v Goldman Sachs JB Were Services Pty Limited [2006] FCA 784). His Honour dismissed Mr Nikolich's claims, other than an aspect of the breach of contract claim. His Honour awarded damages to Mr Nikolich, who he considered suffered a major depressive disorder as a consequence of "the events the subject of the proceeding". Goldman now appeals from that order. 104 His Honour found that a breach of contract arose from Goldman's failure to comply with the promises made by it to its employees, including Mr Nikolich, in a document titled "Working With Us" (WWU). His Honour found that Mr Nikolich received a copy of WWU when he received his letter of offer of employment in May 2000 and that Goldman required him to familiarise himself with its terms. 105 Justice Wilcox considered at [247] of his reasons for judgment that "the explicit promises made in WWU by [Goldman] should be regarded as express terms of Mr Nikolich's contract of employment". His Honour considered the real issue to be "whether [Goldman] has incurred any contractually binding obligation as a result of the provisions concerning behavioural standards [found in WWU]". 106 At [248], Justice Wilcox determined that issue in Mr Nikolich's favour. His Honour said: It is clear that [Goldman] was concerned to insist that all its employees…would comply with those behavioural standards, which it trumpeted as reflecting the firm's values and culture. His Honour said further: …as the document appears to impose legal obligations on [Goldman] in relation to other matters, I see no reason to doubt that it also does so in relation to those provisions of the document that contain express promises about behavioural standards. His Honour then said he considered that Goldman: …may be held liable in breach of contract where it can be shown that, on no view of its conduct, has it responded to a problem or a complaint in the manner promised or assumed in a particular WWU provision. 107 Justice Wilcox then considered whether Mr Nikolich had established the four alleged breaches of obligations imposed on Goldman by WWU. He held that one of them, "the conflict of interest clause", did not give rise to an entitlement to damages. His Honour concluded that Goldman had breached its contract with Mr Nikolich in respect of other provisions in WWU relating to health and safety, harassment and grievance procedures.
(1993) 176 CLR 344
(1992) 36 FCR 439
(1977) 180 CLR 266
(1995) 59 IR 248
(1988) 164 CLR 539
(2005) 222 CLR 44
(1999) 167 ALR 689
(2000) 177 ALR 133
(2002) 60 NSWLR 371
(1965) 112 CLR 597
(2004) 219 CLR 165
(2000) 177 ALR 193
(1959) 101 CLR 298
(1970) 125 CLR 383
(1989) 85 ALR 442
(1986) 68 ALR 537
(1989) 21 FCR 467
(1994) 47 FCR 300
(1983) 152 CLR 570
(1994) 57 IR 243
(1995) 58 IR 67