Health Administration Corporation and others v Crocker and others

Industrial Relations Commission (NSW)|2004-07-01|Before: Wright J, Marks J, Haylen J, Schmidt J

Industrial Relations Commission of New South Wales in Court Session

CITATION : Health Administration Corporation and others v Crocker and others [2004] NSWIRComm 163 APPELLANTS: Health Administration Corporation Northern Sydney Area Health Service Western Sydney Area Health Service South Western Sydney Area Health Service Wentworth Area Health Service PARTIES : RESPONDENTS: Kenneth Darvall Crocker Gregory John Driver Keith Hornshaw Christopher Bentley Kevin Gillies FILE NUMBER: IRC 4893, 4895, 4896, 4897 of 2003 CORAM: Wright J President; Marks J; Haylen J CATCHWORDS : Appeal - Unfair contract - Applications for leave to appeal and appeal - Employer altered conditions of employment of staff - No written agreement - Trial judge found arrangements unfair - Appeal principles - Leave to appeal refused, by majority - Whether reliance by major public authority on misunderstanding of statutory powers raises public interest considerations - Appeals dismissed. Area Health Services Act 1986 Contracts Review Act 1980 LEGISLATION CITED : Conveyancing Act 1919 s 54A Health Services Act 1997 s 16 s 115 s 116 s 121 Industrial Relations Act 1996 s 8 s 13 s 38 s 106 s 175 s 188 s 191 Public Hospitals Act 1929 Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 Beneficial Finance Corporation Ltd v Karavas (1991) 23 NSWLR 256 Commander Australia Limited v Kerr [2004] NSWIRComm 74 Downey v Prior (1960) 103 CLR 353 Gibson v Western Sydney Area Health Service [2003] NSWIRComm 465 Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 House v The King (1936) 55 CLR 499 Houssein v The Under Secretary, Department of Industrial Relations and Technology N.S.W. (1982) 148 CLR 88 CASES CITED : Inspector Moore v Blacktown City Council [2003] NSWIRComm 47 Murphy v Overton Investments Pty Ltd [2002] FCAFC 129 Newton v Goodman Fielder Mills Ltd (1998) 81 IR 227 Norbis v Norbis (1986) 161 CLR 513 O'Sullivan v Farrer (1989) 168 CLR 210 Port Macquarie Golf Club Limited v Stead (1996) 64 IR 53 Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 St George Bank Limited v Trimarchi in [2004] NSWCA 120 Westfield Holdings v Adams (2001) 114 IR 241 HEARING DATES: 03/17/2004 DATE OF JUDGMENT: 06/09/2004

APPELLANTS: Mr M J Kimber SC with Mr R Reitano of counsel Health Administration Corporation (Mr T Craft) LEGAL REPRESENTATIVES: RESPONDENTS: Mr A R Moses of counsel with Mr McInnes McClellands Solicitors (Mr M Burns)

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION FULL BENCH

CORAM: WRIGHT J, President MARKS J HAYLEN J

HEALTH ADMINISTRATION CORPORATION AND ANOTHER v KENNETH DARVALL CROCKER Application by Health Administration Corporation for leave to appeal and appeal against a judgment and orders of Justice Schmidt given on 12 August 2003 in Matter No IRC 5498 of 2000

HEALTH ADMINISTRATION CORPORATION AND OTHERS v GREGORY DRIVER AND OTHERS Application by Health Administration Corporation for leave to appeal and appeal against a judgment and orders of Justice Schmidt given on 12 August 2003 in Matter No IRC 5499 of 2000

HEALTH ADMINISTRATION CORPORATION AND ANOTHER v CHRISTOPHER BENTLEY Application by Health Administration Corporation for leave to appeal and appeal against a judgment and orders of Justice Schmidt given on 12 August 2003 in Matter No IRC 5500 of 2000

HEALTH ADMINISTRATION CORPORATION AND ANOTHER v KEVIN GILLIES Application by Health Administration Corporation for leave to appeal and appeal against a judgment and orders of Justice Schmidt given on 12 August 2003 in Matter No IRC 5497 of 2000

JUDGMENT OF THE PRESIDENT [2004] NSWIRComm 163

1 The present proceedings involve a number of applications for leave to appeal and, subject to leave to appeal being granted, appeals by the Health Administration Corporation and a number of Area Health Services against the judgment delivered by Schmidt J on 12 August 2003.

2 I have had the advantage of reading in draft form the judgment to be delivered by Marks and Haylen JJ. I agree that the appeals should be dismissed substantially for the reasons given by their Honours. However, unlike their Honours, I consider that there is a limited basis for leave to appeal to be granted. Since my views differ in some respects and as there are a number of other matters requiring consideration I find that it is necessary to make a number of observations additional to those in the majority judgment.

3 The particular respect in which I consider that leave to appeal should be granted relates to the appellant's reliance on s 115 of the Health Services Act 1997, because the reliance by a major public authority on a manifestly misguided understanding of powers granted to it by Parliament raises public interest considerations if only because the relevant legal misapprehension requires clarification and correction. Further, the particular statutory provision is significant in the industrial relations of very many employees and employers in the health industry.

4 Section 115 of the Health Services Act is relevantly in the following terms: 115 Determination of conditions of employment of staff (cf AHS Act s 26, PH Act s 40BA) (1) Definitions In this section, enterprise agreement and industrial matters have the same meanings as in the Industrial Relations Act 1996 . (2) Conditions of employment Except in so far as provision is otherwise made by law, the conditions of employment (including salaries, wages or remuneration) of the employees in the NSW Health Service are to be as may be determined from time to time by the Health Administration Corporation. (3) Corporation is taken to be employer for certain purposes The Health Administration Corporation: (a) is, for the purpose of making any determination under subsection (2), taken to be the employer of the employees in the NSW Health Service, and (b) is, for the purpose of entering into an enterprise agreement relating to the enterprise carried on by a public health organisation, taken to be the employer of the employees of the organisation concerned, and (c) is, for the purpose of any proceedings before a competent tribunal having power to deal with industrial matters, taken to be the employer of the employees in the NSW Health Service. (4) Corporation may delegate functions To remove any doubt, the Health Administration Corporation may, in accordance with section 21 of the Health Administration Act 1982 , delegate its functions as such an employer. (5) Corporation may enter industrial agreements The Health Administration Corporation may enter into an agreement (not being an enterprise agreement taken to have been entered into by the Corporation under subsection (3) (b)) with any association or organisation representing any group or class of employees in the NSW Health Service with respect to the conditions of employment (including salaries, wages or remuneration) of that group or class. Any such agreement may (subject to Part 2) extend to conditions in respect of the employment of persons convicted of, or charged with, serious sex or violence offences.

(6) Industrial agreements bind employees An agreement referred to in subsection (5) binds all employees in the group or class affected by the agreement and no such employee, whether a member of the association or organisation with which the agreement was entered into or not, has any right of appeal against the terms of the agreement. (7) Actual employers bound by industrial agreements A public health organisation must give effect to: (a) any determination made by the Health Administration Corporation under subsection (2), and (b) any enterprise agreement referred to in subsection (3), and (c) any order or determination made by a competent tribunal in proceedings referred to in subsection (3), and (d) any agreement referred to in subsection (5). (8) Corporation taken to be employer only for certain purposes Nothing in this section authorises: (a) the Health Administration Corporation to act as an employer, or (b) any function to be exercised by or in relation to the Health Administration Corporation, otherwise than for the purposes of and in accordance with this section. (9) …

5 It is to be observed that this provision provides a number of powers and roles to the Health Administration Corporation including: (a) the power to determine conditions of employment (including salaries, wages and remuneration) for employees in the NSW Health Service (an expression defined in s 16 of the statute);

(b) the authority to enter into industrial agreements with any association of employees representing employees in the Health Service; and

(c) to be the "deemed" employer of employees of the Health Service for certain specified purposes. The enactment of the Health Services Act in 1997 followed very closely on the enactment of the Industrial Relations Act the previous year. It also repealed the Public Hospitals Act 1929 and the Area Health Services Act 1986.

6 It is plain that the "draftsperson" of the Health Services Act, and Parliament in enacting the statute, were well aware of the relevance and significance of the Industrial Relations Act and the Industrial Relations Commission to the Health Service constituted by the 1997 statute. See, for example, ss 115, 116 and 121 of the Health Services Act and the discussion of these and other provisions in my judgment in Gibson v Western Sydney Area Health Service [2003] NSWIRComm 465.

7 The majority judgment refers to the appellants' reliance on both a determination under s 115 of the Health Services Act and an agreement under the same section. Reference is also made to the rejection by Schmidt J of there being any relevant determination made under s 115. However, as I understand the nature of the appellant's reliance on s 115, at both first instance and on appeal, and her Honour's rejection of that reliance, the major reliance was that placed on the claimed existence of a s 115 agreement. For example, the first issue raised by the appellants in their submissions as to leave to appeal was: This appeal raises serious questions of public policy in relation to the role of registered organisations in the negotiation and making of agreements under section 115 of the Health Services Act and in particular the interaction of such agreements with section 106 of the Industrial Relations Act 1996. A serious issue arose before Her Honour in the determination of the proceedings as to the treatment of an agreement made between relevant organisations and the HAC and its impact upon the issues that fell for Her Honour's determination. The HAC relied heavily upon the existence of such an agreement and its binding force in respect of both members and non members of industrial organisations employed throughout the health industry.

8 In my opinion, the appellant's reliance on the existence of a s 115 agreement was misconceived and her Honour's rejection of that reliance was plainly correct, particularly because there is a minimum level of formality required to demonstrate the existence of an agreement made under that provision. The level of formality includes the existence of a written document.

9 True it is that s 115 does not in terms require the existence of a written document but consideration of all relevant statutory provisions, including those in the Industrial Relations Act, makes plain that is the case.

10 As noted earlier, at least in some senses, the Health Services Act may be considered to be legislation cognate with the Industrial Relations Act. There is, for example, at least one reference in the Industrial Relations Act to a predecessor statute to the Health Services Act (see the definition of "public sector industrial agreement" in the Dictionary to the Industrial Relations Act) and it was not necessary for an express amendment to be made to that provision to specifically refer to the Health Services Act because of the transitional provisions of that statute (see Clauses 2 and 52 of Schedule 7). The relevant provisions of the Industrial Relations Act include s 175 which enables the Commission "for the purpose of exercising its functions in connection with a matter before it" to determine any question concerning the interpretation, application or operation of any "relevant law or instrument (including the industrial relations legislation and any industrial instrument)" (emphasis added).

11 The term "industrial instrument" is defined in s 8 of the Industrial Relations Act, as follows: In this Act, industrial instrument means an award, an enterprise agreement, a public sector industrial agreement, a former industrial agreement, a contract determination or a contract agreement. And the phrase "public sector industrial agreement" is, in turn, defined in the Dictionary to the Industrial Relations Act , as follows: public sector industrial agreement means an agreement under section 64 of the Public Sector Management Act 1988 , section 86 of the Police Service Act 1900 , section 26 of the Teaching Services Act 1980 or section 26(4) of the Area Health Services Act 1986 or any similar kind of agreement relating to public sector employees. It follows that the Commission has express power under s 175 of the Industrial Relations Act to make determinations as to the interpretation of agreements made pursuant to s 115 of the Health Services Act .

12 Although, as noted earlier, s 115 of the Health Services Act does not, on its face, require an agreement made pursuant to its terms to be in writing, and although a number of provisions of the Industrial Relations Act (for example, s 13 as to awards and s 38 as to enterprise agreements) and indeed other legislation such as s 54A of the Conveyancing Act 1919 (as to contracts for the sale of land) require particular instruments to be in writing, the legal maxim expressio unius est exclusio alterius is only a guide to construction and not determinative: Pearce and Geddes, Statutory Interpretation in Australia, 5th Edition 2001 para [4.27], O'Sullivan v Farrer (1989) 168 CLR 210 at 215 and Houssein v The Under Secretary, Department of Industrial Relations and Technology N.S.W. (1982) 148 CLR 88 at 94.

13 Courts plainly have an obligation to construe legislation in a way that ensures its effectiveness and identifies its true meaning: cf Downey v Prior (1960) 103 CLR 353 at 361, 366. The meaning is to be identified in accordance with the intention of Parliament; such meaning to be ascertained from appropriate guides available for that purpose including other provisions which show the evident intent of the relevant legislation: the relevant principles have been recently considered by the Full Bench in Commander Australia Limited v Kerr [2004] NSWIRComm 74.

14 Having regard to the effect of an agreement made pursuant to s 115 under the terms of the section (which include making legally binding instruments fixing the salaries and conditions of employment of potentially many thousands of employees of Area Health Services throughout the State) it is unlikely that the legislature would have intended that such an instrument could be in any form other than in written form, or perhaps in a form very similar thereto, such as in a form electronically transmissible via the Internet or by email. Section 115(7)(d) requires that all public health organisations must give effect to agreements made under s 115, emphasising that Parliament intended such bodies would have ready access to such agreements in written form to discharge their consequent legal obligations. Further, the fact that s 115(5) expressly provides that the agreement under the section may extend to conditions of employment in respect of the employment of persons convicted of, or charged with, serious sex or violence offences, makes it extraordinarily unlikely that Parliament would have included such words if it were conceivable that the form of the agreement could be any less tangible or permanent than I have concluded was necessary.

15 So much, in my opinion, can be gauged from the terms of s 115 itself. If there were, however, any doubt remaining in respect of the minimum levels of formality required for an agreement to exist under s 115, that doubt is removed when reference is made to the provisions in the Industrial Relations Act referred to earlier. An examination of those provisions makes plain that the 1996 statute equates an agreement made under s 115 of the Health Services Act (the successor provision to the provision referred to in the definition of "public sector industrial agreement") to industrial instruments made under the Industrial Relations Act, and authorises the Commission to determine questions concerning the interpretation of such agreements. That consideration, taken with the terms and scope of agreements made under s 115, in my view, puts beyond doubt the conclusion that such an instrument is required to be in writing. The conclusion is sufficient to dispose of the issue raised by the appellants. There may be other aspects as to the degree of formality required for the effectiveness of an agreement made pursuant to s 115, such as its distribution to those Area Health Services bound by it and perhaps those industrial unions whose members are bound. However, it is not necessary at present to pursue those matters.

16 It is sufficient to note that there was no evidence of any document in written or similar form which could be identified, relevantly, as an agreement made pursuant to s 115 of the Health Services Act. The appeals in that respect must be dismissed.

17 There was some debate as to the approach that should be adopted in approaching the issues on appeal and particularly whether the decision on appeal represented an exercise of discretion. The respondents submitted that "the appeal is confined to the principles that apply to appeals from discretionary judgments". I do not consider the authorities permit the scrutiny of the decision under challenge to be limited to whether it represents a proper exercise of discretion. Authorities such as Port Macquarie Golf Club Limited v Stead (1996) 64 IR 53 at 59 - 60; Westfield Holdings v Adams (2001) 114 IR 241 at 252 - 256 and Beneficial Finance Corporation Ltd v Karavas (1991) 23 NSWLR 256 at 261, 270 demonstrate that not all of the stages of decision-making under s 106 of the Industrial Relations Act, or similar legislation such as the Contracts Review Act 1980, are considered in legal terms to be exercises in discretion. Although the distinction may seem somewhat semantic, and legal theorists take a broader view of the judicial decisions which are said to be discretionary than do the courts (compare, for example, Hart The Concept of Law 2nd Edition, Clarendon Press, 1994, pp 272ff, Dworkin Taking Rights Seriously Harvard University Press 1978 pp 31ff, 68ff and Lucy "Adjudication" in Coleman and Shapiro Oxford Handbook of Jurisprudence and Philosophy of Law Oxford University Press 2002 pp 208ff with House v The King (1936) 55 CLR 499 and Norbis v Norbis (1986) 161 CLR 513), a finding that a contract or arrangement is "unfair" is not a discretionary decision and a different standard of appellate review applies to it than that which applies to the review of discretionary decisions. Failure to observe the relevant distinctions, even if they are rather fine distinctions, has a potential for error and should be avoided.

18 I consider that, when the appropriate standard of review is applied, leave to appeal should be refused, except in the particular respect identified. The appeals should be dismissed. I have reached these conclusions because her Honour's finding as to the unfairness of the relevant arrangements were reasonably open on the evidence at first instance and the exercises of discretion involved in the making of her Honour's orders as to the relief granted have not been shown to be affected by error of the requisite kind; that is, error in terms of s 191(3) of the Industrial Relations Act and the principles in, for example, House v The King.

19 I would accordingly propose the following orders in disposition of these appeals: 1. Leave to appeal granted as to the issue raised by the appellants concerning s 115 of the Health Services Act 1997. 2. Leave to appeal otherwise refused. 3. Appeals dismissed. 4. The appellants to pay the respondents costs of the appeals as assessed in default of agreement.

20 By judgment delivered on 12 August 2003 Schmidt J upheld claims brought by five employees of the Appellant Health Administration Corporation of New South Wales ("H.A.C.") for relief under s 106 of the Industrial Relations Act 1996 ("the Act"). The five claims were heard together by consent with evidence in the one being taken as evidence in each of the others.

21 The circumstances of each of the five respondents in those proceedings were different as to detail. In general terms, however, each of them when they became employed by various Area Health Services did so on the basis that a fully maintained motor vehicle would be provided as part of their contract of service. Such a vehicle would be able to be used for private purposes.

22 In order to understand the background to the proceedings it is necessary to refer to two policies introduced by H.A.C. which affected each of the respondents. The first policy was instituted in 1990 and the second in 1998.

23 Under the 1990 policy each of the five respondents were entitled to be offered the allocation of a motor vehicle for private use, on a fully maintained basis. Each of them was required to make a contribution towards the running costs of the vehicle paid by fortnightly deductions from salary. There were a number of conditions attaching to the circumstances under which the vehicles could be so provided, which for present purposes are not relevant. From time to time the contributions made by the respondents were increased by H.A.C. Even though some of them complained that these increases were contrary to their contractual entitlement to the provision of a fully maintained vehicle as part of a salary package, each of them allowed the initial deductions and increases in those deductions to be made from time to time.

24 In 1998 H.A.C. introduced a new policy without reference to the respondents and without obtaining their consent. There was evidence that they sought to resist the introduction of the new policy and there was evidence that they did not assent to the new policy, although H.A.C. had negotiated for its introduction with a number of trade unions including the Health and Research Employees Union ("H.R.E.A."), of which some of them were members.

25 Under the 1998 policy certain employees (including the respondents) who were said to "require the use of an official motor vehicle during the normal course of their duties" might be "offered the allocation of a motor vehicle for private use". The employees concerned were required to contribute at a rate determined by the Director General of H.A.C. from time to time. That rate which was set on an annual basis varied depending upon whether or not the number of private kilometres travelled per year did not exceed 15,000 or exceeded 15,000. There was provision for the variation of rates in the future. Employees who travelled in excess of 15,000 kilometres per annum would be subject to an assessment calculated by reference to the running cost rates for six cylinder motor vehicles based on a set 25,000 kilometre travel. In other words, an employee who travelled in excess of 15,000 kilometres per annum would have his or her rates varied by reference to the running cost calculated with respect to 25,000 kilometres travelled, whether or not that distance was achieved. There was provision to phase in these increased rates (when compared with the 1990 policy) over three years.

26 Under the 1998 policy, vehicles must be made available for the use of the local Area Health Service on a daily basis and the Service had the right to require any vehicle to be made available for use of other staff for official purposes.

27 Schmidt J was required to consider whether the imposition of the 1998 policy upon the employment of each of the respondents created relevant unfairness for the purposes of s 106.

28 In the proceedings before Schmidt J, H.A.C. submitted that by reference to s 115 of the Health Services Act 1997 it was entitled to determine conditions of employment of employees and it was inappropriate that the Court should be in a position to make orders which would have the effect of undermining this power. Schmidt J held that no determination had been made by H.A.C. under s 115 of that Act. H.A.C. had also sought to rely on an industrial agreement entered into with H.R.E.A and the other unions incorporating the provisions of the 1998 policy. Her Honour held that there was no evidence of any such agreement.

29 Schmidt J held that the relevant unfairness under s 106 had been created on the following basis:

A. By introducing the 1998 policy, H.A.C. had unilaterally sought to vary contractual terms and conditions, assuming that the contracts of employment of the respondents incorporated the 1990 policy.

B. The unilateral variation involved a breach of contract likely to amount to repudiation but could not be characterised in the circumstances of these proceedings as notice of termination of the contract of employment. Indeed, the parties contemplated that the contracts of employment would continue. The unilateral variation and the basis upon which it operated "including the artificial thresholds of 15,000 and 25,000 kilometres could not be met by an argument that the applicants were always free to forego their access to the benefit". That argument may have been valid if H.A.C. had "offered to provided something to the applicants by way of compensation" but no such offer was made.

C. The respondents "each had little option but to accept what they were confronted with in the 1990 policy and how it was operated. Were that the only basis of complaint in these proceedings, I would, nevertheless, have hesitated before exercising any discretion in favour of the respondents, given the evidence as to the respondents' acceptance of the basis of the charges imposed and the absence of significant complaint over time, given the level of the contributions they were required to make and the gradual adjustments made over time to the rates." However her Honour held that the 1998 policy did not leave such an approach to the exercise of discretion open. The 1998 policy sought to recover from them the running costs of their private use of the car which adversely impacted upon their contractual entitlements, increased what H.A.C. received from the respondents for the private use of the cars and resulted in "the most obvious unfairness".

30 H.A.C. had argued that it was entitled to give notice of the changes wrought by the introduction of the 1998 policy and that the respondents had received sufficient notice. This was rejected by her Honour because there was no evidence of acceptance by the respondents (indeed they had sought to resist the changes) and because of the unilateral imposition of the change by H.A.C. There was a substantial increase in the amount of deductions taken from the respondents' salaries resulting from the imposition of a nominal charge based on salary to one involving recovery of running costs.

31 Schmidt J concluded that the unfairness associated with the introduction of the 1998 policy dictated that the contracts of employment should be varied so that the provisions of the 1990 policy would continue to operate adjusted annually having regard to CPI increases.

32 The proceedings before Schmidt J in essence involved a consideration of the entitlement of an employer to seek to unilaterally vary terms and conditions of the contracts of employment of five employees. Whether the introduction of the 1998 policy which H.A.C. sought to impose on each of these five employees resulted from a determination made by H.A.C. under s 115 of the Health Services Act, or resulted from an Industrial Agreement entered into by H.A.C. under the same section of that Act, or represented an agreement reached by trade unions that such a policy could be introduced, was not conclusive (as was conceded by H.A.C. on appeal) of whether her Honour was entitled to characterise what had happened as being unfair for the purposes of s 106. Indeed, Mr Kimber SC, who with Mr Reitano of Counsel appeared for the appellant H.A.C., submitted that the fact that H.A.C. had been able to negotiate an agreement with all of the relevant trade unions for the introduction of the 1998 policy ipso facto pointed to the fairness of that policy. However, whilst the fact that such an agreement was made might indicate that it reflected circumstances which were not unfair, this could only be so in the context of the collective nature of the agreement reached. It cannot be either indicative of or conclusive as to the impact of the 1998 policy on the individual circumstances of each of the five respondents to these appeal proceedings given their contractual entitlement to a fully-maintained motor vehicle for private purposes, albeit as varied by the implementation of the 1990 policy.

33 The essence of the respondents' case was that each had, as a contractual right, the private use of a fully maintained vehicle. The arrangements were that this valuable right would be made available on the payment of only a modest contribution. The variation proposed by the appellant seriously disadvantaged the respondents - they were required to pay substantially more for this valuable right in circumstances where their consent was not sought and the individually negotiated arrangements were not considered by the appellant. There was nothing unusual in her Honour's approach, for instance Hill J in Newton v Goodman Fielder Mills Ltd (1998) 81 IR 227 at 232 - 233 said: The question is not whether the award is fair but whether the contract of employment is unfair. Awards do (must), of course, prescribe fair and reasonable conditions of employment; but they are based upon general standards applicable to all employees covered thereby. As a general rule they do not have regard to the special circumstances pertaining to the employment of a particular employee; those matters are appropriate to be dealt with by the individual contract of employment. An award applicable to a particular occupation or calling sets the minimum terms and conditions below which the contract cannot fall. On the other hand, s 106 is, as were its predecessors s 275 of the 1991 Act and s 88F of the 1940 Act, designed to deal with the fairness or unfairness of a particular contract or arrangement of employment having regard to all circumstances and considerations relevant thereto.

34 The appellants' reliance on the existence of a discretion to alter the rate of contribution could not extend that discretion to a wholesale revision of the basis upon which a fully maintained motor vehicle would be supplied for the private use of the respondents. Summarizing the approach of Mansfield J in Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 at [152], the discretion to alter the rate or introduce a new rate from time to time would nevertheless be constrained by an implied term that the appellant "would act with due regard for the purposes of the contract of employment (Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 at 63, 137 - 138; so it could not act capriciously, and arguably could not act unfairly towards the respondent; cp. Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 at 61. It might also be a power which, by implication, must be exercised reasonably having regard to the nature of the contract and the entitlements which exist under it (Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 at 279 - 280 per Handley JA)".

35 In the appellants' submissions it was stated: This appeal raises serious questions of public policy in relation to the role of registered organisations in the negotiation and making of agreements under s 115 of the Health Services Act and in particular the interaction of such agreements with s 106 of the Industrial Relations Act 1996. We do not agree. It is abundantly clear that the conciliation of an industrial dispute with unions, and in particular the H.R.E.A., did not lead to the making an agreement under s 115 of the Health Services Act . The case for the respondents turned on their contract and the arrangements as to a modest contribution under which they were to receive a fully maintained motor vehicle for private use. Once this point is reached the serious questions said to be raised by the appeal disappear. Properly understood it was a case similar in nature to that referred to by Hill J in Newton and did not raise the many complexities upon which the appellants' submissions were based.

36 These proceedings are governed by s 188 of the Industrial Relations Act 1996. An appeal to this Court as currently constituted will only lie upon the grant of leave to appeal. By s 188(2) leave to appeal is to be granted if, in the opinion of the court, the matter is "of such importance that, in the public interest, leave should be granted". These provisions have been considered by this Court on many occasions. It is not necessary that we deal with the relevant principles in any detail to determine these proceedings. It is sufficient to note that in addition to the question of public interest, we are entitled to take into account the decision from which the appeal is sought to be prosecuted, as to whether it is "attended with sufficient doubt to warrant it being considered" on appeal, whether substantial injustice would result if leave were refused. (See also the discussion by Walton J, Vice-President and Boland J at [13] and following in Inspector Moore v Blacktown City Council [2003] NSWIRComm 47 and Haylen J in the same case at [66]). See also the fact that "an appellate court should exercise restraint before interfering with the decision of a trial judge who has had the benefit of hearing the witnesses and evaluating the state of mind and conduct of the relevant persons". (Murphy v Overton Investments Pty Ltd [2002] FCAFC 129 at [109] cited with approval by Mason P in St George Bank Limited v Trimarchi in [2004] NSWCA 120 at [73], Sheller JA and Cripps AJA agreeing).

37 We are unable to discern any public interest in these proceedings which would militate towards the grant of leave, nor do we detect any apparent error in the exercise of discretion by her Honour in the manner that the proceedings were determined which would lead us to find to the same effect.

38 For all these reasons, leave to appeal should be refused and the appeal should be dismissed accordingly with costs.

39 PRESIDENT: The orders of the Court are therefore those proposed in the joint judgment of Marks J and Haylen J in paragraph [38] above.

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

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Judgment (56 paragraphs)

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Cases Cited (18)