Michelle Thompson v St John of God Health Services NSW

Applicant: Mr L.A.H. MacInnis of counsel Solicitors: Ms P. Costigan Haywards Solicitors LEGAL REPRESENTATIVES: Respondent: Solicitors: Mr P.J. Punch Carroll & O'Dea

JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Kavanagh J Date : 26 February 2004

IRC7261 of 2003 MICHELLE THOMPSON v ST JOHN OF GOD HEALTH SERVICES NSW Application under s106 of the Industrial Relations Act 1996 EX TEMPORE JUDGMENT (Applicant's Notice of Motion) [2004] NSWIRComm 46

1 HER HONOUR: The applicant moves upon a Notice of Motion filed on 18 December 2003 and seeks orders the respondent be restrained until further order of the Commission in Court Session from terminating the applicant's contract of employment.

2 The applicant submits there are two independent bases upon which the Commission in Court Session is empowered to make the orders sought, namely: (i) the Commission in Court Session's implied powers to preserve the subject matter of its jurisdiction; and (ii) the Commission in Court Session's power to grant an injunction to restrain a contempt or threatened contempt. THE FACTS 3 On 18 December 2003, the applicant filed a Summons for Relief under s106 of the Industrial Relations Act 1996 ("the Act").

4 Order 3 of the Summons seeks a variation of the contract of employment between the applicant and the respondent to afford natural justice and fairness to the applicant in any investigation into allegations as to the applicant's performance and/or conduct. The complaints consisted of allegations of bullying, harassment and an abusive use of authority.

5 On 13 November 2003, the applicant was stood down and, as best as I can understand from the submissions, remains on full pay in the amount of $280,000 (annual salary package).

6 The Board of the respondent, St John of God Health Services, NSW, determined an investigation would take place into the allegations and that investigation be conducted by an appointed professionally qualified person. Various procedures had been followed and correspondence was entered into by both parties in the course of the investigation. THE LITIGATION HISTORY 7 While the investigation was being conducted the applicant on 18 December 2003 filed the Summons for Relief under s106 of the Act. On 23 December 2003, the Summons was listed for mention before Walton J, Vice President (then Acting President). He allocated the matter and it was listed for conciliation on 6 February 2004.

8 The Commission then determined it would deal with this Notice of Motion, and another Notice of Motion filed by the respondent (which I will refer to later in this judgment) after the Conciliation process was entertained by both parties before the Commission.

9 Conciliation failed. The respondent then determined to proceed to finalise the investigation.

10 The applicant was served with the Investigator's Report, which report recommended action to the Board.

11 The applicant, on receipt of the Investigator's Report, requested their Notice of Motion be dealt with expeditiously given the recommendations contained in the Report.

12 I have referred to another Notice of Motion filed by the respondent in this matter. The respondent filed a Notice of Motion in these proceedings seeking to strike out the Summons for Relief on the basis that, by reason of s108A of the Industrial Relations Act 1996, the Commission in Court Session lacks jurisdiction to hear the present proceedings.

13 After conciliation failed, the respondent's Notice of Motion was listed to be heard on 16 March 2004. SUBMISSIONS: The Implied Power 14 The applicant as to the implied power to preserve the subject matter of the jurisdiction, relies on a judgment of Haylen J in Sea Acres Rainforest Centre Pty Limited & Ors v State of New South Wales [2001] 109 IR 56 to submit the following relevant principle to the Commission, namely, that it is necessary for the Commission to consider closely the terms of the relief sought by the applicant to determine whether that relief travels beyond an application for money orders or to what extent a money order under s106(5) would be an inadequate remedy in the circumstances.

15 The applicant further submits there is a discretionary power held by the Commission. In the use of the discretionary power, the Commission could order, while not necessarily specific performance of the contract, rather a grant of relief of the nature sought (see Logan v WorldAudio Pty Limited [2003] NSWIRComm 87, unreported, Marks J, 10 April 2003).

16 The applicant argues the fact the applicant is suspended and on full pay should not prejudice its claim for interlocutory relief. The applicant concedes an order of the type sought in the Notice of Motion would have the effect of keeping the contract on foot such as to allow the Commission, at hearing of the primary matter, to make the variations to the contract as pleaded.

17 The respondent in submissions relating to the court's implied powers submits the court can make Mareva Orders to preserve the subject of proceedings before the Commission. This, it concedes, is a power the Commission holds. Jurisdiction to grant other types of injunctions either interim or final, the respondent submits, perhaps in stronger terms than what has been enunciated in the authorities, is non-existent.

18 The respondent's further submission as to the implied power of the Commission is the orders sought by the applicant are truly that of specific performance of the contract which, it submits, is an order unavailable through the Commission. An enunciation of the principles relied upon is that in Cases and Materials on Equity and Trust (6th Ed) by J.D. Heydon and P.L. McLaughlan (2002 Butterworths, at 947, para 38). The respondent concedes there is no Full Bench decision of the Commission in relation to its powers to make such interim orders particularly in the context of s106.

19 Further, the respondent submits, that what compensation could be granted would be sufficient in the final orders to make fair any proven allegation of unfairness in the performance of the contract, including any unfairness in the conduct of the litigation.

20 In developing this argument, the respondent refers to "damages". The use of the word "damages" in reference to claims brought under s106 of the Act is possibly unwise. Section 106 allows orders for compensation to a party found to have suffered an unfairness in the term or performance of a contract. I would expect when the word "damages" is used in submissions or even in authorities relied upon, it is used as a generic term.

21 The respondent also relies on the view expressed by Peterson J in TAB Agents Association of NSW v TAB Limited [2003] NSWIRComm 316 (unreported, Peterson J, 1 October 2003) as to the implied power of the Commission. His Honour expressed a view different from that expressed by Haylen J in Sea Acres. SUBMISSIONS: As to Contempt 22 The applicant submits the proposition that any enactment causing dismissal arising from the Investigator's Report would be a contempt or threatened contempt of the Commission because the orders sought relate to the procedures followed in the investigation.

23 In support of the above proposition the applicant submits the proposed injunction will lie to restrain a contempt or threatened contempt and the test applied is whether the balance of convenience favours the grant of the injunction (John Fairfax Publications Pty Limited v Doe (1995) 37 NSWLR 81 and Industrial Registrar of New South Wales v The Uniting Church in Australia Property Trust (NSW) [2003] NSWIRComm 387&388, unreported, Marks, Boland, Haylen JJ, 20 November 2003). In the latter authority, the applicant submits the Full Bench made good the proposition the termination of an applicant's employment, after the filing of a Summons under s106 of the IR Act, could amount to a contempt.

24 The respondent as to the submissions in relation to contempt, or possible contempt, distinguishes the facts in this matter before the Commission from those considered in Uniting Church. The respondent, in submissions, makes an examination of the judgments of the Full Bench of the Commission and the various attitudes expressed in those judgments, each and every one of which expressed a different view on some or all of the acts of the respondent which were alleged to be a contempt.

25 The respondent, on the question of whether the application for injunctive relief meets the required balance of convenience and arguable case test, submits the facts would persuade the Commission to deny the application for Orders.

DELIBERATION 26 The Act and s106 of the Act refers to the relief available if an unfairness is found in the terms and/or conduct of an employment contract. Such relief can void or vary the contract which can be reflected in the possible payment of a money order. Section 106(5) states: In making an order under this section the Commission may make such order for the payment of money in relation to any contract, declared wholly or partly void or varied as the Commission considers just in the circumstances of the case. 27 As to the Implied Power of the Commission, Haylen J in Sea Acres at [50] said: . . . If an interlocutory order is not made preventing the respondent from giving full effect to the Notice to Quit then a significant part of the Court's jurisdiction will be effectively removed from the reach of the applicants should they make out a case for final relief. The Court would be left with the only significant power being to order the payment of money in compensation for any unfairness found in the contract. . . . I am of the view that money may not satisfactorily recompense these applicants and the business for any damage done to their reputations because of the manner in which they are sought to be removed from the operation of the Centre. The nature of the damage in the two cases is clearly different but the element of damage to business reputation is a relevant factor in the present case. 28 The parties referred to such an order as granted by Haylen J in Sea Acres as a "preservation order". However, Handley JA in Mitchforce v Industrial Relations Commission & Ors [2003] NSWCA 151 rendered a particularly strong view, in obiter, as to the Commission's inherent powers stating at [202]: The Commission is a superior court of record (s152(1)), but as a statutory court it only has the powers conferred on it, expressly or impliedly, by statute. In R v. Forbes ex parte Bevan (1972) 127 CLR 1 the High Court held the Commonwealth Industrial Court had no implied or inherent power to grant an ex parte injunction to prevent a de facto amalgamation of registered organisations and their funds. This is persuasive authority that the Commission had no implied or inherent power to make orders 11 and 12, whether they are characterised as orders for specific performance, injunctions, or simply as mandatory orders. 29 Peterson J in TAB Agents Case, mindful of these observations in Mitchforce, expressed a view at variance to that of Haylen J but limiting his comment to the effect of s106 of the Act saying at [60]: I can see no reason why the Commission in Court Session ought to be thought to have, pursuant to s106, a power to compel the continuance of a contractual relationship in circumstances where one or other of the parties wish it to end. 30 Notwithstanding the various viewpoints addressing the issue of the Commission's power to order injunctive relief, all authorities conclude, as do the parties before me, that the use of any such power, if it exists, is discretionary.

31 There is no Full Bench Judgment of the Commission on the ambit of the Commission's powers to grant injunctive relief and I do not intend in this extempore judgment to comment any further than to say I am determining this matter, in the use of my discretion, on the facts before me - keeping in mind the balance of convenience and whether the applicant has an arguable case.

32 I find, in the use of my discretion, that there is a significant variation between the facts and circumstances revealed before me to those that have been addressed by the Commission in the authorities referred to above and particularly in Uniting Church Case. I take into consideration the submission there could or would be contempt if the respondent were to terminate the applicant arising out of the content of the investigator's report and that such a termination would trammel the Commission in the use of its jurisdiction to give orders and relief under s106 of the IR Act.

33 I find the factual circumstances in this matter persuade me as to how to use my discretion. The following facts are relevant to my consideration and determination: · the applicant was given written details of all of the allegations against her together with supporting witness statements prior to her initiating any proceedings; · the applicant was given an opportunity to put in writing any answers she had to such allegations; · the respondent has deliberately refrained from specifying any of the allegations in their reply on the public record, leaving the investigative process to take its course; · the respondent refrained from finalising the investigation report until the Commission's conciliation process was finalised; and · the respondent again refrained from any action pending the opportunity for the applicant to have this Notice of Motion heard.

34 I find the respondent in the circumstances has given full courtesy to the court and in such circumstances has not in any way offered to it a contempt. However, that is not the heart of the issue. The issue is, if in going any further, the respondent would offer or purport to offer a contempt. The Commission must also consider the question of balance of convenience and whether the applicant has an arguable case.

35 In making the following comment, I do not intend to assert the role of the Board but from what little examination I have made of the Investigator's Report it could be concluded a consideration of the report could lead to the termination of the applicant.

36 As to the question of the balance of convenience and arguable case I note the following:

· the respondent has filed a Notice of Motion which in effect seeks the protection of s108A of the Act which would have the effect of striking out the Summons on the grounds the Commission lacks jurisdiction. This Notice of Motion is still to be heard;

· the circumstances in this case I find are significantly different from those on which the applicant sets much reliance as were considered in Uniting Church. In this case the respondent has fully co-operated with the procedures of the Commission and has delayed its investigation at times;

· the respondent has properly and fully used, through the conciliation powers, the Commission;

· the effect of the orders sought would allow the applicant who is suspended but receiving the significant income of some $280,000 to continue in that situation until the determination of a hearing of the Summons for Relief filed under s106 of the Act.

· as the Conciliation process has failed that hearing date is subject to the Commission's list and (I quote the respondent here) such a date could be ". . . 12 months (away) . . . subject to the conduct of the court's list."

37 While the respondent's behaviour in its investigation procedures go to the heart of the allegation of unfairness in the performance of the contract, I find the Commission should not interfere at the interlocutory stage with any procedures which are being challenged as unfair in the litigation. The powers to make orders under s106 (see also s107) of the Act are such as could give the applicant appropriate relief if there is found an unfairness in her employment contract.

38 I do not believe in the circumstance a party should be obliged to continue an employment contract when it wishes to terminate it. This is especially so when a contractor is suspended. I find Injunctive Relief would, in the circumstances, be inappropriate.

39 I note in rejecting the Application for Injunctive Relief, the applicant still has leave to pursue her claim for orders and compensation for an alleged unfairness in the terms and/or conduct of her contract of employment. The applicant I believe has an arguable claim to litigate as to an unfairness in the terms and/or the conduct of the contract including the terms and the procedures followed in any termination. I note any such litigation would be subject to the hearing of the Notice of Motion of the respondent who raises a jurisdictional point under s108A of the Act.

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