Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Director of Public Employment

Industrial Relations Commission (NSW)|2011-09-30|Before: Boland J, Phillips J

Background 1These matters concern applications by the Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales ("the PSA") and the Australian Services Union ("the ASU") for declaratory relief or, in the alternative, relief pursuant to the unfair contract provisions of the Industrial Relations Act 1996 ("the IR Act"). The applications were triggered by the announcement of a new policy on 22 June 2011 by the New South Wales Government regarding the management of excess officers in the Government Service. An officer is declared excess by their agency when they no longer have a substantive position. 2The respondents in the proceedings are the State of New South Wales, the Director of Public Employment and the Maritime Authority of New South Wales. Unions NSW, the peak employee body, supported the applicants in their respective cases. 3Before addressing in more detail the nature of the relief being sought, it is necessary to provide the relevant background. 4The New South Wales Government has, for many years, promulgated policies with respect to the management of excess or displaced officers within the New South Wales public sector. Immediately prior to the new policy being announced in June 2011, the applicable policy for managing excess employees was that promulgated in Premier's Memorandum M2008-22, "Managing Excess Employees" ("the 2008 policy"). That policy contained a number of elements including: (1) Redeployment was the principal means for managing excess employees with excess employees being entitled to be placed in any suitable vacancy without advertising and eligible for priority assessment for advertised vacancies before other applicants (clause 3). (2) Voluntary redundancy package of 4 weeks' (or 5 weeks') notice, severance payment of 3 weeks per year of service up to a maximum of 39 weeks and additional payment of up to 8 weeks' pay if an offer was accepted within two weeks (clause 4). Provision was also made for job assist payments of up to $5,000 and up to 12 weeks' job search leave (clause 4.6 and 4.7). (3) A retention period of 12 months commencing when an employee was declared excess during which excess employees would be provided with meaningful work. The retention period was suspended if the employee occupies a temporary suitable position or a temporary position at a higher grade, pending selection or appointment processes or where the employee was directed to take leave (clause 5). (4) A salary maintenance period of 12 months if an excess employee was placed, either temporarily or permanently, in a position of a lower grade or attracting lower remuneration during which the employee's salary would be "topped up" at existing level (clause 5.3). (5) Forced retrenchment to occur only as a last and unavoidable resort after expiry of the 12 month retention period, but could not occur without the employee being notified in writing of their status as "excess", being made at least one offer of voluntary redundancy, registration on the excess employee list, provision of reasonable redeployment opportunities, provision of retraining support and 3 months' notice of intention to make redundant (clause 6). 5On 22 June 2011, the Government announced that a new policy for the management of excess employees in the Government Service would come into effect on 1 August 2011 to be known as the "Managing Excess Employees Policy, June 2011" and distributed the policy by way of Premier's Memorandum M2011-11 ("2011 policy"). The 2011 policy was said to supersede Premier's Memorandum M2008-22. 6The 2011 policy contains a number of features that constitute a significant departure from the earlier policies regarding the management of displaced employees. The features of the 2011 policy include: (1) The policy removes reference to redeployment being the principal means of managing excess employees. (2) An employee is to be declared excess by their agency immediately they no longer have a substantive position and must, upon being declared excess, be given two weeks to choose between accepting an offer of voluntary redundancy or pursuing redeployment (clause 4.1). (3) An excess employee must be made one (and one only) offer of voluntary redundancy with the voluntary redundancy package comprising 4 weeks' (or 5 weeks') notice, severance payment of 3 weeks per year of service up to a maximum of 39 weeks and an additional payment of up to 8 weeks' pay (clause 5). No provision is made for job assist payments or job search leave. (4) Excess employees who decline the voluntary redundancy offer are entitled to a three months' retention period during which they may be placed in any suitable position without advertising and are to be provided with priority access to redeployment opportunities. Redeployment means permanent placement in a funded position (clause 6). (5) An excess employee who accepts a temporary secondment or assignment during the retention period will continue to be employed for the remaining period of the secondment or assignment (clause 6.2.1). Access to priority assessment or direct placement without advertising will only apply during the retention period. (6) If an excess employee is placed in a position at a lower grade, they are to be entitled to salary maintenance at their former grade for a period of three calendar months (clause 6.4). (7) If an excess employee is not redeployed at the end of the three months' retention period, they will be forcibly retrenched. The severance payment upon forcible retrenchment is the statutory minimum payment under the Employment Protection Regulation 2001 plus 4 weeks' (or 5 weeks') salary in lieu of notice (clause 7). 7As at 22 June 2011, there were 365 excess employees. In an endeavour to encourage as many excess employees as possible to take voluntary redundancy, in the period between late June 2011 and late July 2011 (prior to the commencement of the 2011 policy), the employees were made an "incentivised" offer of voluntary redundancy as follows: a. four weeks' notice or payment in lieu; plus b. for employees aged 45 years and over with five or more years of completed service, an additional one week's notice or payment in lieu; plus c. a severance payment at the rate of three weeks per year of continuous service with a maximum of 39 weeks, with pro-rata payments for incomplete years of service to be on a quarterly basis; d. the benefit allowable as a contributor to a retirement fund; plus e. pro rata annual leave loading for leave accumulated at the date of termination; plus f. incentive payments of up to eight weeks, based on years of service; plus g. an additional $10,000 cash payment. Job Assist payments and Job Search leave were not included in the offer. To qualify for the incentivised offer, employees who were excess as at 22 June 2011 were to accept the offer and leave the Government Service prior to the commencement of the new policy on 1 August 2011. Excess employees who did not accept the offer were advised they would be subject to the new excess employees policy when it came into effect on 1 August 2011. The offer was only made once. 8On or shortly after 1 August 2011, upon the commencement of the 2011 policy, a further and "final" voluntary redundancy offer was made in accordance with the 2011 policy and included: a. four weeks' notice or payment in lieu; plus b. for employees aged 45 years and over with five or more years of completed service, an additional one week's notice or payment in lieu; plus c. a severance payment at the rate of three weeks per year of continuous service with a maximum of 39 weeks, with pro-rata payments for incomplete years of service to be on a quarterly basis; d. the benefit allowable as a contributor to a retirement fund; plus e. pro rata annual leave loading for leave accumulated at the date of termination; plus f. incentive payments of up to eight weeks based on years of service. Employees had two weeks from the date of the written offer to decide whether to accept the offer of voluntary redundancy and leave the Government Service within two weeks of acceptance or elect to pursue redeployment within the three months' retention period. 9By 15 September 2011, more than 223 excess officers of the 365 that were excess as at 22 June 2011 had accepted one or other of the abovementioned voluntary redundancy offers and at least 54 had been "redeployed" into permanent positions within the public service. By 15 September 2011, 88 employees had declined voluntary redundancy offers (from the original 365) and of that number 32 are, in effect, applicants for relief in these proceedings. The names of the 32 individuals are set out in Appendix A to this judgment. To avoid confusion I have adopted the respondents' term of "Listed Officers" to describe the 32 individuals. 10Each of the Listed Officers was declared excess or became displaced from his or her existing position within the Government Service at some time prior to the introduction of the 2011 policy. Some of these employees hold no position at all and are currently engaged in "useful work". Unless they are successful in being redeployed within the three months' retention period they will be made compulsorily redundant and will receive only the statutory minimum payment under the Employment Protection Regulation 2001 plus 4 weeks' (or 5 weeks') salary in lieu of notice. Other employees are currently on secondment or in a temporary position. They face the prospect of compulsory redundancy if they have not been permanently placed in a funded position prior to completion of the secondment or temporary position. 11The ASU's claim relates to one individual, Mr Hilal Asmar, who is employed by the Maritime Authority of New South Wales. Mr Asmar was declared an excess employee on or about 2 May 2011. At the time, the 2008 policy applied to Mr Asmar. On about 28 June 2011, Mr Asmar was advised that the Government policy had changed and he would be subject to the 2011 policy. Mr Asmar may be terminated from his employment on or after 19 November 2011.

PSA 12Initially, the PSA had notified the existence of an industrial dispute under s 130 of the IR Act , but attempts to resolve the matter by conciliation were unsuccessful. On 22 July 2011, the PSA lodged an Application that is presently before the Court in Matter No IRC 1286 of 2011. None of the dispute proceedings that were before the Commission are now before the Court. On 17 August 2011, the PSA filed a further 'Summons for Relief', including a claim for relief pursuant to s 106 of the IR Act in Matter No IRC 1376 of 2011. The ASU lodged its claim on 13 September 2011 (Matter No IRC 1497 of 2011) and it was joined to the PSA application by consent. 13The amended orders sought in the PSA's summons for relief were in the following terms:

An order dec laring that Premier's Memorandum M2008-22, Managing Excess Employees forms part of the contracts of employment of public sector employees who had been declared excess in accordance with that policy prior to 1 August 2011 ("the employees").
An order declaring that the contracts of employment of the employees include the following terms after each employee was declared excess: a. A 12 month retention period for the purposes of allowing redeployment. b. Salary maintenance for a period of up to 12 months when allocated work of lower value to their substantive grade. c. Retention and salary maintenance periods would be suspended if temporarily appointed to a suitable position. d. Forcible retrenchment would only occur as a last and unavoidable resort after the 12 month retention period in accordance with Premier's Memorandum M2008-22, Managing Excess Employees . e. The payment of severance payments upon forcible retrenchment calculated in accordance with Premier's Memorandum M2008-22, Managing Excess Employees .
In the alternative to order (1) and (2): (a) An order declaring that the contracts of employment and/or employment arrangements and/or related conditions and/or collateral arrangements between or involving each employee whereby those persons perform work in an industry ("the Contracts") are unfair, harsh, unconscionable and/or contrary to the public interest. (b) An order varying the Contracts so as to include the following terms to apply in the event that the employee is declared excess to the staffing requirements of the Department or agency in which he or she is engaged: i. A 12 month retention period for the purposes of allowing redeployment. ii. Salary maintenance for a period of up to 12 months when allocated work of lower value to their substantive grade. iii. The retention and salary maintenance periods will be suspended if the employee is temporarily appointed to a suitable position. iv. Forcible retrenchment will only occur as a last and unavoidable resort after the 12 month retention period in accordance with Premier's Memorandum M2008-22, Managing Excess Employees. v. The payment of severance payments upon forcible retrenchment calculated in accordance with Premier's Memorandum M2008-22, Managing Excess Employees. (c) In the alternative to order (b), an order pursuant to s 106(5) that the employees be paid an amount as compensation the salary that would have been earned in the remaining period of his or her retention period calculated in accordance with clause 5 of Premier's Memorandum M2008-22, Managing Excess Employees and severance payment calculated in accordance with clause 4 of Premier's Memorandum M2008-22, Managing Excess Employees.
An order declaring that the services of any of the employees may only be lawfully dispensed with in accordance with s 56 of the Public Sector Employment and Management Act 2002 if: (a) The relevant Department Head has determined that he or she is satisfied that the number of officers exceeds the number necessary for the effective, efficient and economical management of the Department's functions; (b) The relevant Department head has taken all practicable steps to secure a transfer to another Department or public sector service; (c) No useful work can be found for the employee.

ASU 14The ASU's claims were in similar terms to those of the PSA except that no declaration was sought in the alternative in respect of s 56 of the Public Sector Employment and Management Act 2002 ("the PSEM Act"). Mr Asmar, together with several employees represented by the PSA, is a Schedule 1, Part 2 employee who, whilst employed in the Government Service, is not a public servant to which Chapter 2 of the PSEM Act applies. Therefore, s 56 does not apply.

Unions' principal contentions 15It may be seen from the claims that there are three principal contentions by the PSA (supported, where relevant, by the ASU): (1) That Premier's Memorandum M2008-22, Managing Excess Employees , or key features of that policy form part of the contracts of employment of the employees named in the Schedule to the Summons for Relief and cannot lawfully be departed from by the Government. (2) In the alternative, that the contracts of employment and/or employment arrangements, related conditions or collateral arrangements involving each employee named in the Schedule to the Summons for Relief are unfair contracts for the purposes of s 105 of the IR Act and should be varied so as to incorporate key aspects of the 2008 policy. (3) That, notwithstanding the provisions of Premier's Memorandum M2011-11, Managing Excess Employees Policy , the employees cannot be lawfully retrenched unless the requirements of s 56 of the Public Sector Employment and Management Act are satisfied.

PSA and ASU evidence 16The PSA filed documentary evidence and statements of 12 witnesses who it contended were representative, or at least indicative, of the circumstances of the employees affected by the proceedings. Additionally, the statement of Anthony D'Adam, senior industrial officer with the PSA, was filed. 17The employees in relation to whom evidence was filed were as follows: Kerry Brown - Personnel Services Coordinator Lindy Brown - Catchment Officer Joanne Caldwell - Ranger Rosemary Constable - Business and Technical Analyst Cathryn Jenkins - Senior Project Officer Martin Kuskis - Manager Procurement Tracey MacDonald - Operations Coordinator Vera O'Donovan - Project Officer Robert Perry - Ranger Tania Sherlaimoff - Strategic Business Policy Manager Peter Thompson - Senior Project officer Robert Towler - Senior Officer 18Each of the PSA's witnesses except Ms L Brown, Ms K Brown, Ms MacDonald, Ms O'Donovan and Mr Towler were required for cross-examination. 19A helpful summary of relevant facts relating to each of the individuals who are the subject of these proceedings is to be found in an Annexure to the affidavit of Suzanne Ashby a witness for the Director of Public Employment. Ms Ashby is the Associate Director, Industrial Relations, Public Sector Workforce (PSW) within the Public Sector Management Reform Division in the NSW Department of Premier and Cabinet. The Annexure divides the excess employees into the following categories: Employees whose temporary appointments extend beyond 2012; Employees whose temporary appointments extend into 2012; Employees whose temporary appointments end before 31 December 2011; Employees without temporary appointments; Employees who have exhausted their retention period; Employees in receipt of redeployment offer; and Other employee - ASU - not on temporary employment. The Annexure identifies the name of the individual employee, the date they were declared excess, the number of days since being declared excess (as at 31 July 2011), the number of days of retention period remaining (as at 31 July 2011), the number of days since being declared excess (as at 30 September 2011), days of the retention period remaining (as at 30 September 2011), the start date of any temporary placement, and the end date of any temporary placement. The Annexure is Appendix B to this judgment. 20The ASU filed a statement of Hilal Asmar. Mr Asmar was not required for cross-examination.

Representative orders 21In relation to the PSA's evidence, the respondents expressed some concern about whether the evidence of 12 officers could be properly regarded as representative of the Listed Officers. The respondents submitted it was not appropriate to make "representative orders", especially in relation to the alternative relief claimed under s 106 given the obvious relevance of individual circumstances, including the "conduct"/contribution of any individual to the claimed unfair operation of the "contract" and their mitigation obligations. It was observed that "the Act contemplates the making of s 106 orders with respect to individual 'contracts' for work in industry, with s 107 of the Act then available to be utilised (in extreme circumstances) to interfere with the use of any particular form of 'contract' more generally ." 22In this respect, counsel for the PSA submitted: The second issue I raise in respect of the orders is the representative nature of what we are seeking to do. ... I think for the purposes of the contractual case there doesn't seem to be any difficulty in the outcome flowing for all employees, if it flows for those in relation to whom evidence has been called. ... The way in which we would ask your Honour to deal with that aspect ... is to make findings with respect to the employees from whom we have called evidence, having regard to the circumstances revealed in their evidence, giving rise to unfairness in the contracts and arrangements whereby they perform work, as the first step. As a second step is to consider whether or not any outcome, which is achieved with respect to those employees, can flow on more broadly to the other employees in relation to whom we haven't been in a position to call evidence. We say that it would be appropriate for any outcome to be applied more broadly. It's not in dispute that in a broad sense the circumstances of the employees in relation to whom we have called evidence and the wider group are the same, in that they were all declared excess prior to the announcement of the new policy. They were all in a position where they were informed, and informed clearly, that they would be treated under the 2008 policy and were entitled to continue to act on that basis. The evidence we have called from the selection of employees, about a third of the total number, not a small proportion, is appropriately representative. If it indicates the type of employee then it would be experience by employees within that category, covers employees that fall within each of the categories identified by the respondents in the document SA8 attached to Ms Ashby's evidence, which includes people with long term public sector employment and those not with long term public sector employment this is people in rural areas as well as metropolitan areas and we say appropriately it appropriately exemplifies the circumstances that are likelihood to have affected the wider group. Obviously we would recognise that that proposition becomes more difficult if your Honour was attracted by some of the arguments by the respondents which would seek to differentiate one case from another and we resist those arguments that alleged disentitlement conduct, for example. If your Honour were to form the view that there were differences between the circumstances of those employees in relation to whom we have called evidence, that merited a particular outcome for one and merited a different outcome for another, then obviously there would be difficulties in any such outcome flowing on or at least automatically to the wider group. If we were in that situation, at least dealing with the wider group, the parties would have to go away and have regard to whatever findings your Honour had made and sort out, if they could, how that would apply to the wider group, if there was differentiation between individuals. That seems to us to be the only common sense way the matter can be approached. 23The Court does not propose to make representative orders. That would be inappropriate if not impermissible under s 106 of the IR Act. The parties will be directed to confer on the implications of this judgment for the Listed Officers who did not give evidence in the proceedings.

Respondents' evidence 24In addition to documentary material that was tendered into evidence, the respondents relied on the affidavits of Ms Ashby, Mr Nigel Porter, Acting Manager Performance and Development in the Department of Premier and Cabinet, Ms Virginia Tinson, Associate Director of Corporate Governance with the Department of Premier and Cabinet, Mr Paul Abraham, Manager Corporate Employee Services, Ms Elizabeth Lonergan, Leader Corporate Employee Service Coordination in the Department of Education and Communities and Mr Anthony Nicod, Manager of Legal Services, Mr Ian Grey, Employee Relations Manager of the Maritime Authority. Each of the deponents, except Mr Grey, were required for cross-examination.

Employees declared excess 25Mr M Gibian of counsel for the PSA submitted that the Listed Officers were all declared excess or became displaced from their existing positions within the public sector prior to the introduction of the 2011 policy. Employees declared to be excess to the staffing requirements of a Department or agency prior to 22 June 2011 were informed in writing that they would be dealt with in accordance with the 2008 policy and were to be provided with the benefits contained in that policy. The exception was Ms Constable who was not formally advised that she was declared excess until 3 August 2011. However, Ms Constable had been displaced from her position in September 2010 in that her position was deleted and she was informed at that time that she would be treated in accordance with the 2008 policy. 26Counsel submitted that on or about late June 2011, each of the employees was offered voluntary redundancy on the basis of the "incentivised" voluntary redundancy offer referred to earlier. Each of the employees was required to accept the offer prior to 22 July 2011 at the latest and to agree to leave the Government Service on or before 1 August 2011 and informed that if they did not accept the offer they could be subject to the new 2011 policy. Each of the employees did not accept the "incentivised" voluntary redundancy offer and became subject to the 2011 policy from 1 August 2011. 27It was submitted that on or soon after 1 August 2011, each of the employees was notified of the commencement of the 2011 policy and informed they had two options: either accept an offer of voluntary redundancy within two weeks or elect to decline the voluntary redundancy offer and pursue redeployment within the NSW Government Service during the three months' retention period. The employees were informed that they would be forcibly retrenched if they had not been appointed to a permanent position at the conclusion of the three months' retention period. 28Further, that each of the employees declined to accept the further offer of voluntary redundancy. Accordingly, the retention period of those employees will expire during November 2011. If the 2011 policy is applied, it was submitted, those employees without a temporary appointment will be forcibly retrenched in November 2011. Those employees who have a temporary appointment that extends beyond November 2011 will be able to continue in employment for the remaining period of the temporary secondment or assignment, but will not have access to priority assessment or direct placement into positions without advertising.

Contractual entitlement 29It was submitted that the 2008 policy constituted a part of the contracts of employment generally of the Listed Officers in one of three ways: express incorporation; incorporation by representation; or in the alternative, even if the terms of the 2008 policy did not constitute terms of the employees' contracts of employment generally, the key features of the policy became incorporated into the contracts when the employees were advised upon being declared excess that they would be treated in accordance with that policy. 30In relation to express incorporation reference was made to Ms Kerry Brown. Ms Brown was employed in the New South Wales Public Service in the Department of Main Roads on 30 January 1979. Since 1979, Ms Brown worked in the following parts of the public sector: the Roads and Traffic Authority; the New South Wales Fire Brigades; a two year secondment to the Department of Transport; and currently Fire & Rescue NSW. In March 2011, Ms Brown was advised by letter her position of Personnel Services Coordinator had been deleted and that she was now an excess employee. 31It was submitted that in some instances the letters of appointment of the Listed Officers contained express reference to documents setting out the terms of the Managing Excess Employees ("MEE") policy as it existed from time to time. Particular reference was made to the "Personnel Handbook" which contained a detailed summary of the key conditions afforded under policies adopted by the Government with respect to the management of excess or displaced officers and expressly incorporated the 2008 policy. It was submitted the contents of the Personnel Handbook, including the provisions of the policies with respect to the management of excess or displaced officers, were incorporated by reference as a result of the indication that the employment was "covered by" the provisions of the Handbook: see Riverwood International Australia Pty Ltd v McCormick [2000] FCA 889; (2000) 177 ALR 193 and Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62. 32In the absence of express incorporation by reference of policies with respect to the management of excess or displaced employees into the contracts of employment of the employees, it was submitted the terms of the policies became express terms of the contracts of employment of the Listed Officers as a consequence of the express promise made by the respondents that certain benefits would be provided in the event of an officer becoming excess. 33There was no difficulty, it was submitted, with a binding contractual obligation being created by an employer announcing to its employees an additional benefit associated with the employment. In such a case, no immediate act of acceptance may be required and acceptance may be evidenced by the act of the employee in continuing in the employment: see Ajax Cooke Pty Ltd t/as Ajax Spurway Fasteners v Nugent (Supreme Court of Victoria, Phillips J, 29 November 1993, unreported); Lee v GEC Plessey Telecommunications [1993] IRLR 383; In the matter of ACN 050 541 047 Ltd [2002] NSWSC 586. 34In these circumstances, counsel submitted, the employee, through the act of continuing the employment, provided sufficient consideration. It was immaterial that the employee is performing an existing contractual obligation under his or her contracts of employment to perform work for their employer: Stilk v Myrick (1809) 170 ER 1168. 35The policies with respect to the management of excess or displaced officers, including the 2008 policy, have since 1988 been published to public sector employees in the form of Premier's Memoranda. It was notable, counsel submitted, that the Government had itself published to public sector employees advice in the form of Circular C2008-47, "Voluntary Redundancy Payments" in which employees were advised that: It is relevant to note that the redundancy payments in the Premier's Memorandum form part of the contract of employment of public sector employees. The payments are acknowledged by the Government to be an entitlement of employees and it is mandatory for all agencies other than State owned corporations to apply the entitlement in a redundancy situation. 36As to the third way in which the 2008 policy became incorporated into the employees' contracts, it was submitted that each of the employees were advised in writing upon being declared excess that they would be treated in accordance with the 2008 policy, including that they would be entitled to a 12 months' retention period for the purposes of pursuing redeployment within the public sector, that forcible retrenchment would only occur as a last and unavoidable resort and that the employees would, in that event, receive severance payments as set out in the Premier's Memorandum.

Unfair contracts 37The 2008 policy and the 2011 policy, it was submitted, were capable in themselves of constituting an arrangement for the purposes of s 105 of the IR Act or of constituting part of the overall arrangement whereby the employees perform work: see State of New South Wales v Banas [2004] NSWIRComm 255; (2004) 137 IR 63 at [63] and [72] (this judgment is referred to as " Banas (No 2) " to distinguish it from the first instance judgment of Haylen J in Banas v State of New South Wales [2003] NSWIRComm 317). Alternatively, the policies were related conditions or collateral arrangements to the employees' contracts of employment whereby they performed work. 38The arrangements set out in the policies with respect to the management of excess or displaced employees were acknowledged by the Government to be an entitlement of employees and that it was mandatory for Departments and agencies to apply those policies in the circumstance of redundancy. Those policies were self-evidently part of the overall arrangement whereby the employees performed work for the Government, counsel submitted. 39The unfairness arose, according to the PSA, for reasons including: i. Firstly, the contracts and/or arrangements permitted the Government to depart from express promises made to the employees upon being declared excess that they would be treated in accordance with and afforded the benefits contained in Premier's Memorandum M2008-22, Managing Excess Employees . ii Secondly, Memorandum M2011-11, M anaging Excess Employees Policy contemplates the employees being forcibly retrenched whether or not all practicable steps are made to redeploy the employees and even if there is ongoing work available for the employee to perform or a position into which the employee could be redeployed. iii Thirdly, the intended application of Memorandum M2011-11, M anaging Excess Employees Policy would result in the employees being forcibly retrenched without the payment of severance payment as would be fair and reasonable in the circumstances and having regard to the nature of the employees' employment.

Section 56 of the Public Sector Employment and Management Act 40Under this aspect of the PSA's case it was contended, in the alternative, that the forcible retrenchment of an employee in accordance with the 2011 policy would be unlawful by reason of non-compliance with s 56 of the PSEM Act. 41The PSA contended that the Court has jurisdiction under s 154 of the IR Act to make binding declarations of right in relation to a matter in which the Commission (however constituted) has jurisdiction; that the Court had jurisdiction to make a declaration in the terms sought, namely, that with respect to those of the employees not in a temporary secondment or appointment, the requirements of ss 56(1)(b) and 56(2) of the PSEM Act have not been satisfied so as to enliven the power to dispense with the services of the employee. 42The PSA submitted s 56 of the PSEM Act permitted the services of an employee to be dispensed with on grounds that the employee was excess only if: (1) the Department Head is satisfied that the number of officers exceeds the number necessary for the effective, efficient and economical management of the Department's functions; (2) all practicable steps have been taken to secure a transfer to another Department or public sector service; and (3) no useful work can be found for the excess officer. 43It was further submitted: Premier's Memorandum M2011-11, M anaging Excess Employees Policy dictates that an excess employee must be forcibly retrenched if not redeployed within the three month retention period in a manner which entirely disregards the requirements of s 56 of the Public Sector Employment and Management Act . In particular: a. The concept of redeployment is limited to "permanent placement in a funded position on an agency's establishment." As such, employees will be forcibly retrenched if they do not secure a "permanent placement in a funded position" even though there may be "useful work" for the employee to perform for the purposes of s 56 of the Public Sector Employment and Management Act . b. Any assistance with respect to redeployment will apply only during the three month retention period and, even if the employee continues in employment in a temporary position, absolutely no steps will subsequently be taken to secure a transfer to another position in the public sector. A Department Head will not have taken all practicable steps to secure a transfer to another Department or public sector service if, months before it is contemplated the services of an employee will be dispensed with, no such efforts are made. A declaration should be made that, notwithstanding the provisions of Premier's Memorandum M2011-11, M anaging Excess Employees Policy , the employees cannot be lawfully retrenched unless the requirements of s 56 of the Public Sector Employment and Management Act are satisfied.

Case for the ASU 44The ASU supported the PSA's case. In addition it was contended as follows: a. Mr Asmar is engaged with the Maritime Authority of New South Wales and employed pursuant to Ch 1A of the Public Sector Employment Management Act. Pursuant to s 4A and Pt 2 of Schedule 1 of the Public Sector Employment Management Act the Maritime Authority is a division of the Government Service. b. Mr Asmar's letter of appointment dated 25 September 2002, expressly incorporates the provisions of the New South Wales Maritime Authority Enterprise Agreement 2007 - 2010 into Mr Asmar's contract of employment. At paragraph 3 the letter states: "Your remuneration will be at a rate of $95, 986 per annum (Maritime Officer Level MA15). Conditions of employment are in terms of the New South Wales Maritime Authority Enterprise Agreement 2007 - 2010 and the staff Code of Conduct and Ethics (copy attached)." 45The Agreement, it was submitted, provides Mr Asmar, as an individual staff member, the benefit of contractual undertakings regarding ongoing security of employment for the duration of the Agreement. In the event that Mr Asmar's position was deleted from the structure, he would obtain the benefit of the 2008 policy . 46Mr Asmar's position was declared excess on or about 2 May 2011. The Maritime Authority wrote to Mr Asmar advising him that he had options to consider; namely, whether to seek redeployment or express an interest in an offer of voluntary redundancy. The correspondence attached a copy of the 2008 policy . 47Mr Asmar communicated with the Maritime Authority regarding this election in writing on or about 16 May 2011, electing to accept the arrangement offered by the Maritime Authority for redeployment, employment retention and salary maintenance. It was contended: (a) The letter of 2 May 2011 varied the contract of employment of Mr Asmar so as to incorporate a promise of a 12 month redeployment, retention and salary maintenance period should Mr Asmar opt to continue in his employment as a redeployed officer. Notably the terms of Circular C2008-47 issued by the Director of Public Employment acknowledge that the redundancy payments provided for in the policy form part of the contract of employment for employees. (b) If there was any doubt about the nature of the contractual arrangement between Mr Asmar and New South Wales Maritime after 16 May 2011, this was clarified in the correspondence of 26 May 2011 from New South Wales Maritime to Mr Asmar in which the Maritime Authority confirms that Mr Asmar has "elected to seek redeployment". 48As matters stood on 26 May 2011 it was clear, it was contended, there had been a variation of Mr Asmar's contract of employment so as to incorporate a 12 months' job retention and salary maintenance period. 49It was further contended as follows: (a) On 28 June 2011 New South Wales Maritime purported to impose amended redeployment arrangements for Mr Asmar. An incentivised voluntary redundancy policy was offered, however it was put to Mr Asmar that if he refused the offer of voluntary redundancy then he would be subject to a unilateral variation of his conditions of employment through the imposition of the new 2011 Managing Excess Employees Policy from 1 August 2011. (b) Having entered into contractual arrangements with Mr Asmar for a 12 month redeployment, retention and salary maintenance period, the Maritime Authority could not adopt amended policy arrangements purporting to deny Mr Asmar access to those benefits. (c) The purported variation of employment arrangements occurring by reference to the June 2011 policy constitutes an unfair contractual arrangement for the purposes of ss 105 and 106 of the Act to the extent that it fails to contain the entitlements set out in the 2008 Policy, previously agreed by way of exchange of correspondence with Mr Asmar and confirmed through Mr Asmar's actions in opting for Redeployment. (d) Notably the 2011 Policy is expressed so as not to "override existing industrial instruments or legislative provisions that deal with managing excess employees." The Applicant says that the letter of 2 May 2011 addressed to Mr Asmar, executed and returned by Mr Asmar on 16 May 2011, is such an industrial instrument. This instrument extended benefits to Mr Asmar, being the 12 month employment retention and salary maintenance period agreed between the parties. Regardless of whether the June 2011 policy may have been expressed so as to purportedly alter public sector redeployment arrangements generally, the Policy did not interfere with existing industrial instruments creating alternate rights. (e) Mr Asmar relied upon the representations made by the Maritime Authority. The evidence is that Mr Asmar carefully weighed the benefits of remaining in the employment of New South Wales Maritime for twelve months versus submitting an expression of interest for voluntary redundancy. (f) Mr Asmar relied on the entitlements conferred by the policy. The 12 month retention period provided valuable time within which Mr Asmar would have an opportunity to search for job vacancies both within and outside the organisation from a position of relative strength in a competitive job market, namely as an employed professional. The evidence is that Mr Asmar found redeployment to be a less stressful option. The evidence is that Mr Asmar was of the view that redeployment would also have greater financial benefits. (g) Mr Asmar has made appropriate use of the 12 month employment retention and salary maintenance period, using the time to apply for government and other positions. (h) The unilateral imposition of the 2011 Managing Excess Employees Policy upon Mr Asmar's employment constitutes an unfair contract to the extent that it proposes to override the provisions of the Maritime Authority of New South Wales Enterprise Agreement 2010-2013. (i) The agreement provided undertakings, expressed to apply to individual employees, for ongoing security of employment. The agreement adopts the provisions of the 2008 Managing Excess Employees Policy. (j) The agreement is clearly an "existing industrial instrument" for the purposes of Clause 3.1 of the 2011 Policy.

Public servants are appointed under statute 50Reference was made to what Brennan J said in Director-General of Education v Suttling [1987] HCA 3; (1987) 162 CLR 427 at 437-438: Members of the Service are appointed pursuant to the Act and their rights must be ascertained by reference to its provisions. The relationship between a civil servant of the Crown and the Crown has often been described as contractual, though the civil servant has been appointed pursuant to statute. However, the contractual nature of the relationship has not been universally accepted. And sometimes an espousal of one view rather than the other has been avoided. If the relationship is contractual, the contract must be consistent with any statutory provision which affects the relationship. No agent of the Crown has authority to engage a servant on terms at variance with the statute. To the extent that the statute governs the relationship, it is idle to inquire whether there is a contract which embodies its provisions. The statute itself controls the terms of service. (respondents' emphasis) 51Reference was also made to Jarratt v Commissioner of Police for New South Wales [2005] HCA 50; (2005) 224 CLR 44 and it was conceded by the respondents that it appeared "to be now resolved that at least as a matter of general theory that the relationship between the Crown and its public servants in this State could be contractual in some circumstances, the incidents of that relationship are embodied in the statute law of NSW". 52However, it was submitted that the circumstances under review in Jarratt were in contrast to those under review in this case, as the evidence here did not reveal the existence of separate contracts of employment at all for the Listed Officers. 53In relation to the Listed officers it was submitted their employment was governed by various statutes, industrial awards, determinations under s 130 of the PSEM Act and policies issued by the respondents from time to time concerning matters pertaining to or otherwise impacting on the "terms and conditions of employment", including MEE Policies. 54Senior counsel submitted that even if the PSA had established that there were "contracts of employment" for the Listed Officers, there is no doubt that any such contract would need to be consistent with the statutory provisions affecting the relationships: Suttling .

The claim for a declaration of 'breach' of s 56(2) of the PSEM Act 55In respect of this claim, the respondents made submissions regarding the proper construction of s 56 of the PSEM Act. In that regard it was submitted, first, that the expression "all practicable steps" had to be read in conjunction with the balance of s 56(1)(b) namely "to secure the transfer of the excess officers to the service of another Department or in any other public sector service". Hence, the question is "what are the feasible, sensible and reasonable steps that could be readily taken to find positions for those excess officers in other Departments or in other public sector services?" 56Next, it was submitted that once all reasonable attempts had been made to place the excess officer into another established or new "position" and had proved to be unsuccessful, then s 56(2) contemplated that the appropriate Department head may then, with the approval of the Director of Public Employment, "dispense with the services of" any such excess officers and to do so without compensation (PSEM Act, s 61). The respondents submitted: Given that the capacity to "dispense with the services of any such excess officers" only arises when the requirements of s 56(1) have been satisfied, it is abundantly clear that there is no separate and additional requirement that the appropriate Department Head also investigate whether there is "useful work" to be "found" for those excess officers (or any of them) in another Department or any other public service. That is, the requirement is confined to investigating the availability of suitable positions in which to "transfer" those excess officers and s 56(2), when properly construed, provides that excess officers for whom such transfers to other positions have not been achievable can then be removed from the public service because in such circumstances it is correct to say that they are persons "who cannot be found useful to work" to do in another Department or in any other public sector service. If the expression "useful work" was a separate and additional prerequisite to an appropriate Department Head dispensing with the services of any excess officer (i.e. in circumstances where no new or established position can be found for that excess officer to be transferred to take up), then there could be little doubt that any such "useful work" requirement would have been found in s 56(1), as sub-paragraph (c) thereof, and not enshrined in the "power to dispense" provision, namely s 56(2) of the PSEM Act .

No breach of s 56 of the PSEM Act 57The essence of the PSA's contentions regarding the alleged breach of s 56 was that the 2011 policy dictated that an excess employee must be forcibly retrenched if not redeployed within the three months' retention period in a manner which entirely disregarded the requirements of s 56 in that: (a) employees will be forcibly retrenched if they do not secure a "permanent placement in a funded position" even though there may be "useful work" for the employee to perform for the purposes of s 56; (b) A Department Head will not have taken "all practicable steps" to secure a transfer to another Department or public sector service if, as the 2011 policy dictates, months before it is contemplated the services of an employee will be dispensed with, no such efforts are made. 58On the respondents' construction of s 56 no breach has occurred. It was submitted that provided the respondents acted in accordance with s 56 of the PSEM Act (as construed by the respondents) when proposing to dispense with the services of excess officers, it was irrelevant whether it could be said that the approach adopted was not consistent with the Government's policy with respect to excess employees at a particular point in time: see Plaintiff M70/2011 v Minister for Immigration and Citizenship ; Plaintiff M106/2011 v Minister for Immigration and Citizenship [2011] HCA 32; (2011) 280 ALR 18. 59It was further submitted that if there is no authority to enter into an agreement with excess employees "at variance with the statute" then it must also follow that there is no authority to fetter, in a binding way, the statutory powers bestowed on Department Heads under s 56 of the PSEM Act , merely by the issue of MEE Policies from time to time (let alone to enshrine, as a binding "contractual" term, a particular policy issued at a specified point in time).

The claim for a declaration that the 2008 Policy formed part of contracts of employment with the Listed Officers 60It was submitted for the respondents that for the reasons earlier summarised there was no proper basis for a conclusion that the Listed Officers had contracts of employment discernible and separate from their statutory appointments to perform work in the public sector. Accordingly, it was not open to conclude that the 2008 policy formed part of any such enforceable contracts of employment. 61However, it was submitted, should the Court reach a different conclusion about the existence of such contracts of employment, the respondents asserted there was no basis for suggesting that the 2008 policy was contractual because, to the extent it was "at variance" with the "excess officer" provisions in the relevant public sector/service legislation, then the policy could not have achieved the status of an enforceable contractual term - either from the outset thereof or by way of later variation thereto.

Express incorporation 62In relation to the PSA's "express incorporation" contention, the respondents submitted that the documentation did not reveal an intention that the terms of the documentation would be contractually binding.

Specific incorporation of 2008 policy by representation 63In relation to the "incorporation by representation" contention, the respondents relied upon the decision of Schmidt J in New South Wales Teachers Federation and Director-General of Education and Training (No 2) [2008] NSWIRComm 218 ("Teachers' Federation Case") . It was submitted the circumstances there considered were not materially different to the current applications. 64In response to the PSA's contentions regarding incorporation by representation, the respondents submitted that whilst each of the Listed Officers continued after being declared excess, there was no evidence from any of them that they had made a conscious election to continue working in the face of an alleged repudiation, or even an alleged offer to vary their contract.

Circular 2008-47 - Voluntary Redundancy Payments 65The respondents submitted that none of the Listed Officers provided documentary or oral evidence to suggest that they were told by the respondents that the 2008 policy henceforth formed part of their "contracts of employment". Whilst the PSA had sought to place some reliance on the statement made in Circular 2008-47 "Voluntary Redundancy Payments", it was notable that none of the Listed Officers gave any written or oral evidence to suggest that they even saw that Circular, let alone saw it and then believed that the 2008 Policy did form part of their "contracts of employment".

No s 106 jurisdiction to provide relief for breach of contract 66The respondents submitted that given the summons for relief in the s 106 claim could only be properly characterised as a complaint of actual or anticipated breach of contract (indeed repudiation of contract by the introduction of the 2011 policy as a unilateral replacement policy for the 2008 policy), this Court had no power to grant a relief as claimed by the applicants. This was because the Court is not permitted to find relevant statutory "unfairness" based on a finding of contractual breach and, of course, such a finding is a prerequisite to the Court having any power to grant any relief with respect to a contract for work in industry: see Sydney Water Corporation Ltd v Industrial Relations Commission of NSW [2004] NSWCA 436; (2004) 61 NSWLR 661; (2004) 141 IR 14; Bowman v Ricegrowers Ltd (formerly Ricegrowers' Co-operative Ltd) [2007] NSWIRComm 204; (2007) 167 IR 325.

Whether the Court has s 106 jurisdiction over claims concerning alleged unfairness in the treatment of officers declared excess in accordance with s 56 of the PSEM Act 67The respondents conceded that the MEE policies from time to time constituted part of the "contract" whereby the Listed Officers performed work in an industry, for the purposes of ss 105 and 106 of the IR Act: see Banas (No 2) at [72] and [77]. However, it was submitted it did not follow that in this particular statutory context the Court had jurisdiction to hear and determine claims of "contractual" unfairness with respect to the management of such excess officers. 68The respondents contended that the principles and approach adopted in the Full Court's decision in Grant v State of New South Wales (No 2) (1991) 48 IR 314 and the decision of Marks J in Robert William Lynn v Gary Byron [1995] NSWIRComm 278, when applied to the current statutory regime governing the management and termination of excess officers (the regime being found not only in ss 56, 57, 61 and 130 of the PSEM Act but also in ss 105 and 146C of the IR Act and the Industrial Relations (Public Sector Conditions of Employment) Regulation 2011), led to the conclusion that this Court did not have jurisdiction to deal with claims for relief based on asserted "contractual unfairness" in connection with the management and termination of the Listed Officers. This was because, whilst the IR Act "binds the Crown", in this special statutory context, the Court's s 106 jurisdiction/powers with respect to the complaints brought on behalf of "excess officers" in these proceedings has been impliedly repealed : see Grant (No 2); Lynn; Virtue v New South Wales Department of Education and Training (1999) 92 IR 428; Ministry of Education & Youth Affairs v New South Wales Teachers Federation (1990) 32 IR 390; and Ferdinands v Commissioner for the Public Employment [2006] HCA 5; (2006) 225 CLR 130 generally; see also Prince v North Coast Area Health Service [2006] NSWIRComm 398; (2006) 160 IR 134 at [66]-[75] (applying Ferdinands with respect to VMOs and the Health Services Act 1997 , albeit finding no implied repeal of s 106 in that context). 69The respondents submitted that even if the Court were satisfied that it still retained the jurisdiction to grant at least some relief under s 106 with respect to the Listed Officers, none of the s 106 relief sought by the PSA could be awarded by the Court because it would all be "inconsistent with or contradictory of the relevant specific provisions of the PSEM Act" (s ee Banas (No 2) at [73]).

No unfairness in the "contract" 70The respondents contended that there was no relevant statutory "unfairness" in the "contracts" of the Listed Officers for the following reasons: (a) The respondents had the ability to change the MEE Policy from time to time and to do so without the agreement of the PSA. (b) From a point in time even prior to the recent State Election, public servants (or at least the Applicant as the representative of those public servants) were clearly aware and "on notice" that if the Liberal/National Coalition was successful in the election that they were going to make significant changes with respect to MEE Policy and move to "dispense with" the services of existing excess officers by removing the "unattached or displaced employees list" and by "no longer continu(ing) to pay employees who we have been unsuccessful in redeploying into new public services positions." (c) The respondents' unchallenged evidence includes clear evidence that there were economic/cost saving reasons underpinning the recent change from the 2008 policy to the 2011 policy. (d) It was not suggested to the respondents' witnesses, nor could it have been, that the policy changes that were made were "arbitrary" or "capricious" or done otherwise than in "good faith" with a view to serving the "public interest" by saving valuable resources and moving towards a more "efficient" and productive public service. (e) It is highly significant that only 33 officers raised a "complaint" about the operation of the MEE policy in these proceedings. 71Apart from the general advance notice of significant change to MEE policy, the Listed Officers were also given formal written notice of that change in correspondence sent to them in June this year and they were all given two firm and reasonable voluntary redundancy offers (noting that neither has been attacked by the PSA in these proceedings) that were available to be accepted if they did not want to continue in the public service in accordance with the new 2011 policy with respect to excess officers. It was further submitted: (a) Whilst it is true that the 2008 policy (and its predecessors) clearly focused on "redeployment" as a priority and that the 2011 policy reflects a change in that focus, firstly it cannot be said that such change was arbitrary or capricious or contrary to the public interest and secondly it is clear from the evidence that all the Listed Officers have had more than reasonable time and undoubtedly every reasonable opportunity (with appropriate assistance from the respondents) to be "redeployed", such that there is no foundation for concluding that "all practical steps" have not been taken with respect to those Listed Officers, or any one or more of them, to facilitate their remaining in the public service. Appropriate assistance was provided to redeploy excess officers and indeed, the officers on the schedule gave evidence of the steps taken by case managers to redeploy them. (b) Apart from the general and specific "notice" of the move away from the 2008 policy that the Listed Officers have already had, the evidence also reveals that because the overall majority of the Listed Officers are currently in "temporary positions", they are also receiving the benefit of further actual notice periods (of varying lengths) that are, in most cases, to be regarded as further (minimum) notice periods before the 2011 policy will operate with respect to them. (c) On the evidence, the balance of the Listed Officers who are not in temporary positions, cannot reasonably complain that their "contracts" are unfair because the 2011 policy applies to them immediately. (d) Whilst a significant number of the Listed Officers, in what can only be described as standard form statements (prepared by the PSA and adopted by the individual officers) asserted that they "relied" upon the provisions of the 2008 policy, this reliance was not explained and, not surprisingly, there is no evidence of any "detriment" said to have arisen from any such reliance. (e) Quite apart from the lack of any "mitigation" efforts by the Listed Officers outside the public sector, in spite of having been declared "excess" some significant time ago, there is also evidence (that could well be regarded as representative evidence) that many of the Listed Officers adopted the (incorrect) view that once put into a "temporary position" that they either did not consider themselves to be obliged to or, in any event, did not attempt to pursue "redeployment" opportunities whilst occupying those "temporary positions". Indeed, some of the Listed Officers went further and actively asserted that they took no such steps during the temporary placements because of the "comfort" they felt from knowing that at the end of any temporary placement(s) that they would still have the 365 day retention period to fall back on. (f) Whilst it is true, that, save for the exception of Cecchele , there is no evidence before the Court that any of the Listed Officers were taken to task for not undertaking their own "responsibility" for redeployment in "good faith", there is some clear evidence before the Court (albeit doubtful whether it can be regarded as being representative) that some of the Listed Officers, especially those that have been excess officers for extensive periods of time (e.g. Cecchele and Shermailoff (sic)) have not really "played the game" with respect to a bona fide commitment to redeployment in that they have found/erected various "obstacles" to temporary placement or trial redeployment opportunities that have operated to undermine the prospect of them ever being "redeployed". (g) There is no assertion from the PSA, that the Listed Officers have not been given a "fair go" with respect to redeployment by the respondents (noting that Shermailoff (sic) was the only exception in this regard). (h) The evidence reveals overall that the respondents and the majority of the Listed Officers co-operated fully with respect to exploring redeployment opportunities often over lengthy periods of time (and are continuing to do so at the present time), with a not unexpected result that it has simply not been possible to re-absorb all the excess officers into the public service. (i) Whilst complaint has been raised about the change with respect to "priority" assessment/placement, the respondents' evidence addressed these changes to the retention period and priority assessment. (j) Whilst a few of the Listed Officers have complained about the adverse impact on their superannuation if they are made redundant, this is hardly representative evidence. (k) Insofar as the concept of "meaningful work" has grown up in recent years seemingly, but wrongly, from a misinterpretation of s 56(2) of the PSEM Act, it cannot be regarded as relevantly "unfair" (in a "contractual" sense) to prosecute a policy of "forced redundancy" when there are no permanent "positions" available in spite of all reasonable efforts being taken to find them, simply on the basis that there is "always" useful or meaningful work to do. (l) In the private sector, once bona fide re-structuring exercises have been undertaken such that there could be no doubt that the resulting redundancies are also bona fide (and the employees selected for redundancy have been chosen on a proper basis), and reasonable and immediate steps have been taken (albeit usually not legally required) to identify any "suitable or acceptable alternative employment" opportunities, then the only residual question is how much extra notice should be provided to the redundant employees and what should be their severance payment packages. In the private sector, it would be inconceivable, that months let alone years could be spent in exploring "suitable alternative employment" opportunities (and "making" work along the way), before fair and proper decisions could be made to "dispense with" the services of those redundant employees. There is no objectively defensible reason why redundancy in the public sector should be managed any differently and hence the contracts of the Listed Officers, even if found unfair, should not be varied to enshrine major differences within the public sector and between the public and private sectors.

Any residual s 106 jurisdiction 72The respondents submitted if, contrary to their submissions, the Court was satisfied that it had a residual s 106 jurisdiction with respect to the management of excess officers and/or the terms and conditions upon which their services are "dispensed with", being a jurisdiction that can only be exercised in a manner that "supplements" the applicable statutory and regulatory regime and that it would not be "futile" or contrary to the public interest to intervene and grant discretionary relief with respect to the Listed Officers if relevant "contractual" unfairness is found, nevertheless the following considerations suggest that no discretionary relief should be awarded in this case, namely: (a) Whilst a MEE Policy may or may not reflect the intent/meaning of the PSEM Act provisions and an individual public servant may be aggrieved by the application such a policy to them, it does not follow that such a complaint is properly resolved by resort to s 106 of the Act. That is, given the clear and extensive statutory regime applicable to public servants generally and excess officers in particular, any individual's complaints are most appropriately dealt with by way of judicial review in the Supreme Court of NSW i.e. by seeking an order that either s 56(1)(b) and/or s 56(2) has not been complied with respect to that individual officer; see Banas No. 1 at [312]. (b) Section 146C(1)-(3) of the Act clauses 4 and 6(f) of the Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 now prevent an award being made by the Commission with respect to excess officers and s 106 is not an appropriate means by which to resolve MEE policy application disputes, because it would be inappropriate for the Court to seek to enshrine the provisions of any particular MEE Policy into an officer's "contract". (c) It is not appropriate to do so in what purports to be "representative" s 106 proceedings for a significant number of excess officers (in this case the 32 Listed Officers), given the obvious relevance of individual circumstances, including the "conduct"/contribution of any individual to the claimed unfair operation of the "contract" and their mitigation obligations: see s 106(6); Banas No. 2 at [106]-[109]; and Gough and Gilmour Holdings v Caterpillar (No. 11) [2002] NSWIRComm 354 at [781] to [794]. (d) The Act contemplates the making of s 106 orders with respect to individual "contracts" for work in industry, with s.107 of the Act then available to be utilised (in extreme circumstances) to interfere with the use of any particular form of "contract" more generally . (e) In reality the applicants are now seeking to do indirectly what they cannot do directly. That is, to have the 2008 Policy enshrined in "representative" "contracts", given that such an outcome is not now possible via award application. The Court should not endorse this approach especially in circumstances where there can be no doubt that if the Court makes the variation orders sought, the Court's decision will henceforth be relied on by the applicants as a precedent to be applied if/when other current public servants are declared "excess". The Court's decision (and orders) will be regarded, in effect, as if it were an award of general application in the public sector (on the strength of limited evidence from 12 officers) even though no generally applicable prescription is achievable by other means; and (f) In any event no general finding of "unfairness" can be made on the strength of such limited evidence and no generally applicable variation(s) could be made based on any such unfairness finding made.

ASU Case 73The respondents submitted that the orders sought in the application filed by the ASU on 13 September 2011 were in the same impermissibly broad form as the "Application" filed by the PSA on 22 July 2011 (i.e. where the class of "the employees" about whom orders are sought to be made are defined as all those public sector employees who had been declared excess at a particular date). For the reasons submitted there was no basis for granting orders in the broad form sought. 74It was further submitted the terms of the various Maritime enterprise agreements did not take the ASU's case any further as they refer to "current Government policy" and/or policies that are "current at the time". In fact, these terms supported the respondents' contention that such government policies are and have been able to be varied from time to time.

Whether relationship between Crown and public servants may be contractual in nature 75Whilst the respondents contended that employment in the service of the Crown is statute based, it was not contended that employment was purely statutory and could never be contractual. Indeed, the respondents conceded that it appeared (particularly by reference to Suttling , Jarratt , Holly v Director of Public Works (1988) 14 NSWLR 140; (1988) 28 IR 270 and Crown in Right of the State of New South Wales (Director-General, NSW Department of Health) in respect of Sydney West Area Health Service v New South Wales Nurses' Association [2011] NSWIRComm 111 ("Nurses' Case")) to be now resolved that at least as a matter of general theory that the relationship between the Crown and its public servants in New South Wales could be contractual in some circumstances, however, that the incidents of that relationship were embodied in the statute law of the State. 76I am content to rely on the discussion by Haylen J in the Nurses' Case at [177]-[185] and the discussion by Schmidt J in the Teachers' Federation Case at [58]-[73] to conclude that the employment of the Listed Officers was statute based, but that did not preclude the employment relationship of these Officers with the Crown also being contractual in nature. At the same time it must be accepted that the terms of any contract must not be inconsistent with statutory provisions governing the employment: Suttling per Brennan J at 437-438. 77As the PSA submitted, this approach, namely, the terms of employment of an officer employed in the Government Service may be determined partly by statute and partly by contract (as well as by industrial instruments) is consistent with the manner in which the courts have considered the position of public sector employees employed pursuant to a range of different statutory regimes: see, in relation to the Health Service, Gillies v Health Administration Corporation [2003] NSWIRComm 243 at [173] (and, on appeal, Health Administration Corporation v Crocker [2004] NSWIRComm 163; (2004) 138 IR 147 at [32]), in relation to the Teaching Service the Teachers' Federation Case at [58]-[73]. See also the Full Court's decision in Banas (No 2) . 78It seems to me there is merit in the PSA's submission that the employment relationship "is contractual in origin". Although that is a reference to what was stated in Byrne & Frew v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 420, which was a case concerned with employment in the private sector, there is no reason why it should not be taken to apply equally to employment in the public sector. As Mahoney JA in Holly stated, a person who is acting in the service of the Crown may do so in one or other of several different relationships that may exist between that person and the Crown. Thus, as his Honour said, "[H]e may act in the Crown's service because he has been appointed to an office in which he acts in that way" or "[H]e may act in the Crown's service because, I think, a contract of employment has been made with him by the Crown and he is, in the ordinary sense, in a master and servant relationship to the Crown." In Holly, Mahoney JA (with whom Kirby P and Samuels JA agreed) held that Mr Holly, an electrical fitter/mechanic, was employed under a contract of employment with the Crown. 79One would not usually expect a person who has been appointed to an office to be referred to as an employee or as being in employment. The terms and conditions of an office holder would normally be found in a statute or may be a matter of convention. Such terms and conditions would not be found in a contract of employment. An employee, on the other hand, may have his or her terms and conditions determined by a combination of statute law, by industrial instruments and by a contract of employment. 80As the PSA submitted, the PSEM Act makes clear that persons employed in the Government Service are employed to work in an employer/employee relationship. The PSEM Act provides that the Government of New South Wales may "employ staff in any Division of the Government Service" (s 4B(1)). A relevant Division Head is able to "exercise on behalf of the Government of New South Wales the employer functions of the Government" (s 4D(2)). Within the Public Service, the Act provides for staff to "be employed in a Department" as officers, temporary employees or casual employees (s 7(1)). The "usual basis for the employment of staff in a Department is to be the employment of officers" (s 7(3)). An "officer" is described in the Act as being "employed in a Department" (s 19(3)). A position in the Public Service becomes vacant if, among other things, an officer "abandons his or her employment in the Public Service" (s 26(1)(d)). 81I note that in his text, "Aspects of Public Sector Employment Law", (Law Book Company, 1988) Professor G J McCarry states at 18: It is unusual to find a public sector worker who is a "pure" officer with entirely independent functions and no element of control or subordination to superior orders, at least below top level positions or judicial offices. For all but those few there will be control of the requisite kind and subordination to orders either in all facets of their work or in almost all (as where a worker exercises an independent function only occasionally). The common law criteria for the existence of a contract of employment will be satisfied. It is submitted that workers so controlled will be employees at common law. This will be so regardless of whether they are called officers in a statute or not. 82After referring to "many cases in the High Court and elsewhere which either refer to the contractual nature of the relationship or which proceed on the basis there is a contract", Professor McCarry stated at 20: It is submitted that the correct position in Australia where there is almost invariably a detailed statute and a large degree of control, is that persons described or appointed as officers are, in almost all cases, employees under a contract although they may at times exercise independent functions invested in them in respect of some of their duties. The extent to which the parties can agree on terms and conditions is, of course, circumscribed by the terms of the relevant statute and subordinate legislation. And one party, the employer, can by valid regulations, vary unilaterally some at least of the terms of the contract. Nevertheless, there will be other terms, not circumscribed or expressly agreed, which will be implied by the common law. Some are illustrated by the passage quoted above from [ Ioannou v Fowell (1982) 63 FLR 170 at 188]. There is also an obligation to obey lawful orders. If not codified in regulations, this too is imported from the common law obligation of an employee. 83It does not seem to me that the PSEM Act, the Public Sector Employment and Management Regulation 2009 and the relevant industrial instruments applying to officers employment in the Government Service, constitute a code and define the parties' rights so completely as to preclude recourse to implied terms (see McCarry at 21). In Ioannou v Fowell (1982) 63 FLR 170 Davies J stated at 188: Furthermore, I do not understand what Mason J. said in the Australian Broadcasting Commission case to mean that he is of opinion that public service pursuant to statutes such as apply here is not pursuant to any contract. That would run counter to long held notions. If he had intended to espouse that view I would have thought that a much more explicit statement to that effect would have been made. I refer in passing to the decision of Gillard J. in Keeley v. Victoria [1964] VicRp 48; (1964 VR 344 and to Hogg on the Liability of the Crown (1971), pp. 148 et seq. The submission made on behalf of the respondents would result in the position of public servants depending upon status rather than contract and would mean that the entirety of their rights and obligations would devolve from the relevant statutory provisions. Notwithstanding the comprehensive code which undoubtedly exists in this case, there are many gaps which need filling in, not the least of which is the necessity to understand the ambit of the responsibilities imposed by his employment upon an employee such as the applicant. These must derive from contract. Unless one were able to ascertain them in this way one would not be able to conclude whether he was efficiently discharging his duties or whether he should be made the subject of some disciplinary action. I would therefore reject the respondents' argument that the employment is entirely statutory and upon the basis only of the provisions of the Acts of Parliament in question. 84Ioannou went to the High Court and was overturned, but as McCarry observed, the observations relied upon by Davies J seemed unaffected. 85The PSEM Act, in Part 3.1 of Chapter 3, deals with public sector executives. It is clear from that part that executive officers are employed under a contract of employment: see s 63, s 69. Because Part 3.1 expressly provides for employment under a contract of employment, it does not necessarily follow by negative implication that, therefore, officers employed in staff positions (see s 7) are not employed under a contract of employment for the reason that, unlike Part 3.1, no reference is made to a contract of employment. To take that view would be at odds with what Davies J referred to as "long held notions" that public service pursuant to statutes may be pursuant to contract. But more particularly, unlike the position in respect of officers, the employment of executive officers is not an industrial matter for the purposes of the IR Act (s 72(2)) and a State industrial instrument does not have effect insofar as it relates to the employment of executive officers (s 72(5)). Industrial instruments covering officers deal extensively with employment conditions and to the extent they do this, they relieve the necessity to formulate the terms of a written contract of employment. In respect of executive officers, the alternative was to fix the terms and conditions of employment for executive officers by regulation or by a contract of employment. The latter was chosen, no doubt because it offered a more flexible option. 86As the respondents submitted, however, it is one thing to recognise the possibility of the existence of contracts of employment for officers, it is another thing to establish that the terms of the 2008 policy constituted or formed part of contracts between the Listed Officers and the respondents.

Whether there was the requisite intention that the 2008 policy form part of the contracts of employment 87It was not contended by the respondents that the 2008 policy had the force of statute. Subject to certain contentions by the respondents that will be addressed later, that elements of the policy constituted a legally binding Memorandum of Understanding, it was submitted the 2008 policy was merely a policy statement and its purpose, according to the respondents, was simply to "guide the parties" and to "state the views of the governing authority" despite being classified as a "Directive" with compliance being "mandatory". It was submitted there was no intention of the parties that the policy would form part of the contracts of employment of the Listed Officers. 88The PSA contended there was such an intention and that the whole of the 2008 policy, or at least those elements referred to in the second of the declaratory orders sought by the PSA, was incorporated into the contracts of employment of the Listed Officers either by express incorporation, incorporation by reference or by variation upon the employee being declared excess. 89A critical question, therefore, is whether the parties intended that the provisions of the 2008 policy were to have a contractually binding effect (in one of the ways contended for by the PSA).

Intention - legal principles 90The intention of the parties is to be judged objectively and not by reference to the subjective understandings or beliefs of the parties: Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8: (2002) 209 CLR 95 at [25]. The Court was referred to Nikolich . This case concerned an appeal against a judgment for damages for breach by the appellant of a contract of employment between it and a former employee, Mr Nikolich. The appeal raised issues about the content of the employment contract, which the trial judge found to be contained in part in a formal letter of offer and in part in a lengthy document entitled "Working with Us" ("WWU"). The appellant submitted that the judge erred in finding that sections of WWU were terms of the contract of employment. 91WWU contained 119 pages and covered many topics including statements about the culture of the firm, safe and healthy work environment, grievance procedures, harassment and employee benefits. At [19] Black CJ noted: [19] Although the appellant contended at the trial, and initially on the appeal, that "WWU ... was not incorporated into the contract of employment" and that the provisions relied upon by the respondent "did not constitute a term or condition of the contract of employment" it accepted during the hearing of the appeal that some sections (but not those in issue) did form part of the contract of employment. This distinguishes the present case from Riverwood International Australia Ltd v McCormick (2000) 177 ALR 133 where there was a question whether any of the content of a document had been incorporated in the contract of employment; the question here turns on the language of the further document which evidently, and concededly, had contractual elements. 92It would appear that the section entitled "Reward Strategy", which was "diverse in content" and included detailed provisions about overtime, was accepted as forming part of the contract of employment. Black CJ referred to parts of this section as being "plainly contractual in concept and language." 93At [22], Black CJ observed: [22] The difficult question is not whether WWU had any contractual effect, for this is now rightly conceded, but whether the portions relied upon by the respondent and found to be terms by the primary judge did indeed have that character or whether, on the other hand, they were at most mere representations of the firm's aspirations. 94At [23], his Honour stated the relevant principles as follows: [23] The principles to be applied in determining whether any, and if so what, parts of WWU were terms of the contract of employment are not in doubt. It is well established that if a reasonable person in the position of a promisee would conclude that a promisor intended to be contractually bound by a particular statement, then the promisor will be so bound. This objective theory of contract has been repeatedly affirmed as representing Australian law by the High Court. Thus, in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 51; (2004) 219 CLR 165, 179, the Court said: It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction. 95The Court held by majority (Black CJ and Marshall J, Jessup J dissenting) in relation to the contested parts of WWU, the health and safety section was contractual, whereas the harassment and grievance procedure sections were not. 96The WWU provided that " JBWere will take every practicable step to provide and maintain a safe and healthy work environment for all people". In finding the health and safety section was contractual Black CJ stated at [29]-[30]: [29] As I have noted, the test is objective. What matters is what the language used, in context, would have led a reasonable person in the position of Mr Nikolich to believe. Context is very relevant. Here, it is plain that in WWU the firm was holding itself out as having a commitment, which it regarded as very important, to provide a caring and safe working environment based upon mutual respect and concern. To repeat examples referred to earlier: "The JBWere culture and 'family' approach means each person is able to work positively and is treated with respect and courtesy" and " Although we are aggressive in the market place, we are not aggressive with each other ". [30] The difficulty is that the statement in issue is not explicitly contractual in its language and could be seen as merely aspirational. It appears in a document of mixed content and purposes and, although these include contractual purposes, at least the primary repository of the employment contract is unambiguously elsewhere. The context is, however, decisive. In the context of WWU as a whole, if the statement that the firm " will take every practicable step to provide and maintain a safe and healthy work environment for all people " were no more than an aspirational representation, imposing no obligation on the maker, it would be seen as an exercise in hypocrisy. The statement is a reflection of, and is central to, WWU's expression of the "culture" of the firm and its approach to its staff, and its aspirations about the approach its employees will take to each other. The language used, taken in the context as a whole, points to the statement embodying a contractual obligation and the trial judge was correct in holding that it was a term of the contract. 97Black CJ also dealt with the meaning of "every practicable step" at [33]-[34]: [33] It is convenient to consider now the meaning of "every practicable step" since it was suggested at one point in argument that "practicable" was synonymous with "possible". It was also suggested that the obligation was impossibly wide since "practicable" was not qualified by "reasonably" as it usually is in Australian occupational health and safety legislation. [34] In its ordinary meaning and also in its present context, practicable is not synonymous with "possible"; what is possible may not be practicable. Does, however, "practicable" in the present context extend to impose an obligation to do something that is unreasonable? To my mind it does not. Whilst it is true that statutory obligations to do what is practicable to protect health and safety are nearly always qualified by reference to reasonableness, in the context of WWU some such qualification is implicit. In a statute, an obligation to do what is practicable might be qualified by the adverb "reasonably" as a matter of prudence but in a document such as WWU the qualification emerges implicitly from the absurdity of supposing that, in the absence of the clearest language, an employer is to be taken to have put itself under an obligation to take safety measures that are unreasonable. 98In Nikolich , reference was made to Riverwood . Riverwood was an appeal from a judgment of Weinberg J in which his Honour determined that Mr McCormick was entitled to redundancy pay on the termination of his employment. Relevantly, Mr McCormick signed a letter of offer of employment offering various terms and conditions of employment by way of acceptance of the offer. The letter stated: You agree to abide by all Company Policies and Practices currently in place, any alterations made to them, and any new ones introduced. 99Riverwood maintained a Human Resources Policy and Procedures Manual which stated: where terminations of employment are as a result of redundancy the terms and conditions of the company redundancy policy shall apply... For calculation see copy of Redundancy Agreement attached. 100The redundancy agreement was an unregistered agreement that had been negotiated with a union. On appeal, Riverwood argued that the letter of offer imposed an obligation only upon Mr McCormick to comply with the provisions of the Manual, and that at its discretion Riverwood was at liberty to apply or not apply the terms of the Manual. 101In separate judgments North and Mansfield JJ held that the doctrine of incorporation by reference had made the redundancy policy an element of Mr McCormick's contract of employment. North J stated at [107]: [107] The association of the expression "abide by" with the reference to the manual, essential characteristics of which have been analysed earlier in these reasons, suggest that the clause was intended to oblige Mr McCormick to comply with his obligations and also to signify that Mr McCormick had accepted an offer from Riverwood to the effect that it would comply with the obligations imposed on it by the manual. Thus, the clause reflected the parties' intention to offer and accept mutual obligations in accordance with the provisions of the manual. The fact that the clause refers only to "You" is consistent with this construction. While Mr McCormick agreed to abide by the manual, he was in part responding to Riverwood in that he agreed to accept its compliance with its obligations under the manual. The phraseology of the clause was proffered by Riverwood. Mr McCormick's acceptance carried with it an acceptance of Riverwood's offer to abide by the manual by conferring the benefits provided in the manual in favour of Mr McCormick. 102It may seen that in Riverwood the respondent signed a letter of offer whereby there was agreement to abide by the employer's policies and practices including the policy regarding redundancy. The doctrine of incorporation applied and the redundancy policy was held to form part of Mr McCormick's contract of employment. In Nikolich there were no words in Mr Nikolich's letter of offer incorporating the WWU policy into the contract. However, Mr Nikolich received the WWU policy at the time he was made an oral offer of employment and later indicated acceptance of the offer by signing a letter. Moreover, elements of the WWU policy were contractual in nature. 103Thus, as it was stated in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 at [40] : [40] ... The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.

Ajax Cooke; Lee v GEC Plessey 104The PSA also relied on Ajax Cooke, Lee v GEC Plessey and In the matter of ACN 050 541 047 Ltd. It was submitted the same approach was taken in these cases as that in Nikolich. Ajax Cooke concerned whether redundancy entitlements negotiated between an employer and a union formed part of the contract of employment of an employee who was a non-union member. The agreement was posted as a notice in the workplace. The plaintiff had read the notice and considered it applied to him. At 9, Phillips J stated: In my opinion, the notice containing the terms and conditions of the redundancy package was an offer to the plaintiff (among others) on condition: if the plaintiff continued in his employ until retrenchment then, if retrenchment occurred during the currency of the agreement, the benefits spelled out in the redundancy package would be paid by the employer.... According to the evidence, the plaintiff read the notice when it was posted, considered that it applied to him and must therefore have continued in employment thereafter in the belief that he would be paid according to its terms if he continued in employment and became redundant. In all the circumstances, then, the plaintiff's continuing in employment until he was retrenched was both the acceptance of his employer's offer and the consideration necessary to make the resultant agreement enforceable by him. 105In Lee v GEC Plessey a collective agreement was negotiated in 1985 that included redundancy payments. The employers issued a statement of terms and conditions in September 1985 which expressly incorporated "general instructions and notices" and provisions of relevant collective agreements into individual contracts of employment. However, a new statement of terms and conditions, which came into force in April 1990, made no reference to the incorporation of "general instructions and notices" or provisions of collective agreements into individual contracts. In July 1990, the employers, by means of a general instruction, purported to withdraw the redundancy terms as from September 1990. In April 1991 it was agreed between the employers and unions the 1985 redundancy agreement would be applied to 270 redundancies but would not apply after 31 May 1991. In June and July 1991 there were a further 441 redundancies and the employers announced redundancy terms less generous than the 1985 agreement would apply. The plaintiffs sought declarations that their contracts of employment included a term entitling them to enhanced severance payments in the event that they should be made redundant and that the employers were in breach of that term. 106The Queens' Bench Division of the High Court relevantly held that: The plaintiffs were entitled to a declaration that their contracts of employment included a term derived from a collective agreement entitling them to enhanced severance payments in the event of termination of their employment on the ground of redundancy. Where, in the context of pay negotiations, increased remuneration is paid and employees continue to work as before, there is plainly consideration for the increase by reason of the settlement of the pay claim and the continuation of the same employee in the same employment. The situation is similar with an increase in a severance payment since a redundancy payment is part of the remuneration package. The employee continues to work for the employer, thereby abandoning any argument that the increase should have been even greater and removing a potential area of dispute between employer and employee. The employer has both secured a benefit and avoided a detriment. It could not be held that the employers were entitled unilaterally to alter the plaintiffs' contracts of employment since they had reserved to themselves, in the statement of terms and conditions issued in 1985, the power to alter individual contracts of employment unilaterally via general instructions. Terms incorporated into a contract as a result of a collective agreement will remain part of the contract unless and until removed, either by agreement or under specific right found within the contract. In the present case, there was no agreement as to the removal of the entitlement to enhanced redundancy terms and there was no clear right in the contract, as set out in the 1985 statement of terms and conditions, to effect unilateral adverse variations to the contract. The plaintiffs could not be held to have compromised their claims by virtue of an agreement by the unions in April 1991 to withdraw from litigation against the defendant employers. The unions could not be regarded as acting as the plaintiffs' agents for the purpose of settling the litigation since they were not authorised to act, and did not act, as agents for the plaintiffs in the course of negotiations leading to the agreement. 107Lee v GEC Plessey is different from Ajax Cooke in that in the former case the terms of the collective agreement in relation to redundancy were expressly incorporated into the employees' individual contracts of employment in 1985. As the High Court held: Terms incorporated into a contract as a result of a collective agreement will remain part of the contract unless and until removed, either by agreement or under specific right found within the contract. In the present case, there was no agreement as to the removal of the entitlement to enhanced redundancy terms and there was no clear right in the contract, as set out in the 1985 statement of terms and conditions, to effect unilateral adverse variations to the contract. 108I n Ajax Cooke, Phillips J considered that a notice at large was an offer of redundancy and the fact that the employee considered that the offer applied to him and remained in employment until he was retrenched was both the acceptance of his employer's offer and the consideration necessary to make the resultant agreement enforceable by him. 109The respondents submitted that Ajax Cooke and Lee v GEC Plessey were inapplicable to the current proceedings and referred to the judgment of Schmidt J in the Teachers' Federation Case where her Honour held that the two authorities had no application where employment contracts were made in accordance with a statutory scheme such as the Teaching Service Act 1980. 110The Teachers' Federation Case concerned whether or not three teachers had certain contractual entitlements in relation to service transfers between Departmental schools. The position of the Director-General of Education and Training was that no such contractual rights existed. The nature of the Federation's claims was described by Schmidt J at [11]: [11] It was claimed by the Federation that the three teachers had each taken up and/or remained in positions at particular schools, relying on the Department's representations to them, that their service in those schools and the transfer points it would accumulate, would in future entitle them to priority in appointment to vacant positions for which they might apply in another school or area, over other applicants, who had not accumulated such points. The result was that the Procedures which the Department had published from time to time, had become express terms of their contracts of employment. The changes to the system introduced when new Procedures were published by the Department, following agreements reached with the Federation, had been accepted by the teachers, with the result that their contracts of employment had been varied. In 2008, there was no such acceptance of the newly published Procedures. The Department was thus not entitled to unilaterally introduce new Procedures which had not been accepted by the teachers, given their existing contractual entitlements in accordance with the 2005 Procedures. 111Schmidt J found that the teachers were employed under common law contracts of employment: see [58]-[76]. Her Honour also found that there was no express incorporation of the 2005 Procedures into the teachers' contracts of employment. In relation to implied terms and the relevance of Ajax Cooke and Lee v GEC Plessey , Schmidt J stated at [79]-[80]: [79] The Federation's case was that publication of the Procedures documents was sufficient to give them contractual force, so long as the teachers continued in employment. While the Federation accepted that it had to demonstrate offer by the Director-General, acceptance by the teacher and consideration, it argued that the communication of the Procedures to the teachers and the act of continuing employment was sufficient . In making its argument the Federation relied on the approach of Phillips J in Ajax Cooke Pty Ltd t/as Ajax Spurway Fasteners v Nugent (1993) 36 AILR 231 and Connell J in Lee v GEC Plessey Telecommunications [1993] IRLR 383. [80] The Federation's reliance on the approach there adopted, given the evidence in this case as to the teachers' reliance on the transfer system in their careers, was understandable. These cases were not, however, concerned with employment contracts made in accordance with a statutory scheme such as that here in question, but rather with a redundancy agreement made with a union, which employees employed pursuant to common law contracts of employment, were later informed was to apply to their employment. In considering whether the approach urged by the Federation is available, the impact of the statutory scheme which governs the teachers' employment may not be ignored. 112Schmidt J noted at [83] that the Director General had contended that the statutory scheme did not permit of the contractual terms claimed and that there was, on the evidence, no basis for concluding that there had ever been any intention on his part, to make the contract claimed with the three teachers. At [84]-85] and [88]-[90] her Honour stated: [84] Was there evidence of such an intention? Certainly in each case the Department communicated the Procedures to the teachers, thereby giving effect to the agreements which had been made with the Federation and which thus bound the teachers upon employment. Could it have been intended that such communication would give the Procedures contractual force? As the Director-General argued, if that were a correct view of what had occurred, logically it would follow that the Director-General had reached such an agreement with each of the teachers employed in the Teaching Service and that upon each new agreement being reached with the Federation, and new Procedures then being published to give effect to that agreement, each teacher had the right to accept or reject what the new Procedures proposed, by way of variation to their individual contract. [85] It is immediately apparent that this would have been a curious thing for the Director-General to have done. Firstly, under the statutory scheme it would have been entirely unnecessary, given that the teachers were all, in any event, bound by the terms of the agreement made between the Director-General and the Federation. Had there been any departure between the agreement and the Procedures, the teachers and the Director-General would have been bound by the agreement, in any event. Further, had the Procedures been given contractual force, it would have meant that the Director-General would have remained contractually bound by what had been agreed with the Federation, even after that agreement had come to an end. There was no evidence from which it could be concluded that this was what had been intended by the Director-General, when publishing the Procedures, or indeed that it had ever been contemplated, or considered. ... [88] So approached, it becomes apparent that under this statutory scheme, there was a real unlikelihood of any intention, on the part of the Director-General, on appointment to enter into contracts of employment with the Department's teachers, to incorporate as an express term, the Procedures by which the agreements made from time to time with the Federation in relation to the transfer system, were to be implemented. Or that it was intended, to incorporate into the teachers' contracts, the new Procedures, which were published, following upon the making of new agreements between the Director-General and the Federation, the last of which was the 2005 Procedures. [89] There was no necessity at all for such contracts to be made. What purpose would they have served? Certainly there was an obligation imposed on the Director-General by the Regulation, to inform staff of their 'statutory conditions of service'. No doubt there were also good practical reasons for informing them as to the mechanisms by which the 2005 agreement and its predecessors would be implemented, but there was no necessity at all, for entering into a contract with the teachers in relation to what was contained in the 2005 Procedures document. [90] To the contrary, the teachers were, by force of s 14 of the Act, already bound by the 2005 agreement which the Director-General had reached with the Federation, superseding as it did, what had been agreed in 2002. ... 113At [94]-[95] her Honour stated: [94] The real difficulty, it seems to me, with the Federation's case was that upon employment the three teachers were each bound by the agreement which had already then been made by the Federation with the Director-General and subsequently, by every agreement which replaced it. When new agreements were made, they were bound by them, no matter what was said in the Procedures by which those agreements were implemented, when they were published. That was not the case in either Ajax Cooke or GEC Plessey. It is difficult to see how it could be accepted that the teachers continuing on in employment, could give rise to the claimed consideration in relation to the Procedures documents, given that the teachers were bound to abide by the agreements which applied to their employment by force of the applicable statute in any event. All that the Procedures did was to implement those agreements. [95] There was no issue between the parties that the agreements made as to the Department's transfer system were agreements in relation to an industrial matter, as defined. Clearly, the agreements concerned teacher's 'rights, duties and obligations' in relation to transfer between Departmental schools. On any view, they were industrial matters about which the Director-General and the Federation were entitled to make s 14 agreements. Those agreements were enforceable as industrial instruments under the Industrial Relations Act . 114Section 14 of the Teaching Services Act , it might be noted, was in the following terms: 14 Agreements relating to industrial matters (1) The Director-General may enter into an agreement with any association or organisation representing any group or class of officers or temporary employees as to any industrial matter. (2) Any such agreement binds all officers and temporary employees in the class or group affected by the agreement and no such officer or temporary 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. 115At [97] Schmidt J found: [97] It follows that the communication of each agreement and the Procedures introduced to give effect to them, cannot evidence an 'offer', in a contractual sense. No doubt the three teachers become aware of the various agreements after they were made, as well as the Procedures which followed. There was no evidence as to how any changes agreed from time to time by the Department and the Federation, impacted on the teachers' personal situation. Nor was there any evidence from which it could be concluded that the teachers for their part, considered that they had the right to refuse to accept new Procedures, as they emerged, because of pre-existing contractual rights. Their evidence was simply that they were generally aware of the system and the points attaching to service at particular schools, having being given copies of the documents or access to the through the website. Nor was there any evidence of 'acceptance' by the teachers of changes introduced over time, other than continuing employment. In this statutory scheme, I cannot see how that is sufficient. 116Schmidt J also found (at [104]-[105]) there was no necessity to imply the 2005 Procedures into the employment contracts: Byrne v Australian Airlines . 117As the PSA correctly submitted, critical to her Honour's findings was that the 2005 Procedures concerning staff transfers took the form of an agreement between the Department and the Federation and that s 14 of the Teaching Service Act made that agreement binding upon individual teachers by force of statute. Her Honour found that the parties could not be taken to have intended an agreement having statutory force to also be contractually binding and that the teachers could not be taken to have given consideration by continuing in employment in circumstances where they were bound to abide by the agreement by the applicable statute. 118It is not the case in the present proceedings that the 2008 policy applied by force of statute. This was the hinge upon which Schmidt J found there was no intention to enter into contractual relations for the purpose of making the 2005 Procedures form part of the contract of employment between the Department and individual teachers; to do so was entirely unnecessary because the Department and the teachers were already bound to observe those Procedures through an agreement that was given statutory force. 119The respondents submitted, however, that a Memorandum of Understanding ("MOU") between the NSW Government and the PSA in 2008 in settlement of the Crown Employees (Public Sector Salaries -2008) Award dealt with the question of managing excess employees and contended that, therefore, there was a parallel between the Teachers' Federation Case and the present proceedings. It was noted that s 131 of the PSEM Act was in similar terms to s 14 of the Teaching Services Act . Section 131(1) and (2) provide: 131 Director of Public Employment may enter into agreements (1) The Director of Public Employment may enter into an agreement with any association or organisation representing a group or class of officers, temporary employees or casual employees with respect to industrial matters. (2) Any such agreement binds all officers, temporary employees and casual employees in the class or group affected by the agreement, and no such officer or 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. ... 120The MOU confirmed that the "understanding and agreement" between the parties would be implemented, inter alia, by variation to relevant policy and expressly stated that it was "designed to provide both parties with certainty of outcomes for the period of the memorandum". 121The 2008 MOU did, indeed, address the question of managing excess employees in cl 5. However, cl 5 was principally directed to forcible retrenchment. In the MOU the parties: Recognise that the Government's policy is to allow agencies, as a last and unavoidable resort, to make redundant excess employees if they are not placed in a suitable position after a 12 months retention period. 122Other provisions in cl 5 were, in effect, merely supplementary to the notion of forcible retrenchment after a 12 months' retention period. The MOU noted that there were matters not agreed in respect of managing excess employees including the meaning of "meaningful work" and the issue of retrenchment payments. 123Subsequent to the making of the MOU on 2 October 2008, the 2008 policy was promulgated on 13 November 2008. It was said that the purpose of the 2008 policy was to update the previous policy following the settlement of the Crown Employees (Public Sector Salaries -2008) Award . The policy incorporated matters that had been agreed with the PSA in the MOU but otherwise the policy was a comprehensive, unilateral declaration by the Government of its policy regarding the management of excess employees. 124It is apparent, then, that the Teachers Federation Case is not a straightforward analogous situation with the present proceedings. In that Case the Federation was seeking to have the 2005 Procedures included in the teachers' contracts of employment in circumstances where the whole of those Procedures were already the subject of an agreement that was binding on the teachers. Schmidt J found that the teachers could not be taken to have given consideration by continuing in employment in circumstances in which they were bound to abide by the agreement by the applicable statute. In the present case, elements of the MOU, which was purportedly made under s 131 of the PSEM Act, consistent with the intention of the parties, were included in the 2008 policy (I say purportedly because I do not think it was proven that the DPE made the agreement that constituted the MOU). However, the 2008 policy as a whole was not an agreement made under s 131 of the PSEM Act and was not in that sense binding on the Listed Officers. 125It does not seem to me that because the MOU dealt with aspects of policy regarding managing excess employees that meant those aspects could never form part of contracts of employment of the Listed Officers. Terms of an instrument such as the MOU may be incorporated into common law employment contracts if there is express or implied agreement provided the tests laid down in Byrne v Australian Airlines were satisfied . In any event, the MOU did not deal with most of the issues addressed in the 2008 policy and in respect of forcible retrenchment, the parties merely "recognised" that was the Government's position; it is arguable that the terms of the MOU was not binding in this respect on those persons identified in s 131 of the PSEM Act. 126In my opinion, and assuming the MOU was validly made, the fact that the MOU dealt with aspects of the 2008 policy is not, with respect, a basis upon which I should follow the approach of Schmidt J in the Teachers' Federation Case. That Case is distinguishable for the reasons outlined. 127Notwithstanding this conclusion, it seems to me with respect that Alphapharm, as it was applied in Nikolich, is the authority I should follow. Although Riverwood is helpful in that it assists in an understanding of the concept of incorporation by reference, it may be distinguished because there was a contract of employment expressly obliging the parties to abide by the redundancy policy. Lee v GEC Plessey may also be distinguished from the present case because unlike the employers in Lee v GEC Plessey , the respondents did not make an express statement that the 2008 policy was incorporated into the individual contracts of employment of the Listed Officers. 128In relation to Ajax Cooke and In the matter of ACN 050 541 047 , a similar approach was taken to the issue of whether redundancy arrangements form part of the contracts of employment, namely, in broad terms: communication of the redundancy arrangement to the employee(s) and the employees remaining in employment, which was held to be both the acceptance of the employers' offer and the consideration necessary to make the resultant agreement enforceable. 129However, what must be considered, amongst other matters, is the context in which the transaction occurred and the nature and purpose of the transaction. Neither Ajax Cooke nor In the matter of ACN 050 541 047 concerned the promulgation of a government policy or the nature and purpose of such a policy. Moreover, Alphapharm requires a consideration of the words and conduct of the parties in determining what a reasonable person would conclude about the common intention of the parties. 130Given the principles laid down in Alphapharm regarding intention and their application in Nikolich I do not think, with respect, it is a sufficient analysis to simply draw from the evidence that the 2008 policy was communicated to the Listed Officers by one means or another, that they assumed the policy applied to them, that they continued working thereby providing valuable consideration and indicating acceptance of the offer and that, therefore, one may impute an intention on the part of both parties to incorporate the 2008 policy into the Listed Officers' contracts of employment. A closer analysis is required, as demonstrated by Nikolich .

Ms K Brown - Express incorporation 131The PSA contended that in respect of Ms Kerry Brown, the 2008 policy was expressly incorporated into her contract of employment by her 2008 letter of appointment, which stated: In accepting this offer, you will be employed under the Public Sector Employment and Management Act 2002 and employed by the Government of NSW in the service of the Crown. This position is covered by the provisions of the Personnel Handbook 2002 and the Crown Employees (Public Service Conditions of Employment) Reviewed Award 2006. 132It was not submitted that the Award referred to in the letter of appointment was incorporated into Ms Brown's employment contract. Rather, it was submitted that the Personnel Handbook, as it has existed from time to time, contained a detailed summary of the key conditions afforded under policies adopted by the Government with respect to the management of excess or displaced officers and expressly incorporated the 2008 policy. It was submitted the contents of the Personnel Handbook, including the provisions of the policies with respect to the management of excess or displaced officers, were incorporated by reference as a result of the indication that the employment was "covered by" the provisions of the Handbook. 133Government policies on the management of excess or displaced employees and the entitlements of employees were, indeed, published to employees in the Personnel Handbook. Version 11.2 of the Personnel Handbook, which was first published in August 1999 and last updated in June 2011, stated in the Foreword: The Personnel Handbook is compiled from legislation, awards, agreements, determinations and policy guidelines relating to conditions of employment in the NSW Public Service. The Handbook does not seek to replace these documents, but to draw their principal provisions together into a single reference source. 134The Handbook contained a disclaimer in the following terms: The Personnel Handbook is intended to be a helpful guide to human resources directors and managers, human resources officers and employees. It is not written for jurists or lawyers and it has no legal status. In all matters subject to dispute, reference must be made to source documents such as legislation and industrial instruments. 135That the Personnel Handbook was expressed to be a "helpful guide" and had "no legal status" would suggest the respondents did not intend that the Handbook would form part of the contracts of employment. Further, significant parts of the Handbook refer to statutory provisions relating to employment and it is unlikely there was any intention to incorporate these into the contracts: see Byrne v Australian Airlines ; Teachers' Federation Case. 136Further still, in Yousif v Commonwealth Bank of Australia [2010] FCAFC 8; (2010) 193 IR 212 at [94]-[96] the Full Court of the Federal Court considered the effect of a disclaimer contained in a Human Resources Reference Manual: [94] The trial judge concluded that the Appointment to Roles Policy was not part of Ms Yousif's contract, based on a disclaimer of incorporation in the opening section of the manual containing the policy, which provided: The manual is not in any way incorporated as part of any industrial award or agreement entered into by the Bank, nor does it form any part of any employee's contract of employment. [95] We agree with his Honour that, absent any countervailing factor, this provision clearly indicates that the Appointment to Roles Policy was not to be incorporated into the contract. On its own, this provision manifests an unambiguous intent that the policies contained in the manual are not to have contractual operation. Other than observing the arguably superficial similarity between paragraph 2 of the AWA and the language in Riverwood , Ms Yousif did not point to any facts that might evince a contrary intent. Accordingly, Ms Yousif has not shown that the trial judge erred in relying on the disclaimer to conclude that the Appointment to Roles Policy was not incorporated in the contract between the parties. [96] As the trial judge found, the express purpose of the Human Resources Reference Manual was to "provide guidance to managers and staff on the interpretation and application of the Bank's human resource policies": see Yousif at [92]. The Manual, accordingly, dictated how the policies were to be read and understood. The effect of the statement in the Manual that it "is not in any way incorporated as part of any ... agreement entered into by the Bank, nor does it form any part of any employee's contract of employment" cannot be read down by reference to the subsequent paragraph stating that, in the event of any inconsistency between the Manual and any agreement or contract, the agreement or contract is to prevail. Construed as a whole both statements have effect. These circumstances are different from those considered in Riverwood and Goldman Sachs . In Riverwood and Goldman Sachs there was no equivalent to the exclusionary provision in the Human Resources Reference Manual on which the trial judge relied in the present case. 137It may be accepted that the Personnel Handbook did not contain an express disclaimer stating that the Handbook did not form any part of any employee's contract of employment. However, in my opinion, the Handbook's disclaimer was to the same effect. The Handbook was a guide and its status cannot be elevated to that of an enforceable contract. 138The Personnel Handbook referred to "source documents". One of those was the 2008 policy, so the inquiry must be whether the parties intended the policy itself was to form part of the employment contracts. This is a question that is not easily resolved. However, I have come to the view that the 2008 policy did not form part of Ms K Brown's contract of employment. 139In arriving at that conclusion it must be conceded that there were a number of indicators that arguably supported an intention on the part of the respondents that the 2008 policy would form part of the employment contract. There is evidence that on the 24 November 2008 the then Director General of the Department of Premier and Cabinet issued Circular C2008- 47. The Circular stated that: It is relevant to note that the redundancy payments in the Premier's Memorandum form part of the contract of employment of public sector employees. The payments are acknowledged by the Government to be an entitlement of the employees and it is mandatory for all agencies other than State owned corporations to apply the entitlement in a redundancy situation. ... In determining what constitutes a written contract, the Oxford English Directory defines "contract" to mean: "1. a written or spoken agreement intended to be enforceable at law ..." Whilst the employment contract entered into by the employee with the NSW government does not contain a specific clause which provides for redundancy, it is mandatory for all agencies of the NSW government (other than State owned corporations) to apply the Memorandum. This Memorandum sets out the employees' entitlement to redundancy payments and the method to work out the amount of redundancy. Given that NSW government agencies must apply the Memorandum and redundancy formula in the case of an employee's redundancy, it follows that the NSW Government treats the Memorandum as a binding commitment. As such, it represents a written contract with the employee, irrespective of any connection with the employment contract. ... 140The Memorandum referred to in the Circular was Ministerial Memorandum M1997-27 of 2 October 1997, which was superseded by Memorandum M2008-22 introducing the 2008 policy. Circular C2008-47 was advice by the Director General of Premier and Cabinet to agencies regarding the obtaining of tax rulings in respect of redundancy payments. The Circular contained an extract from the Department of Premier and Cabinet's application for a tax ruling and the above quote is in that context. 141The difficulty in accepting that Circular C2008-47 indicates a common intention to have the 2008 policy form part of Ms Brown's employment contract is that, first, the Circular was not communicated to Ms Brown; there is no evidence Ms Brown saw the Circular. The Circular was merely advice to agencies; it was not directed to employees. Secondly, the Circular referred to a previous policy (in M1997-27) and although that previous policy was superseded by the 2008 policy, there is no evidence to support the proposition that the Government intended that the superseding policy was to be regarded in the same light as the previous policy insofar as retrenchment payments forming part of employees' contracts of employment. Thirdly, Circular C2008-47 refers only to retrenchment payments forming part of the employment contracts. Even if it were accepted that there was a common intention in respect of payments one could not conclude that C2008-47 indicated an intention in respect of a 12 months' retention period. 142Another indicator of intention is the language used in the 2008 policy. The "document type" is said to be "directive" and the "compliance level" "mandatory". As the PSA submitted, the policy refers repeatedly and throughout to Departments and agencies being "required" to take particular steps with regard to excess employees and asserts throughout that Departments and agencies "must" provide the specified entitlements to excess employees. The policy refers repeatedly and throughout to employees being "entitled" to the benefits conferred by the policy, including that employees may be "entitled" (among other things) to severance payment calculated in the manner set out in the policy, to job assist payments of up to $5,000, to receive assistance in seeking alternative employment and to priority assessment against vacant positions. It was also submitted for the PSA that the policy dealt with core conditions of employment for employees and dealt with matters that were central to the employment 143On the other hand, however, the 2008 policy states: This policy applies to all public sector agencies and employees in the Government Service (Public Service Departments, Non-Public Service Divisions and Special Employment Divisions) other than State Owned Corporations, the Teaching Service, the NSW Police Force (police officers), Railcorp, the Rail Infrastructure Corporation and the Health Service. In consultation with the Public Sector Workforce Office agencies may develop their own policies within the framework of this policy, and which reflect this policy's principles and intent. Agencies not covered by this policy are encouraged to apply consistent provisions. This policy does not override existing industrial instruments or legislative provisions that deal with managing excess employees. 144The provision in the policy that agencies may develop their own policies subject to it being within the framework of the 2008 policy, injects a degree of uncertainty into the policy and is a significant counterpoint to the idea of there being an intention that the policy was to form part of the employment contracts. 145The PSA contended that the 2008 policy was communicated to employees in numerous ways, including making the policy available on the Department of Premier and Cabinet intranet site and through the Personnel Handbook. In Reynolds v Southcorp Wines Pty Ltd [2002] FCA 712; (2002) 122 FCR 301 at [56] Hely J referred to the fact that the termination of employment policy of the employer was made available to employees on the intranet. See also Willis v Health Communications Network Ltd [2007] NSWCA 313; (2007) 167 IR 425 at [58]. In the matter of ACN 050 541 047 Ltd Austin J stated at [33]: [33] The letters of the former employees are also evidence that the company's policy was communicated to them some time after it was adopted in 1997. The 17 employees continued working for the company until their employment was terminated late in 2001 or in 2002. In those circumstances the adoption of the redundancy policy, communicated to them, and their continuing to work with knowledge of the policy when they might have terminated their contracts by resigning, had the effect of constituting a variation of their contracts of employment, supported by valuable consideration, and therefore valid and enforceable. 146Certainly, employees became aware of the policy because, as one would expect, the Government published the policy for all to see, but it was not a communication directed or addressed to individual employees. It was a directive to agencies as to how they were to manage excess employees and I do not consider the publishing of the policy could be construed as an intention on the part of the respondents to make an offer to employees in the terms of the 2008 policy. 147In Ms Kerry Brown's case her evidence was: I became aware of the 2008 Managing Excess Employees Policy and the November 2008 Managing Excess Employees Policy as I was working in the Human Resources Department of the New South Wales Fire Brigades and I had to advise staff who were displaced or declared excess about their entitlements and obligations under the applicable Managing Excess Employees Policy. 148Ms Brown stated that a letter handed to her on 11 March 2011 advised that her position had been deleted and she was an excess employee. Ms Brown said "A copy of the November 2008 Managing Excess Employees in the New South Wales Public Sector Policy was attached to the letter". Further, that: The letter also summarised some of the main terms of the Policy. The letter stated on the second page that the Policy provided for a 12 month retention period that commenced as soon as I was declared excess; that my retention period commenced as of 8 March 2011. The retention period of 12 months would be suspended if I was temporarily placed in a funded short term position, including a short term vacancy or a fixed term temporary appointment and that the retention period would recommence when the temporary appointment came to an end. On the third page of the letter under the heading "Finish of the retention period", it stated that when the 12 months of the retention period had been completed the provisions of section 2.4 of the Managing Excess Employees policy relating to redundancy may be considered by the Department, however, this was not the preferred option and would only be considered as a last and unavoidable resort. I also read the terms of the 2008 MEE Policy and relied on its contents as to my entitlements and obligations as an excess employee. My understanding was that the terms of the 2008 MEE Policy formed part of my conditions of employment as an excess officer. I refused two offers of voluntary redundancy on the understanding that I had a 12 month salary maintenance and retention period that would be suspended whilst I was in temporary work and because of the effect on my superannuation of leaving the public service before retirement age. 149It does not seem to me the letter received by Ms Brown added anything to the 2008 policy. The policy was attached to the letter for information. In the letter, aspects of the policy were merely summarised because the policy required that to be done. 150The 2008 policy was not: (a) the subject of any undertaking by either Ms Brown or the respondents, one to the other, to abide by or comply with the policy (cf. Riverwood ); (b) framed in language that could be regarded as promissory, it being directed to agencies as to how they were to manage excess employees and in Ms Brown's case was provided for information. Ms Brown was not required to sign a document indicating she had read and understood the 2008 policy (cf. Nikolich ); (c) expressly incorporated into employees' employment contracts (cf. Lee v GEC Plessey ); (d) the result of an agreement reached between the respondents and unions and said to apply to employees, but rather it was a unilateral declaration of a policy to be applied to employees by relevant agencies subject to those agencies being able to develop their own policies within the framework of the 2008 policy (cf. Ajax Cooke; In the matter of ACN 050 541 047 ). 151I find that the 2008 policy was not expressly incorporated by reference into Ms K Brown's contract of employment.

Incorporation by representation 152The PSA submitted the terms of the 2008 policy became express terms of the contracts of employment of the Listed Officers as a consequence of the express promise made by the Government that certain benefits would be provided in the event of an employee becoming excess. 153It was further submitted for the PSA that the publication of the 2008 policy caused the entitlements referred to in the policy to be incorporated into the contracts of employment. Counsel submitted there was no difficulty with a binding contractual obligation being created by an employer announcing to its employees an additional benefit associated with the employment and acceptance may be evidenced by the act of the employee in continuing in the employment ( Ajax Cooke ; Lee v GEC Plessey ). The suggestion by the respondents that some separate "consideration" was required was incorrect (see Stilk v Myrick ; Williams v Roffey Brothers & Nicholls (Contractors) Ltd [1991] 1 QB 1; Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 at 738-747; Silver v Dome Resources NL [2007] NSWSC 455 at [121]-[137]). 154Counsel submitted that when consideration is given to the contents of the 2008 policy it dealt with precisely the type of matters in relation to which a reasonable person would infer the Government (as an employer) intended to be bound and used language consistent with the Government being bound to apply its terms. 155A number of the PSA's witnesses gave evidence that, once having been declared excess, they attended meetings and had explained to them the terms of the 2008 policy (Ms Constable, Ms Caldwell), or received correspondence with the policy attached (Ms MacDonald, Ms O'Donovan, Mr Thompson, Mr Perry, Mr Towler, Mr Kuskis) and subsequently familiarised themselves with the policy. 156Undoubtedly, in providing the 2008 policy to the Listed Officers the respondents intended to apply the policy to those Officers and it would appear the Officers assumed that the policy would be applied to them. But in the context of a policy directing agencies to apply the policy to employees it may be expected that employees who became subject to the policy would have it explained to them or at least provided with a copy of the policy. Something more is required, in my opinion. Merely explaining the policy or providing a copy of it to employees, is not a sufficient basis upon which to find a reasonable person in the position of one of the Listed Officers would conclude that the Government intended to elevate the status of the policy so as to be contractually bound by it. There was no evidence to support such a finding. 157For the reasons given in the preceding paragraph and in relation to Ms K Brown I find that the 2008 policy was not incorporated into the Listed Officers' employment contracts by representation.

Variation upon being declared excess 158In the alternative, it was submitted for the PSA that even if the terms of the 2008 policy did not constitute terms of the Listed Officers' contracts of employment generally, the key features of the policy became incorporated into the contracts when the employees were advised upon being declared excess that they would be treated in accordance with that policy. That is, that the removal of an employee from his or her position and the continuation of employment on the basis of the arrangements set out in the 2008 policy, constituted either a variation to the existing contracts of employment or the creation of new contracts. 159Counsel for the PSA submitted that the Listed Officers accepted the variation or new contract by continuing in their employment under the terms set out in the correspondence informing them of the decision to declare them excess. 160No different considerations apply in respect of this alternative submission to those that have already been addressed. Accordingly, the Court rejects the notion that the 2008 policy became incorporated into the contracts when the employees were advised upon being declared excess that they would be treated in accordance with that policy.

Jurisdiction under s 106 161In its unfair contracts case, the PSA contended the 2008 policy and the 2011 policy were capable in themselves of constituting an arrangement for the purposes of s 105 of the IR Act or of constituting part of the overall arrangement whereby the employees perform work: Banas (No 2) at [63] and [72]. 162The respondents conceded that the MEE policies from time to time constituted part of the "contract" whereby the Listed Officers perform work in an industry, for the purposes of ss 105 and106 of the IR Act: Banas (No 2). In that case the Full Bench stated at [72] and [77]: [72] The Displaced Persons Policy clearly complements the relevant provisions of the PSM Act. Indeed, it is arguably essential in managing displaced officers. But it is not part of the PSM Act nor is it delegated legislation. In fact, it is largely an agreement apparently negotiated with relevant public sector unions. For the purposes of ss 105 and 106, as the appellant conceded, the Policy is an arrangement and, therefore, susceptible to the Commission's jurisdiction: See Legal and General Assurance Society Ltd v Stock (1993) 49 IR 464. That the Policy complemented the relevant provisions of the PSM Act does not mean it loses its character as an arrangement. That Mr Banas was not a party to the agreement that gave rise to the policy also does not alter its character. ... [77] However, what Haylen J was required to do was consider whether, in applying the Policy to an individual officer, the appellant conducted itself unfairly, thus making the contract unfair. The appellant submitted to the effect that actions undertaken pursuant to statutory authority could not, in the relevant sense, be unfair. We do not agree. Firstly, the conduct that Haylen J found to be unfair was not pursuant to statutory authority but rather purported to be in accordance with a separate, albeit complementary, policy designed to facilitate what certain industrial parties had agreed was the intent of the legislation. Secondly, the Policy was an arrangement susceptible to the Commission's jurisdiction and, pursuant to s 106(2) of the Industrial Relations Act, it was open to the trial judge to find that certain conduct towards an individual officer purported to have been taken in accordance with the Policy rendered a particular contract unfair. 163The Court accepts that the 2008 and 2011 policies constituted part of an overall arrangement between the respondents and the Listed Officers who gave evidence and Mr Asmar within the meaning of ss 105 and 106 of the IR Act. 164However, the respondents submitted, it did not follow that in the particular statutory context of this case that the Court has jurisdiction to hear and determine claims of "contractual" unfairness with respect to the management of such excess officers: see Public Service Association (NSW) v Industrial Commission of NSW [1985] 1 NSWLR 627; (1985) 11 IR 420 ("the Public Sector Redundancy case") ; Grant (No 2) ; Virtue ; Ministry of Education at 401-403; and Lynn . 165The respondents contended that the principles and approach adopted in the Full Court's decision in Grant (No 2) and the decision of Marks J in Lynn , when applied to the current statutory regime governing the management and termination of excess officers, lead to the conclusion that this Court did not have jurisdiction to deal with claims for relief based on asserted "contractual unfairness" in connection with the management and termination of the Listed Officers. This was because, whilst the IR Act "binds the Crown", in this special statutory context the Court's s 106 jurisdiction/powers with respect to the complaints brought by on behalf of "excess officers" in these proceedings had been impliedly repealed: see Grant (No 2) ; Lynn ; Virtue ; Ministry of Education ; and Ferdinands generally; see also Prince v North Coast Area Health Service at [66]-[75].

Relevant legislation 166The "current statutory regime" referred to by the respondents is to be found not only in ss 56, 57, 61 and 130 of the PSEM Act, but also in ss 105 and 146C of the IR Act and the Industrial Relations (Public Sector Conditions of Employment) Regulation 2011. Section 56, 57, 61 and 130 of the PSEM Act are in the following terms: 56 Excess officers of Department (1) This section applies where: (a) the appropriate Department Head is satisfied that the number of officers employed in the Department exceeds the number that appears to be necessary for the effective, efficient and economical management of the Department's functions and activities, and (b) the appropriate Department Head has taken all practicable steps to secure the transfer of the excess officers to the service of another Department or in any other public sector service. (2) The appropriate Department Head may, with the approval of the Commissioner, dispense with the services of any such excess officers who cannot be found useful work in another Department or in any other public sector service. 57 Excessive salaries of officers of Department (1) This section applies where: (a) the appropriate Department Head is satisfied that an officer of the Department is in receipt of a greater salary than the maximum fairly appropriate to the work performed by the officer, and (b) the Department Head has taken all practicable steps to secure work in the Department, or in another Department or in any other public sector service, that is appropriate to the salary of the officer. (2) The appropriate Department Head may, with the approval of the Commissioner, reduce the salary of any such officer who is not performing work appropriate to his or her salary to the maximum determined by that Department Head to be appropriate to the work performed by the officer. (3) An officer whose salary is reduced under this section: (a) remains eligible for promotion as if the officer's salary had not been reduced, and (b) is entitled to obtain work in the Department at the previous salary of the officer as soon as such work becomes available in preference to any other officer whose salary has not been reduced. ... 61 No compensation to be paid where person's services dispensed with or salary reduced A person employed in the Public Service is not, except as provided by this or any other Act, entitled to any compensation as a result of the person's services being dispensed with or the person's remuneration being reduced. ... 130 Director-General may determine employment conditions (1) The Director-General may from time to time make determinations fixing the conditions and benefits of employment of officers, temporary employees or casual employees (or any group or class of officers, temporary employees or casual employees) and their salary, wages and other remuneration. Such a determination can provide for redundancy and severance payments and for remuneration packaging. (2) The conditions, benefits, salary, wages and other remuneration of an officer, temporary employee or casual employee is, except in so far as provision is otherwise made by law, such as may be fixed by a determination made under this section. (3) This section does not prevent the appropriate Department Head from determining conditions of employment of officers, temporary employees and casual employees under section 14 or under any other law. However, a determination by the Director-General under this section prevails to the extent of any inconsistency with a determination of a Department Head, unless the Director-General approves of the Department Head's determination. (4) An officer, temporary employee or casual employee may sue for and recover the amount of remuneration of the officer or employee that is determined under this section. For that purpose, the determination is taken to be a State industrial instrument. (5) This section does not apply in relation to remuneration or allowances fixed under Part 3.1 or under the Statutory and Other Offices Remuneration Act 1975. 167Section 106 of the IR Act is as follows: 106 Power of Commission to declare contracts void or varied (1) The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract. (2) The Commission may find that it was an unfair contract at the time it was entered into or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason. (2A) A contract that is a related condition or collateral arrangement may be declared void or varied even though it does not relate to the performance by a person of work in an industry, so long as: (a) the contract to which it is related or collateral is a contract whereby the person performs work in an industry, and (b) the performance of work is a significant purpose of the contractual arrangements made by the person. (3) A contract may be declared wholly or partly void, or varied, either from the commencement of the contract or from some other time. (4) In considering whether a contract is unfair because it is against the public interest, the matters to which the Commission is to have regard must include the effect that the contract, or a series of such contracts, has had, or may have, on any system of apprenticeship and other methods of providing a sufficient and trained labour force. (5) In making an order under this section, the Commission may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Commission considers just in the circumstances of the case. (6) In making an order under this section, the Commission must take into account whether or not the applicant (or person on behalf of whom the application is made) took any action to mitigate loss. 168Section 105(2) of the IR Act provides: (2) A contract is not an unfair contract for the purposes of this Part merely because of any provision in the contract that gives effect to a policy that is declared under section 146C. 169Section 146C(1), (2) and (5) of the IR Act provide: 146C Commission to give effect to certain aspects of government policy on public sector employment (1) The Commission must, when making or varying any award or order, give effect to any policy on conditions of employment of public sector employees: (a) that is declared by the regulations to be an aspect of government policy that is required to be given effect to by the Commission, and (b) that applies to the matter to which the award or order relates. (2) Any such regulation may declare a policy by setting out the policy in the regulation or by adopting a policy set out in a relevant document referred to in the regulation. ... (5) This section does not apply to the Commission in Court Session. 170Clause 4 of the Industrial Relations (Public Sector Conditions of Employment) Regulation provides: 4 Declarations under section 146C The matters set out in this Regulation are declared, for the purposes of section 146C of the Act, to be aspects of government policy that are to be given effect to by the Industrial Relations Commission when making or varying awards or orders. 171Clause 6(1)(f) of the Regulation provides: 6 Other policies (1) The following policies are also declared, but are subject to compliance with the declared paramount policies: ... (f) Policies regarding the management of excess public sector employees are not to be incorporated into industrial instruments. 172An industrial instrument is defined in s 8 the IR Act to mean "an award, an enterprise agreement, a public sector industrial agreement, a former industrial agreement, a contract determination or a contract agreement." An award is defined in the Dictionary to the IR Act to mean "an award made, or taken to be made, by the Commission under this Act, and includes any order of the Commission under this Act that sets conditions of employment."

Public Sector Redundancy Case 173In the Public Sector Redundancy Case, the Court of Appeal was concerned with whether the Commission had jurisdiction to make an award in light of ss 113 and 114 of the Public Service Act 1979. These sections correspond to ss 56 and 57 of the PSEM Act. The Court held there was no jurisdiction because in light of s 8 of the Public Service Act, the wording of the sections indicated, by way of negative implication, that the functions and powers these sections created were to be exercised only under the Public Service Act . However, the Court also held the Commission retained jurisdiction to flesh out or complement the scheme set up by ss 113 and 114 provided any award made "was not inconsistent with or contradictory of the specific provisions of those sections because the legislature had not indicated an intention to preclude the Commission from entering this field at all". 174Section 8 of the Public Service Act provided: Unless otherwise expressly provided, nothing in this Act affects the Industrial Arbitration Act 1940. 175Upon the enactment of the Public Sector Management Act 1988 ("PSM Act"), the wording of the equivalent provision was altered. Section 95 of the PSM Act provided: 95 Certain other Acts not to be affected (1) The Superannuation Act 1916, the Industrial Arbitration Act 1940 , the State Public Sector Service Superannuation Act 1985, the State Authorities Superannuation Act 1987 and the Public Sector Executives Superannuation Act 1989 are not affected by anything in this Act. (2) Subsection (1) does not limit section 42J.

Section 160 of PSEM Act 176Section 160 of the PSEM Act now provides: 160 Certain other Acts not to be affected (1) This Act does not affect the operation of the following Acts: (a) the Industrial Relations Act 1996 , (b) the Superannuation Act 1916 or any other superannuation legislation that applies to employees to whom this Act applies. (2) Subsection (1) does not limit the operation of section 22, 35 or 72.

Lands Officer case 177The PSA referred to Re Crown Employees Lands Officer (Department of Lands) Award (1992) 40 IR 120 ("the Lands Officer case"). The issue in that case was whether the Department head's power to "classify and grade" Lands Officers under s 8 of the PSM Act were exclusive and thus overrode the jurisdiction of the Industrial Commission under the Industrial Arbitration Act 1940. The Full Bench in that case concluded that the PSM Act could not be read as having the intention of repealing by necessary implication the Industrial Commission's powers to set wages and conditions by award and that, importantly, the effect of s 95 of the PSM Act was to reverse the common law doctrine of implied repeal of an earlier statute which is inconsistent with it and that the terms of the section provided for primacy to the then Industrial Arbitration Act over the PSM Act. 178The Lands Officer case was followed in Re Government Cleaning Service (Privatisation) Award (1993) 54 IR 112 and Public Employment Industrial Relations Authority v Health & Research Employees' Association (NSW) (1994) 54 IR 162. In Re Government Cleaning Services the Full Bench considered the predecessor provision to s 61 of the PSEM Act, namely, s 55 of the PSM Act. The Full Bench said at 123: The PSMA [PSM Act] was enacted in 1988. It contains s 95(1) which is distinguished from its predecessor, s 8 of the PSA [ Public Service Act ], by the removal of the words 'unless otherwise expressly provided'. The effect of those words was considered by the Court of Appeal in the Public Service Redundancy Cases in coming to the conclusion that the enactment of s 113 and s 114 of the PSA (the predecessors to s 51 and s 52 of the PSMA) 'otherwise expressly provided' as to the matters with which they dealt. The result was the conclusion that the PSA did affect the Commission's jurisdiction under the 1940 Act as to those matters. Both the absence of those words and the ordinary grammatical meaning of the words used by the legislature in enacting s 95(1) of the PSMA, suggest that in the event of conflict between the PSMA and the 1940 Act, it was intended that the 1940 Act would prevail.... 179In the context of dealing with s 55 and the argument that it precluded the making of an award providing for redundancy payments, the Full Bench stated at 122: In our view ... the Commission's obligation under s 84 of the 1991 Act to insert employment protection provisions into award applying to the Crown, includes the requirement that insert provisions as to payments to be made on termination, in accordance with the employment protection principles. If there be any conflict between s 84 of the 1991 Act and s 55 of the PSMA, it must in our view be resolved in favour of the primacy of s 84. 180In Public Employment Industrial Relations Authority v HREA (NSW) the Full Bench of the Industrial Relations Commission said at 182-183 that in making the decision in the Lands Officer case: [T]he Commission in Court Session was doing so as a superior court of record (s.14 of the 1940 Act). In comparative terms, its standing and its decision are analogous to a decision of the Full Court of the Industrial Court of New South Wales. In those circumstances we consider it inappropriate that the Full Commission, which is subject to rulings of law by the Full Court, should reconsider the correctness of the Lands Officers' Case . In declining to do so, however, we would express our concurrence with the reasoning there contained. 181It is a significant shift in language to move from a provision in a statute that enables an earlier statute to operate unless the later statute "otherwise expressly provided", to a provision in the later statute that it will " not affect the operation of the ..." earlier statute subject to specific provision in the later statute that certain sections of it are to prevail over the earlier statute. It is difficult to envisage more direct terms than those in s 160 of the PSEM Act, namely, that it does not affect the operation of the IR Act subject to certain specified exceptions. It appears to reflect a deliberate intention of the legislature to give primacy to the IR Act, subject to the nominated exceptions. It would have been a simple proposition for the legislature to add ss 56, 57, 61 and 130 to s 160(2) of the PSEM Act if it had been the intention to have those sections prevail over the IR Act, but that was not done. 182The phrase "otherwise expressly provided" has been held to include "a negative implication precluding the making of an award inconsistent in operation, or in contradiction, of the..." statute in which the phrase exists. To undertake a search for a negative implication in the PSEM Act precluding the making of orders under s 106 of the IR Act in circumstances where the PSEM Act provides that nothing in the PSEM Act affects the operation of the IR Act (subject to nominated exceptions) would seem to be an utterly purposeless exercise. 183The IR Act binds the Crown: s 404. Section 160 of the PSEM Act provides that nothing in that Act affects the operation of the IR Act except ss 22, 35 and 72, which are not presently relevant. The PSA is correct, in my opinion, in submitting the express provisions of the PSEM Act make clear that there is no intention to impliedly repeal any part of the IR Act and that, in the event of inconsistency, the provisions of the IR Act and the powers conferred thereunder are to prevail.

Grant (No 2) and Lynn 184That dispenses with the respondents' reliance on the Public Sector Redundancy case. Insofar as Grant (No 2) is concerned, that case involved an appeal by the Commissioner and Deputy Chairman of the New South Wales Corrective Services Commission. His appointment had been made under the Prisons Act 1952. An amendment Act in 1988 abolished the Corrective Services Commission and the office of Commissioner and Deputy Chairman. The appellant had sought relief under s 88F of the Industrial Arbitration Act 1940 (a predecessor of s 106). At first instance it was held, inter alia, that as the law was clear that valid removal of a statutory office holder from public office and abolition by statute of that office did not constitute a breach of contract if one existed, and gave no right to compensation unless the statute so provided, the loss of statutory office by the appellant could not be categorised under s 88F as unfair. Where at law the Crown was not required to pay compensation to an office holder whose office was abolished by statute or provide him with alternative employment and did not do so, such actions could not be categorised as unfair within the meaning of s 88F. 185On appeal, it was held (Hill and Sweeney JJ, Maidment J dissenting) the Commission in Court Session did not have jurisdiction to grant the relief sought. Hill J, who delivered the main judgment, referred to Suttling and stated at 325-326: It follows from the whole of the provisions of Sch 3 of the Prisons Act 1952 that the legislature may reasonably be presumed to have intended that an office holder who is removed from or ceases to hold office and who does not fall within the classes specified as eligible for compensation or alternative employment is not entitled, as of right, to any such compensation or alternative employment, unless other legislative provision is made to the contrary. In the present case the applicant was removed from office directly by the amending Act which made no provision for or in relation to compensation but did provide that it was not to affect any arrangement for the appointment of the former office holder to a position in the service of the Government. Accordingly, in my opinion, the intention of the statutes, which both create and abolish statutory offices and which make provision for compensation for loss of office in some cases... but make no such provision in the present case, is that the common law that no compensation is to be payable applies. 186Before dealing with Grant (No 2), reference should be made to Lynn . It was held in that case there was no jurisdiction under s 275 of the Industrial Relations Act 1991 (the predecessor provision to s 106) to grant relief in respect of a claim by a senior executive officer in the public service. In Lynn, Marks J followed the decision in Grant (No 2) and applied the maxim Generalia specialibus non derogant in regarding the 1991 Industrial Relations Act as the "general legislation" and the PSM Act as the "special legislation" . His Honour held that the orders sought would "intrude into the statutory framework which governs the applicant's employment." 187In Lynn , Marks J appears not to have been directed to the effect of s 95 of the PSM Act and in Grant (No 2) it appears there was no equivalent to s 95 in the Prisons Act . It was not argued in the present proceedings what effect s 95 may have had, or not had, if its equivalent had appeared in the Prisons Act . Nor were there any submissions by the respondents about whether a consideration of s 95 in Lynn may or may not have produced a different result. 188It does seem to me, however, that the existence of s 160 of the PSEM Act entitles the Court to distinguish Grant (No 2) and Lynn to the extent those authorities should not be followed in this case.

Ferdinands 189The respondents contended, nevertheless, that the decision of the High Court in Ferdinands meant that "provisions like section 160 cannot and do not provide the final answer to the question of implied repeal by definition" and that what Ferdinands held was that "it is ultimately a matter of construction as to whether the two acts can be construed together and can live together." 190The issue in Ferdinands was whether the Police Act 1998 (SA) and the Industrial and Employee Relations Act 1994 (SA) could apply to the termination of appointment of police officers. Applying a test of inconsistency, the majority found that the Police Act (SA) impliedly repealed the Industrial and Employees Relations Act (SA) to the extent that the latter would have operated on the termination of appointment of police officers. 191Although the majority in Ferdinands held that the Police Act (SA) impliedly repealed the Industrial and Employees Relations Act (SA) to the relevant extent, Gleeson CJ observed at [4]: [4] ... The problem is one of statutory interpretation; a problem that arises only because the legislature did not state an intention either that the two statutory regimes should both apply in such a case, or that the second regime should apply to the exclusion of the first. ... 192There was no reference by the members of the High Court to a provision in the Police Act (SA) equivalent to s 160 of the PSEM Act and it appears no such provision existed. The basis upon which the majority in Ferdinands found that the Industrial and Employees Relations Act (SA) had been impliedly repealed by the Police Act (SA) was that the Police Act (SA) was exhaustive on the topic of police discipline and appointment. See Gleeson CJ at [4] and his Honour's apparent adoption of the approach in Butler v Attorney-General (Vic) [1961] HCA 32; (1961) 106 CLR 268 ("apparent exhaustiveness") and Gummow and Hayne JJ at [55] where it was concluded that: [W]hen read as a whole, the Police Act reveals an intention to deal comprehensively not only with questions of appointment and termination of appointment of members of S.A. Police, but also with what decisions of the Police Commissioner to terminate appointment of a member are to be subject to review apart from the general supervisory jurisdiction of the Supreme Court, a general supervisory jurisdiction exercised principally by the grant of relief in the nature of prohibition, mandamus and certiorari. 193Kirby J dissented, whilst Callinan J stated at [158] that: [I]t is unlikely in particular, that the legislature, having made express provision for a review of a termination of a probationer, or a termination under Pt 7 of the Police Act for disability or illness (s 45), or unsatisfactory performance (s 46), would have intended that members of the Police Force otherwise terminated, have an entirely different, totally unmentioned (in the Police Act ) right of recourse to the Commission. 194It seems most unlikely, indeed, impossible, for the High Court to have come to the view that the Police Act (SA) "explicitly or implicitly contradicts the wrongful dismissal provisions of the Industrial Act" (see Gummow and Hayne JJ at [57]) if there had existed in that Act a provision equivalent to 160(1) of the PSEM Act, which would have provided that nothing in the Police Act (SA) affected the operation of the Industrial and Employees Relations Act (SA). I note further the reliance by Callinan J on the proposition that it was "totally unmentioned" in the Police Act (SA) that there was any "right to recourse to the Commission". If the equivalent of s 160 had been in the Police Act (SA) that would not, with respect, have been a proposition open to his Honour. 195That would seem to be a complete answer to the respondents' submission that the sections relied upon in the PSEM Act impliedly repeal s 106 of the IR Act. Indeed, as the decisions in the Lands Officer case and in Re Government Cleaning Services are binding upon me, I am bound to find there is no implied repeal of s 106 by the provisions relied upon by the respondents in the PSEM Act and I so find.

Section 146C and the Regulation 196Section 146C(5) of the IR Act provides that s 146C does not apply to the Commission in Court Session. Accordingly, reg 6(1)(f), which provides that policies regarding the management of excess public sector employees are not to be incorporated into industrial instruments, also has no application to these proceedings. 197The respondents contended, however, that what was significant was that: The IRC in making any award or order must, inter alia, give effect to government policy regarding the management of excess employees ie it cannot make an award inconsistent with that policy see s146C(1)-(3); Reg. 4 and 6(f); The Governments current (2011) MEE Policy is " a declared policy ": see Reg 6(f) and the words " are not to be incorporated into industrial instruments " do not alter this fact. They are a duplication (at least vis awards), given (a) above; and The Government's current (2011) policy regarding the management of excess public sector employees does form part of (" is a provision in ") the " contracts " (as defined in s105) of the " listed officers ": see s105(2); see also Respondents' Submission paras 25(e), 77(a)-(d). Accordingly, s 105(2) prevents the Court from finding relevant " unfairness " in s106 proceedings " merely because " (on the basis that) these " contracts " give effect to the 2011 MEE Policy. 198The 2011 policy is not, however, a policy declared for the purposes of s 146C of the IR Act. The only matters that are declared to be aspects of Government policy for the purposes of s 146C of the IR Act are the matters actually set out in the Regulation. Regulation 4 provides: The matters set out in this Regulation are declared, for the purposes of section 146C of the Act , to be aspects of government policy that are to be given effect to by the Industrial Relations Commission when making or varying awards or orders. 199The 2011 policy itself is not a matter set out in the Regulation. As the PSA submitted, the only potentially relevant matter set out in the Regulation is cl 6(1)(f) which indicates that the Government's policy is that "policies regarding the management of excess public sector employees are not to be incorporated into industrial instruments." The 2011 policy is not referred to in the Regulation nor are its provisions set out. 200As the PSA further submitted, for the purposes of s 105(2) of the IR Act, the PSA did not and has not complained that the contracts and/or arrangements whereby the officers perform work are or became unfair because the Government declared an aspect of its policy is that policies regarding the management of excess employees not be incorporated into industrial instruments. For this reason, s 105(2) of the IR Act has no application to the proceedings at all. 201In any event, as it was submitted, the PSA's case has not been that the contracts and/or arrangements whereby the employees perform work are or became unfair "merely because" of the 2011 policy. The PSA contended that the contracts and/or arrangements became unfair as a consequence of broader circumstances, including, inter alia, the fact that express representations were made to each of the employees at the time of being made excess that the provisions of the 2008 policy would be applied to them. 202Section 146C and the Regulation do not make it inappropriate or wrong for the Court to apply the provisions of s 106 if the requirements of that section are met.

Whether unfairness in the " contracts" 203The essential reasons relied upon by the PSA to contend the arrangements between the Listed Officers and the respondents were unfair were that: Firstly, the contracts and/or arrangements permitted the Government to depart from express promises made to the employees upon being declared excess that they would be treated in accordance with and afforded the benefits contained in Premier's Memorandum M2008-22, Managing Excess Employees . Secondly, Memorandum M2011-11, M anaging Excess Employees Policy contemplates the employees being forcibly retrenched whether or not all practicable steps are made to redeploy the employees and even if there is ongoing work available for the employee to perform or a position into which the employee could be redeployed. Thirdly, the intended application of Memorandum M2011-11, Managing Excess Employees Policy would result in the employees being forcibly retrenched without the payment of severance payment as would be fair and reasonable in the circumstances and having regard to the nature of the employees' employment.

Arrangements permitted departure from express promises 204In relation to the first contention relied upon by the PSA, it is correct that each of the Listed Officers in relation to whom evidence was called, except Ms Sherlaimoff, were expressly advised in writing upon being declared excess that they would be treated in accordance with the 2008 policy. This included that they would be entitled to a 12 months' retention period for the purposes of pursuing redeployment, that forcible retrenchment would only occur as a last and unavoidable resort and that the employees would receive severance payments as set out in the Premier's Memorandum. 205Each of the Listed Officers who gave evidence, except one, indicated they relied upon the entitlements conferred by the 2008 policy. For example, Ms K Brown said, "I also read the terms of the 2008 MEE Policy and relied on its contents as to my entitlements and obligations as an excess employee." Ms Caldwell stated that: I relied upon the information set out in this letter and also the 2008 Policy which formed, in my mind, my entitlements and obligations as an excess officer. I believe I fulfilled my obligations under the 2008 MEE Policy. 206Ms O'Donovan stated: I was also aware from reading the 2008 MEE Policy that I had a 12 month retention period as an excess employee which would be suspended if I was in a temporary position. I relied upon the protections for excess employees in the 2008 MEE Policy. I also agreed to relinquish my position on the understanding I could not be forcibly retrenched . 207Mr Thompson said: I read the attached Policy and I relied upon its contents as to what my entitlements, benefits and obligations were as an excess officer, including that the 12 month retention period would be suspended whilst I was in temporary employment and would only begin to run once my temporary position ended. 208Ms Sherlaimoff was never informed in any formal way that the 2008 policy applied to her. She was aware of the 2008 policy and looked it up herself, but she was never told that the policy had application in her case. Ms Sherlaimoff was declared excess on 3 March 2005. In a letter Ms Sherlaimoff was advised that she would be provided with "meaningful work" until she was placed in a suitable position and that she would be provided with a case manager who would discuss her redeployment options across the public sector. 209In September 2005 Ms Sherlaimoff received a letter that included a website link to the Information Package for Senior Officers - Declaring Displaced Officers Excess and Advising All Excess Officers of Salary Maintenance Review and Provisions. Ms Sherlaimoff said she received a letter in October 2005 which included a website link to the Managing Displaced Persons Policy Premier's Department Circular 98-62. Ms Sherlaimoff read this Policy on the website. 210The PSA submitted the 2011 policy was introduced without any consultation with the PSA, affected employees or public sector employees generally. It was submitted that when fundamental alterations to redundancy arrangements and benefits are implemented unilaterally, in disregard of the position of affected employees and their entitlements and without prior notice to them or negotiation with them, the conduct of the employer and the relevant contracts and arrangements under attack, are particularly likely to offend s 106 of the IR Act: Martin v National Textiles Limited (unreported, Schmidt J, IRC 98/5100, 21 February 2000). 211The respondents contended that even prior to the recent State Election (March 2011) public servants (or at least the PSA as the representative of those public servants) were clearly aware and "on notice" that if the Liberal/National Coalition was successful in the election that they were going to make significant changes with respect to MEE Policy and move to "dispense with" the services of existing excess officers by removing the "unattached or displaced employees list" and by "no longer continu(ing) to pay employees who we have been unsuccessful in redeploying into new public services positions." 212The policy document relied upon by the respondents for that contention provided no detail in relation to the policy the Coalition proposed to adopt should it be successful at the election and did not indicate what would be done with respect to existing excess employees. Moreover, as the PSA correctly submitted, the Government took no steps to bring the document to the attention of public sector employees and there is no evidence that any of the employees in fact became aware of the documents. 213The respondents, nevertheless, submitted that: the Listed Officers were also given formal written notice of the change to MEE policy in correspondence sent to them in June this year and they were all given two firm and reasonable voluntary redundancy offers that were available to be accepted if they did not want to continue in the public service in accordance with the new 2011 policy with respect to excess officers; all the Listed Officers have had more than reasonable time and every reasonable opportunity to be "redeployed", such that there is no foundation for concluding that "all practical steps" have not been taken with respect to those Listed Officers, or any one or more of them, to facilitate their remaining in the public service. Appropriate assistance was provided to redeploy excess officers and indeed, the Officers gave evidence of the steps taken by case managers to redeploy them. the evidence also reveals that because the overall majority of the Listed Officers are currently in "temporary positions", they are also receiving the benefit of further actual notice periods (of varying lengths) that are, in most cases, to be regarded as further (minimum) notice periods before the 2011 policy will operate with respect to them; they had the ability to change the MEE Policy from time to time and to do so without the agreement of the PSA. Further, that the policy changes that were made were not "arbitrary" or "capricious" or done otherwise than in "good faith" with a view to serving the "public interest" by saving valuable resources and moving towards a more "efficient" and productive public service. 214In relation to the notice to employees in June 2011 regarding the 2011 policy, it was given on or after 22 June. To qualify for the incentivised offer, employees who were excess as at 22 June 2011 were to accept the offer by 22 July 2011 and leave the Government Service prior to the commencement of the 2011 policy on 1 August 2011. Excess employees who did not accept the offer were advised they would be subject to the 2011 policy when it came into effect on 1 August 2011. The offer was only made once. 215On or soon after 1 August 2011, each of the employees was notified of the commencement of the 2011 policy and informed they had two options: either accept an offer of voluntary redundancy within two weeks; or elect to decline the voluntary redundancy offer and pursue redeployment within the NSW Government Service during the three months' retention period. The employees were informed that they would be forcibly retrenched if they have not been appointed to a permanent position at the conclusion of the three months' retention period, subject to those employees being in a temporary position after the three months' retention period. In that case forcible redundancy would apply if they had not been placed in a permanent position. 216Each of the Listed Officers who gave evidence clearly did not want to continue in the public service under the 2011 policy because they considered the 2008 policy applied to them and that the change to the 2011 policy would cause them detriment. It may be accepted there was some notice given to employees of the change and they were given options. But the PSA's case was that the employees had been expressly promised the benefits of the 2008 policy and in the absence of any consultation or adequate forewarning, those benefits were removed to the employees' detriment. That is to say, the options offered were not, in the circumstances of each of the Listed Officers, sufficient to counteract the effect of unilaterally removing the benefits of the 2008 policy. 217The question then is whether it was fair, in the absence of any consultation or reasonable forewarning, for the respondents to unilaterally change the policy regarding the management of excess employees, to the detriment of employees. 218In Riverwood , Mansfield J observed at [152]: [152] Nor do I consider that the fact that it was contemplated by the policy clause in the letter that the appellant might change its policies from time to time, or introduce new policies, signifies that it did not intend to be contractually bound to the respondent to comply with its policies from time to time. Its power to change its policies, or to introduce new policies, from time to time would be constrained by an implied term that it would act with due regard for the purposes of the contract of employment: eg Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (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 v Commonwealth [1977] HCA 71; (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) 28 NSWLR 234 at 279-280 per Handley JA.... 219It may be accepted that the change represented by the 2011 policy was done in the "public interest". However, it was done without any prior consultation with the PSA, which had been the practice in the past given the significant representative role of the PSA, and without any reasonable advice by the respondents to, or in consultation with, their employees. 220The respondents referred to private sector human resource practice in circumstances of redundancy. It was submitted, for example, in relation to exploring "suitable alternative employment" opportunities there was no "objectively defensible reason" why redundancy in the public sector should be managed any differently to the private sector. However, it seems to be the respondents' view that despite the universal requirement in the private sector for employers to consult with employees on change as significant as that represented by the 2011 policy, the failure of the respondents to consult with employees or their union, or to even reasonably forewarn them, should not be regarded as unfair. 221In my opinion, having made it clear to each of the Listed Officers who gave evidence that the 2008 policy would apply to them and the Officers having relied upon those promises, the respondents had an obligation, consistent with past practice, to consult with the employees' representatives namely, the PSA and ASU, or the employees themselves, or at least give reasonable notice of what were very significant changes affecting excess employees in the form of the 2011 policy. I do not consider notice given as late as 28 June 2011 with an ultimatum to leave employment by 1 August 2011 was adequate given the significance of the changes represented by the 2011 policy. 222Despite the failure to consult or adequately advise employees, it must be shown that the employees suffered some net detriment in order to establish unfairness: see the approach taken in Gillies v Health Administration Corporation (and, on appeal, Health Administration Corporation v Crocker ) . I do not submit this is a universal test under s 106, but in the circumstances of this case I do not consider it sufficient to make a finding of unfairness on the basis that the respondents failed to consult. 223The respondents appeared to submit that because the overall majority of the Listed Officers were currently in "temporary positions", they were also receiving the benefit of further actual notice periods (of varying lengths) that were, in most cases, to be regarded as further (minimum) notice periods before the 2011 policy would operate with respect to them. That is not the case with Ms Caldwell, for example, who is currently subject to the three months' retention period and faces the prospect of forcible retrenchment on 17 November 2011. Other employees in temporary positions have varying periods of their 12 months' retention period under the 2008 policy to run once the temporary position finishes. However, those periods are not available under the 2011 policy. Furthermore, priority assessment for vacancies before any other applicants and case management and career transition assistance is only available during the three months' retention period and will not be provided after the expiry of the retention period even if the employee remains in Government employment in a temporary position. 224Many of the Listed Officers who gave evidence said that they had made particular decisions to their detriment on the basis that they would, as public servants, have the security of the employment conferred by the 2008 policy and the representations made that the employees would be accorded the benefits under the policy. For example, Mr Perry voluntarily relinquished his permanent position in 2008 in order to move closer to family. His evidence was that he would never have relinquished his position if he knew he would be subject to forced retrenchment after a 3 months' retention period: I would not have relinquished my position if I knew that I would be subject to possible forced retrenchment after a 3 month retention period as I would have considered this there was too much of a risk that I would not obtain permanent employment by the end of the retention period. As I was in temporary employment for some time before being made a permanent officer I understood the importance of being a permanent officer in the public service. 225Ms O'Donovan voluntarily relinquished her position in 2006 in order to be closer to Sydney for medical treatment on the basis of representations that she was guaranteed a position as a compassionate transfer and have the protections of the 2008 policy. Ms O'Donovan stated: In 2009 my Manager in Tumut asked me to resume my position. I suffer from an auto immune medical condition, linear scleroderma that necessitates me seeking regular medical treatment in Sydney. In order to be closer to my medical treatment I requested a compassionate transfer to the Metropolitan Branch in August 2009. ... My application for compassionate transfer was approved by letter dated 12 February 2010. The letter advised me there were currently no suitable vacancies in the Metropolitan Branch that I could be matched to. The letter said the Compassionate Transfer Policy states " where no suitable vacancies at the same or lower grade exists at the time of the decision, an approved application will be held on file as long as compassionate circumstances continue to exist and approved applications will be matched by Human Resources against vacancies prior to advertising positions" . The letter advised me that I would be placed in a temporary Project Officer position within the Aquatic Protected Area operations section of the Protected Areas Policy and Programs Branch until 30 June 2010. ... I made a decision to relinquish my position on the understanding that I was guaranteed employment in the Metropolitan Branch under my compassionate transfer. I was also aware from reading the 2008 MEE Policy that I had a 12 month retention period as an excess employee which would be suspended if I was in a temporary position. I relied upon the protections for excess employees in the 2008 MEE Policy. I also agreed to relinquish my position on the understanding I could not be forcibly retrenched . I was advised of this by Steve McNabb (Director - Human Resources). 226Ms Constable gave up her right to return to teaching in 2008 and, if now is forced to return to teaching, would have to regain accreditation through the Institute of Teachers and start at the bottom of the priority list: I gave up my right to return to teaching in 2008. I did not think I would lose my status as a permanent employee and be left with nothing at all, which is how I feel now. If I am retrenched I cannot work in the Government again for another 25 weeks. If I am out of the work force, particularly away from technology, it is therefore hard to keep up relevance in a cutting edge unit such as where I work currently and would find it very hard to return. If I was to return to permanent teaching again, I would have to go to the bottom of the priority list as a teacher and would also have to get special approval to teach as I have been out of schools for more than 5 years. I would have to gain accreditation through the Institute of Teachers which takes more than 2 years. 227Each of the Officers gave evidence in relation to the effect of the introduction of the 2008 policy on their personal and financial affairs. The Officers said they organised their personal and financial affairs on the basis that they would have the benefit of a period of 12 months' retention during which to seek redeployment, that they would have a 12 months' period of salary maintenance and/or receive a severance payment calculated in the manner set out in the 2008 policy. Mr Kuskis stated: It is my intention to remain in the Public Service. I feel that I have much experience to offer the Public Service in my area of expertise of procurement, for which there is a continuing requirement. I understand the workings of Government and the rules which apply compared to the private sector. It is very important in my job to have an in depth knowledge of the Public Sector. I am currently 56 years old however I am not financially in a position where I can retire. My Public Service career was predicated on the principle that I could remain in employment and pursue a career path. One of the reasons I had joined the Public Service in the first place was that, in my view, it did provide greater security of employment. Job security was one of the main attractions for me and when I commenced in the Public Service terms such as "excess employee" and "forced redundancy" were unheard of. At my age I feel that I would be very unlikely to secure a position in the private sector in my area of expertise, if I was able to secure a position, it would not be at the same salary or status as I have enjoyed in the Public Service. I have been a Public Servant for many years and even if I was to find work in the private sector it would be very difficult and onerous to transition to the private sector. I would certainly suffer significant financial detriment if I was to be forcibly retrenched in regard to the reduced redundancy payment compared to the voluntary redundancy payment that I would have received under the 2008 MEE Policy. I am in the process of paying off two investment properties and I depend heavily on continuing to receive a salary around my current level. 228Ms L Brown stated: I had the intention of remaining in the Public Service until retirement, which I anticipated would be at around the age of 57. I have had a long history with the Public Service having worked in it for 22 years. I have a strong belief in the Public Service and feel that it is an essential part of a community. I feel proud to be part of the Public Service contributing to a better future for the people of New South Wales and contributing to my community by helping to improve the way that land, soil and vegetation is managed in my local area. The financial implications of a forced redundancy are likely to be very harsh upon me and my family. My family and I have been located in Kempsey for 20 years. My husband has a job here and my children grew up here. I have one child still attending school in the area. In Kempsey, being that it is a regional town there are very few jobs at all let alone job opportunities for a person of my skill level and expertise. I am doubtful that I would be able to gain meaningful employment outside the public sector. At my age it will be extremely difficult, if not impossible, to retrain and pursue a different career path. 229Ms K Brown stated: It is my very strong desire to remain in the New South Wales Public Service as I am in the SSS Superannuation Scheme and I have 7 years to go until my retirement age of 55. As this is a defined benefit scheme and therefore I would lose approximately $400,000.00 in superannuation payments if I leave the Public Service before my retirement age of 55, which would occur if I was forcibly retrenched. This would obviously have a devastating effect on my finances and my future security. I am dependent on my income and I am paying off a mortgage so losing my job now could mean that I would lose my house as I would not be able to afford the mortgage repayments. The letter of 28 June 2011 also offered me a voluntary redundancy package including an additional $10,000.00. I declined this offer for the reasons set out above.... By letter dated 1 August 2011 I was made another offer of voluntary redundancy (without the additional $10,000.00 payment) to be accepted by 15 August 2011. I did not accept this voluntary redundancy offer for the reasons as set out above.... I have become emotionally distressed over becoming an excess employee, and facing forcible retrenchment particularly because of the circumstances of becoming excess, after I had dedicated myself to my position and had received praise for my efforts. It is very difficult at my age, after over 30 years in the public service to be facing forcible retrenchment and having to attempt to find other employment outside the public service. 230Mr Thompson stated: If I lose my employment and I am forcibly retrenched from the Public Service, this will cause significant economic hardship to me and my family. My wife, who has a local job, has been finding it necessary to reduce her employment for health reasons and because of family obligations. This was possible because I had a secure income. As set out above voluntary redundancy is not attractive to me because I have only been in the Public Service for just less than 5 years and I am 64 years old and close to retirement age. My qualifications, skills and experience are best suited to the Public Service and there are very few employment options for me outside the public service in the region where I live. It would cause me considerable hardship to contemplate moving out of the area, where I have lived for the last 11 years and have family, in order to pursue other employment opportunities at this stage of my life. I have a remaining mortgage debt of $16,000. I also currently have unavoidable financial commitments that will result in hardship if I am made forcibly retrenched. These commitments mainly relate to my home which is a rural property with tourist cabins as well as our family home. I am in the middle of significant repairs and improvements to my home and cabins which will cost me around $100,000 to complete. 231Mr Towler stated: Two years ago I purchased a home in Newcastle, near my office. I have a $400,000.00 mortgage with fortnightly payments of $1,500.00. I am in the SSS Superannuation Scheme. If I took a voluntary redundancy payment my superannuation benefit would be $1,893.00 per fortnight which would only just cover my fortnightly payments for my home, I would only have approximately $393.00 per fortnight to live on after making my mortgage repayments. By letter dated on or around 1 August 2011 I received a second letter advising me that the 2011 MEE Policy as of 1 August 2011 had commenced and that my options were to accept a voluntary redundancy payment (without the $10,000.00 incentivised payment) or at the conclusion of my retention period I would be redeployed into the position of Project Manager, Industry Investment, Crown Lands Division, Newcastle, Departmental Officer, Grade 11.... I did not submit an acceptance of the offer of voluntary redundancy and I received a letter dated 17 August 2011 advising me that as I had not submitted my acceptance of the voluntary redundancy it was understood that I had elected to be redeployed. The letter advised me that I would be redeployed into the Project Manager position and my salary would be maintained at its current level for a period of 3 months only until 31 October 2011.... My understanding is that under the 2008 MEE Policy I would have been entitled to 12 months' salary maintenance after I accepted redeployment to the lower grade. The difference in salary between the downgraded position and my substantive salary is $40,000.00. My substantive salary was $143,000.00 and the Grade 11 position salary is $103,000.00. This is an approximately 25% reduction in my salary. As the salary is $40,000.00 less per year it will not leave me enough to continue paying my mortgage. It is certain that I will need to sell my house very soon. I feel that I had no choice but to accept redeployment as if I did not accept redeployment at the lower grade I would be forcibly retrenched as of 18 November 2011. If I still had a 12 month retention period left at the end of my temporary appointment then I would have applied for other permanent positions rather than accepting the lower graded redeployed position. Forcible retrenchment at my age with 4 years left before I intend to retire in the SSS Scheme would be absolutely devastating to my financial security. The difference at the age of 60 in my projected fortnightly income under the SSS Scheme is $2,175.00 as compared to $1,893.00 per fortnight if I was forcibly retrenched in November 2011. If I was being paid at my substantive salary my fortnightly benefits at age 60 would be $2,962.00. The other significant difference between the 2008 and 2011 MEE Policies which affects me is that I would no longer, after the 3 month retention period, have priority assessment for any permanent positions and would have to compete in open competition for any permanent positions. 232Ms Caldwell stated: I have been employed in the Public Service for the last eighteen years, I have a strong commitment to Public Service and I have found it a privilege to work in the National Parks and Wildlife Service. I have particularly enjoyed the team work, the camaraderie and the supportive nature from my colleagues and I have a strong commitment to protecting our natural environment. I believe that there is useful, worthwhile work that I could perform at the end of my three month retention period. I currently have a mortgage of $109,000 . I live by myself and I have financial commitments of $47,000 per annum . I have about five years left to pay off my mortgage at my current repayment rate. I borrowed extra money on my mortgage to improve my house. If I was forcibly retrenched from the public service it is more than likely that I would not be able to afford my mortgage payments and I would be forced to sell my house. If I took a voluntary redundancy package, most of it would have to go into my mortgage repayments and I would have little left to live on. Without my income, I can also not afford private medical insurance which is currently $107.00 per month with the government rebate, income protection insurance of $240.00 per month, home insurance and motor vehicle insurance. I also pay Council rates of $1,539.60 per year, excluding water rates. I started making employee contributions to my superannuation (through salary sacrifice) when I gained full time employment with the National Parks and Wildlife Service, so I only currently have an amount of approximately $130,000 in superannuation. I currently live within two hours of my parents who are both 74 years of age and have a small farm and they require assistance from me on the farm and also with health support. No doubt this will increase as time goes on. I live in a small town which is 43kms away from the Tumut Office and 150 km away from my current work location in Khancoban. There is extremely high unemployment in the area that I live and therefore very little work opportunities for me outside the Public Service especially for someone with my qualifications and experience. It currently costs me $45.00 per week in petrol to drive to Tumut which is the closest town with any potential employment. I would be prepared, of course, to move out of the area for a permanent position, particularly if I received the relocation allowance. Under the current Policy the relocation assistance is not provided unless and employee is forcibly transferred. 233Ms Sherlaimoff stated: Further I am currently 15 months short of my retirement date. Under the old State Super Scheme I would be financially disadvantaged if I were to leave early. I enjoy working and contributing my skills to education. I have an interest in public education and served on the Board of the Macquarie Community College until last year. I would like to remain in the public service and I believe I can continue to make a valuable contribution to the Department. The last three years before retirement are particularly important for determining the final pension in my superannuation scheme. I have enough long service and recreation leave to take me through until the final retirement date, but the new policy precludes me from exiting through normal retirement. As there is meaningful work available in the Department that I could do I had planned on the basis of the old policy to work six months past my retirement date i.e. into 2013 and had made financial decisions along those lines. 234Mr Perry stated: The effects of the forced redundancy on me include the loss of my secure income and the inability for me to meet financial commitments. My understanding based on the information previously provided to me by the Department was that if I could not be placed in a permanent position at the end of my retention period I would be offered a voluntary redundancy and would receive the redundancy payments as set out in the 2008 Policy. The considerably less favourable forced retrenchment payments provided for in the 2011 Policy would severely affect my financial situation. Further, if I was to be forcibly retrenched and then I found a job in the Public Service at a later time I would lose my entitlements to long service leave and would have to work for an additional 7 years to resume my entitlements. The release of the 2011 MEE Policy and the way that it was introduced without any consultation with the affected excess officers, and in my case without any consultation with me or even warning or notice has caused considerable stress to me and I believe has affected my health. I have been advised that only approximately 5% of strokes occur in people under 45 and I am currently 38 years of age, have low blood pressure, average cholesterol and no family history of this condition. I have recently been advised that I have an underlying heart condition and have to undergo open heart surgery to replace a valve. I have been advised by my neurologist that stress can be an amplifying factor for this condition. I have very recently been offered a permanent position in Gloucester, which is a six hour drive from Ulladulla. Due to my health and the fact that I will have to have a few months off work to recover I would obviously prefer to be close to my family during this time. 235Ms Jenkins stated: It is my strong preference to remain in the New South Wales Public Sector. I am 52 years old and have enjoyed access to the career structure and promotion in the New South Wales Public Sector as well as the favourable and flexible working conditions. I would find it difficult to find work in private industry given my age and also as I have no private sector experience. My entire working life has been spent in the Commonwealth and New South Wales Public Sector. There are few opportunities in the Australian Public Service and Local Government sectors at the moment as I understand there is a freeze on filling non frontline positions. I also have accrued benefits in the New South Wales Public Service which I do not want to surrender, such as accrued recreation leave, sick leave, Family and Community Services leave and extended leave. I am in First State Super. I currently salary sacrifice approximately $500 per week to make additional superannuation contributions. My superannuation would suffer if my employment did not continue in the sense that I would no longer be able to salary sacrifice, and for the reasons as set out below. However, my main loss would be the accrued promotions and progress that I have made over the last fourteen years, commencing from the role of OHS Officer, Clerical Officer Grade 5 in the NSW Fire Brigades to my current role at Clerk Grade 9/10. I have made significant progress in my career over that time. Since joining ADHC in May 2011, I believe that I have made further progress since having two years of relatively slow progress and poor work placements in the Department of Premier and Cabinet (DPC) where I was given only 4 week placements, in spite of my challenging that strategy. 236Notwithstanding evidence of the type summarised above, the respondents submitted that whilst a significant number of the Listed Officers asserted that they "relied" upon the provisions of the 2008 policy, this reliance was not explained and there was no evidence of any "detriment" said to have arisen from any such reliance. In this regard, it was submitted that apart from the lack of any "mitigation" efforts by the Listed Officers outside the public sector, in spite of having been declared "excess" some significant time ago, there was also evidence that many of the Listed Officers adopted the incorrect view that once put into a "temporary position" that they either did not consider themselves to be obliged to or, in any event, did not attempt to pursue "redeployment" opportunities whilst occupying those "temporary positions". Indeed, it was submitted, some of the Listed Officers went further and actively asserted that they took no such steps during the temporary placements because of the "comfort" they felt from knowing that at the end of any temporary placement(s) that they would still have the 365 day retention period to fall back on. The respondents offered the following examples to support their contentions: Robert Perry: "I have turned down two temporary employment opportunities"; Vera O'Donovan indicated she had not applied for permanent positions; Lindy Brown: "I did not take any steps to seek a permanent position prior to 2008. I was content in my temporary secondment position..."; Rosemary Constable: "I did not apply for permanent jobs as I was busy carrying out the duties of the position and I did not have time to devote to applying for permanent positions..."; Rosemary Constable found applying for jobs and attending for interviews was too time consuming; Tracey MacDonald was approached about a permanent position but did not apply as "I understood I had two years left on my temporary contract and, in addition twelve months as an excess officer beyond the end of my current contract in which I would receive priority assessment for vacant positions"; Martin Kuskis declined a trial placement at Dept of Services Technology and Administration in 2011 on the basis that he was not obliged to "trial"; Cathryn Jenkins - unreasonably failed to complete trial placement at the Ambulance Service because of longer hours and travel; Tania Sherlaimoff rejected a trial placement where the title of the position had changed, and without making enquiries as to whether it was the same position; and Romeo Cecchele was not prepared to be matched to positions in Sydney until 2011, despite being displaced in 2002, and excess for some time. 237These brief references to the evidence are somewhat misleading. In relation to Mr Perry, the two positions he turned down would have involved him moving his residence from the South Coast of New South Wales to Queanbeyan or Grafton in order to take up a temporary position with no greater security than the position he held at Ulladulla. Turning the positions down was not unreasonable given the representations made to him that the Government would apply the 2008 policy. In relation to Ms O'Donovan, she did not say that she did not apply for permanent positions. Her evidence related to particular positions for which she applied which the Department chose not to advertise permanently. Ms O'Donovan gave evidence in her statement that she has been pursuing permanent redeployment. Ms O'Donovan was not required for cross-examination. 238In relation to Ms L Brown, she stated: I did not take any steps to seek a permanent position prior to 2008. I was content in my temporary secondment position and relied on the representations that I had a 12 month retention period, during which time I would have priority placement in a permanent position when my temporary secondment position came to an end. 239In relation to Ms Constable, she stated: During the period I was working on the project, I did not apply for permanent jobs as I was busy carrying out the duties of the position and I did not have the time to devote to applying for permanent positions, but further and more importantly I was safe in the knowledge that, according to the Policy and the advice from the Department, I still had a full 12 month retention period left at the end of my temporary role to try and find a permanent role (once I was declared excess). I did apply for another permanent position after I received the letter of 3 August 2011 referred to below. However I was unsuccessful. 240To the extent that Ms Constable indicated that she did not apply for any permanent positions between March and June 2011, she explained this was because she was expressly requested by the Department to complete the project work she was undertaking rather than take up another position. 241However, Ms Constable also said: I applied for 5 permanent positions in November and December of 2010 and in February 2011 but I was unsuccessful. There were a large number of displaced officers competing for positions because two Directorates had undergone a restructure and as a result many officers had lost their jobs, therefore the positions were filled on merit rather than through a priority assessment process. 242In relation to Ms MacDonald, she was in a temporary position. She "did not apply for a permanent position at the Department of Lands that I was approached about" because "I understood I had two years left on my temporary contract and, in addition twelve months as an excess officer beyond the end of my current contract in which I would receive priority assessment for vacant positions". Ms MacDonald commenced as a temporary employee in 2001 and was not made permanent until 2007. In 2010 Ms MacDonald was advised her permanent position was to be deleted. In the circumstances, it was not entirely unreasonable for Ms MacDonald to not apply for a permanent position. Most of her service had been on a temporary basis and under the 2008 policy she was entitled to feel reasonably confident of being placed in a permanent position in the three-year period available to her before the retention period expired. Ms MacDonald's current temporary position extends to June 2013. 243In relation to Mr Kuskis, he said in his evidence: I had previously declined an offer by the Department of Services Technology and Administration (as it was then called) for a trial placement in March 2011 because my view is that under the provisions of the 2008 MEE Policy, the outcome of a priority assessment can only be either that the employee is rated adequate (and is appointed to the position) or he/she is not, with the onus being on the recruiting agency to show why the employee cannot meet the criteria (even with adequate training). My view is that a trial placement may operate alongside priority assessment but follows a separate course with less clearly defined outcomes. I would have pursued the earlier trial placement had it not been for the fact that I understood I still had the protection of a 12 month retention period after my temporary position finished during which I could be placed in a permanent position. 244In relation to Ms Jenkins, she explained why she did not take up the position with the Ambulance Service, which was not a trial placement: The position with the NSW Ambulance Service was a temporary secondment, not a permanent or trial placement and would not necessarily have improved my position by resulting in a permanent placement. I reject that the NSW Ambulance Service requested that I return to the Department. Ms Tinson infers that I was unsatisfactory in performance but this was not the case. I was sick and this resulted in nearly a three (3) week absence (supported by medical certification). The travel to and from Rozelle each day to work at the NSW Ambulance Service was lengthy and cumbersome, requiring four changes of transport for me and so I requested that I be returned to DPC. The position was covered by a separate industrial award, which offered me less favourable conditions and pay and required that I work longer hours. The combination of extra travel, inconvenient location, illness and extra work hours dissuaded me from continuing in the position. NSW Ambulance Service negotiated with me and agreed with my decision. There was no ill feeling. 245In relation to Ms Sherlaimoff, I am inclined to accept the PSA's explanation, namely, that the evidence does not support the unwarranted assertion that she provided no real co-operation or effort in her last trial placement. Ms Sherlaimoff's evidence, which was uncontradicted, was that she was provided with no work to do for the first three months of the placement and her supervisor never visited her or provided support. Ms Sherlaimoff set out her concerns in detail in a letter to which she has not received a reply. The suggestion that Ms Sherlaimoff did not make an effort is contradicted by the fact that in the letter she requested a genuine trial placement in the Process Excellence Unit. 246I note that Ms Sherlaimoff is 59 years old. She has been in the public service for 20 years and has a PhD in demography. In her evidence Ms Sherlaimoff stated that she is 15 months short of her retirement date and that she would be financially disadvantaged if she were to leave early. Ms Sherlaimoff said: The last three years before retirement are particularly important for determining the final pension in my superannuation scheme. I have enough long service and recreation leave to take me through until the final retirement date, but the new policy precludes me from exiting through normal retirement. ... However in accordance with the 2011 MEE Policy as I am not in an established temporary position I will be forcibly retrenched on reduced payments as of 22 November 2011. 247It would not seem to be at all unreasonable in Ms Sherlaimoff's case to allow her to take her accumulated leave through to her retirement and avoid the financial disadvantage she would otherwise suffer. This was suggested to the respondents in the course of the hearing but the Court received no final response. 248It was further submitted for the respondents that although, save for the exception of Mr Romeo Cecchele (who I will address later), there was no evidence that any of the Listed Officers were taken to task for not undertaking their own "responsibility" for redeployment in "good faith" , there was some clear evidence before the Court that some of the Listed Officers, especially those that have been excess officers for extensive periods of time (e.g. Mr Cecchele and MsSherlaimoff) had not really "played the game" with respect to a bona fide commitment to redeployment in that they have found/erected various "obstacles" to temporary placement or trial redeployment opportunities that operated to undermine the prospect of them ever being "redeployed". In particular, reference was made to the following: Robert Perry, Vera O'Donovan and Rosemary Constable willingly relinquished permanent positions (Constable from the Teaching Service); Martin Kuskis declined a trial placement with Department of Services Technology and Administration, even though he was aware a successful trial would lead to redeployment to a permanent position; Perry, O'Donovan, Lindy Brown, Kuskis, Constable and MacDonald did not apply for permanent positions at all; Tania Sherlaimoff - non attendance at career training workshop and no real co-operation and effort in her last trial placement (in spite of very lengthy history as an excess officer). 249Although the respondents conceded that the majority of the Listed Officers co-operated fully with respect to exploring redeployment opportunities often over lengthy periods of time (and are continuing to do so at the present time), the attempt by the respondents to portray a number of the Listed Officers in a poor light, as being unreasonable and uncooperative in the effort to find them positions, is somewhat disappointing but more to the point, unfair and unwarranted. I agree with the PSA that the fact Mr Perry, Ms O'Donovan and Ms Constable relinquished positions could not be construed as disentitling conduct. 250Mr Perry consented to relinquish his permanent position at the request of the National Parks and Wildlife Service and on the understanding that he would be treated in accordance with the 2008 policy. He gave evidence that he would not have relinquished the position had he been subject to a three months' retention period and at risk of retrenchment at the end of that period. 251Ms O'Donovan relinquished her position as a result of the need to be near Sydney for medical reasons on the basis that she would be treated in accordance with the 2008 policy. 252Ms Constable relinquished her right to return to teaching to take up a permanent position in the Public Service on the basis of her understanding that she would not lose her status as a permanent employee. In relation to Ms Constable, if the position in which she is currently working becomes vacant after November 2011 she will not be redeployed into that position. Subject to merit selection, a new employee would be employed rather than have Ms Constable continue in her employment. Having regard to Ms Constable's 32 years of employment in the public sector and the effect of retrenchment upon her (including her superannuation entitlements), I agree with the PSA this aspect of the arrangements is unfair. 253In relation to Mr Kuskis, Ms Sherlaimoff, Ms L Brown and Ms MacDonald, I have dealt with the respondents' criticisms earlier. 254The evidence establishes that each of the Listed Officers who gave evidence relied to varying extents on the 2008 policy in deciding what option they should follow in their employment. Each of them gained comfort from the fact that the policy provided for a 12 months' retention period that was suspended during periods of temporary employment and/or that redeployment remained the principal means for managing displaced employees, with excess employees being entitled to be placed in any suitable vacancy without advertising and eligible for priority assessment for advertised vacancies before other applicants and that retrenchment was a last and unavoidable resort. The decisions the Officers took in declining permanent positions, or not applying for permanent positions, or declining trial placements were not unreasonable against the background of their personal circumstances, their aspirations and the 2008 policy. 255For the Listed Officers who gave evidence, the 2011 policy represented a loss of opportunities under the previous 2008 policy, opportunities that they had relied upon, but which to their detriment the 2011 policy removed.

Reduction in opportunities for redeployment 256It was submitted for the PSA that the introduction of the 2011 policy caused unfairness in that it will deny the employees the subject of the proceedings reasonable assistance in seeking redeployment within the public sector. The 2011 policy provides for certain support to be provided with certain assistance during the three months' retention period, namely, priority assessment for vacancies before any other applicants and case management and career transition assistance. That assistance is only available during the three months' retention period and will not be provided after the expiry of the retention period even if the employee remains in Government employment in a temporary position. 257In the case of the employees who are the subject of the proceedings, the retention period commenced in August 2011 and will expire in November 2011. Departments and agencies have confirmed that excess officers will no longer be given priority assessment or case management support after the expiry of the three months' retention period. As a consequence, after November 2011, long serving public servants will be treated as if they are external applicants for employment in the public service and no effort will be made to redeploy or transfer the employees to other positions within the public service or to retrain in order to continue in public sector employment. 258Ms Caldwell said in her evidence, for example, that "an excess officer no longer gets priority assessment after the 3 month retention period." Ms Caldwell said that as of 17 November 2011, which is the end of her three months' retention period, she will "have to compete with everyone else through the merit selection process for permanent positions." Ms Caldwell had not used any part of the 12 months' retention period she was entitled to under the 2008 policy, so that under that policy she would have been entitled to a further period of nine months in employment during which she would have been entitled to assistance in finding a permanent position and if she had been placed in a temporary position during that period that assistance would continue to have been provided. If no position is found for Ms Caldwell before 30 November 2011 when her temporary appointment finishes, she will be retrenched and receive a significantly reduced severance payment compared to that which she was entitled to under the 2008 policy. 259The PSA submitted: An employer acting reasonably will explore all genuine alternative options before retrenchment is considered: see, for example, Shop Distributive & Allied Employees' Association v WD & HO Wills Holdings [2000] NSWIRComm 98 at [66]. Having regard to the serious consequences of forcible retrenchment for the employees the subject of the proceedings..., the capacity of the Government to redeploy employees and the long periods of service of many of the employees, it is unfair and unconscionable for the contracts of employment or overall arrangement whereby the employees perform work to permit the Government to take no steps to redeploy or retrain employees after the expiry of an arbitrary three month period. 260Even if it is accepted the respondents were entitled to unilaterally change the arrangements applicable to the management of excess employees and to do so without any consultation whatsoever, an option not generally open to private sector employers, in the interests of fairness, regard must be had to the consequences for employees. 261Ms Caldwell had an expectation of a period of employment of at least 12 months under the 2008 policy after the expiry of her temporary appointment on 30 November 2011 and valuable assistance in finding a permanent position. She now faces the very real prospect of her employment being terminated after 30 November with a reduced severance payment. The personal consequences for Ms Caldwell were described earlier. 262On any objective analysis, that the arrangement permitted Ms Caldwell to be treated in this fashion was unfair.

Reduced severance payment 263The PSA submitted the 2011 policy caused unfairness because it has significantly reduced severance payments to be paid upon forcible retrenchment and now fails to make provision for a severance payment which is fair and reasonable in the circumstances of the employees the subject of the proceedings. 264In this respect, it was submitted the 2008 policy contained only one method of calculating the severance payment to be paid upon cessation of employment and that was for a notice payment and severance payment of three weeks per year of service up to a maximum of 39 weeks. The employees were never advised that it was proposed to implement forcible retrenchment with a lower payment and were entitled to act on the basis that the severance payment prescribed would be paid. The PSA submitted: The circumstances of public sector employees warrant an appropriate severance payment in the event of forcible retrenchment. The purpose of severance payment is to compensate an employee for the loss of non-transferable benefits and for the inconvenience and hardship imposed by the termination, including the loss of secure employment, the hardships necessarily inherent in retrenchment and the competitive disability of the long term employee as a result of opportunities foregone and the loss of legitimate employment expectations through no fault of the employee: Westfield Holdings v Adams (2001) 114 IR 241 at [144]; English v Aradley Insurance Brokers Pty Ltd (2005) 145 IR 129 at [73]. Public sector employees are particularly affected by loss of the security of employment associated with public sector employment, are likely to suffer particular hardship as a result of the loss of accrued benefits and are likely to encounter particular difficulty in securing comparable alternative employment. This is amply demonstrated by the circumstances of the employees who have been called to give evidence, including as follows: The employees commenced their employment and continued in public sector employment in circumstances in which they were entitled to assume and rely upon the fact that redeployment was the principal means for dealing with excess employees and they would be protected from redundancy. The reliance on redeployment as the primary means for dealing with excess officers was consistent with the long standing principles of a Westminster public service that is based upon an independent career service with security of tenure for officers. The employees had a legitimate expectation of career employment. Many of the employees have given evidence that they were attracted to public sector employment because of the security of employment it offered. For example, Martin Kuskis gives evidence that his public service career was "predicated on the principle that I could remain in employment and pursue a career path" and "one of the reasons I had joined the public service in the first place was that, in my view, it did provide greater security of employment." Vera O'Donovan also gave evidence of having joined the public service because of the increased security of employment that came along with working in the public service. Many of the employees have been employed in the public sector for very considerable periods of time. The dedication of their careers to public sector employment and the specialised nature of public sector work is likely to result in particular difficulty in obtaining comparable employment in the private sector. Many of the employees express great apprehension as to the possibility of securing employment of comparable status or salary in the private sector given that many have little or no private sector employment experience. Forcible retrenchment will also have particular effects upon the superannuation entitlements of the employees, particularly where they have been in public sector employment for many years and are members of defined benefit superannuation schemes. For example, Kerry Brown gives evidence that as a member of the SSS Superannuation Scheme, termination of her employment with 7 years until retirement would result in a loss of approximately $400,000 in superannuation benefits and be devastating for her financial and future security. Rosemary Constable is also a member of the SSS Superannuation Scheme and, if retrenched, would have a pension of less than $50,000 per annum. The particular circumstances of public sector employees have been recognised by the fact that the Employment Protection Regulation scale has never been applied to public servants in New South Wales. The Employment Protection Act 1982 does not apply to the Crown or a public authority. Since the concept of termination of employment by reason of redundancy was introduced to the public sector in the late 1980s, different and superior severance payments have been prescribed. Premier's Memorandum 88-40, Handling of Excess Staff in Public Sector Organisations , Premier's Memorandum 91-23, Restructure of Public Sector - Dealing with Excess Staff and Premier's Memorandum 93-36, Managing Excess Employees provided for the same severance payment in the event of voluntary redundancy or forcible retrenchment. The introduction of Premier's Memorandum M2011-11, Managing Excess Employees Policy causes unfairness because it has significantly reduced severance payments to be paid upon forcible retrenchment and fails to make provision for a severance payment which is fair and reasonable in the circumstances of the employees the subject of the proceedings. 265The respondents submitted the scale of severance payments fixed by the 2011 policy in respect of forcible retrenchment was the scale of severance payments fixed under the Employment Protection Act 1982 and the Employment Protection Regulation and, therefore, the Court could not make a finding of unfairness in that respect: see Payne v Foxboro L & N Pty Limited (1998) 81 IR 404. 266Subject to the observations below, it may be accepted the Court would not find the statutory scale of severance payments per se unfair. The unfairness arises from the unheralded and unilateral reduction in severance payments to the minimum fixed by legislation for the private sector (and unreflective of the norm) in circumstances where employees had a legitimate expectation that if they were forcibly retrenched they would receive the higher payments prescribed by the 2008 policy. 267The respondents referred to my Recommendation of 17 September 2008 in Re Crown Employees (Public Sector - Salaries 2008) Award , Matter No. IRC 445 of 2008, where it was stated: The Commission is of the view that where an employee is made compulsorily redundant after 12 months the retrenchment payment should be fixed at a distinctly lower than what is offered up front, so that it does not reduce the incentive for employees to take early voluntary redundancy and begin the search for other employment". 268That was said in the context of an expectation on the Commission's part that matters concerning the management of excess employees that had not been resolved, including the matter referred to in the Recommendation, would be "the subject of negotiations on managing displaced persons involving the wider public sector, with the union parties being represented by Unions NSW." Those negotiations, if they ever took place, did not resolve the question of severance payments where employees were made forcibly redundant. Instead, the respondents determined the payments unilaterally. That is quite different to providing employees, through their unions, with a voice in any negotiations with the respondents, which is what the Commission had intended. 269I note that the minimum standard provided for in the Employment Protection Regulation has never previously been applied to the public sector. Indeed, s 4(1) of the Employment Protection Act excludes the Crown or a public authority from the definition of employer. Whilst the unfairness may not arise from the application of the minimum statutory standard applying to the private sector, nothing was put by the respondents as to why that standard is now considered appropriate for the public sector. 270There is substance in the PSA's submission that public sector employees are particularly affected by loss of the security of employment associated with public sector employment, are likely to suffer particular hardship as a result of the loss of accrued benefits and are likely to encounter particular difficulty in securing comparable alternative employment. 271It is understandable that the respondents might wish to create a differential between payments for voluntary retrenchment and payments for forcible retrenchment in order to create an incentive for employees to volunteer early for redundancy. However, it would have been far preferable for the differential to have been determined by negotiation and, failing agreement, arbitration by an independent tribunal rather than by unilateral declaration of the employer. 272It would have been relevant to take into account the following considerations: (a) Officers gave evidence that they were attracted to public sector employment because of the security of employment it offered. For example, Mr Kuskis gave evidence that his public service career was "predicated on the principle that I could remain in employment and pursue a career path" and "one of the reasons I had joined the public service in the first place was that, in my view, it did provide greater security of employment." Ms O'Donovan also gave evidence of having joined the public service because of the increased security of employment that came with working in the public service. (b) A number of the officers who gave evidence have been employed in the public sector for considerable periods of time (Ms Sherlaimoff, 30 years). The dedication of their careers to public sector employment and the specialised nature of public sector work is likely to result in particular difficulty in obtaining comparable employment in the private sector. Officers expressed apprehension as to the possibility of securing employment of comparable status or salary in the private sector given that they had little or no private sector employment experience. (c) Forcible retrenchment will also have an adverse effect upon the superannuation entitlements of officers, particularly where they have been in public sector employment for many years and are members of defined benefit superannuation schemes.

Listed Officers who gave evidence - unfairness 273It is appropriate that the Court summarises the circumstances causing unfairness in relation to each of the Listed Officers who gave evidence: (1)Ms K Brown . Ms K Brown has 32 years service and is 48 years of age. She was declared excess on 8 March 2011. On 9 March 2011 Ms Brown was advised that the 2008 policy would be applied to her. Ms Brown's understanding was that the terms of the 2008 policy formed part of her conditions of employment as an excess officer. On 28 June 2011 Ms Brown received a letter advising her of the 2011 policy. A copy of the policy was attached to the letter. Ms Brown declined the voluntary redundancy offers. Ms Brown was not consulted or notified prior to the announcement of the 2011 policy. As at 30 September 2011 Ms Brown had 297 days remaining of her retention period under the 2008 policy. Ms Brown is currently in temporary employment until 16 December 2011. Under the 2008 policy Ms Brown would have had access to 297 days retention period following the expiry of her temporary appointment. Ms Brown will also lose access to valuable assistance during the period of her temporary appointment to find a permanent appointment. Ms Brown is in the SSS Superannuation Scheme and has seven years to go until retirement age. If she is forcibly retrenched before retirement age at 55 she will suffer a loss of benefits. Ms Brown estimated that to be $400,000, but the Court has serious reservations about that being an accurate figure. Ms Brown will also suffer a reduced severance payment upon forcible retrenchment, from a maximum of 52 weeks to a maximum of 21 weeks' pay. (2) Ms L Brown . Ms L Brown has 10 years' service and is 51 years of age. She was declared excess on 30 September 2009. Ms Brown was advised that the 2008 policy would be applied to her. Ms Brown relied on what the policy said about the retention period, voluntary redundancy and other entitlements. On 23 June 2011 Ms Brown received a letter advising her of the 2011 policy. A copy of the policy was attached to the letter. This was the first time Ms Brown became aware of the 2011 policy. Ms Brown declined the voluntary redundancy offers. As at 30 September 2011 Ms Brown had 365 days remaining of her retention period under the 2008 policy. Ms Brown is currently in temporary employment until 30 June 2013. Under the 2008 policy Ms Brown would have had access to 365 days retention period following the expiry of her temporary appointment. Ms Brown will also lose access to valuable assistance during the period of her temporary appointment to find a permanent appointment. Ms Brown was doubtful that she would be able to gain meaningful employment outside the public sector in Kempsey. Ms Brown is part of the SASS superannuation scheme. The consequent reduction in super contributions, given that the SASS scheme is a defined benefit scheme, means that there will be a significant reduction in the amount payable upon maturation. This will impact negatively upon Ms Brown's retirement plans. (3) Ms J Caldwell. Ms Caldwell has 18 years' service and is 47 years of age. Ms Caldwell was declared excess on 9 June 2010. On 6 August 2010 Ms Caldwell was advised that the 2008 policy would apply to her. Ms Caldwell relied upon the information set out in the 2008 policy, which formed, in her mind, her entitlements and obligations as an excess officer. On 23 June 2011 Ms Caldwell received a letter advising her of the 2011 policy. A copy of the policy was attached to the letter. Ms Caldwell declined the voluntary redundancy offers. As at 30 September 2011, Ms Caldwell had 365 days remaining of her retention period under the 2008 policy. Ms Caldwell's temporary appointment expires on 30 November 2011. Under the 2008 policy Ms Caldwell would have had access to 365 days retention period following the expiry of her temporary appointment. Ms Caldwell will also lose access to valuable assistance during the period of her temporary appointment to find a permanent appointment. If Ms Caldwell was forcibly retrenched from the public service it is more than likely that she would not be able to afford her mortgage payments and would be forced to sell her house. If she took a voluntary redundancy package, most of it would have to go into her mortgage repayments and she would have little left to live on. Ms Caldwell will also suffer a reduction in potential superannuation benefits (4) Ms R Constable . Ms Constable has three years' service (although she commenced as a teacher in 1979) and is 54 years of age. Ms Constable was declared excess on 3 August 2011. Ms Constable was previously advised that the 2008 policy would apply to her. Ms Constable relied upon the conditions as outlined to her by the Department and as set out in the 2008 policy. Ms Constable made decisions in relation to job opportunities based on what she understood to be her entitlements under the 2008 policy. On 28 June 2011 Ms Constable received an email advising her of the 2011 policy. The policy was attached to the email. Ms Constable declined the voluntary redundancy offers. Ms Constable has no days remaining of a retention period under the 2008 policy. Ms Constable's temporary appointment expires on 26 January 2012. Ms Constable would lose access to valuable assistance, including priority access to positions, to find a permanent appointment during her temporary placement. She gave up her right to return to teaching in 2008. Ms Constable did not think she would lose her status as a permanent employee and be left with nothing at all. If Ms Constable is retrenched she cannot work in the Government again for another 25 weeks. If she is out of the work force, particularly away from technology, it is hard to keep up relevance in a cutting edge unit such as where she works currently and would find it very hard to return. If she was to return to permanent teaching again, Ms Constable would have to go to the bottom of the priority list as a teacher and would also have to obtain special approval to teach as she has been out of schools for more than five years. Ms Constable would have to gain accreditation through the Institute of Teachers which takes more than two years. Ms Constable has only have five years left before she had intended to retire. Ms Constable was intending to remain in the Public Service until the age of 60 as she is in the SSS Superannuation Fund. Forced retrenchment would have "an absolutely devastating effect on my superannuation payments and the pension I would receive would be approximately $50,000 per annum less." Ms Constable is the main breadwinner for her family. If she was to take voluntary redundancy now Ms Constable would lose a large amount of her expected income which she needs to support her family now and into retirement. (5) Ms C Jenkins . Ms Jenkins has 13 years' service and is 52 years of age. Ms Jenkins was declared excess on 27 July 2009. At the time, because of her position, Ms Jenkins was familiar with the 2008 policy. The 2008 policy was applied to Ms Jenkins. Ms Jenkins was advised that if she managed to get secondments at her substantive grade of Clerk Grade 9-10 "then the clock stops ticking" on the retention period. In addition, when she joined Ageing, Disability and Home Care ("ADHC") on 11 May 2011 on a secondment, one of the reasons that she took the role was as the Department of Premier and Cabinet agreed that the "clock would stop ticking". This ceased to be the case soon afterwards. On 28 June 2011, Ms Jenkins received a letter advising her of the 2011 policy. A copy of the policy was attached to the letter. Ms Jenkins declined the voluntary redundancy offers. Ms Jenkins had 90 days remaining of her retention period under the 2008 policy. Ms Jenkins' temporary appointment expires on 30 June 2012. Under the 2008 policy Ms Jenkins would have had access to 90 days' retention period following the expiry of her temporary appointment. Ms Caldwell would also lose access to valuable assistance during the period of her temporary appointment to find a permanent position. Forcible retrenchment will have an adverse effect on superannuation entitlements. Ms Jenkins would find it difficult to find work in private industry given her age and also as she has no private sector experience. Ms Jenkins main loss would be the accrued promotions and progress that she has made over the last 14 years. (6) Mr M Kuskis . Mr Kuskis has 12 years' service and is 56 years of age. Mr Kuskis was declared excess on 23 January 2009. The 2008 policy was applied to Mr Kuskis. Mr Kuskis relied on the policy. On 23 June 2011, Mr Kuskis was advised the 2011 policy would be applied to him. Mr Kuskis declined the offers of voluntary redundancy. Mr Kuskis had 334 days of his retention period remaining under the 2008 policy as at 30 September 2011. Mr Kuskis' temporary placement expired on 28 October 2011. Under the 2008 policy Mr Kuskis would have had access to 334 days' retention period following the expiry of his temporary appointment during which time he would have received valuable assistance in finding a permanent placement. Mr Kuskis would suffer significant financial detriment if he were to be forcibly retrenched in regard to the reduced redundancy payment compared to the voluntary redundancy payment that he would have received under the 2008 policy. He is in the process of paying off two investment properties and he depends heavily on continuing to receive a salary around his current level. At his age Mr Kuskis feels that he would be very unlikely to secure a position in the private sector in his area of expertise. (7) Ms T MacDonald . Ms MacDonald has four years' service and is 43 years of age. Ms MacDonald was declared excess on 1 November 2010. Ms MacDonald was advised of the 2008 policy and that it applied to her. Ms MacDonald relied on the terms of the policy. On 23 June 2011, Ms MacDonald was advised the 2011 policy would be applied to her. Ms MacDonald declined the offers of voluntary redundancy. As at 30 September 2011 Ms MacDonald had 365 days remaining of her retention period under the 2008 policy. Ms MacDonald's temporary placement expires on 30 June 2013. Under the 2008 policy Ms MacDonald would have had access to 365 days' retention period following the expiry of her temporary appointment. Ms MacDonald would also lose access to valuable assistance during the period of her temporary appointment to find a permanent position. If Ms MacDonald was forcibly retrenched it is most likely that she would not be able to afford her mortgage repayments or her novated lease repayments on her car and she would be forced to sell her house and/or her car. There is extremely high unemployment in the area that Ms MacDonald lives in and therefore very little work opportunities outside the public service, especially for somebody with her qualifications, as she has a PhD in Wetland Ecology. (8) Ms V O'Donovan . Ms O'Donovan has nine years' service and is 34 years of age. Ms O'Donovan was declared excess on 9 June 2010. Ms O'Donovan was advised of the 2008 policy and that it applied to her. Ms O'Donovan relied upon the protections for excess employees in the 2008 policy. She also agreed to relinquish her position on the understanding she could not be forcibly retrenched . On 23 June 2011, Ms O'Donovan was advised the 2011 policy would be applied to her. Ms O'Donovan declined the offers of voluntary redundancy. As at 30 September 2011 Ms O'Donovan had 365 days remaining of her retention period under the 2008 policy. Ms O'Donovan's temporary placement expires on 8 June 2012. Under the 2008 policy Ms O'Donovan would have had access to 365 days' retention period following the expiry of her temporary appointment. Ms O'Donovan would also lose access to valuable assistance during the period of her temporary appointment to find a permanent position. It would be very difficult for Ms O'Donovan to get any positions outside the public service with her qualifications, skills and expertise. The effect upon her if she was forcibly retrenched would be devastating to Ms O'Donovan's work, what she has achieved through her work is an important and integral part of her life. Her medical treatment is expensive and therefore it would be very difficult for her to manage if she was forcibly retrenched. She has a mortgage on her home. Ms O'Donovan would be reliant on her family for help and support if she was retrenched. (9) Mr R Perry . Mr Perry has 10 years' service and is 38 years of age. Mr Perry was declared excess on 13 November 2008. Mr Perry was advised of the 2008 policy and that it applied to him. Mr Perry totally relied on the advice from the Department as to his entitlements as an excess officer and the contents of the 2008 policy. On 23 June 2011, Mr Perry was advised by letter the 2011 policy would be applied to him. Mr Perry declined the offers of voluntary redundancy. As at 30 September 2011 Mr Perry had 365 days remaining of his retention period under the 2008 policy. Mr Perry's temporary placement expires on 31 December 2015. Under the 2008 policy Mr Perry would have had access to 365 days' retention period following the expiry of his temporary appointment. Mr Perry would also lose access to valuable assistance during the period of his temporary appointment to find a permanent position. The effects of the forced redundancy on Mr Perry include the loss of his secure income and the inability for him to meet financial commitments. He would lose the benefit of accrued long service leave. The release of the 2011 policy and the way that it was introduced without any consultation or even warning or notice caused considerable stress to Mr Perry and he believes it has affected his health. The effect on Mr Perry's health has not been taken into account by the Court. (10) Ms T Sherlaimoff . Ms Sherlaimoff has 30 years' service and is 59 years of age. Ms Sherlaimoff was declared excess on 3 March 2005. Ms Sherlaimoff was never advised the 2008 policy was applied to her but she received a letter in September 2005 which included a website link to the Information Package for Senior Officers - Declaring Displaced Officers Excess and Advising All Excess Officers of Salary Maintenance Review and Provisions , which was the predecessor to the 2008 policy. Ms Sherlaimoff received a letter in October 2005 which included a website link to the Managing Displaced Persons Policy Premier's Department Circular 98-62 another predecessor to the 2008 policy. Ms Sherlaimoff read this Circular. Ms Sherlaimoff also read the 2008 policy. Ms Sherlaimoff was advised that she would be provided with meaningful work until she was placed in a suitable position and that she would be provided with a case manager who would discuss her redeployment options across the public sector. On 28 June 2011, Ms Sherlaimoff was advised by letter that the 2011 policy would be applied to her. Ms Sherlaimoff declined the offers of voluntary redundancy. As at 30 September 2011 Ms Sherlaimoff had no days remaining of any retention period and is not on a temporary placement. Ms Sherlaimoff is currently undertaking useful work at a high school assisting the Principal with preparing the 3 year school plan and evaluating the previous plans and researching new planning structures to apply to the school as a Centre for Excellence. The last three years before retirement are particularly important to Ms Sherlaimoff for determining the final pension in her superannuation scheme. She has enough long service and recreation leave to take her through until the final retirement date, but the 2011 policy precludes her from exiting through normal retirement. (11) Mr P Thompson . Mr Thompson has five years' service and is 64 years of age. Mr Thompson was declared excess on 8 July 2010. Mr Thompson was advised of the 2008 policy and that it applied to him. Mr Thompson relied upon its contents as to what his entitlements, benefits and obligations were as an excess officer, including that the 12 months' retention period would be suspended whilst he was in temporary employment and would only begin to run once his temporary position ended. On 23 June 2011, Mr Thompson was advised by letter the 2011 policy would be applied to him. Mr Thompson declined the offers of voluntary redundancy. As at 30 September 2011 Mr Thompson had 265 days remaining of his retention period under the 2008 policy. Mr Thompson is not in a temporary placement. Under the 2008 policy Mr Thompson would have had access to 265 days' retention period following the expiry of his temporary appointment during which he would have had access to valuable assistance to find a permanent position. As of 24 October 2011 Mr Thompson would have been employed in the public service for five years. He received an estimate of the forced redundancy payout and for him the difference was $6,000. He would receive around $54,000.00 net under a forced retrenchment and $60,000.00 net if he received a full redundancy package. If he is forcibly retrenched this will cause significant economic hardship to him and his family. There are very few employment options for Mr Thompson outside the public service in the Coonabarabran region where he lives. (12) Mr R Towler . Mr Towler has 19 years' service and is 55 years of age. Mr Towler was declared excess on 1 December 2010. Mr Towler was advised of the 2008 policy and that it applied to him. His understanding was that the policy contained his entitlements and obligations as an excess officer. On 24 June 2011, Mr Towler was advised by email the 2011 policy would be applied to him. A copy of the policy was provided. He was not consulted about the 2011 policy. Mr Towler declined the offers of voluntary redundancy under the 2011 policy. As at 30 September 2011 Mr Towler had 152 days remaining of his retention period under the 2008 policy. Mr Towler was in receipt of a redeployment offer at the time of the proceedings. Under the 2008 policy Mr Towler would have had access to 152 days' retention period after 30 September 2011 during which he would have had access to valuable assistance to find a permanent position. Forcible retrenchment at Mr Towler's age with 4 years left before he intended to retire in the SSS Scheme would be devastating to his financial security. The difference at the age of 60 in his projected fortnightly income under the SSS Scheme is $2,175.00 as compared to $1,893.00 per fortnight if he was forcibly retrenched in November 2011. If he was being paid at his substantive salary his fortnightly benefits at age 60 would be $2,962.00. 274I should add to each of these summaries that at the time the Officers were advised that the 2008 policy was to apply to them none of the Officers was advised that the 2008 policy was subject to change, with or without notice. 275It is true that from time to time the Government's policy regarding the management of excess employees has changed over the past 30-odd years. It is evident from Mr D'Adam's evidence regarding the history of the various policies that for much of the time there was an aversion on the part of the government in power to forced redundancies and that the emphasis was on redeployment. This reflected, in my opinion, the career nature of public sector employment and the desire on the part of governments to maintain the concept of secure employment. 276It obviously became apparent by about 2003 that a policy of no forced redundancies was not sustainable, however, redeployment remained the principal means for managing displaced employees and no officer was at risk of compulsory redundancy prior to the expiration of a period of 12 months. 277The 2011 policy represented a very significant shift on the part of the Government compared to policies implemented over the previous 30 years. To suggest, as the respondents did, that the policy did not cause detriment to officers defies the evidence. 278There was evidence of Mr Nicod that appeared to challenge evidence elicited by the PSA regarding loss of superannuation benefits to the effect that the losses claimed seemed too high or could not be calculated without serious actuarial input. I should make it clear that I do not necessarily accept the PSA's evidence regarding dollar amounts in this regard. However, it cannot be doubted that the employees whose service will be truncated will incur a loss insofar as superannuation benefits are concerned. 279I indicated earlier that I was not prepared to make a representative order but only orders in respect of the Listed officers who gave evidence. There was evidence given in respect of Mr Romeo Cecchele, but much of that was through Ms Lonergan and her experience in case managing Mr Cecchele since 22 August 2011. Mr Cecchele was displaced on 11 October 2002 from his position of Assistant School Services Officer, Clerk Grade 1/2 and he was declared excess on 3 March 2005. 280The PSA submitted that for "practical reasons" it was not able to provide evidence from Mr Cecchele. In those circumstances, I am not prepared to make orders in respect of Mr Cecchele and he will be treated in the same way as the other Listed officers who did not give evidence.

Conclusions regarding unfairness 281The Court concludes as follows in relation to the issue of unfairness in the PSA matters: (1)The 2008 and 2011 policies constitute part of an overall arrangement whereby each of the Listed Officers who gave evidence performed work in an industry within the meaning of ss 105 and 106 of the IR Act. (2) The overall arrangement was between each of the Listed Officers who gave evidence and the Director of Public Employment, except in the case of Ms Sherlaimoff. (3) In relation to Ms Sherlaimoff, the policy applying to the treatment of displaced persons in 2005 and the 2011 policy constitutes part of an overall arrangement within the meaning of ss 105 and 106 of the IR Act between Ms Sherlaimoff and the Director of Public Employment. (4) That part of the arrangement constituted by the 2011 policy is sought to be imposed on the Listed Officers who gave evidence without consultation or reasonable notice, contrary to past practice. (5) The arrangements permit the employer to unilaterally depart from express promises made to the Listed Officers who gave evidence upon being declared excess that they would be treated in accordance with and afforded the benefits contained in the 2008 policy including the promise of a 12 months' retention period, valuable assistance in finding a permanent position with the public service and a particular level of severance payments in the event of forcible retrenchment. As a consequence, the Officers will suffer a detriment. (6) The arrangements permit Listed Officers who gave evidence to be forcibly retrenched whether or not all practicable steps are made to redeploy the employees and even if there is ongoing work available for the employee to perform or a position into which the employee could be redeployed. As a consequence, the Officers will suffer a detriment. (7) In light of (1)-(6) above, the arrangements were unfair contracts within the meaning of s 105 of the IR Act. 282Finally, on the question of unfairness, I should observe that each of the Listed Officers who gave evidence made clear their objections to the 2011 policy early. There was no opportunism on their part. They faced, no doubt, difficult choices in July and August, but took the view that certain promises had been made to them regarding the application of the 2008 policy. Upon learning of the 2011 policy they took objection to it promptly through their union. There can be no hint or suggestion that the individuals accepted or acquiesced to the 2011 policy in any way by continuing in their employment without signalling their prompt objection to the policy. That has been an important consideration.

Section 56 of the PSEM Act 283The third limb of the PSA's case was that the forcible retrenchment of an employee in accordance with the 2011 policy would be unlawful by reason of non-compliance with s 56 of the PSEM Act. This claim was in the alternative, and it is strictly unnecessary for the Court to deal with it, but given the submissions that have been made regarding this alternative the Court will address it. 284The PSA accepted it was not possible (at this time) to ask the Court to make a final determination as to whether there has been compliance with the requirements of s 56 in the case of any particular employee. That is because, it is not known whether "all practicable steps" have been taken to transfer an excess employee and whether there is "useful work" for the employee to perform. 285Rather, at this time, the PSA seeks a declaration that the services of any of the employees can only be lawfully dispensed with if the requirements of s 56 of the PSEM Act are met, namely, that: The relevant Department Head has determined that he or she is satisfied that the number of officers exceeds the number necessary for the effective, efficient and economical management of the Department's functions. The relevant Department Head has taken all practicable steps to secure a transfer to another Department or public sector service. No useful work can be found for the employee. 286It was submitted there is utility in making the declaration sought in circumstances in which the 2011 policy has no regard to the requirements of the section and the evidence and submissions make clear that the Government proposes to dispense with the services of the employees without having adhered to those requirements. 287In contradiction of that statutory provision, it was submitted the 2011 policy dictates that an excess employee must be forcibly retrenched if not redeployed within the three months' retention period. 288In AJ Mills & Sons Pty Ltd v Transport Workers' Union of New South Wales [2009] NSWIRComm 135; (2009) 187 IR 56 at [55]-[57] reference was made to the rules governing statutory interpretation: [55] In interpreting a statute the courts must determine what parliament meant by the words it used, not what parliament intended to say: Re Bolton & Others; Ex parte Beane [1987] HCA 12; (1987) 162 CLR 514 at 518; Byrne v Australian Airlines Limited [1995] HCA 24; (1995) 185 CLR 410 at 459; Harrison v Melhem [2008] NSWCA 67 per Spigelman CJ at [14] and [16]. [56] The approach to statutory interpretation '(a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses "context" in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means ... one may discern the statute was intended to remedy': CIC Insurance Ltd v Bankstown Football Club Limited [1997] HCA 2; (1997) 187 CLR 384 at 408. See also Project Blue Sky Inc & Others v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [69]; Zoological Parks Board of New South Wales and Australian Workers' Union, New South Wales [2004] NSWIRComm 85; (2004) 135 IR 56 at [44]. 289Section 56 appears in Part 2.8 - Miscellaneous provisions relating to the public service. Section 56 deals with a Department head's power to dispense with excess employees and the conditions under which that may be done. Section 56(1) determines when the section applies. The section applies only if the Department Head has determined that: he or she is satisfied that the number of officers exceeds the number necessary for the effective, efficient and economical management of the Department's functions and taken all practicable steps to secure a transfer of the excess officer to the service of another Department or to any other public sector service. 290Section 56 must be read in conjunction with the provisions in Part 3.2 - Staff mobility of the PSEM Act and in particular Division 1 - Movement of staff within and between public sector agencies. Sections 86 to 91 constitute Division 1. Section 86 deals with temporary staff transfers. It provides for the temporary transfer of a member of staff to the service of another public sector agency with the approval of the heads of the home agency and the host agency. A "member of staff" of a Division is defined to mean "a member of the group of staff comprising the Division (whether employed as an officer, temporary employee, casual employee or in any other capacity)." 291A temporary transfer under s 86 may be made at the request, or with the consent, of the member of staff concerned (an employee-initiated temporary transfer), or at the direction of the head of the home agency (an employer-initiated temporary transfer). A person who transfers to the service of another public sector agency under this section remains an employee of the home agency (s 86(5)) subject to the provisions of ss 86(6), (6A), (6B), (6C), (6D) and (6E). 292Thus, in the case of an employee-initiated transfer, where an officer is temporarily seconded to another agency with the officer's consent for instance, the officer is not transferred to another position in the host agency because the officer retains his or her original position in the home agency. On the respondents' construction of s 56(1)(b) the officer would have two positions, his original position and a new position in the host agency. That would not appear to have been the legislature's intention. An officer who consents to a transfer may be subsequently appointed to a new position by the head of the host agency (s 86(6A)), but that could not be construed as a transfer to a "position" in the host agency. 293Section 87 provides for employer-sponsored permanent transfers. Section 87(3)(b) provides that if the person is employed in a staff position or on a temporary basis, the person is to be transferred to another staff position or to other temporary employment, respectively. An officer is employed in a staff position (s 7(1)(a)). Temporary employees and casual employees are members of staff of, but do not hold positions in, a Department (s 9(5)). 294Section 88(1) provides that a person who is employed in or by a public sector agency may be temporarily assigned to carry out work for another public sector agency. A public sector agency includes a Department. Sections 88(2), (3) and (4) provide: (2) Without limiting subsection (1), any such assignment may be made for the purposes of utilising the person's services in connection with a special project or event or to assist in disaster recovery activities. (3) A person may be temporarily assigned to carry out work for another public sector agency on a full-time or part-time basis. (4) The person's employment in or by a public sector agency (including the continuity of that employment) is not affected by the temporary assignment of the person to carry out work for another public sector agency. 295It is evident that the use of the term "service" in s 56(1)(b) was deliberate in light of the provisions in Division 1 of Part 3.2 of the PSEM Act. The use of the term "service" in s 56(1)(b) connotes something more than occupying a graded and classified "position" (see s 9(3)) in an agency; it has a wider import. 296"Service", as it is defined in the Macquarie Dictionary (online edition, 2011), has numerous meanings, but the most pertinent in the present context are the following: 7. employment in any duties or work for another, a government, etc. ... 9. the duty or work of public servants. 10. the serving of a sovereign, state or government in some official capacity. 297The use of the term "service" in s 56(1)(b) was intended to cater for the different arrangements that might be required in transferring members of staff, including officers. An officer might be temporarily transferred to the service of another public sector agency, but that is not a transfer to another position (s 86). An officer might be permanently transferred to a position in another agency (s 87) and an officer might be temporarily assigned to carry out work for another agency without it affecting his or her position in the home agency (s 88). 298In relation to the phrase "all practicable steps" in s 56(1)(b), I referred earlier to what Black CJ said in Nikolich regarding "every practicable step". Despite the use of "every" rather than "all" what his Honour said is apposite, namely, the obligation to take every practicable step cannot be regarded as an obligation to do something that is unreasonable. Nevertheless, the Department head is obligated to do all that is reasonably capable of being done. 299The obligation is, therefore, an obligation to do all that is reasonably capable of being done to secure a transfer of the excess officer "to the service of another Department or in any other public sector service" consistent with the requirements of Part 3.2. The obligation is not to secure a transfer to another "position". I should add that it is implicit (and explicit in s 87) that the officer being transferred must be capable of undertaking the work that is the subject of the transfer. 300Section 56(2) provides that the Department head may "dispense with the services of any such excess officers who cannot be found useful work in another Department or in any other public sector service." The Department head's obligation in transferring an excess officer is to be carried out in accordance with Part 3.2 of the PSEM Act. Provided the Department head takes all practicable steps open to the Department head under that Part, it seems to me the obligation is fulfilled. Thus, if the Department head takes all reasonable steps to secure a transfer and the other Department or public sector service advises there is no useful work to which the officer might be transferred to undertake and the Department head satisfies himself or herself that is the case, the Department head may, subject to the relevant approval, dispense with the services of the excess officer. 301Under the 2011 policy, the concept of redeployment is limited to "permanent placement in a funded position on an agency's establishment." Employees will be forcibly retrenched if they do not secure a "permanent placement in a funded position" even though there may be "useful work" for the employee to perform for the purposes of s 56 of the PSEM Act. 302For instance, a Department head must take all practicable steps to secure a transfer, including a secondment to the service of another public sector agency that is not a permanent placement (s 86), or a temporary assignment to carry out work for another agency (s 88) that also will not be a permanent placement. In those circumstances, the Department head could not be regarded as taking all practicable steps to secure a transfer if the only step taken was to secure a transfer to a permanent placement in a funded position. 303Under the 2011 policy, any assistance with respect to redeployment will apply only during the three months' retention period and, even if the employee continues in employment in a temporary position, no steps will subsequently be taken to secure a transfer to another position in the public sector. As the PSA submitted, a Department head will not have taken all practicable steps to secure a transfer to another Department or public sector service if, months before it is contemplated the services of an employee will be dispensed with, no such efforts are made. 304I do not propose to make the declarations sought by the PSA because they were sought in the alternative in the event the first two limbs of the PSA's case were unsuccessful. The PSA was successful in the second limb. 305The issue arose as to whether the 2008 policy, including the 12 months' retention period, was inconsistent with s 56. The respondents contended that it was ( Suttling; Public Sector Redundancy Case; Ferdinands ; Grant (No 2) and Lynn ) and, therefore, the Court could not make orders under s 106 inconsistent with s 56 (or s 61). 306This issue is addressed earlier in this judgment and having found s 106 has application to these proceedings notwithstanding s 56 and 61, it becomes unnecessary to consider any inconsistency between the 2008 policy and the relevant provisions of the PSEM Act.

Consideration of ASU's case 307The ASU's application concerned only one individual, Mr Asmar, who was employed by the Maritime Authority of New South Wales. Mr Asmar is 67 years old and a chartered accountant. As noted earlier, s 56 of the PSEM Act did not apply to Mr Asmar's employment. 308The ASU contended that a letter of appointment dated 25 September 2008, expressly incorporated the provisions of the New South Wales Maritime Authority Enterprise Agreement 2007 - 2010 into Mr Asmar's contract of employment. Reference was made to paragraph 3 of the letter, which stated: Your remuneration will be at a rate of $95, 986 per annum (Maritime Officer Level MA15). Conditions of employment are in terms of the New South Wales Maritime Authority Enterprise Agreement 2007 - 2010 and the staff Code of Conduct and Ethics (copy attached). 309The 2007-2010 Enterprise Agreement was superseded by the Maritime Authority of New South Wales Enterprise Agreement 2010 - 2011 , an agreement approved under the IR Act. That Agreement provided in cl 2: Subject to the provision(s) of applicable Government policy and guidelines all full-time or permanent part-time staff of New South Wales Maritime at the time of signing this Agreement will have security of employment for the term of this agreement. This undertaking however extends to staff rather than positions, that is, positions may be restructured or deleted from the structure (Clause 2.2.2) Subject to the provisions of current Government policy, any staff member whose job changes or is deleted during the term of this Agreement may be transferred or redeployed into another position in accordance with applicable Government policy and the guidelines in this Agreement or may be offered the Government's Standard Voluntary Redundancy Package current at the time (Clause 2.2.3) In the event that NSW Maritime is required to undertake a restructuring process which results in a reduction in staff numbers which is not able to be met through natural attrition, the parties agree to make representations to the Government regarding the voluntary redundancy arrangements (Clause 2.2.4). Ongoing consultation with staff and unions will take place with regard to restructuring and the process is to be used (Clause 2.2.4). 310At clause 2.2.4(ii) of the Agreement the reference to the "current Government Policy" is described as the 2008 policy. 311I am unable to accept that reference in a letter to Mr Asmar to the effect that his conditions of employment would be in terms of an enterprise agreement could be construed as an express incorporation of the agreement into Mr Asmar's contract of employment. It does not reflect an intention on the part of the employer that the agreement would form part of the contract. "Conditions of employment" is not necessarily synonymous with a contract of employment. The agreement, which was an industrial instrument, contained numerous employment conditions and stands on its own two feet. The ASU's contention that the Enterprise Agreement was expressly incorporated into the contract of employment encounters the same sort of obstacles addressed in Byrne v Australian Airlines . 312In relation to the second limb of the ASU's case, namely, unfairness, it was undoubtedly the case that the 2008 policy was applied to Mr Asmar in the same way it was applied to the Listed Officers in the PSA's case. The evidence of Mr Grey confirmed this. Mr Asmar's position was declared excess on or about 2 May 2011. The Maritime Authority wrote to Mr Asmar on that date advising him that he had options to consider; namely, whether to seek redeployment or express an interest in an offer of voluntary redundancy. The correspondence attached a copy of the 2008 policy. In further correspondence of 26 May 2011, the Maritime Authority confirmed that Mr Asmar had "elected to seek redeployment". In presenting an overview of the provisions of the policy the correspondence highlighted the operation of the 12 months' retention and salary maintenance period stating "as a last and unavoidable resort you may be made redundant where an alternative position is not found within 12 months of becoming excess." 313On 28 June 2011 an "incentivised voluntary redundancy offer" was made to Mr Asmar. It was put to him that if he refused the offer of voluntary redundancy then he would be subject to the 2011 policy from 1 August 2011. Mr Asmar declined the incentivised offer and the later offer of voluntary redundancy made to him after 1 August 2011. He is now subject to the 2011 policy and is to be forcibly retrenched on or around 19 November 2011 following the expiry of the three months' retention period. 314Mr Asmar said in his statement tendered in the proceedings that the 12 months' retention period under the 2008 policy provided valuable time within which he would have an opportunity to search for job vacancies both within and outside the organisation from a position of relative strength in a competitive job market, namely as an employed professional. The evidence was that Mr Asmar found redeployment to be a less stressful option and that redeployment would also have greater financial benefits than voluntary redundancy. 315Mr Asmar made appropriate use of the 12 months' employment retention and salary maintenance period, using the time to apply for government and other positions. Mr Asmar received notification on 22 September 2011 that he has been unsuccessful in applying for a position as Risk and Insurance Coordinator with Auburn Council. Mr Asmar's efforts to make valuable use of the redeployment and retention period was corroborated by Mr Grey: Mr Asmar has actively participated in his attempts to gain another role and to enhance his skills. 316In his statement Mr Asmar said: Job security was a significant reason for me moving into the public sector. While I was deeply disappointed to be declared an excess employee earlier this year, the limited continuing 12 month retention period was a valuable entitlement which I took into account when accepting the offer of May 2011 [redeployment]. Financially I am not ready for retirement, I have significant commitments in supporting members of my family and will be financially disadvantaged if I am forcibly redundant under the 2011 Managing Excess Employees Policy. Mr Asmar was not required for cross-examination. 317Mr Asmar is in a similar position, in my opinion, to the PSA's Listed Officers in determining whether the arrangement constituted by the 2008 policy and the 2011 policy was an unfair contract within the meaning of s 105 of the IR Act. In summary: Mr H Asmar . Mr Asmar was appointed to the position of Risk Manager Corporate Services Division at the Maritime Authority on 25 September 2008. He is 67 years of age. Mr Asmar was declared excess on 2 May 2011. Mr Asmar was advised of the 2008 policy and that it applied to him. Mr Asmar considered the policy applied to him. On 28 June 2011, Mr Asmar was advised the 2011 policy would be applied to him. A copy of the policy was provided. He was not consulted about the 2011 policy. Mr Asmar declined the offers of voluntary redundancy. As at 30 September 2011 Mr Asmar had 214 days remaining of his retention period under the 2008 policy. Mr Asmar is currently within the three months' retention period under the 2011 policy and unless a position is found for him he will be forcibly retrenched on or about 19 November 2011. Under the 2008 policy Mr Asmar would have had access to 214 days' retention period after 30 September 2011 during which he would have had access to valuable assistance to find a permanent position. Forcible retrenchment will cause Mr Asmar financial disadvantage. 318Accordingly, I find: (1) The 2008 and 2011 policies constituted part of an overall arrangement whereby Mr Asmar performed work in an industry within the meaning of ss 105 and 106 of the IR Act between Mr Asmar and the Maritime Authority of New South Wales (2) That part of the arrangement constituted by the 2011 policy was sought to be imposed on Mr Asmar without consultation or reasonable notice. (3) The arrangement permits the employer to unilaterally depart from express promises made to Mr Asmar upon being declared excess that he would be treated in accordance with and afforded the benefits contained in the 2008 policy including the promise of a 12 months' retention period, valuable assistance in finding a permanent position and a particular level of severance payments in the event of forcible retrenchment. As a consequence, Mr Asmar will suffer a detriment. (4) In light of (1)-(3) above, the arrangement was unfair.

Form of relief 319Section 106(1) and (5) of the IR Act provide: (1) The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract. ... (5) In making an order under this section, the Commission may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Commission considers just in the circumstances of the case. 320The Court intends to make orders declaring the relevant contracts unfair and to vary the contracts of the Listed Officers who gave evidence and that of Mr Asmar, to remedy the unfairness. In doing so, the Court will give consideration to the alternative orders sought by the applicants regarding compensation. 321However, before doing so the Court will provide the parties with an opportunity to confer on the form of any orders in light of this judgment.

Orders and directions 322The Court makes the following orders: (1) Orders (1) and (2) of the PSA's amended orders that were Exhibit 2 in the proceedings are refused. (2) Orders (1) and (2) of the orders sought in the ASU's application filed on 13 September 2011 are refused. (3) Costs are reserved. 323The Court makes the following directions: (1) The parties shall confer on the form of orders to be made under s 106 of the Industrial Relations Act 1996 in light of this judgment. The applicants shall file the short minutes of order they seek (whether by consent or otherwise) by 4.00pm on Friday 18 November 2011. (2) The relevant parties shall confer on the implications of this judgment for those 20 Listed Officers who did not give evidence in the proceedings to which this judgment relates. (3) The parties shall confer on the question of costs. (4) If there is agreement in relation to (2) and (3) hereof the parties shall file the agreed terms by 4.00pm on Friday 18 November 2011. If there is disagreement, the parties shall file an outline of their respective positions by 4.00pm on Friday 18 November 2011. (5) The parties shall report to the Court on the outcome of their discussions at 9.30am on Monday 21 November 2011.

Appendix A | Appendix B 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. Decision last updated: 11 November 2011

Industrial and Employee Relations Act 1994(SA)

Health Services Act 1997 Industrial and Employee Relations Act 1994 (SA) Industrial Arbitration Act 1940 Industrial Relations Act 1991 Industrial Relations Act 1996 Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 Police Act 1998 (SA) Prisons Act 1952 Public Sector Employment and Management Act 2002 Public Sector Management Act 1988 Public Service Act 1979 Teaching Service Act 1980 Cases Cited: AJ Mills & Sons Pty Ltd v Transport Workers' Union of New South Wales [2009] NSWIRComm 135; (2009) 187 IR 56 Ajax Cooke Pty Ltd t/as Ajax Spurway Fasteners v Nugent (Supreme Court of Victoria, Phillips J, 29 November 1993, unreported) Banas v State of New South Wales [2003] NSWIRComm 317 Bowman v Ricegrowers Ltd (formerly Ricegrowers' Co-operative Ltd) [2007] NSWIRComm 204; (2007) 167 IR 325 Butler v Attorney-General (Vic) [1961] HCA 32; (1961) 106 CLR 268 Byrne & Frew v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 Crown Employees Lands Officer (Department of Lands) Award, Re (1992) 40 IR 120 Crown in Right of the State of New South Wales (Director-General, NSW Department of Health) in respect of Sydney West Area Health Service v New South Wales Nurses' Association [2011] NSWIRComm 111 Director-General of Education v Suttling [1987] HCA 3; (1987) 162 CLR 427 Ferdinands v Commissioner for the Public Employment [2006] HCA 5; (2006) 225 CLR 130 Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8: (2002) 209 CLR 95 Gillies v Health Administration Corporation [2003] NSWIRComm 243 Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120; (2007) 163 FCR 62 Government Cleaning Service (Privatisation) Award, Re (1993) 54 IR 112 Grant v State of New South Wales (No 2) (1991) 48 IR 314 Health Administration Corporation v Crocker [2004] NSWIRComm 163; (2004) 138 IR 147 Holly v Director of Public Works (1988) 14 NSWLR 140; (1988) 28 IR 270 Ioannou v Fowell (1982) 63 FLR 170 In the matter of ACN 050 541 047 Ltd [2002] NSWSC 586 Jarratt v Commissioner of Police for New South Wales [2005] HCA 50; (2005) 224 CLR 44 Lee v GEC Plessey Telecommunications [1993] IRLR 383 Martin v National Textiles Limited (unreported, Schmidt J, IRC 98/5100, 21 February 2000) Ministry of Education & Youth Affairs v New South Wales Teachers Federation (1990) 32 IR 390 Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 New South Wales Teachers Federation and Director-General of Education and Training (No 2) [2008] NSWIRComm 218 Payne v Foxboro L & N Pty Limited (1998) 81 IR 404 Plaintiff M70/2011 v Minister for Immigration and Citizenship; Plaintiff M106/2011 v Minister for Immigration and Citizenship [2011] HCA 32; (2011) 280 ALR 18 Prince v North Coast Area Health Service [2006] NSWIRComm 398; (2006) 160 IR 134 Public Employment Industrial Relations Authority v Health & Research Employees' Association (NSW) (1994) 54 IR 162 Public Service Association (NSW) v Industrial Commission of NSW [1985] 1 NSWLR 627; (1985) 11 IR 420 Reynolds v Southcorp Wines Pty Ltd [2002] FCA 712; (2002) 122 FCR 301 Riverwood International Australia Pty Ltd v McCormick [2000] FCA 889; (2000) 177 ALR 193 Robert William Lynn v Gary Byron [1995] NSWIRComm 278 Silver v Dome Resources NL [2007] NSWSC 455 State of New South Wales v Banas [2004] NSWIRComm 255; (2004) 137 IR 63 Stilk v Myrick (1809) 170 ER 1168 Sydney Water Corporation Ltd v Industrial Relations Commission of NSW [2004] NSWCA 436; (2004) 61 NSWLR 661; (2004) 141 IR 14 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 Virtue v New South Wales Department of Education and Training (1999) 92 IR 428 Williams v Roffey Brothers & Nicholls (Contractors) Ltd [1991] 1 QB 1 Willis v Health Communications Network Ltd [2007] NSWCA 313; (2007) 167 IR 425 Yousif v Commonwealth Bank of Australia [2010] FCAFC 8; (2010) 193 IR 212 Texts Cited: "Aspects of Public Sector Employment Law", (Law Book Company, 1988) Professor G J McCarry Category: Principal judgment Parties: Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales (Applicant in IRC2011/1286 and 1376) Australian Services Union of N.S.W (Applicant in IRC2011/1497) Director of Public Employment (Respondent in IRC2011/1286, 1376) Maritime Authority of New South Wales (Respondent in IRC2011/1497) State of New South Wales (Respondent in IRC2011/1497) Unions NSW (Intervenor in all matters) Representation: Mr M Gibian of counsel (Applicant in IRC2011/1286 and 1376) W G McNally Jones Staff Lawyers

[1995] NSWIRComm 278

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