Work in an industry
45In responding to the applicant's contentions, the respondent submitted that Dr Hookey did not perform work in an "industry". "Industry" is defined in s 7 of the IR Act to include:
(a) any trade, manufacture, business, project or occupation in which persons work, or
(b) a part of an industry or a number of industries.
46The respondent submitted that whilst the word "industry", including as it does "any ... occupation in which persons work", is broadly defined, it ought not to be construed so as to include a person holding an "office" as being a person performing work in an "occupation". Reliance was placed on Grant v State of New South Wales (No 2) (1991) 48 IR 314.
47Grant concerned an application under s 88F of the Industrial Arbitration Act 1940 (a predecessor provision of s 106 of the IR Act) by a person who was a Commissioner and Deputy Chairman of the New South Wales Corrective Services Commission under the Prisons Act 1952. The appointment as Commissioner was for a term of seven years, whilst the appointment as Deputy Chairman was for an unspecified period. The Prisons Act was amended in 1988 and the Commission was abolished. Consequently, the offices of Commissioner and Deputy Chairman of the Commission were also abolished.
48At first instance it was concluded that the 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. It was held the loss of statutory office by the applicant could not be categorised under s 88F as unfair, harsh or unconscionable or against the public interest. That conclusion followed as a matter of jurisdiction. Where at law the Crown is not required to pay compensation to an office holder whose office is abolished by statute or provide him with alternative employment and does not do so such actions cannot be categorised as unfair, harsh or unconscionable or against the public interest within the meaning of s 88F.
49On appeal, Hill J (Maidment and Sweeney JJ concurring on this point) was inclined to the view that, at least as to some aspects, the relationship between the Crown and a Crown servant who was the holder of a public office was an arrangement within the definition of a "contract" in s 88F. His Honour referred to Gould v Stuart [1896] AC 575 at 577; Reilly v The King [1934] AC 176 at 179; Carey v The Commonwealth (1921) 30 CLR 132 at 137; Lucy v The Commonwealth (1923) 33 CLR 229 at 237, 249 and 253 and Magrath v Geddes [1933] HCA 57; (1933) 34 SR (NSW) 25 and Morgan v Geddes (1933) 50 CLR 520. However, his Honour went on to state at 321-322:
[A] substantial question arises whether the arrangement was one whereby work was performed, that is, that the work performed by Mr Grant as Commissioner (and Deputy Chairman), was as a consequence of or in fulfilment of the arrangement. In terms of the substance of the matter the work performed by him was governed by and directly consequent upon the provisions of the statute and his appointment thereunder and not upon the arrangement itself. Furthermore, there is in my view some real doubt, even if there was an arrangement whereby work was performed, that the work was performed in any industry as required by the section.
50His Honour continued at 322:
The words [i.e. the definition of "industry"] do not seem apposite to encompass the exercise or [sic] powers, duties and functions attached to the statutory office of Commissioner for Corrective Services established by the Prisons Act 1952.
However, since these issues were not argued before Cahill V-P or on appeal, I do not express any concluded view on them.
51In his reasons for decision, Sweeney J held at 338-339
It may be that there was some arrangement between Mr Grant and the State of New South Wales separate and distinct from the appointment to the two statutory offices. Even if there was such an arrangement I cannot see how it could be an "arrangement ... whereby a person performs work in any industry". It seems to me that the work was performed by Mr Grant pursuant to his statutory appointments and not pursuant to any such arrangements.
For these reasons and the reasons set out by Hill J, I am of the opinion that the Commission does not have jurisdiction to grant the relief sought. I would dismiss the appeal on the basis of lack of jurisdiction.
52The definition of "industry" considered in Grant was narrower than that now appearing in the IR Act. At the time Grant was decided "industry" was defined in s 5 of the 1940 Act to mean:
... craft, occupation or calling in which persons of either sex are employed for hire or reward, and unless otherwise indicated by the context or any provisions of this Act any division of an industry or combination, arrangement or grouping or industries.
53Nevertheless, counsel for the respondent submitted:
[T]he conclusion of Hill and Sweeney JJ that Mr Grant did not perform work in an industry carries no less force when regard is had to the current definition of "industry" in the IR Act. Further, in addition to the above, in enacting s 106 the Legislature would not be found to have intended to empower the Court to not only to vary but to declare void ab initio or from some other time "contract[s]" relating to the holding of important statutory offices: Grant at 326; Ferdinands v Commissioner for Public Employment (2006) 225 CLR 130.
54Counsel for the respondent further submitted that even assuming the Court has jurisdiction in the present matter, the Court would not make an order or declaration that was inconsistent with or derogated from particular matters provided for separately under the Mental Health Act pursuant to which Dr Hookey held office. Reference was again made to Grant where Hill J (Sweeney J concurring) held at 326-327:
In the circumstances s 88F of the Industrial Arbitration Act 1940 cannot, in my opinion, be construed as extending to a case such as the present. Its general provisions must be construed having regard to the provisions and the intention of the special legislation which governs the subject matter of any contract or arrangement which exists in this case. In the result there is no jurisdiction under the section to deal with the present application.
...
Indeed, the application in general of s 88F to a contract or arrangement relating to an important office of the Crown, appointment to and removal from which is governed directly by special legislation, as is the case here, is in my opinion doubtful.
...
It is difficult to conceive for example that under general legislation such as s 88F the Parliament intended that the Commission... would have power to make orders avoiding or varying ab initio, in whole or in part , contracts or arrangements concerning the appointment to and the holding of important statutory offices under specific legislation prescribing, directly or indirectly, the major and substantial terms and conditions of service including those governing the appointment itself, the period of tenure, the remuneration and the loss or vacation of office.
In the present case the Prisons Act 1952 would, in my opinion preclude any effective variation, let alone avoidance, going to any aspect of the relationship regulated directly or indirectly by the statute. ... Certainly the Commission could not make an order having any effective operation declaring any such contract or arrangement wholly void ab initio in so far as it related to the appointment itself, the holding of the office and the terms of service regulated by the Act. Any such order would be futile. Furthermore, I am of the view that if the terms of any such contract or arrangement purported to fetter, qualify or control the proper exercise of any of the rights and/or duties vested in the executive by the legislation they would be invalid as being at variance with the statute and contrary to public policy.
55Hill J dismissed the appeal principally on the basis that there was no jurisdiction under s 88F to deal with the application because the Prisons Act and the Statutory and Other Offices Remuneration Act 1975, with their special provisions that created and abolished the statutory office and which dealt with the question of compensation, prevailed over the general provisions of the Industrial Arbitration Act. Maidment J was of the opinion that the relationship between the appellant and the Crown was an arrangement and one whereby Mr Grant performed work in an industry, namely, "the work performed in the execution of the offices held by him." Maidment J was of the view that the making of an order under s 88F that provided the appellant with compensation for the loss suffered by him would not be inconsistent with, or repugnant to, the statutory provisions which governed the holding of and abolition of the offices the appellant held (at 337). It would appear his Honour came to this view on the basis that the Prisons Act did not contemplate the statutory abolition of the office of Commissioner and consequently the terms of that Act did not address themselves to the entitlements of the office holder upon abolition of the office (at 336).
56Maidment J held the arrangement was unfair and that he would uphold the appeal. Sweeney J essentially agreed with Hill J.
57There is no question that Dr Hookey performed work; he did so as a part-time member of the MHRT. The question is whether he performed work in any industry. The definition of "industry" in s 7(a) of the IR Act was characterised at [37] of Fish as "very wide".
58In Caterpillar of Australia Pty Ltd v Industrial Court of New South Wales [2009] NSWCA 83; (2009) 181 CLR 286, Spigelman CJ (with whom Allsop P and Tobias JA agreed) held that s 106 must be interpreted in its industrial context (at [100] and [113]). At [105] his Honour stated:
[105] ... The reasoning in Fish, Batterham and Old UGC requires the Court to read the critical phrase - "whereby a person performs work in any industry' - as not extending beyond a context which can reasonably be characterised as "industrial".
59His Honour also observed:
[99] The IR Act, including the whole of Ch 2, is not concerned to regulate multi-million dollar investments or relationships which cannot be seen to involve anything analogous to the employer/employee relationship that lies at the heart of the concept of an "industrial" matter.
[100] It is in this industrial context that the particular phrase in s 106 must be interpreted. The High Court proceeded to do so in an extended analysis which, subject to consideration of s 106(2A) subsequently inserted, must form the basis for determining the jurisdictional issue before this Court.
...
[140] Messrs Gough and Gilmour conducted an enterprise in which they were the only investors and occupied the senior managerial positions. They were entrepreneurs who conducted a business of significant scale, involving tens of millions of dollars of capital investment, with 700 employees, over a score of business locations. No doubt they worked. They did not, however, 'perform work in an industry' "according to" the Dealership Agreements or the Overall Arrangement, within the meaning of s 106 of the Act.
...
[142] In the context of a business of this scale, the range of activities to be undertaken by Messrs Gough and Gilmour, as envisaged by or required by the Dealership Agreements or the Overall Arrangement, was devoid of any "industrial" content. Insofar as their activities could be said to constitute "work" within s 106(1), neither those Agreements nor that Arrangement can be said to be, or to be included in, the contract or arrangement "whereby" that work was done.
60Dr Hookey, of course, was not involved in a senior managerial position in a large commercial enterprise. Nevertheless, the question is whether his work may be characterised as "industrial" or analogous to an employer/employee relationship that, as Spigelman CJ observed in Caterpillar , lies at the heart of the concept of an "industrial" matter.
61There does exist indicia that would suggest that the relationship between Dr Hookey and the respondent was analogous to an employer/employee relationship and, therefore, the work he performed could be regarded as "industrial" for the purpose of ss 105 and 106 of the IR Act. For example, Dr Hookey:
(a) was selected for the position on the Tribunal following an interview process;
(b) worked for reward in the capacity of part-time member of the MHRT;
(c) complied with the terms, conditions and policies as formulated and implemented or imposed by the MHRT itself, including the MHRT Members' Manual; and
(d) complied with the terms and conditions as formulated and implemented or imposed from time to time by government policy (as distinct from the operation of the Mental Health Act , and any policy of the MHRT)
In addition, there were a number of indicia one normally associates with the task of identifying whether an individual was an employee or independent contractor that pointed in the direction of an employment relationship between Dr Hookey and the respondent. These are addressed later in this judgment.
62In Caterpillar, the Court of Appeal considered whether Dealership Agreements were contracts whereby work was performed. At first instance and on appeal in the Industrial Court the facts as found (findings not overturned in the Court of Appeal) included that: under those Agreements the Dealer Principals were required to use their qualifications and abilities to achieve the purpose of the Dealership Agreements - to develop and promote the sale of products, to provide high standards of service and to continue in the active management of the business; the Dealer Principals were required to actively participate in the management of the business of their company, Gough & Gilmour Holdings Pty Limited; Messrs Gough and Gilmour as managers and as Dealer Principals did work in accordance with the terms of the Sales and Service Agreement and parallel terms; Messrs Gough and Gilmour were not only Dealer Principals and managers but pivotal workers in the business on a day to day basis; they performed work in a managerial capacity and at a practical level (see Caterpillar at [49]).
63Notwithstanding these findings, it was held that the Dealership Agreements were not contracts whereby the Dealer Principals performed work. It was further held the Dealership Agreements were "devoid" of any "industrial" content and that "[i]nsofar as their [the Dealer Principals] activities could be said to constitute 'work' within s 106(1), neither those Agreements nor that Arrangement [the Overall Arrangement] can be said to be, or to be included in, the contract or arrangement 'whereby' that work was done" (at [142]).
64Spigelman CJ stated at [124]:
[124] When determining which contract or arrangement satisfied the "hinge" word of "whereby", the industrial context of the legislative scheme remains significant. The identification of which of more than one possible contract or arrangement is or includes the contract or arrangement "according to" or "in accordance with" or "in fulfilment of" or "in consequence of" which work was performed, must have regard to the scope and purpose of the legislative scheme. Issues of fact and degree will arise. However, by reason of the industrial context, the further away the relevant contract is from something resembling an employer/employee relationship, the less likely it is that it satisfies the statutory "hinge".
65The other case of Fish involved the question of whether a share purchase agreement constituted a contract whereby work was performed in any industry. At [42]-[43] the joint judgment said:
[42] The share purchase agreement made by Nisha and Mr Fish stipulated that Mr Fish's entering an employment contract with Solution 6 Holdings was a condition precedent to completion of the share purchase. ... The employment agreement that was made and the share purchase agreement were therefore related and one may well be described as collateral to the other.
[43] After the two agreements were made and the share purchase agreement was completed, Mr Fish performed work in an industry. But when one asks what was the 'contract' whereby he performed that work, the answer does not include the share purchase agreement. ...