Was the defendant entitled to unilaterally change the location of the plaintiff's workplace?
- The plaintiff argues that the employment contract expressly provides for the location of the workplace and that it is an essential term of the contract. He says that the effect of the Award is to provide for a minimum set of conditions for the employee but that it did not prevent the parties from agreeing to terms that are more advantageous to the employee. The location provision in the contract, the plaintiff argues, is more favourable to the plaintiff than the mobility provisions of the Award because it does not allow unilateral changes to be made by the employer, whereas the Award does.
- The defendant accepts that the Award does not form part of the contract by implication but says that it and the employment contract operate separately but parallel to each other, with the terms of the Award overlaying the contract in the background.
- The meaning of terms of contractual documents 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: Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 457 at [22]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40].
- The factual background to the entry into the employment contract includes that the plaintiff was already employed in a permanent full-time position as a disability support worker at the Rickard Street Group Home from 2011 when he was offered the position at the Wheeler Street Group Home. The offer of employment was made by letter dated 17 January 2013 [3] . It was said to have been a "permanent transfer" pursuant to s 87(2) of the Public Sector Employment & Management Act 2002 (NSW) [4] . That provision empowered the head of a public sector agency to transfer a member of staff of the agency to another position or other employment within the agency following consultation with the member of staff.
- The position offered was disability support worker, a position already held by the plaintiff. The "transfer", then, was to a different location.
- The letter itself referred to a "permanent transfer" as "stated above". As I have observed in the factual background, the details of the position and conditions of the employment included the location which was given as "Carlton GH 13 Wheeler St, Metro South Region". Given that the plaintiff had moved between locations including the Rickard Street Group Home and the Wheeler Street Group Home, I infer that those were both within the same administrative district of FACS for the services provided at those homes.
- The offer of a new employment contract with a change of location from Rickard Street to Carlton was inconsistent with the mobility provision in the Award. That provision is based on the express premise that employees are recruited to a District, not a unit (i.e. they are not recruited, or employed, at specific group homes). I will return to the effect of that inconsistency later in these reasons. It is sufficient for present purposes to note that the contract of employment contained an express condition specifying the Wheeler Street Group Home as the location of employment.
- Against the background of the plaintiff's current work at the time of the offer it is apparent that the critical change was the location of his work. This makes it clear that it was an essential term of the contract that the work was to be carried out at the Wheeler Street Group Home. The terms of the contract pursuant to which the plaintiff first started working on a full-time permanent basis at the Wheeler Street Group Home remained the same when his employment was transferred from the New South Wales government to the defendant upon privatisation of the government's disability services.
- The next question is whether the mobility provision in the Award gave the defendant the right to change the plaintiff's work location unilaterally.
- The defendant relied upon a number of statements in decisions of the High Court to support the proposition that, regardless of any term in the contract, the provisions of the Award governed the relationship between the defendant and the plaintiff. The first passage relied upon was what Brennan J said in Director-General of Education v Suttling (1987) 162 CLR 427 at 437-438:
"… 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..."
- The next authority is the well-known passage in Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 421 where Brennan CJ, Dawson and Toohey JJ said:
"In a system of industrial regulation where some, but not all, of the incidents of an employment relationship are determined by award, it is plainly unnecessary that the contract of employment should provide for those matters already covered by the award. The contract may provide additional benefits, but cannot derogate from the terms and conditions imposed by the award … the award operates with statutory force to secure those terms and conditions. Neither from the point of view of the employer nor the employee is there any need to convert those statutory rights and obligations to contractual rights and obligations..."
- In order to resolve this issue, it is first necessary to have regard to the nature of awards. Awards are industrial instruments created under statutory authority. Before the Award became a copied State Award under the FW Act, it, and each of its predecessors, was made under the Industrial Relations Act 1996 (NSW). Section 406 of that Act, provided at all relevant times:
(1) The conditions of employment set by an industrial instrument are the minimum entitlements of employees.
(2) The provisions of a contract of employment or other contract do not have effect to the extent that they provide an employee with a benefit that is less favourable to the employee than the benefit to which the employee is entitled under an industrial instrument.
…
- The express purposes of the FW Act are to the same effect: see s 3(b).
- Although the provisions of an award bind relevant employees and employers, given their scope and purpose it is open to an employee and employer to agree to terms that confer benefits on the employer that are greater than those provided for in the award: Kilminster v Sun Newspapers Ltd (1931) 46 CLR 284 at 289; Quickenden v O'Connor (2001) 109 FCR 243 at [69] (Black CJ and French J); Regional Express Holdings Ltd (ACN 099 547 270) v Clarke (2007) 165 IR 251 at [44], [56]; Qube Ports Pty Ltd v Maritime Union of Australia [2018] FCAFC 72 at [72] (White, Mortimer and Bromwich JJ agreeing).
- There can be no doubt that a term specifying one location as the workplace is more beneficial to an employee to one that enables the employer to unilaterally change the location where the employee is to work. For that reason, it was open for the parties to agree to such a term and it is that term which governs the place of work.
- The decision in Director-General of Education v Suttling does not require a different conclusion. The employment in that case occurred directly under the provisions of a statute, the Education Commission Act 1980 (NSW), s 51(2). For that reason, as explained by Brennan J at 437, the rights of those appointed under the Act had to be ascertained by reference to its provisions. That is not the case here. The power of the relevant government officer to offer the plaintiff a transfer to the Wheeler Street Group Home arose under the Public Sector Employment & Management Act 2002 (NSW) ("PSEMA") but that Act did not purport to govern the terms and conditions of his employment upon transfer. Further, and more importantly, although the Award was given operation by statute, it was not a statute and did not purport to limit the scope of the authority granted to the relevant officer by the PSEMA.
- For those reasons, the defendant's argument in reliance on the Award must be rejected.
- The defendant argued, in the alternative, that it was an implied term of the contract that the plaintiff must comply with all reasonable and lawful directions of the defendant and that the requirement to work at a different group home was such a direction. The argument relied on the following statement by Dixon J in R v Darling Island Stevedoring & Lighterage Co Ltd; Ex parte Halliday & Sullivan (1938) 60 CLR 601 at 621-622:
"… If a command relates to the subject matter of the employment and involves no illegality, the obligation of the servant to obey it depends at common law upon its being reasonable. In other words, the lawful commands of an employer which an employee must obey are those which fall within the scope of the contract of service and are reasonable. …"
- The argument must be rejected because it fails to recognise that a direction is not lawful unless it falls within the scope of the contract. It is not lawful simply because it is reasonable in every other respect.
- In light of that, it is not necessary to deal with the subset of the argument that the direction was reasonable because it was done in order to comply with the health and safety obligations of the defendant.
- For those reasons, the defendant was not entitled unilaterally to change the plaintiff's place of work and repudiated the contract of employment when it insisted that the plaintiff work at a place other than the Wheeler Street Group Home.
- That conclusion makes it unnecessary to deal with the third issue, namely, whether, if there was such a power, the preconditions to the exercise of the power were not fulfilled and so the purported exercise of power was beyond the scope of the defendant's authority and constituted repudiatory conduct. However, I will deal with that issue briefly in case my primary conclusion is wrong.