Smith v LWB Disability Services South Limited t/as Life Without Barriers

Factual Background

1. There was little dispute about the factual background in these proceedings. The following summary is taken largely from the outline of submissions for the plaintiff.
2. In about February 2008 the plaintiff commenced employment for the New South Wales government in the department of Family and Community Services ("FACS") as a casual disability worker initially at the Rickard Road Group Home.
3. Between 2008 and 2013 the plaintiff worked in various positions at a number of work locations. In around mid-2009, he commenced permanent part-time employment as a disability support worker at the Charlton Group Home at 13 Wheeler Street, Carlton ("Wheeler Street Group Home"). In around September 2011, the plaintiff accepted a permanent full-time position as a disability support worker at the Rickard Street Group Home.
4. On 17 January 2013, the plaintiff was offered a full-time position at the Wheeler Street Group Home. The letter dated 17 January 2013 set out the "details of the position and the conditions of employment" in a table on the first page, including the following condition: "Location Charlton GH 13 Wheeler St, Metro South Region"
5. The letter further contained the following text underneath the table recording the details of the position and the conditions of employment: "Your employment conditions will be in terms of the Crown Employees Ageing, Disability and Home Care - Department of Human Services (Community Living Award) 2010 and the Crown Employees (Public Service Conditions of Employment) Award 2009. Your appointment may satisfy the requirements for eligibility as a Transferred Officer under the Crown Employees (Transferred Employees Compensation) Award."
6. The first of those awards, the Community Living Award 2010, became the Crown Employees Ageing, Disability & Home Care - Department of Family & Community Services NSW (Community Living Award) 2010 in 2012. That award, in turn, became the Crown Employees Ageing, Disability & Home Care - NSW Department of Family & Community Services (Community Living Award) 2015. In each iteration of the Award, there was a provision entitled "Mobility of Staff" in relevantly identical terms. As at February 2018, that provision was found in cl 27 of the Award which provided [1] : "27. Mobility of Staff (i) All staff members are recruited to a District, not a unit. The movement of staff members within the District will occur in a reasonable manner. (ii) Staff may be rotated through shifts at various units for the following purposes where practicable: For staff and workforce development, including unit induction; To meet client support needs; To address Work Health and Safety issues or injury management obligations; When a staff member has identified a desire to work in another unit; or To support workforce requirements including the filling of long term vacancies. (iii) Staff will not be asked to work a shift in another unit: Without reasonable notice; or If the distance the staff member is required to travel is unreasonable having regard to the individual's circumstances (iv) Where possible, all transfers will be undertaken on a voluntary basis. (v) Where an involuntary transfer is necessary, consultation with the PSA will be undertaken prior to the transfer being affected. (vi) For the purposes of this clause, no transfer will be used as a punitive measure."
7. A "Unit" was defined to mean a group home, respite centre or in-home support service. The PSA was the Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales.
8. The plaintiff accepted the offer of a position at the Wheeler Street Group Home on 10 February 2013 by signing and returning the letter of offer.
9. In mid-2016 the plaintiff was advised that the New South Wales government was planning to privatise its accommodation and respite services in New South Wales. On 1 August 2017 the defendant was announced as the new operator for supported accommodation and respite services in the South East Sydney region.
10. By letter dated 12 September 2017, the plaintiff was informed by FACS that his employment would be transferred automatically to the defendant and that the Government was planning to finalise the transfer by 22 February 2018.
11. By letter dated 26 February 2018, the defendant wrote to the plaintiff to confirm "your terms and conditions of employment following transfer" and to "set out the terms and conditions that now apply following the transfer". The letter contained the following terms: "Continuation of your employment status Your existing employment has now transferred to and will be recognised by LWB Disability Services South. This means you will continue to be employed on the same basis as you have been employed immediately prior to transfer. That is, as a permanent (ongoing), fixed term (temporary) or casual employee. Any temporary arrangements (e.g. reduced hours for return to work) will not affect your contractual employment status."
12. The letter further advised that the plaintiff's current awards had transferred and would continue to apply to his employment and that an employment guarantee period of two years would apply for permanent employees. During the employment guarantee period, the employment of an employee would not be terminated except for serious misconduct, by proper application of reasonable disciplinary procedures or by agreement.
13. The employment guarantee period and the continuation of award conditions reflected contractual or legislative obligations. The employment guarantee period was a stipulation of the Implementation and Sale Agreement between Life Without Barriers and the State of New South Wales [2] . Existing awards that applied to the plaintiff and the New South Wales government immediately prior to the transfer became instruments known as copied State Awards containing the same terms in accordance with Pt 6-3A of the Fair Work Act 2009 (Cth) ("FW Act") and would continue to have operation for up to five years.
14. Prior to the transfer of his employment to the defendant, the plaintiff was required to be off work for a period of time as a result of psychological injury. There had been complaints about the plaintiff by other members of staff at the Carlton Group Home which were then subject to a workplace investigation. The workplace investigation recommended that the plaintiff be "relocated to an alternative vacant position". The plaintiff was informed of a decision in relation to his transfer on or around 9 November 2017 but was medically unfit to perform work for much of that period.
15. After the transfer of the plaintiff's employment to the defendant, a decision was made by the defendant that the plaintiff be transferred to a group home at Caringbah. The plaintiff was informed of this decision at a meeting on 30 April 2018. The plaintiff then, upon request for written confirmation, received a letter dated 4 May 2018 which stated: "This letter is to confirm our recent discussions regarding changes to your current reporting line within the LDS South East Sydney team. Effective from 7/05/2018 you will report directly to Tony Muzich, at 1 Chamberlain Ave Caringbah, 2229. All other employment terms and conditions outlined in your current Contract of Employment will remain unchanged."
16. By letter dated 10 May 2018, the plaintiff protested the decision stating that he had not requested and did not agree to a transfer. In subsequent correspondence, the defendant asserted that it was entitled to move the plaintiff "as required" and repeated that the plaintiff had been transferred.
17. By letter dated 27 September 2018, solicitors for the plaintiff reiterated the plaintiff's position that he did not agree to any transfer and asserted that the refusal to permit the plaintiff to return to work at the Wheeler Street Group Home constituted a repudiation of his contract of employment. By letter dated 18 October 2018, the defendant refused to withdraw its direction for the plaintiff to relocate. Finally, by letter dated 29 October 2018, solicitors for the plaintiff informed the defendant that the plaintiff regarded its conduct as a repudiation of his contract of employment and that he accepted the repudiation.
18. Since that time, in spite of making many job applications, the plaintiff has not worked again.

Consideration

1. The first two issues essentially concern the proper construction of the employment contract and may conveniently be dealt with together. As will be seen, the third issue does not arise, but will be considered briefly against the possibility that my conclusion on the first two issues is incorrect.

Was the defendant entitled to unilaterally change the location of the plaintiff's workplace?

1. 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.
2. 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.
3. 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].
4. 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.
5. The position offered was disability support worker, a position already held by the plaintiff. The "transfer", then, was to a different location.
6. 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.
7. 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.
8. 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.
9. The next question is whether the mobility provision in the Award gave the defendant the right to change the plaintiff's work location unilaterally.
10. 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..."
11. 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..."
12. 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. …
13. The express purposes of the FW Act are to the same effect: see s 3(b).
14. 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).
15. 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.
16. 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.
17. For those reasons, the defendant's argument in reliance on the Award must be rejected.
18. 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. …"
19. 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.
20. 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.
21. 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.
22. 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.

Did the defendant satisfy the preconditions to the power to move the plaintiff?

1. The power under the mobility clause was to rotate staff "through shifts at various units". Assuming for the moment that that enabled the transfer envisaged here, the clause envisaged that the employer would not even ask the staff member to work in another unit without reasonable notice or if the distance the staff member is required to travel is unreasonable having regard to the individual's circumstances: sub-clause (iii). Those two matters, then, were preconditions to the exercise of the mobility power.
2. The clause also stated that, where possible, all transfers were to be undertaken on a voluntary basis: sub-clause (iv). It is clearly not possible to make a transfer on a voluntary basis when a staff member expresses a wish not to be transferred, as happened here.
3. In the case of an involuntary transfer, consultation with the PSA had to be undertaken prior to the transfer being affected: sub-clause (v).
4. Finally, sub-clause (vi) provided that no transfer was to be used as a punitive measure.
5. The issues here were whether the requirement that the plaintiff travel was unreasonable having regard to the individual's circumstances and whether there was consultation with the PSA before the transfer was effected.
6. The plaintiff's evidence, which I accept, was that it would take him an extra hour travelling time each day to travel to the group home in Caringbah. Other evidence shows that the journey from the plaintiff's home to the group home in Caringbah was approximately 35 minutes each way. I consider that there is nothing unreasonable about that in general and there was no evidence that the plaintiff had any physical or other disability or that there was any other circumstance that made such a journey particularly onerous. Plainly, the plaintiff would prefer to work closer to his home, but that preference does not make the transfer unreasonable in the terms of the Award.
7. In light of that, the threshold for asking the plaintiff to move was met. The question remains whether the PSA was consulted before the transfer was affected.
8. Consultation with a party requires that that party be given notice of the subject upon which that party's views are being sought before any final decision is made or course of action embarked upon. It also requires that the party be given a meaningful opportunity to present its view on the matter: Construction, Forestry, Mining & Energy Union v Port Kembla Coal Terminal Ltd (No. 2) (2015) 253 IR 391 at 274, approving Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v QR Ltd (2010) 198 IR 382 at [43].
9. A representative of the PSA, Greg Shaw, was involved in discussions concerning Mr Smith on two occasions: first, at a meeting on 9 November 2017; and secondly, at a meeting on 30 April 2018.
10. On the first of these occasions there was a discussion concerning the recommendations made as a result of the investigation into the complaints made about the plaintiff. Those recommendations included that the plaintiff be offered employment at another group home in the region. While there is no direct evidence of what was said to the PSA representative there was no issue that a transfer was discussed at that meeting in the context of a return to work plan. The plaintiff's evidence was that he did not want to be moved from the Wheeler Street Group Home.
11. A return to work plan was subsequently prepared which involved four stages with increasing work hours all to be undertaken at a group home in Gardeners Road, Rosebery [5] . Mr Shaw signed that plan on 12 December 2017 indicating that he agreed with the plan [6] . I am satisfied that there was consultation with the PSA on that occasion.
12. At the second meeting, however, there appears to have been no similar opportunity for Mr Shaw to present the views of the PSA. There are no notes of the meeting but Mr Due, then the Operations Manager - Accommodation for the defendant, recalled that at the meeting he said to the plaintiff: "… We have located a suitable alternative position that is available at the Chamberlain Avenue Group Home in Caringbah. This position has similar duties and clients requiring a similar level of support to Wheeler Street (Carlton). Therefore, you are required to relocate on a permanent basis to the Chamberlain Avenue Group Home. This decision has been signed off by the HR team and Operations Manager."
13. Mr Due says that the plaintiff agreed to a temporary transfer but with the goal of returning to the Wheeler Street Group Home. Mr Due's response was: "The business will not return you to Wheeler Street."
14. This shows that the defendant had made its decision and would not enter into any further discussion about it. In doing so, however, it failed to consult the PSA as required by the mobility clause and so acted beyond its authority. In those circumstances, the defendant's insistence on the plaintiff working at a different site constituted a repudiation of the employment contract.

Damages

1. The damages for breach of contract are those which, as far as money can do, place the plaintiff in the position he would have been in had the contract been properly performed: Clark v Macourt (2013) 253 CLR 1 at [106], [109] - [110].
2. The plaintiff claims that the damages to which he is entitled relate to two different periods: the first is for the guaranteed period of employment (two years ending on 28 February 2020) and the second for the period after that. There is no real issue about the first of these. The transfer of the plaintiff's employment to the defendant carried with it a guarantee that the employment would last for two years and could only be terminated within that time for serious misconduct, under the proper application of reasonable disciplinary procedures or by agreement with the employee [7] . There was no evidence that there was any prospect of any of those occurring.
3. The limits of the damages after the guarantee period require an assessment of a number of different probabilities. The outside limit is placed by the plaintiff's evidence that he intended to retire at age 67. That is one possible starting point of an assessment of damages. Those damages would then have to be adjusted for what is generally referred to as the vicissitudes of life.
4. Another limit for damages could be the time at which it would reasonably be expected that the plaintiff will find another job.
5. Neither assessment is straightforward and involves a significant level of speculation. That speculation, however, must be based on an assessment of all the evidence.
6. The defendant argued that any damages for the period after the guarantee period should be limited to the notice to which the plaintiff was entitled (namely, five weeks). There are two difficulties with that submission: first, there is no rule limiting damages for repudiation to a notice period: TCN Channel Nine Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130. Rather, the facts of each case have to be considered to determine whether the repudiating party would have exercised its lawful right of termination. That gives rise to the second difficulty that there was no direct evidence from any relevant decision maker that the notice provision would, or might, be used to bring the plaintiff's employment to an end: Walker v Citigroup Global Markets Australia Pty Ltd (2006) 233 ALR 687 at [82]; Willis Australia Group Services Pty Ltd v Mitchell-Innes [2015] NSWCA 381 at [117] - [121] (Macfarlan JA). Indeed, the assertion that the defendant would have exercised its right of termination is inconsistent with the stance that it maintained throughout the proceedings, namely, that the plaintiff was still employed.
7. There are numerous difficulties in assessing the probabilities in this case. First, there is the fact that, had the contract been properly performed, the plaintiff would have returned, at some point in 2018, to the Wheeler Street Group Home after undertaking a return to work program at the Caringbah Group Home. However, his experience there in 2017 was that working at that location made him so sick that he was unable to work at all. The particular cause of that were a number of other employees working at that location. Given that an investigation had been conducted into the complaints made by those employees, and action taken addressed to the plaintiff, there is no evidence to suggest that those employees would have ceased working at that location anytime in the foreseeable future. That gives rise to a significant likelihood that the conduct that caused the plaintiff's illness would continue and so his illness would return. That, in turn, suggests that it was most likely that the plaintiff could not have continued his employment at the Wheeler Street Group Home far beyond the end of the guarantee period, if that far.
8. The plaintiff argued that this was not the case because he had worked at the Wheeler Street premises from 2013 until 2017 without any apparent difficulties. I do not accept that argument. The plaintiff saw a clinical psychologist, Tom Jones, over a period from June 2017 until May 2018. In his report [8] , Mr Jones said that the harassment the plaintiff had faced at Wheeler Street was such that it was impossible for him to remain at the location. The plaintiff denied saying that to Mr Jones. While the plaintiff was generally a credible witness, I do not accept that denial. It is likely that a psychologist, with ready access to contemporaneous notes, would have a more accurate recollection of what he was told than a person suffering from anxiety and depression would have three years later. Further, whatever had been the case prior to June 2017, there is no issue that from that point, the workplace at Wheeler Street had a toxic effect on the plaintiff's health.
9. It is possible, of course, that the plaintiff would have agreed to move to another location; however, given that he has brought these proceedings on the basis that he only wanted to remain working at Wheeler Street this possibility should be discounted.
10. There are similar difficulties with assessing the likelihood of the plaintiff obtaining employment at any particular time. It is odd that, amongst the many jobs he applied for since the termination of his employment, he has applied for jobs in distant locations including Tasmania and yet maintains that a 35 minute journey to Caringbah would be unreasonable. It is also odd that he has not applied for a job at Caringbah given that, on the defendant's evidence, there is a full-time position for a disability support worker vacant at that location. The defendant did not rely on that fact to argue that the plaintiff had failed to mitigate his loss and I will leave it to one side.
11. There was no evidence that there was any impact of the current COVID-19 pandemic on relevant employment opportunities for people with the plaintiff's skills and experience. Although the defendant is a private operator of group homes, the services provided by it are essentially government supported. Further, the need for accommodation and care in group homes is unlikely to diminish by an ongoing requirement for people to stay at home. For those reasons, I do not take the current economic climate into account in assessing the likelihood of the plaintiff's return to work.
12. Ultimately, having had regard to the evidence, I accept the parties' submissions that the more appropriate method of assessing the plaintiff's loss after the end of the guarantee period is by reference to his likely return to work. Given the stability of the industry in which he was employed from 2011, I find that it is likely that he will find further employment in it by the end of a further 12 months from the date of judgment.
13. There will be a verdict for the plaintiff with costs. I direct the parties to bring in short minutes of order dealing with the quantum of damages in accordance with these reasons. The parties have liberty to apply on 7 days' notice.

Endnotes

1. Exhibit 9, p 548.
2. Exhibit 10, cl 13.4 and sch 9 para (c).
3. Affidavit of Greg Smith dated 14 October 2019, Ex.GS-3, pp 29 and 30.
4. Now repealed.
5. Exhibit 3.
6. Exhibit 4.
7. Exhibit 10, cl 13.4 and sch 9, cl (c).
8. Exhibit 6. 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: 15 May 2020