State of New South Wales v Gayle Maree Brown

Judgment 1BASTEN JA: The background to these proceedings has been set out by Bergin CJ in Eq. They involve two applications for leave to appeal from a judgment of the Industrial Court (Boland P) varying a contract of employment under which the respondent worked as an Aboriginal Education Officer at a small school in north-western New South Wales: Brown v State of New South Wales (Department of Education and Communities) [2013] NSWIRComm 115. 2The first question is the standard to be applied by this Court in deciding whether to grant leave to appeal under s 403B of the Industrial Relations Act 1996 (NSW), set out at [34] below. Section 403B is in substantially the same terms as s 188 of the Industrial Relations Act, dealing with appeals to the Full Bench of the Commission. However, in considering the general approach to leave applications adopted by the Full Bench of that Commission, a number of aspects of the changed jurisdictional arrangements are to be borne in mind. First, s 188 applied to all appeals to a Full Bench of the Industrial Relations Commission: it was not limited to appeals from a decision of the Commission in Court Session ("the Industrial Court"). Section 403B applies only to appeals from the Industrial Court to the Supreme Court. 3Secondly, the language of s 403B(2) (which is not replicated in other aspects of this Court's jurisdiction) is imprecise and not easy to apply. Thus, it identifies the circumstances in which the Court "is to" grant leave, leaving open the possibility that leave might also be granted in other situations. Further, the Court must be satisfied that "the matter" is of sufficient importance that it be "in the public interest" to grant leave. Matters can be important in different ways, but it appears that at least the mandatory operation of this provision requires that the importance extend beyond importance to the parties, or perhaps even to a small group of persons. The implication from the phrase "of such importance" suggests that a reasonably high threshold is being set. 4Consistently with the nature of the jurisdiction, there is no monetary qualification for an appeal without leave. However, if a significant sum of money were involved in an appeal, general considerations would suggest that leave might be appropriate (assuming the appeal was reasonably arguable) given the significance for the parties, regardless of any assessment of public interest. Such considerations would be relevant, on the basis that s 403B(1) is directory and leaves open an area of discretion where other factors may come into play. 5The first step in considering an application for leave is to identify what issues might be described as issues of public interest, and consider their sufficiency in all the circumstances. In this regard, the most attractive argument for the State was the possibility that the decision might have wider impact with respect to temporary employment in the Public Service. However, that proposition was not pursued with any vigour by the applicant; indeed, in its written submissions, the matter was referred to but obliquely. The reason why that may have been so, and the reason why the argument should not be accepted, is that the circumstances of the respondent were quite unusual and were most unlikely to be replicated elsewhere in the Public Service. 6The second issue of public interest (and that primarily relied upon by the applicant) was the assertion that the President of the Industrial Commission had applied erroneous principles in making the declarations in favour of the respondent. Four issues were identified. 7First, the applicant submitted that the inclusion of the new term in the last contract of employment was inconsistent with the award governing the position held by the respondent, which required "merit selection" for permanent positions, such as that for which she applied. There may well be substance in the submission, but the attention of the trial judge does not appear to have been directed to the award and, for that reason, it is not an appropriate ground to grant leave to appeal. In a case which was not dealt with hastily, or indeed with great expedition, the State should not usually have a second opportunity to run a point which was not run at trial. 8Secondly, it was said that in considering whether the contract was unfair because it did not include a term that, if the respondent had performed adequately in the temporary position, that fact would be given significant weight in assessing any application for permanent appointment, the trial judge took into account what he accepted were serious deficiencies in the appointment process for the permanent position. Accepting that the conduct of a party may render a contract unfair, as explained by the trial judge at [147]-[148], the applicant submitted that nevertheless post-termination conduct could not have that effect. Assuming that (at least in the circumstances of this case) that proposition is correct as a matter of law, it must also be accepted that the trial judge took into account post-termination conduct in the course of his reasoning to the conclusion that the contract was unfair: at [169]. However, what happened after termination may be relevant as an illustration of the unfairness which could flow from the absence of a relevant contractual protection. It can also be relevant to possible relief. It is far from clear that, extracting that passage from the reasoning, the trial judge would have come to a different conclusion. The complaint does not warrant a grant of leave to appeal. 9Thirdly, the applicant submitted that there was error in awarding damages by reference to the current rate of salary for the position to which the respondent was not appointed. The correct basis of calculation was, the applicant submitted, the rate applicable at the time of the lost opportunity, namely 2010-2011. 10The applicant accepted that this error alone would not warrant a grant of leave. However, it is by no means clear that it was an error. The injury occurred at an earlier time and it would have been necessary to consider whether interest ought to be payable if an earlier rate of pay had been used as the standard for calculation. 11Fourthly, the applicant contended that it was not open to the Industrial Court to vary the award pursuant to s 106, after the termination of the contract. This was relied on as the primary basis for which leave was sought, that being identified as a question going to the jurisdiction of the Industrial Court. If that submission were made good, it would provide substantial support for a grant of leave to appeal. However, for the reasons given by Bergin CJ in Eq, it should not be accepted. 12So far as costs are concerned, it may be noted that the application for leave to cross-appeal was withdrawn by the respondent in the course of the hearing in this Court and the order of dismissal was consequential upon that step. Although that step was taken at the conclusion of the hearing of the State's application for leave, no time at the hearing was spent on the respondent's application. 13Subject to these further considerations I otherwise adopt the reasons of the Chief Judge. 14LEEMING JA: I agree with Bergin CJ in Eq. I also agree with the reasons of Basten JA. 15BERGIN CJ in Eq: On 1 October 2014 the applicant, the State of New South Wales, was refused leave to appeal against part of Boland J's judgment in Brown v State of New South Wales (Department of Education and Communities) [2013] NSW IRComm 115 (the Judgment). These are the reasons in respect of that refusal and also in respect of the question of costs which was reserved on 1 October 2014.

Factual Background 16The respondent, Gayle Maree Brown, worked as an Aboriginal Education Officer (AEO) at the Weilmoringle Public School between 2006 and 2010. The duties of the AEO included assisting teachers in involving parents and the community in school programs, including excursions, and with the progress and support of the Aboriginal students. It also included assisting teachers in developing and implementing an appropriate curriculum for all students and specifically one to meet the needs of Aboriginal students. AEOs are encouraged to work on areas or topics in which they express or show a particular interest or skill. The respondent showed an interest in the development of resources for learning activities in literacy and numeracy. 17Weilmoringle is an isolated community in north western New South Wales close to the Queensland border. It has a very small population. The School has one classroom and caters for primary age children from kindergarten to year 6. The respondent was initially employed by a private cleaning contractor as a cleaner at the School from approximately 1997 to 1999. From 1999 she worked as a temporary school administrative and support member of staff at the School performing duties as a tutor. In 2006 the respondent was appointed as an AEO on a temporary basis. 18The contracts pursuant to which the respondent worked at the School as an AEO were in writing, on forms of the NSW Department of Education and Training (later to become the NSW Department of Education and Communities) entitled Appointment/Variation Form for Long Term Temporary Non-Teaching Staff in Schools. Attached to each form was a document entitled "Terms of Temporary Employment" which included the following: Cessation of employment This appointment is in accordance with the Guidelines for the Appointment of Temporary Non Teaching Staff in Schools for 2010. Should the circumstances of this appointment change, you will be given as much notice as practicable before the change occurs or your employment is terminated. There is no guarantee or expectation of any further or on going temporary employment continuing beyond the end date as specified in the attached Appointment/Variation Form for Long Term Temporary Non teaching Staff in Schools. 19It was noted in those Terms that one circumstance in which a temporary employee's services may be dispensed with was that additional assistance was no longer required. 20There were five contracts in respect of the respondent's appointment as an AEO between August 2006 and April 2010. The first contract, signed by the Principal on 11 August 2006, was for the period from 7 August 2006 to 7 August 2007. The second contract, signed by the Principal on 15 November 2006, was from 5 February 2007 to 20 April 2007. The third contract, signed by the Principal on 8 February 2007, was for the period 5 February 2007 to 4 February 2008. The fourth contract, signed by the Principal on 18 June 2008, was for the period 21 July 2008 to 19 December 2008. The fifth contract, signed by the Principal on 3 February 2010, was for the period 1 February 2010 to 1 April 2010. Some periods overlapped, for reasons which were not apparent. 21These contracts were governed by s 21 of the Education (School Administrative and Support Staff) Act 1987 (the SASS Act) which provides as follows: 21 Employment of temporary employees (1) The Director-General may appoint persons to be employed in the service of the Crown on a temporary basis as members of the school administrative and support staff of the Department in any classification. (2) A temporary employee may be employed for a period not exceeding 4 months, but may, from time to time, be employed at the end of that period or any subsequent period for a further period not exceeding 4 months. (3) A person may not be employed under this section for: (a) a continuous period of 12 months, or (b) 2 or more periods that together are in excess of 12 months in any period for 2 years, except with concurrence of the Minister. (4) The services of a temporary employee may be dispensed with at any time by the Director-General. 22The resources at the School were one teacher (the Principal) and an AEO. Both the permanent Principal and the permanent AEO were on leave for a long period. In those circumstances there was an acting Principal and a temporary AEO. The permanent Principal resigned and the acting Principal was appointed as the permanent Principal in April 2010. The permanent AEO who had been on leave also resigned. The Principal advised the respondent that the position of temporary AEO would not be available for the next term and that the permanent position for the AEO would be advertised in due course. The respondent's employment terminated on 18 April 2010. 23During the latter part of her employment as an AEO tensions had developed between the acting Principal and the respondent. This was exacerbated by certain complaints that the respondent made in respect of the acting Principal. The relationship deteriorated further at the time of the termination of the respondent's employment with a less than amicable parting. 24The position for the permanent AEO was advertised and the respondent applied and was interviewed. It is not in issue that the interview process was flawed. The panel that interviewed the respondent was obliged to approach the matter on the basis of "merit selection" pursuant to clause 10.6.2 of the Crown Employees (School Administrative and Support Staff) Award 2008. There is no doubt that this did not occur. The only other applicant was appointed as the permanent AEO. The respondent was subsequently diagnosed with a depressive illness. 25The respondent commenced proceedings in the Industrial Court of New South Wales by Summons filed on 30 March 2011 seeking an order that the contract or arrangement whereby she worked for the applicant was an unfair contract within the meaning of s 105 of the Industrial Relations Act 1996 (the Act). The pleadings in the matter were amended and at the time of the trial the extant pleading was the Further Amended Summons. There was an application to further amend the Summons to include a claim that the respondent's contracts were in breach of s 21 of the SASS Act and were therefore unfair. This amendment was not allowed. 26One of the orders sought by the respondent in the Further Amended Summons was for the respondent's contract to be varied to include a term "that in circumstances where the Applicant had performed adequately in the position of Aboriginal Education Officer over a period of years that fact would be given significant weight in assessing her application for that position" (the significant weight term). 27The proceedings were heard by the trial judge on 1 to 3 May 2013, 3 June 2013, 13 August 2013 and 11 November 2013. Judgment was delivered on 20 December 2013. 28The trial judge dealt with the various limbs of the respondent's contentions in respect of the unfairness of her contract. His Honour rejected all contentions except those in respect of the significant weight term. His Honour was satisfied that in the absence of such a term the contract permitted the applicant to disregard the respondent's good performance in conducting what was an unfair selection process for the permanent AEO position (at [168]). His Honour was satisfied that the selection process was "patently unfair and rendered the contract unfair" (at [169]). 29The trial judge concluded (at [173]): In relation to the first limb of the applicant's unfairness contentions I find the contract was unfair in that the contract did not contain a term that in circumstances where the applicant had performed adequately in the position of AEO over a period of years, that fact would be given significant weight in assessing her application for permanent appointment in that position. In the absence of this term the contract permitted the respondent to disregard the applicant's good performance in conducting what was an unfair selection process for the permanent AEO position. I will vary the contract accordingly. 30The trial judge made the following declaration and order (at [199]): (1) I declare the temporary employment contract between the applicant and the respondent that applied to the applicant's employment as at 17 April 2010 was an unfair contract. (2) The contract referred to in order (1) hereof is varied to provide a term that in circumstances where the applicant had performed adequately in the position of AEO over a period of years, that fact will be given significant weight in assessing her application for permanent appointment in that position. The trial judge ordered the applicant to pay an amount equivalent to twelve months' salary as compensation for the loss of income and employment opportunity associated with the failure to be appointed as the full time AEO, to be calculated at the current rate at the time the orders were made. His Honour also ordered that the applicant pay the respondent an amount of $5,000 as compensation for the costs associated with her depressive illness.

The Act 31An "unfair contract" is defined in s 105 of the Act to include one that is "unfair, harsh or unconscionable" or one that is "against the public interest". 32Section 106 of the Act provided relevantly: 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. --- (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 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. 33The applicant accepts that it requires leave to appeal pursuant to the provisions of s 403B of the Act which provides as follows: 403B Appeals to Supreme Court by leave only (1) An appeal to the Supreme Court under this Chapter may be made only with the leave of the Supreme Court. (2) The Supreme Court is to grant leave to appeal if, in its opinion, the matter is of such importance that, in the public interest, leave should be granted. (3) The Supreme Court may deal with an application for leave to appeal separately and without conducting a hearing into the merits of the appeal. (4) This section does not apply to an appeal made by the Minister. 34Generally, a matter that turns upon the particular facts of the dispute between the parties and does not involve substantial matters of law and principle, although important to the parties to the dispute, would not be of such importance that in the public interest leave should be granted: Truelove v Sydney Water Corporation Limited [2005] NSW IRComm 191 at [45] (dealing with the identical provision s 188(2) of the Act as it related to appeals to the Full Bench of the Commission). There may be exceptions in cases where although they are fact centric, the determination of the dispute may have wider implications. Grounds for Leave 35The applicant submitted that the grounds upon which the court should find that the matter is of such importance that in the public interest leave should be granted were as follows: (1)There is a potential that the decision has widescale impact on the contracts entered into by the applicant; (2)There is an important issue as to whether the Industrial Court of New South Wales has jurisdiction to make an order varying a contract in the "absence" of such a contract as defined in s 105 of the Act; and (3)There is an important issue whether a contract can become an "unfair contract" as a result of conduct that occurs following the termination of the contract, or alternatively whether the court may reinstate an employment contract. 36The applicant also contended that it had been denied procedural fairness when money orders were made against it without a further hearing. During the hearing of the application for leave counsel for the applicant confirmed that it was not disputed that the applicant did have the opportunity, both in writing and in two days of oral addresses, to make such submissions as it might wish in relation to the making of money orders. There was no error and no question of public interest, in this contention. A party is to be given a reasonable opportunity to present its case. The Tribunal is not required to ensure that the party takes the best advantage of that opportunity: Re Association of Architects of Australia; Ex parte Municipal Officers Association of Australia (1989) 63 ALJR 298 at 305. Ground 1 37Two of the respondent's contracts were for a continuous period of 12 months. Although there was no evidence of the Minister's concurrence in these appointments, the applicant would rely on the presumption of regularity: Minister for Natural Resources v NSW Aboriginal Land Council (1987) 9 NSWLR 154 at 164 per McHugh JA. However the respondent's fourth contract was for a period of 5 months. It would appear that this contract would fall foul of s 21(2) of the SASS Act. 38In exercising its jurisdiction in respect of allegedly unfair contracts, the Commission may consider whether a contract is unfair because it is against the public interest (s 106(4)). It is common ground that the applicant made no submission at trial that a variation to include the significant weight term would have any effect on "a series of contracts" and would be against the public interest. The respondent submitted that had this been a matter of such importance in the public interest, such submissions would have (and should have) been made at first instance. This submission has much force. 39In any event it would not be envisaged that the Department would enter into contracts inconsistently with s 21(2) of the SASS Act. It would not be envisaged that there would be a panel interviewing applicants for positions that would not comply with its obligations under the relevant Award. Rather it is expected that temporary employees will be employed under the SASS Act and in compliance with the relevant Awards. This was not so in this case and its determination could not have any impact on other contracts throughout New South Wales. 40This is a case on its own facts and not one of any wider import.

Ground 2 41The applicant contended that the Industrial Court lacked jurisdiction because the contract had come to an end. It was submitted that the Court could not make an order varying a contract "in the absence of such a contract". This contention must fail. Indeed applications before the Commission where contracts, apparently fair during their operation, but found to be unfair as a result of their termination, have been described as the "staple diet" of the work of that Court: Gambotto v John Fairfax Publications Pty Ltd [2001] NSW IRComm 87; (2001) 104 IR 303 at 312. The remedy provided in s 106(3) of the Act is available even though applied after the termination of the contract: Sydney Water Corporation Ltd v Industrial Relations Commission of NSW [2004] NSWCA 436; (2004) 61 NSWLR 661 at 669 [28] per Mason P.

Ground 3 42The applicant's third contention is that a matter of importance is whether a contract can become unfair as a result of post-employment conduct. This arises from the trial judge's statement that the patently unfair selection process "rendered the contract unfair" (at [169]). I am satisfied that the trial judge fell into error in making this statement. 43It appears that, having regard to the particular and rather special contractual history between the parties, his Honour intended to vary the fifth contract on the basis that the absence of the significant weight term would permit unfair treatment of the respondent in connection with her contract. That unfair treatment was the exclusion of the respondent's previous experience from any consideration when assessing her for other employment with the Department. The unfair selection process was the breach of the contract as varied. It did not render the contract unfair. However the trial judge's conclusions were reached in the absence of any of the parties bringing to his Honour's attention the requirement under the Award for the interviewing panel to conduct a merit selection. 44These are circumstances peculiar to the particular dispute between the parties with no wider import. There is no matter of importance that in the public interest leave should be granted to the applicant to appeal. Costs 45On 1 October 2014 an order was made refusing the applicant's leave application. The respondent did not proceed with her application for leave to bring her Cross Appeal and consequential orders were made, save as to costs. 46Both the applicant and the respondent incurred costs in meeting each other's applications. It was not until the applicant's leave application was refused that the respondent indicated that she would not proceed with her application. 47The general rule that costs follow the event should apply in this case. I propose the following orders: (1) The applicant is to pay the respondent's costs of its application for leave to appeal. (2) The respondent is to pay the applicant's costs of her application that was abandoned on 1 October 2014.

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: 27 October 2014