Stonham v The Speaker of the Legislative Assembly of New South Wales

Award - Conditions of employment set are minimum entitlements of employees - Apparent conflict with contract of employment - Contract of employment providing more favourable benefits for employee - Whether unfair contracts jurisdiction affects an award. CATCHWORDS : Enterprise Agreement - Apparent conflict with contract of employment - Contract of employment providing more favourable benefits for employee - Whether unfair contracts jurisdiction affects an enterprise agreement.

Practice and Procedure - Notice of motion challenging jurisdiction as a preliminary point - Test to apply in determining appropriate time to hear preliminary point - Whether applicant's claim could not succeed or was so manifestly faulty as not to admit of argument - Jurisdiction upheld - Leave reserved to further argue certain aspects of motion - Motion dismissed, with costs. Industrial Arbitration Act 1940 (repealed) s 88F Industrial Relations Act 1991 (repealed) s 275 LEGISLATION CITED : Industrial Relations Act 1996 s 8 s 105 s 106 s404 s 406(1) and (2) Pt 1 of Ch 2 Pt 2 of Ch 2 cl 6(1) of Sch 4 Employment Protection Act 1982 Workplace Relations Act 1996 (Cth) s 170 s 170CE s 170CH s 170EE Navigation Act 1912 (Cth) s 77(2) Nagle (t/as W D & J L Nagle & Sons) v Tilburg [1993] 51 IR 8 Federated Municipal and Shire Council Employees' Union of Australia, New South Wales Division v Energy Australia (1999) 90 IR 311 Clarkson v Dent (1998) 84 IR 250 Knowles v The Anglican Church Property Trust, Diocese of Bathurst (1999) 89 IR 47 Virtue v New South Wales Department of Education and Training (1999) 92 IR 428 Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd (1991) 28 NSWLR 443, 39 IR 169 Barry v Incitec Limited [1991] 45 IR 143 Incitec Limited v Barry [1992] 45 IR 148 Incitec Limited v Industrial Court of New South Wales (1992) 29 NSWLR 83, 45 IR 155 Rothmans Distribution Services Limited v Full Court of the Industrial Court of New South Wales [1994] 53 IR 157 McNaught v Micador Australia Pty Limited (1996) 83 IR 111 Newton v Goodman Fielder Mills Ltd (1997) 81 IR 227 Baker v National Distribution Services Limited [1993] 50 IR 254 Brown v Rezitis (1970) 127 CLR 157 Pullen v R & C Products Pty Ltd (1994) 60 IR 183 CASES CITED : Addis v Gramophone Co Ltd [1909] AC 488 Whelan v Waitaki Meats Ltd [1991] 2 NZLR 74 Rowlands v Collow [1992] 1 NZLR 178 Baltic Shipping Company v Dillon (1993) 176 CLR 344 Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144 Liu v Coms 21 Limited (Print S3571) 25 February 2000 Mallinson v The Scottish Australian Investment Co Ltd (1920) 28 CLR 66 Amalgamated Collieries of WA Ltd v True (1938) 59 CLR 417 True v Amalgamated Collieries of WA Ltd (1940) 62 CLR 451 Re Waterside Workers Award [1957] 1 FLR 119 Byrne v Australian Airlines Limited (1995) 185 CLR 410 Kilminster v Sun Newspapers Limited (1931) 46 CLR 284 Harcourt Brace & Co (Aust) Pty Ltd v Cory (1997) 81 IR 321 Westfield Ltd v Helprin (1997) 82 IR 411 Beahan v Bush Boake Allen Australia Limited (1999) 93 IR 1 Federated Seamen's Union of Australasia v Commonwealth Steamship Owners' Association (1922) 30 CLR 144 Casey v Wentworthville Memorial RSL Club [1986] 16 IR 337 HEARING DATES: 11/03/1999; 11/15/1999 DATE OF JUDGMENT: 05/05/2000

APPLICANT Mr S L Ferrier, solicitor SOLICITORS Ferrier & Associates

RESPONDENT Mr P Menzies QC with Ms T J Anderson of counsel SOLICITORS I V Knight, State Crown Solicitor

JUDGMENT:

• 42 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: HUNGERFORD J Friday, 5 May 2000 Matter No IRC 649 of 1999 ANNE MARGARET STONHAM v THE SPEAKER OF THE LEGISLATIVE ASSEMBLY OF NEW SOUTH WALES Application under section 106 of the Industrial Relations Act 1996 re unfair contract. JUDGMENT (on motion re jurisdiction) 1 The action before the Court has been brought by Anne Margaret Stonham against The Speaker of the Legislative Assembly of New South Wales for relief pursuant to s 106 of the Industrial Relations Act 1996 in respect of a contract of employment whereby the applicant performed work for the respondent in the electorate office of the Hon Gabrielle Harrison MLA as the Member for Parramatta in the Legislative Assembly of the State. Although the applicant was actually employed by the respondent, the work performed under the contract was for the benefit of Ms Harrison and for that purpose she was subject to the direction and control of Ms Harrison. 2 The initiating summons, in its further amended form, impugned the said contract and alleged it was unfair, harsh, unconscionable, contrary to the public interest and avoided the provisions of an industrial instrument in various respects so as to justify being declared wholly or partly void; in the alternative, an order was sought for the variation of the said contract. A claim was made also for the payment of certain monies by the respondent to the applicant, together with interest and costs. 3 The process for relief was filed in the Court on 16 February 1999, amended on 19 April 1999, further amended on 21 June 1999 and still further amended on 3 November 1999. The amendments concerned essentially the grounds and reasons relied upon for the claims but the orders sought remained largely unchanged so that nothing turned on those amendments for present purposes. By notice of motion filed on 6 May 1999 but as amended on 3 November 1999 (confirmed by notice filed on 9 December 1999), the respondent sought an order that the applicant's further amended summons be struck out, with costs, on the ground that there was no jurisdiction to grant the relief claimed. For the purposes of the jurisdictional argument only, the parties agreed that the evidence filed in affidavit form for the applicant may be assumed to be correct and to be taken at its highest; in addition, the parties agreed on other facts relating to the terms of various industrial instruments (enterprise agreements and awards) applicable to the applicant during the course of her employment by the respondent from 12 September 1994 to 10 November 1998. 4 This judgment is restricted to a determination of the preliminary jurisdictional point and, as such, I have approached the issue on the basis that to succeed on the motion the respondent must establish in the circumstances as they presently appear from the evidence that the applicant's claims made in the summons could not succeed or were so manifestly faulty as not to admit of argument: see Nagle (t/as W D & J L Nagle & Sons) v Tilburg [1993] 51 IR 8 at 13. In other words, and as a Full Bench ( Wright J, President, Peterson J and McKenna C) of the Commission remarked in Federated Municipal and Shire Council Employees' Union of Australia, New South Wales Division v Energy Australia (1999) 90 IR 311 at 316 - "The power to terminate a cause of action should be employed sparingly and only where the lack of a cause of action is clearly demonstrated": see also Clarkson v Dent (1998) 84 IR 250 at 251-252; Knowles v The Anglican Church Property Trust, Diocese of Bathurst (1999) 89 IR 47 at 48; and Virtue v New South Wales Department of Education and Training (1999) 92 IR 428 at 447-448 to the same effect. It is appropriate to cite how the principle was stated, in a manner which I adopt, by Kirby P in Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd (1991) 28 NSWLR 443 at 446-447; [1991] 39 IR 169 at 170-171, thus : Such a course is often a sensible one where a party has a substantial threshold argument which, if it succeeds, will knock out the claim and save the costs and inconvenience that attend a protracted hearing of proceedings on the merits. But, as with any threshold relief of this kind, it must be conserved to a clear case where it is plain that the invocation of the jurisdiction impugned is wholly misconceived or, upon analysis, lacks an arguable legal foundation. Necessarily, refusal of relief at the threshold will not finally determine that jurisdiction exists for any order which the Commission might make between the parties. This is because, to secure relief, the claimants must demonstrate that no order could be made which would be within jurisdiction. This burden, which is a heavy one, was accepted by the claimants. 5 Mr P Menzies QC, who appeared with Ms T J Anderson of counsel for the respondent, outlined the nature of the claim in the following way : This claim asserts conduct in support of a claim that the contract was unfair which included, for example, working excessive hours, performing work which was not part of the employment, in suffering personal injury by way of psychological distress, and there are other aspects of it, but that is generally what is put. As I understand it, what is put is that the circumstances of the work that was done was outside the working conditions in circumstances which were not tolerable and involved activities which were not properly part of the employment and a number of consequences flow, including personal injury, and there is a claim for overtime pay and additional payments for work done. That is generally what the case is about.

Our motion is based upon construction of the statute and the enterprise agreement and now award, which controlled the work. The other matter of jurisdiction is that there was sought to be recovered damages which are simply not available. 6 In light of the basis on which the motion was put, it is necessary to refer to the terms of the specific relief claimed by the applicant in the further amended summons, as follows : 1. An order declaring void in whole or in part either from its commencement or from some other time the contracts of employment between the applicant and the respondent whereby the applicant performed work in an industry.

2. Further, in the alternative, an order declaring void in whole or in part, or varying, either from their commencement or from some other time, those parts of the contracts of employment between the applicant and the respondent, or arrangements between the applicant and the respondent, whereby the respondent paid monies to the applicant upon the termination of the applicant's employment.

3. An order that the contracts between the applicant and the respondent were, or became, harsh, unconscionable, and contrary to the public interest and avoided the provisions of an industrial instrument. 4. Further, an order that that part, or those parts, of the contracts of employment between the applicant and the respondent which relate to payment for overtime were unfair, harsh and unconscionable and contrary to the public interest.

5. Further, an order that the contracts of employment between the applicant and the respondent be varied, as and from 12 September 1994, by deleting so much of the contract that relates to payment for overtime and inserting the following : "The employee shall be paid overtime for any hours worked in any week in excess of those specified in the Memorandum to the Speaker setting out her "Hours of duty", as those hours were specified to be from time to time. The employee shall be paid at 1.5 times the base hourly rate for the first ten (10) hours in excess of those hours, and at twice the hourly rate for any overtime worked thereafter."

"The base hourly rate shall be calculated in accordance with the following formulae:

A = The applicant's annual salary for a full-time employee (or, where the annual salary is varied by order of the Commission, the salary as varied)

6. Further, an order that the contract of employment between the applicant and the respondent be varied, as and from 12 September 1994, by deleting so much of the contract that relates to the salary to be paid to the applicant by the respondent, and inserting the following : "The employee shall be paid an annual salary equivalent to three-quarters of that earned by a Member of the Legislative Assembly of New South Wales." 7. An order that a clause be inserted in the contract as follows: "Upon termination of employment for a reason not involving misconduct or incompetence, the employer shall provide to the employee a reference stating the period for which the employee was employed by the employer, the nature of the duties performed by the employee, and that the employee was a competent and conscientious employee." 8. Further, an order that the contract of employment between the applicant and respondent, in respect of which the applicant was employed from 12 September 1994 to 12 April 1995, be varied so that the applicant be paid as a full-time employee.

9. An order that the respondent pay to the applicant such amount of money in connection with the contracts of employment so voided or varied as may appear just in the circumstances. 10. An order that the respondent pay to the applicant interest upon such amount of money as is ordered to be paid to the applicant in connection with the contracts of employment or the arrangements or collateral arrangements at such rates and from such time as this Honourable Commission considers appropriate. 11. An order that the respondent pay the applicant's costs of these proceedings.

12. Such further or other orders as this Honourable Commission may consider appropriate. 7 The particulars of the manner in which the monetary amount was claimed were : 1. Overtime to be calculated upon order from the Commission.

2. Difference between wage actually paid, (assuming applicant paid as a full-time employee from 12/9/94 to 12/4/95) to be calculated upon order of the Commission.

3. Compensation for stress and suffering in the course of the applicant's employment.

4. Compensation for impairment of employment prospects and reduction in quality of life.

5. Payment in lieu of notice. 8 The further amended summons set out the grounds upon which the relief sought was supported but for present purposes, having in mind the way in which the motion was argued, those grounds may be seen generally as directed to an allegation that the impugned contract between the parties was, or subsequently became, an unfair contract in the particular circumstances pleaded and as more fully set out in the applicant's affidavit filed in the proceedings. It is sufficient at this stage to simply remark that if such grounds were made out then at least an arguable case would exist for some relief being allowed. However, that is an aspect for attention in any final hearing and not by way of preliminary point. 9 The relevant empowering provisions of the Industrial Relations Act under which the applicant's claim has been brought are ss 105 and 106 in Pt 9 - Unfair contracts of Ch 2 thereof, in the following terms: 105 Definitions

contract means any contract or arrangement, or any related condition or collateral arrangement, but does not include an industrial instrument.

(c) that provides a total remuneration that is less than a person performing the work would receive as an employee performing the work, or

(d) that is designed to, or does, avoid the provisions of an industrial instrument.

106 Power of the 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 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. 10 As indicated by Mr Menzies , an enterprise agreement and an award applied to the employment of the applicant as a parliamentary electorate officer and it was the provisions of such industrial instruments which, by reason of the definition of "contract" in s 105 as excluding therefrom an industrial instrument, removed the applicant's claim from the remedial provisions of s 106 and so beyond power. The applicable enterprise agreement and award were admitted into evidence. 11 The enterprise agreement was known as the Parliamentary Electorate Officers Enterprise Agreement and it was made on 11 May 1994 between the defendant and the Public Service Association of New South Wales pursuant to the provisions of Div 2 - Enterprise Agreements (ss 115 to 132) of Pt 3 of Ch 2 of the then Industrial Relations Act 1991. Once registered with the Industrial Registrar, as that enterprise agreement was on 28 July 1994, it became enforceable as if it were an award and its provisions prevailed over the provisions of any award dealing with the same subject matters insofar as they purported to apply to a person bound by the enterprise agreement: ss 117, 118 and 126. An enterprise agreement was binding on the parties to the agreement, each person from time-to-time employed in the enterprise for which the agreement was made and each successor to an employer party to the agreement: s 120. It was common ground that the applicant was bound by the enterprise agreement as an electorate officer employed by the respondent. 12 The purpose of the enterprise agreement here was stated in cl 4 - Intention thereof as being "to regulate the terms and conditions of employment previously regulated by the Crown Employees (Parliamentary Electorate Secretaries - Salaries) Award and the Crown Employees (Administrative and Clerical Officers - Salaries) Award and replaces the previous Parliamentary Electorate Staff Enterprise Agreement". It contained provisions for salaries and allowances, a special salary scale, commencing salaries, higher duties allowance, hours of work, overtime, relief arrangements, training, performance management system, grievance and dispute handling procedures, leave, termination and separation from service provisions. The particularly relevant provisions referred to by Mr Menzies from the enterprise agreement related to salaries, hours of work, overtime and termination; those provisions were in the following terms :

Officers shall be paid the following salaries effective on and from the first pay period falling due after the identified dates as they appear in the schedule of salaries below. These salary rates will apply for the duration of the agreement unless an application to vary or terminate the agreement is lodged by either party under section 124 and 125 of the Act

The ordinary hours of work shall be 9 am to 5 pm, Monday to Friday, regardless of whether duties are performed at the electorate office or Parliament House, with one hour for lunch. Flexible working hours will not apply.

12. OVERTIME The remuneration prescribed in this Agreement includes payment for all incidents of work including overtime. Work will not be conducted on weekends or public holidays without reasonable prior consultation with the employee or the Public Service Association of NSW.

(a) Electorate Office staff are employed by the Speaker of the Legislative Assembly.

(b) An Electorate Officer's services may be terminated by the giving of 2 weeks notice by either the Speaker, being the employer, or the individual officer or upon the end of the term of office of the Member for whom the officer works.

(c) Termination of service other than by way of resignation or voluntary withdrawal of service may only be made by the Speaker of the Legislative Assembly. 13 With effect as from 2 September 1996 the present Act commenced and, as its long title indicates, it is "An Act to reform the law concerning industrial relations, and to repeal the Industrial Relations Act 1991". As provided by cl 6(1) in Div 2 - Former enterprise and industrial agreements of Pt 2 of Sch 4 - Savings, transitional and other provisions thereto, the Parliamentary Electorate Officers Enterprise Agreement as an enterprise agreement registered under the repealed Act was taken to be an enterprise agreement approved under the new Act and, so, continued in full force and effect. 14 On 11 March 1997, Schmidt J made a new award known as the Crown Employees (Parliamentary Electorate Officers) Award [1997] 301 NSWIG 626 which, as cl 22 thereof stated, applied "to all officers of the Legislative Assembly employed as Electorate Office staff to members of the Legislative Assembly from the first full pay period to commence on or after 25 February 1997". That award, it was common ground, applied to the employment of the applicant. Like the enterprise agreement immediately before it, the award contained provisions for salaries and conditions of employment in substantially similar terms. Clause 5 - Salaries thereof stated that "Electorate Office staff shall be paid the annual salary rates as set out" in the table annexed thereto, together with by cl 6 an annual allowance styled as an "all incidence of employment allowance". Other directly relevant provisions in the award were as follows : 10. Hours of Work

The ordinary hours of work shall be 9.00 a.m. to 5.00 p.m., Monday to Friday, regardless of whether duties are performed at the Electorate Office or Parliament House, with one hour for lunch. Flexible working hours will not apply. 11. Overtime

The remuneration prescribed in this award includes payment for all incidents of work, including overtime. Work will not be conducted on weekends or public holidays without reasonable prior consultation with the employee or the Public Service Association of New South Wales.

… 16. Family and Community Service Leave, Personal/Carer's Leave and Flexible Use of Other Leave Entitlements

(6) Time Off in Lieu of Payment for Overtime - There is no provision for time off in lieu of overtime as clauses 6, All Incidents of Employment Allowance and 11, Overtime, replace payments for overtime with an annual allowance prescribed in this award. … 17. Termination of Employment (a) Electorate Office staff are employed by the Speaker of the Legislative Assembly.

(b) An Electorate Officer's services may be terminated by the giving of two weeks' notice by either the Speaker, being the employer, or the individual officer or upon the end of the term of office of the Member for whom the officer works.

(c) Termination of service other than by way of resignation or voluntary withdrawal of service may only be made by the Speaker of the Legislative Assembly. 15 It appears from the applicant's affidavit that she commenced employment with the respondent on 12 September 1994 in the position of job-share Electorate Officer, Grade 1, working two days per week at Ms Harrison's Parramatta electorate office. A memorandum dated 15 September 1994 from the Clerk of the Legislative Assembly to the respondent, who indicated his approval of its terms on 19 September 1994, contained details of the applicant's appointment, including the following provisions : Hours of duty : 14 hours per week to be generally worked from 9.00 am to 5.00 pm, Monday and Tuesday, less one hour for lunch daily, in accordance with the Parliamentary Electorate Officers Enterprise Agreement.

Leave entitlements : Eight days recreation leave per annum. 6 days sick leave per annum, fully cumulative. Other leave conditions are similar to those applied to the position of Clerk in the State Public Service.

All absences from duty must be notified immediately by the completion of a leave application form.

Salary : Commencing on the weekly equivalent of $28,538 per annum (Special Salary Scale Y1), yielding a salary of $11,415 per annum for two days per week, and progressing by increments to a maximum of $31,060 per annum (Special Salary Scale Y4) yielding a salary of $12,424 per annum for two days per week.

Salary will be subject to all subsequent variations by way of National Wage or other adjustments.

Terms of employment : Terminable upon the giving of two weeks notice by either side or upon the end of the term of office held by the Member. A three month probationary period will apply to the appointment . 16 However, the applicant deposed in her affidavit that she performed work beforehand between April 1994 and 27 August 1994 on an unpaid basis in Ms Harrison's campaign office and, in that respect, stated : 3. Between April 1994 and 27 August 1994 I worked on an unpaid basis in Gabrielle Harrison's campaign office and campaigning out of the campaign office for between 35 and 40 hours each week. The office was located at Church Street, Parramatta. I worked together with my sister, Jill Raines. Upon being elected Member for Parramatta at the by-election on 27 August 1994 Gabrielle Harrison offered Jill and I a job share to replace Susan Fawcett. In my initial interview with Gabrielle Harrison, she said: "I must make it clear that the main aspect of the job was not to speak out of school. Additionally, loyalty is 99% of the job. My late husband, Andrew employed an Electorate Officer, Susan Fawcett who would not work a minute past 5 pm even for a short letter. I don't want someone like Susie."

I made no response. I did not find the expectation of occasional overtime to be a problem, as I know that it is occasionally necessary when an urgent task arises. I did not expect and was not led to believe that I would be required to work as much as seven days each week and to spend my entire time on an urgency basis. Had the task that I found later that I had to undertake been properly and fairly described to me, I would have declined to take the position. 17 What then occurred was stated in the applicant's affidavit as follows: 9. In September 1994, my employment records will show that I worked two days a week. My position was as junior Electorate Office Secretary. In fact I worked more than five days a week and the extra work was unpaid. Gabrielle Harrison said to me in approximately late September 1994: "I am pretty sure I'll get a ministry after the next Election … you'll get a really good position Anne but you will have to do extra work now and keep doing extra work without pay until I do get that position. The new job will be a full time position. The job you are doing now and this extra work is a job of commitment and loyalty. Its not any ordinary job. You just can't walk out the door at five o'clock."

10. I recall this conversation occurred in the hallway of my sister Jill's home on a social occasion. I understood that this would mean that in the event of an occasional emergency, that I may have to work an extra hour or so. 18 Following the March 1995 State election, the applicant was promoted in Ms Harrison's electorate office to the position of Electorate Officer, Grade 2 as from 13 April 1995 on a full-time basis. A memorandum dated 2 May 1995 from the Clerk of the Legislative Assembly to the respondent, who approved its terms on 4 May 1995, set out new conditions allowed to the applicant on her promotion, as follows : Hours of duty : 35 hours per week to be generally worked from 9.00 am to 5.00 pm, Monday to Friday, less one hour for lunch daily, in accordance with the Parliamentary Electorate Officers Enterprise Agreement.

Leave entitlements : 20 days recreation leave per annum. 15 days sick leave per annum, fully cumulative. Other leave conditions are similar to those applied to the position of Clerk in the State Public Service.

All absences from duty must be notified immediately by the completion of a leave application form.

Salary : Commencing on the weekly equivalent of $35,591 per annum (EO2 Year 3) and progressing to a maximum of $36,714 per annum (EO2 Year 4). Salary will be subject to all subsequent variations by way of National Wage or other adjustments.

Prior Service : All prior service and leave entitlements accrued whilst job-share Electorate Officer, Grade 1 to be carried over to this position.

Terms of employment : Terminable upon the giving of two weeks notice by either side or upon the end of the term of office held by the Member. A three month probationary period will apply to the appointment . 19 The applicant then detailed in her affidavit the events concerning her work in the electorate office covering the specific duties performed, the hours she worked and alleged difficulties which arose; it is unnecessary for the purposes of the jurisdictional point to elaborate those matters. It is sufficient to observe that the applicant left the electorate office on stress leave on or about 4 November 1997 and was medically retired from employment on 10 November 1998. The present claim for relief under s 106 was filed on 16 February 1999. 20 Mr Menzies' proposition against the existence of jurisdiction in the Court to entertain the applicant's claims relied upon the exclusion, by reason of the definition of "contract" in s 105, from the coverage of s 106 over a contract which was an "industrial instrument". Section 8 of the Industrial Relations Act defines an industrial instrument as meaning inter alia "an award, an enterprise agreement, … ". Primarily, senior counsel put the lack of jurisdiction to make an order on two bases: first, where the order would have the effect of rendering any part of the enterprise agreement or the award void either in whole or in part; and, second, where the order would, with respect to any matter dealt with by either the enterprise agreement or the award, be inconsistent with, contrary to or confer a benefit greater than that conferred by such enterprise agreement or award. The respondent conceded, correctly in my view, that relevant unfairness may arise either from the terms of a contract and/or from the manner of performance or operation of the contract as laid down in cases such as Barry v Incitec Limited [1991] 45 IR 143 at 146 per Hill J, Incitec Limited v Barry [1992] 45 IR 148 at 152 (Full Court of the Industrial Court), Incitec Limited v Industrial Court of New South Wales (1992) 29 NSWLR 83 at 86-87 and [1992] 45 IR 155 at 157-158 (Court of Appeal), Rothmans Distribution Services Limited v Full Court of the Industrial Court of New South Wales [1994] 53 IR 157 at 160 per Priestley JA and McNaught v Micador Australia Pty Limited (1996) 83 IR 111 at 116-117 per Hungerford J. 21 Mr Menzies submitted that to the extent the precise issue here was decided by Hill J in Newton v Goodman Fielder Mills Ltd (1997) 81 IR 227 by reliance upon the Court of Appeal in Incitec Limited v Industrial Court , his Honour was in error because that latter decision was concerned with the unfair contract provisions contained in s 88F of the Industrial Arbitration Act 1940 which, like the jurisdiction conferred by the comparable provisions in s 275 of the Industrial Relations Act 1991, was not limited by a definition of "contract" such as that included in s 105 of the present Industrial Relations Act which expressly excluded an industrial instrument from those contracts caught by s 106. For the same reason, senior counsel submitted, the decisions in Baker v National Distribution Services Limited [1993] 50 IR 254 and Rothmans Distribution Services v Industrial Court (53 IR 157) as relied upon by Hill J in Newton v Goodman Fielder Mills were of no assistance. 22 Having in mind the express provisions, as set out earlier, of the enterprise agreement and the award applicable to the applicant's employment, senior counsel submitted that the orders sought by her with respect to overtime, higher salary rate and payment in lieu of notice of termination of employment were inconsistent with, contrary to or would confer a benefit greater than that conferred by such enterprise agreement and award. Consequently, the Court had no jurisdiction to make the orders. 23 The remaining attack on jurisdiction was directed to the orders sought for the payment of compensation for stress and suffering in the course of the applicant's employment and for impairment of employment prospects and reduction in quality of life. Mr Menzies relied upon the decision of the High Court in Brown v Rezitis (1970) 127 CLR 157 as support and submitted that the reasoning of Marks J in Pullen v R & C Products Pty Ltd (1994) 60 IR 183 at 214-216, which suggested that power existed to allow such relief, was wrong and should not be followed. 24 The applicant's solicitor, Mr S L Ferrier , characterised the nature of s 106, as supporting the orders sought and as being consistent with the decision in Newton v Goodman Fielder Mills , in the following way : What this case in brief states is the obvious. That is, that section 106 is designed to bring relief to people who are forced into or find themselves subsequently in arrangements which are against their interest and which derive from a perversion of the documentary contract. In a sense the original document is in the nature of a sham. That is, a sham is a real document entered into by real parties who sign their names but then the events which actually occur are events which are nothing like those which are written into the contract. It would take away from the jurisdiction of this court if it were not in a position to involve itself with those actions which actually occur in respect of a contract of employment, notwithstanding that the real contract may have been entirely proper according to its terms. The Act in sections 105 and 106 continues that legislative concept without any falter. The crucial matter is that it has accepted the making of a document so that it is not appropriate in a case such as this for the award itself to be the subject of an attack. We do not seek to attack the award in this case. 25 Mr Ferrier furthered his description of the written contract of employment here as being in the nature of a sham by submitting that the evidence would show that what occurred to the applicant was not within the purview of an employment contract otherwise properly entered into so that if the existence of an enterprise agreement or award excluded relief under s 106 then "demands made over and above … would be just shut out of this Court". In that respect Mr Ferrier called in aid the remarks of Gleeson CJ in Incitec Limited v Industrial Court (45 IR at p 157), namely - "Section 88F is concerned with alleged unfairness or harshness or unconscionability of individual contracts of employment. The focus of attention is the contractual relationship between a particular employer and employee". That was the approach also, correctly in Mr Ferrier's submission, followed by Hill J in Newton v Goodman Fielder Mills (81 IR at pp 232-233). In any event, as Mr Ferrier emphasised, this case made no attack on the enterprise agreement or the award but was directed to the contract of employment. 26 In relying upon Brown v Rezitis to enable the payment of monies as claimed by the applicant for restitution for what occurred during the employment relationship, Mr Ferrier submitted that "If such harm in this case should be of an unusual nature, the authorities plainly support that payment can still be ordered to redress the harm. That would be a retrospective remediation". 27 In repeating that the applicant's case was not to call the enterprise agreement or award into question in any way, Mr Ferrier , in relating the relief sought to the concept of restitution for the alleged harm done, summarised the applicant's case in the following way : The fact that this applicant has suffered damage of three kinds may be peculiar to this applicant, but the purpose and philosophy of this Act is that where an employment-related harm is done, one that goes to the way in which a contract of employment was carried out by a process of persistent, deliberate and in some respects previously intended actions, as the applicant alleges occurred against her by Harrison, we are squarely with an egregious breach of a contract which is the only source of the harm which this applicant suffered; that the harm can be restituted by payment for overtime, payment which goes to the question of the seniority of the work, and payment which goes to re-establish her as a result of the mental stress and indeed breakdown that she suffered arising directly from the activities that this employer forced on her.

There is no other place for her to go. There is no other harm but the harm of employment and its working out. There is no provision for mental harm to be dealt with by the Workers Compensation Commission. This applicant does not have a case for Workers Compensation for the mental harm she has suffered. There is no general damage. This is a woman who went to work, was put to work in the most outrageous way and has suffered harm. Brown v Rezitis stands unchecked as saying that there is a payment available to her. 28 I deal initially with the issued raised relating to the applicant's claim for compensation for stress and suffering in the course of her employment and for the impairment of employment prospects and reduction in quality of life. In respectively opposing and supporting this claim at the jurisdictional level, both counsel relied upon Brown v Rezitis as setting the limits within which such relief under s 106 could be allowed. It is not incorrect to say that claims for this head under s 106 are rare and there is little reference to it in the decisions. However, in Pullen , Marks J considered a claim for monetary compensation under s 275(3) of the former Industrial Relations Act 1991, the statutory predecessor to s 106(5) of the present Act, where the compensation claimed was based on physical and mental injury sustained consequent upon the termination of the complainant's employment. His Honour referred to Addis v Gramophone Co Ltd [1909] AC 488 in which the House of Lords held that an employee was unable to recover damages for injured feelings and loss of employment prospects arising from the harsh and humiliating manner of his dismissal in an action for damages for breach of contract. As his Honour noted (60 IR at p 216), the approach in Addis has not been followed in New Zealand: see Whelan v Waitaki Meats Ltd [1991] 2 NZLR 74 and Rowlands v Collow [1992] 1 NZLR 178. 29 The right to recover damages for distress and disappointment was reviewed by the High Court in Baltic Shipping Company v Dillon (1993) 176 CLR 344 and, without disturbing the approach in Addis , various exceptions to the general rule were stated by all members of the Court. Significantly, it seems to me, Mason CJ (with whom Toohey and Gaudron JJ agreed; Brennan, Deane , Dawson and McHugh JJ to a similar effect) remarked (176 CLR at p 359) that "Pain and suffering is a well-known common law head of damage recoverable in actions for damages for personal injury, whether awarded for tortious conduct or conduct which constitutes a breach of statutory duty". The Chief Justice added (176 CLR at p 362) : But one might ask why the injured party should be deemed to take the risk of damage of a particular kind when the fundamental principle on which damages are awarded at common law is that the injured party is to be restored to the position (not merely the financial position) in which the party would have been had the actionable wrong not taken place. Add to that the fact that anxiety and injured feelings are recognized as heads of compensable damage, at least outside the realm of the law of contract. And as well the circumstance that the general rule has been undermined by the exceptions which have been engrafted upon it. We are then left with a rule which rests on flimsy policy foundations and conceptually is at odds with the fundamental principle governing the recovery of damages, the more so now that the approaches in tort and contract are converging. 30 Of course, the present action is neither an action for breach of contract nor in tort for common law damages. Rather, as s 106(5) of the Industrial Relations Act states, the Court is empowered to "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". In Pullen, Marks J recognised the difficulties arising but, in the exercise of a discretion, his Honour declined to award any monies by way of compensation for any physical damage or inconvenience and distress because, as his Honour said (60 IR at p 216), "in the absence of any finding that the contract of employment should be varied to insert any contractual term covering the circumstances in which the termination processes should be undertaken, I am not inclined to award any monies [for those heads]". 31 In Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144, a Full Court of the former Industrial Relations Court of Australia considered the availability of damages at common law for distress, disappointment or injured feelings arising out of termination of employment. Their Honours held that the shock, humiliation and distress suffered in respect of the unlawful termination were matters proper to be taken into account in considering the amount of compensation under the then s 170EE of the Workplace Relations Act 1996 (Cth). In making those observations the Full Court said (142 ALR at p 156) : The court's power under s 170EE(2) of the Act is to order payment of "such amount (of compensation) as the Court thinks appropriate". In making its assessment, the court is obliged to have regard to lost remuneration, but is not limited to that item. If the evidence establishes other damage flowing from the unlawful termination, the court is entitled to take that into account in making its assessment, up to the limits prescribed by paras (a) and (b) of s 170EE(3). It follows that the shock, humiliation and distress suffered by Ms Burazin in respect of the unlawful termination of her employment are matters that Madgwick J was entitled to take into account in considering the proper amount of compensation to be ordered under s 170EE(2). 32 For completeness, I should refer to the decision of a Full Bench of the Australian Industrial Relations Commission in Liu v Coms 21 Limited (Print S3571) given on 25 February 2000 regarding the payment of compensation for "shock, humiliation and distress" in respect of the termination of employment found to be harsh, unjust and unreasonable pursuant to s 170CE of the Workplace Relations Act 1996 (Cth). In such a situation, s 170CH(6) empowered the Australian Commission, if it thought that the reinstatement of the employee was inappropriate, to "make an order requiring the employer to pay the employee an amount ordered by the Commission in lieu of reinstatement". The Full Bench referred to the earlier decision of the Full Court in Burazin v Blacktown City Guardian , which considered the question prior to the enactment of the provision in s 170CH(6), and commented (at para [7]) : If the current Act was intended to overrule Burazin one would expect a specific indication of that, given the terms of s 170CH(7), rather than the minor changes in phraseology to which Mr Constance referred. We have concluded that the relevant words in s 170CH(6) should be construed to mean only that where the Commission considers that reinstatement is inappropriate it may make an order for compensation as an alternative remedy. We do not think that such a construction does any violence to the ordinary meaning of the words used. We reject the submission that the terms of s 170CH(6) do not permit the Commission to order compensation for shock, humiliation and distress. 33 Having in mind the way in which the applicant proposes to advance her claim under s 106, and particularly in light of the statutory terms of sub-s (5) thereof, I am by no means persuaded that this aspect of the claim is appropriate for determination at the threshold and before the substantive hearing. To use the words of Kirby P in Majik Markets (28 NSWLR at pp 446-447), I am not satisfied that the argument thus far advanced by the respondent "will knock out the claim" nor "that no order could be made which would be within jurisdiction". Indeed, the present state of the authorities on this aspect would seem to favour a view that power exists to entertain this head of the applicant's claim. However, the proper construction of s 106(5) requires detailed consideration in the context of full argument in all the circumstances as they may be found at a final hearing and at this preliminary stage I decline to make a final ruling. Therefore, this argument on the motion must be rejected on the principle in Nagle v Tilburg . 34 I turn then to deal with the primary grounds of attack on the s 106 claims as advanced by Mr Menzies . That challenge was mounted, as I have said, on two bases. The first was that no order could be made under the section which would have the effect of rendering any part of the enterprise agreement or the award void, either in whole or in part. Mr Ferrier conceded the force of that submission but met it with the submission that no part of the applicant's claim sought to avoid or vary such enterprise agreement or award; rather, as he put, the challenge was to the contract of employment between the applicant and the respondent. In my view, Mr Ferrier's concession was properly made and this aspect of the argument need be taken no further as it misconceived the real character of the applicant's claim. 35 The second argument by Mr Menzies , however, viewed the relevant effect on the enterprise agreement or award as being barred by the statute where any order made under s 106 would be inconsistent with, contrary to or conferred a benefit greater than that conferred by the enterprise agreement or the award with respect to any matter dealt with by those industrial instruments. In other words, as I understood the argument, once a matter was dealt with by either the enterprise agreement or the award then no order could be made under s 106 with respect to that matter which, in effect, conferred on the applicant a different or more beneficial condition of employment. 36 In my view, the initial answer against Mr Menzies' submission, like the first leg of his argument, is that the applicant's claims do not seek an order directly avoiding or varying any industrial instrument. The claims were, as Mr Ferrier emphasised, directed to the contract of employment between the parties. Section 105 in defining a relevant "contract" excludes from s 106 "an industrial instrument" and s 106 therefore only enables an order to be made declaring void or varying any contract whereby a person performs work in any industry provided the impugned contract is not an industrial instrument. Thus, it seems to me, the real question for determination raised by the motion is whether the enterprise agreement and award formed part of the contract of employment in such a way as to make them exclusive of anything otherwise contained in it whether by the contract's terms or by the operation of orders under s 106 affecting the contract. That requires attention to the nature of the relationship between an industrial instrument and the contract of employment. 37 The question so posed necessarily is to be seen, apart from the statutory provisions to which I have already referred, in light of ss 404 and 406 contained in Ch 8 - Miscellaneous of the Industrial Relations Act which are in the following terms : 404 Act binds the Crown This Act binds the Crown in right of New South Wales and, so far as the legislative power of Parliament permits, the Crown in all its other capacities.

406 Awards and other industrial instruments provide minimum entitlements

(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.

(3) In the case of a contract determination or contract agreement, a reference in this section to an employee is a reference to a driver or carrier and a reference to employment is a reference to engagement as a driver or carrier. 38 The making of the industrial instruments referred to in s 406 is covered in the statute by Ch 2 - Employment; Pt 1 (ss 10 to 28) thereof applies to awards and Pt 2 (ss 29 to 47) thereof applies to enterprise agreements. Relevantly for present purposes, s 10 enables the Commission to make an award "setting fair and reasonable conditions of employment for employees" and s 12 makes an award binding on all employees and employers to which it relates and, subject to its terms, on all employees and employers engaged in the particular industry concerned. Section 29 enables an enterprise agreement to be made "setting conditions of employment for employees", including by s 30(1)(d) public sector employees; s 40 makes an enterprise agreement binding on the parties to the agreement and each employee for whom the agreement is made (whether or not such an employee at the time the agreement was made); and s 41(1) gives primacy to the provisions of an enterprise agreement over the provisions of any award which deals with the same matters. In the present case, it was common ground that once the award commenced on 25 February 1997 it replaced the terms of the then existing enterprise agreement as it applied to the employment of the applicant. Therefore, the question of jurisdiction posed is to be seen by reference to the enterprise agreement for the period of the applicant's employment from 12 September 1994 to 24 February 1997 and thereafter by reference to the provisions of the award. 39 However, and as was acknowledged by Mr Menzies , both the enterprise agreement and the award contained terms which were substantially the same so that in assessing senior counsel's argument it is sufficient to refer to one of them only - for present purposes, I will do so by reference to the award. 40 In a system of industrial regulation as exists in this case where awards (and enterprise agreements) may be made to prescribe conditions of employment for employees generally in a particular industry, it has long been recognised, as I understand the position, that where a person is employed to perform work to which an award applies the parties are nonetheless bound by a contract being a contract of employment. In other words, the legal relations between them are determined in part by the contract and in part by the award but it is the existence of the contract creating the relationship of employer and employee which makes applicable the award to the extent the award controls or regulates the relationship as to the matters it covers: see generally Mallinson v The Scottish Australian Investment Co Ltd (1920) 28 CLR 66 at 73; Amalgamated Collieries of WA Ltd v True (1938) 59 CLR 417 at 423, 436-437, 438-439; True v Amalgamated Collieries of WA Ltd (1940) 62 CLR 451 at 454-455; and Re Waterside Workers Award [1957] 1 FLR 119 at 122-123. 41 The distinction between an award, on the one hand, and a contract of employment, on the other, including the continuing existence of each during the employment relationship, is crucial in considering Mr Menzies' argument. Essentially, senior counsel had to establish that in some way the award (and enterprise agreement) became merged in or part of the contract of employment so as to be able to call in aid the explicit exclusion of industrial instruments from the contracts covered by s 106. Alternatively, senior counsel had to establish that the award in some way superseded or supplanted the contract of employment so that any purported avoidance of or variation to such contract by means of s 106 was in fact not permitted because to do so would be to confer on the applicant benefits different from or in conflict with those laid down by the award. 42 Given the separate existence of an award and an employment contract, I am not at all persuaded it could be said on the evidence in this case that the award (in relevant respects as to salary, overtime and termination of employment) either expressly or by implication became part of the employment contract. It is true that the award once made required the parties to observe it and to be bound by its provisions, but that was so by reason of the status and force of the award under the Industrial Relations Act . Even so, and accepting that the award and enterprise agreement here were indeed part of the contract of employment, that would not, in my view, change the nature and character of that contract. The point arose for decision in Byrne v Australian Airlines Limited (1995) 185 CLR 410 where dismissed employees relied upon the statutory force of an award as incorporating the award - or at least its provisions that termination of employment shall not be harsh, unjust or unreasonable - in the employment contract to enable the enforcement of those award provisions by the use of contractual remedies for damages for breach of contract and statutory duty. Brennan CJ, Dawson and Toohey JJ said (185 CLR at pp 420-422) : A right to the payment of award rates is imported by statute into the employment relationship, which is contractual in origin, and, express promise apart, it is only in that sense that it can be said that award rates are imported into the contract of employment. The award regulates what would otherwise be governed by the contract. But award rates are imported as a statutory right imposing a statutory obligation to pay them. The importation of the statutory right into the employment relationship does not change the character of the right. As Latham CJ points out in his judgment in Amalgamated Collieries of WA Ltd v True ((1938) 59 CLR 417 at 423), the legal relations between the parties are in that situation determined in part by the contract and in part by the award. And as the judgment of the Privy Council in that case suggests, a provision in an award may also be made a term of the contract by agreement between the parties, but that is only to emphasise the distinction between an obligation imported by statute and one arising by agreement. … 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 (see Kilminster v Sun Newspapers Ltd (1931) 46 CLR 284) and, as we have said, 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. There is, therefore, an insuperable obstacle in the way of the appellants' second argument that the terms of an award such as cl 11(a) are implied terms of the contract of employment. 43 I do not consider, therefore, that the award and enterprise agreement became part of the contract of employment - the contract of employment here stood separate from those industrial instruments. 44 At the least, for the respondent to succeed it would have to be shown that what the applicant has claimed as relief under s 106, or any similar order thereunder made by the Court, would derogate from the terms and conditions prescribed by the award. And, as it was developed, that was the thrust of Mr Menzies' argument that effectively the orders sought under s 106 would be inconsistent with, contrary to or conferred a benefit greater than that allowed by the award so as to be barred by the exclusion of industrial instruments from the section's remedial scope. 45 I think it timely at this stage, in considering the inconsistency argument, to repeat the terms of s 406 which in sub s (1) thereof lays down that "the conditions of employment set by an industrial instrument are the minimum entitlements of employees"; sub s (2) reinforces sub s (1) by making ineffective the provisions of a contract of employment "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". It is trite law, in my view, and hardly seems necessary to cite authority for support, that awards traditionally lay down the minima leaving individual employers and employees free to agree to conditions more favourable to the employee. Section 406 not only recognises that but gives the proposition statutory force and effect. 46 If, as I have found to be the case, parties to an employment relationship are able to contractually agree to conditions more favourable to the employee than those in an applicable award, why then is it not open under s 106 for the Court to make orders affecting that contract so agreed? It would indeed be surprising if it were not so. 47 Further, and this may well be the position on the final evidence in the instant case, even if a contract of employment expressly imported the conditions of employment prescribed by a relevant award or enterprise agreement, why could not orders be made under s 106 more favourable to the employee? I do not see why not. After all, the award or enterprise agreement would still continue unaffected as the minimum prescription - it would be the contract of employment itself that was affected by an order and, as the majority decision in Byrne v Australian Airlines (185 CLR at p 420) makes clear, "that is only to emphasise the distinction between an obligation imported by statute (the statutory force of an award) and one arising by agreement (the employment contract)". 48 The claims made by the applicant sought declarations avoiding or varying the contract of employment, together with orders for consequential monetary relief as to salary, overtime payments and termination of employment. As to the declarations, I have found already that the contract of employment was separate from the industrial instruments here and which instruments were not relevantly incorporated within the impugned contract. The result must be, in my view, that the declarations sought, or similar declarations thought appropriate after a final hearing, are within the jurisdictional scope of s 106 and only await one or more of the statutory grounds for relief being established as would warrant discretion being exercised to make them. 49 As to the claim for the insertion in the contract of employment of a clause that upon termination of employment, other than for cause, the respondent shall provide the applicant with a reference containing certain specified details, I am satisfied it is competent for the same reason as are the declarations of avoidance or variation of the contract. Also, the subject matter of a reference nowhere is contained in the enterprise agreement and award as would even suggest any inconsistency of the nature argued by Mr Menzies. 50 I deal then with the remaining claims as to monetary benefits sought by the applicant concerning salary rates, overtime payments and payments on termination of employment in lieu of notice. This requires consideration of Mr Menzies "inconsistency" argument based on the award and enterprise agreement superseding or supplanting in some way the contract of employment. 51 Inconsistency, in the sense used by Mr Menzies , cannot, it seems to me, arise without more where a subject matter merely exists in both of the competing instruments. In other words, there would have to be something in the nature and terms of the primary instrument, said here to be the enterprise agreement and the award, which made it ineffective in its operation if the secondary instrument, said here to be an order made under s 106, were to operate. If it were otherwise then the requirement of s 406, like the ordinary relationship between an award and a contract of employment, that awards set minimum employment conditions would be infringed. For instance, it is clear that if an applicable award prescribed a salary rate of, say, $500 per week then a contract of employment, and hence an order under s 106 varying it, could not validly prescribe, say, $400 per week. But there would be nothing, in my view, to prevent the contract of employment or an order varying it under s 106 prescribing a salary rate of, say, $600 per week. Likewise, the position would be so in relation to entitlements to overtime and termination payments. 52 The point may be illustrated by reference to the decision of the High Court ( Gavan Duffy CJ, Starke, Dixon and McTiernan JJ) in Kilminster v Sun Newspapers Limited (1931) 46 CLR 284 where it was held unanimously that the provisions of an award permitting termination of employment by two months' notice did not interfere with an employee's right ex contractu for a period of notice longer than that prescribed by the award. Their Honours said (46 CLR at p 289) "that the provisions … of the award merely mean that the employment shall not be put an end to unless notice as therein prescribed shall be given, and they do not interfere with the rights of the parties with respect to longer notice by contract or otherwise". The employee was thus able to sue at common law for damages to recover under his contract of employment "reasonable notice" as a period longer than the two months allowed under the award. The decision in Kilminster v Sun Newspapers was referred to with approval in Byrne v Australian Airlines (185 CLR at p 421 per Brennan CJ, Dawson and Toohey JJ, and at p 444 per McHugh and Gummow JJ). 53 In his minority decision in Amalgamated Collieries v True (59 CLR at p 439), but affirmed as correct by the Privy Council on appeal in True v Amalgamated Collieries of WA Limited (1940) 62 CLR 451 at 455, Evatt J relied on the decision in Kilminster v Sun Newspapers as illustrative of the principle "that the employee is always at liberty to bring an action in the ordinary courts in order to recover under the terms of his contract of employment so long as such contract is not void or unlawful or inconsistent with the terms of the appropriate award". It is clearly open, in my view, to read the word "contract" in that reasoning and in Kilminster v Sun Newspapers as including "a contract as varied by an order under s 106": see Harcourt Brace & Co (Aust) Pty Ltd v Cory (1997) 81 IR 321 at 331-333; Westfield Ltd v Helprin (1997) 82 IR 411 at 433-434; and Beahan v Bush Boake Allen Australia Limited (1999) 93 IR 1 at 33-34. 54 I mention in further illustration of this point the decision of the High Court ( Isaacs, Higgins and Starke JJ, Knox CJ and Gavan Duffy J dissenting) in Federated Seamen's Union of Australasia v Commonwealth Steamship Owners' Association (1922) 30 CLR 144 where it was held that the words in a statute, s 77(2) of the Navigation Act 1912 (Cth), that "all wages earned shall be paid monthly" imposed a duty to pay the wages not less frequently than once a month but did not prohibit payment more frequently so that parties might agree, or an award may be made, for wages to be paid fortnightly; also, it was held where the statute required payment of three-quarters of the wages within 24 hours after a ship's arrival in port that an agreement could be reached, or an award made, for payment of the wages within four hours after the ship's arrival in port. 55 It is necessary in determining this inconsistency argument put by Mr Menzies to consider the nature and operation of s 106. That was addressed quite recently by a Full Bench ( Wright J, President, Walton J, Vice-President, and Hungerford J) of the Court in Beahan v Bush Boake Allen where, after reciting the various authorities, their Honours concluded (93 IR at p 35) : What emerges from the above authorities, we think, is the now settled view that s 106 (as with the previous s 88F of the 1940 Act and s 275 of the 1991 Act) is directed to an impugned contract of employment, whether existing or terminated, as to the fairness of its express or implied terms. Such unfairness will depend upon the facts of each particular case by focusing attention on the contractual relationship between a particular employer and employee and where the unfairness may arise from the terms of the contract itself, the surrounding circumstances and/or the manner of performance or operation of the contract. The section, we emphasise, is not concerned with re-establishing an employment relationship which has ended nor with compensating an employee for the loss of his employment contract. In other words, the section is properly concerned with the fairness of the terms of a contract of employment in its various respects and, if relevantly found to be unfair, to provide remedial relief by avoiding or varying the terms of that contract and to order the payment of money in connection with any contract so avoided or varied as is considered just in the circumstances of the case. 56 The important point for present purposes is that s 106 (like its statutory predecessors in s 88F of the Industrial Arbitration Act 1940 and s 275 of the Industrial Relations Act 1991) is concerned with a particular case, as distinct from attention to conditions of employment generally in an industry to be allowed by employers as minima for all employees in that industry, by focusing on the contractual relationship of an employer with an employee. Where relevant unfairness is found in the terms of an employment contract then s 106 may be utilised to provide remedial relief in respect of that employment contract. That mechanism is not, in my view, offensive of the exclusion of industrial instruments from the coverage of s 106 but rather provides conceptual support for the exclusion being provided. In other words, the statute recognises the true scope and ambit of s 106 as being directed to the contract of employment and makes it plain that industrial instruments may not be the subject of attack. 57 It is worth repeating at this point the fact in the instant case that the challenge is to the employment contract between the parties and not to the award or the enterprise agreement as such. The respondent's real concern, it seems to me, is that he faces the potential of orders being made granting to the applicant benefits more favourable to her than those in the award or in the enterprise agreement. 58 That type of concern was demonstrated in relation to a claim made under the former s 88F in Casey v Wentworthville Memorial RSL Club [1986] 16 IR 337. Macken J there held that s 88F provided no jurisdiction to find an employment contract unfair in relation to a provision for one week's notice of termination of employment where the applicable award, the Club Employees (State) Award, contained a provision for termination on notice of one week. His Honour reasoned (16 IR at pp 339-340) : It is necessary to next consider whether the express terms of an award made by the Industrial Commission could be brought within the enumerated sub-paragraphs of s 88F.

To decide whether a term of a State award can be attacked under s 88F by an employee working pursuant to its terms I have borne in mind that the Industrial Commission has always treated s 88F as a provision in the Act which stands alone. It is distinguished as a judicial function of the Commission and much of its value comes from its distinction from the exercise of arbitral power under other provisions of the Act. Sheldon J in Davies ' case [1967] AR (NSW) 371 at 374 made the comment: "If ever a law was intended to stand on its own feet it is this one." Sheldon J went on to comment: "no action is warranted on a transaction not covered by (c), (d) or (e) unless it is unfair or harsh or unconscionable. To determine this requires no more than the common sense approach characteristic of the ordinary juryman …" No State award could be caught by pars (c), (d) or (e) because of their terms. Awards of the Industrial Commission of New South Wales are made after hearing the parties represented in the proceedings, but subject to the overriding consideration to consult the public interest with respect to the award.

"The interest of the public generally, 'the silent party in every dispute', has always been considered by all industrial tribunals, both federal and State, to be a matter which cannot be disregarded in the making of an award." [1930] AR (NSW) 363 at 400. As awards are thus made taking into account the public interest it can hardly be said that ground (c) of s 88F can be levelled against a clause of a State award. Similarly, pars (d) and (e) are in their terms inconsistent with an application to void or vary the terms of a State award.

It remains to consider whether jurisdiction exists in the Commission to entertain an application under s 88F to set aside a term of a State award on the grounds that the State award is unfair, harsh or unconscionable. To read the Act so as to allow such a claim to be made would be to suggest that an employer who has wholly complied with an award of the Commission should be said to have acted unfairly, harshly or unconscionably in doing so.

Such a construction of s 88F would be so destructive of the award-making powers of the Commission and so potentially unfair and inconvenient to all parties bound by awards, corporate and individual, that it is a construction against which one should lean in construing the section and the width of the jurisdiction vested in the Commission by it. 59 Whilst Macken J recognised, correctly I think, the special nature of s 88F in the legislative scheme and its "stand alone" character, his Honour nevertheless viewed the matter, like the present respondent, as if s 88F was being used to challenge the award provisions themselves and even though his Honour earlier (16 IR at p 338) acknowledged that "the mere presence of an award as the basis of an employment contract was conceded as not excluding the operation of s 88F which could operate with respect to extra award terms and conditions of the contract". 60 I am of the opinion that the decision in Casey was directly contrary to the finding of the High Court in Kilminster v Sun Newspapers , which finding, as I have said earlier, was followed with unanimous approval by the High Court in Byrne v Australian Airlines and by the minority of Evatt J in Amalgamated Collieries . Also, I think the approach of Macken J was against that of the High Court in Seamen's Union v Commonwealth Steamship Owners' Association as to how inconsistency should be determined. I think too that his Honour's approach was contrary to the conceptual nature of s 88F (and, hence, s 106) as discussed in Beahan v Bush Boake Allen . I decline to follow it, satisfied as I am that his Honour seemed to treat, wrongly in my respectful view, subject matters of employment conditions once contained in an award as being exclusive of and a bar to more favourable terms being agreed in a contract of employment or inserted therein by variation pursuant to s 88F. 61 In Newton v Goodman Fielder Mills , Hill J expressed the view that Casey was no longer authority for the proposition stated by Macken J. Hill J considered the issue to be settled by the decision of the Court of Appeal in Incitec v Industrial Court in which Gleeson CJ, with whom Kirby P and Priestley JA agreed, said (29 NSWLR at pp 86-87; 45 IR at pp 157-158) as to the relationship between s 88F and the legislative provisions concerning employment protection in the Employment Protection Act 1982 : Section 88F is concerned with alleged unfairness or harshness or unconscionability of individual contracts of employment. The focus of attention is the contractual relationship between a particular employer and employee. The employment protection legislation, concerned, as it is, with the matter of awards and industrial agreements, directs attention to more general industrial issues.

Hill J said in his judgment at first instance ( Barry v Incitec Limited (1991) 45 IR at 146) : "On the other hand s 88F of the Act deals with the matter of what for present purposes may be briefly described as unfair contracts. It applies to a contract or arrangement between the particular persons who are party thereto. Unfairness may arise either from the terms of the contract itself, the surrounding circumstances, and/or from the manner of performance or operation of the contract. The section deals largely with private rights inter partes. Despite that a general and relevant industrial prescription governing benefits payable to employees in termination of employment situations may exist, unfairness in relation to a particular contract of employment may nevertheless arise in a situation of redundancy or termination of employment for reasons unrelated to or not relevant to the basis of award prescription of an objective and fair general standard of redundancy or severance benefits. It may arise simply in the special circumstances of and surrounding the particular contract." The fact that Parliament has, in employment protection legislation, dealt in a particular way with disputes about redundancy payments, arising in certain defined circumstances, and between certain classes of employer and employee, does not require or justify a construction of s 88F which treats the subject of termination entitlements as being outside the scope of the power which is given by that section to remedy contractual unfairness. 62 Hill J said in Newton v Goodman Fielder Mills (81 IR at pp 232-233) : The question is not whether the award is fair but whether the contract of employment is unfair. Awards do (must), of course, prescribe fair and reasonable conditions of employment; but they are based upon general standards applicable to all employees covered thereby. As a general rule they do not have regard to the special circumstances pertaining to the employment of a particular employee; those matters are appropriate to be dealt with by the individual contract of employment. An award applicable to a particular occupation or calling sets the minimum terms and conditions below which the contract cannot fall. On the other hand, s 106 is, as were its predecessors s 275 of the 1991 Act and s 88F of the 1940 Act, designed to deal with the fairness or unfairness of a particular contract or arrangement of employment having regard to all circumstances and considerations relevant thereto.

In my opinion, the provisions of the relevant award, assuming they are applicable to the employment in this case, provide no barrier to a determination by the Commission that the contract is unfair because it does not contain an express provision for fair and proper notice and/or such other provisions governing the termination of Mr Newton's employment on redundancy grounds as may be found fair and reasonable, having regard to all of the circumstances of and surrounding his employment and its termination. 63 The consequence of his Honour's decision in Newton v Goodman Fielder Mills was that jurisdiction existed under s 106 to make an order affecting a contract of employment so as to provide for a longer period of notice to terminate employment than the period allowed under an award, the Commercial Travellers &c (State) Award. As Mr Menzies acknowledged, that is directly one of the claims in the present case and, so, senior counsel submitted Hill J was in error and I should not follow his Honour. It will be apparent from my earlier comments that I think his Honour was, with respect, correct - the reasoning is otherwise entirely consistent with my approach, as earlier outlined, to the distinction between awards and contracts of employment and the way in which inconsistency should be viewed. I regard the position to be now settled by a long line of authority. Specifically, this approach to the scope of s 106 was expressly affirmed by the Full Bench in Beahan v Bush Boake Allen (93 IR at pp 31-32). 64 The monetary claims made by the applicant in this present action seek benefits referable to the contract of employment greater than and not relevantly inconsistent with those contained in the subject enterprise agreement and award. I have reached the conclusion that jurisdiction exists under s 106 to entertain the relief sought notwithstanding the exclusion of industrial instruments from the range of contracts covered by the section. The claims are directed against the contract of employment and in no way seek to derogate from the enterprise agreement or award. 65 The applicant's claims in the further amended summons are within the Court's competence under s 106, save that the claims for compensation as to stress and suffering in the course of the applicant's employment and for the impairment of employment prospects and reduction in quality of life are reserved for further argument in jurisdictional respects at the substantive hearing of the action. The respondent's motion must, therefore, fail. 66 The applicant has successfully met a significant barrier of a jurisdictional nature to the full hearing of her claims. She should, therefore, have her costs of the motion. 67 I make orders accordingly to give effect to my conclusions.

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