Ahern v The Australian Federation of Totally and Permanently Incapacitated EX-SERVICE Men and Women (Western Australian Branch) Inc
[2000] WASCA 80
•31 MARCH 2000
AHERN -v- THE AUSTRALIAN FEDERATION OF TOTALLY AND PERMANENTLY INCAPACITATED EX-SERVICE MEN AND WOMEN (WESTERN AUSTRALIAN BRANCH) INC [2000] WASCA 80
| WESTERN AUSTRALIAN INDUSTRIAL APPEAL COURT | Citation No: | [2000] WASCA 80 | |
| Case No: | IAC:8/1999 | 1 FEBRUARY 2000 | |
| Coram: | KENNEDY J (Presiding Judge) ANDERSON J SCOTT J | 31/03/00 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed | ||
| PDF Version |
| Parties: | ANNE PATRICIA AHERN THE AUSTRALIAN FEDERATION OF TOTALLY AND PERMANENTLY INCAPACITATED EX-SERVICE MEN AND WOMEN (WESTERN AUSTRALIAN BRANCH) INC |
Catchwords: | Industrial relations (WA) Contract of employment Misdescription of name of award in contract Name of award intended to be referred to clearly identifiable Appellant not paid in accordance with terms of contract Claim by employer that an incorrect rate under the award had been included in the contract No basis for departing from the rate nominated in the contract |
Legislation: | Industrial Relations Act, s 29 |
Case References: | BP Refinery Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1981-1982) 149 CLR 337 Slee v Warke (1949) 86 CLR 271 Brunskill v Sovereign Marine & General Insurance Co Ltd (1985) 59 ALJR 842. Devries v Australian National Railways Commission (1993) 177 CLR 472 Jones v Hyde (1989) 63 ALJR 349 Perth Finishing College Pty Ltd v Watts (1989) 69 WAIG 2307 Simons v Business Computers International Pty Ltd (1985) 65 WAIG 2039 |
JURISDICTION : WESTERN AUSTRALIAN INDUSTRIAL APPEAL COURT CITATION : AHERN -v- THE AUSTRALIAN FEDERATION OF TOTALLY AND PERMANENTLY INCAPACITATED EX-SERVICE MEN AND WOMEN (WESTERN AUSTRALIAN BRANCH) INC [2000] WASCA 80 CORAM : KENNEDY J (Presiding Judge)
- ANDERSON J
SCOTT J
- Appellant
AND
THE AUSTRALIAN FEDERATION OF TOTALLY AND PERMANENTLY INCAPACITATED EX-SERVICE MEN AND WOMEN (WESTERN AUSTRALIAN BRANCH) INC
Respondent
Catchwords:
Industrial relations (WA) - Contract of employment - Misdescription of name of award in contract - Name of award intended to be referred to clearly identifiable - Appellant not paid in accordance with terms of contract - Claim by employer that an incorrect rate under the award had been included in the contract - No basis for departing from the rate nominated in the contract
(Page 2)
Legislation:
Industrial Relations Act, s 29
Result:
Appeal allowed
Representation:
Counsel:
Appellant : Mr R D Farrell
Respondent : Mr T M Retallack
Solicitors:
Appellant : Derek Schapper
Respondent : Wilson & Atkinson
Case(s) referred to in judgment(s):
BP Refinery Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1981-1982) 149 CLR 337
Slee v Warke (1949) 86 CLR 271
Case(s) also cited:
Brunskill v Sovereign Marine & General Insurance Co Ltd (1985) 59 ALJR 842.
Devries v Australian National Railways Commission (1993) 177 CLR 472
Jones v Hyde (1989) 63 ALJR 349
Perth Finishing College Pty Ltd v Watts (1989) 69 WAIG 2307
Simons v Business Computers International Pty Ltd (1985) 65 WAIG 2039
(Page 3)
1 KENNEDY J (Presiding Judge): I have had the benefit of reading in draft the reasons to be published by Scott J, in which the facts are set out. I agree with his Honour that this appeal must succeed and that, unless the parties can agree on the figure, the matter should be remitted to the Commissioner at first instance for the determination, in accordance with the reasons of this Court, of the amount of the benefit to which the appellant is entitled by way of salary under her contract of service.
2 As the learned President of the Commission has pointed out, in an application under s 29(1)(b)(ii) of the Industrial Relations Act 1979, the Commission is exercising a judicial power, and it is required to determine what are the applicant's existing rights under the contract of service, and whether the applicant has been denied a benefit under that contract.
3 Although the parties were able to agree a statement of facts at first instance, they do not appear to have reduced the essential issues to writing or to have pleaded their respective cases, whether informally or otherwise. Had they done so, there would undoubtedly have been a much sharper focus on the principles which are required to be applied in the resolution of the present dispute.
4 The appellant has appealed against the finding of the majority of the Full Bench that the rate at which the appellant was entitled to be paid under her contract of employment was the rate of an Assistant Community Services Officer (2nd year of experience) under the Local Government Officers (Western Australia) Award. There is no longer any issue as to that award being the relevant award, although misdescribed as the Local Officers (WA) Award in the appellant's so-called duty statement.
5 The majority of the Full Bench, with the President dissenting, dismissed the appellant's appeal insofar as she sought to bring other benefits into her contract of service in addition to her basic salary. These benefits included leave loading and overtime rates. There has been no appeal from that part of the decision. It follows from the conclusion which we have reached that the appellant was not entitled to any increase in her salary, as the Full Bench found, while she was acting as Co-ordinator, for the reason that she was already entitled to a salary at the rate of that enjoyed by the Co-ordinator.
6 The duty statement described the appellant's position as being Assistant Co-ordinator (Occupational Therapist part time). This is not a description to be found in the award. It does not matter, however, because the duty statement fixes the appellant's salary by reference to a particular
(Page 4)
- salary level under the award, namely, that of Community Services Officer, Level 1, 5th years (sic). The reference to "current salary" in the statement, in my opinion, is clearly a reference to the salary for the time being fixed for the specified level under the award.
7 There was no ambiguity, either patent or latent, with respect to the basis on which the appellant's salary was fixed, although it had necessarily to be adjusted pro rata due to the fact that the appellant was to be working "regularly for less than the standard ordinary hours" - see cl 31(a) of the award. The learned President concluded that parol evidence could be adduced in order to explain the contract. In this case, however, once the award had been properly identified, the method of calculation of the amount which it was agreed the appellant should receive by way of salary was quite unambiguous. The only possible remedy of the respondent would then have been to seek rectification, but a claim for rectification, on the evidence, could never have succeeded.
8 The evidence of the appellant, which was not challenged on this point, was that she had made no inquiries regarding her salary prior to her signing the duty statement. Notwithstanding the evidence of Mr E J Ahern, having regard to the terms upon which the grant of assistance was made to the respondent under the Home and Community Care (HCC) programme, the salary probably should have been fixed at the level of Assistant Community Services Officer (2nd year of experience). But the appellant had no knowledge of the HCC correspondence, and if there was a mistake, it was a unilateral mistake on the part of the respondent, the appellant simply having signed the document when it was produced to her. The appellant's uncontradicted evidence was that the duty statement was just given to her by the Executive Officer at the time, Mr F Verdi, since deceased, who told her to read it and sign it, which she did. There was only one copy which was signed by her, and she was never given a copy of the document for herself. She appears only to have secured a copy after her resignation, having had to resort to her rights under the Freedom of Information Act 1992.
9 Shortly prior to her resignation, the appellant said that she approached the Pay Officer about what she claimed was her not being paid the correct rate of pay. This was in May or June 1997. She was told that she was being paid under the Hostel Award, which she disputed. At about this time, she also spoke to the Executive Officer, Mr S M Walker, and believed that he was going to sort the matter out, but no action was taken by him. In or about 1995, the appellant said, she had been told by the Manageress of the respondent that she was not entitled to any pay
(Page 5)
- increases because she was only working part time. There was no suggestion that she conceded any of these matters. She simply did not pursue them. She denied receiving any approach from the respondent about changing her salary or the manner of calculating her salary during the period of her employment, and there was no evidence to the contrary.
10 The learned President pointed out that the letter of the appellant dated 18 July 1997, in which she initially made a claim against the respondent for benefits not received by her, contained an acknowledgment that the salary she expected was not at the level of the Co-ordinator, except when the appellant acted in the position of Co-ordinator. This letter was written on the same date as her letter of resignation. It reveals no inconsistency on the part of the appellant, because her evidence was not to the effect that, prior to obtaining a copy of the duty statement, she believed that she was to be paid at the same rate per hour as the Co-ordinator. One of her claims was, in fact, that, when acting as Co-ordinator, she should have been paid at the Co-ordinator's (higher) salary. The critical point is that the duty statement fixed the amount of her salary, a fact which the appellant had not appreciated at the time. In this regard, it is to be noted that no defence of estoppel has been asserted by the respondent.
11 The Full Bench rightly rejected the opinion expressed by the learned Commissioner at first instance that, if there were a contract agreeing to pay the same rate of salary to the Co-ordinator and to the Assistant Co-ordinator (being that of Community Services Officer (2nd year of experience)), it was varied by the consent of the parties, as evidenced by their subsequent conduct at a time when the contract was on foot. Not the least of the difficulties in the way of this view was, as the Full Bench found, that there was no evidence of any agreement for the variation of the appellant's salary, let alone any evidence as to when any such variation might have been effected. The appellant's evidence, there being no evidence called on behalf of the respondent, was not that she had accepted a lower amount than that to which she was entitled, but that she did not know the amount to which she was entitled and that she had not made any inquiries concerning it. There was no cross-examination of the appellant on this point. There has been no appeal from the rejection by the Full Bench of any agreed variation of her salary.
(Page 6)
12 ANDERSON J: I have had the advantage of reading in draft the judgment of Scott J with which I agree. There is nothing I can usefully add.
13 SCOTT J: By a written contract dated 24 January 1992, the appellant accepted employment with the respondent in a position with the title of "Assistant Coordinator (Occupational Therapist Part-time) TPI Memorial Estate Day Centre."
14 The contract was subject to a three month probation period and in respect to the general conditions of employment the contract provided:
"2.2 Assistant Coordinator. Current salary is at Local Officers' (WA) Award, Community Services Officer, Level 1, 5th years (sic)."
15 It is common ground that there was no "Local Officers' (WA) Award" but that there was an award correctly described as "Local Government Officers' (Western Australia) Award 1988" and that in such an award there was a salary rate set for the position of Community Services Officer, Level 1, 5th Year.
16 It is common ground that the appellant was not paid at the rate prescribed in the Local Government Officers' (Western Australia) Award for a Community Services Officer, Level 1, 5th Year, but was paid at the rate applicable to an Assistant Community Service Officer, 2nd Year as prescribed in the Local Government Officers' (Western Australia) Award. The difference between the two rates of remuneration was of significance in terms of the appellant's claim.
17 It is common ground that at the time the appellant was working for the respondent there was a Coordinator employed by the respondent to whom she was an assistant. That Coordinator was paid at the rate applicable to Community Services Officer, Level 1, 5th Year under the Local Government Officers' (Western Australia) Award.
18 The wages record of the respondent reveal that the difference between the appellants remuneration and that of the Coordinator was evident on the wages sheet which the appellant signed which revealed the different hourly rate of remuneration. It is common ground that the appellant was paid at the lower rate throughout the course of her employment with the respondent.
(Page 7)
19 Following the appellant's resignation, by letter of 18 July 1997 she sought to recover what she described in a letter as:
"… annual increases in wages, the adjustments for which remain unpaid from the period 1995 to the present time. Adjustments will include annual leave and leave loading, and the periods I was Acting Coordinator in the absence of Margaret Scott (Coordinator) during her annual and sick leave."
20 It is clear from that letter that the appellant from time to time acted in the position of Coordinator and when she did so she believed she was entitled to remuneration at the higher salary rate. That letter was of considerable significance in the reasons both of the Commissioner who first heard the appellant's claim and the Full Bench. That letter will be discussed in greater detail later in these reasons.
21 Following her resignation the appellant brought an application against the respondent pursuant to s 29 of the Industrial Relations Act claiming outstanding benefits for the period of her employment between 28 January 1992 and 1 August 1997. No amount was specified, but the application specified the Local Government Officers' Award as being the award applicable to the appellant's service.
22 The matter was first heard by Commissioner Cawley on 25 March 1998. At that hearing the appellant gave evidence and called as a witness her father-in-law, Eric John Ahern, who was at the time of her employment, the President of the respondent's organisation. Mr Ahern was questioned about the appellant's remuneration from the time of her employment. Mr Ahern testified that the appellant's remuneration was set at the level in the contract because, as he explained it:
"… it was decided that we would keep them all on the same level, because we were able to - - instead of bringing outside staff in when the - - one of them were absent, like the Coordinator was absent, we were able to just extend the hours of work, and the pay they were - - was the same."
23 Mr Ahern went on to explain that funding for the payment of staff was provided by the Health Department of Western Australia under what was known as the "Home and Community Care Programme" ("HAC"). It is common ground that the HAC scheme provided salaries for both a full-time and assistant Coordinator based on the Local Government Officers' (WA) Award, Community Services Officer, Level 1, 5th Year for the full-time Coordinator and Assistant Community Services Officer, 2nd
(Page 8)
- Year for the Assistant Coordinator (20 hours). It follows that if the contention of the appellant was correct, then the funding from the HAC scheme would not have been sufficient to meet the appellant's salary.
24 When asked about that anomaly, Mr Ahern said in his evidence:
"We, in our wisdom, only considered this money that was coming in from HAC as a fill-in or a subsidy, until the completion of the project, where, as we had stated to government, that we were going to be a fully self-funding organisation, where we did not have to rely on State moneys or anybody else, other than for special little incidents. That was the - - - that was the uniqueness of the project. We - - we were determined to be a self-funding project.
Right. So it was quite deliberate to put the Coordinator and the Assistant Coordinator on the same salary rate? - - Yes. They - - they knew all about it, and - - and raised no objection to it. We received no - - no objection to it.
Alright. That was HAC, but TPI itself deliberately put the Coordinator and the Assistant Coordinator on the same rate? - - We - - we did that, as I've explained, especially for the purpose of absence for leave, absence for sickness, etc - more than five days; that we just had to extend the pay hours not change the rates to an upper - - higher rate of pay under the Local Government Award."
25 Mr Ahern made it clear in his evidence that the reference to the remuneration in the appellant's contract of service was no error. The rate had deliberately been set by a decision of the respondent so that the rate of remuneration between the appellant and the Coordinator was at the same hourly level for the reasons that Mr Ahern explained.
26 The appellant called two further witnesses but their evidence was of no particular significance in relation to the issue the subject of the appeal.
27 The respondent elected to call no evidence and relied upon the cross-examination and the documentary evidence placed before the Commissioner.
28 In her decision, Commissioner Cawley reviewed the evidence in some detail. The contract of employment between the appellant and the
(Page 9)
- respondent (exhibit 3) was examined by the Commissioner who concluded that:
"Insofar as the document exhibit 3 refers to a non-existent award for the salary to apply, it is in error. However I am not convinced that there is reason why the Commission now should intervene to remedy (sic) that by reading the document as if corrected and construing the entitlements to salary claimed from that."
30 In my view, in coming to this conclusion the Commissioner made an error of law. Whilst I accept that a court should be reluctant to rectify documents, in my opinion, in this case it is plain that both parties intended the contract to refer to the federal Local Government Officers' (Western Australia) Award 1988. In my opinion it is quite clear that the common intention of the parties was that it was this award which was intended to be the basis upon which the appellant's salary was calculated. That being the case, in my opinion this is clearly the type of matter where rectification is appropriate: see Slee v Warke (1949) 86 CLR 271 per Rich, Dixon and Williams JJ at 280:
"It has sometimes been said that the power of the court to rectify a contract on the ground of mutual mistake is confined to cases where there was an actual concluded contract antecedent to the instrument which is sought to be rectified. The law was so stated by James VC, as he then was, in MacKenzie v Coulson (1869) LR 8 Eq 368 at 375 and by this Court in Australian Gypsum Ltd & Australian Plaster Co Ltd v Humes Steel Ltd (1930) 45 CLR 54. But in Shipley Urban District Council v Bradford Corporation (1936) Ch 375 Clauson J as he then was, held that the statement of James VC in MacKenzie v Coulson did not warrant the suggestion that the jurisdiction of the court cannot be exercised so as to rectify an instrument which clearly does not give effect in some respect to the concurrent intention of the parties existing at the date of its execution unless a previously existing contract be proved."
(Page 10)
31 In my view it is clear that at the time of execution of the document, exhibit 3, each of the parties intended the appellant's salary provision to refer to the Local Government Officers (Western Australia) Award 1988 and that the incorrect description of that award in the contract was a mutual mistake of the kind which the law should rectify. The Full Bench allowed the appeal on this ground and that decision has not been challenged in this appeal.
32 That however, is not the end of the matter. Commissioner Cawley in her decision, referred to the appellant's evidence that she did not know what her salary rate was at the time she was employed and that she relied upon the respondent's accountant ("Verdi") to pay her at the correct rate. The Commissioner found that the appellant did in fact work as an assistant to the Coordinator and not as an additional part-time Coordinator. In addition the Commissioner referred to the fact that the appellant at times acted as a Coordinator in the absence of the person who held that position and she noted the "adjustments" which the appellant claimed from the respondent for the periods when she was acting Coordinator. The Commissioner saw those claims as being significant because there was an acknowledgment by the appellant that her rate of remuneration was less than the Coordinator and that she was claiming an adjustment for the periods when she acted as Coordinator in the absence of the person who held that position.
33 In concluding her reasons, the learned Commissioner said:
"Notwithstanding Mr E Ahern's evidence as to the intention of the respondent to pay the same rate for the position of Assistant Coordinator as for the position of Coordinator, it is clear this was not implemented and the applicant accepted the situation. If the condition of same salary existed at all, which I doubt, it was varied by consent of the parties as evidenced by their subsequent conduct when the contract was afoot. It may be that there is some entitlement for the applicant for any periods she acted as Coordinator but this was not put."
34 Ultimately the Commissioner concluded that the applicant's (appellant's) claim was not made out.
35 The appellant then appealed to the Full Bench who reviewed the decision of the Commissioner and upheld her decision. In the reasons of the learned President, he concluded:
(Page 11)
- "In my opinion, it was open to the Commissioner to find that the reference to 'Assistant Coordinator' meant that, and it was not established that this then was to be paid, on the basis of the performance of the contract, and of the terms of the contract, which were not merely confined to exhibit 3 at the same rate as the Coordinator. The evidence of her letter is cogent evidence that she, at least, accepted that that was the contract. The Commissioner did not err in not finding that the appellant was to be paid at the Coordinator rate, given the evidence of subsequent performance. The Commissioner was entitled to find that the true agreement was that the appellant was to be paid at the rate of Assistant Coordinator, not the rate of Coordinator, pursuant to the Local Government Officers' (WA) Award, except, of course, when she filled the position of Coordinator which she apparently did."
36 The difficulty with the decision of the learned President is that it is inconsistent with the terms of the written contract exhibit 3, which was signed by the appellant and by Verdi on behalf of the respondent. Apart from the description of the award which has been discussed earlier in these reasons, the remuneration provision, in my opinion, is clear and unambiguous and the appellant's salary level was set by reference to a readily identifiable salary level described in that award. That being the case, in my opinion, in the circumstances it was not appropriate to apply any other rate of remuneration. The contract stipulated that the appellant was entitled to be remunerated at the rate of a Community Services Officer Level 1, 5th Year as described in the award, and in my view there was no evidence which entitled either the Commissioner or the Full Bench from departing from the clear words of the contract. In BP Refinery Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20, the conditions necessary to ground an implied term in a contract were summarised by the Privy Council per Lord Simon of Glaisdale at 26:
"1. It must be reasonable and equitable;
2. It must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it;
3. It must be so obvious that 'it goes without saying';
4. It must be capable of clear expression;
5. It must not contradict any express term of the contract."
(Page 12)
- That decision was followed by the High Court in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1981-1982) 149 CLR 337 per Mason J at 347.
37 The grounds of appeal from the decision of the Full Bench are that:
"1. The majority of the Full Bench erred in law in its finding that the rate the Appellant was entitled to be paid under her contract of employment was the Assistant Community Services Officer, 2nd Year rate of the relevant award when the written part of the employment contract expressly and unambiguously identifies 'Community Services officer, Level 1, 5th years' as the relevant rate of salary to be paid.
2. Having had regard to extrinsic evidence to determine and give effect to the intention of the parties as to the identity of the relevant award where the name of the award had been misdescribed in the written part of the employment contract and therefore ambiguous, the majority of the Full Bench then erred by also having regard to extrinsic evidence to support a conclusion that the rate of salary to which the appellant was entitled under the contract was something other than that expressly and unambiguously nominated by the parties in the written part of the employment contract."
38 In my view, in this case there is no basis for implying the condition that the appellant's rate of remuneration should be anything other than the rate specified in the contract.
39 The learned President in his conclusion said:
"(a) The contract of service did provide for rates of pay, contained in the award, to apply at the rate of Assistant Coordinator.
(b) All of the conditions of the award did apply, by implication, for the reasons I have expressed above.
(c) The Commissioner was in error, having found that the contract (exhibit 3) was in error, insofar as it referred to a non-existent award for a salary level, and should have found that there was reason to intervene in the manner sought by the applicant/appellant.
(Page 13)
(d) The terms of the contract, as established by the appellant, were those to which I have referred above, including all of the terms of the award."
40 I am of the view that the Full Bench was in error in concluding that the rate of salary to be paid to the appellant was a different rate to that in the contract. The contract clearly and unambiguously expressed the rate of salary to be paid to the appellant. I am otherwise unpersuaded that the Full Bench has made any other error and I would allow the appeal to this extent.
41 The matter should be remitted to the single Commissioner to determine the amount of under-paid salary and I would remit the matter to the Commissioner for further hearing and determination on that issue.
42I would hear the parties as to any further or other orders necessary to give effect to these reasons.
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