Barry Dickins v Herald and Weekly Times Limited

[1994] IRCA 34

C A T C H W O R D S

Industrial law - contract for services - application under ss. 127A and 127B of Industrial Relations Act (Cth) 1988 to review contract on ground that it is unfair - whether sections can apply to a contract terminated before application made - use of present tense - whether retrospective operation of sections.

Industrial Relations Act (Cth) 1988 - ss.127A and 127B

In re Becker and Harry M. Miller Attractions Pty Ltd (No.2) 1972 AR(NSW) 298

Re Transport Workers' Union of Australia (1993) 50 IR 171 at 193-195

BARRY DICKINS v. HERALD AND WEEKLY TIMES LIMITED
VI No. 664 of 1994

KEELY J.
MELBOURNE
31 August 1994

IN THE INDUSTRIAL RELATIONS COURT )
  )
OF AUSTRALIA  )  VI No. 664 of 1994
  )
VICTORIA DISTRICT REGISTRY  )

B E T W E E N :

BARRY DICKINS
  Applicant

- and -

HERALD AND WEEKLY TIMES LIMITED
  Respondent

REASONS FOR JUDGMENT

31 August 1994  KEELY J.

Mr Barry Dickins (the applicant) on 7 June 1994 filed an application under ss. 127A and 127B of the Industrial Relations Act (Cth) 1988, as amended by Act No. 109 of 1992 from 23 July 1992 and as further amended by Act No. 98 of 1993 with effect from 30 March 1994 (the Act).  The applicant wrote, in his application, that he "is a party to a contract for services" (the contract) with the respondent and that the grounds for his application "are that the contract is unfair and/or harsh".  The applicant then set out particulars of the grounds.

The respondent has moved, on notice filed 18 July 1994, that the application be dismissed.  Its supporting affidavit contained the following paragraph:

"5.The respondent respectfully submits that this Honourable Court does not have the jurisdiction to hear and determine the application filed by the applicant on 7 June 1994 because:-

(i)properly construed, section 127A does not permit the review of a contract no longer in existence at the time the application for review is made; and

(ii)the contract which the applicant seeks to have reviewed had ceased to exist before the time at which jurisdiction to review such contracts was conferred upon this Honourable Court upon the coming into operation of the Industrial Relations Reform Act 1993 on 30 March 1994 and, properly construed, that Act does not operate retrospectively."

It was common ground that the contract was terminated on or about 30 August 1993.

Sections 127A and 127B of the Act provide as follows:

"127A

(1)In this section and in section 127B:

"contract" means:

(a)a contract for services that:

(i)is binding on an independent contractor; and

(ii)relates to the performance of work by the independent contractor, other than work for the private and domestic purposes of the other party to the contract; and

(b)any condition or collateral arrangement relating to such a contract.

(2)Application may be made to the Court to review a contract on either or both of the following grounds:

(a)the contract is unfair;

(b)the contract is harsh;

(3)An application under subsection (2) may be made only by:

(a)a party to the contract; or

(b)an organisation of employees of which the independent contractor is (or has applied to become) a member, if it is acting with the written consent of the independent contractor; or

(c)an organisation or association of employers of which the person contracting for the services is (or has applied to become) a member, if it is acting with the written consent of the person.

(4)In reviewing the contract, the Court may have regard to:

(a)the relative strength of the bargaining positions of the parties to the contract and, if applicable, any persons acting on behalf of the parties; and

(b)whether any undue influence or pressure was exerted on, or any unfair tactics were used against, a party to the contract; and

(c)was repealed by No. 98 of 1993

(d)whether the contract provides total remuneration that is, or is likely to be, less than that of an employee performing similar work; and

(e)any other matter that the Court thinks relevant.

(5)  If the Court forms the opinion that a ground referred to in subsection (2) is established in relation to the whole or part of the contract, it must record its opinion, stating whether the opinion relates to the whole or a specified part of the contract.

(6)  The Court may form the opinion that a ground referred to in subsection (2) is established in relation to the whole or part of the contract even if the ground was not canvassed in the application.

(7)  The Court must exercise its powers under this section in a way that furthers the objects of this Act as far as practicable.

127B

(1) If the Court records an opinion under section 127A in relation to a contract, it may make one or more of the following orders in relation to the opinion:

(a)an order setting aside the whole or part of the contract, as the case may be;

(b)an order varying the contract.

(2)  An order may only be made for the purpose of placing the parties to the contract as nearly as practicable on such a footing that the ground on which the opinion is based no longer applies.

(3)  While the application is pending, the Court may make an interim order if it thinks it is desirable to do so to preserve the position of a party to the contract.

(4)An order takes effect from the date of the order or a later date specified in the order.

(5)  A party to the contract may apply to the Court to enforce an order by injunction or otherwise as the Court thinks fit.

(6)This section does not limit any other rights of a party to the contract."

Immediately before those two sections came into operation on 30 March 1994 in the amended form set out above (the 1994 provisions), ss.127A and 127B which had come into operation on 23 July 1992, were in the Act in a different form (the 1992 provisions). They differed from the 1994 provisions in various ways including:

1. application under s.127A was to be made to the Australian Industrial Relations Commission (the Commission);

1. the grounds upon which an application could be made included grounds (a) and (b) as they now appear in s.127A(2) of the 1994 provisions but also contained an additional ground upon which application could be made, namely that "(c) the contract is against the public interest";

1. the matters to which the Commission might have regard under s.127A(4) included the four matters to which the Court may have regard under the 1994 provisions but in addition permitted the Commission to have regard to:

"(c)whether the contract may have an adverse effect on the development of the skills of employees performing work of the relevant kind in the industry, including any system designed to provide a trained labour force (for example, apprenticeship or any arrangement for improving the skills of employees);"

It is convenient to say at this stage that I accept the submission of Mr G. Giudice, of counsel, who appeared for the respondent, that, as to the amendments to ss. 127A and 127B which came into operation on 30 March 1994 under the Industrial Relations Reform Act 1993, there is a presumption that the amendments should not be understood as applying to past events in such a way as to affect rights and liabilities unless there is a manifest intention to do so.  As Dixon C.J. said in Maxwell v. Murphy (1957) 96 CLR 261 at 267:

"          The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events.  But, given rights and liabilities fixed by reference to past facts, matters or events, the law appointing or regulating the manner in which they are to be enforced or their enjoyment is to be secured by judicial remedy is not within the application of such a presumption.  Changes made in practice and procedure are applied to proceedings to enforce rights and liabilities, or for that matter to vindicate an immunity or privilege, notwithstanding that before the change in the law was made the accrual or establishment of the rights, liabilities, immunity or privilege was complete and rested on events or transactions that were otherwise past and closed.

. . .

The distinction is clear enough in principle and its foundation in justice is apparent.  But difficulties have always attended its application.  In some cases they have been due to the discovery in the nature or context of the legislation or in its subject matter of indications, whether faint and conjectural or strong and persuasive, of a desire to cover situations already existing."

As to the latter part of that statement by Dixon C.J., having considered the 1994 provisions and the submissions of counsel for the parties, I am unable to discover "in the nature or context of the legislation or in its subject matter . . . indications . . . of a desire to cover situations already existing".  The "indications" in the legislation are in my opinion to the contrary.

Mr Giudice relied upon the fact that the provisions in ss.127A and 127B are in the present tense. The following sub-sections of the 1994 provisions are examples:

s. 127A(1)(a)(i)
s. 127A(2)(a)
s. 127A(2)(b)
s. 127A(3)(a) - (read with s.127A(1)(a)(i))
s. 127A(4)(d)
s. 127B

I accept his submission that the powers conferred upon the court by s.127B are powers to make orders in respect of an existing contract i.e. a contract that has not been terminated. Those powers are contained in the following sub-sections:

s. 127B(1)(a)
s. 127B(1)(b)
s. 127B(3)

As Mr Giudice pointed out, the final orders which the court is empowered to make are expressly limited by s.127B(1) to orders varying, or setting aside the whole or part of "the contract" - words which appear to refer to existing contracts. In considering that submission I have not overlooked the decisions, cited by Mr Watson, of counsel, who appeared for the applicant, as to the use of the present tense, including In re Becker and Harry M. Miller Attractions Pty Ltd (No. 2) 1972 AR (NSW) 298, Shaw v. Sampson (No. 1) 1966 AR (NSW) 6, Manni v. Scully and another 1967 AR (NSW) 606 and Re Transport Workers' Union of Australia and others (1993) 50 IR 171 at 193-195.

Because of the wording of the application filed on 7 June 1994 by the applicant, the court requested that it be told "at least the substance of what [the applicant] is seeking from the court".  In response Mr Watson on the following day handed in a document, headed "Relief claimed by the applicant" which read as follows:

"1.A declaration that the contract was unfair or harsh in the following respects:

(a)the total level of remuneration paid to the Applicant was inadequate taking into account, inter alia, the failure of the contract to make provision for the payment of:

(i)annual leave;

(ii)superannuation;

(iii)reimbursement of expenses;

(iv)compensation in circumstances of redundancy;

(b)the contract permitted termination of the contract in circumstances which were harsh, unjust or unreasonable;

(c)the contract permitted the Respondent to terminate the contract for reasons related to the Applicant's conduct or performance in circumstances where:

(i)the Applicant had not been given the opportunity to defend himself against the allegations made; and

(ii)the Respondent could reasonably be expected to give the Applicant such opportunity;

(d)the contract failed to make any adequate provision for:

(i)the process of consultation and negotiation with the Applicant prior to any proposed termination of contract;

(ii)the investigation by the Respondent of alternatives to any proposed termination of a contract;

(iii)the implementation of measures by the Respondent (including the offer to the Applicant of an appropriate alternative engagement or employment with the Respondent) for the purpose of mitigating the burden of any proposed termination of the contract on the Applicant.

2.An order that the contract be varied as follows:

(a)by treating the contract as binding on the parties as at the date of this order and as not having been terminated on 30 August 1993;

(b)further or alternatively, by inserting the following term:

"Notwithstanding any other provision in this contract and in particular notwithstanding any provision in this contract relating to the termination of the contract this contract shall be binding on the parties on and from the  day of  1994 (insert the date of the Court's order) and shall continue until terminated in accordance with the terms of the contract as varied by the Court";

(c)by increasing the level of remuneration payable to the Applicant to $  per week;

(d)by inserting terms as follows:

"(i)termination of this contract shall not be harsh, unjust or unreasonable;

(ii)the Respondent must not terminate the contract for reasons related to the Applicant's conduct or performance unless:

(A)the Applicant has been given the opportunity to defend himself against the allegations made; or

(B)the Respondent could not be reasonable (sic) expected to give the Applicant such opportunity;

(iii)the Respondent must not terminate the contract unless it has investigated all reasonable alternatives to termination of the contract;

(iv)prior to any proposed termination of the contract the Respondent shall implement measures (including, where appropriate, the making of offers to the Applicant of appropriate alternative engagements or employment with the Respondent) for the purpose of mitigating the burden of any proposed termination of the contract on the Applicant;

(v)where the Respondent has made a definite decision that it no longer wishes the work the Applicant has been doing done by anyone and this is not due to the ordinary and customary turnover of labour and that decision may lead to termination of employment ("a redundancy situation") the Respondent shall treat the Applicant no less favourably than it would an employee performing similar work for the Respondent where a redundancy situation had arisen in respect of that employee";

(e)by inserting a term as follows (for the purposes of ensuring that the harshness and/or unfairness caused by:

(i)the Respondent's payment of an inadequate level of remuneration; and

(ii)the Respondent's termination of the agreement in circumstances which would have been contrary to the terms referred to in (c) hereof;

no longer applies):

"that on or before a date one month after the date of this order the Respondent pay the Applicant $;".

3.Further or alternatively to 2., the Respondent pay the Applicant the sum of $ (being an amount equal to two years notice less four weeks pay).

4.Further or alternatively to 3., a declaration that the contract was harsh and/or unfair in the following respects:

(a)the contract provided for termination on four weeks notice;

(b)the contract provided for payments to the Applicant on termination which were less favourable than those which would be paid to employees performing comparable or similar work in the event of termination of their contract of employment.

5.An order that the contract be varied as follows:

(a)the period of notice of termination under the contract is extended from four weeks to two years;

(b)by inserting a term as follows:

"That the Applicant shall receive benefits on termination of the contract no less favourable than those paid by the Respondent to employees performing similar work on termination of their contracts of employment."

(c)that on or before a date one month after the date of this order the Respondent pay the Applicant a sum representing the greater of:

(i)two years notice less four weeks pay;

(ii)the sum payable by the Respondent to an employee performing similar work to the Applicant in circumstances of the termination of the employee's contract of employment.

6.Such further or other orders as to the Court seem fit."

Mr Watson acknowledged that the claim, as filed by the applicant, would require amendment but made it clear that the above statement of the "relief claimed by the applicant" was not to be taken as representing the terms of any such amendment.

The respondent's counsel tendered extracts from statutes of State Parliaments as illustrations of provisions which could have been inserted in the 1994 provisions of the (Commonwealth) Act if the Parliament had intended to confer upon the court the powers for which the applicant contends.  The extracts included:

The New South Wales Industrial Relations Act 1991, provided for:

(s.275(1)):  " . . . an order declaring wholly or partly void, or varying, either from its commencement or from some other time, any contract ..."

(s.275(3)):  " . . . an order . . . as to the payment of money in connection with any contract, . . . declared wholly or partly void, or varied . . . ".

The South Australian Industrial Relations (Miscellaneous Provisions) Amendment Act 1992 amended s.39 of the principal Act by inserting sub-section (4), which included an express power, by order, to:

(s.39(4)):"(a)     set aside the contract (wholly or in part), or vary its terms, from the inception of the contract or from some later time;

(b)give consequential directions for the payment of money . . . ".

The Queensland Industrial Relations Act 1990 provided that:

(s.40(1)):  " . . . the Industrial Commission may vary, ab initio or from some other time, the terms and conditions [of the contract] . . . "

(s.40(2)):" . . . the [Industrial] Commission may declare the contract, . . . to be void (wholly or in part) . . . "

(s.40(3)):  " . . . may make such order as to payment of money in connection with any contract . . . varied or declared void (wholly or in part) . . . ".

In my opinion the court is not authorised by the 1994 provisions to make orders varying or setting aside the whole or part of a contract which is no longer in existence. Section 127B(4) expressly provides that an "order takes effect from the date of the order or a later date specified in the order". That sub-section may be compared with sub-section 88F(1) of the Industrial Arbitration Act, 1940 (N.S.W.) which gave power to declare void any contract "either ab initio or from some other time" - see Becker's case, supra, at 299. I am unable to accept the ingenious submission advanced by Mr Watson as to the construction of sub-section 127B(4). In my opinion s.127B(2) which includes the words "only be made" and "such a footing that the ground . . . no longer applies" also supports the respondent's contention that the sections are not intended to have retrospective operation.

In my opinion the court has no power to set aside or vary the applicant's contract which was terminated on or about 30 August 1993.  The respondent's motion must be granted and the applicant's application dismissed.

I certify that this and the preceding ten (10) pages are a true copy of the Reasons for Judgment of the Honourable Mr Justice Keely.

Associate:

Date:              31 August 1994

Solicitors for the applicant            :  Maurice Blackburn & Co.

Counsel for the applicant              :  Mr A. Watson

Solicitors for the respondent         :  Minter Ellison Morris Fletcher

Counsel for the respondent           :  Mr G. Giudice

Dates of hearing  :  23 and 24 August 1994

Date of judgment  :  31 August 1994