Edward Roper v The Board of Trustees of the Brisbane Grammar School T/A Brisbane Grammar School
[2023] FWC 543
•7 MARCH 2023
| [2023] FWC 543 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Edward Roper
v
The Board of Trustees of the Brisbane Grammar School T/A Brisbane Grammar School
(C2022/7966)
| COMMISSIONER SIMPSON | BRISBANE, 7 MARCH 2023 |
Alleged dispute about any matters in a contract of employment or other written agreement in relation to the NES or a safety net contractual entitlement; [s738(c)]
On 2 December 2022, Mr Edward Roper (Mr Roper / the Applicant) made an application to the Fair Work Commission (the Commission) under s.739 of the Fair Work Act 2009 (the Act) to deal with a dispute. The Board of Trustees of the Brisbane Grammar School T/A Brisbane Grammar School is the Respondent in the matter (BGS / the Respondent).
I listed the matter for a private conference on 13 December 2022. At the conference, the Respondent objected to the application arguing that the Commission did not have jurisdiction to deal with the dispute. The matter did not resolve at conference and was ultimately referred for arbitration of the jurisdictional objection.
Directions were issued for the filing of evidence and submissions, and the matter was listed for hearing on Friday 3 March 2023 in Brisbane with the parties to attend in person. Prior to the hearing after all material had been filed, the parties consented to the matter being determined on the papers on the basis that determination of the jurisdictional objection did not turn on factual issues.
THE DISPUTE & BACKGROUND
The dispute relates to a claim for redundancy pay, access to long service leave prior to the Applicant’s employment coming to an end on 31 December 2022, and the provision of outplacement support.
The Applicant had been employed by the Respondent in various positions and capacities since 1982. Most recently, the Applicant was employed as a member of the Respondent’s Senior Leadership Team (SLT).
The contract of employment which is the subject of the dispute is made up of:
· A written contract dated 15 September 2016, pursuant to which the Applicant’s employment was renewed for a period commencing 20 June 2016 and ending 18 June 2021 (2016 Contract); and
· A written variation dated 1 October 2020, whereby the 2016 Contract was extended for a further 12 months ending on 31 December 2022,
(collectively, the Contract).
On 22 February 2022 a meeting occurred between the Headmaster and Mr Roper. During this meeting the Headmaster advised that Mr Roper’s contract would not be renewed. The parties engaged in correspondence following this advice including on 11 March 2022, when Mr Roper received written advice that no renewal of any employment would occur. This provided that:
“Dear Mr Roper
Employment at Brisbane Grammar School
Further to our meeting on 22 February 2022, I confirm that a decision has been made not to renew or extend your employment at Brisbane Grammar School. Accordingly, your employment at the School and your position on the SLT will come to an end on 31 December 2022 when your current employment contract expires.
For the balance of this year, I ask that you focus on the following key deliverables:
1.complete the annual report to parliament (now tabled);
2.continue to embed the people & culture strategy and HR structure;
3.negotiation of a new enterprise agreement and reporting periodically to myself and the Board of Trustees; and
4.complete re-accreditation with Non State School Accreditation Board (NSSAS).
As I have previously indicated we should meet again to discuss options, and appropriate communications plan and acknowledgement of your significant contribution.
…”
On 1 August the Headmaster responded to Mr Roper’s material.
On 26 October 2022 Mr Roper wrote to the Headmaster requesting a resolution regarding the termination of his employment. On 8 November 2022 the Headmaster replied to Mr Roper as follows:
“…
I confirm that your employment at the School will come to an end on 31 December 2022, consistent with its terms and as previously advised. At that point you will be paid your accrued annual and long service leave entitlements. You are not entitled to a redundancy payment and no other payment will be made.
The School is happy for you to keep the mobile phone that has been allocated to you and facilitate arrangements for you to keep the leased vehicle on payment by you of all remaining lease costs. Please let me know if you would like me to arrange a quote of those costs for your consideration.
Otherwise, I again encourage you to engage with me about a communications plan for your departure and a suitable event to acknowledge your contribution.
…”
Mr Roper’s request for redundancy pay was made on the basis that his employment was not for a fixed term, or an outer limits contract, as was considered in Khayam v Navitas English Pty Ltd t/as Navitas English[2017] FWCFB 5162. Mr Roper submitted a request to access leave was made on the basis of the Headmaster’s description of a similar request by another employee as being “a well established cultural norm” at the School.
On 22 November 2022 the IEU wrote to the Headmaster seeking a meeting consistent with the Grievance and Dispute Settlement procedure. On 24 November 2022 the IEU received a letter from the employer’s solicitors refusing the request for a meeting.
Following this, the dispute was lodged in the Commission on 2 December 2022, and the Applicant’s employment came to an end on 31 December 2022.
RESPONDENT’S JURISDICTIONAL OBJECTION
The Respondent submitted that the Applicant claims that the Contract, in particular the reference in it that it is ‘subject to’ the Brisbane Grammar School Enterprise Agreement 2014 (2014 Agreement), enlivens the jurisdiction of the Commission in this matter. The Applicant further contends that the disputes procedure in the 2014 Agreement applies ‘because of the agreement of the parties, not by virtue of the coverage of a formal industrial instrument’.
The Contract relevantly says:
“Your employment is subject to:
· the terms set out in this letter;
· the Brisbane Grammar School Certified Agreement 2014 (“the Agreement”);
· the Role and Duty Statement applicable to your position; and,
· any other applicable industrial instruments and legislation”
The Respondent submitted that the Commission has no jurisdiction to arbitrate the Application because the Contract does not include a term that meets the requirements of section 738(c) of the Act.
This is because:
(a)The terms of the 2014 Agreement were not incorporated by reference into the Applicant’s Contract and therefore, by extension, the relevant disputes procedure in the 2014 Agreement was also not incorporated into the Contract; and
(b)Even if the Applicant’s Contract did incorporate, by reference, the 2014 Agreement, and by extension the disputes procedure in the 2014 Agreement, the disputes procedure (clause 2.3 of the 2014 Agreement) has no practical effect because:
(i)the 2014 Agreement was not in operation at the time the Application was lodged with the Commission and therefore the disputes procedure in the 2014 Agreement did not apply to the Applicant’s employment; and
(ii)the Applicant was not covered by the 2014 Agreement by virtue of clause 1.3 of that Agreement, which expressly states that the 2014 Agreement does not apply to members of the School’s SLT, which the Applicant was.
Whether Roper’s Contract includes a term that provides a procedure for dealing with disputes (section 738(c) of the Act)
Are the terms of the 2014 Agreement, incorporated by reference into the Applicant’s Contract?
The Respondent submitted that the Commission firstly needs to consider whether the terms of the 2014 Agreement were incorporated by reference into the Applicant’s Contract, and only then can the disputes procedure in clause 2.3 of the 2014 Agreement be considered as the pre-requisite term to enliven the jurisdiction of the Commission in section 738(c) of the Act.
The Respondent cited the Full Court of the Federal Court in ACTEW Corporation Ltd v Pangallo (ACTEW)[1] where it was held that the terms of an enterprise agreement are not automatically incorporated into a contract of employment but must be expressly incorporated.
Further, the Respondent cited the case of Sarah Noisette v Brotherhood of St Laurence (Noisette),[2] which applied ACTEW, where Deputy President Clancy considered a dispute application under section 739 of the Act where the employer raised a jurisdictional objection regarding a term in both the employee’s enterprise agreement (section 738(b)) and contract of employment (section 738(c)). It was considered that if an employee seeks to rely on matters that are contained in their contract of employment, the Commission needs to be convinced that the words used in the contract are capable of supporting a finding that the terms of the enterprise agreement were expressly incorporated into the contract of employment.
Further, the Respondent submitted that in Noisette, Deputy President Clancy applied the general proposition held by the Federal Court in Soliman v University of Technology, Sydney (Soliman),[3] that a reference in a contract of employment to an appointment being ‘subject to’ and ‘governed by’ certain industrial instruments, including an enterprise agreement, did not have the effect of incorporating them.
In Noisette, Deputy President Clancy further applied the observations of Jagot J in Soliman, as follows:
because agreements “are legislative instruments capable of alteration from time to time without any involvement of the applicant”, reference to them in a contract is indicative of “relevant information capable of affecting the parties’ contractual relations rather than documents intended to be binding and enforceable as part of their contractual relations.
The Respondent submitted that the same reasoning applies here. The Respondent submitted that in this case, the Applicant’s Contract did not contain any express wording to the effect that the terms of the 2014 Agreement were ‘incorporated’, or ‘formed part of’ the Contract. It follows that the jurisdiction conveyed by section 738(c) is not enlivened.
(b) If the terms of the 2014 Agreement are incorporated by reference into the Applicant’s Contract, is the dispute procedure clause 2.3 contractually enforceable?
The Respondent submitted that even if the terms of the 2014 Agreement were somehow incorporated into the Applicant’s Contract, the practical effect would be that all of the terms of the 2014 Agreement would be incorporated, including clause 1.3 of the 2014 Agreement which says:
“1.3 Application
This Agreement shall apply to all employees of the School except members of the Senior Leadership Team (SLT).”
The Respondent submitted that clearly, by the above, the 2014 Agreement did not apply to the Applicant and it is circular or flawed logic to somehow suggest that for this Application, it does.
Relevantly also, the Respondent submitted that section 51(1) of the Act provides that an enterprise agreement does not impose obligations on a person, and a person does not contravene a term of an enterprise agreement, unless the enterprise agreement applies to a person. Further, section 51(2) provides that an enterprise agreement does not give a person an entitlement unless the agreement applies to the person. An agreement can only apply to a person when it is in operation (section 52).
Relevantly, the Respondent submitted that the 2014 Agreement has not applied to any of the School’s employees since 30 June 2016, when it was replaced by the Brisbane Grammar School Enterprise Agreement 2016 (2016 Agreement). The 2016 Agreement was in turn terminated on the 30 June 2018 when it was replaced by the Brisbane Grammar School Enterprise Agreement 2018 (2018 Agreement).
The Respondent cited the Full Bench in Construction, Forestry, Maritime, Mining and Energy Union & others v Falcon Mining Pty Ltd,[4] where it was found that the Commission has power under section 739 of the Act to arbitrate a dispute arising under an enterprise agreement that has been replaced if the agreement was in operation at the time the application was made to the Commission.
The Respondent submitted that is not the situation here. In this case, the 2014 Agreement was not in operation at the time the Application was made to the Commission, and pursuant to section 739(1) of the Act, there is no term which requires or allows the Commission to deal with this dispute as is required by section 738(c).
Therefore, the Respondent contended that on any analysis, the disputes procedure referred to by the Applicant had and continues to have no practical effect.
APPLICANT RESPONSE TO JURISDICTIONAL OBJECTION
The Applicant cited Black CJ in Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120 at [23] where it explained the relevant contractual principles as follows:
“It is well established that if a reasonable person in the position of a promisee would conclude that a promisor intended to be contractually bound by a particular statement, then the promisor will be so bound. This objective theory of contract has been repeatedly affirmed as representing Australian law by the High Court. Thus, in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, 179, the Court said:
‘It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.’”
Consequently, to use the words of the High Court of Australia:
“What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe.”
The Applicant submitted the words “subject to” are equally applicable to each of the following:
· “the terms set out in this letter” [dated 15 September 2016 – the contract of employment];
· “the Brisbane Grammar School Certified Agreement 2014”;
· “the Role and Duty Statement applicable to your position”; and
· “any other applicable industrial instruments and legislation”.
The Applicant submitted that the submissions on behalf of the Respondent seems to be an argument that the Respondent can ascribe a different meaning to the words “subject to” depending on what suits the employer.
The Applicant submitted that if it is argued that the words “subject to” (as used in the contract of employment) create an enforceability in relation to “the terms set out in this letter” [the contract of employment], but the words “subject to” do not create an enforceability in relation to “the Brisbane Grammar School Certified Agreement 2014”, then the poverty of logic is manifest.
Further, the Applicant submitted that the parties to the contract of employment deliberately choose to include in that contract that the contract was “subject to” the Brisbane Grammar School Certified Agreement 2014. If the submission on behalf of the employer is accepted, the consequence would be that the parties deliberately inserted an expression which had no work to do. The Applicant submitted that it is unbelievable that an employer who is well advised, such as the Brisbane Grammar School, would include in a contract of employment a useless provision. The only logical conclusion is that the expression was included to achieve a desired purpose. Further, the only logical purpose was to expressly call up the provisions of the Agreement into the contract.
The Applicant contended that it is readily accepted that an Enterprise Agreement, is a creation of statute. It has enforceability by virtue of that status.
The Applicant submitted that as (traditionally) originally noted in Byrne v Australian Airlines Limited, an entitlement derived by a creation of statute does not require inclusion in a contract of employment to be enforceable.
The Applicant submitted that the Respondent has sought to gain support from the following cases:
· Byrne v Australian Airlines Limited;
· ACTEW Corporation Limited v Pangallo;
· Sarah Noisette v Brotherhood of St Laurence;
· Soliman v University of Technology, Sydney.
The Applicant contended that the above cases are distinguishable from the present application. This is so because in all of these cases the creation of statute (the Agreement or the Award) applied to the subject employee because it covered the subject employee.
It was submitted by the Applicant that the situation must be contrasted with the situation in the present application where the Agreement (or Award) does not apply by force of the creation of statute (but by virtue of the contract of employment). This different context is identified in the submissions on behalf of the employer. The coverage of the Agreement is set out at clause 1.3 (Application) of the Brisbane Grammar School Certified Agreement 2014.
The Applicant submitted that the only case cited where the words “subject to” were required to be interpreted was Soliman v University of Technology Sydney. The Applicant submitted that a reasonable person, to use the expression of the High Court (in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd) would expect that the intention of the parties when using the words “subject to” would be influenced by context in which they are used.
The Applicant submitted that it is also relevant to note that comments by the Deputy President in Sarah Noisette v Brotherhood of St Laurence regarding the words “subject to” were obiter dicta.
The Applicant submitted that they have demonstrated that the context is significantly different between a situation where the Agreement (or Award) applies and is enforceable, and a situation where the Agreement (or Award) does not apply.
The Applicant submitted that the employer’s submission that the Brisbane Grammar School Certified Agreement 2014 has subsequently been replaced, or was “not in operation” at the time the dispute was filed, is simply a distraction to the key question. Such a submission would only have relevance if Mr Roper was covered by the Agreement. As previously noted, Mr Roper is excluded from the coverage of the 2014 Agreement, and all subsequent Agreements. The pertinent facts are, as submitted at the outset, that the parties deliberately included a reference calling up the 2014 Agreement. The further submission is that such document, unamended as it was, formed part of the contract of employment.
The Applicant submitted that the employer’s alterative submission that if the 2014 Agreement is explicitly part of the contract of employment, the exclusion in such Agreement for members of the Senior Leadership Team (of which Mr Roper was a member) would mean that he could not rely on the dispute procedure in the Agreement, fails the ‘reasonable person’ test. It also fails the test of logic: why was the provision deliberately included if it meant nothing?
RESPONDENT’S REPLY
The Respondent submitted that the relevant contractual reference to the 2014 Agreement did not have the effect of incorporating the entirety of the 2014 Agreement into the Contract, and by extension the subject dispute settlement clause relevant to this application.
The Respondent submitted the contractual reference to the 2014 Agreement needs to be considered in the context of the Contract as a whole. Relevantly, that includes:
(a)the reference to the 2014 Agreement occurs within the preamble of the Contract as a document providing contextual type matters, as opposed to being a substantive provision within the Contract itself; and
(b)the only other reference to the 2014 Agreement is an express reference to a “Leave” provision and nothing else.
The Respondent submitted that consistent with the reasoning in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (Toll), a reasonable person taking into account the surrounding circumstances, would or could not conclude that the reference was intended to create a contractual entitlement to all of the terms of the 2014 Agreement at the time. The subject dispute procedure term of the 2014 Agreement is not expressly referenced in the Contract, whereas the “Leave” provision is.
The Respondent likewise rejects the Applicant’s assertion that the “subject to” reference in the Contract creates a contractual entitlement to the terms of the 2014 Agreement (or for that matter, any of the other three matters listed in the preamble). The preamble in the Contract is analogous to the preamble considered in Soliman, where the court held that the provision “identifies relevant information capable of affecting the parties’ contractual relations rather than documents intended to be binding and enforceable as part of their contractual relations”.
The Respondent submitted that consistent with the reasoning in Soliman (which was adopted by the Commission in Sarah Noisette v Brotherhood of St Laurence), and Toll, there is not a sufficient basis to find that the effect of the words was that the entirety of the 2014 Agreement would be incorporated into the Contract.
The Respondent submitted that as the Applicant was, but for the Headmaster, the most senior human resources officer at the School who was involved in the negotiations and approval of the School’s enterprise agreements, including the 2014 Agreement, a suggestion that somehow it would apply to him contrary to its express terms is misconceived.
In light of the above, the Respondent submitted that the effect of the “subject to” reference and the later “Leave” provision in the Contract is that the Applicant’s leave entitlements could not be less than those set out in the 2014 Agreement, and this is the extent to which the reference to the 2014 Agreement can be given.
The Respondent repeats that even if the entirety of the 2014 Agreement was somehow intended to be incorporated into the Applicant’s Contract, the practical effect would be that all of the terms of the 2014 Agreement would be incorporated, including clause 1.3 of the 2014 Agreement, which expressly excludes coverage to members of the Senior Leadership Team, of which the Applicant was a member.
In light of the above, the Respondent repeats there is no term within the meaning of section 738(c) of the Act that requires or allows the Commission to deal with the dispute under section 739(1).
CONCLUSION
In Soliman the Federal Court considered a term in an employment contract with similar language to that found here and concluded the language did not support incorporation. Noisette applying ACTEW and Soliman also adopted this view.
The words “subject to” are insufficiently explicit in this case to have the effect that the Applicant has argued for. In the context of the contract itself, it seems reasonably clear the words are intended to be explanatory or descriptive of an instrument the Respondent believed applied to the Applicant, rather than an intention to incorporate the entirety of the 2014 Agreement into the contract.
I agree with the Respondent’s submission that applying the decision in Toll a reasonable person taking into account the surrounding circumstances, would or could not conclude that the reference was intended to create a contractual entitlement to all of the terms of the 2014 Agreement at the time, particularly given the dispute procedure term of the 2014 Agreement is not expressly referenced in the Contract.
The Applicant has submitted that this case is distinguishable from the cases referred to by the Respondent because in each of those cases the relevant instrument covered the employee, whereas here it did not. I have not found this submission persuasive. As was submitted for the Respondent, the preamble in the Contract is analogous to the preamble considered in Soliman, where the court held that the provision “identifies relevant information capable of affecting the parties’ contractual relations rather than documents intended to be binding and enforceable as part of their contractual relations”.
In conclusion, I prefer the Respondent’s submission that the terms of the 2014 Agreement were not incorporated by reference into the Applicant’s Contract and therefore, by extension, the relevant disputes procedure in the 2014 Agreement was also not incorporated into the Contract. On that basis the Commission does not have jurisdiction to deal with the matter by force of section 738(c) as has been contended for the Applicant.
Even if I were to be wrong in this conclusion, I also agree with the Respondent’s submission that as clause 1.3 of the 2014 Agreement expressly excludes coverage to members of the Senior Leadership Team, of which the Applicant was a member, and therefore the 2014 Agreement excludes the dispute settlement procedure from applying to the Applicant.
COMMISSIONER
[1] (2002) 127 FCR 1 at [33], applying Byrne v Australian Airlines Ltd (1995) 185 CLR 410.
[2] [2017] FWC 3075.
[3] (2008) 176 IR 183 at [63] to [68].
[4] [2022] FWCFB 93.
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