Harvey Industries Group Pty Ltd v Jones
[2017] WADC 74
•9 JUNE 2017
HARVEY INDUSTRIES GROUP PTY LTD -v- JONES [2017] WADC 74
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2017] WADC 74 | |
| Case No: | CIV:3056/2014 | 1 MAY 2017 | |
| Coram: | DERRICK DCJ | 9/06/17 | |
| PERTH | |||
| 34 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed in part | ||
| PDF Version |
| Parties: | HARVEY INDUSTRIES GROUP PTY LTD TREVOR WAYNE JONES RHONDA MEGAN GADDES MICHAEL BRADLEY WOOD MARK CHARLES LINTOTT JAMES MULDER as Executor for the Estate of VIVIENNE LEE MULDER DARRYL WERTH ANTONIO MICHAEL PANETTA PAUL YERBURY |
Catchwords: | Practice and procedure Appeal from a deputy registrar adjourning defendant's summary judgment application pending discovery by defendant Summary judgment application Strike out application Employment law Implied terms |
Legislation: | Workplace Relations Act 1996 (Cth) District Court Rules 2005 (WA) Rules of the Supreme Court 1971 (WA) |
Case References: | Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 Aldersea v Public Transport Corporation [2001] VSC 169; (2001) 3 VR 499 Apache Energy Ltd v Alcoa of Australia Ltd (No 2) [2013] WASCA 213; (2013) 45 WAR 379 Australian National Hotels Pty Ltd v Jager [2000] TASSC 43 Bednall v Wesley College [2005] WASC 101 Bell v Cribb [2013] WASC 32 BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 67 IR 162 Buitendag v Ravensthorpe Nickel Operations Pty Ltd [2012] WASC 425 Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64 Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14; (1986) 160 CLR 226 David Clarke Air Conditioning Pty Ltd Atf David Clarke Air Conditioning Trust v Quann [2016] WASC 73 Elliott v Kodak Australasia Pty Ltd [2001] FCA 807; (2001) 108 IR 23 Elovalis v Elovalis [2008] WASCA 141 Forsayth NL v Northern Gold NL (Unreported, WASCA, Library No 940012, 20 January 1994) Gallop Investments Pty Ltd v Jones [2002] WASC 66 Gramotnev v Queensland University of Technology [2015] QCA 127; (2015) 251 IR 448 Hastings v JH Corporate Security Services Pty Ltd [2000] SASC 216 Hawkins v Clayton (1988) 164 CLR 539 Hazart Pty Ltd v Rademaker (1993) 11 WAR 26 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 Hunter v Shire of Wagin [2010] WADC 13; (2010) 69 SR (WA) 291 Interco (Vic) Pty Ltd v Walmsley [2004] VSCA 90 James Point Pty Ltd v Minister for Transport [2015] WASC 323 Kilminster v Sun Newspapers Ltd [1931] HCA 37; (1931) 46 CLR 285 Kimberley Downs Pty Ltd v Western Australia (Unreported, WASC, Library No 6414, 25 August 1986) Knights Capital Group Ltd v Bajada and Associates Pty Ltd [2016] WASC 69 McDonald v Parnell Laboratories (Aust) Pty Ltd [2007] FCA 1903; (2007) IR 375 Melville v Gibbs [2012] WASCA 207 Rogan-Gardiner v Woolworths Ltd [No 2] [2010] WASC 290 Russell v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2007] NSWSC 104; (2007) 69 NSWLR 198 Russell v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2008] NSWCA 217; (2008) 72 NSWLR 559 Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 SMEC Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138 Smith v McCusker QC [2005] WASCA 226 State of New South Wales v Shaw [2015] NSWCA 97; (2015) 248 IR 206 The State of New South Wales v Paige [2002] NSWCA 235; (2002) 60 NSWLR 371 Theseus Exploration NL v Foyster [1972] HCA 41; (1972) 126 CLR 507 Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598 Westpac Banking Corporation v Wittenberg [2016] FCAFC 33; (2016) 256 IR 181 Wright v Wright [2002] WASC 30 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Appellant
AND
TREVOR WAYNE JONES
Respondent
- Appellant
AND
RHONDA MEGAN GADDES
Respondent
- Appellant
AND
MICHAEL BRADLEY WOOD
Respondent
- Appellant
AND
MARK CHARLES LINTOTT
Respondent
- Appellant
AND
JAMES MULDER as Executor for the Estate of VIVIENNE LEE MULDER
Respondent
- Appellant
AND
DARRYL WERTH
Respondent
- Appellant
AND
ANTONIO MICHAEL PANETTA
Respondent
- Appellant
AND
PAUL YERBURY
Respondent
Catchwords:
Practice and procedure - Appeal from a deputy registrar adjourning defendant's summary judgment application pending discovery by defendant - Summary judgment application - Strike out application
Employment law - Implied term
Legislation:
Workplace Relations Act 1996 (Cth)
District Court Rules 2005 (WA)
Rules of the Supreme Court 1971 (WA)
Result:
Appeal allowed in part
Representation:
CIV 3056 of 2014
Counsel:
Appellant : Ms G A Archer SC
Respondent : Mr A J Stewart
Solicitors:
Appellant : Clayton Utz
Respondent : Chapmans
CIV 3057 of 2014
Counsel:
Appellant : Ms G A Archer SC
Respondent : Mr A J Stewart
Solicitors:
Appellant : Clayton Utz
Respondent : Chapmans
CIV 3058 of 2014
Counsel:
Appellant : Ms G A Archer SC
Respondent : Mr A J Stewart
Solicitors:
Appellant : Clayton Utz
Respondent : Chapmans
CIV 3059 of 2014
Counsel:
Appellant : Ms G A Archer SC
Respondent : Mr A J Stewart
Solicitors:
Appellant : Clayton Utz
Respondent : Chapmans
CIV 3060 of 2014
Counsel:
Appellant : Ms G A Archer SC
Respondent : Mr A J Stewart
Solicitors:
Appellant : Clayton Utz
Respondent : Chapmans
CIV 3061 of 2014
Counsel:
Appellant : Ms G A Archer SC
Respondent : Mr A J Stewart
Solicitors:
Appellant : Clayton Utz
Respondent : Chapmans
CIV 3063 of 2014
Counsel:
Appellant : Ms G A Archer SC
Respondent : Mr A J Stewart
Solicitors:
Appellant : Clayton Utz
Respondent : Chapmans
CIV 41 of 2015
Counsel:
Appellant : Ms G A Archer SC
Respondent : Mr A J Stewart
Solicitors:
Appellant : Clayton Utz
Respondent : Chapmans
Case(s) referred to in judgment(s):
Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Aldersea v Public Transport Corporation [2001] VSC 169; (2001) 3 VR 499
Apache Energy Ltd v Alcoa of Australia Ltd (No 2) [2013] WASCA 213; (2013) 45 WAR 379
Australian National Hotels Pty Ltd v Jager [2000] TASSC 43
Bednall v Wesley College [2005] WASC 101
Bell v Cribb [2013] WASC 32
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266
Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 67 IR 162
Buitendag v Ravensthorpe Nickel Operations Pty Ltd [2012] WASC 425
Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410
Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194
Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337
Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169
Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64
Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14; (1986) 160 CLR 226
David Clarke Air Conditioning Pty Ltd Atf David Clarke Air Conditioning Trust v Quann [2016] WASC 73
Elliott v Kodak Australasia Pty Ltd [2001] FCA 807; (2001) 108 IR 23
Elovalis v Elovalis [2008] WASCA 141
Forsayth NL v Northern Gold NL (Unreported, WASCA, Library No 940012, 20 January 1994)
Gallop Investments Pty Ltd v Jones [2002] WASC 66
Gramotnev v Queensland University of Technology [2015] QCA 127; (2015) 251 IR 448
Hastings v JH Corporate Security Services Pty Ltd [2000] SASC 216
Hawkins v Clayton [1988] HCA 15; (1988) 164 CLR 539
Hazart Pty Ltd v Rademaker (1993) 11 WAR 26
Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41
Hunter v Shire of Wagin [2010] WADC 13; (2010) 69 SR (WA) 291
Interco (Vic) Pty Ltd v Walmsley [2004] VSCA 90
James Point Pty Ltd v Minister for Transport [2015] WASC 323
Kilminster v Sun Newspapers Ltd [1931] HCA 37; (1931) 46 CLR 285
Kimberley Downs Pty Ltd v Western Australia (Unreported, WASC, Library No 6414, 25 August 1986)
Knights Capital Group Ltd v Bajada and Associates Pty Ltd [2016] WASC 69
McDonald v Parnell Laboratories (Aust) Pty Ltd [2007] FCA 1903; (2007) IR 375
Melville v Gibbs [2012] WASCA 207
Rogan-Gardiner v Woolworths Ltd [No 2] [2010] WASC 290
Russell v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2007] NSWSC 104; (2007) 69 NSWLR 198
Russell v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2008] NSWCA 217; (2008) 72 NSWLR 559
Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596
Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357
SMEC Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138
Smith v McCusker QC [2005] WASCA 226
State of New South Wales v Shaw [2015] NSWCA 97; (2015) 248 IR 206
The State of New South Wales v Paige [2002] NSWCA 235; (2002) 60 NSWLR 371
Theseus Exploration NL v Foyster [1972] HCA 41; (1972) 126 CLR 507
Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598
Westpac Banking Corporation v Wittenberg [2016] FCAFC 33; (2016) 256 IR 181
Wright v Wright [2002] WASC 30
- DERRICK DCJ:
Background
1 On 22 August 2016 the defendant made applications by chamber summonses in eight separate actions (the actions) for summary judgment pursuant to O 16 r 1(1) of the Rules of the Supreme Court 1971 (WA) (RSC). In the alternative, the defendant sought by the applications orders that the plaintiffs' statements of claim in each of the actions be struck out in their entirety and that the actions be dismissed pursuant to O 20 r 19(1)(a) and r 19(1)(b) of the RSC. I will from this point on refer to the defendant's applications as the 'dismissal applications'.
2 On 26 August 2016 the plaintiff in one of the actions, namely CIV 3056 of 2014, made an application by chamber summons for discovery (the Jones discovery application).
3 The dismissal applications and the Jones discovery application ultimately came before Deputy Registrar Harman for hearing on 17 November 2016. By the time of the hearing each of the plaintiffs had filed amended statements of claim pursuant to r 48(1) of the District Court Rules 2005 (WA) (DCR).
4 The deputy registrar decided that the Jones discovery application should be heard before the dismissal applications and consequently declined to hear the dismissal applications. The deputy registrar made orders adjourning the dismissal applications sine die and requiring the defendant to file within 14 days affidavits directed to the 'difficulties' that it would have in complying with the Jones discovery application. The deputy registrar further ordered that the Jones discovery application be adjourned to a directions hearing at 9.30 am on 7 December 2016.
5 On 28 November 2016 the defendant filed notices of appeal in each of the actions against the decision of the deputy registrar adjourning the dismissal applications sine die. In action CIV 3056 of 2014 the defendant also appealed against the deputy registrar's decision adjourning the Jones discovery application to a directions hearing on 7 December 2016.
6 On 30 November 2016 the defendant filed a chamber summons seeking a stay of the orders made by the deputy registrar on 17 November 2016 in relation to the Jones discovery application.
7 On 7 December 2016 the parties attended the directions hearing in action CIV 3056 of 2014. Deputy Registrar Harman ordered the hearing of both the Jones discovery application and the defendant's application seeking a stay of the orders made by him on 17 November 2016 be adjourned to a special appointment. The deputy registrar also directed that the parties provide their unavailable dates for the special appointment hearing.
8 On 8 December 2016 the parties provided their unavailable dates for the special appointment to the court.
9 On 14 March 2017 each of the notices of appeal were listed for a directions hearing. At the directions hearing the defendant's appeal in action CIV 3056 of 2014 was listed for hearing on 1 May 2017. The defendant's appeals in the other seven actions were at that time unable to be listed for hearing because they had been placed on the inactive cases list.
10 On 7 April 2017 the defendant filed an application by chamber summons seeking orders that the seven actions be removed from the inactive cases list and that the notices of appeal in each of those actions be listed for hearing on 1 May 2017. On 24 April 2017 orders were made in terms of the defendant's chamber summons.
11 Given the listing of the appeals, the hearing of the Jones discovery application and the defendant's application seeking a stay of the orders made by the deputy registrar on 17 November 2016 in relation to the Jones discovery application has not yet occurred.
The plaintiffs' actions – summary
12 In each of the actions it is alleged that an ex-employee of the defendant was wrongfully dismissed from their employment in breach of several terms of their contract of employment (the Contract). In each of the actions the defendant denies this allegation.
13 The ex-employee the subject of action CIV 3060 of 2014 is Ms Vivienne Mulder who is now deceased. Accordingly, the plaintiff in action CIV 3060 of 2014 is Ms Mulder's executor. In the other seven actions the plaintiff is the ex-employee. For convenience I will hereafter use the term 'the plaintiffs' to refer not only to the seven ex-employee plaintiffs but Ms Mulder also.
14 It is common ground that:
1. The plaintiffs were employees of the defendant;
2. In or around March 2009 the plaintiffs were dismissed from their employment by the defendant; and
3. The plaintiffs' employment was regulated by an industrial agreement made and certified under the relevant provisions of the Workplace Relations Act 1996 (Cth) (the Act) on 13 March 2006, being the EG Green & Sons Pty Ltd (subject to deed of company arrangement) 7th Street Harvey andthe Australian Meat Industry Employees Union, Western Australian Meat Processing Agreement 2006 (the Collective Agreement).
Nature of the appeals
15 The appeals are brought under r 15(1) of the DCR.
16 An appeal from the decision of a registrar to a judge under r 15(1) of the DCR is a hearing de novo: DCR, r 15(6); Hazart Pty Ltd v Rademaker (1993) 11 WAR 26, 28. I am therefore to treat the applications which led to the making of the orders the subject of the appeals as though they have not been previously determined. It is not necessary for the defendant to establish appellable error on the part of the deputy registrar: Hazart v Rademaker (28); Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 [13], [14].
Orders sought on the appeals and questions for determination
17 By the notices of appeal the defendant relevantly seeks the following orders:
1. Summary judgment in favour of the defendant;
2. Alternatively, the plaintiffs' statements of claim and amended statements of claim be struck out in their entirety and the actions be dismissed pursuant to O 20 r 19(1)(a), r 19(1)(b) and r 19(1)(d) of the RSC; and
3. The plaintiffs pay the defendant's costs of the actions including costs of the appeals, costs of the dismissal applications and any costs thrown away in any event.
18 The questions raised for my determination by each of the appeals are identical. They are, bearing in mind that the appeals are hearings de novo, as follows:
1. Whether the dismissal applications should be adjourned until after the Jones discovery application has been dealt with and determined; and
2. If the dismissal applications should not be adjourned until after the Jones discovery application has been dealt with and determined, whether it is appropriate to make any of the orders sought in the dismissal applications.
19 In support of the appeals the defendant relies upon:
1. An affidavit sworn by Madeleine Jane Clohessy on 22 August 2016;
2. A supplementary affidavit sworn by Ms Clohessy on 4 November 2016;
3. An affidavit affirmed by Anna Louise Casellas on 18 April 2017; and
4. An affidavit sworn by Saul David Harben on 18 April 2017.
20 The plaintiff did not adduce or rely upon any affidavits in opposition to the appeals.
Should the Jones discovery application be dealt with first?
21 The Jones discovery application has been made in one of the actions only, namely CIV 3056 of 2014. It might therefore immediately be said that the existence of the Jones discovery application does not provide a basis for delaying the determination of the dismissal applications in the other seven actions. However, I am willing to accept in this regard the plaintiffs' counsel's assertion that the determination of the Jones discovery application will have 'flow on effects' for the other seven actions (ts 53). I will therefore assume for the purposes of determining this aspect of the appeals that if the Jones discovery application does provide a basis for delaying the determination of the dismissal application in action CIV 3056 of 2014, it also provides a basis for delaying the determination of the dismissal applications in the other seven actions.
22 As will be seen from the ensuing discussion, the dismissal applications turn upon questions of law, not questions of fact. This in itself, in my view, provides a basis for upholding the appeals against the deputy registrar's decision to adjourn the dismissal applications pending the determination of the Jones discovery application. However, even if the dismissal applications did raise for consideration questions of fact, I would still not see this as a reason for delaying the determination of the dismissal applications on their merits on the material that has been put before the court.
23 I therefore uphold the appeals against the decision of the deputy registrar adjourning the dismissal applications pending the determination of the Jones discovery application. It follows that in my view it is appropriate for me to proceed to deal with the dismissal applications.
Principles applicable to determination of the dismissal applications
24 It is convenient at this point to refer to the principles applicable to the determination of a summary judgment application made under O 16 r 1(1) of the RSC. The principles are not in dispute.
25 On an application by a defendant for summary judgment on a plaintiff's claim, the defendant bears the burden of demonstrating that on the material before the court the action should not be permitted to go to trial in the ordinary way because it is apparent that the action must fail; the defendant must show that there is no serious question to be tried on any cause of action raised by the plaintiff: Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57]; SMEC Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138 [20]; Melville v Gibbs [2012] WASCA 207; Bell v Cribb [2013] WASC 32 [49]; Apache Energy Ltd v Alcoa of Australia Ltd (No 2) [2013] WASCA 213; (2013) 45 WAR 379 [86]; Knights Capital Group Ltd v Bajada and Associates Pty Ltd [2016] WASC 69 [40] - [42]. The power to order summary judgment must be exercised with 'exceptional caution': Apache Energy v Alcoa [86]; Knights Capital Group v Bajada [40] - [42].
26 Although the court may determine any difficult question of law on an application for summary judgment, it will usually be appropriate to leave the determination of such questions for trial: Theseus Exploration NL v Foyster [1972] HCA 41; (1972) 126 CLR 507, 514 – 515; SMEC Australia v Valentine Falls Estate [20]; Knights Capital Group v Bajada [41].
27 In dealing with a defendant's summary judgment application it must be accepted that the plaintiff will be able to establish the material facts pleaded in the statement of claim: Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598, 608; Wright v Wright [2002] WASC 30 [13]; Gallop Investments Pty Ltd v Jones [2002] WASC 66 [4].
28 In Forsayth NL v Northern Gold NL (Unreported, WASCA, Library No 940012, 20 January 1994) Franklyn J said:
It is not for the Court, on an O 16 application, to identify or accept some other cause of action, not pleaded, which the evidence before it might arguably support and which, possibly for good reason, was not relied on by the plaintiff in his statement of claim and then allow the statement of claim to remain on foot in reliance on a possible subsequent amendment.
29 However, as Martin CJ observed in Elovalis v Elovalis [2008] WASCA 141 [46] when the context of Franklyn J's observations are taken into account it is clear that his Honour was referring to an 'entirely separate and discrete and unpleaded cause of action, and not to a nuance or variant of the basic cause of action pleaded'. To put it another way, the statement of claim should be construed broadly and generously, with any ambiguities either clarified or assumed in favour of the plaintiff: Smith v McCusker QC [2005] WASCA 226 [37].
30 I note that the principles that must be applied in determining a defendant's summary judgement application as stated above are, in substance, equally applicable to the determination of a defendant's application made pursuant to O 20 r19(1)(a) or r 19(1)(b) of the RSC to strike out a pleading in a statement of claim: Kimberley Downs Pty Ltd v Western Australia (Unreported, WASC, Library No 6414, 25 August 1986); David Clarke Air Conditioning Pty Ltd Atf David Clarke Air Conditioning Trust v Quann [2016] WASC 73 [14].
The terms allegedly breached
31 In their amended statements of claim the plaintiffs allege that the Contract, apart from being regulated by the Collective Agreement, was not in writing but rather was partly oral, was partly derived from the course of conduct between them and the defendant during the period in which they were employed, included the defendant's relevant policies and/or procedures, policy handbooks and manuals, and was partly constituted by terms which were implied both in law and in fact.
32 In their amended statements of claim the plaintiffs further allege that the defendant's termination of their employment was a wrongful dismissal in that the defendant breached three terms of the Contract. The alleged terms of the Contract that are alleged to have been breached by the defendant are as follows:
1. A term implied in law that the plaintiffs' employment could only be terminated by the defendant on reasonable notice (reasonable notice term);
2. An express term and/or a term implied in law that the defendant would not discriminate against the plaintiffs on the ground of joining a trade union and/or participating in trade union activity (non-discrimination term); and
3. A term implied in fact as being necessary for the Contract's effective operation that the defendant would not, except in the case of a summary dismissal, terminate the plaintiffs' employment for reasons related to the plaintiffs' conduct or performance unless the plaintiffs were given an opportunity to defend themselves against any allegations in line with the principles of natural justice (natural justice term).
33 The plaintiffs also allege that they have suffered loss and damage as a result of the alleged wrongful dismissal.
34 The defendant, for its part, denies the existence of the alleged implied terms of the Contract, and denies that it breached any of the alleged terms if they were terms of the Contract. The defendant further asserts, in essence, that the employment of the plaintiffs was lawfully terminated because their positions were made redundant due to its financial position and operational requirements.
35 The plaintiffs also allege in their amended statements of claim two further terms of the Contract, although they do not actually plead any breach of these terms by the defendant. These further terms, which were not pleaded in the statements of claim, are as follows:
1. A term implied in law and/or by conduct, that the defendant would utilise 'a last in, first out' practice when it chose to terminate employment on the grounds of redundancy (last in, first out term); and
2. A term implied in law that the defendant would act in good faith and not unreasonably exercise its powers under the Contract (good faith term).
36 The defendant, given that it is yet to file amended defences, has not to this point expressly pleaded a response to the allegations that the Contract contained the last in, first out term and the good faith term. However, it is clear from the submissions made on the defendant's behalf at the hearing of the appeal that the existence of the terms is denied by the defendant.
37 Despite the fact that the plaintiffs have not actually pleaded a breach of the last in, first out term or a breach of the good faith term, the defendant's counsel, although pointing to the plaintiffs' failure to plead a breach and making the point that on this basis there is no serious question to be tried in relation to the alleged terms, understandably proceeded at the hearing of the appeal to make full submissions on the assumption that the plaintiffs' cases, albeit yet to be pleaded, are that the defendant's termination of their employment was a 'wrongful dismissal' in that the defendant breached the last in, first out term and the good faith term. The plaintiffs' counsel did not at any point in his submissions suggest that the defendant's counsel's assumption in this regard was incorrect. I therefore propose to deal with the dismissal applications on this basis, that is, on the basis that the plaintiffs' cases are that the defendant, in terminating their employment, did breach the last in, first out term and the good faith term and thereby wrongfully dismissed them.
38 It follows from what I have said, that in order to make out their claims against the defendant the plaintiffs will need to prove, in respect of each of the five alleged terms of the Contract, the following:
1. The term was a term of the Contract;
2. The term was breached; and
3. They suffered loss or damage as a result of the breach of the term.
The defendant's contention
39 The defendant's contention is that there is no serious question to be tried on the plaintiffs' claims. In particular, the defendant contends that four of the alleged terms were not terms of the Contract, and that the fifth alleged term (the good faith term), if it was a term of the Contract, cannot apply to the termination of an employment contract.
40 I will deal with the defendant's contention by reference to each of the five alleged terms in turn.
Reasonable notice term
41 The plaintiffs' allegation is that the reasonable notice term was a term of the Contract implied by law.
42 It is well established that in the absence of anything to the contrary a contract of employment for no set term is to be regarded as containing an implied term that the employer give reasonable notice of termination except in circumstances justifying summary dismissal: Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410, 422 – 423, 429, 446. However, where employment is governed by an industrial agreement or a workplace agreement or an award, and the agreement or the award provides for the termination of an employee's employment on the giving of a specified period of notice, there is no room for the implication by law of such a term: Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 67 IR 162, 189; Australian National Hotels Pty Ltd v Jager [2000] TASSC 43; Elliott v Kodak Australasia Pty Ltd [2001] FCA 807; (2001) 108 IR 23 [90] – [97]; Hastings v JH Corporate Security Services Pty Ltd [2000] SASC 216 [7]; Westpac Banking Corporation v Wittenberg [2016] FCAFC 33; (2016) 256 IR 181 [216] - [238].
43 In the present case, and as I have already pointed out, it is not in dispute that the Collective Agreement regulated the plaintiffs' employment. On the plaintiffs' cases the Collective Agreement, together with the defendant's relevant policies and/or procedures, policy handbooks and manuals, comprised the written part of the Contract.
44 Clause 2.1.6 of the Collective Agreement, so far as is relevant, was in the following terms:
2.1.6 Termination of Employment
(a) Application of Clause
i. A contract of service may be terminated in accordance with the provisions of this clause and not otherwise but this subclause does not operate so as to prevent any party to a contract from giving a greater period of notice than is hereinafter prescribed, nor to affect the company's right to dismiss an employee without notice for conduct that justifies instant dismissal, including misconduct, malingering, inefficiency or neglect of duty. An employee so dismissed shall be paid for the time up to the dismissal only.
ii. Subject to the provisions of this clause, a party to a contract of service may, on any day give to the other party the appropriate period of notice of termination of the contract prescribed in subclause (b) or (c) of this clause and the contract terminates when that period expires.
(b) Notice of Termination by Company
i. In order to terminate the employment of an employee (other than a casual employee and an employee who has justifiably been instantly dismissed) the company shall give the employee the following notice.
Period of Continuous Service Period of Notice
not more than 1 year 1 week
1 year but less than 3 years 2 weeks
3 years but less than 5 years 3 weeks
5 years and over 4 weeks
ii. An employee who at the time of being given notice is over 45 years of age and who at the date of termination has completed two years' continuous service with the company, shall be entitled to one weeks' notice in addition to the notice prescribed in paragraph (i) of this subclause.
iii. Payment in lieu of the notice prescribed in paragraphs (i) and (ii) of this subclause shall be made if the appropriate notice period is not given. Provided that employment may be terminated by part of the period of notice specified and part payment in lieu thereof.
46 In my view the terms of cl 2.1.6 are such that it is simply not possible to imply by law into the Contract the reasonable notice term. There is no room for the implication of the reasonable notice term. To imply the reasonable notice term would be inconsistent with the right to terminate created by the clause.
47 In their written submissions the plaintiffs contend that because the Collective Agreement did not prevent a party from giving more notice than was prescribed it is open to imply into the Contract the reasonable notice term. The plaintiffs seek to derive support for this contention from the decision in Kilminster v Sun Newspapers Ltd [1931] HCA 37; (1931) 46 CLR 285.
48 In my opinion the mere fact that cl 2.1.6(a) did not preclude a party from giving more notice than was prescribed does not provide a basis for implying into the Contract the reasonable notice term. The fact that cl 2.1.6(a) does not preclude a party from giving more notice than was prescribed does not alter the position that the implication of the reasonable notice term would be inconsistent with the right to terminate created by the clause.
49 So far as the plaintiffs' reliance on the decision in Kilminster v Sun Newspapers is concerned, the decision does not provide support for the plaintiffs' contention. In Kilminster v Sun Newspapers the contract of employment between the plaintiff and the defendant expressly provided that the plaintiff should remain in the employment of the defendant until the expiration of reasonable notice to be given by either party. All that the court decided was that the award that applied to the employment relationship between the plaintiff and the defendant, which provided that the plaintiff's employment could not be terminated unless two months' notice of termination had been given, did not interfere with the plaintiff's express contractual right to the provision of reasonable notice.
50 For the reasons I have stated I am satisfied that the plaintiffs' allegation that the reasonable notice term was an implied term of the Contract cannot succeed. The allegation does not give rise to a serious question to be tried. It obviously follows that I am also satisfied that the plaintiffs' allegation that they were wrongfully dismissed in that the defendant breached the reasonable notice term does not give rise to a serious question to be tried.
Non-discrimination term
51 As I have already indicated, the plaintiffs plead that the non-discrimination term was an express term of the Contract and/or a term of the Contract implied by law. Clearly the non-discrimination term could not have been both an express term and an implied term of the Contract. If it was a term of the Contract it could only have been either an express term or an implied term. Therefore I will treat the pleading as an allegation that the non-discrimination term was either an express term or an implied term of the Contract.
Allegation that non-discrimination term was an express term
52 During the hearing of the appeal the defendant's counsel, consistently with the written submissions filed on behalf of the defendant, focused her attention on the plaintiffs' allegation that the non-discrimination term was a term of the Contract implied by law. This was unsurprising given that in the written submissions filed on behalf of the plaintiffs in advance of the hearing before the deputy registrar, and also in the written submissions filed on behalf of the plaintiffs on the appeal, the plaintiffs did not, in support of their opposition to the dismissal applications, contend that the non-discrimination term was an express term of the Contract. Nonetheless, during the hearing of the appeal counsel for the plaintiffs made a point of drawing to my attention that the non-discrimination term was pleaded as an express term of the Contract (ts 57). In other words, counsel did not concede that the plaintiffs' cases were restricted to asserting that the non-discrimination term was a term implied by law.
53 There is no term in the Collective Agreement to the effect of the non-discrimination term. Moreover, it is not expressly pleaded that the non-discrimination term was one of the oral terms of the Contract or was contained in the defendant's relevant policies and/or procedures, policy handbooks and manuals. However, given that the non-discrimination term is not to be found in the Collective Agreement, the only reasonable inference is that the plaintiffs, in alleging that the non-discrimination term was an express term of the Contract, are alleging that it was an oral term of the Contract or was expressed in the defendant's relevant policies and/or procedures, policy handbooks and manuals.
54 On the basis of what is before me I have some doubts about the ability of the plaintiffs to prove that the defendant's policies and/or procedures, policy handbooks and manuals formed part of the Contract. However, in dealing with the dismissal applications I must accept that the plaintiffs will be able to establish the material facts pleaded in the amended statements of claim. Accordingly, I must accept that the plaintiffs will be able to establish that the Contract was partly oral and included the defendants' relevant policies and/or procedures, policy handbooks and manuals, and also that the non-discrimination term was an express term of the Contract in that it was an oral term of the Contract or a term expressed in the defendant's relevant policies and/or procedures, policy handbooks and manuals. This being the case I am unable to conclude that there is no serious question to be tried on the plaintiffs' allegation that the non-discrimination term was an express term of the Contract.
55 In all but the action commenced by the plaintiff Jones (CIV 3056 of 2014) the plaintiffs allege that the termination of their employment was a wrongful dismissal in that the defendant, prior to the termination, breached the express non-discrimination term by discriminating against them on the grounds of joining a trade union and/or participating in trade union activity. I am unable to conclude on the material before me that this allegation does not give rise to a serious question to be tried. Indeed, the defendant did not suggest that if I was satisfied that there is a serious question to be tried as to the existence of the non-discrimination term I should nevertheless conclude that the alleged breach of the term does not give rise to a serious question to be tried.
56 In the Jones action the alleged breach of the non-discrimination term is, for reasons not explained to me by the plaintiffs' counsel, pleaded differently. In the Jones action the plaintiff alleges that the termination of his employment was a wrongful dismissal in that the defendant, prior to the termination, breached the non-discrimination term by acting in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between himself and the defendant.
57 I have difficulty understanding why the plaintiff in the Jones action has pleaded the alleged breach of the non-discrimination term in the way that he has as opposed to the way in which the breach is pleaded in the other seven actions. The breach plea in the Jones action does appear to confuse two distinct concepts, namely the allegation that the non-discrimination term formed part of the Contract and the idea that there is a relationship of confidence and trust in Australian contracts of employment. Further, the plea necessarily carries with it an assertion that the defendant in performing the Contract was obliged not to act in a way likely to destroy or seriously damage the relationship of trust and confidence that existed between it and the plaintiff.
58 In my view the breach as pleaded in the Jones action does not give rise to a serious question to be tried. I say this because it has now been determined by the High Court that a duty of trust and confidence will not be implied into employment contracts in Australia: Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 [15], [35] - [42], [114] - [118].
59 Despite my above expressed view, I would not uphold the dismissal application made in respect of the allegation in the Jones action that the defendant breached the express non-discrimination term. I would not do so on the basis that despite the terms in which the breach is currently pleaded, the essential allegation is still that the termination of the employment was in breach of the non-discrimination term. However, I make clear that I do not, for the reasons I have expressed, consider that it is open for the plaintiff in the Jones action to contend that the breach of the express non-discrimination term was constituted by the defendant acting in a manner calculated or likely to destroy or seriously damage a relationship of confidence and trust that existed between the defendant and the plaintiff.
Allegation that non-discrimination term was an implied term
60 I turn to the plaintiffs' allegation that the non-discrimination term was a term of the Contract that was implied by law.
61 In order for a term to be implied by law into a contract of employment the term must be necessary in the sense that unless the term is implied the rights conferred by the contract would or could be rendered nugatory, worthless, or perhaps be seriously undermined: Byrne v Australian Airlines (450); Commonwealth Bank of Australia v Barker [28] - [29], [36].
62 In the present case there is no doubt that the defendant was not entitled to discriminate against the plaintiffs on the ground of them joining a trade union or participating in union activities. It is common ground between the parties that this was a statutory obligation that was at the relevant time imposed on the defendant by provisions of the Act: see, in particular, s448(1), s 643(1), s 659, s 792(1), and s 793(1).
63 In Byrne v Australian Airlines the majority made the following comments which are in my view apposite to the present case (420) (footnoted citations omitted):
… No doubt there are terms which are incorporated by statute in contracts of a particular kind so that the ordinary remedies for breach of contract are available in relation to them. And apart from statute, a term may be implied by law as an incident of a particular class of contract, but we did not understand the appellants to be submitting that any such implication arises here. They rely upon the statutory force given to the award and say that, because the relationship between the parties is contractual, the provisions of the award – or at least some of them including cl 11(a) in this case – become terms of the contract enforceable by the use of contractual remedies as well as the remedies provided by statute.
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 their employment relationship does not change the character of the right. As Latham CJ points in his judgment in Amalgamated Collieries of WA Pty Ltd v True [(1938) 59 CLR 417, 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.
64 A little later in their judgment the majority continued as follows (421) (footnoted citations omitted):
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 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.
65 Statements to similar effect were also made by McHugh and Gummow JJ (452 - 453).
66 Although the court in Byrne v Australian Airlines was dealing with the contention that certain terms of an award that operated with statutory force should be implied into a contract of employment, the statements made by their Honours are clearly, in my view, equally applicable to the situation where a party is in effect contending, as in this case, that an obligation imposed on an employer by statute should be implied into the employment contract.
67 In my opinion, given that the obligation alleged to have been imposed on the defendant by the non-discrimination term was a statutory obligation to which the defendant was subject, it is not, in light of the above referred to statements made in Byrne v Australian Airlines, reasonably arguable that there is any need or necessity to imply the term into the Contract in order to ensure that the rights conferred by the Contract are not rendered nugatory, worthless, or seriously undermined. In my opinion, the existence of the statutory obligation presents an 'insuperable obstacle' to the contention that the non-discrimination term was a term of the Contract implied by law: Byrne v Australian Airlines (421).
68 For these reasons I am satisfied that the plaintiffs' allegation that the non-discrimination term was a term of the Contract implied by law cannot succeed. The allegation does not give rise to a serious question to be tried. It obviously follows that I am also satisfied that the plaintiffs' allegation that they were wrongfully dismissed in that the defendant breached the implied non-discrimination term does not give rise to a serious question to be tried.
The loss issue
69 I have concluded that the plaintiffs' allegation that the defendant terminated their employment in breach of the express non-discrimination term gives rise to a serious question to be tried. However, with respect to this aspect of the plaintiffs' claim I need to deal with a further alternative submission put forward on behalf of the defendant. The alternative submission is that even if it is accepted that the plaintiffs' allegation that their employment was terminated in breach of the express non-discrimination term does give rise to a serious question to be tried, such a breach, if proved, could not give rise to anything other than an award of nominal damages. Therefore, it is submitted, the plaintiffs' claim is frivolous or vexatious or an abuse of process.
70 In my view, if I am satisfied to a high degree of certainty that the plaintiffs could recover only nominal damages for breach by the defendant of the express non-discrimination term the dismissal applications, to the extent that they relate to this aspect of the claim, should be allowed on the basis that the claim is frivolous or vexatious within the meaning of O 16 r 1(1) and O 20 r 19(1)(b) of the RSC, or an abuse of process within the meaning of O 20 r 19(1)(d) of the RSC: Hunter v Shire of Wagin [2010] WADC 13; (2010) 69 SR (WA) 291 [65]; James Point Pty Ltd v Minister for Transport [2015] WASC 323 [37], [61] – [67]. The plaintiffs did not attempt to suggest that the position is other than I have just stated it. Indeed, the plaintiffs did not advance any substantive arguments in response to the defendant's contention that their claim could not give rise to anything other than nominal damages.
71 The argument underlying the defendant's submission that the alleged breach of the non-discrimination term, even if proved, could only give rise to an award of nominal damages to the plaintiffs may be summarised as follows.
72 If a termination of employment is wrongful, the assessment of damages is based on the assumption that the employer would have discharged its contractual obligation in the way least burdensome to it, unless there is evidence to the contrary: Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64, 93, 114, 132 - 133, 146, 150; McDonald v Parnell Laboratories (Aust) Pty Ltd [2007] FCA 1903; (2007) IR 375 [79]; Buitendag v Ravensthorpe Nickel Operations Pty Ltd [2012] WASC 425 [171] – [174]. As Buchanan J stated in McDonald v Parnell Laboratories [79]:
Normally a party to a contract is entitled to perform the contract in a way which is open to it. Sometimes damages are assessed by reference to a principle the defendant would have performed a contract, if not in breach, in the manner least burdensome to it. However, it is clear that such a principle does not operate as an automatic restriction on the quantum of damages (see TCN Channel 9 Pty Ltd v Haydon Enterprises Pty Ltd (1989) 16 NSWLR 130 at 154-156; Amann at 93). Instead a court will look to the facts. It is not obliged, nor entitled, to proceed upon 'an improbable factual hypothesis'.
73 In the present case the least burdensome way for the defendant to have discharged its contractual obligations would have been for it to terminate the employment of the plaintiffs in accordance with cl 2.1.6 of the Collective Agreement and to make redundancy (severance) payments in accordance with cl 2.8(c) of the Collective Agreement, clause 2.8(c) being the clause which specified the amount that was required to be paid to an employee whose role was terminated due to redundancy. In the present case the plaintiffs, save for Ms Mulder (CIV 3060 of 2014), received redundancy payments which, if their employment was terminated in breach of the express non-discrimination term as opposed to on the ground of redundancy, they were not entitled to. Therefore these redundancy payments will need to be set off against any damages payable to the plaintiffs, these damages being assessable by reference to the least burdensome way for the defendant to have discharged its contractual obligations (that is, by reference to cl 2.1.6 and the redundancy payments that would have been payable under cl 2.8(c)). Further, so far as Ms Mulder is concerned her loss, calculated by reference to the redundancy payment that would have been payable to her under cl 2.8(c) would, given her length of service, in any event be nominal. In these circumstances any damages payable to the plaintiffs will be nominal.
74 So that is a summary of the defendant's argument underlying its submission that the alleged breach of the non-discrimination term, if proved, could only give rise to an award of nominal damages to the plaintiffs. I note in this context that the evidence which establishes that the plaintiffs other than Ms Mulder did receive redundancy payments calculated in accordance with cl 2.8(c) of the Collective Agreement is contained in the supplementary affidavit sworn by Ms Clohessy on 4 November 2016.
75 As I have previously indicated, the plaintiffs plead that by reason of the alleged wrongful dismissal in breach of the non-discrimination term they suffered loss and damage. At present the plaintiffs do not particularise the loss and damage allegedly suffered. Rather, they plead that particulars of the loss and damage 'will be provided in accordance with Rule 45C of the District Court Rules 2005 (WA)'.
76 In my view the difficulty with the defendant's argument is that it proceeds on the assumption or hypothesis that if the defendant had not, as alleged in the amended statements of claim, wrongfully dismissed the plaintiffs in breach of the non-discrimination term, it would nevertheless have terminated their employment in accordance with cl 2.1.6 on the ground of redundancy and consequently made redundancy payments under cl 2.8(c). However, this is an assumption which I do not think can be made on the material before me. It cannot, in my view, be assumed that in the absence of the alleged breach the defendant would have terminated the plaintiffs' employment on the ground of redundancy.
77 For the reasons I have stated I am not satisfied to the necessary high degree of certainty that the plaintiffs, if they make out their claim that the defendant wrongfully dismissed them in breach of the express non-discrimination term, would recover only nominal damages. It follows that I am not satisfied that this aspect of the plaintiffs' claim is frivolous or vexatious within the meaning of O 16 r 1(1) or O 20 r 19(1)(b), or an abuse of process within the meaning of O 20 r 19(1)(d).
Natural justice term
78 The plaintiffs' allegation is that the natural justice term was a term of the Contract implied in fact.
79 The implication in fact of a term into a contract is based upon the presumed intention of the parties: Byrne v Australian Airlines (422). The legal principles relating to the implication in fact of a term into a contract are well established. Generally speaking, at least where the parties have reduced the contract to a complete written form, a term will not be implied in fact into a contract unless the following requirements are met:
1. The term must be reasonable and equitable;
2. The term 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. The term must be so obvious that it 'goes without saying';
4. The term must be capable of clear expression; and
5. The term must not contradict any express term of the contract: BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, 283; Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596, 605 – 606; Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337, 345 - 347; Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, 65 - 66, 95, 117 – 118, 121, 139; Hawkins v Clayton [1988] HCA 15; (1988) 164 CLR 539, 571 - 573; Byrne v Australian Airlines (422, 441 - 442).
80 In the present instance the Contract, on the plaintiffs' cases, had not been reduced to a complete written form and was partly oral. It has been recognised that if a contract has not been reduced to complete written form caution is required against the automatic or over rigid application of the above identified cumulative criteria: Hospital Products v United States Surgical Corporation (121); Hawkins v Clayton (571 - 572); Byrne v Australian Airlines (422 - 423, 441 - 442). The question, in such a case, is whether the implication of the particular term is necessary for the reasonable or effective operation of the contract in the circumstances of the case. It is only where this can be seen to be true that the term will be implied: Hawkins v Clayton (572 - 573); Byrne v Australian Airlines (442). Further, the fact that the implication of a term would, if it were breached, support an action for damages is not a ground for saying that the term is necessary for the reasonable or effective operation of the contract: Byrne v Australian Airlines (423).
81 Clause 2.1.6(g) of the Collective Agreement provided:
(g) Employee to have Opportunity to Respond to Allegations
Except in the cases justifying summary dismissal, the company must not terminate an employee's employment for reasons related to the employees conduct or performance unless the employee has been given the opportunity to defend himself or herself against the allegations in line with the principles of natural justice.
82 Thus the Collective Agreement contained an express provision which was to precisely the same effect as the natural justice term. Further, penalties and remedies for breach of the provisions of the Collective Agreement, including of course cl 2.1.6(g), were provided for by the Act: see in particular s 643(1), s 654, s 718 and s 719. In these circumstances it is simply not reasonably arguable, in my view, that the implication of the natural justice term is necessary for the reasonable or effective operation of the Contract in the circumstances of the case.
83 For the reasons I have stated I am satisfied that the plaintiffs' allegation that the natural justice term was a term of the Contract implied in fact cannot succeed. The allegation does not give rise to a serious question to be tried. It necessarily follows that I am also satisfied that the plaintiffs' allegation that they were wrongfully dismissed in that the defendant breached the natural justice term does not give rise to a serious question to be tried.
Last in, first out term
84 The plaintiffs' allegation is that the last in, first out term was implied into the Contract in law and/or by conduct.
85 In my opinion there are two reasons for concluding that there is no basis for arguing that the last in, first out term was a term of the Contract implied by law.
86 The first of these reasons can be simply stated. It is not necessary to imply the last in, first out term in order to prevent the Contract being rendered nugatory, worthless or seriously undermined. The Contract was capable of operating reasonably and effectively in the absence of such a term: Byrne v Australian Airlines (423).
87 The second reason is that to imply by law the last in, first out term would be inconsistent with the express terms of the Collective Agreement. This statement requires some elaboration.
88 Clause 2.8(a) of the Collective Agreement provided as follows:
2.8 REDUNDANCY
a) Discussions Before Termination
i. Where the company has made a definite decision that the company no longer wishes the job the employee 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, the company shall hold discussions with the Consultative Committee and Union.
ii. The discussions shall take place as soon as is practicable after the company has made a definite decision which will invoke the provisions of paragraph (a)(i) hereof, and shall cover, among other things, any reason for the proposed terminations, measures to avoid or minimise the terminations and measures to minimise any adverse effects of any terminations of the employees concerned.
iii. For the purpose of such discussions the company shall, as soon as practicable, provide in writing to the employees concerned and their union, all relevant information about the proposed termination, including the reasons for the proposed terminations, the number and categories of employees likely to be affected and the number of employees normally employed and the period over which the terminations are likely to be carried out. Provided that any employee shall not be required to disclose confidential information, the disclosure of which would be detrimental to the employer's interests.
Staff Reductions
In the event that staff levels are reduced in any section or department, the method applied by the Company to identify surplus employees shall be based on:
a) objectively quantifiable skill and competency related criteria; and
b) the operational requirements of the business.
90 Clause 2.1.7, although obviously not appearing within or as part of cl 2.8 which dealt expressly with redundancy was, like cl 2.8, one of the provisions which appeared in the Collective Agreement under the major heading 'Conditions of Employment'. In any event, when one reads cl 2.1.7 in the context of the Collective Agreement as a whole it is readily apparent, in my view, that the clause did provide the mechanism for selecting those employees whose employment was to be terminated on the ground of redundancy. The reference in the clause to the 'method' to be applied by the defendant 'to identify surplus employees' in my view makes this clear.
91 By cl 2.1.7 the method that the defendant was required to apply in selecting those employees whose employment was to be terminated on the ground of redundancy was to be based on 'objectively quantifiable skill and competency related criteria' and 'the operational requirements of the business.' The method did not require the adoption of a 'last in, first out' approach. Under the clause length of employment was not a relevant consideration. In these circumstances the express terms of the Collective Agreement leave no room to imply by law into the Contract the last in, first out term. To imply the last in first out term would be inconsistent with the terms of the Collective Agreement and consequently the Contract: Hastings v JH Corporate Security [7], [10].
92 I turn to the allegation that the last in, first out term was implied by conduct.
93 The plaintiffs in their written submissions do not address or attempt to explain the allegation that the last in, first out term was 'implied by conduct'. Further, the plaintiffs' counsel did not during the hearing of the appeal make any substantive submissions in relation to the allegation. Counsel did, however, make some passing and somewhat confusing references to the allegation in support of his submission, which for the reasons already stated I have rejected, that the Jones discovery application should be dealt with before the dismissal applications. Thus counsel asserted on more than one occasion that the allegation did not just raise a question of law (ts 51, 55). Counsel also asserted that it had been 'expressly pleaded' that the last in, first out term, as well as the non-discrimination term and the natural justice term, 'were express terms and/or implied' (ts 57). It is, of course, not the case that the plaintiffs have pleaded that the natural justice term and the first in, last out term were express terms of the Contract.
94 The net result is that it is simply not clear to me what is meant by the allegation that the last in, first out term was implied 'by conduct'. Implication of a term into a contract 'by conduct' is not a concept which on my review of the authorities is recognised or established.
95 It may well be that the allegation that the last in, first out term was implied 'by conduct' is intended to be an allegation that the term was implied by custom or practice. That is, the allegation is that there was a custom or practice in the industry in which the plaintiffs were employed that the employer would utilise a last in, first out approach when terminating the employment of an employee on the ground of redundancy. This is how the defendant's counsel approached the allegation for the purposes of the appeal. She did so without any dissent from the plaintiffs' counsel.96 Alternatively, it may be the position that the intention behind the plea, albeit poorly framed, is to allege that the last in, first out term was a term of the Contract implied in fact.
97 In the circumstances as I have just outlined them, I propose to deal with the defendant's submission that the plaintiffs' allegation relating to the last in, first out term does not give rise to a serious question to be tried on the assumption that the allegation is either that the term was implied by custom or practice, or that the term was implied in fact.
98 In order for custom or practice to form the basis for the implication of a term into a contract the following matters must be established:
1. The existence of a custom or practice that will justify the implication of the term into a contract (this being a question of fact);
2. Evidence that the custom or practice relied on is so well known and acquiesced in that everyone making a contract in that situation can reasonably be presumed to have imported the term into the contract; and
3. The term must not be contrary to the express terms of the contract: Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14; (1986) 160 CLR 226, 236 – 237; Byrne v Australian Airlines (423 – 424), (440 – 441).
99 The reason why a term will not be implied into a contract on the basis of custom or practice where it is contrary to the express terms of the contract is that it is on the presumed intention of the parties on which the importation of a term on the basis of custom or practice rests. Given that the importation of the term rests on the presumed intention of the parties it must yield to the actual intention as embodied in the express terms of the contract: Con-Stan Industries v Norwich (236 - 237); Byrne v Australian Airlines (440).
100 I have already expressed my view that the last in, first out term is inconsistent with cl 2.1.7 of the Collective Agreement and consequently inconsistent with and contrary to the Contract. It is therefore not, in my opinion, open to argue that the last in, first out term was implied into the Contract by custom or practice.
101 As to the allegation that the last in, first out term was a term of the Contract implied in fact, there are in my opinion two reasons why this allegation cannot possibly succeed. First, because it is not necessary to imply the term to give business efficacy to the Contract in the circumstances of the case. Second, because the term, for the reasons I have expressed above, is inconsistent with cl 2.1.7 of the Collective Agreement and therefore contradicts an express term of the Contract.
102 For the reasons I have stated I am satisfied that the plaintiffs' allegation that the last in first out term was a term of the Contract implied in law and/or by conduct cannot succeed. The allegation does not give rise to a serious question to be tried. It obviously follows that I am also satisfied that the plaintiffs' allegation that they were wrongfully dismissed in that the defendant breached the last in, first out term does not give rise to a serious question to be tried.
Good faith term
103 The plaintiffs allege that the good faith term was a term of the Contract implied by law.
104 In Australia courts in different jurisdictions have expressed different views as to whether a 'good faith' term will be implied by law into an employment contract. Further, the issue was not resolved by the High Court in Commonwealth Bank v Barker. While in that case the High Court did hold that the duty of trust and confidence will not be implied into employment contracts, the court expressly stated that this should not be taken to reflect upon the question of whether there is a general obligation to act in good faith in the performance of contracts: [41] - [42].
105 Cases decided since Commonwealth Bank v Barker arguably suggest that a good faith term will not be implied into employment contracts: State of New South Wales v Shaw [2015] NSWCA 97; (2015) 248 IR 206 [113] – [136]; Gramotnev v Queensland University of Technology [2015] QCA 127; (2015) 251 IR 448 [157] – [172]. However, even if it is accepted that a good faith term can be implied into an employment contract, it is clear on the authorities that such a term cannot apply to the termination of employment. The reason why such a term cannot apply to the termination of employment is that the termination of the employment relationship is fundamentally inconsistent with the purpose of a good faith term, namely to ensure the effectiveness of a working relationship between the employer and employee: Russell v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2007] NSWSC 104; (2007) 69 NSWLR 198 [141]; Rogan-Gardiner v Woolworths Ltd [No 2] [2010] WASC 290 [116]. It follows that damages for breach of an implied term of good faith are only available where the damages flow from a breach which occurs during employment, separate and independent of the subsequent termination of any employment. In other words, where an employee claims for loss on the basis of an alleged breach of a good faith term it will be necessary to prove that such loss was caused by conduct of the employer which proceeded and was independent of any subsequent dismissal: Aldersea v Public Transport Corporation [2001] VSC 169; (2001) 3 VR 499 [75] – [93]; The State of New South Wales v Paige [2002] NSWCA 235; (2002) 60 NSWLR 371 [133] – [155]; Interco (Vic) Pty Ltd v Walmsley [2004] VSCA 90 [27] - [29]; Bednall v Wesley College [2005] WASC 101 [52] – [54], [65], [93] – [98]; Russell v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [141]; Russell v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2008] NSWCA 217; (2008) 72 NSWLR 559 [59] – [65]; Rogan-Gardiner v Woolworths Ltd [No 2] [112] – [126].
106 As I have already noted, the plaintiffs have not pleaded a breach of the alleged good faith term or any loss caused by such a breach. However, and as discussed previously, the plaintiffs' cases, albeit not pleaded, are that they were wrongfully dismissed in breach of the good faith term. Therefore, even if the plaintiffs were to again amend their pleadings to reflect this allegation, their claim would be that the good faith term applied to the termination of their employment. Their claim would not be that the good faith term was breached by conduct of the defendant which occurred during their employment and was separate and independent of the termination of their employment by the alleged wrongful dismissal. It follows, in my opinion, that the plaintiffs' foreshadowed allegation (yet to be pleaded) that the defendant wrongfully dismissed the plaintiffs in that it breached the good faith term, does not give rise to a serious question to be tried.
107 I note that in their written submissions the plaintiffs seek to draw support for this aspect of their cases from the decision in Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 [5] - [6]. However, this decision does not support the plaintiffs' cases involving as it did a provision of the relevant employment contract vesting in the employer a discretion to pay a bonus to an employee. In other words, the case was not concerned with any alleged wrongful termination of the employment contract but rather conduct of the employer which occurred during the course of the employee's employment.
Conclusion
108 I have found as follows:
1. Each of the plaintiffs' allegations that the defendant wrongfully terminated their employment in breach of the reasonable notice term, the natural justice term, the last in, first out term, and the good faith term do not give rise to a serious question to be tried;
2. The plaintiffs' allegation that the defendant wrongfully terminated their employment in breach of a term implied by law into the Contract that the defendant would not discriminate against them on the ground of joining a trade union and/or participating in trade union activity does not give rise to a serious question to be tried; and
3. The plaintiffs' allegation that the defendant wrongfully terminated their employment in breach of an express term of the Contract that the defendant would not discriminate against them on the ground of joining a trade union and/or participating in trade union activity, and thereby caused them loss, does give rise to a serious question to be tried.
109 My findings that all but one of the plaintiffs' allegations do not give rise to a serious question to be tried equate to a finding that these allegations disclose no reasonable cause of action within the meaning of O 20 r 19(1)(a) of the RSC. It follows that although I would not grant summary judgment to the defendant, I allow the appeal to the extent of making orders, pursuant to O 20 r 19(1)(a), striking out the paragraphs of the amended statements of claim, or the relevant parts thereof, which relate to the allegations that I have found do not give rise to a serious question to be tried.
110 I will hear the parties in relation to the precise terms of the orders that I should make in order to give effect to my decision.
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